Enterprise Software is at an inflection point. Over the past 15 years, it has gone from a fast growth, innovative industry to one that looks increasingly oligopolistic. The number of players in the industry has shrunk, and as IBM and Oracle’s most recent financial results exemplify, economic power is shifting rapidly to vendors with scale. Innovation has slowed as vendors combat challenging recessionary times. At the same time, other trends, such as Cloud Computing, and increasingly mobile workers are rapidly gaining traction, indicating the need for a new category of applications. However without critical enabling systems, it will remain challenging to reconcile the competing pressures of enterprise information security against the open access paradigms dictated by these newer trends. In this article, we explore the critical enabling systems that will power this next wave of innovation.

Shifting Dynamics in the Enterprise

As is frequently the case in maturing markets, economic power has moved away from smaller, typically more innovative enterprise software players to larger vendors. Many smaller vendors have gone out of business or been acquired. And venture capital investment in enterprise software has fallen dramatically. To make matters worse, battling recessionary times, larger enterprise vendors have cut R&D budgets and are raising maintenance prices. Faced with falling demand in their own businesses, customers are targeting several areas to cut IT spending, including software maintenance. Goldman Sach’s January 2009 IT spending survey (Figure 1) depicts this shift. Unfortunately, this situation does not bode well for innovation as it implies further contractions in R&D budgets for larger vendors. The result is an open door for those with the foresight to enter.

Increasing Mobility, Smartphones and Clouds

Even as IT spending shifts, there are other rapidly occurring changes that promise to forever change the economics and drive up value of corporate applications. Chief among these are the trends towards powerful smartphones, netbooks and cloud-based data centers.
The past few years have witnessed an explosion in the capabilities and shipment volumes of mobiles devices, such as the various RIM Blackberry models and iPhones. A newer trend is the use of netbooks – lightweight ultra mobile “palm tops” – that further enable mobility of corporate data access points. In addition, there is growing demand by employees to gain access to corporate data in ways that mimic the ease of use of consumer applications, such as facebook, wikis, business oriented social networks and blogs. However predictably, this category of access brings a new dimension of risk to corporate data as show in Figure 2.