business software is alive and well…at least in medium and longer term!

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I just picked up this note questioning if enterprise software is failing. My medium- to long-term perspective is that:

– 150 years ago, most people were working in agriculture, but productivity increasing machines, biochemistry, and production methods reduced this number down to single digit percentages in the more developed countries.

– The productivity improvements in agriculture and the industrial revolution moved people to factories where just 50-75 years ago, a very large percentage of the population worked. Again, productivity increasing automation and production methods reduced this number down greatly.

– At this point in our evolution, most people work in offices… even in manufacturing companies a large portion of the jobs are “information worker” or “office worker.” Software powering companies, the Internet, and cloud computing environments, and devices is the productivity engine that is going to keep chipping away at the waste in the office jobs.

Business software and software in general has been evolving for the last 50 years and has an extremely long run to go before it does to the information environments what productivity enhancements have done for agriculture and manufacturing. At this point, the industry has done a relatively good job with things like payment systems, transactions, and to some extent simple search and simple network building simple communications and some basic information worker functions (like creating spreadsheets and documents), but even these technologies are only at their infancy from a “what is possible” perspective.

Software has gone through many transformations in the last 50 years, and I suspect it will continue going through rapid advancements for at least the next 50 years (so long as there continues to be great competitors and great competition)…there will probably be many periods of rapid growth and many periods of lower growth as the industry evolves.

At this point, the industry is working on mobile platforms, cloud computing platforms, hardware and IT efficiency (e.g., virtualization), anything as a service (XAAS), user experience improvements, and simple business “intelligence”, and many other initiatives. There is a long way to go with these and, as they develop and fade from the focus the next wave of platforms and software will take the focus.

From a much more narrow perspective, as a venture capital investor with business development services (a.k.a., “OpenView Labs”), we spend a lot of time working with our portfolio companies to help them develop their products, go-to-market strategies, teams, and companies. We are always looking for the opportunities to give our portfolio companies an edge and we find that there are a lot of software and Internet products that we are recommending to our portfolio companies to help give them an edge, including software that helps with:

– Product and development methodologies
– Executing content marketing strategies and influence marketing
– Website management
– Demand generation and lead management
– Community management
– Sales contact and process management
– Sales and marketing support
– Recruiting support
– Financial and operational support
– Management team support
– And many more!

The opportunity to build software and Internet companies using advanced software and Internet products has never been stronger and these products work well for all companies, not just software companies. While our portfolio companies may be on the early adopter end of the spectrum with respect to the use of software products, we find that the products add significant value and, therefore, we expect that these products will continue to gain broad adoption in the market.

From a broad perspective and from a narrow perspective we see the same rosy future for software. Net net, I have no worries about either business software or the business of business software …the customers need it and the industry will continue to create it and continue to create new and useful software products for many years to come!