I have just come back from a round the world trip with frequent reminders of Great Britain’s wide influence – Victoria Harbour, Raffles Hotel, Brabourne Stadium, Kipling’s Kim in bookstores among others. You could almost visualize the rise and fall of a mighty empire.
The metaphor was apt for a few meetings I had with CIOs during the trip . The common thread from these meetings was the proposition of buying (versus building application software) is just not as compelling as it was two decades ago when I had helped many of them as a Gartner analyst
The TCO of procured software has exceeded even the most pessimistic expectations. Vendors are greedily looking for more via audits and other predatory behavior. Worse, the application vendors have invested little of the maintenance revenues or cloud subscriptions back into applications. They have invested in tools, databases and data centers and encouraged SIs and smaller partners to build new functionality for which customers had to pay even more.
I sensed disappointment, even anger. As an CIO mentioned: ‘
People in Asia have long memories, there are only so many quarters that you can pull a rabbit out of the hat.
The shame is there has never been a better time to be a pure-play application vendor. Consumer tech vendors are making the capex investment in platforms and infrastructure that enterprise application vendors can leverage as a service. There are industry application niches galore as every vertical market goes through gut wrenching changes. A whole new generation of business processes and applications is needed for the changing man/machine mix in a world of artificial intelligence, robotics, autonomous vehicles and wearables
We are seeing the passing of the torch. The ERP and other application vendors we have known and loved for a while have had their turn. It’s time for a new generation of application vendors but they face a group of cynical buyers. They have to behave very differently from the previous generation of application vendors.
The Queen is dead. Long live the Queen!
(Cross-posted @ Deal Architect)