Today, the Higher Education software market is well saturated with enterprise software components and systems developed across decades of investment and deployment. I am describing student systems, financial management systems, human resource management systems, learning management systems, course management systems, grants management systems, email systems, document management systems, e-portals and business intelligence as enterprise software since the majority of the university and college community utilize and are dependent on the functions delivered from the software and interconnections. We use to describe these systems as mission critical and covered the essential functions of an institution's operation. Some of the primary assumptions made by enterprise software rely on the value delivered through the combination of functions, the common look, the umbrella support and the shared resources. The integrated suite versus best of class software systems is not at issue. The philosophical boundaries have been crossed so it is greyer than black and white.
Enterprise software combines many functions into one system, like a home entertainment system I bought from RCA years ago. The pre-engineered unit allowed me to plug in the packaged components to play and watch my videos and music I acquire at local stores on CD and DVD. My laptop computer is similar. It comes bundled with CPU, disk, dvd/cd, memory, sound card, ports, screen, keyboard and configurable expansion options. Someone else put in all the effort to figure out what those components were, acquired or built them and made a single unit that I could affordably acquire. We pay the value for the combined unit which adds convenience over doing it all myself. My entertainment unit lives in my family room next to my plasma screen. My laptop is my business desktop and home computer.
From ERP (enterprise resource planning) to departmental to desktop to web, software is designed and built to serve functions and people that evolve from use. Use is another way of reflecting behavior. Software systems deliver value only if they continue to evolve with the rest of the world. Along comes disruptive changes and the assumptions once relied upon, break down. Like my RCA home entertainment system, enterprise software is at a fork in the road. I rarely use my home entertainment system these days, since I acquire music on iTunes and rarely acquire physical medium any more. The system has been marginalized by alternatives. And, soon, I will remove it from my family room, because it is just taking up space, power and can be supplanted by other specialized devices with superior convenience. My laptop has a useful life as well. I would average about two years with one. With new technical features to improve my convenience, many of us replace our laptops to improve speed, update operating systems and add the components newly introduced since my last acquisition. My new laptop has a nice camera, HDMI port and a huge amount of disk to store movies. Plus, the new N-network features improved by upload and download speed almost five fold over my old laptop and gave me greater distance from my access point.
We can debate the timeframe. Traditional enterprise software vendors are like deer in headlights. The market is saturated from one perspective and growing more and more obsolete from another. We can debate what is disruptive enough to the install base and what future events will draw institutions to move away from hosting enterprise software systems and components. The inevitable pattern of obsolescence will continue as new innovations supplant older enterprise software solutions and functions. It may take another ten years when we think of the longevity of organizations and computing as an industry and discipline to shift. But, the reason the present model of enterprise software will be supplanted by new open shared community based platforms seems inevitable to me in that the complexity of assembly, deployment, sales and support will make the enterprise single vendor, single platform obsolete and too costly compared to software as a service (SaaS) or on-demand components integrated along agile boundaries well defined by industry standards. The question is just a matter of time. Just as the rise and fall of video outlets, photo reproduction and distribution channels changed for autos, electronics and even legal services, we will see the evolution of digital utilities leveraging the network effect and viral adoption of components bringing value to the market as new computing services distribute greater value than controlling one's own technology stack through proprietary locks that are artificially reinforced because it is within the scope of the vendors offering or not.
Higher education, a niche that has long prided itself for sticking with traditions will be the last bastion of enterprise software managed in their localized data centers and controlled by each institution as if it was their own. Many schools have already moved their ISP and email services outside. Industries outside higher education are on a fast track replacing proprietary enterprise systems with SaaS and on-demand components for the last decade breaking down the centralized control and oversight of IT. We are in a new cycle of evolution no doubt. So, if you are an enterprise software company serving higher education, take heed. Get it while you can. Higher education is an industry leveraging their investment in software for extended periods. More than than most industries because of the complexity of moving organizations beyond boundaries and the past the effort it takes to change. It takes years and years to setup and implement software systems in higher education because of the committee decision. And, it will take years and years for the investments made today to be replaced. No great rush.
Wait. If that is the case, then why are the enterprise software companies serving higher education retrenching and pulling back? Is it just the economy? Why are they struggling with reinvestment? And, why are they fixated on proprietary behaviors like a caged animal with its food? They control access to their environments like they are Fort Knox and protecting gold. Unlike many new internet and web savvy companies, they lack integration and open technology to help institutions extend their investment. They promise that, but rarely deliver it as part of baseline services, because of the revenue they would be giving up. They pay lip service to open industry standards yielding slow adoption in general. This is part of the problem my RCA home entertainment had. If it had the ability to access iTunes, I would be still using it today. But, it is locked down with a proprietary box and no means to extend even though it is connected to my internet enabled TV. Maybe there is no alternative. Enterprise software vendors become buffered from reality that they sit patiently waiting for the next big thing, instead of inventing and innovating new products cannibalizing their own install base. With business models evolving faster than software development life cycles, what is a company to do with stuff developed over twenty years that can't be re-written when the install base is seeking incremental steps?
Is open source a replacement for enterprise software? I don't think so. It confuses the discussion to degree. Because the debate between open source and proprietary is also grey. The future of enterprise software is not determined by how the software is developed and deployed. It could be freeware, shareware, and proprietary or home grown. Open source or community source or community shared resources are three different models. How software is designed, developed and deployed is really the issue. What point of view is it trying to serve? The issue is how will cloud computing, SaaS and on-demand functions hosted by digital utilities be integrated into enterprises eroding the one system source or vendor and the requirement to locally manage the technology, the stack, the servers and the connections?
Yesterday's software was designed as an extension and replacement for files, forms and actions that required input, processing, storage and reporting. I remember replacing paper and manual processes with record keeping software systems managed by a drove of users thirty years ago. It is rare today to replace a manual and paper based system. We always thought the ROI was the replacement of staff or the cost savings of reducing the labor to perform things like mail merges, because the old way of looking at things focused on the traditional work in an organization that required record keeping, archives, reporting, etc. Man, was that wrong.
Software evolved from table driven to procedure driven to event driven to user driven. Self service and the dot.com era before the turn of the century reflected the hype cycle. Many still live in this realm of one stage or another. I still can't believe how much COBOL based systems are still out there running. The effort to develop complex data models optimized for storage and retrieval were called enterprise systems and they had little to do with the value of what the software did for users or customers. We think in terms of logical, physical and normalized structures now, requiring common steps organized to serve the machine or system design, not the users or customers. This is what we are moving away from. When the organization decided to move to a new platform, everyone worked together to feed the system move. I still see this today. The effort expended sucks the wind out of the lungs of most organizations. Have you ever found an organization that really improved by implementing an ERP? Is the ERP really being used to better plan the use of resources in a university of college environment? This will change. That was the intent originally. It was over-hyped along with the dot.com run up. It does not have to be that way, as more and more evidence shows that software can be implemented with far less effort, when engineered in smaller components allowing the value to be gained in a few days, not months or years.
I recall designing application functions to support CRUD (create, read, update and delete), represent the relationships between tables and how users would serve the system collecting data which we would then transform into information through reports. Looking back, I can remember thinking a certain way about functions and processes. So, software from this bi-gone era, which is still in place across thousands of colleges and universities, is like the grass outside my house. I have to keep feeding it, watering it, weeding it and cutting it. It looks nice on the surface. It is a huge expense – for what purpose? And, rarely does anyone come and value it or walk on it. Each week, it raises the thought of what it would be like if I would let it grow. Does it matter? What I once thought was important, is now just a field of grass I pay little attention too. The assumption of course is, I won't be living in this house forever and eventually will move because of the effort to keep up with things, like cutting the grass, painting and not needing all this space.
Is the shift from enterprise software to open platforms under way? I think the one-size-fits-all set of modules developed by a single vendor or community with limited connections is way too confining in today's internet world that is like entropy expanding in the universe. Even with proprietary API's (application programming interfaces) pre-built and hidden under the hood, enterprise software is constraining and overwhelms most institution's IT resources because they are designed from the process of satisfying what the "system" needs to continue to operate, and not the user or customer who needs to bring value working together. The whole premise of enterprise system over the last twenty years is inside out. The old premise is similar to railroad companies who never transitioned to making automobiles or other forms of transportation including airplanes, because they were in the rail business presuming the points of destination, confined by the method and not willing to risk challenging their install base of riders.
IT departments generally have little discretionary resources to attack new challenges, to answer the call for change. Nor, can they easily integrate new components into their environments without diverting limited resources and time to study the implications. Universities and colleges won't be able to compete or survive if they lack connectivity in the network world with applications that span their internal environments. Unifying and enabling IT to broker and manage decentralization, control of work flows spanning departments and intertwining a range of components hosted outside the enterprise, providing greater benefit from shared resources will be the challenge over the next decade. Vendors or systems offering support for open platforms will overtake those that lock down and hold back their clients desire for a new level of independence and flexibility. That is the future of enterprise software systems in higher education according to my perspective. It won't be overnight and a big rush. But, a slow march.
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