Deadly dull enterprise IT markets--Geoffrey Moore and John Gallant hope Vortex conference will spice things up
By Tom Foremski - July 27, 2005
I'm in Hotel Monaco, chatting with uber Silicon Valley consultant Geoffrey Moore, (Crossing the Chasm, etc), John Gallant editorial director of Network World, and Bob Angus, president of A&R Partners.
They are preparing for the Vortex conference in San Francisco in October, and a Churchill Club event this Wednesday evening: Creating Competitive Advantage Through Information Technology.
We're talking about the IT enterprise market, a topic that is very dull because nothing much is going on. But Mr Gallant and Mr Moore are determined to get the market moving and make enterprise IT interesting again.
"The IT market is mired in a morass and that needs to change. At the Vortex conference we will be bringing the main constituents together, the vendors and the customers. It will be a frank exchange of ideas," Mr Gallant promised, and no PowerPoints allowed. Tough questions and one-on-one interviews, and large amounts of audience participation are also promised.
Mr Moore will keynote Vortex and talk about core versus context, a concept he expands in his forthcoming book out in January, "Dealing with Darwin."
I'm a huge fan of Mr Moore's work and his thinking and ideas have made an enormous impact on how businesses understand themselves.
"My clients often don't have the time to reflect on their business, they are distracted by making the quarter's numbers, and daily operations. I get to reflect on their business and think about their IT strategy and what is core IT to their business." Mr Moore said.
Stuck in a Sargasso sea of morass
The trouble is that enterprises often aren't able to think about how to use IT strategically, because they are stuck dealing with a huge amount of complexity. Mergers and older IT architectures such as client/server, have created layers and islands of IT systems within corporations. Most of it can't be junked but must be made to work together, a long, tedious process.
"The last things CIOs want is somebody trying to sell them more IT because the integration challenge outweighs the ROI," says Mr Moore.
Yet the IT vendors such as HP, IBM, EMC, etc talk about adaptive computing, utility computing, virtualisation, etc. "Companies are telling the vendors, 'we don't understand how adding another layer of complexity will help us,'" says Mr Gallant.
Flogging a flagging horse
So, how do you jump start the enterprise market when dealing with legacy IT is such a massive burden?
I wish them the best of luck in their goal it is not a job I would like to do, but, then again, I don't have an attachment to the subject matter. Mr Gallant's Network World publication is aimed at enterprise IT users. And Mr Moore has his book publishing empire and his Chasm Group consulting firm, firmly focused on advising on IT strategy.
I think they have a long, hard slog ahead because:
-Maintenance spending is rising, there is less money for new technologies.
(See SVW "There's lots of gold in maintenance deals...Accenture study")
-The IT enterprise market sectors are controlled by one or two large players which discourages innovation and new products. (see SVW "Giant sucking sounds.")
-There is too much FUD in IT markets such as security, which lengthens buy cycles. (See SVW, "FUD in IT markets..."
)
-And the enterprise market will dwindle further because many of the enterprises themselves, will become extinct. They will suffocate under the load of legacy IT systems and other legacy factors. What I call the New Rules Enterprise will emerge. (See SVW,"These are the new dotcoms...and they will eat lunch this time around."
)
I think that the conversation has moved on, what will distinguish companies is their strategy around business process innovation. A corporation's IT strategy is not core, it is context, it is determined by the meta level strategy, imho.
Also, IT strategy can be duplicated, business process innovation is harder to duplicate. Look at iPod, for example.
[More on this topic in Thoughtleader Thursday...]
By Tom Foremski - July 27, 2005 | Permalink | Comment
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Comments (2)
I'd beg to differ that many Enterprises are suffocating under the load of legacy IT systems. More companies - by far - suffocate under the load of "I ain't got no customers or money" syndrome. Those who actually do have legacy systems, such as Fortune 2000 companies, are objectively are doing the best in the world. And I wouldn't bet on the New Rules companies replacing them en masse, no matter how well they do. I like the New Rules model, and actually practice it, but done right it launches a company that typically then sell products to big companies or consumers who actually have MONEY, not credit card debt. Yes there is a cost to maintain legacy systems. Enterprise IT often boils down to a cost of doing big business, a necessary cost, not an absurdly inflated ROI calculation. Good enterprise systems are often expensive and complex, but if done correctly provide an advantage comparable to a good foundation. If companies are willing to pay to maintain a system, it is because it provides some operational or strategic value.
There is plenty of pain and room for innovation in the Enterprise space, if not dazzling excitement, such as emerging open source enterprise products. Or how about products that help manage the complexity and lower maintenance costs of legacy software systems (shameless plug). The world is in need of some real innovation in the standards of system management, the CBE standard by IBM is pretty interesting. What I’d like to see: a RSS layer used to publish errors and provide a management interface into complex software systems. And FYI, the link to Vortex above is broken.
Posted: July 28, 2005 1:19 AM
The problem all these vendors have got is that the old-style tech business model demanded that they sell the customer a product: a discrete entity that will "solve all their problems". Want CRM? Buy our CRM package. Want Web access to your legacy applications? Buy portal software. But that does not go to the central concern of the enterprise: how do I make all this stuff play together?
They did not ask: what is your problem and what do you want done about it? They are not providing much that is of real value to the enterprise other than kits of parts.
Enterprises are aware of the problems they have but many seem to be doing something about it. They know their data is in a mess, so they are starting to clean it up. They know have too many lumps of hardware, so are starting to use virtualisation.
They have plenty of legacy software but, to a large extent, they don't have to touch it. They are using Web services-style software to build more intelligent systems that combine their legacy databases etc. Some of that is off-the-shelf stuff. But a lot is custom software that may be built from .Net, J2EE or maybe just AJAX-type stuff downloaded off the Net.
Enterprise IT vendors might be better off looking at a different set of customers: the tier below that is used to buying off-the-shelf and may be more prepared to have their data moved over into a new system as long as the cost of acquisition was not prohibitive. It's people without the massive IT departments who have the most to gain from buying "enterprise IT" as a product.
Posted: August 4, 2005 12:51 PM