

The Economist: Deflating IT - startingup
http://www.economist.com/people/displaystory.cfm?story_id=12052307&fsrc=rss

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dant
I'm a manager in an in-house corporate IT dept. Far from running scared from
this kind of thing I'm constantly trying to get the rest of the business to
except off the self software for all the little tools that they ask for so
that we can focus on the key business differentiators.

Problem is, they're a big company and they want slick corporate branded stuff
that integrates with our ActiveDirectory and where the drop downs have sucked
values in from other apps so it all just works. Which is fine, only, it costs
loads and its in most cases it's not worth it.

I think it'll be hard for a lot of big corporates to accept that it's better
(for example) to adjust their business to Zoho CRM than to hire people to
adjust SAP CRM to their business. I think a few startups will have to adopt
things like Zoho and then grow big, before the incumbents change.

~~~
adamc
I think businesses have to pick and choose, but: if inhouse CRM is part of the
competitive advantage, then it makes sense. If it isn't, and the only goal is
for it to be acceptable, then it makes more sense to license an existing
product.

Except for state/government institutions, which very often have many other
regulatory hurdles that commercial software doesn't handle well. That's one of
the ways in which regulation can be very expensive.

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LarryV
While I am a bit worried about how scatterbrained AdventNet seems to be - I do
think that they have a chance to disrupt a very inefficient and parasitic
software eco-system that exists in Business Software. They only need to figure
out the integration piece and the fact that they have played with some
Microsoft Active Directory tools and embrace outside identity systems may help
them get there.

I have found that the biggest draw to "integrated" software is not having a
new set of credentials to login into it.

I am finding some success with technologies that can play nice with various
directories. I am currently playing with Novell's EDirectory and its Identity
Management solutions and it surprises me how few companies focus on what I see
as one of the central problems in business IT: the seamless integration
between the company's CRM, the team's contacts and the directories that power
each business solution.

There is a huge need for a business class 'identity-in-the-cloud' solution
that speak to many internal systems using software hooks/drivers that are very
transparent, have good auditing and can be controlled by the company/customer.

I bet a large percentage of software projects at companies have overlapping
user management sub-systems that could be better addressed by an identity-in-
the-cloud system like the ones emerging from Microsoft, Google et al.

And for those who say that your company has too many secrets to possibly use
an outside solution for identity - get over it, it is not true. You have many
people forwarding things to their Gmail accounts and many mobile devices
around the country without even a pin code to secure them. Your sense of
security is an illusion, embrace solutions that can provide complete audits of
what happens with them, then you will know how insecure you really are and
plan around the fact that total security is impossible. And your internal
development team will never reach the self-auditing stage of the solution
because as soon as it half works they are pulled to something else.

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stanley
"Microsoft, having grown up making money selling traditional software, will
have a hard time being successful online, he argues. He thinks Google is
unlikely to invest much in enterprise applications, because profit per
employee is much lower than in its advertisement-financed consumer business."

I hope for his own good that he's not staking the future of his business on
those basic assumptions. If Google and Microsoft were to ramp up their
development of online enterprise software (which IMHO will undoubtedly
happen), he'll have very little room to maneuver and no time to react.

~~~
sridharvembu
Google & Microsoft will both do very well, indeed. Even then we will have a
decent business if we execute well.

First, we are much smaller, so it takes a lot less to be successful. Second,
even in the face of the most successful business on the planet, Intuit and
Adobe succeeded well. Third, monopolies are exceptionally rare, and fairly
transient - so Microsoft's Windows/Office monopoly is likely to prove to be
the exception than the rule, even for Microsoft itself. Linux on the server
side, Mac on the client, Firefox/Chrome in browsers ... all point to that.

Dell is an outstanding success, and still only holds somewhere under 20% of
the global PC market. That's what I expect to be true in cloud computing.

Bottomline: there are going to be many players with many successful
strategies.

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richcollins
IT needs are a moving target. I don't see how you can commoditize custom
software.

~~~
jacobscott
You refactor your product to need as little customization as possible, and
make it easy to extend and modify. The more OSS you can build on, the more
money you save. One IT employee is easily $100K/yr after benefits, so if you
can eliminate that much custom work, that's what you can charge. I'm not
saying that this is easy to do.

~~~
13ren
I was thinking that understanding the problem (the business's "IT needs") is
hard to commoditize, and can't be done with 100% automation (unless all
businesses were cookie-cutter, automatically formally describable - perhaps
almost true for some franchise-style businesses).

But much can be done without reaching perfection.

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netcan
_He thinks Google is unlikely to invest much in enterprise applications,
because profit per employee is much lower than in its advertisement-financed
consumer business._

I know this isn't the article's centre of gravity, but...

It bugs me to hear this thrown around so easily. There is no existing business
model that produces that type of cash from online advertising. Search is the
exception. Not the rule. Google's hedging bets, tying their hands but at the
end of the day, these free web services will either need to be:

1\. subsidised by a giant (like google does now) for whatever reasons they can
get together

2\. very cheap to run. IE web-services will replace companies many times their
size, taking only a fraction over the revenues. You can always get _some_
revenue from ads.

3\. paid for by users

4\. a business model will emerge that will do for apps what overture/adwords
did for search.

I wouldn't be putting all my shells on 4. Unless i'm missing something.

Gmail is probably one of the 'best-bet' ad-supported apps. If it was a
yearbook, they might get 'most likely to succeed' Anyone have an idea how much
they make?

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13ren
> “I was convinced that something big was about to happen with software in
> India,” he explains. “I wanted to be part of it.”

> Customers must be convinced that they can entrust their business to the
> software.

The first kind of convincing is harder.

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13ren
disruptive adoption: <http://news.ycombinator.com/item?id=297597>

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sabat
Deflating IT? Oversimplifying IT, rather.

