The New Integration Mandate
Software companies must include integration as part of their development budgets or risk losing sales opportunities - and interest from potential acquirers.
By Ashok Santhanam, Bristlecone
Feb. 04, 2008
Consolidation is rampant in the software industry. The product "stacks" at the major enterprise software vendors grow taller and wider by the week, even as emerging vendors with new models work to steal share from an increasingly demanding and impatient set of corporate CIOs.
The need for enterprise software applications and infrastructure products to work together seamlessly is greater than ever before. Yet software companies continue to place integration capabilities on the back burner during a new product release, preferring instead to work on adding new speeds and feeds.
Customers and investors will not stand for this "development in a bubble" much longer. The new integration mandate dictates that vendors must incorporate integration and certification as a strategic part of their development process or risk becoming sidelined in the new, interoperable enterprise software ecosystem.
The Back Story on Integration
It was only a few years ago that software companies would assign a certain percentage of their R&D budgets to ensuring that their product would work seamlessly on all major hardware and database platforms. In fact, Oracle beat Sybase and Informix in the database race not by introducing brilliant new features but by ensuring their product ran well on all major operating systems on the market.
Today, integrating with the large enterprise software suites holds the same potential for strategic advantage. Yet too many ISVs are performing integration work on a case-by-case basis. Resource constraints have relegated integration to a nice-to-have feature - something that is tackled when trying to close a deal with a big customer.
Very few software companies take a strategic approach to determining which products they should integrate with, what impact that integration would have on overall sales and what portion of their budget should be devoted to integration - even if it means "back-burnering" some of the nice-to-have new features planned for the next release.
The Integration Challenge
Customers no longer accept that an enterprise software product will not integrate out of the box with their other major installed enterprise application platforms - specifically, SAP and Oracle. CIOs are more demanding than ever and speeding time-to-value is critical for this group to prove their project successes internally.
The traditional model of enterprise software which involved paying a seven-figure sum for the application, then seven-figures to a systems integrator to put it together, then a healthy six-figures back to the vendor for annual maintenance is a thing of the past, unless you're one of the big guys. Many vendors today will provide an upgrade for free but require customers to pay integrators and maintenance fees to keep things working together.
CIOs are wise to these ways and are actively working to shake off these chains where they don't add value. Many are turning to new vendors with new models, such as software as a service (SaaS) and open source. But the need for these new vendors to deliver products that seamlessly integrate with major installed software platforms is just as critical.
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The need for enterprise software applications and infrastructure products to work together seamlessly is greater than ever before. Yet software companies continue to place integration capabilities on the back burner during a new product release, preferring instead to work on adding new speeds and feeds.
Customers and investors will not stand for this "development in a bubble" much longer. The new integration mandate dictates that vendors must incorporate integration and certification as a strategic part of their development process or risk becoming sidelined in the new, interoperable enterprise software ecosystem.
The Back Story on Integration
It was only a few years ago that software companies would assign a certain percentage of their R&D budgets to ensuring that their product would work seamlessly on all major hardware and database platforms. In fact, Oracle beat Sybase and Informix in the database race not by introducing brilliant new features but by ensuring their product ran well on all major operating systems on the market.
Today, integrating with the large enterprise software suites holds the same potential for strategic advantage. Yet too many ISVs are performing integration work on a case-by-case basis. Resource constraints have relegated integration to a nice-to-have feature - something that is tackled when trying to close a deal with a big customer.
Very few software companies take a strategic approach to determining which products they should integrate with, what impact that integration would have on overall sales and what portion of their budget should be devoted to integration - even if it means "back-burnering" some of the nice-to-have new features planned for the next release.
The Integration Challenge
Customers no longer accept that an enterprise software product will not integrate out of the box with their other major installed enterprise application platforms - specifically, SAP and Oracle. CIOs are more demanding than ever and speeding time-to-value is critical for this group to prove their project successes internally.
The traditional model of enterprise software which involved paying a seven-figure sum for the application, then seven-figures to a systems integrator to put it together, then a healthy six-figures back to the vendor for annual maintenance is a thing of the past, unless you're one of the big guys. Many vendors today will provide an upgrade for free but require customers to pay integrators and maintenance fees to keep things working together.
CIOs are wise to these ways and are actively working to shake off these chains where they don't add value. Many are turning to new vendors with new models, such as software as a service (SaaS) and open source. But the need for these new vendors to deliver products that seamlessly integrate with major installed software platforms is just as critical.
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