There was a time when Enterprise IT defined the future of computing. Laptops were designed for corporate consumption first and the best software was sold to enterprise for business use. The other markets for computers was “home users” who were offered cheap, low quality and low performance versions of corporate computers. IT was critical to the success of a company and spending on IT increased for many years. Productivity gains during those years were enormous – accounting staff dropped by 80% or more as computers replaced manual accounting.
But for the last 5 years, corporate IT spending has become a slow growing market with Gartner surveys placing growth of just 2-3%. Compare this with 30% or more growth in consumer while Cloud is growing at 80% or more.
A couple of weeks ago, Apple announced that its app store grossed more than $10 Billion in sales, sales of smartphones are measured in billions of units. For those who don’t want Apple’s iOS there are Android phones and its ecosystem. And tablets, or home appliances like Amazon Fire and Apple TV ….. etc etc etc.
As an example of the disruption, this graph from Ben Evans show how far Microsoft has fallen in the five years when the total market is considered:
The fundamental point is that Enterprise IT doesn’t get new technology first.
The growth market is Consumer first, Cloud second and then slow-moving, risk-shy, service-heavy Enterprises. When companies start new products, they don’t target the Enterprise anymore. That’s why IBM setup a partnership with Apple to attempt to grab some part of a market that is actually growing.
Innovation doesn’t happen in the Enterprise anymore. Apple iPhones have very few enterprise features because its not a big enough market. The majority of startups are working on consumer apps and hardware (Instagram, Snapchat, Nest etc) because that is the biggest market.
I wonder how many people who work in the Enterprise have actually realised that they work in a legacy, slow moving market that gets second best technology that is handed down from the consumer and cloud markets ?
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