The ability to customize purchases has become the norm across so many industries, but it wasn't always so.In the PC industry, for example, small local retailers built custom "white box" PCs going back to the fairly early days. But it wasn't until Dell went the build-to-order route in the 1990s (PDF) that it became commonplace. Today, although retail stores stock standard configurations, the option to order a custom config online is the norm.
It's therefore notable that the increasing shift, for some types of applications from on-premise software to software-as-a-service (SaaS) reverses this customization trend. "We're more customizable" certainly no longer seems to be the rallying cry across much of the software universe.
Just to be clear, for most individuals and many organizations (especially smaller ones), SaaS and other online services dramatically increase the overall choices available. How so? By eliminating the "friction" of installing software, by providing access to immense data sets, by leveraging huge server farms, by making it easier to access applications from more places and more devices.
However, in the narrower domain of enterprise application software, this shift's effect on choice is less clear.
That's because on-premise enterprise software was historically highly customized and adapted to the specific requirements and workflows of the organization using it. Entire categories of software with acronyms like EAI (Enterprise Application Integration) and EII (Enterprise Information Integration) came into being to tie processes and software components together.
Such customization and adaptation didn't come cheap of course. Large checks written to consulting organizations were part and parcel of the package. Rolling in new software could also take years. And then there are the legal costs when such projects fail.
It's therefore not surprising that the SaaS concept is interesting to enterprises. And some SaaS vendors like Salesforce.com do indeed provide a rich set of interfaces that allow both users and third parties to extend their basic applications. Nonetheless, SaaS is much more of a take-it-or-leave-it proposition than traditional enterprise software.
But for many types of applications in many organizations, that's actually a good thing.
Everyone wants to have it their way. It's natural. It can also lead to fairly silly and expensive outcomes at an organizational level. I've heard people at very small (as in fewer than 10 employees) businesses passionately argue that hosted Google Apps were too inflexible for their needs and that they therefore needed to operate their own Exchange server. And, at large enterprises, millions may be spent to align with ingrained business processes.
Much of this sort of customization may be about creating differences. But it's not about differentiation to make a positive business impact. It's to satisfy what are far more whims than they are needs.