Reading the recent news about Labor backbencher Ed Husic's campaign against alleged price discrimination by IT vendors in Australia and his efforts to improve value for money in government software procurement made me think that a large number of CIOs in Australia (and not just those in government organisations) could very well be suffering from Stockholm syndrome.
I am sure most are familiar with this term, which was originally coined by criminologist and psychiatrist, Nils Bejerot. It describes the psychological phenomenon where hostages express empathy and have positive feelings towards their captors, sometimes to the point of defending them. These feelings are generally considered irrational in light of the danger or risk faced by the victims who essentially mistake a lack of abuse from their captors for an act of kindness.
Given Husic's claims that Australian businesses are paying up to 80 per cent more for software, despite the relative strength of our currency, it appears that we have uncovered a unique, proprietary software version of the Stockholm syndrome. CIOs are indeed hostages who are experiencing real abuse. Yet, they persist in defending their captors by continuing to shell out huge amounts of money for debatable value.
The Australian Government Information Management Office (AGIMO) claims to have made more than $60 million in “savings” from federal volume sourcing agreements. This is something to seriously think about. How much money must it be spending in total when it can claim to make savings of that magnitude? Goldman Sachs bankers would be envious at the sheer brazenness of it.
Given all of this, there’s one question that’s long overdue in the face of all these “savings” — is this really value for money?
A New Year's resolution to consider
With the end of 2011 upon us there comes an opportunity to set goals and ‘resolutions’ for the next year ahead, so here’s one to consider.
New Year's resolution: CIO hostages can and should break free from their software captors by taking a very deliberate approach to opening up their architectures to a more heterogeneous approach to software selection.
Of course, the idea of breaking years of habit and abuse can be a daunting one, and sure, optimising around the mega software vendors can have some benefits in terms of things such as reducing the costs and availability of skills, lowering procurement costs and reduced infrastructure costs.
But, are these really good enough reasons to remain locked up with all the other hostages? What about the truly important things such as innovation, flexibility and the agility to ‘get a jump’ on your competitors with capabilities to pivot quickly around key business processes?
Last month at its 2011 Symposium on the Gold Coast, Gartner warned organisations about committing too much to the ‘mega-vendors’. Gartner’s managing vice-president, Dennis Gaughan, presented a deconstruction of these vendors’ strategies and it illustrated a master class in hostage control, wrapped up with the ominous warning about the danger of the mentality that “I am a SAP/Microsoft/Oracle/IBM shop, and it drives everything I do.”
CIOs across all sectors must seriously evaluate their individual situations and decide whether the costs of being locked into a proprietary ‘gilded cage’ give sufficient value in return.
I argue that the costs outweigh the perceived benefits. But, who am I to comment? Yes, I have my own dog in this fight, but after 25 years in the software industry, including over a decade working for two of the mega-vendors identified by Gartner, I believe I have a reasonable platform from which to observe.
So, if we assert that many CIOs are the ‘hostages’ and proprietary mega-vendors are the ‘captors’, who then gets the megaphone out to negotiate on their behalf while the bullets are flying?
Enter open source software (OSS)
Commercial OSS simply offers a more balanced, equitable relationship for CIOs. OSS vendors can't just skip off whistling with your millions in licensing dollars in their pockets and let you worry about what happens next.
John Newton, founder and chief technology officer of Alfresco believes that "if you can replace us you, will use us", and it’s true. The commercial OSS world is cut throat, because if vendors don't provide value, customers simply don't renew annual subscriptions and they don't have a business. Value must be proven time and time again, and for the long term.
In OSS culture, users are not held prisoner, and as a rule, it also offers much less vendor lock-in because OSS will generally run on most common operating systems, databases and middleware. There’s also substantially less financial outlay with no licensing costs (sorry to mention this if you’ve just paid your latest enterprise agreement invoice). Basically, the more freedom of choice you have, the more leverage for you. And, there’s more.
OSS usually provides much stronger support for open standards, thereby providing extra options for CIOs to escape capture in addition to that other well-known hallmark of OSS; the higher rate of innovation due to the vitality of their user communities.
Another key issue is that it’s not just Bruce Willis charging in on his own to break you out of the bank vault, along with all the other sweaty guys lying on the floor. There is a whole army of them, and believe me, they have serious firepower.