January 5, 2009

The future is already here - it is just unevenly distributed. —William Gibson

the enterprisization of consumer IT

enterprisization

Much digital ink has been expended on the trend of consumerization of enterprise IT–the trend of consumer-facing technology being used in enterprises because of there being high-quality applications. Less has been written about a closely related trend: the enterprisization of consumer IT. Contrived as its name may seem, I think the trend of consumer-facing technologies acquiring characteristics traditionally ascribed to enterprise software is very real. First let’s explore a few ways in which consumer technology is getting enterprisized:

  • Scale. Even the world’s biggest employer, Wal-Mart, has only 2.1m employees, whereas the U.S., which doesn’t even have the biggest broadband user base in the world, boasts over 40m broadband Internet users. The global spread of broadband has given rise to a class of applications that must deal with scaling problems hitherto unseen by any enterprise-class software. Accordingly, any consumer-facing technology that has managed to attract and adapt to a sizeable user base will find little trouble applying the lessons of Web-scale computing to the needs of most enterprises.
  • Availability and reliability. Not all in the most recent generation of Internet applications may have viable business models, but the resulting changes in user behavior are significant. Be it teenagers using Facebook as Outlook to Indians spending $2bn on online airfare purchases, the Internet is increasingly used as a transactional substrate rather than just a means of transactional support. The increasingly transactional behavior of Internet users on Web services and social networks is giving so-called consumer technology a bunch of enterprise-appropriate features using commodity hardware and software redundancy.
  • Interoperability and standards-based distributed computing. A consumer Web site may not be designed from the start with a predetermined list of point integrations with other consumer Web sites. The prevalence of platform-neutral Internet standards enables opportunistic instances of integration to emerge serendipitously. Broadly applicable standards for data, architecture and identity enable the creation of pipelined systems that can dwarf much traditional enterprise software in terms of complexity, utility and elegance. These very principles can be applied within enterprises to create modular, interoperable  systems that can be reconfigured flexibly rather than complex monoliths designed from the start against a fixed specification.

In the long run, the consumerization of enterprise IT will just be part of a larger renovation of enterprise IT and will one day disappear into the ether as a trend. The enterprisization of consumer IT, however, has major implications for business models and investment. Time was when the quality of supporting technology and availability of resources to create it was a significant gating factor that determined the choice of business model and market to pursue. Now, however, conditions are in place for a venture to realistically choose between pursuing the enterprise market and the consumer market. It is not that the distinction is becoming false or irrelevant, because the resource allocation methods required for either market are (still) too widely divergent for a venture to pull off pursuing both. But for a software venture, realizing that it is finally beginning to have a realistic choice between pursuing the enterprise market and the consumer market is immensely empowering.

July 2, 2008 | Filed Under Technology 

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