Is there really a global 'IT debt' of $500 billion?

Summary:Gartner is arguing that there's a $500 billion global IT debt that's about to mushroom to $1 trillion by 2015. The big question is whether enterprises will buy the argument and upgrade applications.

Gartner is arguing that there's a $500 billion global IT debt that's about to mushroom to $1 trillion by 2015. The big question is whether enterprises will buy the argument and upgrade applications.

On Thursday, Gartner touted this IT debt concept. In a nutshell, Gartner defines IT debt "as the cost of clearing the backlog of maintenance that would be required to bring the corporate applications portfolio to a fully supported current release state." In other words, more of your budget goes to maintenance for old applications.

Gartner analyst Andy Kyte will highlight the issue at the firm's IT powwow next month. "The application portfolio risks getting dangerously out of date," argued Kyte. The strong hint here is that companies will have to pay this IT debt at some point and upgrade.

Also: Gartner pegs global IT 'debt' at $500 billion and growing

I was a bit skeptical about the IT debt concept, which could be used as an excuse to scare you into an upgrade you don't want. To get a little more clarity I consulted the Enterprise Irregulars mailing list and came away with the following:

  • "Technical debt" is a well-developed concept for start-ups, but I think this Gartner approach to valuing it is not so good.  When we say "technical debt," we don't mean "this is the amount of money it will cost to fix things," we mean "this is the list of things we deferred because they were too big for right now, or we don't have a concept to deal with it, or because our architecture is not compatible with a solution, or whatever."

  • Technical Debt consists of bad design decisions and shortcuts you take in order to ship. You know that some day you will either fix it, or wake up to a bowl of spaghetti code that can't be maintained or enhanced. It is not some mythical thing that accrues line by line and can be accurately measured.

  • The problem is real, but the solution is not for buyers to spend more but for vendors to come up with more SaaS-like background upgrades and not charge that much for routine/regulatory fixes. The burden of the upgrades and the cost are gating factors.

  • Vendors have conditioned buyers to select and live with "good enough" software. They've made their beds and now they have to live with it.

Others argued that core enterprise IT is about putting out fires and upkeep. The real innovation is handled at the department level where people are buying SaaS.

Speaking of innovation, one EI noted:

You have to ask, what causes upgrades? The happy answer is you upgrade because such great new innovation comes along that you can pay for the upgrade and still come out economically miles ahead by taking advantage of all that shiny new goodness.

Yeah right.

Imagine the hapless IT guy.  The app is installed and running.  It works well and they actually don't even have to call Tech Support very often.  But, there have been one or two times when something BAD happened and they did.  Now he gets a note telling him the release they are on is being sunset.  Support for it will no longer be available.  He thinks back to those BAD incidents (and upgrades).

And.

I have a problem with the term debt. It creates a mindset of an obligation to the vendors. The SaaS model has found an optimal solution to keep majority of customers in sync and on latest version without needing months of rehearsal, testing and chaos.

In reality, IT debt is a concept worth pondering---whether you buy it or not---just to highlight where you've cut technical corners. But if everything works good enough you may just scrap the IT debt concept and ponder a third party support provider like Rimini Street or moving more to a SaaS model.

Topics: CXO, IT Priorities

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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