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March 28, 2005
Enterprise Software: Who's got the real platform?
Jeff Nolan has a great entry about all the consolodation in the enterprise software space.
First, he does a great job of industry landscape/gap analysis:
There are simply fewer enterprise software segments that are hitting good growth numbers, and even fewer that you can call 'whitespace' and grow into... The investment required to build a vertical from the ground up is too great, it's much more cost effective to acquire a dominant vendor and use the maintenance base to pay off the acquisition.
In addition he has a great observation about what it really takes to build a platform play:
"so many vendors want to claim the "platform vendor" title, and with it the underlying assumption that in order to be a platform player you need to have account control. I think this is a false assumption, witness Intel's use of partnerships to gain channel mastery without having absolute account control. Nonetheless, many enterprise software vendors believe that they have to own an account in order to reap future rewards from it, so consolidation is a natural strategy to employ in order to accomplish this goal."
Great long term platforms tend not to built by locking things up totally but by sharing the wealth and making it easy for others to make money because you exist. This does not always have to be through direct sales (in fact very, very often it means a strong channel).
Posted by johnza at March 28, 2005 09:48 AM
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