A recent exchange with my father-in-law, Tony, who, before he retired, handled mergers and acquisitions (and sales and demolitions) of companies for a large Global 2000 conglomerate, provided the thesis for this month’s column. Tony gave me his two cents’ worth regarding one of my recent columns, which criticized a new product offering from a leading storage vendor, EMC. From his perspective, I was missing the point entirely.
He opened the EMC stock chart on the Yahoo! Finance Web page to make a simple point. Regardless of the quality of its products, he observed, the company was executing on business. A $1,000 invested in EMC 10 years ago, he noted, would be worth $1 million today.
When I tried to explain that part of my job was to review products for their architectural goodness and fit with consumer problems—a daunting challenge in the face of many half-baked technologies and out-and-out snake oil being peddled in the storage market today—he dismissed me out of hand. “You do-gooders,” he exclaimed in the most exasperated tone, “do not understand business.”
Where was my faith, he asked, in the “unseen hand” that Adam Smith described as the guiding principle of capitalism and free trade? Didn’t I understand the market contained its own mechanisms for correcting aberrations? If XYZ company was selling bad products, eventually competitors with better products would appear, and XYZ would either be forced to change or find itself out of business.
For now, he said, it was incumbent on me to look out for me and mine, and to follow the path—a potentially more lucrative one at that—of endorsing the industry leader. If those wares were what the market wanted, who was I to question their decision?
I might have dismissed the view as armchair quarterbacking, but I’ve heard it too many times lately. Stated in different ways and often less eloquently, a lot of CIOs and business managers have been telling me they are buying the technology products of “market share leaders” on an all-too-familiar premise: nobody gets fired for buying XYZ (you can substitute EMC, IBM, HDS, Cisco Systems, etc.). There are even several books topping the business reading lists today whose authors project the future of technology as the exclusive domain of an oligarchy of seven or eight brand-name vendors.
Forget the “disruptive innovators”: start-up vendors with good ideas but not a lot of customers. They are as dead as dot.coms. Business technology will eventually come down to buying the products of (or outsourcing IT altogether to) a handful of vendors with good stock charts.
The foundation of this cynical interpretation, of course, is fear. Some CIOs are afraid of trying new technologies. It isn’t “career safe”—especially, if a new idea fails to deliver the expected value.
Others reject the notion of innovation, even when it promises to deliver the kind of value the front-office is looking for: top line growth, operational efficiency, and risk reduction. Saving money, for example, by trying an innovative solution isn’t a motivator, even in these budgetary belt-tightened times. “It’s not my money, after all,” I’ve heard too many IT decision-makers say.
Adding to these attitudes is a new chant I’ve been hearing more often: “I don’t have enough information to make an intelligent decision on my own. It’s better to work with a ‘strategic’ vendor in a one-stop shop.” Basically, the reluctance of many vendors to provide competitive speeds and feeds data on their products, combined with a technology “analyst” community that prefers to sell its opinion to the highest bidder, combined with budget cuts that eliminate testing budgets in many companies, makes the name brand vendor “solution sale” de rigueur in many larger firms.
The way I see it is that many IT folk have basically outsourced their thinking process to the vendor. Such a strategy may provide confidence and comfort for a time, and it might seem to fit with the politics and budgetary realities confronting many shops today. But it’s wrong.
Not long ago, I was having too many cocktails with some middle managers at a software company in Germany. One of the guys, deep in his cups, pounded a fist on the bar and announced that his country “was never supposed to be a democracy.” He growled that Germany “has always needed the leadership of one strong man.” I responded by asking whether the fellow had ever watched the History Channel on TV. His were clearly “fightin’ words” to a lot of people.
So it is with, “Nobody ever got fired for buying EMC, IBM, HDS …” Once a company goes down the path of outsourcing its IT decision-making to a vendor, the inevitable outcome is self-destruction. For all its initial appeal, the idea eventually gets tarnished by outrageous pricing models, forced marches through the vendor’s preferred technology roadmap, and failure to meet business needs that see the front-office issuing pink slips to everyone involved.
My words of caution, as someone who lived through such a purge when the blush was off IBM’s rose a decade or two ago, “Those who forget the past are condemned to repeat it.”