We are in the middle of a $600 billion disruption, but hardly anyone has noticed. The once-staid world of enterprise computing is in silent convulsions, with incumbent giants being assaulted by startups that are building from scratch for a new era in which the cloud, mobile, and on-demand software will dominate. Hot companies such as Dropbox, Asana, and Atlassian will ascend to the throne, while the corpses of the old rulers – Microsoft, Oracle, SAP – will lie rotting in the gutter. The Great Replacement is beginning.
- Hamish McKenzie, The Great Replacement: Microsoft, Yammer, and a New World in Enterprise Computing via PandoDaily
Hamish inteprets Microsoft’s eagerness to acquire the work media company, Yammer, as something greater than the value of the business — even given its solid team, momentum, and product — but instead as part of a strategic vision of a ‘great replacement’ of the current generation of enterprise software. This transition may take a decade or more, but we will witness the slow dismantling of server-based software running onsite, and the migration to cloud-based solutions, like Yammer.
Hamish also points out that Microsoft has deep expertise in running massive cloud solutions, like HotMail, which they acquired in 1997.
I agree that players like Microsoft, SAP, and Oracle are not going to let themselves be squeezed out of the market by upstarts: they will buy a seat at the table, and cut the cards.