CEOs of Box, Zendesk, and Nebula: 'Incumbents are going to die'

SAN FRANCISCO — A group of CEOs from some of the hottest and most disruptive enterprise companies discussed what it will take to topple the incumbents at TechCrunch Disrupt today.

The panel, “The 30 New Franchises,” gets its inspiration from a blog post that Andreessen Horowitz partner Scott Weiss wrote. Weiss said that a “perfect storm” of three forces drives this shift — software-as-a-service (SaaS), cloud infrastructure, and mobile.

“If you look across our entire portfolio, not one of our companies is running anything Oracle,” Weiss said. “Change is going on, and no new customers are coming up and using their product. When kids are not using the product, eventually the company is going to die.”

Weiss said that cloud computing has given enterprise companies, like Box and Zendesk, significantly greater insight into how their products work in the real world.

“Aaron [Levie] and Mikkel [Svane] know every click that goes now with their software,” Weiss said. “When they roll out a new feature,  they know exactly how much people are using it and build on that. It’s almost like cell division. The old companies are not used to seeing in real time what is going on with their software. The innovation loop is 10 times faster than Microsoft or Oracle is used to.”

Levie is the colorful CEO of Box, an enterprise cloud-storage provider. Box has raised a staggering $287 million and is valued at over $1 billion.

“Traditional enterprise products are just not as relevant in conversation for most customers,” Levie said. “The whole ecosystem is moving on from that kind of product category or product line. Now you can take best of breed companies and have them mix and match and integrate together. This is changing nature of what ecosystem around your company even means.”

Box now has 20 million users. The company is prepping for an initial public offering in 2014 and has resisted acquisition offers along the way. Levie said this is because there is still a lot more Box can do.

“With the amount of change and transformation happening in the space, we thought there was still 100X the potential and growth for what we are trying to do,” Levie said. “This opportunity to create the next generation of foundational technology companies comes around every couple decades. This is the window of opportunity, which is a rare and infrequent process in tech.”

Levie was onstage with Zendesk CEO Mikkel Svane. Zendesk builds software that helps companies improve their customer service.

“There is not the traditional vendor/company relationship anymore,” Svane said. “Next-generation companies can compete on completely different terms, with disruptive sales models that involve the network effects. Data is also a big part of what you are selling. The level of disruption we are seeing now is just going to accelerate and go crazy. The incumbents will have drastic falls very quickly.”

The fourth panelist was Nebula CEO Chris Kemp, who is the former chief technology officer of NASA. Nebula provides on-premise private clouds for enterprises. The company takes advantage of Openstack technology and creates hardware appliances that make building and managing low-cost data centers a reality.

“One of attributes of ‘franchise’ is it has an ecosystem around it, which reinforces the value propositin of that product and what customers are able to do or not do with it,” Kemp said. “What you find around each of our companies is a different ecosystem emerging.”

Almost any investor you talk to this day is bullish about the opportunities in enterprise software and disruption in IT. Thanks to the forces Weiss outlined in his article, the way people compute and businesses operate has completely changed. Box, Nebula, Zendesk, and their investors, are at the forefront of this shift.