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The coronavirus crisis is force-feeding 2 big changes into the stodgy enterprise software market. Here's why some startups are already benefiting.

The coronavirus crisis is force-feeding 2 big changes into the stodgy enterprise software market. Here's why some startups are already benefiting.
Richard Drew/Associated Press



A pair of trends going on in the enterprise software business may help it weather the coronavirus crisis, Jai Das, an industry expert, told Business Insider.




The shelter-in-place orders and the economic downturn have spurred interest in cloud-based software as an easier-to-manage, less costly alternative to running applications in corporate data centers or workstations, he said.




Many recent enterprise software companies bill customers based on how many employees they have using their software, a model that could expose them to big revenue cuts with corporations slashing their workforces.




But some software makers are moving to usage-based billing models, which could limit the losses, Das said.




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The enterprise software sector is already starting to feel the impact of the coronavirus crisis, but a pair of trends may help buoy the industry, one expert says.
The widespread shelter-in-place orders have spurred demand for software and services that run in the cloud rather than in corporate data centers, said Jai Das, president and managing director of Sapphire Ventures, which focuses on enterprise software startups. Meanwhile, software makers are moving from per-person billing models to usage-based ones, which could limit the damage to their revenue from customers cutting their staffs.
"Everybody saw a slowdown in April" as the pandemic throttled business activity, Das said. But because of such trends, "it wasn't like completely the world [was] cratering. That didn't happen."
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