In this keynote address from the Software 2006 conference, venture capitalist, and former Oracle COO, Ray Lane assesses the current state of the software industry. He describes how the landscape has changed, with slow growth and shrunken profits, and then lists the strategies that today's software companies need to follow.
Eighty percent of enterprise software industry profits currently go to just three companies, while seven thousand companies fight over the remainder. Enterprise customers are dissatisfied with their software vendors. The software business is becoming globalized. It's increasingly difficult for a software company to make money, but Ray Lane knows which business models give a competitive edge and which are likely to fail.
Lane's tips include ease of adoption, instantaneous value, minimum IT footprint and appealing to users rather than to corporate buyers. Vendors need to make it easy for users to get started and provide real value to the customer before she is required to pay. The user experience should be personalized and contextualized and the product should spread through the enterprise organically, via user recommendation, rather than by management edict.
Backed up by case studies and hard statistics Lane delivers a clear, valuable narrative on the past, present and future of the enterprise software business
Ray Lane is General Partner at Kleiner Perkins Caufield & Byers, America's premier venture capital firm, focused on helping entrepreneurs with technological and market insight, organizational development, team building, selling, and managing growth. Since joining KPCB, Ray has sponsored several investments for the firm aimed at improving enterprise productivity. He sits on the boards of Elance, MetaMatrix, Virsa, Visible Path, Xsigo Systems, SpikeSource and PodShow. He also serves on one public board, Quest Software.
Before joining KPCB, Ray was President and Chief Operating Officer of Oracle Corporation, the second-largest software company in the world and the leading enterprise software and services company. During his eight-year tenure, Oracle exhibited phenomenal sales growth, from approximately $1 billion in 1992 to its current annual revenue of $10 billion. Ray led Oracle's business expansion beyond its core database technology into enterprise applications and professional services.
Before joining Oracle, Ray was a senior partner with Booz-Allen & Hamilton, where he pioneered and led the Information Systems Group, a worldwide consulting practice targeted at helping senior management achieve better results from information technology. He also served on Booz-Allen's board of directors and executive management committee. Prior to Booz-Allen & Hamilton, Ray served as division vice president with Electronic Data Systems Corp (EDS). In addition, he spent ten years with IBM in various product-management, sales and marketing positions.
Ray received a bachelor's degree in mathematics and an honorary Ph.D. in Science from West Virginia University (WVU). He was elected to the Academy of Distinguished Graduates of WVU and serves as a director of the Foundation Board for the University. Recently, WVU honored Ray by naming the Lane Department of Computer Science and Electrical Engineering. Ray also serves on the board of trustees of Carnegie Mellon University. He has been an active campaigner and planner for Carnegie Mellon's establishment of a Silicon Valley campus, and the co-creator of a High Dependability Computing Consortium with Carnegie Mellon and NASA. Ray also serves as Vice Chairman of Special Olympics International and has served on the International board of Special Olympics for several years. He also holds an honorary Ph.D. from Golden Gate University.
This free podcast is from our Software Conference series.