Why Enterprise Software Solutions will Rule the Tech Space?

Futuristic Digital Software Solutions

Software-as-a-Service (SaaS) has democratised the playing field for startup enterprise-software vendors, leading to new startups and investment:

• The cloud make it easy to build SaaS web-apps. Startups no longer need $20,000,000, a datacenter, and 20 engineers to get running — a few domain experts can cobble together a professional service in a couple months.


• Privacy breaches + SaaS have turned the table on data security, in a couple ways:

• Many enterprises know that their security is poor. They don’t have qualified security engineers. They don’t want to have to secure sensitive customer data. By outsourcing data storage to vendors, they also outsource their own security engineering.
• When a breach does happen, they can point to the vendor. “Our security didn’t break down. [Stripe | Salesforce | Workday | Segment ] got hacked! We are the victims here, and will make the vendor pay!

• Related to the above — enterprises are increasingly comfortable using software which is not hosted on-premise. SaaS is WAY easier to install and maintain than on-premise devices.

On-premise devices require coordinating with operations teams; flying an engineer out to install the software; flying an engineer out to upgrade the systems.

SaaS software can be purchased and used without engineering support by the customer. This makes it cheap and easy to sign new customers. And even when a customer doesn’t want to use a SaaS product, software is easy to distribute now-days as VM images or Docker containers.

• There are a lot more kinds of software an enterprise needs to use to be competitive. 20 years ago, enterprises weren’t using recruiting-tracking software, sales lifecycle software, chat software, benefits tracking software, etc etc. There was payroll software and… often, not much else.

Couple this with the fact that engineer salaries are going through the roof. Enterprises are waking up to the fact that they can’t hire enough engineers to build all of these tools. So there’s really no choice except to use SaaS vendors.

• Enterprise software development is, believe it or not, far more meritocratic than consumer application development. When founders (or venture capital firms) bet on an enterprise startup, it’s still a gamble, but it’s a much lower-variance gamble than investing in the “next big mobile gaming app”.

• Consumer applications are all about “going viral” and looking slick. It’s about getting a few celebrities — streamers, movie stars, politicians — to uses our app and get buzz. Features are somewhat important, but being slick and popular is 90% of the game.
• Building enterprise applications is all about checking feature boxes. Finance teams don’t care about buzz — if they need VAT-withholding software which works in Germany, and yours only works in France, you lose. ‘Buzz’ can get you in the door, but it won’t get you a sale.


• The iPhone app gold rush is over. The space for consumer applications is pretty saturated. There are odds and ends to fill, but most of that app development can be farmed out to app-development shops in southeast Asia, faster and cheaper than building out a US team.

This leaves domain-experts better situated to build… domain-specific applications, which usually means enterprise applications

Basically, enterprise apps are hot because the cloud has made it easier than ever to build them, and enterprises are far more open to SaaS vendors than ever before.