Sitting on the sidelines observing the recent glut of big acquisitions by even bigger tech companies has been fascinating. It’s not just because we are seeing young companies with lots of promise (but not so much revenue) be gobbled up with ant-eater like precision, but also because we are seeing some of the early pioneers and principle enablers of “this generation” of Information Technology be swallowed up, stripped of name and identity and re-aligned in larger, all-encompassing behemoths, jostling for the lucrative leadership positions in the “next generation” of the Digital Age.
Of course, this isn’t a new phenomenon. In 1992, I worked for a large technology manufacturer and service provider in the UK. They were called ICL.
They were huge….and now, they don’t exist anymore.
ICL was acquired, bailed out, snapped up, whatever, by Fujitsu and forty years of history attached with the brand – and the name – disappeared overnight.
For large organizations, let’s call them the “traditional enterprise”, the safe bet has usually been to buy technology products and services from big vendors, resting assured in the knowledge that the millions of dollars invested in R&D, marketing, sales and support means that you will be getting a quality product that meets, or in some cases, exceeds your needs.
That’s a pretty sound philosophy if you’re willing to juggle the pros of predictability and cons of cost, lock in, forced upgrades, etc etc etc…all of which leaves me wondering if today’s unrelenting dog-eat-dog world of big player acquisitions is actually confounding this problem, making the customer walk the proverbial plank a lot quicker than we may realize.
I’m sure there are many continued supporters of today’s version of the old adage “nobody ever got fired for buying IBM” and that may well hold true across many industries, but in the age of agility, flexibility and much shorter product lifecycles, the winds of change and opportunity are certainly blowing.
These opportunities lie with the start-ups and smaller vendors.
I like to call them “emerging vendors”. I like to think of them in the same way I like to think there are no such thing as strangers, just friends you haven’t met yet. They are open to new models of engagement, which can be broadly classified as partnerships.
Wikipedia describes a partnership thus : A partnership is an arrangement where entities and/or individuals agree to cooperate to advance their interests.
Note that this doesn’t use the word “sell” ? I will come back to that later.
I am lucky enough to wear my large enterprise hat as a forward-thinking architect, but twinned with the responsibility of what we term “strategic sourcing management”. Essentially, this means that I am able to combine the responsibilities of setting technical direction with the selection, management, and commercial term negotiations / agreements with vendor(s) large and small. I am not too sure of many organizations where one person has this same responsibility at a managerial (not CxO) level, but I can see a world, not too far away, where this makes total sense.
If CIOs of tomorrow are to become service aggregators, then the next generation of architects might just be the swiss army knife of technical, business and commercial savvy that plays a key supporting role in future organizational success.
In my recent experience, I have been fortunate enough to create and foster some really exciting partnerships, true partnerships, with some emerging vendors. I can’t name them in this post, but I can say that it has been an absolute pleasure and a breath of fresh air to work alongside some of the smartest folks in the industry to create solutions of real value to our business. These are not necessarily vendors that would have made it onto our radar a few years back, when the landscape and the mentality was different, they just would not have fit that mold, but in today’s world, they have more than a seat at the big table. They are key to our strategy and we treat them as we treat all our strategic vendors – as a part of the team.
What’s in it for them ? They get to work with smart people who can articulate challenges. They get help to understand real world use cases for their technologies. They get an ethical and honest prospect who appreciates their time and remunerates accordingly. They get feedback, open and regular. They get a conduit to other, maybe unknown, vendors in the ecosystem and contextual introductions to bigger vendors who may well be higher up the food chain.
Ultimately, the common goal is that they get a customer and a revenue stream. All off the back of the original partnership, and without the word “sell” ever being mentioned.
What’s in it for us ? We get to work with smart people who understand our challenges. We get to help define features, influence roadmaps and create solutions that plug into our existing environment(s), enabling the speed that is so critical to the IT services we deliver as a business. We get flexibility and choice. We get satisfaction from seeing these guys engaged in discussions with others in our ecosystem.
In the current climate, choice is a big word. I no longer see this as “either, or”, “big versus small” vendor decision – it’s both. It’s a consensus that the one size fits all model is an antiquated approach. If that isn’t recognized by everyone today, I am convinced it’s only a matter of time.
I am also pretty much convinced that a good proportion of emerging vendors sets their sights on gaining momentum, a customer base, a revenue stream and then either aims to :
a) be acquired
Either one is usually considered a good result, just how good, depends on the terms of the deal. What is important to me as a customer (or even a prospect) is not the end result, but the other end of that spectrum – finding these guys at the right time, finding the ones who are willing to listen and learn and above all, finding the ones who truly understand the process (and value) of “partnerships” between themselves and large organizations to help provide the solutions that drive our business forward.