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Global CIO: Upheaval In The IT Industry: The End Of The World As We Knew It

The old model where hardware was hardware and software was software is gone, finished, and not to be seen again.
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Bob Evans The IT industry has become so convoluted that even an ultrasharp guy like Steve Ballmer seems flummoxed by it, per his recent comment in the wake of Oracle's bid for Sun that he has "no idea why a software company would buy a hardware company." I guess Steve, who was in Egypt when he made that comment, didn't get the memo: THERE ARE NO MORE HARDWARE OR SOFTWARE COMPANIES ANYMORE. This will certainly cause some havoc among IT vendors that have to rapidly reconfigure their personalities, messaging, profiles, and pitches, and it will no doubt spark some upheaval among consultancies like Gartner that will have to dust off and repackage the tired old three-ring, three-letter-acronym binders they've been peddling for the past 15 years. But we here at Global CIO will explain it all for you; just follow the thread:

Oracle buys Sun and thereby gets into the hardware business plus ownership of Java, which an analyst said might cause IBM to buy SAP, which has signed a deal with Teradata to blunt some of the momentum being built by the Exabyte Database Machine from Hewlett-Packard and Oracle, whose acquisition of Sun changes "nothing" in the eyes of IBM's CFO, who noted that his company won 62 first-quarter deals to rip and replace Unix systems, while VMware says that although it didn't lock down a lot of virtualization deals in the first quarter it did sign two worth more than $20 million each as CIOs look to LTCOI (Lower The Cost Of Infrastructure), an objective that Amazon Web Services is taking warmly to heart while rapidly extending its offerings beyond startups and small businesses to the enterprise space from which it says it is gaining a great deal of interest, which is good news for IBM since one of its four core strategic initiatives for 2009 is cloud computing, which is both good and bad for Microsoft because it's good in that IBM's presence will no doubt make the whole cloud thing less risky for some CIOs but bad in that it means one more big competitor Microsoft has to battle with as it rolls out its own cloud strategies, which will involve a "hardware company" called Hewlett-Packard via HP's EDS subsidiary, which will be offering and integrating Microsoft's Business Productivity Online Suite in a deal that Microsoft and HP think could approach $3 billion in value even as another HP "software" partner, Oracle, squares off in yet another battle against gigantic database company IBM, which has decided to adopt technology from a small database company that makes it easier for DB2 users to migrate away from the Oracle database system, but then again who knows if Oracle's impending ownership of Sun and its hardware line will cause any static with current hardware partner HP (see Exabyte Database Machine above), which itself is wondering what a partnership's worth anymore ever since longtime server-buddy Cisco decided to go solo and combine servers and networking and storage and virtualization all into one Unified package, which leads the discussion right back to Oracle and Sun because some observers say that combo has all the necessary ingredients to make a strong push into virtualization even though it's an area neither of them has been in before but that's hardly an issue anymore is it since Oracle's breaking new ground in becoming a hardware company even as IBM continues to become much less of a hardware company as its percentage of hardware revenue shrinks dramatically as IBM becomes largely a software + services + financing company (although those 62 disinterred Unix systems noted above would no doubt beg to diffuh) while Cisco becomes more of a full-line hardware company and anyway let's go back to Steve Ballmer because by his reasoning if Sun can be only a hardware company because it sells some hardware then isn't Microsoft also a hardware company because it sells the Xbox and that, folks, is that, the entire new topography of the new IT industry where there are no more hardware or software companies just multiplatform partners pursuing the cloud.

If I were a more empathetic guy, I'd cry a little bit -- or at least feel bad for a moment or two -- over the havoc this must be causing at Gartner with its carefully orchestrated TLA (Three-Letter Acronym) subscription services. In this NWO (New World Order), where does Oracle go -- is it in ERP or OSI via MySQL? Where do we put Cisco in the post-BFF with HP era? And if Oracle is now a "hardware" company then can it really be a threat to the neo-BFF footsy-work between IBM and SAP over ERP and SOA? Or should Gartner just tell us all that, no, it's an REM thing: "It's The End Of The World As We Know It (And I Feel Fine)."

But to make sure you feel fine about some decisions you're making now about IT strategies and strategic IT partners, think very carefully about any plans that are predicated on the old-world model where hardware was hardware and software was software and rarely the twain did meet, because that world is gone, finished, and not to be seen again.

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It was easier when we could put vendors in boxes and seal those boxes up tight with heavy tape and rarely have to open them up to add new ones or pull out old ones. But it was also easier in a lot of ways when customers and partners didn't need and demand massive transparency into your operations and plans, when you could dictate terms to buyers, when you could isolate your network team from your apps team from your hardware team from your customer team. And those days are gone.

The new world of transformed IT requires CIOs to rethink and reconfigure not only how their teams interact with the external world of customers and partners, but also how CIOs and their teams view IT vendors, which have themselves begun a series of massive transformations aimed at delivering what customers need and demand rather than just updating last year's product list.

While it's no doubt a wrenching time for CIOs and their teams, it's also a tremendous opportunity to enlist these new-age vendor-partners in ways that previously were not possible. So yes, it's the end of the world as we knew it, but those CIOs who seize the initiative will ultimately, just as the song promises, feel fine.

GlobalCIO Bob Evans is senior VP and director of InformationWeek's Global CIO unit.

To find out more about Bob Evans, please visit his page.

For more Global CIO perspectives, check out Global CIO,
or write to Bob at [email protected].