Mar 11, 2024, Business, Consulting

Key differences between Enterprise and Startup software development

John Oxley Business Consultant
enterprise or startup software development
It’s like comparing apples and raspberries in the context of the software development process. I mean, they’re both fruit, but they are quite different.

So it goes in software development, the end result is a software product that makes something work better, faster or stronger, using a computer or other communication device. But how the service gets there is worthy of investigation.

In human terms, I guess you could describe an Enterprise as a large, multi-building company, with several locations, where staff know only those in their immediate area of work, with a few outside contacts for continuation of business. A Startup will likely have less than 50 employees, who all know each other and work together as needed, often resulting in different development costs and approaches.

Today, we’ll explore both the technical and human side of the key differences between Enterprise and Startup in software development. Let’s go!

What is enterprise software?

It is software developed to meet the requirements of an organization, not an individual.

It is multi-faceted, making it useful for staff members working in all aspects of the company, from accounting to warehousing, to work together and communicate in real time. In many cases, it is specifically tailored to individual organizational needs by a custom software development process, but sometimes it can be an ‘off the shelf’ package. Everything is bound together and works seamlessly. Data storage can be onsite, or cloud-based. Examples of users are businesses, schools, clubs, and government by a software development company.

One of the drawbacks is that most organizations use a mature system, with limited scalability, and it can be slow and cumbersome, impacting development costs.

Finally, it is usually owned by the company or organization, which allows its IT department to make minor changes and updates as and when required by the software development process.

What is startup software?

On the other hand, startup software is usually designed more for individuals and general use, not corporations, unless there is a requirement for a third party application to be added to an enterprise system. Such software products are mainly for a specific service, and will not be all-encompassing like Enterprise software. Startup software looks to fix problems and fill gaps in the software market, taking on subjects like blockchain, healthcare, and even sentiment analysis for product opinion (you know the type, happy face, satisfied face and grumpy face). 

For another example, an estate agent might use a paid app to give potential clients access to a booking system for house showings. Paying a monthly fee is cheaper than a secretary, illustrating the differences is development costs.

 

Key differences between the two

I’ll try and make this list as easy to read as possible, by headlining the difference and then using enterprise first followed by startup.

Target audience

When marketing enterprise software, the team has to look at the whole picture before making a pitch. This means doing heavy research. Most enterprises will at least have departments for finance, sales and marketing, legal, HR, public relations, technology and sometimes even warehousing and delivery. Leads come from an experienced sales team and only when it has a good understanding of possible requirements does it go ahead and make an approach to the enterprise, as outlined by the software development process of a software development company.

In the beginning, startups tend to innovate, rather than follow requests. They can react quickly to disruptive technology and changes in market conditions. They can do what an enterprise software development company can’t; they can design, produce and release a minimal viable product, with enough features to satisfy early adopters, then by using feedback, develop it into a final outcome. This use of an agile development cycle increases speed and workflow. Additionally, the end user feels more connected to the software, illustrating the flexibility in the development process.

 

Storage

As previously mentioned, enterprise software can be stored onsite or in the cloud, the choice is theirs. Onsite storage is expensive, given the vast amounts of data produced by a large organization, but doesn’t require connection to the internet for general accessibility.

Startup software is almost completely cloud maintained, unless it has been designed as a third party app for integration into an enterprise system, showing a different approach in the software development process.

 

Development process

For a customized enterprise software development application, it can be a long and complicated process, typically from four to twelve months, although, according to a KPMG report, almost 85% of projects go over schedule. Large scale projects will need to be able to integrate with existing software, and QA testing might extend the timeframe. New APIs will have to be programmed, and subsequent alteration requests by stakeholders may increase the length of the project, impacting development costs.

Startup development appears to be much faster, with production times of 10-12 weeks for a small application, going up to 35-38 weeks for a large project. This approximate timing accounts for all aspects of the project, from wireframing to UI and beta testing. As the majority of startup apps are mobile specific, they do not have to be concerned with integration and problems with legacy systems.

Customization

Enterprise software is, by design, customized for the client, as no two companies are the same in their makeup. A clear road map of requirements is needed for development to begin, with multiple stakeholder meetings for clarification and objective resolution, a key part of the custom software development process.

On the other hand, startup software customization is not necessary, as the specific target audience will be known to the developers, and they will usually have one service to provide.

Scalability

For bigger companies, scalability is vital to growth. If you have more customers than you can handle, you have a problem. If there is lag on ‘requests per minute’, you have a problem. Enterprise software needs to have scalability built in, and with a service level agreement attached, the company will not have to worry about dropping profits.

For a startup, some say it is better to produce something that people want, without worrying how many people will use it. But if an app proves to be wildly popular, end users will be forced to suffer slower responses and possible downtime. Bad news for the developer. There is a suggestion that an alternate server be used as a ‘testing scalability’ system while the main app is on another server, then if the app goes ballistic, the startup can switch servers with a minimum of fuss, or at least without losing too many customers. That’s an aspect to consider in the development process.

In a perfect scenario, startups should plan for scalability but not deploy it unless it needs to be done.

Security

Generally speaking, enterprises pride themselves on maintaining the highest level of security they can manage, protecting client and business data and restricting access to only those that need it. But in the real world, humans are fallible, and missing a software update, web app vulnerabilities, and lack of incident reporting, to name a few, are going to happen even with the best possible intentions. In 2019, The US Department of Homeland Security issued a warning on several ERP systems that could be hacked. Now that is old news, but I would guess that someone, somewhere, missed the bulletin.

Startups are well known for speedy service, working overtime to produce on time and budget, but speed can be a dangerous thing. The faster it deploys, the less time for bug checking, QA and testing. Some developers do not use strong password authentication on cloud servers, and credentials may be lost. Finally, cloud backups will still be compromised by ransomware attacks, and few companies place a backup in a separate standalone system which would survive such an attack, underscoring different concerns in the development process and the importance of quality assurance.

Environment

Software developers are all so happy and attractive, aren’t they? At least, that’s the image portrayed in most photos I see connected with the business. Within an enterprise, chances are that devs will be doing exactly what was said on their job description, and no more. They won’t get many chances to ‘grow’ their knowledge base. There is a big emphasis on the hierarchy, and the bureaucracy can be tedious. But overall, there is less stress and everyone works within strict guidelines, clear in the knowledge that the business will remain stable. The pay is better too.

With a startup, a junior developer, one who has just graduated perhaps, will have a chance to learn far more skills than with an enterprise, as the company will probably expect the dev to learn back end (server) and front end (client facing) know-how. There is less bureaucracy, a stronger feeling of teamwork, and a more relaxed attitude in daily tasks. However, there is a fair possibility that the dev will have to work long hours without extra pay, with subsequently higher levels of stress. So, in a nutshell, more freedom, more fun, more stress.

Useful life

Establishing the useful life and relevance for an enterprise app is difficult, but it is a task that must be addressed. If it doesn’t generate revenue, how can the development cost be appreciated? There is a system that suggests that the general rule of thumb for software lifespan is 3-5 years, but if competitors have managed to use an app that significantly impacts on a business, change will have to be accelerated.

Startup apps cannot be compared to enterprise software as the requirements are completely different. Googling ‘oldest apps still available’ lists Google Maps as being 16 years old! Now, that particular app has a strong background and is constantly updated, but moon+ ebook reader was released in 2010 and is still pretty much the same.

Innovation and Adaptability

The software development landscape is perpetually changing, driven by evolving technology, emerging business needs, and the constant pursuit of efficiency and effectiveness in software products. This dynamism necessitates a degree of innovation and adaptability from both startups and enterprises, albeit in markedly different ways. Let’s delve deeper into how these two entities navigate the waters of change and innovation within the software development process.

Startups are often synonymous with innovation. They are the trailblazers, seeking to disrupt the market with novel software products that address unmet needs or introduce entirely new ways of doing things. The nature of startup software development is inherently agile and flexible. This agility is not just a characteristic but a necessity, as startups must rapidly iterate their software products in response to user feedback, market trends, and the competitive landscape.

The development process in startups is geared towards rapid prototyping, minimum viable products (MVPs), and a lean approach to custom software development. This enables startups to pivot quickly if needed, exploring new opportunities or refining their offerings with minimal development costs.

The culture within startups further fuels this innovative spirit. With teams often comprising individuals who embody entrepreneurial and creative mindsets, there’s a collective drive towards innovation. This environment encourages risk-taking, with the understanding that failure is not a setback but a stepping stone to discovery and improvement. Consequently, startup software often leads the way in adopting cutting-edge technologies and experimenting with new software development methodologies, pushing the boundaries of what’s possible in software development.

Enterprises, on the other hand, approach innovation with a more strategic lens. Given their size and the scale of their software development efforts, enterprises focus on incremental innovation—gradual improvements and updates to their software products that maintain their relevance and competitiveness. The software development process in enterprises is more structured and methodical, involving extensive planning, quality assurance measures, and multiple stages of testing to ensure the new or updated software products meet the high standards expected by their large user bases.

However, this does not mean that enterprises are stagnant. On the contrary, many large organizations invest heavily in research and development (R&D) to explore new technologies and methodologies that can enhance their software development process.

For instance, an enterprise software development company might experiment with artificial intelligence (AI), machine learning (ML), or blockchain to improve their software products or streamline the development process. These explorations, though more measured than in startups, are crucial for ensuring the enterprise remains at the forefront of technology.

Conclusion

As you can see, it really is apples and raspberries. Two completely different approaches to a product that effectively has all the same ingredients. For a junior developer, who has been offered two positions, one for an enterprise and one for a startup, the decision is quite difficult. Do they go for stability or excitement, repetitive actions or steep learning curve, good salary or the chance to get shares. Chess or poker?

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