I like attending our annual Directions conference. In addition to catching up with clients, it gives me a chance to also get up to speed on what my IDC colleagues are doing. While listening to Frank Gens, I began to think about how IT has evolved from the first to the second and now on to the third platform.
When I first had the opportunity to run an IT organization, it was still the first platform era. We were defined by the proprietary systems that we ran. In my first stint as CIO, we were a Digital Equipment shop. And that was the first thing you said when you met a peer from another company – “I run IT at XYZ Company, we’re a DEC shop”. Some were HP shops or Prime or Wang – many were IBM shops from the really big iron to mid-range S/3x (later AS/400).
And all the decisions went through your hardware provider. We ran the VMS operating system, clients were VT100 terminals which were connected via DECNet, and the software to run the business (we called it MRP then, not ERP) was selected from a list of partners the hardware company gave you – I ran ASK ManMan on my DEC VAX servers.
I was actually on the cusp of the client/server, second platform phase. PC’s had made their way into the organization and personal productivity applications began to be widely use, particularly word processing and spreadsheets. However, some even stuck with their hardware provider for those applications as well (anyone remember IBM PROFS or DEC All-In-One?). Once we added terminal emulation, the office worker could shed the terminal and do everything with their PC.
The emergence of UNIX from under the control of AT&T, the availability of powerful relational data base systems, and the widespread adoption of Ethernet as a networking standard began to marginalize the value of the hardware and, with the power to choose any software to run the business regardless of hardware, companies began to define themselves by the foundational ERP package they ran. Personally, I had just transitioned to the research world just as this second platform was obliterating the first, accelerated both by the commercial Internet and Y2K.
The share leaders became known collectively as the JBOPS – JD Edwards, Baan, Oracle, PeopleSoft, and SAP. IT management now identified themselves by which of these companies provided the corporate system of record as in “I’m from XYZ Company, we’re an Oracle shop”. Implementations were done by certified providers, run on certified hardware, and, if you wanted to extend the functionality to areas like procurement, sales, and supply chain, it was difficult to not give the budget to the ERP provider.
On the desktop, nobody was more dominant than Microsoft, but companies didn’t think of themselves as Microsoft shops necessarily, more hostages perhaps. In the grand scheme, Office was familiar and relatively inexpensive so few strayed.
That brings us to the third platform and the aforementioned Directions content. Similar to the last transition, the incumbent power base is being marginalized by recent advances. Companies can now stand up applications on the cloud for corporate use and individual employees have a wealth of apps, many free, at their disposal on the various app stores. This has loosened the ERP vendor’s grip and will change how IT organizations think of themselves.
If the first platform was the hardware era and the second the software era, the third platform might come to be considered the services era. And I don’t mean services like system integrators or outsourcers, but in the “as-a-service” context. Further, we believe the market will focus in on the platform as a service (PaaS) providers more so than those categorized as purely infrastructure (IaaS) or a specific software application (SaaS). In fact, Frank Gens talked about the coming “platform wars” and there was a track dedicated to the idea at the conference.
So IT organizations may start to define themselves as a “Google shop” and the analyst community will talk about the GFAMIOS providers (pronounced g-famous – Google, Force, Amazon, Microsoft, IBM, Oracle, SAP). The platforms will provide a development context, a large ecosystem, and unique tools for data interrogation, mobility, and social collaboration. There will even be major consolidation among the initial providers.
How does an organization gird itself for the coming platform wars and make a smooth transition to the services era? It is a topic that will be part of our ongoing IT Priorities and Strategies research. The financial flexibility, new organizational capabilities, and productivity opportunities will be compelling and companies should be planning a holistic transition now. Stay tuned.