During an enterprise-focused panel at TechCrunch Disrupt today, Box co-founder Aaron Levie noted how startups have “an unfair advantage” over the incumbents in the enterprise world today. In his view, the enterprise market isn’t just getting “sexy” today, but it’s actually now a very attractive market for startups. The traditional enterprise vendors, after all, are accustomed to slow innovation cycles that’s just not sustainable now that so many consumer trends have infiltrated the enterprise.
Startups, too, don’t have to go through the usual sales channels that the incumbents in the enterprise world are used to. Instead, said Levie, the incumbents now face startups that are web-native and often use a freemium model, which makes it very easy for a company to just trial a new product (Levie also recounted an anecdote from visiting a bank earlier this month that was still using Sharepoint 2007). Instead of having to wine and dine a CIO, these startups can simply make inroads into a company by letting them test their product for free.
These changes, together with the trend towards mobile, have “exploded the size of the market for these companies.” Now, there are also billions of new knowledge workers who can access these technologies thanks to mobile and employees who weren’t traditionally considered knowledge workers (like store employees, field-service teams etc.) now have access to enterprise technologies.
In addition, he pointed out, the fact that the new mobile enterprise world is very heterogeneous means that businesses can’t just go to Microsoft to get their issues fixed if their workforce mostly uses devices from other vendors.
For incumbent enterprise companies, the transition to these new business models is very cost intensive, Levie stressed. They are buying their way into it by acquiring startups, but there is still lots of room for disruption here.