It’s been a busy week at Intridea. Michael, Pradeep, and Chris presented a couple of talks in Berlin. Then, Chris and Pradeep met up with Adam in Austin, Texas for a full-day training session. Back in our DC headquarters, I was one of the panelists for the Future of Software event organized by Potomac Tech Wire. Japan and China next year? We are definitely getting our name around.
The Future of Software event was attended by over 200 tech executives in the area. The discussion revolved around technology trends, business model implications, and funding software companies. There was a lot of discussion on open-source and software as service (SaaS) models destroying the lucrative, traditional perpetual license models. I was really surprised by how much discussion we had on Ruby On Rails (and I didn’t even have to start it!), both among the panelists and the audience. It’s nice to know that ROR is hot in this area flooded with defense contractors.
Here are some of my thoughts I prepared for the meeting:
Three Software Trends
Cheap, easy-to-use consumer software will continue to make in-roads into the business world. Google Apps in the enterprise will fundamentally change the way we collaborate inside the companies as well as personal life (e.g. Gmail, Calendar, GChat, Apps, Sites, etc)
Building applications on top of open platforms with existing user bases will continue (e.g. iPhone Apps, OpenSocial, Facebook apps, Linkedin). Innovation and the killer apps come from the development community rather than the platform companies. It’s still hard to make money on these platforms.
Software as Service is finally taking off (Salesforce, Google Apps, Basecamp, …). Even small companies can buy enterprise software.
Commoditization & Business Models
Commoditization is inevitable. Companies will need to aggressively focus on customer value and innovate more rapidly.
Software as Service is finally taking off (Salesforce, Google Apps, Basecamp, …). Even small companies like us can buy enterprise software like SalesForce.
The freemium model is also popular on the web. You attract the users with the free version and then upsell them through value-added features.
Servicing open-source apps is great way for new companies to compete with the large companies. Even using this approach you need lot of energy to promote the technology, build a multi-vendor eco-system, and convert the leads into sales.
Fate of big software companies (Microsoft, Oracle and SAP, etc) in 10 years:
Ten years is a long time in software business. Probably a couple of players will be still very strong. Probably 25% will fail. The remaining players will not be so dominant. They will continue to survive through acquisition of innovative companies. New leaders will emerge. Second comings like Apple are going to be rare.
Advice to new startups:
Don’t under-estimate the need for marketing and sales. After your initial beta launch, the interest will wane. You have to promote the product pretty heavily to get the traction you wanted. It will take time to succeed. Ideas are cheap and execution is hard.
Find a business partner. Start-ups can be a roller coaster ride, it helps to have someone to brainstorm ideas and to share the ups and downs.
I think entrepreneurship is the best way to compete in the global marketplace.