“The Matrix is the World that has been pulled over your eyes to blind you from the truth” – Morpheus
We at Culta love studying and revealing the brainwashing we meet everywhere in our daily lives. One day we were looking at our software prices and wondering why software sold to companies is so disproportionally more expensive than other software and if everything we have been led to believe about it is actually a well constructed lie…
Taking a closer look at how the software market is set up, you can see that over the last fifty years, a “syndicate” of the largest software companies in the world (names we all know well), have worked tirelessly to construct a business model where the customers pay them billions of dollars but receive very little in return – except frustration and promises. The fabricated reality is so successful that customers of these companies rest easy believing two things to be true:
1. the products and services they receive from these firms are actually helping their businesses
2. because they themselves are large businesses, they have no options but to buy from these legacy companies.
If you are a representant of a large company and have never thought about this before, we understand – that is what they want. Now, take a step back and ask yourself some questions about “enterprise” software:
- Why do legacy “enterprise” solutions cost so much to buy and operate?
- Why are they so time consuming and costly to implement?
- Why are they so hard to use?
- Why does the cost of everything else in technology seem to be coming down, but the cost of these “solutions” continues to rise?
Isn’t technology supposed to be getting faster, more powerful, and more useful?
We have good news and bad news. Let’s start with the bad news.
If you are a big company, you are led to believe that you need BIG technology and you are stuck in a well designed, vicious cycle. You are a big business so you set big budgets for “enterprise” technology and you have been setting and spending those big budgets with the same companies for decades. Everyone you trust; your advisors, other large companies and the technology firms you rely on, tell you that you need to do things this way…..because your challenges are big. The software companies oblige you and provide estimated costs that are equally big. Because this is the way it has always been, and the alternatives do not seem to exist, you give them the money. The cycle is complete. There is only one problem: this cycle is a lie.
Go a bit deeper and look at what you really get for all that BIG-ness?
- First you pay hundreds of thousands or even millions for the license to use the software
- Then your software vendor introduces you to their consulting partners. You pay those consultants to scope the project
- Then an army of additional consultants starts to re-engineer your business to meet the requirements of your new software.
- Then you pay the consulting firms to “implement” the software you just purchased.
- Then you pay to hundreds of thousands more to integrate your new software with your existing company software infrastructure.
- Then you pay the consultants to test the software to make sure it works,
- Then more consultants make sure everyone is trained
- Then finally you get to use your new “solution”, but all you hear are people complaining about how slow, cumbersome, frustrating and demoralizing it is.
- Then you get a invoice from your software vendor to “maintain & support” your new technology.
- And when your business changes or needs to do something new, you have to bring back the same consultants and pay them more money to make the required changes.
- Then, the software company you just paid a ton of money to make their software better for you – you have to pay them again to get those “upgrades”
- If you don’t pay them for those enhancements your software becomes “un-supported” and you are on your own.
Sounds familiar? You’re not alone. This business model has been in play for decades and everyone has become so used to it that we don’t see it as crazy as it is. The software firms get away with this because five of them represent 93% of the global software market. Better stated, they ARE the global software market, so they have been able to dictate how it works.
These companies and their friends the big consulting firms, have convinced everyone that big equals complicated. That in order to satisfy the needs of large companies, large, complex technology is required.
Simply put – enterprise customers just believe they need “enterprise” solutions to run their businesses, so they don’t really look at alternatives, or spend much time thinking about how drastically technology has transformed over the last few years. Moreover, everyone involved in this syndicate is so dependent on this model continuing that nobody wants to tell the truth or see it end. Whether by conscious choice or blissful ignorance, large companies allow the cycle to continue.
You have got the money, you are willing to spend it to solve your challenges. Everyone from your board to your executive staff would laugh at the suggestion that you could run a billion dollar business on a thousand dollar solutions so it is safer and easier to keep doing what you’ve always done because like in the old saying – “No one ever got fired for buying IBM”
The enterprise charade is so well designed that even after you have spent millions of dollars and countless hours, when everything is outdated and nothing works, instead of stopping the madness, we have been conditioned to invest more into “tweaking” what was already been built.
Also, a very interesting phenomenon exists in “enterprise” solutions. It seems that the more money companies spend on these solutions, the more they are willing to tolerate poor performance.
“Everything will be fine, we’ll sort it out. Go back to sleep,” they whisper.
The good news is that you do have choice.
“YOU TAKE THE BLUE PILL, THE STORY ENDS AND YOU WAKE UP IN YOUR BED AND BELIEVE WHATEVER YOU WANT TO BELIEVE. YOU TAKE THE RED PILL, YOU STAY IN WONDERLAND AND I SHOW YOU HOW DEEP THE RABBIT HOLE GOES”
The revolution has already started. Over the past couple of years a change has started to take place within large businesses. Employees have started asking why the software they use at work doesn’t look and function like the software they use at home. Why isn’t the accounting system as easy to use as Facebook? Why is their inventory management system not as friendly as Instagram? Why is their ecommerce software not as easy as Pinterest?
In addition to questions like these, there are mega-trends reshaping the technology landscape in ways no one could have imagined even five years ago. The consumerization of the enterprise, the destruction of the CIO’s office, and the transition from on-premise to SaaS are all colliding to offer large companies staggering capabilities without the ridiculous costs, time-frames and PITA factors of legacy solutions.
The Enterprise grade software has been “consumerized” and large enterprises can now deploy powerful, friendly, user-driven solutions that actually help people do their jobs better. Unlike their forefathers, today’s enterprise software is made for the people, not for IT.
The past few years have seen a shift and soon the CIO’s office can be going the way of the dinosaur. Harvard Business Review predicts that by 2017 marketing will be spending more on technology than the CIO. Technology has transformed to be a service to the business, not the other way around.
The Rise of Software-as-a-Service (SaaS) – A new generation of enterprise-grade software platforms has emerged and is disrupting how large companies do business. Faster, more scalable, more reliable and at a fraction of the cost, these next-generation platforms are re-writing the decades old enterprise playbook.
Been spending a ton of money on infrastructure, servers and manpower just to keep your systems online? Worried about infrastructure failing and taking your business offline, or worse being hacked and having to explain it to the world?
Things have changed.
Large companies are refocusing their resources on their core competencies, instead of IT. Companies no longer need the expertise, budgets and challenges associated with managing huge IT infrastructure. Software as a Service (SaaS) has come of age, proven it can be more scalable, more reliable and more secure than any of the legacy vendors we’ve been handcuffed to for decades.
Gone are the days of maintenance contracts, upgrade cycles and 1000 day implementation projects. Today’s enterprise grade applications install in weeks, are updated with the latest and greatest features in real-time and many are based on simple, month-to-month contracts.
Large customers are starting to experience what happens when technology gets out of the way.
Some of the things here can be hard to hear, or even believe. If you have been spending millions on your software for years, it’s hard to think that it may not have been necessary to do so. And I’m 100% sure the syndicate will fight back against me. They will call in their supporters, those who need this flawed business model to continue. They will rage, but they will not succeed because soon these software companies just cannot explain the existence of all the innovative enterprise companies who are thriving without them. They cannot explain why they are not innovating themselves, and they can’t keep their customers from finding out the truth any longer. It’s been a great 50 year run, but their time is almost over.
So a question to you who run large companies and are looking to innovate and lead: Do you want to go back to sleep, or would you like to wake up?