With rapid developments in Social Media, Gamification, Cloud, Enterprise software, Big Data and Analytics I feel awful to stay away from the blog for over a month and not share my thoughts, although it’s not like I have a 1,000 followers who hold their breath in anticipation to read my blog 😉 Recent business-as-usual and business-as-unusual events kept me preoccupied and I kept pushing writing the next post for ‘later. However a certain event (no, not my master thesis kick-off) got me excited to write again!
Last week while I was returning from Amsterdam to Delft after facilitating a YES+ workshop (the participants decided to support an existing service project and create a new social project specific to the Netherlands), I met a very interesting girl on the train and we got into a discussion on technology in today’s world!
I couldn’t help but shrug my shoulders, shake my head and prepare myself to say why I think not. Undoubtedly the technology landscape has changed in the last decade. Why decade, even about 5-7 years ago. I wholeheartedly agree there are highly innovative companies and the market has significantly shifted in this time frame. We have all heard Bill Gates (back in 1999), Steve Jobs, Larry Ellison and several other CEO’s say ‘We’ve moved from the PC age towards Mobile and Tablets’. It would not be incorrect either to agree that Oracle, SAP and Microsoft are playing catch-up.
Honestly, they all missed the plot. How they managed that, I dunno – it probably takes immense talent to mess up so much 😉 Compounded to every other obstacle in Microsoft, Oracle and SAP’s path today is the ‘perception in the public eye’. Yet I disagree that their days are numbered.
It is naïve to say ‘dinosaurs’ can’t be vanquished. It’s also perhaps inappropriate to say the ‘old-guard’ are so pervasive that you’re not going to bring them down. Yet you cannot disregard the immense cash reserves they continue to sit on. I’m no visionary to tell you where I see the industry in the next 5-7 years, cause I don’t know. 2 years ago, Big Data in my opinion, was part of the hype-cycle. 5 years ago, Facebook, I believed would be used just to connect with friends. In 2007 I thought Twitter would be used only at events not in daily life – I write this at the risk of a recruiter reading my blog and re-considering my job offer 😉 But what I do anticipate is that these companies will not just survive the next few years but become stronger than before.
Look at the market – they’re making immense revenues in the ‘disruptive’ segments. We saw at the end of the 90’s consolidation in the industry after a few years of massive change. I believe we’re seeing that all over again. You can talk about ‘Cloud’, ‘Big Data’, ‘Social’ as much as you want – we’re going to see recurring company names being associated to them. And these will be a handful. In each of these segments we already see convergence. In a manner of speaking – Microsoft, Oracle, SAP, Apple, Google, Amazon are basically the big 6 who ‘own’ the market. Salesforce.com still has time to get there but they are contenders especially since they are growing outside the CRM-forte. I think we’re still going to see 4 or 5 companies dominate and eat most of the market share while the rest….. The next few years will be interesting to watch Microsoft, Oracle & SAP. The process of consolidation and tune into the new business model will be the key. The rise of Google and Apple is something the world is anyway looking at. The very breadth (horizontal) and depth (vertical dominance) they have is ‘scary’. As much as I’d love to, I doubt we will see a start-up scale up both, horizontally as well as vertically, so quickly and so thoroughly. This is why the smaller companies will make their presence felt but not cause Microsoft, Oracle and SAP to a spectacular collapse. Many might label me ‘old-school’ and ‘delusional’ but I doubt you will get past the enterprise landscape without a mention of either of these three. I am not a man who goes by stock prices. If anything I believe over the last 10 years the most stable stocks have been Microsoft, SAP and Oracle. It shows the robustness of the company despite it not fetching you big and quick money. The fact is that they are global. The fact remains, that despite them having tens of thousands of clients, it is a few thousand companies that are really core to their sustenance (lest we forget the fortune 500) and that they are all tightly entrenched with products from these three companies. We will see them survive and win this war.
I believe this is key – we live today in an ecosystem, a highly networked and interdependent market. We are talking of a world where Oracle is fighting with Google, who is fighting with Apple, who has problems with Microsoft, who competes with SAP. And yet, they spend billions making products compatible to each other and co-develop products.
History is already repeating itself. Salesforce.com has not become ‘cheaper’ as they grow. Google has streamlined its product portfolio. Apple is being incremental in its innovation and bringing down costs. SAP has made massive acquisitions. Companies will need to adapt. Inevitably when it comes down to pricing wars Microsoft, Oracle and SAP will have the advantage. They are innovating, they are playing hard (read ‘patents’) and investing in more areas to give maximum ‘value’ – which will make sure they do not fail. Microsoft will not lead the market like they did in the 90’s but their presence will be felt everywhere and with that, take a good chunk of the market share.
That is as much as we could cover in our train journey! I found this quote while writing the blog –
“History does not repeat itself, but it does rhyme” – Mark Twain
She was, at best, halfheartedly convinced. Only time will tell us if we see the demise of Microsoft, Oracle and SAP but until then we have very exciting days ahead, whatever the outcome! The debate shall undoubtedly continue…..