Consumption Rules, E-mail Thrives, Enterprise Agreements are Dead

Opinion

Microsoft opened its Office suite to play with other cloud services, Box debuted on Wall Street, and Google reinvented the inbox. Not even three months into 2015, and we’ve already had several interesting developments in the online collaboration software market. Here’s how these announcements fit into trends we’re seeing at Smartsheet.

Consumption-Based Pricing Eats Per-User Pricing

The days are numbered for seat-based enterprise software licensing and negotiating enterprise agreements that don’t include consumption metrics. I chuckle every time I get an e-mail from a company called Software Licensing Advisers inviting me to a workshop called 2015 Microsoft Licensing and Negotiation Workshops: Seattle—Become a Microsoft Licensing Expert and Negotiate Better Deals with Microsoft. Why would I need a workshop to negotiate my licenses? Likely because I lack the transparency in my software usage to understand what features and functionality I need.

The availability of Microsoft O365 marks the tipping point for software pricing. Now that it’s possible to see actual usage online, they prices are under the same “active users” microscope as all the other SaaS tools that are routinely graded on usage, not just seats sold.

The rest of the megacaps are now officially on notice.

Smartsheet customers simply true-up their license every quarter based on the actual use. Usage of the tool spreads virally as people collaborate and active use is transparent, so we rarely speak with a CIO who doesn’t have hundreds or thousands of active users to set the value.

App Fatigue Creates a Backlash Against BYOA

For the past couple years, mobile devices and apps have been the Wild, Wild West, as the bring-your-own trend swept the enterprise, while the core services we grew up on such as Microsoft Office made their move to the cloud. The BYOD and BYOA trends have been a great thing. Letting employees choose their own apps has enabled enterprises to internally crowdsource future solutions in productivity. But like too much of any good thing, the BYOA pendulum has swung too far.

Today 78 percent of employees (PDF)are managing their work on their own devices, using a mix of personal and company-purchased apps. The average information worker routinely uses six to10 apps, which can create silos of work separating teams, departments, vendors, and clients.

Now the apps proliferation has crossed the Rubicon and needs to be reined in. What if a project manager moves content from a company Google Drive account and puts it in their personal Box? Who owns the content then? These blurred lines are causing IT to struggle with balancing their security concerns with employees’ need for choice and immediate return.

This year companies will start to consolidate around the core apps that have the best and broadest adoption.

E-mail Not Only Survives, but Thrives

For years we’ve vilified e-mail as the great productivity sink, but it’s one of the few tools that has evolved to work seamlessly among everyone, regardless of platform or device.

If executed well, e-mail makes our apps more useful. All the apps we install will continue to notify us via e-mail, and the apps that don’t talk to each other directly will still force us to talk with each other via e-mail.

Plus, there are some exciting new advancements in e-mail. Microsoft is upping the ante with the recent release of Outlook for Android and iOS mobile devices. While this is partly due to their acquisition of Acompli, it’s also a step towards delivering on Microsoft CEO Satya Nadella’s “cloud first, mobile first” strategy.

The world’s biggest e-mail service, Gmail, is seeing big changes as well with their introduction of Google Inbox. New Assists, Bundles, and Now Reminders all are designed to help you sort, find, and deal with e-mail faster.

Needless to say, with these types of investments, e-mail as we know it is in for some big changes, and will continue to be the one tool that binds us all.

Visualizing How Work Gets Done Will Become Central

Managers are feeling the pressure to keep track of who’s doing what with whom and where projects stand. It’s driving the need for visualization tools that can illustrate the big picture in simple ways.

A new report by the late tech industry news and analysis site GigaOM describes the value of combining people, work, and content in a visual framework that uncovers valuable insights about the patterns of work collaboration. Not only is it possible to graphically depict project status, you can now identify patterns in team collaboration, visualize hubs of activity, and identify who the top performers are. This view of work is unprecedented.

Visualizations will be particularly helpful in understanding how employees collaborate with external partners. Our customers have discovered that 35 percent of people contributing to their projects are actually outside the company domain. Being aware of this, and having the ability to audit and control this collaboration, is a godsend to CIOs.

Brent Frei is the co-founder and chief marketing officer of Bellevue, WA-based Smartsheet.com, an online work management software company. Follow @b_frei

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