About the software part of the ecosystem…and women’s shoes….
This is the most glamorous and most “watched” component of the CIO’s ecosystem, maybe also the most critical and the one which will be most impacted by new trends.
I recently had dinner with a successful enterprise software exeutive. He has spent years selling software to enterprise CIOs and understands the business very well. He started his career selling shoes to women..and said he was pretty good at it….and he was very successful in selling software too!
“I found some similarity in both”, he said. “In both cases, managing perception of the customer and making them feel that it is a “must-have” is important”.
On a more serious note, he also admitted that in 90s he could truly establish a linkage where the software gave his customers a competitive advantage and delivered real business value…which today is not as visible and clear and tangible as it was earlier. There are too many me-too software vendors and ISVs have been selling too much of software at too high a price without delivering enough of value.
A CIO on defensive will mean that the software vendors are going to be much more on defensive.
The CIOs will demand lower costs of license and lower costs on recurring maintenance. In cases where enterprises have built a spaghetti of too many applications, rationalisation will be a clear goal thus impacting the recurring revenue to ISVs from enterprises.
Open Source software is a very real threat, SaaS is no longer a “fringe” and is a “must-have” part of business model for all software companies, and third party maintenance companies like Rimini street are attacking the “cash-cows” of assured support revenues which were the cushion to help them meet quarterly numbers.
If one has to choose one sector which will be most impacted by CIO’s defensive posture, it is the enterprise software sector.