New Era for Enterprise IT

I work in enterprise software, and am customer facing. Just read an article that captures the paradigm shift that my customers are experiencing.

https://techcrunch.com/2019/04/26/a-new-era-for-enterprise-i…

Excerpt: "Deploying software in the on-prem world required a team of highly trained professionals and a hefty budget. By lowering costs and and removing adoption hurdles, the cloud expanded the market from millions to billions of people globally and in turn, businesses are using more apps than ever before.

With a market of that magnitude, enterprise IT no longer can be controlled by just a handful of vendors, as we saw in the 90’s. And what were once solved problems in a prior era of IT are now unsolved relative to rapidly changing user and buyer expectations in the cloud, leaving the door open for new disruptors to emerge and solve this problem better, faster, and with more focused visions.

In all of these cases, “best-of-breed” platforms are growing rapidly in their respective markets, with near limitless size and potential. And as processes for every team, department, business, and industry can now be digitized, we’ll continue to see this play out in every category of technology."

Working and mostly investing in this industry, I’m mindful of confirmation bias influencing my decision making. However, I’m helping my customers with their digital transformation journeys first hand and watching the shift from legacy software to best-of-breed play out. This helps me compare and contrast my actions based on real customer conversations. There will always be organizations that need on-premise software that will be customized to fuel their business processes. These are few and far between and will be the laggards in adopting not cloud software, but cloud business applications.

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I worked in IT at a major aerospace firm for 30 years, apx 1980-2010. Though I held several different positions during my employment, most of my experience related to development or purchase of applications in service to different functional areas. For the first 15 years, virtually all new apps were internally developed and implemented. This demanded large teams of developers. After an application was implemented, it moved from the development team to a different maintenance team. Aside from programmers and DBAs, there was a change board whose job was decide which bugs would be fixed and which enhancements would get incorporated to the application and during which cycle (we called these cycles “blockpoints”). There was also a configuration control and change management team, spec writers, training developers & delivery teams, project management personnel and others - and that was just the software side. There was also a bunch of hardware and network folks. True, not all these folks were dedicated to every application. Some of them were while others served a spectrum of applications. But, the simple fact was that it took a lot of specialized, high salary folks.

During the last 15 years of my tenure there was a shift to buying increasing numbers of externally developed software packages. The nature of several IT jobs changed during this period. Far fewer programmers were needed. Much of the training materials came from the vendor and often training delivery was also provided by the vendor. In a nutshell, the size of the IT department went down. At it’s peak, IT employed well over 2,000 software folks (mostly programmers and DBAs) that supported only one major division of the company. I’m not certain, but the number probably got cut by 50%, maybe more. And another transition also took place. We hired increasing numbers of non-employee contractors. At this time I don’t know what the IT department looks like. A number of my former colleagues are still there, but when I retired I was an enterprise architect. If anything, this particular organization may have grown, but that’s atypical.

My point is the move to cloud based apps is not just a compelling functionality case. The overall cost savings is also a very compelling case. Cloud based, externally developed focused applications does not just cut the development budget, but it also reduces maintenance costs to a significant degree. There’s no turning back. This is a paradigm shift for a lot of organizations in a lot of industries.

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