allensblog

Enterprise Software Today

Thoughts on Enterprise Software

For at least the last few years (one could argue: ever since the Y2K scare ended) the “traditional” enterprise application market has been distressed. Most of the big areas of “application white space” have been covered, the vendor/systems integrator/customer relationship has become strained, applications were bloated and too difficult to install. And, oh by the way, once they were installed, users didn’t like to use them because of, among other things, the rigid workflow they required – always different than the workflow that users had previously used.

Yet, despite this, the enterprise applications market is huge. With a new investment we just made, JotSpot (www.jotspot.com) we’re trying to address the need that enterprises (of all shapes and sizes) have for easy to write, lightweight and flexible enterprise applications that knowledge workers in enterprises will actually use to increase their productivity. JotSpot is building apps using a wiki on top of (one of several) databases. This has a number of advantages over traditional enterprise apps and over most of the existing open source wikis (some of which are quite good, but most of which require more “programming” skill than the broad base of enterprise users will ever acquire.

Other areas that are interesting in the enterprise space are security, where there are still too many “point” solutions and inadequate management tools. A couple of companies we’ve invested in Determina (www.determina.com) and Elemental (www.elementalsecurity.com) fit into this “white space”, with, respectively, a powerful host-based security offering and an easy to deploy and use security policy management set of applications.

Other interesting areas we’ve explored include the enterprise messaging marketplace with our investment in Scalix (www.scalix.com). Many enterprises (and other educational and governmental organizations) are seriously considering moving their “rich messaging” (email, shared calendars, contact management, tasks, etc.) infrastructure to Linux. Based on the proven OpenMail technology, but with man-years of improvement and thin-client development, Scalix offers an alternative to messaging infrastructures that require Windows or UNIX to run. Interesting TCO and flexibility benefits to the customer, as well as the benefits of Linux (no lock-in, etc.).

You’d think that, given the history of software development (and the importance of software to the world today); more would have been done to improve the software build process. But anyone in the software development world (certainly the non-java world) can still vouch for the slow, nightly heartbeat of the build. One of the companies we’ve invested in, Electric Cloud (www.electric-cloud.com) is addressing this by massively parallelizing the build process. This achieves significant speed ups in build times, but also offers improved build management tools in future releases.

So, there is still opportunity for entrepreneurs in the enterprise applications space, with the right approach. In particular, building enterprise apps on top of some of the newer web-centric concepts such as blogs, RSS feeds and social networking (social mapping) hold some interesting promise.

If you’ve got an interesting idea for a new company in this space, let me know.

Opportunities in Online Tools

To state the blindingly obvious, almost all of us are “living” more and more of our lives online – dating, job hunting, house-, and apartment-hunting, getting news and entertainment, and, of course, buying, well, nearly everything….and blogging, of course.

Of course, there are lots of reasons why, but I think several reasons stand out:

• Good Internet Search: Google and Overture have made internet search useful and usable, and other efforts (e.g., A9, and Microsoft’s efforts among them) should, because competition is always good for consumers/users, continue this trend;

• “Pervasive”, always-on broadband internet connectivity:

o I don’t have the data, but I believe that most Americans have daily broadband/always-on internet access, if you combine access available to them at school, at work and at home

o BTW, I’ve always felt that “always-on” was more important than “broadband” – I’d rather have an always-on 56K modem connection than a broadband connection that you had to “dial-up” and for which you paid by the minute.

• Mass Consumer “Training”: I’m sort of joking (but not entirely), but thanks in some measure to the strikeouts by the venture capital industry, we all have had a multi-billion-dollar, 7-year training course in learning to “live” on the internet (a/k/a: the funding by VC’s of probably billions dollars of failed, “ahead-of-their time” dotcom startups).

o More thoughts in a subsequent posting, but many Web 1.0 ideas that failed in 1998-2000, were nevertheless great ideas, and are worthy of renewed VC interest – for the three reasons described above.

Interestingly, with all this increasing time and energy spent online, the main tools we use to “live” online – email and the browser – have not been significantly innovated since they both became owned by a monopolistic software company. No surprise here, of course, since industries of all types rarely innovate when controlled by a monopolist (innovation, after all, is risky and expensive).

I think this creates a “white space” of opportunity for entrepreneurs: the gap between (1) the steep, “up-to-the-right” curve representing what people want to do online, and (2) the virtually flat curve representing the lack of innovation in the main tools available to people online. At Mayfield, we’re spending a lot of time looking for investment opportunities in this area.

Also interestingly, the most exciting attempts, until recently, to innovate in this area have not been by either big software companies or even by smaller, venture-backed startups, but instead by “amateurs” (who were often awesome, even famous, programmers) and by open-source enthusiasts:

• Wikis, developed originally by Ward Cunningham in 1995;

• Blogs, which don’t seem to have a single or small, easily identifiable group of inventors, but which were initially used and subsequently popularized by a number of folks involved in the open-source community; and

• RSS feeds, whose origins go back to efforts in 1995 by Guha, then continuing to be co-developed by Tim Bray, Dan Libby and others (if you think metaphorically enough, this idea was first launched, sort of, by a Company called Pointcast); and

• Social-mapping (or “social networking”) technologies, which relate back at least to the early-to-mid nineties.

There are many other efforts now afoot, both at large software companies as well as venture-backed startups, to build new tools (many based on wikis, blogs or around RSS feeds) to enable people to do more interesting stuff online, to use information online in more and more useful ways (work, home and play). This is a very promising area for entrepreneurs, especially as web services increasingly make the web a robust application platform.

At Mayfeld, we’re actively pursuing investment opportunities in this area. Among our current portfolio companies innovating in this general area are:

• JotSpot (www.jot.com)
• Pluck (www.pluck.com)
• Scalix (www.scalix.com)
• Tribe (www.tribe.net)

Check them out, and let me know if you have a great, new idea for a company in this area.