An Angel’s View of Enterprise Trends

Startup Investor Jeff Clavier, talks about trends in enterprise software.

Having heard that last quarter was A good quarter for VC's, I asked Jeff Clavier, an angel investor I’ve known for a few years, for his thoughts on the latest Enterprise trends. Clavier’s venture capital firm, SoftTech VC is based in Palo Alto, California and has invested in over seventy five startups since 2004, including the personal-finance service Mint (sold to Intuit), MyBlogLog (sold to Yahoo), and Truveo and Userplane (both sold to AOL).

Most of SoftTech’s investments have so far been in the consumer space. “Innovation is slower on the enterprise side,” Clavier claims, and “beset by security issues.” “It’s a mature market with only a few acquirers; sales are more difficult and investors have little leverage when there are so few buyers. Low cost, consumer applications that leverage the Web offer capital efficiencies not matched on the enterprise side – and they are fun to work with.”

But Clavier sees changes ahead for enterprise architectures. Cloud-based computing will present challenges for traditional software vendors and opportunities for others. clearly saw the potential for cloud-based services; it was “a visionary,” Clavier says. Mint’s online service targets QuickBooks’s desktop software while Erply, with its simple, low-cost, low-priced, online business software for small business owners, “is doing to SAP what Skype did to telco’s.”

ReTel Technologies offers an example of B2B possibilities. It captures video surveillance data over the web, analyzes it using video analytics and Amazon’s Mechanical Turks service, then sends the reports back to its customers. Clavier expects we will see more private clouds and cloud interoperability, with batches of computing being sent to places offering the cheapest, Mechanical Turks labor.

“Simple, easy-to-build, easy-to-learn, easy-to-use consumer-style apps will increasingly be used to power enterprises,” Clavier believes. They will follow the 37signals model:  simple, web-based tools built for individuals as well as large and small businesses.

Watch the short video below to learn what Jeff Clavier believes are three trends in the enterprise software market.

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