It has been almost a year and a half since we looked into the land of the zombie apocalypse, and the infection is spreading. At the last briefing, the focus was on the endangered species known as enterprise CMS vendors. Current events reveal that the paid software industry as a whole is experiencing an accelerating disruption causing a litany of existential questions.
Anybody Seen Lando Calrissian?
The rapid enterprise flight to the cloud has accelerated and we are now seeing the competitive effects in many paid software industries beyond enterprise content management. Customer relationship management (CRM) systems, collaboration platforms and intranets, and even basic productivity suites are being embraced by customers in droves and we are seeing even the most mature enterprise software vendors completely overhaul their offerings and competitive strategies.
It is no wonder that the vendors are adapting to the new model given that customers are leading the way. This mad rush to the cloud may at some time swing back towards internally managed platforms, but it will not be anytime soon as the trend seems to be accelerating. Software as a service (SaaS) and Platform as a service (PaaS) models have instant credibility given that almost every big vendor has an offering in the market or on its near-term road-map.
A Demonstrated Weakness in the Battle Station
The precise hit offered by the original cloud based application vendors has started a chain reaction. This is no longer a trend, it is now a self-sustaining dynamic. Business leaders demand shorter development cycles, lower employee carrying costs and a near 100% focus on top line revenue driving activities.
How much longer will IT departments want to compete with fully operationalized and specialized managed infrastructure, especially given that the infrastructure management piece can come with a right-sized customization approach (PaaS) or a low cost out-of-the-box multi-tenant approach (SaaS)?
How far has this chain reaction gone? The one company that is more responsible than any other for starting the retail software business has caved! Just last month, Microsoft has gone full bore into "transforming into a devices and services business" rather than an enterprise software vendor.
When Microsoft is pushing consumers out of licensed software market, you know the party is just about over. Given that the upstarts like Acquia, Amazon, Jive, Alfresco and Salesforce.com are no longer upstarts at all, and are now clearly well established and dangerous competitors, the facts make it clear that the death-star software vendor model is on its last legs:
- open source customers have higher satisfaction than licensed software customers
- open source customers utilizing infrastructure partners have higher success rates
- more and more government and financial institutions (the last holdouts) are using cloud-based infrastructure.
Zombie Apocalypse or Space Opera?
As many of the big vendors are adapting to the new landscape, we are not seeing much in the way of "dead men walking." As predicted in 2011, the big vendors are in the act of shedding the old ways of life, unlearning what they had learned relative to the artifacts and behaviors that no longer have any value in the new marketplace.
The forces of change are so strong, the view of the landscape seems to be shifting from a wreckage strewn zombie apocalypse to a highly volatile, yet choreographed, space-opera.
Even now at the outer rim of the software galaxy the new mini-empires, built around app-stores, are already beginning to falter as the rebel Firefox alliance seeks to take down the mobile app-store empires and their army of photo-sharing app clones.
Last month, Firefox and Geeksphone teamed up to make a fully HTML5 web-standards compliant phone built with browser access to phone hardware. This may not seem like a big deal, but this is clearly aimed at the apple money printing machine known as the Apple app-store.
A little less than a year ago, advances in HTML5 foretold this possible future where apps and app-stores would be endangered by browsers that could talk directly to hardware.