In the summer of 2006, CIOs were growing frustrated at rogue tech projects taking place within their companies. Business users were going behind CIOs' backs with stealth IT, also known as skunkworks. In one case, marketers sent email campaigns through their company's domain server and bypassed controls that ensure emails don't break anti-spam laws. Needless to say, the company was flagged as a spammer.
CIOs were also getting fed up with tech vendors, especially startups, trying to get their foot in the enterprise door by selling their products and services directly to business users and then installing them without IT's knowledge. Any tech vendor caught doing this would see their technology ripped out and the company black-balled.
Flash forward seven years, and CIOs are singing a different tune. At last week's DEMO conference in Silicon Valley, CIOs said they're taking an "open minded" approach to technology brought in by business users.
CIOs See Simple Twist of IT Strategy
In a strange twist, CIOs at DEMO were attempting to make the case for why startups should go through them and not directly to end users. CIOs are the ambassadors of new technology, they said, and can usher products and services throughout the enterprise. The CIO is an ally that can turn a silo-ed tech deal into an enterprise-wide one.
-- MoNimbus CEO Ram Kumar
"The one thing I tell them is that the CIO is the common denominator," says CIO Steven John at Workday. "If you want to get into multiple areas of the organization, whether it's human resources or finance or sales, if you get the CIO on your side, all of those other entry points are going to be so much more easy. If you don't, the CIO can turn into a blocker."
Yet the very question - Why should startups sell to the CIO? - is a far cry from the CIO's hardline stance of yesteryear. Truth is, technology purchasing power has shifted away from the CIO to the point where skunkworks aren't a surprise to anyone.
Consumer tech in the enterprise, coupled with the ease of adopting cloud computing services, has empowered business users to seize control over technology. IDC predicts that by 2017, line of business executives will control 40 percent of IT spending.
Even worse for CIOs, tech vendors aren't buying into the idea of bringing the CIO into the deal. After decades of feeling the sting from the CIO's requirements whip, many tech vendors find selling to business users a huge relief. This is most true among tech vendors with products and services aimed at marketers, who are undergoing a digital transformation themselves; Gartner predicts that by 2017 the CMO will spend more on IT than the CIO.
At Ad Age's Digital Conference for marketers in San Francisco last week, tech vendors said that they were thankful they no longer had to suffer through a CIO's laundry list of technical requirements, from requests for proposal-quote to security authentication to service level agreements. Ninety-percent of the requirements, a CEO of a tech startup said, was probably to preserve the CIO's role in the company.
IT Vendors Seize the Moment
Tech vendors selling wares to the enterprise also haven't missed the signs of a purchasing power shift. They're building products that let business users cut out IT.
In August, mobile device management software developer MobileIron trotted out a new offering called Anyware, a cloud-based mobile management service that lets businesspeople manage and use iOS and Android apps in minutes.
At DEMO, startup MoNimbus showed a product that lets a business user drag and drop all sorts of existing services, such as LinkedIn, Salesforce, Dropbox, among others, into a single mobile app. Never mind the dangers of a consumer storage repository such as Dropbox containing sensitive corporate data.
Of course, none of this is to say that the purchasing power pendulum has completely swung in favor of business users. Nothing moves that quickly, especially at large enterprises where CIOs still rule the roost. They continue to have tight control over software spend and data security - at least for now.
"I am of the opinion that is going to change big-time," says CEO Ram Kumar at MoNimbus. "Business users will become decision makers, but enterprise IT will not die. It will reinvent itself to be a cheerleader and custodian of the enterprise app store."
Tom Kaneshige covers Apple, BYOD and Consumerization of IT for CIO.com. Follow Tom on Twitter @kaneshige. Follow everything from CIO.com on Twitter @CIOonline, Facebook, Google + and LinkedIn. Email Tom at email@example.com