When Lew Cirne, founder and CEO of New Relic, took Centre Stage at the prestigious Web Summit in Dublin, Ireland, earlier today, he used a classic sports analogy to point out a dramatic sea change in the role of software in businesses around the world.
“A trend that is really fascinating,” Lew said, “is how businesses are playing offense with software development, not defense.” Despite ongoing turf battles between IT and marketing, Lew believes that the key isn’t where these initiatives sit in the organization, but instead that companies are thinking offensively with their software. They’re now asking: ‘How can I use software to fundamentally grow the top line?’
(Note: You can see a video of Lew’s entire “Fireside Chat” embedded at the end of this post.)
Offense addresses the top line
Lew explained what he meant this way: “Playing defense with software is automating things to reduce cost—order processing, backend stuff to make the operations of your business a little more efficient. And that’s kind of the IT products of the 1990s and early 2000s.” But now businesses are figuring out how to use software to grow revenue.
To illustrate his point, Lew used an example from American football that should translate around the world, even to places where “football” is played with your feet:
“Let me give you a great example. The San Francisco 49ers—a very popular football team in the U.S. —they’re becoming a software company as well as a football team. When you go into the stadium to watch a football game, with your phone you can order food to your seat, you can see how long the bathroom lines are, you can watch instant replays, and all the stats of your favorite players—all with this mobile app. You can forget your wallet when you go to a football game, but don’t forget your phone.”
With VenueNext’s mobile app, Lew said, the 49ers are no longer just thinking about using software to automate things like payroll or management. “When they think about developing software,” he said, “they think about ‘how can I make the experience of watching a football game 20% better?’”
No matter what kind of football you play, that’s the difference between using software for offense instead of just defense.
Defense still matters, too
Of course, that doesn’t mean that “defense” no longer matters. “I think there’s most definitely a place for both [offense and defense],” Lew said. Reducing expenses is important because “every business must drive the P&L.” But offense is where he sees the excitement right now.
“I love creating software,” Lew said. “I love working with people who create software. I think this room is filled with people who think that software can create totally new categories of products that can change companies–and those are the people that New Relic is best suited to really help be successful.”
How New Relic helps
So how do we do that? “New Relic helps by helping people measure their effectiveness against those top line goals,” Lew said, and helping them understand the stories their software is trying to tell them.
That’s critical, because a company’s software is now the primary way they interact with customers. To succeed, businesses must know their customers, but how do you do that when the interactions come through a screen instead of being face to face with another person?
“That’s where New Relic comes in,” Lew explained. “We see every New Relic-customer interaction going on through the software and therefore we can measure whether that’s a good customer experience. If you’re not measuring your customer experience, then you don’t know your customer.”
Presentation is a super-hard problem
The final step is making that data understandable. “We collect over 3 trillion data points a month from out customers’ software,” Lew said. “Measuring everything that goes through their software, from companies like Airbnb as well as small startups. How you make sense of all that is a super hard problem… easily overlooked for enterprise companies, but it’s essential to actually succeeding in 2014 in enterprise software.”
“Most enterprise software companies aren’t thoughtful enough about the design, the presentation of the data they collect, and the ease of use of their software,” Lew said. “New Relic is very different in that way. If you look at my office in headquarters, the closest person to my office is the lead designer of the company… The person I want most in earshot is the lead designer of the company because… we need to deliver great customer experience and make it so that our customers are spending their time effectively in front of our software.”