Variables For Enterprise Software

Most enterprise software incumbents deliver a suite of products.  You want to use one bit of their product?  Well your only option is to buy it all.

Incumbents predicate their success on this model.  It’s the way they got to the top and that’s how they want to keep it.  They like to work in verticals – selling their suite of products to different enterprises.

New startups in the enterprise software space can leverage this to their advantage.  They can take something which is painfully broken, make something which elegantly solves the problem and sell it.  The larger incumbents haven’t fixed this problem already because they either haven’t realised it exists or because it’s not lucrative enough for them to fix.

However, what startups can do is work the horizontal axis.  If this product can be sold to a lot of people and can result in a platform, then you’ve started to disrupt the incumbents.  As the platform grows so does the value of your product.  Incumbents don’t have a chance of competing as their business model won’t allow it*.

*There are a few examples of some incumbents who have been brave enough to change their models and remain the winners, but these are very rare.

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