Corporate Spring

That was how Salesforce.com CEO Marc Benioff described what was happening in the tech world of enterprise software.  Benioff used that play on words in a recent presentation to describe the same kind of disruptive technology disintermediation as the Arab Spring was causing in the Middle East as a result of the rise of social networks and their corrosive, disruptive impact on traditional enterprise software companies.

But before Benioff starts believing his own press releases about being the Luke Skywalker to Larry Ellison’s Darth Vader he should remember that Ellison still has the time and the money to ‘keel haul’ him on Ellison’s racer in San Francisco Bay before Benioff outruns him to escape through the Golden Gate.

What are you talking about?

Not content to be the market leader in customer relationship software, Salesforce.com has grander ambitions as the cloud-based conqueror of the dark side.  It is a big, hairy, audacious goal well worth pursuing given Salesforce.com’s track record—but success is not assured.  Oracle has plenty of death stars in its arsenal and there are others like SAP with its BusinessbyDesign online solution seeking to be faster, better but not necessarily too much cheaper than anything Oracle can bring to market.

And then there is mass and inertia.  Those two principles of physics still dominate the market for enterprise software.  Mass is the installed base of Oracle and SAP enterprise solutions in the market today.  Dislodging them is not going to be easy for an upstart like Salesforce.com because they are already there and it must confront the second law of physics at work—inertia.  Since the Fortune 1000 already have one of these enterprise systems and have spent literal fortunes to install them, debug them and put them into practical use they are loath to change them.

In fact, inertia is one of the biggest threats to Oracle and SAP.  The mere threat of an upstart like Salesforce.com getting into the cloud based enterprise software business is enough to discourage Fortune 1000 players from upgrading before it is time.  When will it be time to upgrade?  When they are forced to thrust the pen into the hand of a cold, stiff, dead CEO of one of its clients to sign the dang contract for an upgrade in this economy!

Business is into hoarding cash these days and spilling blood and treasure on new Oracle or SAP solutions seems more like drinking hemlock than sipping the nectar of the gods of new software improvements.

And then there is the Smarter Planet bling from IBM preaching the gospel of integration, optimization and smarter everything from the guys who used to wear blue shirts now seen everywhere as they invade every segment with their solutions.  Is it possible to be THAT good at THAT MANY things all at once?  While the marketing strategy is pure genius, at the end of the day IBM is still all about business process—-and business process change for IBM clients will continue until the clients run out of money!

What stops progress is a combination of a crappy economy and a fear of spending hoarded cash in it before its time.  Political dysfunction and the uncertainty of a remote but still possible global financial unraveling that starts in a place like Greece and spreads as collateral calls and other mischief from unsecure securitized bonds does its damage like coffee spilled on your laptop keyboard.

Corporate spring is coming.  I think Benioff is right.  But it is going to be more profound and much less satisfying for upstarts like Salesforce.com than for those who have spent the past few years hoarding real cash rather than living in bubbles and hoping to get out before they burst.

Corporate spring is coming because disintermediation is going to turn every enterprise system on its head.  Social networking is only the beginning not the end of the process.  Like the commercial where the sage old executive looks out his penthouse window to see the FedEx truck pull up cross the street at the door of one of his upstart competitors and worries out loud—-logistics!

Corporate Spring is Innovation!

Corporate spring is going to be a cloud-based, mass customized and customizable, modular world of apps and mobility that we rent a transaction at a time or consume by the drink rather than by the vineyard.  The secret sauce of the smarter planet is interoperability.  Interoperability is kryptonite to Oracle and SAP.  Just like the iPad is destroying the market growth potential for desktops and raising doubts about laptop computing futures, Salesforce.com, Workday, Zuora and others are doing to services and enterprise software.

Darwin was right!  Stuff happens—slowly but surely!  Adapt or die off!  Corporate spring is coming and it will be good if it unleashes the enormous potential for innovation and disintermediation found in American businesses small and large.

Corporate spring will be better if it is encouraged by public policy, tax structures and a conducive business climate that unleashes that innovation and reminds Americans that our “exceptionalism” comes from our optimistic spirit-driven ability to continually reinvent ourselves to adapt to change.

Corporate spring is permission to quit playing the global commoditization game that allows China to take IP and turn it into mass produced products to use against us.  Look at what has happened in the renewable energy space of photovoltaic solar panels and wind turbines.  The oldest, least efficient renewable energy technology is mass produced in China and sold around the world at rapidly falling prices as China floods the market with product to keep its export production going, suction up subsidies, and grow market share for its exports.  The risk of catching a falling knife just forced Solyndra and Evergreen Solar into bankruptcy.  Similar fates happened in Spain and Germany to domestic PV panel makers.  Others will follow unless they break the cycle, innovate and separate themselves from the commodity products by quantum leaps in efficiency and performance.

America’s corporate spring potential is to innovate and go to market faster, better and cheaper than China because we are focused on the next technology not the first.

Corporate spring is the democratization of technology innovation that gives that small upstart across the street from Oracle access to “logistics” so it can be faster, more nimble, and more responsive to customer needs in a mass customizable, modular workplace of solutions and apps that just work.  It is how the west was won!  It is how the east will be humbled!