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A “System of Record” (or “SoR” for short) in the software world refers to “the authoritative data source for a given data element or piece of information.” Good examples of SoRs include Salesforce (the authoritative source for sales data), Zendesk (the authoritative source of customer support data), or SAP, the most infamous SoR, for enterprise resource planning. We could spend an entire blog post detailing SoRs across various segments of the software world, across various verticals, and covering every “data type,” but the bottom line is that there is now a system of record for everything. Perhaps even too many!
At PeakSpan, we’ve cultivated a thesis over the last several years around what we call Integral Systems of Record. An Integral SoR ingests data from multiple existing systems of record (Salesforce, Zendesk, etc.), co-mingles these sources to generate new datasets and valuable insights, and becomes the central system of intelligence. The secret sauce for an Integral System of Record is the platform’s positioning in the tech stack and within the enterprise (strong API connectivity is a must and has enabled Integral SoRs to exist). Once these insights are generated, an Integral System of Record is positioned in a way that makes it easy to distribute data and insight back out to multiple constituents, both internal and external to an enterprise driving immense stickiness and long-term persistent value. An Integral SoR’s ability to add value to multiple constituent groups throughout the enterprise is an exciting component of this thesis and what really drives distinction from traditional systems of record. For example, Salesforce might be able to ingest multiple data feeds, but the platform traditionally serves a single constituent group/department (sales).
We formed our first Integral SoR partnership in 2016 with Kenna Security. Kenna ingests data on an enterprises’ IT assets (computers, servers, etc.) principally via APIs with security scanner tools (i.e., vulnerability assessment (“VA”) scanners). These include companies like Rapid7 and Qualys. These datasets tell you who hasn’t updated their windows version within the enterprise (resulting in a vulnerability), for example. Separately, Kenna then ingests various threat intelligence feeds (aka — what vulnerabilities are being exploited the most). Kenna’s Integral System of Record Platform or “System of Intelligence” co-mingles these datasets, algorithmically assigns risk scores to each vulnerability which is then updated in the platform for security professionals to leverage. The use case is simple — by knowing both where/what your vulnerabilities are, as well as which vulnerabilities are being actively exploited by hackers, enterprises can then prioritize vulnerabilities and patch the riskiest ones first.
Kenna ingests several other data sets and does much more than described above (reduced for simplicity). However, another important pillar to this value prop is how many stakeholders can stand to benefit. Unlike some categories of software (as discussed above) where the value sits inside a single functional group (Salesforce → sales team, Zendesk → support team), here — the value gets redistributed back out to at least three different groups — i) Security Professionals (the primary group), ii) IT Professionals (responsible for fixing the vulnerabilities) and iii) the board of the directors. While security is the buyer of the product, the IT team is arguably the most important group to boost up with intelligence, given they actually fix the problems identified by the platform. Lastly, the board is quite strategic, given cyber-risk is a board-level imperative these days (as it should be!).
At PeakSpan, we’re big believers that the next generation of software leaders will win with data. It’s no longer an option to simply be an application. We have an application for everything at this point, meaning any “next-gen” applications will be incremental versus game-changing. To truly bring more strategic value to a market segment in the year 2021, an effective combination of application value and the data value is key. This doesn’t necessarily mean every company has to be an integral system of record, but we are surely in the age of data intelligence.
Our Integral System of Record thesis spans multiple (if not all) of our industry themes at PeakSpan. On the front of the house, we see platforms ingest multiple data sets related to sales to derive new, often prescriptive insights for sales professionals. Conversely, in the back of the house, we see supply chain/procurement platforms doing the same thing (i.e., ingesting several supplier data sources to generate next-gen visibility and insights on an enterprises’ suppliers). In PropTech, the amount of data being collected on buildings and workplaces would blow your mind! (temperature/climate data, electricity/utility data, resource utilization, etc.). Lastly, think about data related to workers — whether this is in our human capital management theme, customer experience management theme, E-Commerce theme, or elsewhere, humans are increasingly acting as digital Hansels and Gretel's — leaving virtual breadcrumbs everywhere they go online and at all hours of the day. Platforms that can capture these breadcrumbs in an intelligent and scalable way will have the edge in building the next generation of strategic, data-centric software use cases and will lead us into the age of intelligence.