Enterprise IT and megavendors: Cloud players angle in on bad marriages

Enterprise IT and megavendors: Cloud players angle in on bad marriages

Summary: The attitude toward the megavendors is notable, but it's unclear whether enterprises will leave bad marriages.


Each year the angst over large enterprise tech vendors seems to ramp up just a smidge, but the big question is when customers will jump ship.

This week at the Gartner Symposium megavendors were described as risky in many camps. The argument is that companies ranging from SAP to IBM to Oracle to Microsoft have to navigate mobile, social, big data and cloud. Meanwhile, consumer giants like Apple and Google will disrupt the big guns.

The attitude toward the megavendors is notable, but it's unclear whether enterprises will leave bad marriages. The annual CIO session that is the Gartner powwow in many respects reminds me of a conference of bad marriages. IT buyers want to escape and get a clean slate. These megavendor customers won't go on record and mostly mumble under their breath. Some of them may even have a mistress on the side via a software as a service vendor just to cope. But in the end these customers stick around and complain like someone that has been married three years and one upgrade cycle too long.

It was hard not to notice that the sessions that were most popular revolved around cloud operating models and disruptive vendors such as Apple. For these enterprises, a move to the cloud is a way---if not THE ONLY way---to ditch the legacy applications that feel like shackles. Gartner analyst Peter Sondergaard described the big vendors as "long-term risky."

How risky? The wrong vendor bet may mean you're toast amid consumerization and the fact that business units may control the IT budget more than CIOs. Clayton Christensen, speaking to CIOs, laid it out for executives:

Some of you will be slow of foot about innovation and will likely be killed.

NetSuite CEO Zach Nelson made his appearance at Gartner in what amounted to his first trip to the CIO powwow. His talk revolved around how Groupon rolled out NetSuite globally with mind-boggling---at least in enterprise IT terms---speed. Nelson was also touting Knowledge Universe and other wins. His message revolved around two-tier ERP implementations. In other words, NetSuite can be the mistress you ultimately decide to marry after ditching SAP or Oracle.

Nelson recently officially moved NetSuite upmarket to target the enterprise. NetSuite has built a nice foothold in the midmarket for companies looking to consolidate global operations on its OneWorld ERP system. "In ERP horizontal problems are hard to find, but multicompany consolidation is one," said Nelson in an interview. He's right. Many companies have multiple units and subsidiaries spread around the world.

For now, NetSuite and Nelson are just getting started courting large enterprise customers. A partnership with Accenture will help NetSuite greatly. As for verticals, NetSuite has its specialties for software, wholesale distribution and e-tail. That's good because enterprises copy each other. Once you land a few customer wins in one vertical others follow.

Nelson wasn't the only one introducing himself to CIOs. Appirio's Narinder Singh, chief strategy officer, was also making the rounds. I caught up with Singh, who was introducing Appirio, a cloud integration services outfit, to CIOs. Appirio, which doesn't have any servers in its internal operations, may seem a bit extreme to CIOs who still think that buying hardware somehow relates to cloud computing (the private variety). But Singh noted it's a marathon not a sprint. These CIOs may come around---they may have no choice.

These introductions to CIOs at large enterprises are seeding ventures today. At Gartner's 2010 confab, Salesforce.com CEO Marc Benioff finished his keynote and roamed the halls talking to CIOs for 8 hours. Gartner obviously noted since many of its themes could have doubled as a Benioff keynote.

What remains to be seen is whether these marriages are really bad or just mean there's a 7-year itch. For instance, Oracle will change its cloud stripes, according to Gartner.

In another presentation, Gartner wonks argued that Oracle will increasingly look like Salesforce.com.

If Oracle and SAP become cloud juggernauts, perhaps these long-running maintenance driven enterprise relationships will survive. If not, there are dozens of cloud players ready to step in.

Today, cloud players are just speed dating with large enterprise buyers. Tomorrow, there may be more meaningful relationships.

The week at Gartner's Symposium:


Topics: Enterprise Software, CXO, Cloud, Data Centers, Emerging Tech, IT Priorities, Software

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  • Revolution

    How curious that a post about dissatisfaction with megavendors attracts not a single response ... but the mere thought that M$ may be acting anti-competitively with secure-boot draws baying crowds to watch biased ZDNET bloggers put their party's point of view.

    "Some of you will slow of foot and innovation will be killed'.
    If we leave the likes of M$, Apple, Google, IBM, ORACLE, VMWARE, AMAZON, OEM's et al to carve up the cloud then we will be saddled with whatever charging model those global corporates care to foist upon us. Instead of a steady reduction due to technology improvements they will do exactly the same as the media giants: restrict customers and construct licensing policies to preserve their revenues. It looks increasingly likely to me that there will be an unholy alliance between the IT and media giants, with 30% on top.
    I believe it is time to get revolutionary (as it is on the moral, political and banking fronts) and work to restore the balance between megavendors and customers. We need more innovative solutions like <strong>symform</strong> and <strong>wanova</strong>
    ... and not the eighth version of Windows or AZURE ... and we need new business financial models and not 'everyone has to buy their own copy'. Time to share computing power the way customers want it: not the way megavendors want it.

    In this respect ZDNET is largely a corporate sheep, with only a few original thinkers. The great debates revolve around whether W8 will be a success ... instead of 'how can we escape the tyranny of the megavendors'. And the baying crowds ask for more. Megavendors like it this way: the media and the public can argue aimlessly like politicians in their biased respective parties ... while the megavendors seal our fate. I am reminded of the splendid opening to War of the Worlds:
    "With infinite complacency men went to and fro over this globe about their little affairs ... intellects vast and cool and unsympathetic, regarded this earth with envious eyes, and slowly and surely drew their plans against us."

    One such intellect died a few weeks ago leaving a company with more cash than its Government, while the world population endured a recession.

    Go figure: for goodness sake - GO FIGURE!
  • RE: Enterprise IT and megavendors: Cloud players angle in on bad marriages

    These are all great points, Larry. As CIOs and IT buyers look to keep budgets tight, working with legacy vendors and having disparate or burdensome systems will only hurt business. We are seeing this even more with our own enterprise customers, as the bigger players like Oracle cannot provide enough support or flexibility of services to meet the ever present needs of CIOs today. The decision no longer includes considering how long to stay on board with a legacy system or megavendor; it is actually about how long a company wants to lose profits or customers.