The Rise & Fall Of Enterprise Software | Bill Janeway, Warburg Pincus | BoS Europe 2018
Summary
So when I speak about the transformation of enterprise software from one it was the most wonderful place in the world to invest I do so with a certain nostalgia, thankfulness, gratitude to all those mindless investors who got the hint somewhere around 1997/98 that what we were doing was actually going to enable a new economy. It began with Unix given to the world under the orders of what was then an active aggressive Antitrust Division of the United States Department of Justice which provided an enormous benefit to the world by requiring that AT&T license on a fair and non-discriminatory basis all the technologies that developed at bell labs that were not exclusively dedicated to communications and it went with a host of other like Ethernet other other protocols all the protocols of the Internet that combined to make for a platform a target platform that companies like Veritas and BEA we could focus. It meant that the rich customer was funding the poor startup with no issuance of equity, no dilution of ownership, and of the upside rewards available to the investors and the entrepreneurial founders of the business – the cheapest capital imaginable. Enterprise software, as a couple of really really smart young academics have written, in this environment from the old venture model – and I don’t know if there’s anybody else here in this room who’s a functioning working venture capitalist – but the old model one reason one reason we limited in each portfolio the number of investments we made was because every investment was a call option on an infinite amount of time and energy and sweat and pain as my very distinguished partner Henry Purcell who in his days as a working physicist at the RCA Sarnoff labs had the patents which made the semiconductor lasers that were reliable enough to hook up to the fiber coming out of Corning and enable fiber optic communications. But is there not another way that says there should be a return of almost a craftsman investor which is basically to say you find yourself somebody who understands the use case in a given subsegment of an industry very very very well, has a vague notion of what technology is possible and can articulate and then story-fy out and then you just slot a team under that they’ll say well I’ll take a bit of Amazon, Google just assemble it and here you go.