The Consumerization of Enterprise Tech
Can enterprise bring sexy back? Freddy and I dug into a few examples of how enterprises are adopting new tech.
The consumerization of enterprise tech, defined as corporations adopting consumer-like solutions for business use, and often purchased through consumer channels, is a trend that’s growing. The widespread adoption of BYOD policies in the workplace has given employees an expectation of choice in the tools they use.
Enterprises have traditionally been slow to adopt new technologies. However, members of today’s distributed workforce are making their own decisions. This is especially true with the growth of bottoms-up management, where individual teams have more autonomy in their decision making and budgets. Employees are not waiting around for antiqued enterprise solutions to get approved, rather they are turning to solutions that anyone can download and install with their own credit card. While this may be a headache for CISO/CIOs, small, lightweight consumer-like solutions are empowering today’s corporate workers.
Dropbox is the canonical example of consumerized enterprise tech. Taught at business schools around the country, not only because of its unique marketing technique (treating free cloud storage as a substitute for marketing spend to get users), but also because of its trojan-horse approach to business adoption. Dropbox was a consumer product, but had clear enterprise uses, and workers would start installing this product they used at home on their work machines before IT could stop it. By the time IT noticed the problem and mobilized to block it, doing so would effectively halt all work at the company, so IT had no choice but to buy their business products.
Since then, other consumerized enterprise companies have followed this approach. Zoom provided a quick fix to frustrating legacy IT systems that an individual could buy with their credit card and use without long purchase approval processes. Slack, through its free tier, provided an easy and inexpensive way for teams to collaborate and chat, with IT eventually buying the pro version of the product to manage users and control their domain. Today, we see Notion gaining traction in the enterprise, after acquiring users through a strong evernote-like note-taking app, with collaborative and sharing features.
Accompany is another example of a startup using consumers to enter into enterprise sales. Their app connects with a user’s calendar and address book to provide information on people they are about to meet. Reading data from corporate calendars and address books would naturally raise attention from IT, but with enough pressure from users, the service would become officially sanctioned. LinkedIn is ostensibly a consumer product, allowing individuals to have a professional presence on the web, but much of its revenue actually comes from its enterprise products: LinkedIn Recruiter and LinkedIn Sales Navigator. Uber and Lyft have added the option to specify if rides are “personal” or “business”, effectively recruiting their personal consumers to become enterprise users as well, and stealing business from traditional corporate limo companies.
The hardware space is not immune either: for years companies have implemented BYOD policies for smartphones, and now many larger organizations will pay for whatever business phone or laptop their employees want within a certain budget limit. Consumer brands like Logitech are making inroads into enterprise — not only for PC accessories like mice and keyboards, but also for videoconferencing and huddle rooms (which has seen enormous YoY growth), where a straightforward self-checkout credit card purchase is a major convenience advantage over the traditional extended call with a sales rep and a third party integrator.
SMBs are particularly early adopters of consumerized tech, in part because most of their needs can be satisfied by high-end consumer hardware, and they don’t have the niche customization demands of large enterprises. Many small businesses opt for consumer internet, consumer routers, and consumer web-building services like Wix and Squarespace. In fact, many of these companies (including Eero) have started offering more advanced features usually reserved for enterprises (such as traffic analytics, DNS blocking, malware and ransomware detection and prevention, and VPNs).
Many small business owners choose to use familiar products for their work, including products like Office 365 and GSuite, so they don’t have an onboarding learning curve. These businesses have small IT budgets, no designated IT staff, and no purchasing departments, so self-checkout and the ability to purchase with credit card on a subscription basis are paramount.
As consumer and enterprise tech continue to converge, our work life will start feeling more natural and less restrictive. Productivity will be built into our everyday lives, and every tool that is used by employees must provide a world-class user experience to compete. With that said, there are still a few risks to consider including data privacy and security. Empowering employees with the right safeguards around data security and privacy, and enabling IT managers to quickly evaluate and integrate new solutions is paramount.