Surviving and thriving: or why MISO has it (mostly) wrong

Summary:Microsoft, IBM, SAP and Oracle collectively make up what Irregulars call MISO. Harsher critics might think they are the Four Horsemen of the Apocalypse.

Microsoft, IBM, SAP and Oracle collectively make up what Irregulars call MISO. Harsher critics might think they are the Four Horsemen of the Apocalypse. Whichever your chosen position I am coming to the view that the way they are going to market is wrong for the conditions in which we are living and more important for the future. There are misalignments to the messages they put out and what they deliver across multiple dimensions.

First up, the egregious treatment of customers at the shrine of maintenance revenues is an ongoing topic that will continue to get aired. This is particularly true of SAP and Oracle, both of which have received a lot of attention on these pages. Regardless of the irritation it causes these companies, it won't go away. Too many voices are questioning one or other company for its practices. What started as a general complaint has taken on a freshness of purpose as those with deep experience provide fresher and more poignant insights. The vendor response is an all too often silence or behind the scenes wrangling.

Second, I see the race (and noise) towards social computing as poorly conceived and inappropriate. Earlier in the week, Yuri Alkin contacted me with the subtlest pitch I've received in a while, pointing to his post about Enterprise 2.0 on FastForward. It's a good read:

E2.0 is still primarily a vendor space, dominated by ISVs selling software to businesses who haven’t really asked for it. It is simply not a demand-driven market. By contrast, just think of CRM or payroll software. You don’t need to convince businesses they need that.

I had to smile wryly at this statement, coming as it does from a Microsoft representative, the company that is working like crazy to flog its E2.0 bag of bits aka Sharepoint. Contrast Yuri's position with our own Dion Hinchcliffe's enthusiastic handwaving for all things E2.0:

The bottom line: The tools have arrived. How enterprise knowledge and is created and flows within our organizations is beginning to change dramatically.

Yay!

Then we have IBM, which does have a solid offering in the social computing space. Our own Susan Scrupski is in awe of Atlas in comments (see also demo link) and sure, it looks cute. But I'm willing to bet that IBM will screw this up royally. When I run into IBM'ers I posit the question: "But IBM really wants to sell consulting, right?" and you can see by the look in their eye they know where I'm going. "Expensive consulting that is..." That's IBM's schtick. Don't get me wrong. I know some very bright,enthusiastic and committed IBM'ers who would love nothing more than to see the company's products bringing the kind of value they evangelize. But they are often maverick operators who at times seem tolerated because they are too good to RIF.

Earlier today a colleague said: "Sending laptops to Africa is a bit pointless when they don't have clean drinking water." Indeed. Several of my Twitter pals suggested that the two could go hand in hand. Maybe. I draw the parallels with the enterprise. What's the point of selling me shiny new technology which I'm struggling to understand anyway when I need to pay the bills more efficiently but more importantly find new business. Despite her enthusiasm for all things E2.0, Susan gets this in spades:

The reality is SAP and its global customer base are just not ready for the socialization of the enterprise. It’s just not a topic that commands attention...

And this is where MISO starts to unravel because you could say the same for Oracle, IBM and Microsoft customers. All four have some sort of toe in the E2.0/social computing/collaborative computing space making varying degrees of noise about what's coming next. Note the emphasis on next. But real world businesses have far more important issues with which to be concerned. And even there, MISO can easily muff it.

David Dobrin, independent analyst and of a vintage to which I can strongly relate had this to say about a supplier managed inventory product demo at the recent SAPPHIRE:

The questions raised by the demo all have to do with the contribution (or lack thereof) that SAP is making to the process when the software is turned on. One possibility (the most likely) is that turning on the software does virtually nothing; it allows you to execute some (unknown) piece of code after you select an item that is to be supplier-managed and do all the aforementioned set-up. If that’s the case, I’m sorry to say, SAP’s brand-new, big, big capability turns out to be fairly trivial. At best, turning it on is one step along a 100-mile journey.

I will not quote any more, readers should savor it for themselves. It is both an entertaining yet laser sharp analysis of what he sees as a missed opportunity by SAP to demonstrate a genuinely powerful product...or a dud. I looked at the demo (webcast link) and while I don't fully concur with David's analysis - I think there was some evidence of deep functionality the demonstrator skimmed - I can understand the skepticism.

So where is all this leading?

I think Yuri provides one clue. Tech companies like selling technology and often lead with solutions to ill defined problems. To me, the Atlas demo shows plenty of sex and sizzle but unless you understand the context then I'd expect people to be lost. David amplifies that in a way, implying that SAP has failed to demonstrate its understanding of business problems even though it may well have a solid handle on 'best practice.' Is it any wonder then that Mike Krigsman, when reporting on yesterday's MIT CIO Symposium laments that (with my emphasis added):

Aligning business and IT is a buzzword concept that comes up at every gathering of CIOs. Listening to technology CEO’s discuss the topic at MIT’s CIO Symposium, it appears little progress has made been in addressing this issue...

...Despite predictability of topic and response, the panel did offer insightful comments. I particularly liked several points from management guru, Jim Champy, who said, “CEOs don’t pay attention to technology unless something breaks down.” Champy added:

"CIOs should participate in innovation around the company’s business model, which goes beyond contributions just to product, services, and operations. Managing infrastructure is worthless if the business fails."

On the other hand, this comment from Alan Trefler reminded me why so many CIOs are in the doghouse, treated almost as second-class citizens by their organization:

"IT spending often doesn’t create top line growth or greater efficiency."

Add in what Bob Evans had to say in an 'open latter' to Leo Apotheker:

Your customers are being asked to help transform their companies from what they had been in the 20th century and the early part of this decade to what they will need to be to survive in the next decade: more responsive and adaptable to rapid and often unpredictable changes in consumer tastes, preferences, buying habits, and experiences.

...and you start to get a picture of what really matters. The question then comes - can MISO deliver? Here are some of the issues:

  • The foundational technologies for what they deliver are all showing distinct signs of age, wear and tear. Yes it's a complex world we live in and some parts of those technology investments should be concreted over and left as far as possible. How does that square to today's needs as articulated by the vendors and customers alike?
  • It concerns me that while the words value, agility and innovation are bandied about you have to ask whether the 5-year delivery cycles of the 90's are appropriate for the rapidly changing world of today. Where for instance is Oracle Fusion? If MISO is cornered into these long release cycles then where do the rapid fire releases come from? SaaS, where new 'stuff' is, in some cases coming weekly but mostly each quarter?
  • Right now my sense is the vendor community is at risk of leaving a very bitter taste in customers' mouths. While the vendors speak the necessary words of acknowledging change, they too have to commit and be seen to commit to new business models where the notion of partnership cuts across every dimension of the relationship. Including financial.
  • Attention should be paid to cost issues but as Mike Krigsman reports, IT isn't seen to help the top line. Where then are say the predictive analytics that could materially assist? Here's a wild idea. What would be wrong in hiring some of the out of work PhD's that used to fill the halls of Wall Street? Why hasn't someone snapped up vendors like Spigit, thrown them together with the best and brightest engineers to help provide the forward view needed to help the top line? You can have as many partners and product lines as you want but priorities dictate that applications that are needed now should be the ones that get showcased. From wherever they come.
  • Last week, some of my geeks pals got excited about in-memory databases. C'mon guys, Mike Stonebreaker has been plowing that furrow for years. Vertica offers an IMDB operating in the cloud for $500 a month. Who's going to acquire that company and build the apps in double quick time so that many types of data can be crunched together in sub-second response times to provide essential forward views and not just the reactive analysis?
  • Where are the deep customer driven process applications that will help business retain and build upon what it has? Sure- take the social computing stuff for selling and marketing if you must. But quickly embed those into processes that ensure your customers can go to market with actions that will help build and preserve their reputations. Markets might be shrinking so preserving what you've got matters. Now is the time to get serious about customer service apps.
  • . There could well be apps in development but right now, IT needs relief. It needs vision to which it can relate and which it can present to those even more skeptical CEOs.

I've missed out many things some of my colleagues would raise as more likely to deliver value. That's fine. I wanted to focus on applications (rather than technology) that might not only help but raise energy levels inside beleaguered IT departments. Does any of this resonate with you?

Image courtesy of my son: Joe Howlett

Topics: Social Enterprise, Collaboration, CXO, IBM, Oracle, SAP

About

Dennis Howlett has been providing comment and analysis on enterprise software since 1991 in a variety of European trade and professional journals including CFO Magazine, The Economist and Information Week. Today, apart from being a full time blogger on innovation for professional services organisations, he is a founding member of Enterpri... Full Bio

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