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I agree with your first three paragraphs.

On your final point, I think that's certainly possible. At least that's the historical cycle. There are actually a bunch of plausible acquirers at scale -- of the new companies Salesforce and Workday are certainly candidates, and a bunch of the older companies as well -- it will be interesting to see if a new CEO of Microsoft embarks on a major acquisition binge of enterprise cloud companies (perhaps in conjunction with spinning off or killing some of their less-successful consumer efforts).

However, it's also possible this cycle plays out differently, or at least at much larger scale and over much longer. The three big arguments in favor of this are:

* New enterprise cloud/SAAS vendors may be able to sell into much bigger markets than traditional enterprise software -- since there are many more companies that can use online services than could ever install and use enterprise software on premise. In particular, going downmarket is far easier with the new model. Plus, globalization and the developing world could dramatically increase market size. So new entrants may be able to get much larger as independent companies than the last generation.

* New enterprise/SAAS vendors may exist in many more categories than traditional enterprise software. New development/adoption/business models make it reasonable to think about a lot more horizontal and vertical applications and services than old enterprise software was capable of addressing. So maybe new vendors get much larger than anticipated since they can cover a lot more functions and verticals, or alternately maybe there are many more new vendors than we can conceive of now. We are already seeing a trend towards enterprise use of a lot more cloud apps per customer at this point in the cycle than a lot of people expected.

* As a consequence of the prior two, the independent market caps of the new cloud/SAAS vendors may end up being a lot higher than you might anticipate from history. This could really remove the incentive to sell hot new cloud/SAAS vendors as quickly.

I think these are live topics right now, and the answers will determine a lot of what happens in the enterprise startup ecosystem for years to come.




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