Never Miss a Beat: Get a snapshot of the issues affecting the IT industry straight to your inbox.
Five Amigos Fight The Power
Every time I'm at an airport and I see one of those giant SAP ads claiming that the world's best-run companies run SAP, I wonder how many of the executives those ads are targeting choke on their Dramamine at the reminder of the ungodly implementation cycles, which are matched in gruesomeness only by the dreadful 22 percent maintenance fees charged by the vendor. I wonder if they worry whether they'll lose their jobs over the cost overruns or the fact that the software doesn't allow them to innov
3 Min Read
Every time I'm at an airport and I see one of those giant SAP ads claiming that the world's best-run companies run SAP, I wonder how many of the executives those ads are targeting choke on their Dramamine at the reminder of the ungodly implementation cycles, which are matched in gruesomeness only by the dreadful 22 percent maintenance fees charged by the vendor. I wonder if they worry whether they'll lose their jobs over the cost overruns or the fact that the software doesn't allow them to innovate as effectively as their competitors.Now, those executives can fire up their netbooks and send a bat signal to five of arguably the most curmudgeonly voices in enterprise IT, who have joined forces to fight the power, and sworn to defend the interests of IT administrators everywhere.
Calling themselves the Enterprise Advocates, the band of brudders describes itself as
a highly visible group of like minded people who 'bat' for the buyer side in the buyer-vendor relationship [and] draw on more than 100 years combined experience, backgrounds as diverse as Gartner, Forrester, PwC, Deloitte and Sony Playstation.
The self-styled defenders of the helpless include former Forrester analyst Ray Wang, author of the Software Buyer's Bill of Rights (the Thomas Jefferson of enterprise IT?), former PwC and Gartner analyst Vinnie Mirchandani, as well as independent consultants Oliver Marks, Dennis Howlett and Frank Scavo.
The big idea is that traditional software vendors are padding their margins with maintenance contracts rather than delivering value to customers. As Howlett notes in his opening salvo:
When companies like Oracle can throw 19% of their last quarter's revenues at sales and marketing but only 13% at R&D, much of which you can be sure was related to patching and bug fixing rather than innovations and still earn 31% net you have to ask 'What's in it for me?' A further analysis of Oracle's numbers show that they earned 93% margin in support and maintenance while margins on new license sales were comparatively paltry at 21%. (see Oracle's latest 10-Q.) That should tell you Oracle is in the business of acquiring maintenance income. For all practical purposes, it has pretty much abandoned the idea of delivering transformational functional value back to its customers.
Marchandani further explains that customers can't penetrate the fog of self-congratulatory vendor vapor.
Technology vendors spend 20 to 50% of their revenues in sales and marketing. Give or take that is a trillion dollars a year. The buyer's voice is often drowned in that roar.
Each of these "advocates" brings his own perspective: Howlett likes to hold software-as-a-service (SaaS) over the heads of the vendors like a sword of Damocles, while Marks is more of a SaaS-a-Skeptic. Wang, Scavo and Marchandani also bring significant management and vendor experience to the page. They each have their separate gigs, but believe that their combined voices will have more impact under a single banner.
It's a space that the vendors will be watching very carefully, so at the very least, customers have an opportunity to drop comments (and complaints) at a very visible Web address. I know I'll be watching.
About the Author
You May Also Like
More Insights
