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TECH TALK: Alt.Software: Alt.Software: Enterprise Software Today

October 5th, 2001 · No Comments

Let us look at the enterprise software market as it exists today. The perspective here is as seen from India, so it may not be reflective of a universal viewpoint. But as I will explain in the coming columns, markets like India are where the significant future growth is going to come from.

High Cost: Software today is dollar-denominated, and expensive from the viewpoint of most smaller companies in markets like India. The result is that software piracy levels run at over 90%. The result is also there are few local software brands, since it is almost impossible to control piracy. In India, perhaps the only well-known home-grown software brand is the accounting package, Tally. Whether its database software or ERP software, the cost remains the single largest factor impeding adoption.

Anti-Piracy Measures: The new versions of Microsoft Windows XP and Office XP have anti-piracy measures built-in, especially through the need to go in for an “activation”, which takes a snapshot of the hardware on which the software is installed. These anti-piracy measures will mean that companies either pay up if they want the new legal versions or stay a generation behind. Not that it makes much of a difference for the kind of things that most companies are doing.

Feature Overkill: This has been a common problem with software. Just as processors have become faster, software has become more and more feature-rich. The problem is that for most users, both the processing power of machines and the feature-laden software is way over their expectations. Our usage of applications like MS-Word has basically remained the same over the past few years.

Need for Customisation: Businesses differ, their business processes differ. Since there are few reasonably priced packages which take care of all their needs, businesses chose to create customised software. This has its own challenges in terms of the time taken for development, meeting user expectations, cost, and later, with maintenance and support. In the words of Larry Ellison, software has become a “parts-and-labour” industry.

Lack of Integration: Information still exists in silos in different software databases. To get over this, one needs to put in adaptors or other glue software which can convert from one format to the other. What enterprises want is a single view of what exists. Most packages still do not provide this.

Upgrade Hassles and Costs: New versions of software and the concomitant need to upgrade almost invariably causes pain in businesses. More software companies are going to push for building in upgrade costs into the licence fees since the market for new software is getting saturated in many countries, especially the US.

Poor Connectivity to ASPs: Software-as-service is the new mantra. Single version, accessible through a Web browser from anywhere, and a pay-as-you-go model. Take for example Salesforce.com. Wrote Forbes in an article entitled Reinventing Software: “For $65 a month per user, customers get the benefits of browser-based software. It can be installed in a few weeks, not months as with traditional packaged wares. Upgrades are done six times a year instantaneously, online, at no added cost. Included in the fee are data storage and any tweaks to the software like adding new data categories or ways to sort sales reports. These can be done easily without programming help from sales jocks. `We’re seeing the end of software as we know it,’ says Marc Benioff, the founder of Salesforce.com”. Not so soon! The biggest problem with ASPs in countries like India is connectivity. It is difficult to imagine critical corporate data residing anywhere outside the LAN since Internet connectivity is, at best, intermittent.

If we think of these problems as opportunities, then one thing becomes clear.

This is a great time to disrupt the global Enterprise Software products market.

Tags: Tech Talk

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