Guest Post: The future of enterprise software is abundance

Fragmentation Continues, and Software Budgets Growing Rapidly
We’ve seen a massive change in the enterprise software market in the last dozen years and it can be described by four numbers (20, 10, 12, and 4).
Here is the summary of how the landscape has changed in the last 10 years:

  • 20x increase in software vendors
  • 10x the number of software products companies buy
  • 12x the number of internal “buyers” inside companies
  • 4x increase in budgets for software solutions

(Note: This is from hundreds of surveys Siftery did of many of the largest software buyers. Siftery helps companies discover enterprise software they should be using. Disclosure: I am an investor and board chairman at Siftery).
The high-level macro is that the world of software is getting way more crowded and way more complex.
Buying software is daunting … but it is also REALLY impactful. The right software gives you a competitive edge. Software isn’t just eating the world … it can help you eat your competitors for brunch. Choosing the right vendors is really important for businesses to succeed … so we would expect companies to be spending much more time selecting vendors … and they have.
The Four Numbers: 20, 10, 12, and 4
In the last dozen years, we have seen a software explosion. This is mainly due to software being easier to buy, integrate, deploy, and use because it no longer needs to be hosted on premises. This software is usually lumped together as SaaS (or DaaS or even some other name) … but the main take-away is that one does not need a really expensive on-premises integration and therefore it can be tried and used quickly and with less risk.
When we talk about “software”, we’re not just talking about code you run inside your corporate firewall. And we’re not just talking about traditional SaaS products (like Salesforce, Workday, etc.) either. We’re also talking about data services your company consumes (like Bloomberg and Acxiom). And services that help market your business (like ad networks and Google search spend). And subscriptions you use to help your business (like LinkedIn and Glassdoor).
20: The number of software vendors has increased 20x in just ten years
That’s right. There are twenty times the number of software vendors that there were just ten years ago. There are a lot of causes of this rapid increase:

  • As stated earlier, it is much easier to buy software, so there is more software to buy.
  • The really large software companies have embarked on a strategy of growing their product and feature set by acquiring companies (or sometimes partnering) rather than developing these features and products in-house.
  • Seeing this opportunity, venture capital firms have poured tens of billions of dollars funding software companies.
  • It is now much cheaper to start a software company because of things like distributed computing and the rise of software companies that help other software companies.

10: The number of software products (unique vendors) a company buys has increased 10x in the last ten years
This is an even crazier statistic than the first macro trend. Take the average large retailer — ten years ago they had maybe 40 software vendors across their organization … and today they will have 400. One large retailer polled by Siftery has over 2,000 software vendors!
The right software stack gives your company a competitive advantage. And because it is so much easier to buy today (and there are more people making buying decisions), companies are becoming increasingly open to buying from a large number of vendors.
The major beneficiary of this trend has been start-ups … they can get a beachhead in large companies much faster than they could in the past.
Of course, this trend is happening in some industries faster than others. Retailers are super fast adopters — probably because their business is so competitive and the market leaders there (Amazon, Walmart, etc.) are filled with incredibly smart technologists.
Companies that have many regulatory requirements to keep their data on premises (like financial institutions and healthcare) have fewer software vendors … but even there we have seen a massive increase in the diversity of vendors.
12: The number of internal buyers has increased 12x in the last ten years
The number of people buying software (or influencing the buying) of software in a company has grown dramatically. Almost every professional in a company is now a buyer. Software engineer? Buyer. Salesperson? Buyer. HR Manager? Buyer. Finance person? Buyer. Lawyer? Buyer. Marketing? Definitely a buyer. In 2012, CEB did a study that found buyers did “60% of a typical purchasing decision—researching solutions, ranking options, setting requirements, benchmarking pricing, and so on—before even having a conversation with a supplier.”
In fact, only 12% of the users of Siftery are in traditional IT. The other 88% care just as deeply about the software for their organization.
And it is easier than ever to buy. Companies like New Relic and Sendbloom have built their company selling one seat at a time to an organization and then using their internal advocates to get larger deals. Freemium software like Slack, Glassdoor, and Cloudflare make it easy to try. Freemium or low cost products mean less red tape and less need for budget approvals in the initial stages of adoption.
Engineers, lawyers, salespeople, finance, HR, marketers, etc. that can pick and implement software are the ones rewarded with promotions and bonuses. Professionals that do not develop the core skill of picking the right software vendors will find much more limited career paths.
4: The spend on software has increased 4x in ten years
A 4x spend is an astonishingly large increase — and it is because software is easier to buy and it is becoming more and more powerful. Of course, since the number of vendors a company has increased 10x, the dollars per vendor has decreased dramatically in the last ten years. This trend might be worrisome for the giant enterprise software companies but it is really good news for software companies that are innovating and are on offense.
One thing to note is that during the last ten years, these same companies that are spending so much more on software have not significantly increased the number of people they employ. In fact, many companies have FEWER employers today than they did ten years ago (even though revenue has increased). The take-away is that companies are choosing to spend on software INSTEAD of people. This may or may not be a good thing for the world … but it is happening and will likely continue to happen.
The fragmented world of software will continue

Most every macro data point on Siftery shows the trend of the last ten years will continue in the next ten. It’s easy to dismiss that this abundance and fragmentation is just part of a cycle that’ll eventually move towards consolidation. But if one digs a level deeper to look at the forces that created such a vast, fragmented and active product ecosystem, it becomes apparent that this isn’t a trend but a transformation. More business processes are automated now than ever before – run by software or reliant on it. In many cases, we see software talking to software, APIs talking to other APIs. As long as this data can be integrated well, there will be more software.
This means there will be even more software companies in the future than there are today. And buyers will be even more overwhelmed and will need help deciding what to buy, how to buy, how to integrate, and how to best use the software.
I invested in Siftery ( because I love their unique way to help discover software. Siftery believes the products you should use is dependent on the products that you do use.
About Auren Hoffman:
Auren Hoffman is the former CEO and cofounder of LiveRamp (sold to Acxiom) — the largest middleware provider in marketing technology. He is Chairman of Siftery – using data to help companies better buy enterprise software. He previously served on the board of BrightRoll (acquired by Yahoo).
He is the founder of the Dialog Retreat and investor in over 65 active technology companies (
Auren holds a B.S.E. in Industrial Engineering and Operations Research from UC Berkeley. You can find him on Quora and Twitter (@auren).”

Hands on with Microsoft’s new Outlook for iOS

Microsoft quietly released Outlook for Mobile this week. It was a little weird as there were no leaks or even a hint at last week’s Window’s event. While I haven’t been overly happy with Outlook on my Mac, I like it on Windows. Exchange and Outlook are so deeply rooted in enterprise IT it’s almost impossible to segregate yourself from that platform. I wasn’t sure what to expect from this product.

So far, I’m very happy with it and it has become my mail client of choice. Since it’s available for both iOS and Android, for the sake of simplicity I’m going to call it Outlook for Mobile in this article to differentiate from Outlook for a desktop OS.

The problems with

The default Mail app on iOS does the bare minimum in terms of email handling. Sure, I can send and receive emails, but has always been more of triage tool and a quick way to reply to emails as opposed to a good way to process them. For starters, how it handles attachments is abysmal. It shocks me to think of how far we’ve come in some ways with iOS with new features like extensions, but how far we still have to go. still won’t allow you to attach a file from a cloud storage service to an email.

This next complaint isn’t really directed at the Mail app, but an entire career that’s revolved around Outlook has trained me that when I’m looking through my work email, that the email client is also where I’ll get information about my calendar. There have been countless times I’ve been in answering work emails and looked for a calendar icon to check my schedule. Again, this is more muscle memory, but it’s something I’ve missed.

Outlook to the rescue

There are many things I love about the new Microsoft. Even the freemium versions of Office have been great. With basic editing free, I no longer feel like Microsoft is beating me up for my lunch money. This trend continues with Outlook as it doesn’t even seem to care if you have an Office 365 account.

Outlook for Mobile will connect to most major email providers. Currently, it will not connect to a custom IMAP provider. This is not a big deal for me as all my personal domain email is on Google Apps anyway. I’m also forwarding all of them to one Gmail address anyway – it was just easier to have one set place to check all my mail. Outlook for Mobile also has a Focused Inbox. This is similar to the Primary view in Gmail. It cuts out a lot of garbage I get in my email, especially the stuff that ends up in Social and Promotions. Generally speaking, the emails in the Focused Inbox are emails I want to read.

A huge part of the email experience is sending attachments. I’ll often get an email from someone requesting a file. With, I’d have to go dig out the file and try to an email it from the service’s app. If I’m on my desktop, it’s not a problem. Outlook for Mobile will let you simply reply to the email and select an attachment from either Dropbox, Google Drive, or OneDrive. You can also save attachments to these services, too.

This is such a huge game changer on iOS. I can’t believe Apple still doesn’t support email attachments very well. I can only hope iOS 9 will include this very basic feature.


Outlook for Mobile’s Calendering

There is also a button to view your calendar within Outlook for Mobile. As you’d expect this brings up the calendars for all connected accounts. While you can create accounts, I noticed connected to my work email account it could not bring up the Free\Busy status for attendees. I think this is intentional since there is an option to email people to see when they are available. This is a feature I’d like to see added.

The calendar views are also limited. I can view a list of upcoming appointments, a day’s worth, or if I rotate my phone the next three days. On the iPad, I can see a full week, but it’s a full week in advance; not the current week. For example if I look at it on a Friday it will show appointments until the next Friday. On either device, I cannot get a month view.


Final thoughts

Outlook for Mobile looks fantastic. The fonts are nice and clean and look amazing. I love I can finally reply to a message and attach a file without needing to jump between apps. My complaints so far are limited to the calendar, but that’s not the end of the world. It’s not like there aren’t other ways to view my calendar on my devices.

Overall, this is an extremely impressive initial release from Microsoft.

Skydio raises $3M to build software for safer, smarter drones

Skydio came out of stealth today with plans to build a smarter navigation system for drones, plus a $3 million seed round led by Andreessen Horowitz and Accel Partners.

Unlike most navigation systems that require a drone to have a GPS signal and dedicated human pilot, Skydio relies on computer vision to help drones see the world. A video on the Skydio website depicts drones flying around trees and through a parking lot, plus autonomously following people and being maneuvered by waving a mobile phone.

Skydio CEO Adam Bry wrote in a blog post:

A drone that’s aware of its surroundings is far easier to control, safer to operate, and more capable. Almost all the information a drone needs to be good at its job can be found in onboard video data; the challenge is extracting that information and making it useful for the task at hand. That challenge, and the incredible capabilities that are unlocked, are our focus.

For us this project is about harnessing the beauty and power of flight to make it “universally accessible and useful.”

Andreessen Horowitz general partner Chris Dixon wrote on his blog that Skydio is also poised to simplify drone programming to the point that it only takes a simple command.

“Smart drone operators will simply give high-level instructions like ‘map these fields’ or ‘film me while I’m skiing’ and the drone will carry out the mission,” Dixon wrote. “Safety and privacy regulations will be baked into the operating system and will always be the top priority.”

The Skydio team has roots at MIT, where two of its three co-founders worked on drone vision systems. They later went on to found the Project Wing delivery drone program at Google.

Andreessen Horowitz previously invested in another drone intelligence company: Airware. But Dixon doesn’t see the two companies as competitors.

“You can think of Airware as the operating system and Skydio as the most important app on top of the operating system,” Dixon wrote.

A milestone moment for Microsoft: .NET is now an open-source project

In what probably never would have happened under the first two CEOs to lead the historic software company, Microsoft plans to announce on Wednesday that it is open sourcing the entire .NET framework, a symbolic move by the Redmond, Washington-based legacy technology company officially recognizing that the open-source model of software development is here to stay.

OpenStack-friendly Blue Box lands $10M to push its private cloud

Blue Box, the Seattle-based startup that in September showcased an expandable private cloud built on top of OpenStack, has brought in a $10 million series B funding round. The startup did not disclose the lead investor but said that prior investors Voyager Capital and Founders Collective as well as the Blue Box executive team pitched in. This funding round bucks this fall’s trend of how many cloud startups startups are being swallowed up by big tech companies: EMC acquired Cloudscaling earlier this week. In September, Cisco bought Metacloud and Hewlett-Packard bought Eucalyptus.