The Incumbent's dilemma

In politics, incumbent candidates have an unfair advantage - so much so that we keep thinking about term limits.  As Mel Brooks would say "It's good to be the king". In technology, in contrast we love to churn our technology incumbents. Remember BUNCH, the Big 5 consultants, Baby Bells? De-throned, deposed.

The restructuring usually happens by sector - telecomm, hardware etc. Never in my two decade long IT career have I seen as I do today so many tech sectors simultaneously in churn  And in many cases, the challengers are not the 6th or 8th market share player in the category but often brand new players out from left field.

Telecomm - threatened by VoIP providers, municipal WIFI, even Google?
Enterprise software - threatened by SaaS, open source, third party maintenance, may be even Google?
Outsourcers/systems integrators - offshore vendors, rural vendors,  amazon- you kidding me?
Hardware - The Chinese, Linux based products

I could go in to sub-sectors but you get the point.

The instinctive reaction of most incumbents (today that would include IBM, Microsoft, SAP, Oracle, EDS, Accenture, Verizon) is to focus on account control, "value sell", spread FUD about start-ups - increase their sales and marketing budgets. Instead, investing more in R&D and cutting prices may be a far better response. Of course, they will worry about what Wall Street thinks of resulting lower gross margins and higher development costs.

More than Wall Street they should worry about Main Street. The average CIO is far less likely to continue to re-up on the golf course like his/her predecessor a decade ago. Not when the CEO is reading about China and India in Friedman's The world is flat and about VoIP in airline magazines and comes back and questions the CIO about it.

Uneasy lies the head that wears a crown.  Shakespeare wrote that over 4 centuries ago.  Still true today. Change Mel's quote to "It's good - but nerve wracking - to be a technology king"