I just finished reading Dennis Howlett's excellent analysis "Surviving and thriving: or why MISO has it (mostly) wrong" in which he discusses the basic strategic mistakes being made by Microsoft, IBM, SAP, and Oracle. The net takeaway is that the companies have an unfriendly attitude toward customers and a focus on technologies that the market has not demanded.
Some key points that outline why MISO are going in the wrong direction:
- The egregious treatment of customers at the shrine of maintenance revenues
- The foundational technologies for what they deliver are all showing distinct signs of age, wear and tear
- The five year lifecycle of product delivery is all wrong in today's rapid development
One of the reasons we hear (and write) so much about open source and cloud computing these days is because customers want to be in control of their destinies as well as their infrastructure. MISO offer a great deal of lip service to new technologies but don't deliver an overwhelming wealth of new products or features that users actually want.
What's the point of selling me shiny new technology which I'm struggling to understand anyway when I need to pay the bills more efficiently but more importantly find new business.
Howlett wrote a lot of words, but it's definitely worth a read. The issues at hand with MISO provide enormous opportunities for start-ups to jump in and take market share while the big guys offer empty promises.
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SAP has announced that it plans to transition all customers to its new Enterprise Support offering starting January 1st, 2009. There's nothing like being stuck on a giant system like SAP with no choice but to pay whatever ransom they ask for.
This reminds me of the time that Hoboken, NJ parking garage didn't want to pay for a 20% license increase and all the cars got trapped.
According to the press release, SAP will incrementally raise support costs up to 22% by 2012: "For example, subject to specific contractual limitations, a typical customer paying 17 percent of maintenance base for SAP Standard Support in 2008 will pay a rate of 18.3 percent of maintenance base for SAP Enterprise Support in 2009."
While this feels like sneaky attempt to raise prices (see previous post on Oracle) at least they are not raising license fees. There is value in support, though the increased cost doesn't exactly explain what you get for the additional cash.
Via Irregular Enterprise (ZDNet)
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