Beware the Appliance?

By Dan Wallace

A recent issue of InformationWeek (Sept. 27, 2010) featured the “Rise of the Appliance” on its cover. My first reaction was a flash-back to those scary borgs in sci-fi movies. After reading the feature articles, I’m just as scared.

It seems that all the “Big Boys” – the Oracle’s, IBM’s, SAP’s, H-P’s, and others – are stirring the pot to create crazed excitement and demand among IT professionals for software-plus-hardware systems. InformationWeek seems to be falling for the idea, calling them “game changers.” Businesses want highly integrated hardware, software and operating systems that speed up their ability to analyze data to better serve their customers. Sounds great, right?

It sure is. And that’s why the vendors are pushing the idea as the latest and greatest technological development. Appliances are expensive. And because they’re expensive, buyers have to commit to them for the long term. For vendors, that means substantial long-term profits.

In an era where budget constraints and economic pressure is the number one challenge for IT executives, does it really make sense to lock yourself in with one vendor supplying your data appliances? Do you really want to be in bed with Oracle (for example) for the next five years? Do you really want to invite a supplier to become an “entrenched” supplier and lose your future negotiating leverage?

If you believe Larry Ellison, appliances will become the greatest technology on the face of the earth. And we’ll all be at the mercy of the suppliers. Hmm… Maybe the sci-fi borg analogy isn’t such a stretch.

Our guest blogger is Dan Wallace, a staff member at ICN and Caucus-The Association of Technology Acquisition Professionals. For advice on negotiating with entrenched incumbent and single/sole source suppliers, contact ICN.