Most large vendors still talk in terms of selling entire application suites, growing their “wallet share” of customer IT spend, and the joy of their “all you can eat” buffets. It all sounds so retro, 90s talk because so many customers, especially those in middle of significant digital transformations are more into buying small components, building their own applications and integrating.
Many reasons for the disconnect between vendor and customer talk:
a) The last generation of vendor suites disappointed. For all the talk of “wall to wall” functionality, customers ended up buying number of “ring fence” applications and customizing the packages as vendors did not adequately keep up with changes in their industries and regulatory requirements . In SAP Nation, I pointed out “According to Panaya, a tool vendor, "More than 50% of SAP shops have 40+ satellite applications. Of these less than 10 are SAP applications." CAST Research Labs has analyzed customizations at several major SAP customers and found most of the customizations were sizable, with many of them high-risk according to its benchmarks.”
b) The concentration of dollars with a handful of suppliers led to “lock-in” and bad vendor behavior. It is rare to find a CIO who will not share a story of an unjustified vendor audit or other aggressive behavior. The promise of economies from vendor reduction and concentration has mostly stayed just a promise. It’s hardly an endorsement to sign up again for procurement of large suites.
c) As they rethink business processes and especially business models as part of their digital transformations, enterprises are finding a wide array of cloud applications, easily developed mobile and analytical applications and a growing array of automation technologies (with AI, robotics, wearables etc) that they can themselves weave together. In contrast they find enterprise vendors are mostly taking old processes and “moving them to the cloud”. As one CIO told me “Our industry has gone through so many changes in last decade that you are almost better off starting from scratch.” Said another “there is not much original thinking. Enterprise UX continues to trail consumer tech UX. Still a keyboard and mouse paradigm when we should have much more voice driven and automated processes“
One of the biggest constraints to moving aggressively to a build versus buy paradigm is most CIOs have very lean staffing models – few architects, few developers or integration specialists. As they committed to the last generation of suites they also moved to a different staffing model, often heavily outsourced. That will not change overnight – but that hardly makes them welcome a new generation of suites.