The supervendor debate: Will there be an IT buyer backlash?

The supervendor debate: Will there be an IT buyer backlash?

Summary: The most compelling theme of the Gartner Symposium this week can be boiled down to five words: The rise of the supervendor. The big question is whether there will be any backlash from IT buyers.

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TOPICS: CXO, IT Priorities
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The most compelling theme of the Gartner Symposium this week can be boiled down to five words: The rise of the supervendor. The big question is whether there will be any backlash from IT buyers.

Here's the backdrop: Supervendors are being formed via merger and acquisitions. You know the history by now. Oracle has acquired PeopleSoft, Siebel Systems, BEA Systems, Hyperion and dozens of others. Hewlett-Packard bought EDS, Palm, 3Com, 3Par and others. IBM bought Cognos, but has mostly focused on smaller software firms with an analytics hook. The general concept: Customers want integrated systems and one complete stack.

The rub: There seems to be some angst among CIOs when it comes to supervendors. CIOs privately note that they worry about giving away leverage. No one trusts lock-in. On the other hand, these executives don't exactly have the budgets to go best-of-breed and fool around with a lot of integration. Gartner analysts say that cloud services may be a once-in-a-career opportunity to stop paying so much maintenance and support to supervendors, who live and breathe support and maintenance costs.

Among the most notable quotes on supervendors this week:

  • Saleforce.com CEO Marc Benioff said that large vendors reinforce stale business models and prevent market shifts. Benioff specifically took aim at Oracle. Benioff talked about how he roamed around Oracle’s OpenWorld conference and saw 200 red cubes for all the companies Larry Ellison acquired. “Hyperion has a little cube. And BEA. This is what our industry has come to? 200 red cubes?" he said. Benioff questioned the wisdom of vendors trying to offer everything in one stack. "What’s next? More servers? More private clouds that eat up more carbon? While vendors get larger they hold the paradigms back."

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.

  • Meanwhile, William Snyder, another Gartner analyst, said vendors are becoming "monolithic" and more likely to manage you than the other way around. "Vendors that are here today are somewhere else tomorrow, and, all too often, these vendors are consumed by a larger vendor with interests that may not be consistent with a customer's strategic direction," said Snyder.

CIOs will nod in agreement with most of these statements. However, there's no revolution. These CIOs are in yet another year of Gartner therapy in the name of better management, business alignment and all that stuff that has been talked about for a decade or more. But there's no revolt. Most of their budget goes to supervendors.

More: Salesforce.com's Benioff unplugged: Supervendors suck

The supervendor situation is almost tragically comical. Everyone sees the problems. Yet the IT buyer keeps going along with the status quo.

Sondergaard's statement that "users will not accept architectural mediocrity" had me chuckling the first time he said it. Why? Customers have already accepted mediocrity in many cases. Good enough is fine. In IT you strive for the "C" grade that won't get you canned.

Perhaps cloud computing will lead to a revolt that will seriously upend business models of these supervendors. The transition from support and maintenance to subscription revenue would be too much to bear. Salesforce.com is the most successful cloud/on demand software providers, but it's on a run rate of $1.6 billion in revenue a year. That's a nice chunk of change, but it's a rounding error to a supervendor.

Instead, IT buyers will have to focus more on vendor management, something they already do. Snyder's talk focused on the reality of vendor management. The gist: You need to allocate resources to deal with your big strategic vendors. The general idea is that you focus on vendor relations and management before there's a purchase event or failure.

Snyder said in his presentation:

Customers often focus significant resources on the initial acquisition to try to get the relationship right from the start, but then fail to be attentive to how the vendor performs unless there is some type of crisis. This pattern of attention has resulted in vendors that are attuned to dazzle customers during the sales cycles, but then ignore the customer until the next time a major buy is in the works. Customers are recognizing that this behavior does not deliver optimal long-term vendor performance.

While there's a lot of talk about revolution and whining about supervendors, the reality is that it's probably more prudent to follow Snyder's advice and put more time into vendor management. Welcome to enterprise IT, it's a game of managing monoliths.

Topics: CXO, IT Priorities

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6 comments
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  • Excellent coverage ... more please

    The signs are there:<br><br>- the accretion of supervendors<br>- secret ACTA negociations between governments over copyright<br>- the vendor-controlled APP store<br>- the multitude of Profit Driven Technology Decisions favouring suppliers over consumers<br><br>Some see it ... but they are outnumbered by the flocks of corporate sheep following in case they lose their jobs ... and the consumer fanbois who love M$ or Apple without realising just how much is being hald back.<br><br>They exist like Neo in The Matrix ... hopelessly hooked up to a false reality, used merely as batteries to power the machines.
    jacksonjohn
    • RE: The supervendor debate: Will there be an IT buyer backlash?

      @johnfenjackson@...

      It would be easier to read your rant if you cleaned up your grammar and spelling mistakes.
      BlogLogMog
  • RE: The supervendor debate: Will there be an IT buyer backlash?

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    LINCC337
  • RE: The supervendor debate: Will there be an IT buyer backlash?

    Yes the one "stack" but what does that mean? One branded name but underneath a hugely complex mix of bought in technologies? Gartner need to ask the right question if they are to really help CIOs.
    David Chassels
    • RE: The supervendor debate: Will there be an IT buyer backlash?

      @David Chassels

      Exactly, these supervendors may buy all the products but do not necessarily integrate them well. Try to make sense of IBM's Information Management offerings for example. So many products with massive overlaps in functionality and "all our products do everything" style marketing makes it more of a lucky dip than a seamless package.

      As for Sondergaard, mediocre is the gold standard as far as IT architecture goes I'm afraid. Particularly as you now have vendors deliberately shunning good architecture in favour of "features" that unnecessarily lock you into their product stack.
      xBeanie
  • Co-Operative computing

    Large companies have the resources to co-operate and build their own customer focused alternatives to the big IT vendors offerings.

    This probably isn't viable for hardware but it is certainly a strong possibility for software.

    I am confident that a co-operative approach among the world's largest companies could create software tools that were significantly out-perform the offerings of the big IT vendors.

    Of course you have to get out of the application specific tool trap that the vendors are leading us into at the moment (and is an unfortunate by-product of out-moded ways of thinking like object orientation).
    jorwell