“Australia has traditionally always had more of an enterprise focus, which means we have a high level of understanding in building and investing in such companies,” says Randal Leeb-Du Toit, an original co-founder of the Innovation Bay investor networking and pitching events, and now Head of Commercial Development at the University of Sydney. “What we need to see more of, though, is large corporates being prepared to partner early with startups to get them into their channels and help define their specific needs. There are promising signs that this is beginning to take place.”

Earlier this year, Aaron Levie, CEO of US company Box, which offers a service for secure document sharing, said that startups have an “unfair advantage” over industry incumbents when it comes to building software for other companies. They can innovate faster, and can get their products to CEOs and CIOs faster, as they tend to be web-based, and usually offer a ‘freemium’ model — where you can trial the software up to a limit (i.e., for Box there is a free version where you can store up to 50GB).

We’ve seen plenty of these ‘enterprise 2.0’ products hit the shelves in the past few years —  some of the most successful have been developed by startup companies. Let’s face it, startups are better able to follow the ‘church of lean’ — they are more focussed, can innovate faster and can worry less about failing. This means companies with a good product-market fit, technology that works, and the ability to grow are doing well. It also explains the number of Australian startup companies targeting enterprise customers.

Duncan says AtMail has been revenue positive for a number of years now, and that appeals to Australian VCs. “We were lucky to have built a good revenue model,” he says. “Say you had an idea and you didn’t build a business and cash-flow, it’s much harder to raise money.”

The next big technology wave looks like it will be an extension of the enterprise software market. Leeb-Du Toit thinks Australia is well placed to be at the forefront of smart enterprise: the development of incredibly fast systems which can process large swathes of data, to drive decisions in real time.

“It will be driven beyond cloud through new computer architectures that can achieve greater man-machine symbiosis with computers doing far more heavy lifting, so that knowledge workers can transform data into action in real time,” he says.

Research published this week by From Little Things, Deloitte, Pollenizer, and the Startup Genome project, showed that Australian companies tend to be more-risk averse than their US counterparts. They are more likely to focus on a proven market or adapt something that has worked in one market, and translate it to another. One example is transferring a consumer innovation to the enterprise, a company described as an ‘integrator’: the study found startups here are 4% more likely to do so.

Even more interesting though, was the finding that Australian companies tackle niche markets 14% more often than those in Silicon Valley. For the enterprise startup, this means targeting a particular market; like Renterfixer does for real estate, or 5th finger does for mobile.

It’s also why we’re seeing companies like SAP are doing their best to copy the methodologies startups use to build products. The company relies heavily on user groups to provide feedback during the development cycle, and as Australian Marketing Director, Ray Kloss, said earlier this week, it is designing around the customer now: “we’re testing with customer feedback. We’ve adopted design-thinking where the main premise is you get buy-in before you build.” But as CEO of enterprise startup Huddle, Alistair Mitchell, said; “Disruptive enterprise startups no longer face a credibility gap like we used too.”

With enterprise customers prepared to spend big money, make decisions based on cost savings and performance, and having been ignored by the large software companies, enterprise markets are ripe pickings for technology startups.