Innovation Pushed to Vendors

date:2008-04-16 10:37:34
category:Economics of Software

Here’s the analysis.

“60 cents of every IT dollar goes to maintaining existing systems”.  “This increased ‘run the business’ spending has consumed budget resources that were originally earmarked for more strategic and transformational investment,” writes Gartner analyst Jed Rubin.

So, what happens with the “innovation” portion of the budget?

In effect, it’s outsourced.  Since the CIO can’t invest much in innovation, the vendors will be offering innovation as part of products or services.

We wind up in a three-way tug-of-war.  On the one hand, some vendors offer proprietary innovation; think Microsoft and Oracle.  On the other hand, some vendors offer supported open source innovation; think Red Hat.  On the third hand, we have any in-house initiatives.  To stick with the “no investment” strategy of modern IT, the in-house folks can only use open source solutions.

With two of the three poles being open source, I can see where this is headed.  Firms like IBM and Sun have a mixed bag of open source and proprietary offerings.

With the third pole being Microsoft, I can see how Fear, Uncertainty and Doubt will slow movement to a glacial pace.

And – bonus – end users are forced to suffer through this glacial pace of change.  The users can buy all the iPhones and build all the unsupported applications they want.  IT remains doggedly attached to yesterday’s technology until a vendor provides the solution or it drops out of the open-source sky.

I thought I read an opinion piece that pointed this out recently.  I can’t find the piece anywhere, however, so perhaps I just made it up.

Here’s some related material: Information Week’s The CIO Dilemma , from March ‘07, and this blog posting from the Long Tail: Who Needs a CIO?

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