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While the CIO was sleeping, enterprises look elsewhere for innovation

The CIO's devotion to the old-guard vendors is fueling an exodus to new, disruptive SaaS and open-source vendors.

With SAP and Oracle raising prices in an effort to test the limits of price elasticity, CIOs are devoting an ever increasing share of their IT budgets to feeding bloated technology vendors. As's Bernard Golden suggests, however, such devotion to the old guard of IT is making it easier and easier for disruptive SaaS and open-source vendors to "ooze" into the enterprise:

...[J]ust because most of your budget is tied up feeding legacy vendors doesn't mean that the rest of your company isn't going to pursue new IT-enabled offerings, it just means they're not going to look to you to deliver them. You're the folks stuck in the big vendor hairball. The other parts of the company will find money to do new things; it just won't go into your budget.

You can hope that the big vendors will deliver products and functionality to get you out of the box, but that won't solve the problem [as it forces the enterprise to accept the vendor's priorities and walk in lock-step with its other customers]....While IT is apparently willing to live with big vendor decisions, the rest of the company can't afford to, because it threatens their ability to compete....A stability-focused, risk-averse stance based upon big vendor dependence forces non-IT organizations to look elsewhere for innovation.

As the Bank of New York told me, open source is the new innovation platform. More enterprises look to open source to provide cutting-edge IT solutions. They also look to SaaS because they can afford to skirt the CIO's pet vendors to get things done, as Asurion's R0ml Lefkowitz suggested at OSBC last year.

The big vendors are forcing enterprises to look elsewhere for solutions through high prices, high lock-in, and high complexity. Thank you!