Yesterday morning, I took to Techcrunch to publish some thoughts I’ve been working on for a while now: The Trillion Dollar Market To Remake Business Applications.
In my view, the fundamental key takeaway is in the fourth paragraph:
With the enterprise undergoing many fundamental changes – from the Bring Your Own Device movement of the late 2000’s to the recent explosion in cloud software – one additional trend is now emerging: that enterprise buyers act significantly like consumers when purchasing services.
When I shared the article to my friends on Facebook earlier this evening, I did so with the following context: “How those on demand apps you love so much will soon be taking over your business too!” What I really should have said was as follows: “You know all those on demand apps that are becoming second nature in our personal lives? Your corporate life will very soon look and feel extremely similar.” The reason that “enterprise buyers act like consumers when purchasing services” is because enterprise buyers are consumers. The platforms that can realign the motions we’ve become habituated to in our personal lives for the enterprise are going to win much of the $Trillion opportunity that’s up for grabs. I’m convinced of that.
I wanted to open-source the brief slide deck I put together to cover the emergence of these B2B On Demand services. If you have suggestions for companies or categories to add to my market map, please don’t hesitate to let me know in the comments or via e-mail.
Another nuance I find interesting about this space is the convergence between the Enterprise and SMB in adoption of these tools. Because purchasing within these applications is often authorized by a single mid-level manager (or even an executive assistant in some cases) the user experience is decidedly consumerized. What that means is that unlike a lot of enterprise software, these apps will largely be able to bridge both big firms and small and increase their market opportunity – and will increase their moat around the market because an SMB-focused tool, for example, is less likely to steal share. I think this concept is worthy of a post in its own right and I will try to do the near term.
Jeremy Liew of Lightspeed Venture Partners recently uttered a line I found deeply poignant: “It’s hard to predict the future. It’s easier to be open-minded to what’s present.” B2B On Demand is a trend which should not be ignored. I think given the opportunity size and the number of verticals, it is both massively under-innovated and massively under-funded.
Last, another good read is: The Arrival of On Demand in the Enterprise which was sent to me by Bucky Moore of CostanoaVC (and which preceded my article by 2 weeks). Some very nice thoughts on why they invested in Directly and where they see the space going. I can say that Chicago Ventures and Costanoa see eye to eye on this.
Please don’t hesitate to reach out, and if you’re an entrepreneur building in this space, I’d love to meet you.