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Ironically, Big On-Prem Enterprise Software is the Most Customer Driven Software There Is

Posted by Bob Warfield on June 25, 2009

Vinnie Merchandani thinks big Enterprise software involves building a lot of features nobody wants.  He riffs about underutilized features and wishes for a market like the iPhone’s AppStore.   He wishes SaaS vendors to use their real time visibility into what their customers are doing to give them that kind of market-driven visibility into what to build.

Vinnie and I are fellow Enterprise Irregulars, and I really enjoy his perspective most of the time, but he has it all wrong on this one.  Backwards in fact.  Sorry Vinnie!

You see, Big On-Premises Enterprise Software is more customer driven than any other kind of software there is.

“Huh, why is that and what are you talking about, Bob?”

As one person described it to me, for these sorts of companies the Customer is God and Sales is the Church.  Sales people are natural arbitrageurs.  Any time a question comes up they are rapidly computing who to say “no” to.  Is it easier to negotiate with the customer about their request, or is it easier to negotiate with the company?  The bigger the deal and the better the salesperson (and the two go hand in hand, don’t they?), the more likely it is they choose to say “yes” to the customer and “no” to the company.

All that feature bloat in those products is as a result of saying “yes” too many times to customers.  “Yes” was easier than educating them about better ways to do things, or on how while it seems like “yes” is a good answer today, tomorrow they will have enough experience with the software to realize “yes” is no longer important.

Many view the essential function of marketing and sales as finding ways to say “yes” as often as possible, no matter what the cost.  But here is the problem.  Many times “yes” is exactly what wrecked the product.  “Yes” led to the kinds of problems Vinnie wants to escape from.

Look at it this way.  Marketers are fond of saying that since everyone consumes marketing, they all think they are good marketers.  The same is true for products.  Every user wants to tell you how to fix it before they have even explained what the problem is that needs fixing.  There is a whole school of product management that holds that the way to build great products is to constantly survey end users, build great big prioritized lists of what they want, and then give it to them.  That’s how Microsoft builds its products, for example.   But just as everyone who watches movies is not Steven Spielberg, most people who think they have a great idea for how to change a product are probably not helping.

When you approach things that way, you have a lot of trees and no sign of a forest.  Microsoft is known for successful products (unfortunately more in that past than present), but not for great products.  How do companies operate that are known for great products?  Well, consider Apple, which is perhaps the diametric opposite of the democratic product design process.  They annoint a very few philosopher kings who have the vision.  They’re spurred on by the philosopher emperor-in-chief Steve Jobs until they get it right.  Insanely Great Products are the end result.  Apple’s brief fling with moving away from that approach with Soda Pop King John Sculley was a total disaster for them.  On a much smaller scale, 37Signals is a similar model.  They actually take features back out of products if they think they were a bad idea.  That’s something that is very hard to get customers to recommend very often, and they take heat for it.  But they stick to their guns and they are generally quite successful.

Operating that way leads to conceptual integrity.  You get a forest instead of just a bunch of trees.

Companies can’t afford to ignore customers, there has to be a balance.  You need people making product decisions who are enlightened enough to connect the two ends together.  They’re going to ensure a forest gets built, but they will let customers position enough of the trees to keep them happy too.  And, where a tree is being positioned that’s in the way of a vital river needed to bring water to the forest, they will object and stop that tree being planted.  Even if it means losing one customer.  Because it ensures a healthy forest that ultimately leads to more customers in the end.

It’s a tricky process.  If you have a company that either ignores customers too much, or gives in too easily, you’ll have a product that suffers for it.  Visionaries have to be good listeners, and they have to go forth among the customers to understand their needs.  They have to be good at selling their point of view too.  If you can convince a customer to buy into the vision, they’ll quit trying so hard to plant trees in the wrong places.  Steve Jobs does all that in spades.  Is it any wonder he has been so successful?

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4 Responses to “Ironically, Big On-Prem Enterprise Software is the Most Customer Driven Software There Is”

  1. vmirchan said

    Bob, if it were true SAP, Orcale Lawson would have the most robust utility billing, clinical and university endowment systems there are around. In vertical after vertical, country after country, business process after business process there are major gaps – and customer disillusionment they got far less than they were promised. On the other hand in some horizontal areas we have too much as I responded on my blog – for AP we have payment on receipt, 2 way, 3 way, 4 matching – customers only use policy at a given time.

    Part of the issue is on-premise vendors do not really know what their customers are truly using. They may get periodic access to troubleshoot, but not at a granular feature level. And none that I know off are disciplined enough to mine support logs to see which features are most being called in about (not a perfect scenario because that would point to trouble spots more than usage patterns, but at least some visibility)

    SaaS could change that. With multi-tenancy on their box vendors should get far more visibility to what customers are using in bulk versus onesy twosy basis.

    PeopleSoft used to allow customers to literally vote on features in next release – it was a budget constrained process but it had a semblance of customer input. Most sw vendors do not offer a systematic input process – and you are right one off customizations promised by sales people or delivered by consultants proliferate

    which is why I am saying at least in the iPhone App store the market votes. If the majority of customer want the silly apps so be it. You and I can roll our eyes but the market has spoken

  2. smoothspan said

    Vinnie, I don’t doubt you can find some customers who feel there are some gaps, but in general I don’t see anything to dissuade me from the notion that these companies were in the end far too tactically inclined to cave in to point features specified by those very same customers.

    In fact, my point is that’s exactly why you wind up with such gaps and with products filled with features that “nobody” wants. It’s because you went deal by deal, caving in on features to close the deal of the day, without a plan to deal with things comprehensively. Hence the forest is ignored despite however many trees are planted willy nilly.

    Sorry Vinnie, product design by committee builds camels, not race horses. The bigger the committee, the more outrageous the animal. The AppStore doesn’t build better products either. It just provides more transparency on how the better products are being rewarded.

  3. I AGREE WITH SMOOTHSPAN (BOB)

    Having been on the pre-sales side of the ERP business I have to agree with Bob. To win a deal a salesrep (NOT the pre-sales guy/gal ;) ) will work the enhancement requests into the deal. Soon, development releases bloated software with lots of unweildy features – camels as Bob calls them. One of the common jokes during a new release is: “this is the GE release, this is the AT&T release”, meaning that this release includes features requested bu GE, AT&T only …

    I agree with the Apple approach – simple, elegant products that the market loves!!

  4. [...] Ironically, Big On-Prem Enterprise Software is the Most Customer Driven Software There Is [...]

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