Enterprise Software and the Network Effect

Written by Harsh Jegadeesan on 12:00 PM

Businesses have always tried to exploit network effect and the bandwagon effect to their advantage to attract new customers and improve their top lines. Microsoft is a classic case in point - Windows is occupying more than 90% of the world's desktops largely due to the network effect.

How can enterprise software makers leverage the network effect to increase their installed base? the answer lies in 'business network transformation'. Earlier, enterprise software was used to automate internal businesses processes in finance, HR and operations. ERP software was ruling to roost.

Come Y2k, the new world order is:

- forcing businesses to focus on their 'core', their differentiating claim-to-fame capabilities and work with parters in the ecosystem to provide complete customer solutions - outsourcing

- forcing businesses to engage with suppliers and partners in different corners of the globe - off-shoring

From an enterprise software perspective, collaboration with partners is the new mantra, consolidation and automation is a given. If any enterprise software can support such kind of collaboration and enable out-of-the-box collaboration capabilities for entities in the business network, it would emerge as the de-facto operating system of business.

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