Enterprise Software Needs Consultants

Shaan Puri and Sam Parr discuss their confusion about enterprise software companies and systems integration, revealing how complex yet lucrative this space is, despite being difficult for outsiders to understand.

Key Points:

• Enterprise Software Understanding Gap:

  • Even successful entrepreneurs struggle to understand what major enterprise companies like SAP, Cisco, and Oracle actually do
  • Basic concepts like "procurement" and "systems integration" are confusing to those outside the industry
  • Website descriptions often use vague language like "networking redefined" that doesn't clarify the actual service

• Implementation Complexity:

  • Large consulting businesses generate billions helping companies implement these software systems
  • Example: When companies adopt Netsuite, they need consultants to:
    • Set up the system (takes ~12 months)
    • Integrate with other services
    • Train employees on usage
  • Companies can't simply purchase and implement enterprise software on their own

• Business Model Insights:

  • These enterprise solutions are so unintuitive that there's an entire consulting industry built around implementing them
  • The complexity creates opportunities for billion-dollar consulting businesses
  • Services revenue is a major component of enterprise software companies' earnings

• Market Dynamics:

  • Companies are willing to pay significant amounts for implementation help
  • The complexity creates a moat around these businesses
  • The unintuitive nature of the products doesn't prevent their success - it may actually contribute to it