Big Software has given up on developing The Next Big Thing

So, SAP is not delivering on innovation, says the excellent enterprise software analyst Ray Wang. Sadly, I gave up expecting much in the way of innovation from big companies several years ago.

Frankly, it's no longer considered the done thing.Once they get to a certain size, enterprise software companies tend only to innovate when it comes to licensing Ts and Cs and the fine art of milking locked-in users.

Why? It's too pricey to hammer away at speculative R&D and much more cost-effective to buy up small companies that do innovate. The big companies have vast resources and can pick off hot technologies once they have established value by deploying M&A experts that operate like hawks chasing field mice. Just as big Premiership football clubs tend not to bring through their own players any longer, the big software outfits can afford to be lazy about what comes next.

When was the last time Microsoft, IBM, Oracle or any of the other gazillion-dollar enterprise software giants did something game changing with their core B2B products. I'm honestly struggling to think of any unless you go way back. Windows NT? Windows 95? SharePoint? Multi-platform DB2? Oracle RAC?

All of this is not to say that there aren't legions of extremely bright people working hard to make products more secure, usable, scalable and other good things -- just that the business of changing the software world is in the hands of the young and hungry.

And even when a remarkable phenomenon occurs, the big companies will often fight it rather than join in. Look at software as a service. Big Software plays it down, FUDs the hell out of the media and analysts, dances around it or comes up with hybrid responses that protect their revenue streams. It's understandable: the public markets aren't going to like companies that swap heaps of upfront recongised revenue for ongoing trickles of subsription tariffs.

I have enormous admiration for these giants but the odds are stacked against them coming up with the Next Big Thing in business software.

Comments