In part 1, I asserted that while the discussions around MISO’s (Microsoft, IBM, SAP, Oracle) present and future present valid arguments they miss the cultural point. This is important because cultural shift is defining the way companies are organising themselves to meet the challenges of 21st century operations. Here’s a small example. Severn Delta threw out the rule book when its management acquired an ailing tea towel manufacturing business. It is constantly setting itself challenges by questioning its business practices and aggressibvely focusing on value. It rejected conventional wisdom for the implementation of business systems, opting instead for Erik Keller’s build rather than buy model and using open source as the foundation.
Mediocrity or innovation?
In a recent article, Erik posits that in an era of consolidation:
…the best sales forces of the largest vendors sell mediocrity and the status quo…While many of the largest software companies speak of how the market has become more commoditized, they continue to price their products (as well as their maintenance) as [if] they were highly strategic and innovative. Again, this diminishes the value of software in the eyes of buyers as it fuels the view that buyers are paying a lot for something worth a whole lot less…
I think that many software buyers are beginning to see through this and, as I have written before, are moving aggressively to deploy innovative solutions through building rather than buying software.
Erik has an excellent point but avoids discussing the cultural shift that drives change.
Game changing
When I look at innovative vendors (i.e. game changers) they are, without exception, doing something fundamentally different from the engineering led efforts of the previous two decades. They are led by people who have identified a clearly defined problem, looked at the market and said ‘No.’ They are creating businesses where the chief motivations are deep root change coupled with a fundamentally different view of their employees and customers. They want to make work a fun activity.
To quote Polly LaBarre:
Brand is culture, culture is brand.
Why would great people want to come work here?
Maverick leadership
Neither SAP nor Microsoft have maverick leadership. By that I mean people who have disruptive points of view about which I can get passionate. Forget disruptive software or services. The current software battle has nothing to do with software but experimentation based on making business changing difference. Those who adhere to this view recognise that software is the enabler for new service delivery models that are relevant to their customers and in which their people can take pride. That’s way more challenging than developing the next bit of code.
Microsoft’s leadership cannot re-imagine what it might be like to be in a ‘new’ software industry. Or rather if Ray Ozzie, Bill Gates appointed successor is supposed to be that person then he’s not having much obvious effect. The same goes for SAP. Regardless of what others may say about ‘teamwork’ Shai Agassi was a genuine change agent. Can we say the same of the recently re-jigged leadership?
Microsoft’s Steve Ballmer almost chokes at the mention of software as services. I saw him talk about it recently. He spluttered. Henning Kagermann’s public statements indicate he has trouble understanding services delivery models. These are the people who set the agenda in these companies. Or rather set the agenda their investors need to hear. They’re wedded to 1980-90s models of delivering and servicing customer need. They understand that models are changing but don’t see how to do it but know it totally screws their business model.
Microsoft’s innovations team is working hard to discover partners who can help take them forward. But it is on the premise that the offering will inextricably wed the user to Office and SharePoint. Wrong, wrong, wrong. SAP is doing the same but substitute NetWeaver for SharePoint. If you wed your success to a single idea then you’re baking in lock-in, something buyers hate at a time when, if Ismael Ghalimi’s Office 2.0 database is to be believed, we’re almost drowning in choice which is being defined by others.
Where does the phoenix part kick in? Read part 3.
Technorati Tags: cultural difference, Microsoft, MISO, SAP
