Suites and niches.
That old nugget
I was wondering what to write about today.
I read a post from Alexander Atzberger , CEO of Optimizely, where he cogently argues that his company’s marketing suite is well positioned to win out against niche competitors. Read the post here.
Alex may well right, but that got me thinking about suites and niches in our little corner of the software industry.
Objects in (the) mirror are closer than they appear"
One vendor's suite is another vendor's point feature or niche, it's all a matter of perspective. Salesforce would probably consider Optimizely's scope a niche, and Oracle would consider Salesforce's scope a niche.
Just as candidate relationship management is seen a niche by recruitment vendors, and recruitment is seen as a niche by the HR suites, which in turn is seen as a niche by the ERP vendors.
The suite always wins, or does it?
When the tech stack and business models are relatively stable and consistently defined, the suite has significant avantages. We saw that in on-prem ERP, to an extent with today’s multi-tenant SaaS. When almost everyone has a similar back-end and front end, the one with most features wins, and platforms provide efficiencies of scale and so on. Larger vendors acquire smaller ones, and drive contractual cohesion, even if technical cohesion lags behind. The power of the sales and marketing machines of large vendors, and the risk and disruption aversion of CIOs gives suites a tail wind. (I’ve written about sunflowers and daisies to describe this in more depth).
Today though, we are in the early stages of a new s-curve. New technologies and business models mean that the cosy dominant design of traditional SaaS is beginning to be threatened. SaaS isn’t dead, but it is becoming less relevant.
Here’s my counter argument to the suite always wins.
AI tooling dramatically lowers the cost of integrations between niche applications.
AI makes proprietary UX irrelevant through conversational UX, and agentic access.
Agents may be able to reconcile multiple versions "of the truth". Over time, structured databases become less important, replaced by agents that can accurately sift through unstructured data instantly.
New niche players are able to develop far faster, as they exploit the potentially massive improvements in developer productivity and VC funding largesse.
There are a lot of of suites that aren’t really suites, but merely collages of older niches. They will found wanting.
The people who bought the suite a decade or two ago are retiring.
The next few years are going to be really exciting. There will be a battle over who gets to deliver today’s application scope, and there will be new categories we can’t yet imagine. I can imagine these new categories far exceeding today’s scope. We will have new suites, and new niches.
As usual we need a tune to wrap things up. How about a bit of Crowded House….