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Enterprise Software Market Myths and Conventional Wisdom


August 13, 2012

How Agile Companies Compete Effectively with Major Vendors

Doug Hadden, VP Products

The enemy of the conventional wisdom is not ideas but the march of events.
John Kenneth Galbraith

Conventional wisdom in the technology market suggests that medium-sized companies like FreeBalance cannot compete against the big enterprise software vendors. Especially in the global market. Yet we do. And, we tend to win more than our share of government contracts, enjoy higher satisfaction and implementation success rates.

What happens when I mention this in public? I’m met with suspicion (he’s just saying that) and consternation (that can’t be right). Pretty much everyone in the business acknowledges the “open secret” of Enterprise Resource Planning (ERP) failures in government. Yet, they find it almost inconceivable that FreeBalance does not suffer from the same disease considering the number of implementations in countries of high risk.

I hope to address the major myths from conventional thinking over the next month is a series of blog entries. First, as a service to our peers: agile and innovative Independent Software Vendors (ISVs) competing against large enterprise software vendors. Second, as a service to the entire enterprise software ecosystems including press, analysts, systems integrators (SIs), Value-added Resellers (VARs) and government customers.

The conventional view serves to protect us from the painful job of thinking.”

John Kenneth Galbraith

Strategy – Distinctive Competence – Competitive Differentiation – Go-to-Market

Consider these four elements as part of a planning recipe. These are fraught with conventional thinking. Many companies operate on auto-pilot by following industry practices without much thought.

My series will cover the following myths:


  1. Key end-game is to “own the customer”
  2. Large companies have better economies of scale
  3. Large companies can afford innovation
  4. Organizational structural efficiency is the key to efficiency
  5. Enterprise Software companies should avoid implementation services except in extraordinary situations
  6. Enterprise Software companies should focus on building the product, have the channel build the solution
  7. The software company with the most features wins?
  8. The myth of enterprise software risk avoidance
  9. It is less risky to buy software from a larger software companies
  10. Emerging markets are risky except for large companies
  11. Don't re-invent the software wheel
  12. Global markets are too difficult for smaller firms to penetrate
  13. Social media is just another marketing tool
  14. Users are the best way to enable customer advocacy
  15. Corporate Social Responsibility (CSR) is good marketing for large ERP firms
  16. Customer centric companies cannot effectively collaborate

<h3 style=” text-align:=””>from Wikipedia:

“Conventional wisdom is not necessarily true. Conventional wisdom is additionally often seen as an obstacle to the acceptance of newly acquired information, to introducing new theories and explanations, and therefore operates as an obstacle that must be overcome by legitimate revisionism. This is to say, that despite new information to the contrary, conventional wisdom has a property analogous to inertia that opposes the introduction of contrary belief, sometimes to the point of absurd denial of the new information set by persons strongly holding an outdated (conventional) view. This inertia is due to conventional wisdom being made of ideas that are convenient, appealing and deeply assumed by the public, who hangs on to them even as they grow outdated. The unavoidable outcome is these ideas will eventually not match reality at all, so conventional wisdom will be violently shaken until it doesn’t conflict reality so blatantly.”

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Doug Hadden

Doug Hadden

Executive Vice President, Innovation at FreeBalance
Doug is responsible for identifying new global markets, new technologies and trends, and new and enhanced internal processes. Doug leads a cross-functional international team that is responsible for developing product prototypes and innovative go-to-market strategies.

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