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

The attitude toward the megavendors is notable, but it's unclear whether enterprises will leave bad marriages.
Written by Larry Dignan, Contributor

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:


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