At the dawn of a new generation of enterprise applications

As I wandered the show floor the first time Slack brought its Frontiers event to London a few months back, an intriguing thought occurred to me. Half the exhibitors were companies I've become familiar with over the past two or three years — Atlassian, Guru, Workato and Zendesk, along with Slack itself — while I know most of the others well, including Box, Dropbox and Okta.

It struck me there's a common cause uniting most of these vendors that goes beyond their partnership with Slack — they all share a similar and very distinctive approach to enterprise applications. What I felt at Frontiers was that sense of community you get when technology startups converge around a new trend that's going somewhere. It reminded me of the early days of SaaS — and look where that led.

Going into December, the impression intensified that this emerging tribe is a force to be reckoned with — one that will have a profound impact on the future of enterprise applications. The youngest members, knowledge management vendor Guru and workflow automation vendor Workato, demonstrated their growing traction when they each announced a $25 million series B funding round. In Workato's case, this includes the endorsement of ServiceNow as a corporate investor, alongside Workday and Salesforce. Meanwhile, Zendesk in November unveiled an expansion of its product portfolio, including its Sunshine CRM platform, which as I wrote the other week, is an important new take on enterprise SaaS. Zendesk's Chief Product Officer, Sam Boonin, explained why the company thinks differently:

Philosophically, companies like us — born of the public cloud, with restful interfaces, well after open source had become mainstream — we don’t think of vendor lock-in, we think of openness.

I would argue that it's more than just openness, it's connectedness. These vendors have grown up in an environment that is inherently more connected than previous generations of enterprise applications. This means they approach how they build, design and deliver their applications in an entirely new way. It's not just the technology architecture that's different, but also how the applications are used within the enterprise.

A cloud-native view of enterprise applications

Born cloud-native, these vendors have a completely different perspective on how to architect enterprise applications than earlier generations. Before the cloud came along, application vendors wanted to own the entire technology stack. Even the first generation of SaaS vendors followed this mantra, building proprietary multi-tenant architectures and operating their own datacenters. Today, Oracle and SAP still pursue this path, aiming to find competitive advantage as application vendors through their proprietary database technologies.

The cloud-native tribe are having none of this. They build on whatever technology comes to hand — open source and cloud infrastructure, connected services. For them, competitive advantage doesn't come from owning the stack, it comes from being free to select the best available resources for the moment.

Most of these vendors are building on Amazon Web Services, using open source software running in containers, and harnessing serverless resources through open APIs. It makes sense to build on AWS not only because of the economies of scale and speed to market, but also because many of their customers are here, too — Zendesk's Sunshine platform is deliberately engineered so its customers can directly connect their own AWS-hosted resources. Others may prefer to build on Google Cloud Platform or Microsoft Azure, and the prevalence of open source and API-based services ensures a high degree of interoperability.

The conventional wisdom is to maximize what you own, but in today's hyperconnected cloud world, there's a new maxim — focus on whatever it is you can scale first, and faster, than anyone else. For everything else, use what's already out there.

In the enterprise applications space, it's not infrastructure and technology that distinguishes a vendor these days. It's their knowledge of the domains they serve, and their ability to co-ordinate technology resources to continually evolve and improve how they serve their customers.

Operating at a human level

Another break with the past is that these applications are designed to be instantly usable by the people they’re designed for, without any need for specialist training. People used to have to adapt to the technology to be able to use it, but now the technology adapts to their context, whether they want to access information or functions from mobile, via a voice assistant, or through chat. The tech even uses machine learning to become better at adapting to its users over time.

These vendors are converging around Slack because its connected messaging is designed to make it easy for people to find information and get things done. That doesn't mean that Slack is the fulcrum of their world, it just makes Slack a natural partner because it's thinking the same way.

Cutting across the old divides

The other big difference about this next generation of enterprise applications is that they don't adhere to the old functional boundaries of the past. Applications like Guru and Zendesk blend sales and customer service operations together. Slack and Workato are designed to join up conversations, collaboration and workflow that cut across every functional silo in the enterprise.

By enabling these more fluid ways of working, these applications are dismantling the old structures and forging a new, more joined-up, cross-connected enterprise organization. Again, it's not just the technology that's changing. What the tech is enabling is a reimagining of the enterprise itself. This is something I've been forecasting for a long time — it's called frictionless enterprise. This new generation of enterprise applications is helping to make it a reality.