What is an Enterprise Software Startup?

Computer Startup

Bill Gates is currently the third richest person worldwide after Elon Musk and Jeff Bezos. We admire what he has accomplished with his company, Microsoft, but there is probably nothing much you know about the kind of business he runs. Well, Microsoft falls in the category of an enterprise software startup. Developing software for enterprises is challenging; yet, such companies spend hundreds of billions of dollars building enterprise software products. As you dream of becoming as rich as Gates and maybe even follow in his footsteps, let us tell you what precisely an enterprise software startup is and how you can build a successful one.

Defining an Enterprise Software Startup

The FundersClub defines an enterprise software startup as a technology company that focuses on delivering services and/or products to businesses through software/programs operating on mobile devices or computers. There is no limit to the scale of the companies they deal with since they sell their products and services to small, medium, and large enterprises.

Enterprise software refers to computer software meant to satisfy any organization’s needs, such as schools, governments, and charities but not individual users. Such software includes Business Intelligence (BI), Customer Relationship Management (CRM), project management tools, and Enterprise Resources Planning (ERP) software. On the other hand, Enterprise hardware refers to telecommunication systems that include telephone systems, large-scale network equipment, and SIP (Session Initiation Protocol) devices. Examples of enterprise hardware include data storage devices and servers.

Therefore, based on the type of services or products they offer, you should differentiate between an enterprise software startup and an enterprise hardware startup. Enterprise hardware startup refers to a technology company that concentrates on selling products/services to businesses using physical, electronic devices, the keyword here being “physical.” Some enterprise software startups also provide enterprise hardware and consumer software. Consumer software refers to software sold directly to individual users instead of businesses; hence most consumer software is applications, not systems. Companies like Microsoft sell consumer and enterprise software. Some sell enterprise software and hardware, while others like Slack and SAP are entirely enterprise software startups.

Tips for Building a Successful Enterprise Software Startup

TechRepublic reported that in 2014, enterprise software startups had raised $5.4 billion in the first half of the year. The amount was what the companies had raised in 2013, which proved that software startups were gaining popularity as more businesses adopted cloud storage and sharing. Consequently, it was predicted that in 2020, global enterprise software application spending would be 196 billion. In 2021 it was also anticipated that new cloud-based enterprise software purchases would increase by 95%. If you plan to venture into business, an enterprise software startup could be your gateway to prosperity. However, you would have to be successful in operating it, so here are few tips you might want to know as Founder Institute enlightens us.

Focus on Giving Value

In business, remember that the customer is king, and you should always focus on providing him what he wants; otherwise, what is the point of creating software with many features that no customers need. Therefore concentrate on creating value by researching what your prospective customers would find helpful in solving the problems they have or those you foresee in the future. For this reason, even as you market your software, tell the customer the problem your software will solve instead of boasting about the features it has.

Make the Software User-friendly

One software developer recounted her experience of making complicated software that customers did not use. As per Forbes, the software development company had created software they thought would make the work easier for the clients who ended up discarding it. The clients explained that the software was too confusing with its many features; instead of helping them, it stressed them. As a result, the developers went back to the drawing board to make the software user-friendly and straightforward. Therefore as you go about developing your enterprise software, ensure that it is simple enough for your prospective customers. Some of the features may appear easy to use because of your technical background. However, always put yourself in the shoes of someone who knows nothing about technology and work from there. Your system should also integrate well with others in the customer’s business to prevent inconveniencing them with extra cost to install more hardware to support your software.

Make Your Software Affordable

Although your aim to venture into business is to make profits, keep in mind that you can only remain a player if you consistently meet your customers’ needs even when faced by competitors. Therefore ensure that your customers can afford the software you are offering by having a subscription tier system such that a business only pays for features it needs. Offering incentives is also an effective way to lure them into buying your software. Microsoft sets an ideal example because, as reported by Channel Daily News, it gave small and medium-sized businesses a chance to get about 10% of their money back if they purchased Microsoft software through certain partners. It also eliminated the need for businesses to buy the Enterprise Assurance (EA) maintenance program and SQL Server database. The customers complained EA did not come with the significant updates it promised; hence, there was no value for their money.

Continually Improve Your Software

Benjamin Franklin said that words like “improvement,” “success,” and “achievement” lack meaning without continual growth and progress. Given how dynamic technology is, sticking to the software you developed years ago will not do much for your clients nor your business. Therefore, ensure that you stay abreast of the current technology and provide software updates necessary for companies to remain relevant in the market. However, you can only do this if you also study your client’s changing behaviors, attitudes, and preferences. Also, encourage innovation in your team to continue making changes that address the current market needs.


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