A Springboard To Services

Every couple of weeks I help teach my son’s kindergarten computer lesson at his school. This is of course a lot of fun, and at a level that usually matches my real functional computer capabilities. Of course even with a bunch of five year olds the analyst comes out in me.

I decided to subject a couple of his poor friends to some computer branding exercises. I through a few names to them in terms of technology companies. Microsoft and HP were well known, and Dell had some awareness, (their machines were whiteboxes, but have Dell or HP or others at home I guessed). IBM had no awareness, however, Skype had a couple of nods, as did e-Bay and Google, scarily perhaps so did Facebook. Perhaps not surprisingly, IBM had 1 response. For other services firms such as Accenture and EDS there was blank stares.

Was I surprised by this no, of course not. What it will mean is that the companies such as Microsoft, HP ect will have their potential customers grow up on their product and understand it. In 25 years time when my son’s classmates maybe in a position to buy IT, they are going to be more and more disposed to brands that they have grown up with. This generation will not know that IBM made the PC mainstream. There is every likelihood that as for Accenture and EDS, they will not learn about IBM as a company in a practical sense until they reach the workforce in 20 or so years.
This is a fundamental challenge in particular with the growth of Google, e-Bay etc as brands. How IBM, Accenture etc handle it may very well define how they maintain a future as an organisation in the future. The need for these firms to continually reinvent themselves is becoming clearer, and the reinvention cycles for every brand in IT, consumer or enterprise is becoming shorter.

I admit that I am on Facebook, not really that exciting I hear you say, however what is exciting (or sad depending on perspective) is that I don’t spend much time there. I tend to ignore requests to join what various groups, or in effect what are 101 different applications that sit on top of Facebook. and seem to be mushrooming in number. It and some other thoughts that I had seen, has led me to see Facebook as becoming a de-facto Operating System.

This concept is stunning in realisation. Facebook as an OS embodies so much of the new world of consumer led IT, it has open source as its core for many of the applications, a plug in model of delivery, in effect SaaS but free. Aside from the customer base and flow through in terms of being on the cutting edge of consumer led IT, is a key driver I believe for the acquisition by Microsoft of a small strategic stake.

What is more inevitable, just as I suggested to EDS to get Google into their Agility Alliance, this highlights that the new breed of software based companies such as Facebook, Google and e-Bay (which seems like an old breed company in Facebook terms) are going to transform the way in which IT is engaged. The incumbents need to understand how to engage with the new models, or they will be quickly subsumed as the new dinosaurs. This is where companies such as Dell, Microsoft and HP are at an advantage, the penetration that they have into the consumer led markets can put them one step ahead of firms such as Accenture, EDS, Fujitsu (ex Japan) and of course IBM.

Over the years I have been presenting or doing client workshops I have often had a slide that is simply put as the other 95%. By this I highlight the part of the enterprise budget that is not IT related. I often hear from frustrated IT directors not being able to get their CEO's ear on the basis of competing priorities for tight funds. It is in many ways further proof of the need for IT to integrate itself into the organisation and highlight the value it brings processes that make up the 95%. The sooner an IT department does this the higher the level of IT credibility, and the better chance IT has of catching more than a fair share of the CEO ear.