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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Not sure what the intent was here, but the article was somewhat undermined by a lack of clarity.
What you appeared to be suggesting was that technology vendors should abandon serving their enterprise customers and focus on consumers instead, I’m not sure its possible to install SAP HANA on an iPad or is it?
10 out of 10 for your observation on cloud, a model that you actually could attribute to Apple, thus a way businesses can cost-effectively extending their Enterprise IT functions, thus the reason for its phenomenal growth and Microsoft don’t appear to be doing too badly here either.
It’s also a shame you didn’t actually read the article you linked to the IBM-Apple partnership, if you had you’d probably have noticed this is about bringing Apple to the Enterprise and IBM furthering it’s Big Data & Analytics ambitions, note that IBM have also inked a partnership deal with Twitter.
As for Microsoft I’d hesitate in writing them off just yet, bare in mind that this is a company that have already successfully crossed the business/consumer divide and with what they’ve announced with Windows 10 could potentially turn the tide once again.
Fundamentally, when it comes to Information Technology, Enterprise IT departments are consumers too!
1. Enterprise IT now comes last when startups are being funded.
2. Incumbent IT vendors are putting their money and resources into consumer markets to drive growth. IBM partnering with Apple is good for IBM but Apple couldn’t give a hoot about Enterprise for a few more years.
3. IBM is shrinking fast. Although it can & will survive like Microsoft, these companies will extract value from slow-moving mature markets.
*Scratches head at virtual whiteboard*
Okay!
1. So if I’m interpreting this correctly, its not the vendors that should be abandoning Enterprise IT, its the corporate IT staff members themselves who should be abandoning their posts and developing mobile consumer apps because VCs will throw money at them??
I like the way you’ve rolled career and financial advice into one, though personally I’d have thought it a lot easier to suggest using some of your savings to buy Apple shares, LOL!
2. If Apple couldn’t give a ‘hoot’ about the Enterprise then there would’ve been no need for them to ink a deal with IBM, it’s an Enterprise Mobility play, each has pieces that the other hasn’t and their strategies do not conflict.
3. There isn’t a so-called incumbent vendor in the industry today that isn’t having to transform their business in one way or another, but this doesn’t mean they’ll will be disappearing any time soon and even if we do see a major casualty during this transition, IBM or Microsoft won’t be one of them. 😉
Being a part of an enterprise, I already knew this and have had to come to terms with it. But you’ve really articulated it well and shown good examples to back up your opinion/statements.