Seen that movie before

Bruce Richardson puts his 3-5 year forecast hat and lays it out without any probability disclaimers.  Bruce is a great guy,  the cuddly curmudgeon, a credit to the analyst profession.  But I find myself disagreeing with him - I like the term ERP II - better than Enterprise 2.0 -)

But I think he is too optimistic about the ability of service providers - IBM and Accenture and other integrators - to take over mantle of leadership in applications. Bruce, we made that mistake in 1998 when at Gartner we projected market leadership would move to service providers. They have no real interest in leadership (and related investments). They want to sell bodies.  So show them the money - around IBM's SOA. SAP's SOA. Oracle's SOA. Around BPO. Their BPO. Around SAP's. Justin Timberlake's. Anybody's..

But almost $ 100 billion in outsourcing contracts is coming due for re-negotiation in the next couple of years. You have to be blind to not have read IBM is moving 40,000 jobs to India. Guess what rates those re-negotiations are going to be at? Adjusting to global delivery and related economics is going to keep IBM and Accenture busy. Even less time to think about market leadership.

So, the power shifts to the Indians and the East Europeans, says Bruce.  If they can adjust to the demand without  losing their historical quality focus, I say. A very tall order. Besides, the Indians, in particular,  are cautious.  Sitting on $ 10-15-20 billion in market cap, and hundreds of millions in cash, they make $ 50 m acquisitions - reluctantly.  They don't invest in large internal IP development. They enter new markets slowly through established paths. Give me legacy apps maintenance. Give me ERP rollouts, not the first implementation. Market leadership?  Not any time soon.

Lots of upstarts - SaaS, BPO, BPM, Open Source - will provide fragmented offerings, but none will individually emerge as dominant players in the next 3 years. Sorry, Dave. Sorry, Marc. You have lots of fans, but overall market leadership is far away.

Then there are wild cards Bruce does not mention. An outsourcing exec told me recently he is scared to death of Google. Honestly. HP about to take over from IBM the mantle of tech leadership will have a few things to say. Verizon gradually learning about integration. Lots of private equity trying software and services mashups. Clearly they will be influences - but not likely dominant players around enterprise software in next few years.

So, shiver me timbers - am I actually saying SAP and Oracle will continue to rock along? No, they are already starting to be weakened by some of the upstarts, third party maintenance, open source vendors. Lots of custom development/BPO going on in non-manufacturing verticals they were counting on getting to next.

To me, we are about to enter a new era of choice. The market leader will be the CIO. He/she is smarting from the lock-in pricing both the software vendors and the integrators have enjoyed for the last few years. Those gravy days are coming to an end.  I agree with Bruce that integrators will take over. Just a different kind of integrator - the CIO.