Innovation Dreaming Won’t Stop Enterprise Software Screaming

This week, three smart people who have decades of experience working in and dissecting the enterprise software industry all riffed on the same topic: Signs that software vendors can’t innovate fast enough for their customers.

Forrester Research’s star software analyst Ray Wang kicked things off with his seven signs (my favorite: 2. Repackaging existing products to sell back to you).

Next up was ERP guru Vinnie Mirchandani and his seven salvos (my favorite: 3. User interfaces continue to evolve at snail’s pace).

And last was ZDNet’s blogger extraordinaire Dennis Howlett and his seven signs (my favorite: 4. No clearly defined strategy for providing SaaS/on-demand offerings).

No doubt, these guys know their stuff, and I take no issue with their spot-on observations—enterprise software vendors need to change their self-centered ways (especially when it comes to maintenance fees).

But their points and the term innovate tilled up a topic that I had been thinking about for a while: That tech-industry watchers and bloggers (myself included) downplay the day-to-day struggles that confront the majority of corporate IT shops and end-user organizations.

Just think about the decades’ worth of siloed, legacy applications that users have “made do with” and which IT staffers have kept alive with metaphorical duct tape and lots of smoke and mirrors, mostly because people hate change and corporations believe that IT investment is such a huge money pit as is (especially with ERP systems).

In other words, innovative tech dreams can often conflict with stark IT realities. And how much ground-breaking software innovation can a company actually deal with at the moment?

For instance, a new Forrester survey of more than 2,200 IT executives and technology decision-makers in North America and Europe found that modernizing key legacy applications is the top software initiative for businesses this year (cited by 64 percent of enterprise and 55 percent of SMB respondents). These companies also have chopped their IT budgets, so innovation is probably not top of mind right now.

I would also point to the meteoric rise of third-party maintenance provider Rimini Street, whose simple message has been bought into by many companies: Half-off ERP maintenance and support costs charged by Oracle and SAP for customers looking to just use the software they already have. CEO Seth Ravin recently told me: “Customers have more software already than they know what to do with—they’re ‘oversoftwared.'”

And then consider the lengthy delays with Oracle’s next-generation and as-yet-unfinished Fusion Applications Suite: Perhaps Ellison & Co. have realized that there is no good reason for Oracle to trot out a next-generation applications suite to a customer base that’s in financial and infrastructural turmoil and is not looking for that kind of application horsepower right now.

Of course, innovation is a pretty subjective word and can be twisted into whatever shape or form needed at the time—by vendors, by customers, by analysts, by journalists. Software innovation for one company or vendor can mean something drastically different to another. And, really, it should be all about value for the customer, in the end.

By no means am I removing blame from the enterprise vendor cartel and the turtle’s pace at which they’ve been able to help their customers—with bleeding-edge innovation or basic customer service.

But it’s not like the customers who complain about a lack of vendor-driven innovation don’t share some blame either—they are free to take their business elsewhere.

It takes two to tango. And many companies and their IT shops just aren’t in a position to dance at too fast a pace right now.

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