The fierce urgency to improve business productivity in Africa is very clear, when you consider the kind of values companies are creating, not just in the consumer software market, but also in the enterprise one. Our continent is marginally “snailing” in the consumer market nexus. But when it comes to the enterprise one, we are yet to take off. Enterprise software is huge and brings enormous opportunities. But most times, you need the enterprises before you can build the software that will support them. That is compounded by lack of top-grade facilities which can help companies even adopt modern solutions and tools. Those include electricity and internet connectivity.
Enterprise software companies are rarely of great interest to anyone other than their employees and customers. What does make people stand up and take notice of these digital plumbing concerns is their eye-popping valuations. Once hooked, corporate users tend not to be able to operate without them, making an enterprise software franchise particularly lucrative.
One of the newest of these companies is ServiceNow, an online-only firm that handles, processes, and automates IT requests. This isn’t exciting stuff, but it greases the wheels of any modern corporation. ServiceNow, with just north of $1 billion in annual sales, is worth nearly 15 times that much. On Monday it changed out its CEO, bumping upstairs to chairman Frank Slootman in favor of John Donahoe, the former management consultant who went on to run eBay in the post-Meg Whitman years.
“I am honored to lead ServiceNow,” Donahoe said in a statement. “ServiceNow is extremely well positioned to expand its leadership in the years ahead. Working alongside Frank and the Board, the management team and I intend to capitalize on our opportunities to drive growth and create value for our customers, partners, shareholders and employees.”
The shift is significant for the company and for Donahoe in one significant way: He’s a consumer guy, not a business-to-business specialist. Already, though, he has the lingo down. He noted on Monday that there are only three great enterprise software companies “born in the cloud”: Salesforce.com, Workday, and ServiceNow. The first specializes in sales and marketing software, the second in HR software. ServiceNow focuses on a “system of action,” rather than a system of record, says Donahoe, which is why it works with rather than competes against its two cloud classmates. ServiceNow has branched out into four new “actions:” HR, security, customer support, and business applications. “It has now become a platform,” says Donahoe, a particularly pleasing word for someone familiar with how eBay makes money.
Making money is one thing ServiceNow doesn’t do, though Donahoe says it would but for its generous equity grants to employees. Under Slootman the company already promised to hit $4 billion in revenue by 2020. It was considered a takeover candidate in the constantly consolidating enterprise software world, and the stock dipped on Donahoe’s hiring. The assumption, which Donahoe confirms, is that you don’t hire a guy like him to sell. “The board is signaling an intention to continue to be on offense,” he says. Now that’s exciting.
Also, thirty big banks, tech giants, and other organizations—including J.P. Morgan Chase, Microsoft, and Intel—are uniting to build business-ready versions of the software behind Ethereum, a decentralized computing network based on digital currency. The group, called the Enterprise Ethereum Alliance, is set to debut at a summit in Brooklyn, New York on Tuesday, during which members J.P. Morgan Chase and Banco Santander are supposed to demonstrate a pilot of the financial technology as it exists today.
The African continent has the promise to deliver this type of value if many things can change fast including reliable electricity and affordable internet. That will make it possible to build products for African SMEs and companies which can grow fast and improve the efficiency of business systems. Without these facilities, few entrepreneurs will take up the challenges of building enterprise software despite the latent opportunities in the continent.
– adapted from Fortune newsletter