The Enterprization of Consumer Apps

The classic Eddie Murphy/Dan Aykroyd comedy “Trading Places” explores what happens when people from completely different walks of life switch places, in that case over a $1 wager. In the technology world, we are witnessing a similar swap.

Many industry pundits have talked about the Consumerization of the Enterprise — the idea that enterprise users expect the mobility, integration and ease of consumer technologies in their work lives. People often cite the move to user-purchased mobile devices like the iPhone or user-provisioned collaboration services like Box, DropBox and Yammer as evidence of this phenomenon. And because many of these services have freemium models, IT departments are finding that huge numbers of their employees are already using these services for business purposes in addition to personal ones. So in many ways, consumer expectations are driving the ways enterprise CIOs think.

But what about the other side of the phenomenon? Eddie Murphy’s character Billy Ray Valentine influenced Dan Aykroyd’s character, Louis Winthorphe, III, as much as the reverse. What’s less discussed — but equally fascinating — is the impact of enterprise requirements on the consumerization trend.

Many of the aforementioned start-ups initially focused entirely on end-user needs, providing simple user interfaces and sign-ups, and building multi-million user customer bases in the process. But as these vendors switched focus from user acquisition to monetization, they realized some IT department requirements are legitimate, and more importantly, are barriers to sale.

The most recent example: Box. Box founder Aaron Levie probably never imagined his company would be working with enterprise IT directors in designing his product roadmap when he started his file sharing company, but nonetheless it recently announced partnerships and integrations around identity federation, mobile security, e-discovery, and other IT-centric areas.

In contrast, DropBox has continued to focus heavily on end-user adoption with limited IT focus. Indeed, their total reported user counts dwarf those of Box or any other service. Yet the CIOs I’ve spoken with had a proliferation of users on DropBox and Box when they decided to standardize on a collaboration service. Despite the fact that their companies may have had more DropBox users, Box’s enterprise functionality tipped the scale in its favor. So while user adoption gets you in the door, without some enterprization you don’t get the sale.

Similarly, for Google’s Enterprise team, bringing Gmail to companies involved a lot more than just learning how to charge for the service. Google has spent the past several years trading places with Microsoft, investing in policy management, security, compliance and other IT-centric functionality to address early inhibitors to adoption. And it has worked. Analyst firm Gartner now sees Google as a viable alternative to Exchange for enterprise collaboration.

Indeed, even in the truly consumerized world of mobile devices, iPhones and Androids don’t roam free in most large companies. Many security-sensitive organizations are investing in Mobile Device Management (MDM) solutions like those from Good, MobileIron, Zenprise and Symantec, to bring enterprise manageability to smartphones.

The Enterprization of these traditionally consumer apps is going to center around three legitimate enterprise requirements:

  1. Data ownership: While enterprises are excited to leverage the flexibility and fluidity of cloud apps, the idea of an enterprise’s intellectual property spread across hundreds of cloud services, many times in user-provisioned accounts where the enterprise has no access, is scary. What if the company is involved in a lawsuit and has to put a user’s data on legal hold? How can the company recover data if the cloud service loses it? And most importantly, how can the company get its data back if it wants to change services? Tough questions if the data is trapped behind a user’s personal cloud account.
  2. Data security: Similarly, the thought of sensitive customer information living in cloud accounts where users choose passwords like “password” or, for the more secure, “password1,” is nerve-wracking to a security officer. How can the company ensure that its data is protected with strong passwords? When an employee leaves, how can the company revoke access to all cloud apps at once? Without company administrative rights, the enterprise is dependent on the judgment of the user.
  3. Data compliance: Whether data is stored on your G:\ drive or in Gmail, if it’s work-related, for the most part the same compliance rules apply. While SOX, FRCP and GLBA are not as sexy as FourSquare, Angry Birds and AirBnB, they are still critical for most companies. How can companies meet regulatory requirements around searchability, records retention, logging and other areas?

The real challenge as start-ups address the needs of enterprises is to maintain the core value that earned users in the first place. If they add every feature IT asks for, will the products lose their usability? If they make it easier to lock down access to the systems with two-factor logins when you can’t remember one factor, will users revolt? If these tools were used to get around IT, will the fact that they can now be monitored scare users away?

Time will tell. But this grand experiment would make the “Trading Places” brothers proud. And a lot more than $1 is at stake.

Nick Mehta is CEO of LiveOffice and has served in senior operating roles in the enterprise and consumer technology markets for much of his career. He spent more than five years at Symantec Corporation and Veritas Software Corporation (now Symantec), where he served as vice president and general manager of the Enterprise Vault information archiving and discovery software business.


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