Photo: Flickr / Joi
Enterpreneur turned Google Ventures investor Kevin Rose just said a surprising thing: He sees enterprise software as a hot spot for venture capital and startups.It’s one of the trends for 2012, he said.
“Enterprise is getting sexy,” he said. He’s looking for startups coming up with “well-designed, not-corporate-yet-corporate apps,” he said.
He’s seeing a big opportunity for startups that are tring to “make software for the Fortune 500 a cool and fun thing rather than the old, stodgy software most enterprises have to deal with,” he said.
This surprises us because Rose is most famous for Digg, a consumer website for sharing links to interesting news stories.
We’ve heard this before from consumer app geniuses. Facebook cofounder Dustin Moskovitz and his business partner, Justin Rosenstein, said much the same thing to Business Insider. Their startup, Asana, is trying to replace boring, ugly email with a collaborative project-management tool.
If this holds true, two things will happen.This new crop of startups are going to become the next Microsoft, Oracle, or SAP … and traditional companies will be pressured into making their software more beautiful and easier to use.
Rosenstein echoed that sentiment in a panel at the TechCrunch Disrupt conference.
Top executives of some of the hottest enterprise startups—Box, Cloudera, and Okta, as well as Rosenstein of Asana—explained why enterprise startups are killing it now and what it means for traditional vendors.
It’s all in the DNA, they agreed.
“Trandtional vendors they all trying to make this transition,” said Box CEO Aaron Levie. But they are doing so “at a much higher cost basis” than a startup. They’ve already got huge investments in their software development processes, sales channels, and so on. “They have to work in a world of freemium, and virality, and end user design.”
A startup “can give people the exact same experience in the consumer experience,” Levie said. He compared that “style” and “speed” to the traditional software development cycle where companies have engineers “spending years on a development before it ever goes live.”
On top of that, enterprise comapnies can try before they buy, easily, often for free. That’s very different than spending months investigating software, taking a year to roll it out, and spending more time to get employees to use it, said Cloudera COO Kirk Dunn.
“That gives startups an unfair advantage to move into this new world,” says Levie. “It’s unfair by design.”
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