Product suites are history!
Two weeks ago, I walked around the CEBIT exhibition area in Hannover, Germany. I was amazed by how unclear software vendors’ messaging was within their own exhibition spaces. The bigger vendors, in particular, failed to convey their product strategy and mission.
On the last day of CEBIT, I noticed a multimillion-dollar software vendor’s booth. One of the managers was giving a speech to more than 80 employees. He thanked them for their presence and dedication, and in an attempt to add some marketing to his speech, he asked these employees to state their own tagline. It was embarrassing to see that none of the employees could answer, not even by looking around, since the tagline was not prominent in the booth. Although I felt sorry for the manager, this incident provides a clear example of the software-vendor identity crisis.
If employees cannot state what their own company does, how can anyone expect customers to understand?
In today’s business climate, product suite suppliers face difficult times in a fast-paced market with continually changing demands. Old-fashioned product suite vendors find it hard to answer when asked to explain why customers need to wait for one-and-a-half years for the next version of the software before feature requests are implemented, or why customers have to pay for functionality they will never use.
In this time of economic crisis, professionals responsible for IT operations and budgets are open to pragmatic approaches. They need IT vendors that put their money where their mouth is. Customers want point solutions that give them the functionality they need, at prices that deliver a return on investment, preferably within the first year. When customers have specific requirements, they need agile vendors who can provide immediate turnaround by turning their requests into functionality.
Traditional product suite suppliers are becoming outdated and struggle to survive. They have large development teams with lots of processes, meetings, procedures, templates and scripts just to ensure they are doing the right thing. It is in this over-organizing that they fail to understand their customers’ environments, since they are mostly busy looking inward. I have seen these kinds of software companies unable to finish the next product release due to all these well-intended hurdles. Do customers really need or want to pay for this overhead?
Compared to large vendors, agile software vendors have minimal hierarchy. Organized with responsiveness at the top of the agenda, they are in close contact with customers and partners, they provide a stimulating working environment, and they use the latest online media to communicate with their eco-system. There is no room for arrogance or politics. It is all about being proud of market knowledge and experience, being passionate about that expertise, and having a drive to share all this with the community.
Agile software companies have taken full advantage of the cloud by now. They are leading the pack by concentrating on what they do best and have implemented SaaS and cloud services for their business processes using other vendors’ best-of-breed point solutions. In addition to greater efficiency and scalability, adopting cloud services shows that these software vendors understand the latest technology and business models better. The ideal agile software vendor can use the old server room for another purpose because now there is only a router left, which connects the devices to the Internet. Interestingly enough, the use of cloud services enables all employees to access all business applications from any location.
Twenty-first century software development needs to be truly agile. Lightweight development methodologies such as XP or Scrum that heavily depend on intensive customer interaction should be used. Only when the customer experience is actively fed back into the development process will the result be fast and also very effective, thus truly agile. The twenty-first century is all about time-to-market and providing pragmatic and customer-oriented software products that solve real problems at commodity prices.
The large product suite vendors are stuck in a rat race. Investors expect quarter-by-quarter growth and therefore vendors tend to look for promising technologies to acquire. According to Heinrich Vaske, chief editor of the leading German IT magazine Computerwoche, these acquisitions are primarily driven by economic reasons but are not necessarily in the interest of customers. Once a big vendor acquires new technology, it often takes too long to integrate the new technology and often this integration is poor.
The British research firm Economist Intelligence Unit (EIU) recently reported that 70% of respondents to one of their polls prefer best-of-breed solutions to create a customized IT environment in a flexible way. They willingly take the extra integration effort for granted. Customers know themselves and are smart enough to create IT environments using the point solutions that are best suited to meet their needs rather than waiting fatalistically for a product suite vendor to solve their challenges with relevant IT infrastructures.
Immidio’s strategy is to deliver these best-of-breed point solutions. We offer low-priced products that are simple to implement and provide a clear return on investment. We have no intention of combining our solutions into a product suite. We will add more point solutions over time and these will all continue to be separate products. We will keep our company lean and mean to prevent unnecessary overhead from slowing us down and to stay responsive to the real needs of IT environments. Today, our company is smaller than some of the management teams of the suite vendors with whom we compete!
Category: General