Fred Wilson Calls Out Enterprise Tech Incumbents, Sees Room for NY Startups

http://www.xconomy.com/new-york/2012/12/19/fred-wilson-calls-out-enterprise-tech-incumbents-sees-room-for-ny-startups/

by robertbud1 • 14 years ago

25 11 14 years ago

mbesto• 14 years ago

“If I could short the entire big, fat, old, cynical, rip-off artist enterprise software business, I would,” he said. “They’re not innovating. There’s nothing that those big companies do that’s really any good. The caveat is it takes forever to rip out those systems.” The half-life of enterprise software, he said, is often longer than desired, making it difficult for new, replacement technology to gain a foothold.

Curious - what vendors is he specifically talking about? If he's insinuating a company like SAP, I'd beg to differ. I'm not a huge fan of what SAP does (and I work in the space), but the reality is that there are MANY companies who rely on them to do fairly straight forward operational things (such as Finance, Accounting, Materials Management, etc). Additionally, SAP is actually trying to rip out it's own infrastructure and get all of their customers on SAP HANA. They've put MASSIVE money (I would argue billions) behind marketing and selling it and even then they are finding enterprise customers slow to adopt.

To put this in perspective, they have a install base of roughly 10,000 customers on SAP BW (their data warehouse product) and have managed to get around 500 customers on SAP HANA in roughly 2.5 years. That's only 5% of their own market.

In case anyone is interested in understanding more about this, feel free to ping me directly. There's a lot more to the enterprise then it just "being old, cynical, and fat". I'm also writing a book on it.

w1ntermute• 14 years ago

I don't have personal experience with SAP, but I have a parent who does, and from what I've heard, it's a nightmare. It's expensive, has lots of problems, is very inflexible, etc.

But none of the things it's being used for are very programmatically complicated (inventory management, sales, etc.). The software is just buggy and slow. The SAP "consultants" cost an arm and a leg and are near worthless.

trotsky• 14 years ago

Given his portfolio I'd be thinking more along the lines of oracle.

You're taking it all too seriously though. All he's saying is "stop bringing me hyper local social mobile, we rode that trend into the ground" while trying to not sound that cynical and trying to get the kids excited about it, which isn't the easiest thing in the world.

zt• 14 years ago

I work in civic technology, and one could easily rewrite this to say:

“If I could short the entire big, fat, old, cynical, rip-off artist [government] software business, I would,” he said. “They’re not innovating. There’s nothing that those big companies do that’s really any good. The caveat is it takes forever to rip out those systems.” The half-life of [government] software, he said, is often longer than desired, making it difficult for new, replacement technology to gain a foothold.

bernardom• 14 years ago

How could there not be room for innovation there? Anyone who has used SAP can see that.

A few years ago, one of my clients in an oil plant was trying to find parts (a certain type and size of carbon-steel pipe). They were on SAP, and all inventory was logged by the maintenance people in the various plants in this complex. The guy had to try inputting every combination of "3' diameter steel pipe" into their 90s-esque interface because they hadn't standardized the parts names.

3 foot, three foot, three ft, di, diameter, etc.

Is that SAP's fault? Well, I suppose it could have been avoided with training- training every single maintenance guy in a huge complex to standardize the name of every single part.

What bothers me isn't that they didn't solve that specific problem- I'm sure it happens everywhere. But 'implementing SAP' is a multibillion dollar industry because it's so configurable. There has to be a better way. (I've heard mixed things regarding OpenERP in this forum)

dave_sullivan• 14 years ago

There's a lot more to enterprise than being "big, fat, old, cynical, rip-off artists". It seems like a lot of people are underestimating the sales/decision cycle of the enterprise market and the effect this has on costs.

This model of the consumerization of enterprise where users will just come and sign up has been far from proven at this point. People keep talking about "disrupting the enterprise space" but it's really a very conservative space. People with regular jobs tend to be very risk averse (in my experience). They don't want to make the wrong decision, and are willing to spend a lot of money and TONS of time to try to mitigate that risk. They also have lots of weird little requests re: functionality, so enterprise products kind of do need some kind of platform around them that allows heavy customization (and that takes tons of time to develop).

So, while I certainly agree there's plenty of money to be made in this business, I'm finding it more and more unlikely that a truly different business model is the way to go about making it.

amorphid• 14 years ago

As a recruiter, I can comment on the state of recruiting software. All recruiting software sucks. I've never meant anyone with.the right combination of aptitude, perspective, resources, and moxie to build something I would care to use on a daily basis.

loceng• 14 years ago

You'll know what companies are leading innovation by how much they get done, how broad they go, how big their ecosystem or breadth becomes. Apple is a good example, Google too. Mind you, these are both massive companies so they have tons of resources to put towards innovation - so they may not actually be doing a very good or efficient job, but they're able to ship.

jasonkolb• 14 years ago

Ok so I live, eat, breath, and drink data, and I'd never heard of a "data network" before, other than as the thing that connects computers together. Is this some new buzz word I'm unaware of?

bigtones• 14 years ago

He doesn't call out any Enterprise Tech Incumbents at all. We're all left guessing - making this entire article complete hyperbole.

teamlaft• 14 years ago

Hi guys, I'm the organizer of the NY Enterprise Technology Meetup (www.meetup.com/ny-enterprise-tech). It was a great talk, and Fred shared a lot of relevant feedback for entrepreneurs working on enterprise technology.

Here is a video of his keynote for anyone interested: http://youtu.be/k_ZpbESDkAc

Fred Wilson Calls Out Enterprise Tech Incumbents, Sees Room for NY Startups

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