Throwback to a mere few decades ago when the first computers cost more than a home in San Francisco.
The price curves for the two necessities would soon intersect and diverge as the cost of technology plummet and housing prices soar. Computers, once limited to corporate offices, gained consumer adoption and the initial focus to solve business problems shifted to improving users’ experience.
The inflection point for enterprise software in particular came when software moved to the cloud. Previously, organizations had to worry about maintenance and support costs when choosing a software vendor. The Chief Information Officer who made the decisions, would be inclined to choose full-suite solutions which offered the benefit of “one throat to choke,” even if the individual offerings within the suite provided a mediocre experience. When the cloud eliminated the need for physical servers and introduced the concept of software-as-a-service, enterprise customers suddenly could prioritize things like usability and design. The cloud gave rise to the proliferation of enterprise software categories and afforded customers the ability to use the best-in-breed products.
The concept ‘consumerization of IT’ was originally coined by Douglas Neal and John Taylor, members of a digital technology think tank, in a 2004 paper. Their official definition that “the defining aspect of consumerization is the concept of ‘dual use’” meant people’s expectation for the experience of products used at home and at work would converge. This idea manifested in different strategies used by large and familiar companies looking to carve their territory in the enterprise space.
Google and Facebook, known to be giant consumer companies, began selling their products to business customers in the form of Gsuite and Workplace. Skype Teams on the other hand, was Microsoft’s attempt to intentionally build for the enterprise a product that held all the characteristics of consumer software. Then comes the likes of Atlassian, Slack, and Dropbox who bring along an entirely new business model that forgoes the need for a traditional salesforce. Network effects, virality and word-of-mouth marketing—buzzwords typically associated with consumer products—suddenly emerged in the conversations surrounding enterprise companies.
IDG Enterprise Research revealed that the consumerization of enterprise software led to a 70% increase in business agility, 76% increase in user productivity, and 82% increase in user satisfaction. The top vendors are increasingly the most beloved by their end-users, representing a shift in decision-making power from top management to the teams actually using the software. This ‘consumerization’ trend is here to stay which means it’s advantageous for both organization leaders and software vendors to embrace it.