The enterprise has to change: How Trump and Brexit create opportunity for SaaS

Am I alone in finding something a bit weird about the rise of equity markets since Brexit/ the election of Trump? Its true there are financial dynamics at work. Increased spending on infrastructure and the fall in the pound have some immediate benefits for some large companies.

But this window dressing obscures a fundamental underlying message. A big part of the populism that is driving today’s political agenda is rage against multi nationals. In the US the talk is of trade barriers that will disrupt low cost global supply chains. In the UK and Europe Governments and citizens demand “fairer” tax contributions. Extracted from the profits generated by global companies. Used to prop up public spending.

In every country and all sides of the political debate, inequality is seen as the defining economic and social challenge. And nothing represents that inequality more vividly than the pay of Fortune 500 CEOs and their ilk.

2017 will be the year when some of this anger translates into real challenges. Corporate giants are right in the cross hairs. The US President’s remarks about the pharmaceutical industry are a straw in the wind. The actions of the new US administration and the fallout from the UK leaving the EU will have consequences for big companies.

Hitting the enterprise where it hurts

In a sense these are symptoms of a wider trend. Anger and frustration at the profits of global corporations is widespread. Business practices and networks are also in the spotlight. This is an issue which appeals to all politicians. One of the few areas of common ground between left and right, populist and technocrat, democrat and dictator.

Expect meaningful action in areas like:

• Taxation. Nominal corporation tax rates will fall. But linked to a much more determined effort to bring profits within the tax net. The overall tax burden will rise.
• Regulation and disclosure. Red tape will be back in fashion. There are new targets such as high/ low income ratios, immigration and new tax rules. But the solution will be familiar.
• Competition policy. While startups grow and disrupt at the edges, established business has been consolidating. A big part of the world economy now lies in far fewer hands.
• Trade. The most talked about area of all. Yet, my guess is that changes to global agreements will have less impact than the other areas on this list. May well get more press coverage though!

The mechanisms for change in all these areas are misunderstood. By politicians, by so called experts and by the general public. So the impact will be hard to assess. But the narrative targeting global fat cats and inequality is seductive. More rather than less will be the temptation.

The SaaS opportunity

​Your view on the politics and economics of this is not important. Enterprises large and small are entering a period of unprecedented disruption. At a time when there is also severe pressure on profits. For a B2B SaaS company this is a once in a generation opportunity. Global corporations need to change. Improved adoption of digital technology must be part of that change. This broad theme was reinforced by McKinsey this month in Measuring B2B’s Digital Gap.

The enterprise software landscape is also shifting on the ground. I was fascinated by Tom Tunguz’s $100m ARR Deal. The headline number is eye catching. His analysis of the implications for Workday is interesting in its own right. But for me the big message is that this was a straight fight between the SaaS alternative ERP company and SAP. No better sign that SaaS will be a big part of the solution for enterprise companies.

The Chairman’s view

These trends are important for setting the scene. Yet the big picture offers no direct link to revenue growth. Generalisation can help you identify targets. Winning deals depends on specifics. Enterprise sales depend on three things:

• Finding organisations where there is an appetite for change and a trigger to make it happen. Perhaps because of a change in leadership or significant market setback.
• Understanding the change needed for the individual organisation. Then being clear how your solution helps the customer execute that change.
• Building value adding business relationships with multiple people in each customer. Recognising different priorities and agendas for each individual.

This takes time and effort from the most important people in your team. Founders, sales leaders and top developers. Each enterprise customer you tackle is a significant investment in its own right. Aiming at the wrong target can kill your SaaS company.

Success with enterprise customers is not about a high volume of leads and conversion rates. Nor is a brilliant sales team the key factor. Focus on qualifying which opportunities to go for. Analysis and insight followed by patient pursuit is the winning formula for enterprise SaaS.

This post originally appeared on my blog at sunstonecommunication.com. Click here to subscribe https://upscri.be/f176b7