Simon’s Blog

It’s notoriously difficult for start-ups and other small companies to sell Enterprise-class software into the Enterprise. Even if you have an influencial internal champion in the large company, it’s hard for that company to choose your product over more established competition.

Quite a few years ago, my team had developed what we thought was a pretty good digital asset management system. You could use it, for example, to manage image data. We had licensed this system, as part of a more focussed system, to deal with a particular type of image data, to a division of a large trans-national mega corporation. No problem. What we didn’t know at the time, however, was that the mega corp was looking for general solutions to the problem of digital asset management.

One day, I got a call from the CIO of the division, “Simon, we’ve actually been using your system to benchmark all the digital asset management vendors in the market, company wide. And I have to tell you - your system blows everything else away. I’ve never seen a vendor offer anything close to your level of delivery. Would you consider separating out the digital asset management part of your system, so that we could license it across the whole company (not just the division) to deal with all our image data?”

I replied that we’d be happy to help in any way we could - there’s nothing quite like customers coming to you! However… to cut a long story short, we didn’t get very far along the path of licensing the system. The issue wasn’t the quality of software; in the end it didn’t matter that it was the best software in that category available. What did matter was that the CIO in the mega corp had a different attitude to risk to his division CIO. He felt he couldn’t take the risk of placing the company’s digital asset management bets on a small organisation.

It was no real loss to us - selling digital asset management software wasn’t (and isn’t) that aim of that company. However, it was a valuable lesson - it really is hard for small companies to sell Enterprise-class software into the Enterprise.

Fast forward to today, and the problem of selling Enterprise-class software to the Enterprise is harder than ever; which is why so many successful software start-ups you see today don’t even try to do this. Rather, they sell software (or software services) straight to consumers, as opposed to big business e.g. Skype, or Flickr.

However, nothing is impossible, providing you attack the problem in the right way. Ed Sim has a great post on his blog about possible ways to succeed…