Sunday Mar 15, 2009
Rethinking IT truisms
I hear this all too often, "We don't do software development" inferring that preference is given to buying software packages. What about this one, "We are in the process of vendor consolidation and procurement don't like adding new vendors"?
Is it time to rethink these truisms? Why would you want to?
Vinnie Mirchandani, on his deal architect blog , wrote about "How the crash will shape Corporate IT" (follow the link also to his Information Week article). It really hit the spot for me and summed up what I've been feeling about some of these IT truisms for a while.
What I'm finding is that internal IT departments are losing the ability to write software programs and to understand the organisation through various disciplines of architecture. Their strongest skills, that is the internal IT department, now is in managing vendors in acquisition and in contract administration. Through losing their software development capability, they become an internal support organisation and not a center of leadership for change or efficiency improvement in the business.
When the business wants to do something new, the IT department on behalf of the business, hire external consultants to interview the business. The consultants then collate requirements to prepare a Request for Quote/Tender document for a COTS (Commercial Off The Shelf) or MOTS (Modified Off The Shelf) package. Vendors with possible solutions, preferable with existing relationships, are approached and one is selected. This process can be very time consuming and all parties involved will expend significant effort. Mean while the business has changed, some of the requirements change or even worse no one can remember why a particular requirement was required in the first place. See how quickly the costs mount up. Not to mention the additional cost of the annual maintenance and support fees!
Tags software truism development vendor it | Comments 0
Sunday Nov 30, 2008
Industry Clusters - What's Microsoft up to?
A few weeks ago, I received an invite by email to a local AIIA (Australian Information Industy Association) event. The event was for the launch of SouthAustralia.NET.
The following is the introductory paragraph: "AIIA together with Microsoft and the Government of South Australia is pleased to announce the launch of South Australia.NET (SA.NET) Industry Development Cluster. SA.NET is primarily designed to bring together local ICT organisations and promote South Australia as a world class location for software development. ".
I thought the sentiment regarding "world class location for software development" was excellent but had a niggling suspicion that this might have been standard copy used in the other announcements interstate. However, for those of us focused on Open Standards based software development, we were immediately concerned at the message this was sending regarding Microsoft in our state at the exclusion of other technology.
For those that don't know me, I'm also completely Microsoft Free, and have given up on using all their software (blog entry here on the experience).
A few persons and organisations locally, have seen this impartiality towards Microsoft by the SA Government and the AIIA. Now we are starting to organise ourselves and do something about it. It has been proposed that we establish our own Industy Cluster, with the current proposed name of joltSA (Java and Other Leading Technologies South Australia). You can't call something like this, everything but Microsoft technology, but that's what it appears to be (I'll write in another post at a later date why I think there is so much perceived Microsoft mindshare in our geographic area).
But more importantly, I've started asking myself the question - "what is an Industry Cluster?". The classic wikipedia definition is related to associated businesses that are working together in a geographic area to effectively create a better supply chain. In the software industry, the most famous one of the past has been Silicon Valley. In this case, it brought together startups, techos and venture capitalists into closer geographic proximity to each other.
Thinking through this, it sounded like a term that was used to describe something that was successful in the past. So there must be alternatives that take into account what current technology can facilitate. In the wikipedia article one was suggested, being Hubs and Nodes - "is a geographic model, explaining how linked regions can cooperate to fulfill elements of an industry's value chain, and collectively gain sufficient mass to drive innovation growth." But the most important point I think from the definition is "The model of hubs and nodes builds on Porter's cluster model which served well in the past, but as businesses and regions around the world have adjusted to the realities of globalization, the concept of clusters is becoming outdated.".
You wouldn't think that Microsoft would be promoting an outdated concept, such as an Industry Cluster would you? So what were Microsoft really up to?
I went back to the Launch Event email and thought a little more about "Guest speaker Peter Watson, Director - Software + Services, Microsoft Australia, will give you a taste of the next wave from Microsoft, the exciting future ahead and derive early competitive advantage.". Ah ha, this is about rallying the troops towards the future Microsoft Azure platform I thought. Low and behold the AIIA and Microsoft apparently were also promoting Microsoft BizSpark (hadn't heard of this before) at the event, which is targeted at startups. Now this made more sense, Microsoft sold this very well to the different audiences with the safe and warm language that each different type of audience wanted to hear.
I read the terms of the Microsoft BizSpark program and you need to be a startup less then 3 years old, that doesn't host its own service to be a member. A smile crossed my face, as I understood what they are doing. Have you worked it out yet?
If the future is the cloud, as promoted by Ray Ozzie, they need applications that can run on it. Deriving innovation internally in large corporates has increasingly become more difficult, thus the need for external organisations (startups with the innovation, that lack the culture that stifles it) to provide that organic innovation to allow growth. However unless they capture this innovation, and tie it in to run on their platform, they will have a bunch of expensive cloud infrastructure services sitting there, that in essence is not providing much real value to the End User consumers.
So now that we have been nicely distracted, its time to come out of the clouds. Its time to create larger mind share about other technologies that will be still provisioned on-premise (it pays the bills, well tries to) at this time and off-premise in the future. How to do so, is what I spend a lot of time thinking about.
Tags software industry clusters joltsa nodes hubs networks | Comments 0
Wednesday Oct 15, 2008
Uncertain times - can SaaS based applications be used to get an edge
I've been thinking a lot recently about what the potential impact may be to new IT projects with the recent credit crunch. Some believe that there will be increased belt tightening in business in general, with few new capital projects being approved.
Is this the opening that we should be looking for to introduce SaaS applications?
I don't think it will be. In the past, some basic primary research that I did, suggested that over 80% of ICT budgets was used to support existing systems. Out of the remainer of that ~20%, a similar percentage was spent on enhancements to existing systems. So if a capital project is required, to upgrade existing systems, the path of least resistance will be used to reduce risk. The status quo will be maintained to preserve existing operations.
What I'm looking for is those variables that are going to suggest a reduction in Op Ex budgets.
To me the driver is about improving the operating efficiency of business to allow them to compete more effectively against their competitors. So a smart business to me, will be looking to offset capital and op ex costs to get an edge at the moment whilst their competitors are distracted. So these businesses that break with tradition and use SaaS based applications, may just achieve that.
If you think you have spotted some doing just that, let us know.
Tuesday Jul 15, 2008
SaaS - those that get it and those that don't
Two camps are evolving in the software world. Those that see SaaS (Software as a Service) as the future of software delivery to end users and those that don't.
Entrepreneurs and innovators see that providing access to their software over the internet through a hosting provider as the main viable method of delivery to consumers. Establishing traditional channels via distributors and resellers is too cost prohibitive, as well as potentially a prohibitive barrier to entry. This is the great disinter-mediation that is happening with software.
It is also some what silent from the perspective of people working inside of larger corporates and government organisations.
At this time, the majority of IT executives perceive that their organisations will continue to install software on-premise and support it. For the majority of IT consulting organisations this is still a lucrative business to persue. There is services revenue for customisation, training, installation & support as well as from the initial product sale, and with some vendors from support renewals.
So what you can see is a conflict developing here. There are groups of people that want to make the SaaS model work to break down the barriers and obstacles that are stopping them from selling their products. On the other side, there are also groups of people that want to preserve the current status quo with on-premise software installations.
If they do get it, they can see the world of hurt that is coming.
Tags on+premise software development channels off+premise saas | Comments 1
