We have a saying around our shop that Darwin was an optimist. Darwin never met Willy Loman.
It’s always interesting when people ask “where are the next great enterprise opportunities?” Many are not surprised when I cite the obvious tectonic forces of the cloud, open source development and content management platforms, Big Data, NoSQL and transformative mobile technologies. Oh, and SaaS delivery wiping out the need for on-premise servers.
All compelling enablers to the next generation of innovation.
But an enabler just as dramatic is the disruption that’s progressively occurred over the last decade on the business side of the enterprise fence.
The business disruption enabled by SaaS delivery, subscription licensing and low-touch, high-velocity selling models enable each of the above areas of technology disruption. Disruptive costs of delivery and customer acquisition have enabled business tectonic forces to emerge alongside their technology companions.
There‘s been much written over the past week or so since the great Oracle miss. It’s a surprise to some that the old school enterprise sales rep is an endangered species. Truth is, the enterprise sales model as we knew it has been living on borrowed time for the past decade. Barb Darrow of GigaOM recently wrote a great piece to this point on the Death of the IT Salesman.
I spent the first two thirds of my career as an operating guy, building and presiding over enterprise selling efforts of all shapes and sizes. I’ve spent the last third of my career investing in next-generation software start ups that have some common threads running between them.
- They sell by means of new-school, low-touch, high velocity sales models.
- Their product value propositions are directed towards individuals and workgroups as much as organizations.
- Their products are delivered with multiple tiers of functionality.
- They’ve perfected (or working on perfecting) the art of initially exposing just enough functionality to deliver critically-needed value to obvious problems.
- They deliver quick value and can be self-served and self-supported.
- Their user experiences are elegantly simplistic.
Business-level individuals (rather than IT staff) learn about them, quickly download a portion of the product that exposes just the right amount of value to get them hooked on their use. These start ups don’t have expensive, outside sales forces that sell their products top-down to C-level executives via long, complicated, cross-level influencing campaigns. Or followed by still-longer deployment periods.
You see, the really big change in selling to the enterprise is about how customers buy.
Legacy software providers are forced to confront a fundamental shift in how companies buy enterprise IT. A shift in the database mix to NoSQL products which add non-relational database capabilities to manage, query and curate unstructured data. A shift to distributed data stores. A shift to pay-as you-consume value. A shift away from IT leading the way.
Enterprises large, medium and small no longer are willing to pay big, up-front fees for annual software and upgrades when they can easily move workloads to Amazon Web Services. And move databases to AWS Dynamo services. And move shared files from local networks and storage to Egnyte cloud services.
But even more importantly, the buyer has changed. Certainly at the application level, individuals make the buying decisions now. File-sharing and collaboration applications enable not just advocacy but virality across work groups, and eventually across organizations.
Because the buyer has changed, product design has changed.
LogMeIn, Lookout and Dropbox and others set the bar for one-button simplicity. Freemium and free trials focus on quick time-to-value. Self-served or assisted by inside sales, added functionality is up-sold and quickly deployed. Value is shared and the gospel is spread from user to user, without IT involvement nor blessing.
And marketing has changed. It’s now focused on supporting this low touch model. Fine-grained analytics help to predict conversion success, to pinpoint areas where inside sales assistance is needed, and to optimize product iteration though understanding user experience.
Five years ago, it was conventional wisdom that innovative software start ups never stood a chance to sell to enterprise customers. But that was when IT was the gatekeeper.
Now the user is the key to selling to the enterprise.
High velocity enterprise sales are all about targeting the individual as the point of entry, exposing and realizing quick value, elegant design which minimizes customer support requirements, and promoting viral expansion across organizations.
The evolutionary process is too big for Willy and his kind. We’re well into massive transformation and we’ll never go back.
Good thing for buyers and sellers alike.