Monday, June 23, 2008
Why innovation isn't occuring in enterprise software...
Enterprises are doing themselves a disservice by elongating procurement cycles. Has any enterprise architect ever considered the cost of sales for your software vendors? Let's say that you are an enterprise architect who has been indoctrinated by Robert McIlree into heavyweight process to the point that you understand nothing about technology and become hooked on vendor presentations like a crack addict. Instead of looking at open source software such as Liferay Enterprise Portal which is freely downloadable and doing your own proofs of concept, you instead decide to have an enterprisey vendor do it for free. They send a sales executive who needs to make $150K a year along with a sales engineer who also needs to make the same.
These two individuals do multiple demos. First to you in order for you to feel comfortable, then to a small team of interested parties and then again for the official POC kickoff. In the meantime, they have spent lots of time travelling back and forth on airplanes, trains and rental cars. Let's not forget that they would have needed to take you to lunch at least once or twice. By now, they have spent at least $10K on expenses not including salaries. We decide to do a proof of concept where the goal is to demonstrate low-hanging fruit and you put up a demo that is the equivalent of Hello World. They could have done this remotely but it was important to you to have lots of face time with the vendor. Let's now add the cost of hotel and meals to the equation.
Anyway, you decide to make the move to purchase the software, but unlike in the past you have to jump through more hoops (better known as governance). What used to take three months now takes nine months. Remember, the vendor hasn't seen a single nickel for their efforts. You finally make it through all the hoops and are ready to get the deal executed and then a reorg occurs and new folks are involved and need to be brought up to speed. Yet another round of demos.
I hope you are starting to see a pattern emerge where if the cost of software stayed the same yet us enterprisey architects are causing more expense for enterprise software vendors, then how can they possibly have enough monies left to actually innovate...
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