Soups, Nuts and Tooth-picks

By : |June 8, 2012 0
INDIA: 
Ab ovo usque ad mala 
Roman meals started from eggs and ended with apples. There is a different flavour in being a chef that serves everything — from the small portions of hors d’oeuvres to the big scoops of dessert.
The urge to do the same strikes our IT industry time and again, and more often than not, it has all the ingredients of being a pot boiler.
If a vendor has been selling software, there may be a new calling to wipe his hands in the hardware gravy train. If someone has been on the other side of hawking hardware pieces, he may very well think of connecting the jigsaw through software chunks now. From servers to storage. From networking to middleware. From databases to ERPs. From ERPs to data-warehousing. From disks to virtualization. From PCs to servers. The stack approach beckons all. 
Soups-to-nuts approach has attracted every big name. Be it Oracle, HP, IBM or the recent ambitions of SAP as it decides to make a deep dive in the database waters.
‘We give you the full stack’ is more than a proud sales-spiel. It has many connotations when the sentence impacts a vendor’s revenue pipeline, M&A appetite, customer lifecycle value, HR decisions, brand power, as well as in pre-empting rivals, or in cross-selling deals and raking in up-selling moolah.
But does it make an equally powerful proposition for the customer too? How does it affect him on fronts like cost, license upgrades, total expenditures, maintenance, lock-in, exit options, integration, migration and other IT management issues?
“Stacks are definitely a good idea. Umbrella approach always appears to be a good choice. There are good integration features.” Also, according to Kamlesh Jain, Deputy General Manager- Accounts (SAP) at K Raheja Corp., one can rely on a full-stack approach for a vendor like SAP, as the company brings along a history of ERP experience. 
One gets free from integration hassles, as he rightly points out. Another factor to consider is that the TCO numbers are much more favourable with a single vendor stack than multiple vendors.
Suneel Aradhye, CIO, Essar Steel opines that a certain number of platforms are better when one thinks of usability, maintenance, and even a team’s career progression. It makes sense to have a stack from a long-term point of view, as per his lens and long-vision-based IT strategic choices.

Raghubir Singh, GM-IT, Usha International too, finds stacks a good idea, as he reckons that someone who has been supplying software for years, might have a better grip on hardware angles going forward. "It can be cost-efficient and economical too from a budgeting side, as it’s a bundled proposition. It can be a good strategy from all sides: viable, economic and performance-savvy."

Lock-in and other risks, though, are something that’s part of the package as many CIOs agree on. Jain concurs, “There are pros and cons always, and one has to weigh one’s priority clearly.”

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Buying everything from one vendor goes against the thumb rule of spreading your eggs in many baskets. It might limit your exit options if it comes to an anti-incumbency spree you are on due to any disappointments or SLA issues. As to your negotiation muscle, well, that power can careen either ways. It’s as likely to be in your favour as otherwise. Short-sighted gains can tempt one easily here.


Then there’s the fear about product road maps. A vendor’s direction can alter drastically with a full-stack aerodynamic change. Strategy affects products, upgrades, and support and service areas considerably. The case of Itanium-support pull-out by Oracle and the ensuing legal brawl with HP sent a lot of confusion running amok inside customer premises.
A report by Constellation Research underlines some more watch-out corners.
Prominent among them are warnings about the pile-up of shelfware. As it suggested — “Because most organizations allocate from 60 to 85 per cent of their budget to keeping the lights on, very little of the budget is left to spend on new projects. Shelfware (i.e. purchased software, not deployed, but incurring annual maintenance fees) is one of the biggest drains on operational expenses for enterprises.”

                                 

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Shelfware or software that you buy and don’t use, can be an easy and hardly-noticed upshot of a full-stack contract. The user nevertheless pays support and maintenance on the license whether or not they use the software.  The research highlights the need for unbundling maintenance contracts here.

“About a decade back, vendors would offer support and maintenance as two separate line items on their contracts. Support would run about five to 10 per cent of the license fee and so would maintenance. Keep in mind, average support and maintenance fees were under 15 per cent back then.”
It even adds how consolidated contracts as a new slew of deals should be chewed with caution. Many new versions are being offered by vendors who are saying they are empathizing with the new set of expensive-maintenance concerns by customers recently. As the research firm cautions – At first glance, this may appear to be proactive and beneficial to customers, but it is important to avoid bundling.”

There are both sides to this soup-to-nuts table as we see. Bundled or unbundled, the plate is yours to watch for.

Full stacks can definitely be tempting, provided they are viable from all angles, from the hard-wired issues of integration to the hard numbers of TCO and license fees.
Soup or nuts, make sure it fits your diet plan. Your Rome. Your Way.

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