The smarter enterprise

Enterprises spend $270 billion on software every year, yet some can’t even calculate the number of employees in their organizations. Shocking? Well, such was the problem for Chiquita before they moved to Workday.  But rudimentary challenges like this plague every enterprise in the world, and every individual within those enterprises. When we need to derive anything beyond the basics from our enterprise software, most corporations are out of luck.

This problem is only getting worse. With 1.8 trillion gigabytes of information projected to be generated and stored this year alone, our enterprise technology is on a collision course to become utterly useless if something doesn’t fundamentally change.  The data being created is obnoxiously large, with IDC citing that “by 2020, IT departments worldwide will need to administer 10 times the number of servers–both virtual and physical–50 times the amount of data, and 75 times more files.”  Our software, infrastructure, and organizations are ill-prepared to manage this scale of data creation, let alone generate anything meaningful or useful with this amount of content being created and shared.

But this is about to change. It has to. The cloud, social capabilities, and a web of integrated applications are on the verge of creating a far more personalized technology experience for tomorrow’s workers, and a world where an increase in data generates an increase in value and knowledge for organizations.

The client-server paradigm and a reverse network effect

The emergence of the personal computer may have transformed the way we work, but the software revolution that followed was anything but personalized. And amazingly, very little has changed for today’s average knowledge worker over the past two decades. The legacy software within today’s enterprises is stale, static and non-contextual. Applications don’t adapt to our behavior, or tell us anything new about our content and projects that we didn’t explicitly tell them. And they certainly have no understanding of our relationships with co-workers, partners, or customers.

It’s not just end users who are suffering. Technology still rooted in the client-server paradigm invariably prevents organizations from deriving real value from their systems.  Generally, any influx of employees or the addition of a geographically disparate team requires new instances of applications and infrastructure. An organization might have SharePoint running in many different data centers throughout the world, making it nearly impossible to efficiently upgrade applications, deploy new servers and perform maintenance at scale. And with application sprawl comes data sprawl, creating a veritable digital landfill of unconsolidated, silo-ed information.  In looking at the fragmentation of SharePoint in large organizations, a leading enterprise content management analyst, Alan Pelz-Sharpe, discovered that “…enterprises can in fact reach a point of negative returns where an inability to manage proliferating SharePoint silos becomes a hidden but serious enterprise management risk.”

Enterprises everywhere are experiencing the opposite of a standard network effect with their information and people. In these sprawled and firewalled environments, an increase in users and data make it more difficult to locate content, make decisions, and gain insights from past actions.  This means more information is creating more complexity – far from the ideal outcome if organizations are about to generate orders of magnitude more information.

The cloud and centralization

Of course, decentralization and fragmentation of data and applications isn’t a new problem by any means. Early last decade, Oracle decided that application and data sprawl were hindering customers’ agility, decision making and cost savings.  Larry Ellison said of the client/server era, “Your information was chopped into tiny pieces, stored in lots of tiny databases, running on lots of tiny PC server computers.  This data fragmentation was accompanied by distributed complexity.”

Not surprisingly, Oracle’s solution to this problem was to have all core applications run on a single Oracle database instance with consistency across its apps. This would have worked marvelously if the world wanted to adopt only Oracle’s software — but that comes at the cost of tying your entire fate to a single vendor’s vision, roadmap and services.  With the emergence and maturity of cloud platforms, there’s now another way.

On-premise applications are inherently limited in that they rarely leverage data beyond what’s immediately available on a local machine, server or narrow data store. The opposite is true with most cloud products that take a centralized approach to storage and computing, and we’re only now starting to tap into their potential.

At Box, our model is store once, extend everywhere — and “everywhere” spans desktops, smartphones, tablets and even other apps. With the cloud, users can get to content and tools from any device, and IT departments are no longer burdened with maintaining and upgrading cumbersome hardware and software. This is making today’s employees more mobile, nimble and productive, and it’s enabling organizations to focus on competitive differentiators rather than systems management and maintenance.

But centralization is only phase one. If the first wave of the cloud is about realizing the efficiencies of moving software to the web, then the second wave is about making this software — and in turn, our organizations — much smarter. Software has tremendous potential to look at lots of pieces of information and make decisions to produce optimal outcomes. Then learn from these results, iterate, and do it again. We’re seeing this at work in the consumer world: think about how Facebook exposes the people we’re likely to know or updates we’re likely to engage with, or how Netflix makes personal recommendations to its users, aggregating and learning from the ratings across millions of users. As described by Mike Olson, the CEO of Cloudera, the power all this data is about being able to answer qualitative questions like, “What do you like? Who do you know?” and no longer about simply solving basic equations.

Applied in the enterprise, our software, backed by large amounts of information to cull through, can tell us far more about our businesses than we could ever know ourselves.

From the social enterprise to the smarter enterprise

Given our trajectory, all enterprises will soon be filled with dozens or hundreds of light and heavy-weight applications that are function, company and industry specific. has an app marketplace of thousands of add-ons, Jive and Yammer have their own respective ecosystems. With apps that can talk to each other, we’re seeing the emergence of a much more integrated enterprise technology stack – starkly contrasting the vertically integrated solutions from a single provider, apps are pulling from different data sources to create powerful mashups and overlays. Roambi, for instance, makes it easy for you view your CRM data from your iPad. Marketo lets you create extensive marketing automation customizations tying together email marketing, Google AdWords, and Salesforce.

But rather than the proliferation of apps creating more fragmentation, they’ll actually increase personalization and relevance of information. Driving this will be the social utilities that wrap around our enterprise applications of the future. Every action we take in our personal lives can be manifested as a social event, whether it’s checking into a restaurant, accepting a party invitation, or updating a status — our whereabouts, thoughts and actions help us engage with others both actively and passively. The same is becoming true in the enterprise, and it will create the first real ROI we’ll see from social activity in the enterprise. Yammer, Jive, Box, and Chatter securely broadcast the work we’re doing to our coworkers, and we’re about to see yet is what happens when these streams become more connected to all the other applications we’re using.

But it’s not just about creating a more social workforce with frequent status updates, file “likes” and ad-hoc conversations. In the enterprise, social is only useful if it makes us smarter. Think about it. You update a project status and all the relevant participants are passively notified of the change or delay.  Or a member of the sales team uploads content for a proposal, and someone from another department or team comments on its relevance to their own work.

As our social stream algorithms improve, user behavior will drive for better ranking of the information you and others should be looking at.  And with federation and syndication of this data and events, our applications will all work smarter together.  An HR update in Workday will prompt a response from someone on Chatter.  Customer support requests on Zendesk are analyzed by an executive in GoodData.  Software will be able to quickly connect the dots across people and data, building a combined view of the most important information. Most importantly, this can all be done passively, with little to no involvement from the user.

Rather than an increase in information and engagement yielding diminishing returns, our systems will get smarter with every interaction. We’ll be served content that has been filtered by our colleagues, and outputs that are corroborated by multiple platforms. As individuals and organizations, we’ll move faster and make better decisions based on better data. This is what we’re starting to hear from customers when they deploy cloud solutions like Box and others. This is the future.

Aaron Levie is CEO and founder of Box.

Image courtesy of Flickr user Susan NYC.