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Monday, August 28, 2006
I wrote a note for the The Deep End column at Sandhill.com. While evryone today is busy talking about Enterprise 2.0,web 2.O, their current penetration into large business enterprises are nothing great to write about. I feel that the 2.0 Craze media coverage is ahead of reality. CIO's are preoccupied in managing the existing IT investements and hence the focus on enteprise software in the form it mostly exists today. Of late, traces of real innovation have been rarely spotted in the enterprise software sector - so complain a majority of stakeholders. If one were to think of the situation, it is clear that innovation, or lack thereof can be paradoxically seen to enjoy a well defined pattern of cause and effect relationship. This is clearly driven by the oft-heard maxim: consolidation is stifling innovation, and lack of innovation is driving consolidation. The raison d'etre for consolidation happens to be the ability to bring out positive outcomes based on bringing together supplementary and complementary offerings. In reality we are getting to see mega vendors racing to integrate acquired technologies into wide suites. This has an inevitable consequence - that of managing a maturing stack (which no doubt would consume significant efforts). With this lopsided approach towards gaining strength in the market, the mega vendors are forced to focus their energy and resources to integrating diverse and newly acquired technologies into so-called "best-in-class" enterprise suites. In reality it is seen that their original maturing IT stacks are holding back their powers of innovation as this absorbs substantial share of their R&D outlay. New ideas and new product development take a back seat - resulting in a slow pace of progress. This preoccupation of bringing together such new solutions as against developing new programs is certainly not a healthy trend. Owing to the consolidation frenzy, smaller firms are also focused on developing solution allied to mega vendors and larger brands and not necessarily focused on rolling out innovative products. Vendors tell us that customer demands, market dynamics, and technology advancements are pushing solution frameworks to be aligned towards an experience of end-to-end process fulfillment. This forces the vendors to acquire new functionalities faster and integrate them to increase the richness and appeal of their application stack. This leads to a situation where some tend to view that increasingly because of its value proposition getting based on its consolidated avatar, all enterprise systems are running the risk of being seen at its core as essentially the same. Of course, vendors would make us believe that there is so much of differentiation that provides an edge to their respective products. Leaving aside ROI assessments, feature and function comparison, market share or cost comparisons, vertical spreads, but seen from an end user perspective, mature enterprise software today seems to provide performance advantage just within a band. The hope for the future is based on the trends which show that componentized software products, interoperability standards and Internet technology will lead to a rich array of considered choices for enterprises to adopt. Software vendor's execution of their futuristic strategies would come into sharper focus as users would realize that migrating older instances and/or integrating them to other software will remain resource consuming and painstaking for some time to come. New solutions within enterprises shall find easy fitment to newly rearchitected products, capable of actualizing automation and transformation of processes end-to-end. Enterprises shall actively begin looking at new protocol adherences, standards and technologies in order to benefit from Web services/SOA frameworks. With large scale consolidations are happening within the industry, the basis of competition shifts from plain market muscle, promotions and fast moving abilities to providing future proof architectures and good support to business processes through repository centric integrated offering benefiting the business across the extended value chain. As I wrote recently , the enterprise software market will have to reflect and embark on an important restructuring and transformation to become more vibrant, broad based, innovative and bounce back as a serious contributor to the growth of the industry ecosystem and the business at large. Read the full note here.
Category :Enterprise Software, Emerging Trends |
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