Agreeing to disagree on the future of enterprise IT
Dear Vorticians,
Every once in a while you run into an intelligent, thought-provoking person with whom you disagree completely.
That was the case late last month when I met with Tom Foremski, the founder of SiliconValleyWatcher.com, an excellent Web site that you may want to add to your list of favorites. Geoffrey Moore and I were talking to Tom about Vortex 05 when Tom stated flatly that the enterprise market was boring. In fact, Tom went on to write a fairly lengthy piece on our discussion that I'd encourage you to read.
I couldn't disagree more. In fact, I think Tom's dead wrong.
Tom isn't the first person I've heard this from lately. In most instances, the person making the claim is doing so based on the fact that the enterprise IT market isn't growing as fast as it has in some past years. If your yardstick of excitement for the tech market is the late 90s, things ain't likely to suit you for a good long time to come (maybe never). But even the slow growth argument doesn't hold water. If the $1 trillion tech market grows between 5% and 10% this year - the range I've seen from most of the analysts - that's $50 billion to $100 billion in new expenditures. You know many other markets offering that much 'excitement'?
Some others make the claim because it's tough for tech companies to go public today. This investment-centric view of the world gets a great deal of press, but it is a reflection on the current conditions of the stock market and the venture world rather than the real, day-to-day world of enterprise IT.
To his credit, Tom doesn't make either the core of his argument. Rather, he cites a number of problems weighing down the enterprise IT world and making it "deadly dull," to quote from the headline of his piece. Among the challenges he cites: that more and more enterprise dollars are spent on maintenance; that "one or two large players" dominate the market; that problems like security are lengthening IT buy cycles; and, most impressively, that many of the enterprises themselves will become extinct, put out of business by what Tom calls "New Rules Enterprises." (Read here about them.)
With all due respect to Tom, I think he's missed the point. Far from being a "deadly dull" landscape, the enterprise market is undergoing profound changes - changes that offer huge opportunities to the enterprises and the suppliers who best capitalize on them. This is the premise that Geoff and I have embraced with Vortex and, with each passing conversation with IT executives and tech leaders, I'm more certain it's on the mark.
We are at the end of the client/server era of computing. What the next era will be is not clear yet. That presents vast potential and vast risk to enterprises, who have to navigate major changes in the way they build and use computing, network and storage technology, and for the vendors who have made their fortunes on client/server. Some of them will choose the dangerous and self-destructive path of trying to protect the current ways of doing IT, failing to learn the lessons of earlier dinosaurs who fell in market upheavals of yesteryear.
Where we are today is analogous to the end of mainframe and mini-computer eras and the emergence of PCs, networking, the Web - shifts of vast magnitude. We're on the verge of a revolution because enterprises need IT more than ever to compete in a highly price-competitive, fast-shifting marketplace and they need to do IT better, smarter, faster and cheaper. They have to break the bounds of today's systems and they need much more help from the IT industry to make these changes.
The problems that Tom cites are real. But they are symptoms of client/server's demise. They were caused by client/server (just throw cheap bandwidth, storage and servers at any problem!) and they are exactly the kinds of challenges that must be addressed in the new era. What's more, they are exactly the kinds of opportunities that smart entrepreneurs are setting their sights on today. And, sorry Tom, I don't buy the New Rules Enterprise angle either. Yes, there will be New Rules Enterprises. But traditional enterprises are also quickly embracing new approaches to virtualizing systems, Web services applications, RSS and many other promising new technologies. (Two readers commenting on Tom's story also raised similar points and their insightful comments are well worth reading.) Old Rules Enterprises built on powerful brands and innovative use of technology just might - like Mary Tyler Moore - make it after all.
The technology industry has been marked by major periods of upheaval. That's been a fact of life - often, a very painful fact. (Just ask IBM, DEC, Wang, etc.) But for some today, that fact is lost. They look at the tough, seemingly intractable problems facing IT customers and they only envision more of the same. The reality is that those problems are the breeding ground for future solutions. The future for enterprise IT will be markedly different and new companies (perhaps a few of the old) will dominate the landscape. And that future will arrive faster than you think. As we've seen, change in the tech market can hit like a whirlwind.
Your thoughts?
Back to Vortex Blog
Comments
Dear John and Fellow Vorticians,
The implication that IT is deadly dull and is no longer, if it ever was, a growth driver of the economy is off center. There is no doubt that a shift is underway in IT expenditures from the enterprise to the edge - where a business' ecosystem lives. Multi-enterprise collaboration, which drives greater efficiencies between an enterprise and its trading partners, is creating new opportunities for competitive advantage because organizations are able to derive greater visibility from where business is being transacted. Over the last twenty plus years, we have thought of trading partners as strictly direct materials or manufacturing focused. In the last 10 years, we have seen the advent of giant retailers like Wal-Mart and Home Depot gain tremendous advantage from IT expenditures focused on collaboration with their suppliers. Now the action in leveraging IT for trading partner enablement is starting to move toward other services companies in areas like banking, insurance, healthcare and even education.
I agree with Tom Foremski's New Rules in one area - Web services. Sterling Commerce is beginning to see the convergence of service-oriented architectures with service-oriented business applications as an entirely new growth area, enabling companies to further leverage multi-enterprise collaboration for competitive advantage.
Posted by: Sam Starr on September 8, 2005 02:41 PM
Post a comment
