Forum: Mopping up the old IT industry

Once big names fall by the wayside

For those in the IT industry it has been a month when the question “whatever happened to ...” was answered several times over.

Whatever happened to SGI? Assets sold to Rackable. Whatever happened to Borland? Sold to Micro Focus. Whatever happened to Vignette? Sold to Open Text.

Its decline was so fast, nobody even had a chance to ask that question of Sun Microsystems.

Add to that others that have fallen over the last year, such as EDS, and you get a picture of an IT market and industry that is being radically transformed — at internet speed.

The case of Sun is enough to make any IT executive pause and ask who will be next.

There are certainly plenty of companies struggling right now, both financially and technologically.

What we are seeing here is a massive consolidation of the industry, something that was predicted back in the 1990s and something that happens to any new industry as it matures.

This consolidation has its own particular face in New Zealand. Many of the large international vendors operate here as little more than sales and marketing organisations with limited local autonomy.

More and more of our IT industry is being run from Sydney or Singapore. More and more country managers are actually ANZ country managers, or even Asia-Pacific managers that fly through once a month or once a quarter.

We’ve seen, for example, local layoffs at one former industry giant, CA, as it adopted a pure channel strategy here.

So that leaves the really big — Microsoft, IBM, HP, Oracle, SAP and a few others — and local providers such as Gen-i and Datacom, Revera and Axon and a host of others delivering truly local service.

Below them are the small, nimble, local and innovative. New Zealand is blessed with many of these.

Despite these industry changes, I don’t think we are in any danger of a lessening of competition. There are still significant providers and challengers in all market niches. But CIOs would be wise to look at the level of commitment vendors make to New Zealand, whether directly or through a channel, when making their buying decisions, especially for mission-critical systems and technologies that may require quick, effective and local back-up.

I don’t know how often I’ve been to launches (or worse, relaunches) as companies noisily enter or reenter the local market, only to see them disappear again a few months later.

I’m sensing that local commitment and capability is one requirement getting increased weighting in many of the tender documents I get a look at. And rightly so.

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