David and Goliath: The Enterprise Software Version

Annraí O'Toole, Chief Executive Officer of the small Cape Clear Software is taking on IBM in a battle for the future of SOA.

O’Toole is joining the ranks of other CEO’s of software startups anticipating the demise of Big Blue and other industry giants. Another example that comes to mind is Salesforce.com’s outspoken Marc Benioff, who has taken on the established enterprise software regime with his “end of software” rally cry (check out Benioff’s latest response to Bill Gates’s memo on Internet Software Services and the Microsoft Live announcement).

So far, Benioff has been able to marshal the success to back his rhetoric, but for every successful modern-day David like Benioff, there are hundreds of software CEO’s that lost their battles against industry Goliaths, burning through many millions of VC dollars in the process.

What makes one successful and others fail? Had I known the answer, I would probably be as rich as Benioff, so I am still hoping you can help me figure it out… One thing that separates Benioff from many others is that Salesforce.com presented a real paradigm shift in the way software is used.

Perhaps even more importantly, Salesforce.com made it easy for users to test out this new paradigm. While Benioff presented a grand vision for his “no software” approach, Salesforce.com started out with a small and simple SFA application. It kept expanding the solution in small increments with quarterly updates of the software. This was a brilliant way of taking advantage of the Software-as-Service model to add new functionality in an incremental, non-intrusive, and easy-to-digest fashion.

I am a firm believer that ease-of-adoption and ease-of-use could either propel your software to greatness or spell its doom. You may point to SAP as an example of successful yet tough-to-use product, but let’s not forget that SAP made its big market push as a replacement to IBM and other legacy systems, which were even more difficult to use, implement, and maintain.

The push for small, simple, and modular software grows as computing becomes more and more distributed, decentralized, participatory, and collaborative.

I don’t know enough about SOA to tell whether Cape Clear provides such a solution, but if you asked me to bet on the success of a newcomer taking on the reigning gorilla, these are the questions I would ask:

First, I would ask, is it a real paradigm shift or just a slightly better product that does the same thing as IBM? Second, and not less important, is the solution easy to try and adopt?

If it’s not a real breakthrough, you’re going to run into the “why bother” roadblock; if it’s not easy to try, you will hit the “who has the time” roadblock. There are additional roadblocks that must be conquered on the path to beating Goliath, but if you cannot get past the first two, I would suggest you find yourself a weaker target to take on.

Good luck!