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Productivity Suites Are Eating Enterprise Software. What's Next?

As a whole, enterprise apps are typically hard to use. They're rolled out generically company-wide and suffer low adoption rates. While it's not a secret that users dislike enterprise software, it took a decade of using really awesome consumer apps, and a new generation entering the workforce, to help us realize what was wrong.

Millennials make up the largest generation in the U.S. workforce, and what they’ve become accustomed to in their personal lives is slowly becoming part of their expectation at work. Today’s consumer expectations, coupled with millennials' need for productivity and on-demand experiences, are contributing factors that are changing how today’s software companies and IT teams approach the enterprise.

These changes didn’t happen overnight, and many critical enterprise apps are still clunky, outdated and confusing to users. Some, however, like Gmail, Asana, Slack and Nextcloud, are paving the way and proving that there is still hope. To evaluate where we are today in terms of progress, it’s important to look at when this shift started taking place, as well as some of the major players that ushered these changes into the enterprise.

In the late 1980s, it was common to have a separate computer for every task in the workplace. Departments remained separate, with little room to collaborate digitally. In the 1990s, companies like Siebel brought business apps to the user’s desktop. With the rise of Salesforce and SaaS in the 2000s, business apps could be delivered to users in the browser, on any computer. This allowed core business apps to be accessible to anyone, from anywhere and allowed teams to share a single configuration and a single set of data. It was progress, but still not enough to shift users’ opinions of enterprise software.

It wasn’t until the late 2000s that we began to see a real distinction between consumer and enterprise apps. We can attribute this to the iPhone, Apple's app store and the subsequent mobile revolution. Soon after the iPhone was released, consumer expectations skyrocketed. Apps had a specific purpose, there were no instruction manuals necessary, and they were connected to your phone, your contact list, your photos, your email and your social network automatically. The experience of downloading an app and using it in minutes became so commonplace for consumers that we hardly even stop to think about it when it happens today.

Google caught this trend early with Gmail and Google Calendar and adapted all of that learning to its business-life-changing productivity suite, G Suite. Google shifted the center of power directly to the end user, creating an optimal productivity suite that was shareable, intuitive and only required one login. Today’s workforce was raised on this simplicity with Google, from elementary school through college, and it has shaped their demands in a radically different way than generations before.

The success of Google’s approach to business apps is hard to overstate. If you’re a knowledge worker on Gmail, Google Calendar and G Suite, you may spend 60% to 80% of your day working inside of the productivity suite. The center of gravity, where work gets done, has shifted here. Because of this, modern enterprise software has begun to build directly into the productivity suite.

If you are building enterprise software right now, and you are not starting from the user’s experience inside the productivity suite, you could be missing a major component of your user’s work life and a shortcut to immediate value and higher user engagement. If you don’t believe me, consider the energy G Suite’s competitors are spending to defend against this trend. Microsoft recently launched its Appsource ecosystem centered around its productivity suite, Office 365. Or take a look at Salesforce’s $750 million acquisition of Quip, a productivity suite it purchased to upgrade its productivity chops.

There's another shift happening in enterprise software that is helping to cement the productivity-centered future. In the past, the people making purchasing decisions within a company or handling the rollout of a new app were not also the day-to-day end-user. That has changed. Business apps like Dropbox, Slack and other apps with freemium models are changing the expectations of users and buyers. People expect to try, buy and deploy an app in a few minutes or less, and without contacting IT. The purchasing decision itself is shifting to a bottom-up model, allowing the users to be fully in control.

In the world of productivity-centered apps, this means that you can find and try business apps in minutes, right from your email client, spreadsheet tool or calendar. The apps are automatically connected to your business identity, email, documents and more. Business users can try and use apps the same way they do on their phones in their consumer lives. Software purchases can start with one user and expand to teams or even grow company-wide, and they can be deployed directly within the productivity suite that's already in the hands of every user in the company. I believe the impact here is huge.

While the big guys will make the case that they are secure, some privacy-minded organizations are not so sure.

This was highlighted recently in Germany when government officials said they are moving away from third-party platforms for its 300,000 workers who collaborate over multiple devices. Instead, the federal IT agency will be using Nextcloud, an open-source, internally hosted tool produced by a German company of the same name.

Once companies choose to adopt decentralized cloud tools, there’s still the question of where to host them. While many large organizations naturally install them in their own data centers, others choose to host them on cloud-based servers. The Amazon Web Services Marketplace even contains multiple ready-to-go server images preloaded with everything that’s needed to run Nextcloud.

Running high-level private cloud services on top of centralized cloud servers may not be the contradiction it seems. Many companies have come to trust cloud providers like AWS, Upcloud, DO to build stable and secure infrastructure, and without the right economies of scale, it can be difficult for self-managed servers to compete on price.

Some companies even choose to outsource managing decentralized cloud tools entirely. They can still shop and potentially port data between multiple providers based on costs, service guarantees, and other factors.

The main difference is that there is not only one service provider, but we have several. You have the freedom and flexibility to pick and choose. Price Advantage
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