![]() This drove a huge economic shift for customers: you don’t buy the expensive software anymore you rent it for a fraction of the cost. On-prem became on-demand, and SaaS companies made sure to specify that their software was proudly “single-instance, multi-tenant.”ĭevelopment costs fell as it became possible to build, maintain and continuously improve a single codebase for all customers. Virtualization eventually drove software out of the data center and into the cloud. The Exec Era began in the 2000s, and you know the story. The CIO was the buyer and her key decision-making criteria was IT compatibility-will this product work in my environment?ĭuring this period, software distribution was defined as “sales-led growth” with blazer-clad field sales reps taking CIOs out to fancy steak dinners in hopes of winning the RFP. This monolithic on-prem software was expensive to build and expensive to buy-think 6- to 7-figure CAPEX purchases. Back then, software lived in a physical box installed on a physical rack inside of a physical data center. The CIO Era dates back to the 80s and 90s when the software industry really got going. When you examine the history of the software industry with these drivers in mind, things quickly snap into three primary eras: the CIO Era, the Exec Era, and the End User Era. As you might expect, distribution continually adapts to fit the evolving market landscape. More affordable software that’s easier to buy drives decentralization in purchasing power and the buyer persona moves down the org chart. These cost savings are passed on to the customer and the purchase price falls. ![]() As infrastructure evolves, software becomes cheaper to build and easier to buy. These interconnected factors all feed off of each other. ☁️ Infrastructure: Where does software live? □ Cost: How much does it cost to build and buy software? □□ Buyer: Who evaluates and selects software products? □ Distribution: How do software products get in front of the buyer? I wanted to see if this thing was real and if it deserved further attention.Īfter some digging, I uncovered four foundational elements that drive evolution in the software market: When I first observed this trend, my goal was to get down to first principles. Here’s the harsh truth: software companies must adapt and embrace the end user if they want to remain relevant. The software market is continually evolving, and we’re witnessing the rise of the end user. Or is this idea still a total head-scratcher to you? What about your company? Is your product being “magically” adopted by new customers? Do you describe your business with the same end-user language that Slack and Atlassian use in their S-1s? Atlassian’s S-1 says, “We recognize that users drive the adoption and proliferation of our products.” And you’ll find similar quotes in the S-1s of Zoom, Shopify, Twilio, Dropbox and other recent IPOs. Organic growth is generated as users realize the benefits of Slack.”Īnd it’s not just Slack. In its S-1 filing, Slack stated, “Many organizations adopt Slack initially as part of our self-service go-to-market approach. The best software companies have recognized this market shift and have put end users at the core of their business. And it’s all happening at lightning speed. ![]() End users are finding products on their own and telling their bosses which ones to buy. Long sales processes, complex implementation, formal training and certification-the list goes on.Īll this took a lot of time-months, quarters, sometimes even years.īut today, software just shows up in the workplace unannounced. It used to be hard for a company to adopt new software. ![]() Most software companies dream of seeing people adopt their product like this. Pretty soon the whole company was on Slack, and no one can remember life before it. I don’t know your company’s story, but I’m guessing this is how it happened: Jane heard about Slack from a friend, so she signed up and started using it with her team. ![]()
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