IT supervendors: They can buy innovation, but can't maintain it

Summary:Enterprise technology supervendors are busy gobbling up acquisitions in a strategy that equates to buying R&D. However, that model is unsustainable in the long run, argues Gartner's head of research.

Enterprise technology supervendors---Oracle, Hewlett-Packard, IBM and others---are working diligently to acquire everything in sight and give you integrated stack of technology and innovation in a box. However, these IT vendors can buy innovation, but they can't maintain it over the long run.

Does your enterprise tech vendor look like this?

Does your enterprise tech vendor look like this?

That's the message from Gartner research head Peter Sondergaard. Speaking at the Gartner Symposium in Orlando, Sondergaard said:

The IT industry is caught in a vortex of supervendors who claim that they can purchase innovation. They claim this is superior to internal R&D. We believe this is not sustainable. Acquiring innovation is one thing. Maintaining it is impossible. Users will not accept architectural mediocrity. This will challenge the business models of supervendors.

Sondergaard's theory is that the enterprise IT industry is going to face a massive upheaval over the next 20 years as things like social computing, context aware computing, pattern based strategy and cloud computing all wreck traditional supervendor models.

I've questioned the concept of the supervendor for one reason: Economics. Why would an IT buyer give up all of the negotiating leverage to one vendor and one stack? Why would you lock yourself in like that? The idea of an integrated stack always struck me as a vendor creation.

Sondergaard's argument is a bit different. He projects middling IT budget growth over the next 5 years. Think 3 percent to 5 percent growth a year, a tally that won't keep up with global inflation. This weak budget growth will force companies to act differently. Toss in consumerization, changing work habits and the blurring of personal and professional activities and IT managers are just going to use whatever gets the job done. Those tools could be smartphones, tablets or something else. Chances are it won't be a so-called integrated stack.

The message: Some supervendors will be toast because they won't be able to meet the needs of customers. They will miss the curve, becoming jarringly mediocre and lose. When will this happen? Sondergaard said the next decade to 20 years. For now, supervendors are dominating, but the following trends will make them look like dinosaurs:

  • Cloud computing: On demand delivery models will change the IT industry and its financial model. Can supervendors adapt to cloud models when they live off support and maintenance and upgrade cycles?
  • Social computing: This trend will change marketing, customer service and culture and pervade the enterprise. Lines between personal and professional activities will blur. "The rigid business processes you have are suited for routine activities, but are poorly suited for complex decision making," said Sondergaard. Guess what supervendors sell? He added that processes merely show how work is supposed to get done, not how it actually happens.
  • Context aware computing: Wireless connectivity everywhere will create a new Internet fabric. Context like location, language, desires and dreams will launch a bevy of new services. The network will provide translation between machines, people and other devices.
  • Pattern based strategy: Analytics will combine structured and unstructured data. Companies will seek patterns, model the impact and then adapt to them. It's no wonder that supervendors are talking analytics so much.

Sondergaard said each will be disruptive, but combined these four trends will be "diametrically the opposite of what we have focused on the last 40 years."

Topics: Emerging Tech, CXO

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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