Software as service, cloud computing, Mobile end: Three forces will subvert the enterprise application domain

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There is now a perfect storm of three distinct subversive forces that have the potential to overthrow almost every major enterprise in the software sector. Mergers and acquisitions, the traditional way of coping with the shift in technological trends, do not seem to avoid the fate of failure. So this is an unprecedented opportunity: for companies that are in those forces and unwilling to give up even in the face of unusually high bids, they are expected to create billions of of billions of dollars in business.

Let's discuss these three forces separately:

Software as a service (SaaS):

Software as a service has been seen as subversive for some time, and eventually became mainstream in the top 200 of global listed companies. The main subversive force of this technology is the speed of innovation. The feedback loop is particularly powerful: SaaS companies do not need to use specialized groups and surveys to understand how users interact with products, and they can see what users are doing right now by capturing and analyzing each click. They rapidly expand their products in the form of "cell division", which continues to build and detach tests (A/b test) featuring features that maximize participation. The product cycle based on preset and client (PC) software may not be able to contend with, as SaaS products are typically released 10 times times faster, in 45-60 days, and the former cycle is usually 18-24 months.

There is always a version/code base that makes it easy to quickly provide support, fix bugs, and push new functionality to all customers. The old joke, "How can God Create the world in 7 days?" He didn't even have a setup base. "This is certainly true--but SaaS also requires a whole new set of skills that are relevant to 24x7 service business." Development/operations, customer service centers, network operations, and uptime through failover, mirroring, and hot backup are all new and necessary. It is easy to see those early SaaS pioneers gain a huge advantage through technological innovation, but they are not prepared enough and lack a good framework to deal with the recent rise of the subversive.

Cloud Infrastructure:

As I wrote in my previous article, "The Building is the new Server," Internet giants such as Facebook and Google are innovating in redesigning the design, components, and operating costs of large data centers. In their cloud-computing infrastructure business, the main disruptive force is a significant reduction in costs. Facebook, for example, is experimenting with cutting-edge technology to address the new costs of power and cooling. I recently read that there's going to be rain in one of their data centers.

Under their leadership, cloud computing service providers are using wholesale components, open source software, data center design, and testing software that defines storage and networking products to achieve a similar huge cost curve. Corporate databases (private clouds) will rise slowly as the "top 200 global" companies are shifting to these irreversible new cost curves. Don't be stupid to think that security and reliability concerns will keep large companies away – as IronPort chief executive, this trend scares me because large companies point their valuable mail exchange records to cloud computing services such as Postini- One side is the cloud computing architecture that is better and cheaper, and the other is the device where we have boundaries. E-mail is the most sensitive and important application.

Mobile End:

About 2 years ago, all consumer companies experienced "Oh, XXX" moments in Mobile. In the first year, mobile only accounted for 10% of the flow, the next year when everyone in the expected ratio reached about 20%, but has risen to 30%, and to 50%. Facebook, for example, buys Instgram for 1 billion dollars, then continues to pursue talent, redesigning the mobile end. New mobile operating systems and devices are spreading a new paradigm of interaction and design, the main subversive force being a redesigned user interface.

The innovative use of touch/gesture guided by consumer applications will also be valued by the enterprise. Although it is still the early stages of development, mobile sensors (such as GPS, accelerometers, videos, etc.) will also become important and drive a lot of innovation in the enterprise sector, which has helped to bring about the rise of new consumer businesses such as Lyft and Instagram.

The first big problem many startups face is recruiting designers (for example, mobile apps, front-end projects, and user interfaces) to take advantage of this trend. In addition to the very large demand, most of these people are "art freaks", and for them, cash and equity are not incentives to attract them, because they work for a purpose, and they want to be in a situation where design is the primary consideration or core competency – not something that adds to the icing on the cake. This environment is difficult to find.

So why can't big industry-led companies succeed? Many things are suddenly squeezed together and changed. In addition to technological change, there are structural obstacles. The person responsible for the sale has become a farmer rather than a hunter. They still rely on relationships and bundles/discounts to sell, not product traits. They sell their products to CIOs rather than to corporate buyers who make decisions. Quotas and incentives are very different. The accounting system does not automatically pick up repetitive billing and revenue. Because there have been so many changes.

The market capitalisation of several successful companies is about 11 times times the expected earnings for the next 12 months, compared with about 4 times times the remaining SaaS. Examples include workday, Splunk, ServiceNow, Marketo and tableau. SuccessFactors (11 times times) of the IPO deal has officially sounded a new wave of consolidation. In unlisted enterprises, the New Relic, AppDynamics and Zendesk and other enterprises have achieved 9 times times to 11 times times the value of times.

Big mainstream companies now have a panic because they pay a very high premium for early SaaS companies. So why are these mergers and acquisitions not successful? Most of the early SaaS companies lacked the infrastructure to leverage the cost advantages of cloud computing infrastructure, and most of them missed out on the opportunities for mobile business development. While start-ups in the new business sector are having difficulty recruiting the necessary talent, big companies are not looking forward to it.

Looking to the future

As I mentioned above, a perfect storm of three different subversive forces is brewing, and it is likely to erupt into a new wave of corporate business worth billions of of dollars. In particular, there will be at least 30 companies moving forward to resist the temptation of high mergers and acquisitions because they will become industry-led.

These businesses include Cumulus NX, Okta, New Relic and Nimble Storage, Box, Evernote, Base, Expensify, and Tidemark.

Where will the 30 new businesses come from? The SaaS dual-investment cycle paves the way for large enterprises to acquire early SaaS Discovery Enterprises and to handle errors. As the "of Mice and Men" mentions, these businesses are stifled by large companies that bring too much negative attention to these mergers and acquisitions, allocate disproportionate salespeople and misinterpret business models. After a short line-right wait period, product and management personnel-who are accustomed to working in a completely different environment-will eventually leave these large companies, resulting in the creation of a group of entrepreneurs who will launch more similar businesses.

I am very much looking forward to this moment.