Own Your Digital Ecosystem, or It'll Own You

It's one of the most deflating moments for a software business: you've poured thousands of hours into building a great product. It works as promised, and you have early customers who believe in your vision and are getting results. But now you're trying to sell the product more broadly, and prospects are asking the tough questions: "Does this work with Salesforce?" "What about SAP and ServiceNow?" "What about the 20 other products in my MarTech stack?" "Can you make this all work together for us?"

In that moment, you realize your Total Addressable Market is not as big as you told investors. Each question you can't answer with a definitive "yes" reduces your addressable market — usually by dozens or hundreds of customers who have the same questions. So what do you do? You get back to work building dozens or hundreds of integrations, so you can turn the reluctant "no" into a ready-to-go "yes." You shift development resources away from innovation. You build one integration, then another, then another, wishing there was a better way.

This is the cycle of modern-day software, where the typical enterprise customer has 1,000-plus applications (whether they know it or not). It's a huge challenge for software providers, and an equally daunting challenge for enterprise IT and business leaders.

That's why businesses identify integration as a critical barrier to digital transformation — stalling progress for 84 percent of organizations, according to MuleSoft's latest survey. Meanwhile, software vendors increasingly realize the importance of building integrations with partner companies, and venture capitalists advocate that software companies should shift their thinking from "products" to "platforms."

Well, it's time to break the cycle. Or at least re-engineer it. The problem is that integration is traditionally an afterthought. Software teams focus on building the thing, not thinking about how it'll work with all the other things — most of which were created by someone else, often using a different generation of technologies. Integration needs to become a forethought — and it needs to graduate from the "point to point" legacy approach that simply won't scale in the cloud era. (Have you seen "The Trouble With Tribbles"? Yes, that's what we're dealing with.)

In short, it's time to embrace the Ecosystem. People in Silicon Valley talk about it from time to time, but it tends to be a throwaway word in the marketing pitch. It needs to become a defining force in the business plan for software providers, as well as a defining force in the IT strategy for enterprises. The "stack" is too monolithic and locks people into old-world thinking. It no longer reflects the dynamism of today's technology environment. The "ecosystem" is a more relevant world view:

1. A biological community of interacting organisms and their physical environment.

2. A system, or a group of interconnected elements, formed by the interaction of a community of organisms with their environment.

3. Any system or network of interconnecting and interacting parts, as in a business.

Aaron Levie from Box recently published a piece in TechCrunch calling for "a new era for enterprise IT," highlighting the rich innovation happening in enterprise software:

"What seemed unfathomable merely a decade ago is now becoming commonplace, as Fortune 500 companies are mixing and matching best-in-class technologies to power their business. These tools must work together without requiring the customer to stitch systems together manually. Without interoperability and integration, enterprises will be left with siloed data, fragmented workflows and security gaps in the cloud. In this digital world we can no longer think about a few vendors owning layers in a stack but instead as an ecosystem of multiple services working together to deliver value to the entire network."

We're also seeing the concept used vertically and horizontally to talk about the "FinTech ecosystem," "MarTech ecosystem," "digital health ecosystem," etc. The concept can also be applied more narrowly to an individual software company ("SAP ecosystem") or enterprise (" American Express ecosystem ").

Whatever term or context is relevant to you, the important point is that you need to proactively plan, build, manage and scale your ecosystem. Or put simply, "own" your ecosystem.

Your ecosystem is key to enterprise agility and fluid business workflow. It's foundational for digital transformation. And for software providers, it's a prerequisite for creating the best customer experiences and growing your market opportunity.

-Mark Geene, CEO at Cloud Elements

With that backdrop, we're incredibly excited to launch our latest software platform that will help businesses build and manage their digital ecosystems. Cloud Elements 3.0 is a true innovation accelerator for software providers and enterprises. Read our latest announcement here.

This is truly an exciting time in the enterprise software business. Unlike the old days of monolithic stacks when dinosaurs ruled the earth, it's time for a world of free-flowing and democratic digital ecosystems powered by APIs. So, what's in your ecosystem? And how will you manage it? Learn how you can build the future by downloading our latest strategic brief below.