Opportunties for Enterprise Software Investments

I had the opportunity to spend a few hours today at an Intel Capital event for their portfolio companies and VC friends. While a great way to network with fellow investors and meet new companies, I particularly enjoyed a talk given by Chris Thomas, Intel's EStrategist, on the future of software in the enterprise. While none of the ideas were new, I liked how he laid out the major themes in computing and software in a well-thought out presentation.

Here are some of my notes from that discussion.

Chris' view is that we are moving towards a service-oriented world, where enterprises can tap applications and resources on demand and on the fly. Yes, we have heard this theme over the last few years in a number of different incarnations. In fact, I got a chuckle from Chris' list of marketing slogans from all of the large vendors trying to trademark their specific vision on the service-oriented world (N1, on-demand, etc.). Anyway, despite the hype of SOA (service-oriented architectures), it is beginning to happen, it is real, and it is still early. As we move into this world of SOAs, there will be tremendous opportunities for software investment as enterprises consolidate, modularlize, and virtualize their data centers. Chris highlighted the 5 buckets or themes that mattered to him:

1. Software and data delivered as services
-think ASP model, think modular, software components that perform a specific task, which can be used as building blocks and combined with other components via web services to solve a specific business problem
-this will be the new way to build software and go-to-market
-he gave an example of how AT&T used a combination of hosted software vendors and their APIs to deliver an order routing solution for a customer in 2 weeks instead of 9-12 months
-a side note - as we move into an increasingly global world, no need to worry about software piracy since you can't steal a service but you can steal sofware

2. Hardware as a virtualized resource
-view hardware as one set of services
-manage capacity on demand
-new hardware=new software opportunity

3. Autonomic data sources (RFID, tags, smart sensors)
-Chris gave an estimate that an average retail store could have up to a terabyte of data from RFID alone
-think about the opportunities here to process, filter, store, and understand all of this data
-how will all of this data flow through the network in an optimal way?
-once again, more investment opportunities in software

4. Occasionally connected usage (Intel's mobile theme)
-performance of offline and occassionally connected usage much better than always-on
-opportunities include power, performance, software that works online and offline (go to back to theme #1 above, ASP model)

5. Services cross firewalls (security)
-if we move to this service-oriented world where partners, machines, and applications access data on the fly, there will be tremendous need for security

Chris' bottom line was that asynchronous XML messages are what makes this service-oriented world possible. We are just at the beginning phases, a new architecture is needed and with that comes new and interesting opportunities for software investments. I totally agree here as most of the service-oriented talk from many of the large tech vendors is still a pipe dream and more marketing than fully functioning product. In addition, most enterprises are experimenting with various aspects of the above themes but far from prime-time in terms of deployment.