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Enterprise software: The next generation

software tools
(Image credit: Image source: Shutterstock/niroworld)

Back in the 1990s, selling enterprise software mostly involved shoe-leather, with salespeople traveling the country, taking executive-level decision-makers out for steak dinners, and trying to convince them to write checks with lots of zeros on them. The result: powerful but brutishly ugly software designed with a focus on institutional benefits and ROI rather than design or the end-user experience.

That all changed when the Millennials came along. Raised on Facebook and other design-forward consumer-grade software, the new generation of workers weren’t willing to settle for clunky legacy tools. They were digital natives, ready to take full advantage of the burgeoning cloud-computing revolution, and eager to curate their own portfolios of well-designed apps combining form and function to eliminate quotidian workplace annoyances.

The Millennials’ approach to software filtered outward, driving the organization-wide adoption of now-staple apps such as Slack, Zoom, and Dropbox. In response, vendors changed their strategies to focus on end users, using decentralized, product-led growth strategies instead of high-level sales pitches. Suddenly, the ability to eliminate mundane annoyances became a key driver of scalable success, with vendors trading a handful of high-dollar deals for freemium and subscription models designed to attract huge numbers of individual users.

The rise of product-led growth strategies has democratized our workplaces and changed the world we live in, while giving rise to software companies with collective market caps of more than $200 billion. But while hideous legacy software is largely a thing of the past, the times are changing once again.

After all — sorry to break it to you, kids — the truth is that Millennials aren’t as young as they used to be. The oldest Millennials are now pushing 40, and even the youngest are now in their mid-20s, out of college, and well-established members of the workforce. Increasingly, we’re seeing the Millennials move into management roles, while those vital front-line positions are being filled by Gen Z employees with new expectations and new ideas.

That raises the vital question: As a new generation of fresh-faced youngsters become our end-users, what will happen to software sales? Can we expect more of the same, or are we on the brink of another enterprise software revolution? And, most importantly, how can we vendors reimagine product-led growth, and position ourselves for continuing success?

What millennial managers will expect

As Millennials age into middle management, they’ll change — but they won’t suddenly adopt a Boomer or Gen X worldview. Many of the traits that made Millennials unique will continue to be present as they climb the corporate ladder. They’ll just be expressed in different ways.

If we’re lucky, software companies that have adopted product-led strategies will see millions of Millennials growing into management roles just as their own product-led growth strategies are maturing. After all, beyond a certain level, product-led approaches still require high-level sales strategies, and it’ll be easier to close those deals with Millennials making procurement decisions. Millennial bosses have seen the boosts in productivity and collaboration that tools like Slack and Dropbox can deliver, and they’ll be more likely to see end-user benefits as a tangible reason to invest in software.

That doesn’t mean Millennials will simply sign up for whatever software companies pitch them, though. Many Millennials, having survived one major downturn even before the coronavirus pandemic struck, have deliberately positioned themselves as multifaceted generalists, able to adapt to whatever the world throws at them. That could make them more flexible managers, but it will also make them more hands-on and more exacting when it comes to determining what software tools are best for their frontline workers.

In other words, expect Millennials to pay attention to the details, and to expect you to bring tangible proof when you promise them productivity and value. Having lived through the product-led software boom, Millennials rightly consider themselves better informed than their elders, and better equipped to see through salesmanship and spin. To win over Millennial software buyers, vendors will need to deliver real value — both for the end user, and for the organization as a whole.

What Gen Z will do differently

In some ways Gen Z employees are like Millennials with the volume cranked up even higher. They aren’t just digital natives — they’ve grown up living online 24/7, with an immersive, media-rich Web environment permanently at their fingertips.

If Millennials demanded enterprise software experiences that could rival the design-forward consumer apps they loved, Gen Z workers will expect enterprise software to be even slicker, even more immersive, and even more richly interconnected. Expect mobile-first apps with powerful social connectivity to become a must-have for the new generation of front-line workers, just as pleasant-to-use, problem-solving cloud apps were for Millennials.

Gen Z users will also be shaped by their environment. The 2008 downturn looks like a minor market correction compared to the havoc now being wrought by the coronavirus, and that will shape Gen Z attitudes in profound ways. We’re already seeing Gen Z workers as more focused on their own finances than previous generations — not a sign of avarice, but rather a reflection of the inequality and economic challenges they’re having to endure as they study and begin their careers. Gen Z enterprise software users will have extremely high expectations, and they’ll be focused on value and utility, not just convenience and design.

There’s one more important consequence of the inequality and instability that Gen Z-ers have grown up with. While many young workers are smart, educated, ambitious, and digitally savvy, they’re also increasingly likely to be joining the deskless workforce.

Some of that will be by necessity: in the post-pandemic era, we’ll see an increasing need for delivery workers and other blue-collar logistical and maintenance workers. But we’ll see plenty of highly educated young people gravitating to deskless roles, too. In fact, according to one recent poll, 45 percent of current college grads aspire to work in deskless roles — a sign that mobility and flexibility are increasingly prized by talented and highly trained young professionals who might previously have been content to take an office job.

That could be an important driver of enterprise software development for deskless workers, who’ve hitherto been largely neglected by Silicon Valley. At my own company, MaintainX, we’re seeing young workers increasingly drive organization-wide adoption of mobile operational apps and connectivity tools, even in industries that have previously relied largely on pen-and-paper solutions. That’s likely to become a more widespread phenomenon, with product-led growth fueling a new wave of apps targeting mobile workers who want to choose their own software stacks, and who refuse to give up connectivity and powerful software simply because they don’t have a desk.

The future of product-led growth

So what does all this mean for software vendors? Well, it suggests we’re heading into a world in which product-led growth, fueled by young, digitally savvy end-users adopting and evangelizing  the apps we make, has never been more important. The democratization of software-buying is here to stay: important decisions will be made at the grass-roots level, not in the C-suite, and companies that can effectively address users’ pain points will find it far easier to get their foot in the door.

But it also means that for software developers, the stakes are higher than ever. With Millennials in management and procurement positions, and Gen Z graduates now entering the workforce, we can’t allow the innovative products of today to become the legacy tools of tomorrow — we need to keep on innovating, and finding ways to make our products better for both companies and individual users alike.

That will mean building software with the beautiful, intuitive mobile-first interfaces that Gen Z users consider table stakes. While on desktop you can add a lot of "usability", the true mastery in mobile enterprise is not adding features to the screen but taking features away. Expect to see a growing number of developers adopting a less-is-more approach to UX, and using best practices such as feature flagging to ensure that each user is presented only with the precise tools they need and nothing else. But it will also mean building tools that are genuinely enterprise-ready, with strong security, integration, support, and services.

Firms that deal with critical infrastructure or sensitive information are rightly worried about “shadow IT”, and the risks that come with allowing eager young workers to develop new workflows and bolt new apps onto their digital ecosystems. It will take more than just a generational shift in attitude to solve those problems — vendors will have to work in partnership with their institutional customers, as well as their end-users, to deliver industrial-strength security and reliability, as well as extreme ease-of-use.

Finally, software sellers will need to remember that selling remains a critical determinant of success. Product-led growth is the tip of the spear, but wait too long, and you might find a top-down software provider grabs the CEO’s ear and convinces them to sign a big contract — regardless of what your existing users across the organization think of that plan.

Such incidents should become rarer as younger managers move up the ranks and understand the desire of their end users to choose their own software stacks, but it will always be important for software companies to have a value proposition that goes beyond just solving pain points for individual users. Millennial managers understand the value of standardizing a software solution across an organization, so sellers with enough user-driven momentum may find they’re the only software vendor invited to pitch to the C-suite. Once you get in the boardroom, though, you’ll still need a convincing ROI-focused business case in order to convert product-led growth into a big enterprise-scale deployment.

The bottom line is that product-led growth is an increasingly powerful strategy for software companies — but to succeed, vendors will have to keep adapting and changing as new generations of employees explore new ways of working. Product-led growth will only become more important in coming years, as a new generation of employees who’ve learned to love products designed with end-users in mind mature into positions of leadership. But the needs of those end-users will keep on evolving. Companies will need to change with the times, and focus on delivering relevant products that provide genuine value for both users and enterprises in order to stay relevant in years to come.

Chris Turlica, CEO, MaintainX
Alex Rosen, Managing Partner,
Ridge Ventures