Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

[thoughtleader thursday] More from Geoffrey Moore and John Gallant on IT strategy. . .

Posted by Tom Foremski - July 28, 2005

By Tom Foremski for SiliconValleyWatcher

On Tuesday I met with Geoffrey Moore, Silicon Valley's leading IT strategy consultant. He was running around with John Gallant, head of Network World, who had just flown in from Boston.

I wrote about their attempts to kick some life into enterprise information technology, make it interesting again, and be recognized as an important and strategic field(here).

Here is part II, some further notes from our conversation:

Geoffrey Moore: Companies have to figure out what is their strategic IT, the core of the enterprise; and which part is context, the commodity part of their IT. Then you innovate around the core, and outsource the rest.

But can you extract the jewels that make your company different? A lot of companies do things backwards: they do the commodity IT in-house, and then outsource the core IT work to outside consultants, who then go off and do it for their other clients.

[Chastising companies that use IT consultants for strategic IT work seems a bit strange. Could Mr Moore be signaling a new role? I didn't spot this at the time; but I'll ask him about it next time. -Tom Foremski]

Geoffrey Moore:
India and China are a big challenge to US companies because they have come online much faster than anyone expected. That means companies here have to innovate faster than ever before.

The Gorilla IT companies can be seen as the coral reef: they provide the ecosystem on which the market flourishes. It encourages innovation.

- - -

John Gallant: The CIOs we talk with are so mired in what they have to do to maintain their legacy systems that they are leery of computer vendors offering new solutions, and leery if they have chosen the right path. This has produced a stasis in the industry.

Enterprises are cautious on proprietary IT systems because they don't want to be stuck paying a proprietary margin and then getting little in proprietary value for it. IT companies need to add value constantly to stay ahead of the open source snowball.

IT is not boring: there are a lot of interesting things going on in security, mobile applications, virtualisation, etc. . .

- - - -

Foremski's Take: It was an interesting conversation about a mostly dull sector that I covered as a reporter for many years. John Gallant was certainly very energized about the subject, and eager for the battle ahead. He hopes his Vortex conference in San Francisco in October will convince others that IT is indeed strategic, and that IT does indeed matter.

As for Mr Moore, I somehow felt that he would rather change places with me (not salaries of course), and be free of the "is IT strategic?" argument. And also be free to be disruptive and provocative, which is lots of fun :-)

The way I see things is that IT is not very strategic; but business process innovation is strategic. IT is now all about how well you can glue the computers and software to the business process.

Therefore, how you combine these business processes is where the real innovation occurs. This then leads to what are effectively proprietary business process architectures, which are very strategic and very profitable. (See Apple/iPod/iTunes for a text book example.)

The future that I see is an "Atomic Ventures" world consisting of technology-enabled business units, where each unit is a "best in show," and simple technologies such as the web browser, RSS, and the URL bind them all together.

(Except that it will be molecular aggregations of business units rather than "atomic," so that license/IP issues are simplified. One bill, one license will be the mainstream mantra.)

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