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Engines of Growth in Enterprise Software

Engines of growth are one of the most important aspects of a product strategy. When launching a product or service, companies need to establish the customer acquisition channels that are going to allow them to grow in the initial days while the product establishes an identity. The concept of engines of growth a fairly well established in the consumer market. Virality, advertisement, tapping into large user base like Facebook’s or Twitter’s are some of the well-defined customer acquisition processes in the consumer space. The story in a bit different when comes to enterprise software.

Historically, enterprise software has been corrupted with complex, expensive software products that require fairly long sale cycles. In that sense, there is well known engine of growth: spend considerably resources in building a sales and marketing army and go chase customers. While that model is still at the core DNA of large enterprise software companies, the rapid consumerization of the enterprise have brought flavors of the customer acquisition and product marketing models in consumer markets to the enterprise world. Conceptually, the consumerization of the enterprise has partially to do with technology (making products more mobile, social, simpler, etc) and a lot to do of how technology is delivered, marketed and acquired by enterprise customers. In that sense, modern enterprise software products can leverage new engines of growth that were unconceivable years ago.

As a founder of an enterprise software company, I spent a lot of time thinking about creative strategies to establish growth avenues for our new products. Regardless of the quality and uniqueness of a technology, the enterprise software market dynamics require a period of time before a software technology can establish its own identity and growth channels. The first step to make that happen is to find the correct engines of growth for your new product or service.

At a high level, here are some of the engines of growth that can be considered when comes to enterprise software.

Growth by Partnership

When you are still a small startup, it becomes really challenging to reach out to large groups of enterprise customers. However, there are large enterprise software and services companies that have a direct channel to a large customer base. Examples can be a large system integrator like Accenture or a software company like Microsoft. If your product or service complements the offers of those large organizations, you are in a good position to establish strategic alliances that can get your product in fronts of thousands of customers.

Microsoft is a company that has mastered the art of growing a product by partnership. With any new Microsoft product you will find an army of partners that are ready to offer complimentary services around it.

Tap into Existing Communities

The explosion of social media has created lots of vibrant communities around various areas relevant to enterprise software. The nice thing about those communities is that they facilitate certain levels of virality when comes to promote a product or service. Tapping into existing enterprise software or customer communities can becomes a very important engine of growth in the initial days.

Huddle is one of the hottest software startups which recently raised an astonishing $24M series C. The company has positioned it’s product as a simpler alternative to Microsoft’s SharePoint Server and has found a solid engine of growth within existing SharePoint communities.

Growth by Customer Segment

Depending of the nature of your product, there are good chances that a particular customer segment will be quicker to embrace compared to the rest of your customer population. As an example, your software might include some features that rapidly resonate with customers in a specific vertical industry. As a startup, acquiring customers have to be on the top of your priority list. In that sense, there is no harm of focusing on growing an initial customer segment while prepared to expand to other groups of customers.

Palantir Technologies is a great example of this strategy. For years, the company focused on expanding the footprint of its analytics and big data technologies within the intelligence and government agencies before deciding to expand to the financial sector.

Growth by Picking Up a Fight

Competition is great in enterprise software. If nothing else, competition means that there is an existing market ready to be served with different products. If you are launching a new product in an established market, the customer base of your competitors can become an important engine of growth for your product. In that sense, there is nothing wrong with going very aggressively after your competitors stating the benefits of your product. If you execute well, that strategy can certainly catch the attention of existing or potential customers of your competitors.

Box is a great example of a company that has executed impeccably using this strategy. The company has gone aggressively after Microsoft’s SharePoint offering and has certain caught the attention of customers, partners and technology vendors in the SharePoint space.

These are just some of the most notable engines of growth that I’ve found have worked for us. As always, the consumer space is a  huge source of inspiration when comes to implement creative customer acquisition models.

What other engines of growth have you seen applied on enterprise software technologies?

 
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Posted by on May 30, 2012 in Uncategorized

 

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