One of the challenges - and pleasures - of life as a regular blogger for CIO UK is contributing to the development of each year's CIO 100 list - and identifying a 'winner' which will be announced during a CIO 100 celebration on April 3.
One focus of our discussion is on the effectiveness of each CIO (private or public sector) in delivering enterprise performance transformation, especially in this age of the cloud. At our most recent judging session I pointed out that there is in practice an additional transformation agenda that top CIOs should also be addressing.
This is the determined transformation of the vendor landscape - its business models and its commercial modus operandi (including its contractual habits). It is what I call proactive market-making.
The vendor landscape is clearly in the process of quite radical reworking. Think of the arrival of Amazon Web Services, and of Google: the power of virtualisation being exploited to create high productivity service factories that offer the means to flexibly source compute and communications capabilities at very competitive prices, on demand. Think of the Gartner report last summer that the scale of Amazon's Cloud compute services now totals five times the volume of the sales of their next 14 competitors combined. Read the very insightful special report in the January 18 issue of the Economist ('Tech Startups - A Cambrian Moment') detailing the current sustained surge in the number of innovative startups and new service ventures in the cloud.
But the old guard are proving reisitant to change. In the short term they have too much cash flow and margin still tied up in their pre-cloud, legacy modus operandi.
In the UK it is Her Majesty's Government (the Cabinet Office and the Government Digital Serivce) that is taking a lead in driving a determined proactive market-making strategy to exploit and promote change into the vendor landscape and its commercial practices: a cap on contract size (to kill off the mega-contracts beloved of the old guard), a determined move to shorter term contracts (two years max), and a deliberate bias in favour of the SME supplier in the workings of the successive G-Cloud frameworks.
The contemporary Enterprise CIO should surely be taking an equally proactive role to market-making.
Where computing power, today a commodity, is being sourced in whatever form (the means to deliver private cloud capacity, to create hybrid cloud capability, or to source 'as a service' from the public cloud) then surely Amazon provides the clear current market bench mark that all competing suppiers should be expected to match, or out compete. No ifs and buts.
Also - consider the long-established norms of major IT contracts. I have previously set out the case for escaping the conflicts of interest inherent in them. Where financing is required, source it independently of potentially competing vendors. Assemble a small team of vendor-neutral specialists to help shape and deliver the systems transformations required. Source new IT capabilities and services as required by direct cloud sourcing wherever practical. By dis-enfranchising the vendors from financing change, and from scoping the systems transformations required, they are forced to focus on the competitive delivery of their core services - and that alone.
A determined CIO, taking this approach to sourcing, can more easily break with the old guard and seek out newer, more innovative and competitive suppliers to negotiate with.
One key feature of the historic vendor landscape is the role of the Systems Integrator. In the old universe of long-established enterprise or government legacy systems, tightly-coupled and complexly-integrated, the work of the highly techie expert systems integrator is king. In the new world of SOA, of loosely-coupled systems and cloud-sourced services, of open standards, effective use of APIs and the mashup, the emerging player is the Services Integrator, whose prime expertise is rooted in deep intimacy with the client's business. Services Integrators are a new breed, generally small and agile, micro-vertical focused and intimate. Systems Integrators find it almost impossible to transform to become Services Integrators - too many bums on seats, with a culture of deep technical expertise rather than deep end-market intimacy.
So one key objective of the proactive market-making will be to break free from the dominance of the Systems Integrators and encourage opportunity for the new generation of Services Integrators. The enterprise whose core systems model is SOA-based, cloud-sourced services-based and who exploits a service intregration model has more agile ways of working, is more open to rapid change and innovation, and benerits from lower operational costs. A fundamentally more competitive business.
So on April 3, at the CIO 100 gala, I will seek out the proactive market makers, those using their sourcing power to speed the demise of the Systems Integrators and accelerate the arrival of the very different Service Integrators!