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Sunday, October 09, 2011

Consumer Technology Camp Disrupting The Enterprise

10:51 AM Posted by Deepak Nayal , 2 comments
The world of technology seems to be divided into two major camps: consumer and enterprise. Enterprise is like the older brother who wears suit and tie. He is serious, talks less and is more interested in getting the job done than having fun. Consumer on the other hand is like his cool younger, jeans and T-shirt wearing, brother. He is charming, ready to try out new things that make his life easier, and likes to have fun. These two technology camps are very different in nature. 
  • Consumer tech is the talk of the town, even though, the enterprise technology market is much bigger in size 
  • Consumer technology players frequently try out new things that can enable better processing or user experience, whereas, enterprise market waits for technologies to mature before adoption 
  • Consumer side focuses more on user experience, design and intuitiveness, while enterprise focuses on features and robustness 
  • Oracle, SAP and IBM are the poster children of enterprise technology, while Apple, Google and Facebook are the icons of consumer tech 

Influence At Various Levels 
Consumer technology camp has gained more attention in recent years due to success of platforms - such as smartphones, tablets and social networks - and companies - such as Google, Facebook, Zynga and Twitter. The changes and technological improvements triggered by these platforms and companies are disrupting the status quo. While leveraging these changes and improvements can add to an enterprise's competitive advantage, ignoring these can prove to be dangerous for its existence. These disruptions are happening at various levels, and vary in their intensity, impact and adoption levels on the enterprise side. 

DATA LEVEL
These disruptions are occurring at the data level in two ways. First, the increased adoption of mobile phones, tablets and social networks has led to generation of massive amounts of [structured and unstructured] data in the form of location tags, connections, texts, images and videos that can provide companies with incredibly useful information on consumers, competitors and markets. Second, consumer technology companies have led the innovations and adoption of big data tools - such as Hadoop, Cassandra, MongoDB and Rainbird - that can be used to store massive amounts of data and process it (even in real time) using inexpensive technology. Enterprise software players and customers have started to realize the importance of these disruptions at data level and are trying to find ways of riding this wave.


APPLICATION LEVEL 
Various disruptions have been and still are occurring on the application level. Cloud computing is probably the most profound of them. Many consumer side companies such as Zynga and FourSquare run their applications on cloud. These companies have been able to scale fast and cheaply by leveraging cloud computing - even with millions of active users spread across the globe - thereby improving its credibility amongst the enterprise users.

Analytics is another area where consumer tech players are leading the way. Consumer tech companies are user focused and most of them are web based, allowing them to be able to track complete user journey and provide better service by analyzing the user behavior. Analytics can help enterprises in two ways: understand their customers better and track and improve their operations. Though there are software packages available for enterprises as well to monitor and analyze their systems and processes, they either do not use those tools properly (if at all) or do not leverage that data. Analytics is certainly one of those areas where enterprises can catch up faster, however, are not able to due to non-technical reasons, such as unwillingness, ignorance and bureaucracy.

Consumer tech (the web in particular) practices short release development cycles. This means that unlike the long development cycles (spanning months, sometimes years) that you see on the enterprise side, consumer web usually releases changes much more frequently (weekly, bi-weekly or monthly). This leads to quick bug fixes and new feature rollouts, improving the user experience. Though enterprises have been trying to implement such development methods (e.g. Scrum), many fail to do so or end up somewhere midway. The reason for failing to implement such development processes is that implementing such methods require not just technological but cultural changes as well, which have to be initiated at the top. And usually enterprise CTOs and CIOs are either not willing to take that risk or have other priorities or do not realize the benefits of this practice.

Nowadays, consumer applications generally are available for all devices allowing users to use these applications anytime and anywhere. Apps such as the ones provided by Google and Twitter are good examples. These can be used from your PC, tablet or mobile phone. Enterprise applications can also be made available on different devices so that employees and customers are not bound to their desktops for getting work done, leading to increase in level of satisfaction.

One of the best things about the consumer side of technology is that players in this camp are more willing to integrate with existing services out there. They extend their APIs and use the ones extended by other players. They understand that open is better than proprietary, as it leads to better integration hence better user experience. [Note that we are talking about open here, not open source - these can be two separate things.] The enterprise camp historically has not been good at this aspect and has been very closed in its approach. Though there are integrations in enterprise world these are usually within the organization and ones with partners are on a one-to-one basis. 


PRESENTATION LEVEL 
The disruptions on the presentation layer have been the most profound and, obviously, visible ones. The reason that consumer camp has a huge lead over its enterprise counterpart in this area is that users of consumer technology choose the products they use and if that product is hard to use, they will just stop using it or will switch to an alternative. Enterprise users, on the other hand, are not that fortunate. They pretty much have to stick with what they have got. This leads to the consumer side trying out new things in order to improve the user experience and the enterprise world being happy with what they have in most cases as long as it gets the work done.

User experience and design is given a lot of importance in the consumer camp. In order to improve the end user experience on the web and make it more fluid, the consumer side has been heavily using lightweight web technologies, such as Javascript, CSS and, more recently, HTML 5. Enterprise software, on the other hand, generally bloated and heavy, as user experience is not that high on priority.

Social networking has added to this user experience by enabling people to connect with other people and follow interesting topics. In fact, it has turned into more of a movement led by the likes of Facebook, Twitter and Linkedin. Even though enterprise camp has using collaboration software for a long time, the concept of connections and interactions complimented by fluid and intuitive user experience has been missing from those products.

The biggest disruption caused by consumer technology camp, that the enterprise side cannot ignore, has been in the field of mobile devices, led by Apple. The smartphones and tablets have ushered us into a new world of computing, beyond the desktops. The unbelievable and phenomenal growth in user adoption of these devices has forced enterprises to stand up and take note. One of the primary reasons for this huge uptake is that these are not just devices but are part of a platform which also consists of application stores that provide desktop quality applications. This combo of powerful mobile devices and easy to setup and use applications has allowed users to do almost anything on their smartphones and tablets that they can on their desktops. This disruption has forced enterprise camp to think of ways it can use these devices to engage and empower its customers and employees.

New Breed of Enterprise Players 
Even though the enterprise camp has been trying to learn from its cooler brother and understand ways and benefits of adopting these disruptions, the rate of adoption has been slow. There are various reasons for this slow adoption. These impressive disruptions and the less impressive responses from existing enterprise software players have led to two kinds of new entrants in the enterprise camp. First are the existing consumer side players which are trying to sell their consumer side offerings to the enterprise customers. This includes behemoths such as Apple and Amazon and startups such as Box.net. And second are the new entrants in software market who are leveraging these disruptions to serve enterprise customers. Companies such as Cloudera, Twilio and Zendesk are examples of such providers. 

A lot has changed in the enterprise camp over the last few years, but a lot more has yet to be changed. There definitely is a lot of potential in "consumerization of the enterprise". However, like many other things in the technology world, it is much easier said than done.

2 comments:

  1. Woud you say that,in a sense, consumer applications are to the enterprise what F1 is to the auto industry, a low risk way to push the envelope? Once the concept is proven, then it makes it way into enterprise apps?

    Like you say, the cool thing is innovation is now flowing in the opposite direction. Consumers get access to the coolest tech first and then John Q.Employee

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  2. Consumer tech is definitely a different market than enterprise. So as such I do not think consumer apps are a way to push the envelope into enterprise.

    I think one of the biggest problems with selling enterprise apps is the long sales cycle. The reason sales cycles are long in enterprise is that the consumer and customer are different and there are many stakeholders involved. This is where bottom-up sales model helps a lot. Get your stuff in the hands of the employees so that they can start using it without following the bureaucratic sales process.

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