When I began my consulting career, I provided software reviews and recommendations to enterprise customers. Best-in-Breed was the focal point with a huge number of startups pushing hard to grab market share in the late 90s through early 2000s. It was labor-intensive work where numerous niche vendors were vetted with RFPs and on-site pitches. I was going through one of my older “deliverables” which referenced a CRM report by Michael Maoz in 2000.
The enterprise software market was fragmented back in 2000. An old-school approach was needed to implement mostly on-premise software and perform numerous integrations. Many of the vendors cited in Michael Maoz‘s report have been acquired, merged or gone out of business. HBR did a nice industry recap in 2004. A few enterprise players emerged over the years, and these dominate cloud computing as we know it: offering a development platform, a full suite of tools, and almost unlimited integrations based on “plug and play.” E-commerce was the buzzword back then. This has reverberated 15 years later to today’s clarion call for SaaS/Cloud computing. The world economy has also grown from $41 trillion to close to $80 trillion today. Our brave new world is fueled by wifi and online commerce. A huge chunk of growth is coming from tech-savvy, smaller and medium-sized businesses.
Back then we didn’t have G2 Crowd or TrustRadius. You couldn’t do online research, purchase 5 licenses with a credit card and start with a product immediately. Shadow IT has emerged — allowing enterprise innovators to perform a “trial before they buy for the entire enterprise.”
Today, vendors realize that “land and expand” is key to growing accounts and have deployed customer success teams. Customer success managers were known as post-sales account managers back then. Today, they are hands-on and focused on nonstop customer advocacy — augmented by 24×7 tech support teams. A great customer success team can help the bottom line as much as your outbound sales and channel efforts.
As we round the corner to 2016, I think it’s worth revisiting Michael Maoz’s 2000 report. I believe every niche area in cloud computing is growing — from help desk software to business analytics. Some niche markets need further definition. The room is getting crowded in some areas, where everyone is targeting the same customers. In Silicon Valley, many SaaS startups are trading services to maintain financial posterity. Mostly larger cloud companies are chasing verticals like healthcare, financial services and government. It’s expensive and cumbersome to satisfy these markets, but the strongest players in the 2000 report used a vertical strategy to separate themselves from the crowd.
I don’t know what the future holds given the nature of business cycles. Understanding the customer experience should be your top priority in 2016.