Ray Wang, one of the analysts at Forrester I respect because he speaks his mind on the over-priced maintenance of large software vendors, writes at Sandhill.com about growing ISV ecosystems around the major vendors
"Consequently, major software vendors like IBM, Microsoft, Oracle, and SAP are encouraging their partners to innovate on their platforms, fill existing gaps, and ultimately help drive long-term customer loyalty. The result: each of these large software vendors now has a vast partner ecosystem filled with solutions at varying levels of integration, support, and quality."
He lays out a useful framework on how to decide between one of the partners in the ecosystem or waiting for the "parent" to itself develop that capability.
Four observations:
a) For many industries, the partner applications are not "the last mile" - they represent core processing capability. As I wrote recently about Oracle's Insurance offering, most big vendors have not delivered vertical functionality for most non-manufacturing industries. So, another decision point is whose ecosystem? If I was a hospital CIO I would let my clinical application's ecosystem drive my financial or HR application choices, not the other way around.
b) While the bigger vendors boast thousands of partners in their ecosystems (Ray has some stats in his analysis), they often represent agreements signed eons ago and atrophied partnering practices. More contemporary developments and business practices are likely to come out of ecosystems like Apple's rapidly growing App Store around the iPhone (ironically, the bigger software vendors cannot wait to be showcased in that ecosystem) or Zoho's recently announced marketplace
c) You may be better off buying comparable functionality from a non-ecosystem vendor - the smaller vendor will likely give you better pricing (the core vendors often skim 25 to 40% of revenues from the partner) and far better support. While most CIOs groan at the thought of more integration, the reality is the cost of integrating a non-ecosystem vendor will typically be lower than the lock-in TCO of an ecosystem partner.
d) Don't forget to hammer the core vendor for not delivering that ecosystem functionality that your maintenance dollars of prior years were supposed to have already funded.
For a change I am with Lou Dobbs
I disagree with Monsieur Dobbs on trade, immigration and a variety of other issues. But I kinda agreed with him when he says "Hooray for those who defeated bailout"
Am I nuts?
Believe me I grimaced when I checked my 401-K investments last night. But I am tired of Wall Street every few years pouting, pushing us to the brink and telling us it is Judgment Day. I am tired, in tech, seeing us so focused on investors and not enough on customers.
If it changes some fundamental behavior in our economy and our politicians, it can only be good. If the Republicans who voted against the bailout bill are truly going back to economically conservative roots, I say hooray. It is shameful a Republican administration has run up such massive deficits. If it makes Democrats more forceful to saying no to handouts, I say hooray. No to Wall Street, no to all of us.
One thing I would love to see Lou Dobbs soften. The reality is several countries around the world have been more disciplined, harder working than us over the last two decades. We need to use them as role models going forward, not continue to bash them.
Good, old-fashioned hard work and ingenuity, customer-is-king attitude - the values of our previous generations - and frankly those of most small businesses even today.
We do that and Wall Street will reward us - and itself.
September 30, 2008 in Industry Commentary | Permalink | Comments (2) | TrackBack (0)