Enterprise software makers have tried to blend social tools and consumer technology for at least a decade. It's been a slow process, but by 2020 the biggest names in business software will likely be well-known consumer brands, instead of the stalwarts that dominated the market for decades, according to Aaron Levie, CEO of cloud storage service Box.
Outsiders are redefining the future of workplace collaboration, and some of these companies, including Facebook, are focused on specific tools or technologies instead of platforms that try to serve every business need. The one-vendor-for-all-things-enterprise approach has no place in today's business landscape, Levie says.
"When you have providers of technology that focus on a specific area and build a best-of-breed technology, we just know empirically that customers get more innovation from that provider than a company that sort of has a 'Swiss Army Knife' where they put everything together into a gigantic portfolio or suite," he says. Vendors that offer a selection of tools "don't focus on the innovation of every individual product, because their value proposition is the collection of tools that makes the whole system useful and powerful."
Businesses want specialized tools from different vendors
Enterprise software underwent a "decoupling of capabilities and technologies" during the past decade, according to Levie. Many modern businesses buy applications for HR, CRM, productivity, collaboration and IT management from individual firms that specialize in those fields. Having one vendor provide multiple tools often "leads to inferior versions" of those products, Levie says.
"Customers get way more innovation because of choice, and that choice drives the need to have our technology be able to work together," he says. "We're entering an era of enterprise software where I want to be able to mix and match my tools from a set of vendors that might be five, 10, 20 different applications that I want to work together seamlessly."
Facebook is taking a partner-centric approach to its first foray into the enterprise with "Workplace," its new social productivity app for business. For example, a group of partners companies that has already earned the trust of IT leaders provides the specialized tools and services in Workplace, such as file storage, document management and secure identities, according to Sean Ryan, Facebook's vice president of partnerships.
Business collaboration: Integration over consolidation
Other consumer giants, including Apple, also aim to deepen their ties in the enterprise by riding the strengths of established vendors. Since 2014, Apple inked deals with IBM, Cisco, SAP and Deloitte. Google, which has sold software to businesses for almost a decade, relies on partners to a lesser degree, because its G Suite of apps is more comprehensive, with tools for messaging, email, calendar, contacts, office software and storage.
Aaron Gette, CIO of Bay Club, a lifestyle and fitness company, says ease of integration with current systems is an important factor when choosing new collaboration tools. "Legacy will always count for something … when making the decision to implement a large-scale platform that will drive revenues and lift the business beyond expectations of the operations, sales and marketing folks who have to use these tools on a daily basis," he says. "Bringing our work and personal experiences into a single focus makes sense as Facebook and Google amass data that can be served back to workers in a more meaningful and engaging manner."
Google is now more trusted in enterprise, but it and Facebook suffer from a similar reliance on advertising for revenue, according to Gette. He says Facebook has a steeper hill to climb in that regard but adds it may also benefit from better behavioral data than Google. "Collecting data on your customers and understanding their behavior better than your competition is going to be crucial to the success of your business," Gette says.
This new era of enterprise software, driven by consumer giants such as Amazon, Apple, Facebook and Google, creates a new era of work, according to Box's Levie. Despite a growing number of providers at the fringes of enterprise collaboration, Levie doesn't think there's much room for consolidation. "We're now in an era where the tools are going to start to integrate with one another, so it's far less about consolidation and far more about integration at this point."
This story, "Future of collaboration software all about integration — not consolidation" was originally published by CIO.