Leadership

Poll: Is the rise of the IT supervendors a good thing or a bad thing?

IT superpowers IBM, HP, Oracle, and Cisco have been gobbling up big acquisitions to become the one vendor IT departments need. Is this a good trend or a bad trend? Take the poll.

The superpowers in IT -- IBM, HP, Oracle, and Cisco -- have been swallowing big acquisitions in recent years in an effort to expand their portfolios and become the one supervendor that an IT department can turn to for almost all of its technology needs.

This was a hot topic this week at the Gartner Symposium/ITxpo 2010 in Orlando. See:

However, while it may be easier to have one company to call when you have problems or need an upgrade, I know a lot of IT departments get nervous about putting all of their eggs in one basket.

What do you think? Answer the poll and then jump into the discussion to explain why you answered the way you did.

Take the poll

About

Jason Hiner is the Global Editor in Chief of TechRepublic and Global Long Form Editor of ZDNet. He is an award-winning journalist who writes about the people, products, and ideas that are revolutionizing the ways we live and work in the 21st century.

38 comments
Eoghan
Eoghan

There once was a time when "you couldn't get fired for buying IBM". Then PCs came out and the next 25 years it was a roller coaster. cisco (they like that little c) wasn't even a company until the late 1980s and HP sold test equipment, so they can be excused.

mgrs_must_go
mgrs_must_go

When will corporate f-up America ever realize this? And it is always worse on competent people in technical fields and always empowers the dummies who manage the mess.

mgmorgan01
mgmorgan01

Count the success of IBM Now count the failures of IBM. Which has the most?

jmarkovic32
jmarkovic32

Small example: AMD vs Nvidia If you are in the market for a graphics card, now is a good time to buy. Why? AMD released a couple of new cards today at sub-$200 prices so that forced Nvidia to reduce their cards with similiar performance levels even lower! The customer wins! Competition makes things great for customers. That's why I despise only a few dominant vendors because they can charge what they want and behave the way they want with no consequence.

NickNielsen
NickNielsen

And based on the current market and the direction Cisco seems to be heading, there may be significant competition between IBM, HP, and Cisco. Competition for Oracle? Possibly from SAP and IBM services. These four will also be concentrating on the national accounts, such as Caterpillar and Sears. The regional companies, and most SMBs, can't usually afford continuing support from one of the major national vendors. This opens a hole, and a thriving market, for regional support service vendors and VARs. I work for one of them. There is plenty of competition at our level.

kraterz
kraterz

Isn't it obvious, less competition = less choice and less power to the consumer? If Oracle swallows up everyone else and decides to up their support costs by 600% next year, grin and bear it.

AllenT_z
AllenT_z

This reminds me of the late 1960s and on into the 70s when other vendors started making tape drives and other peripherals that were compatible with IBM mainframes. IBM's response was their hated FUD campaign, in which their people were trained to instill "fear, uncertainty and doubt" in their customers' minds. It was quite effectice. Allen

PEStyles
PEStyles

The issue with super vendors is in the consolidation thus forcing an up charge in small competitors cost in the market. This sounds good but in turn changes a business?s buying mentality to price points over the actual product due to all products being ?good enough?. Consider Walmart for an example, consolidated store with cheap(affordable) stuff that works and some is good quality. Now look at their employees, under paid. Now look at what they have done to the competition, decreased small private businesses. The trend of super vendors is to profit for the stakeholders. They are not concerned with making sure people in the IT industry maintain their present value. If anything they would prefer that we get paid less so that Business?s can then purchase more upgrades as they roll out because they are decreasing payroll costs for the business by cutting back our salaries and available jobs. The last point I will make is, due to supervendors you have IT professionals with jobs that don?t know what they are doing and they end up relying on the supervendors. So I understand the need for supervendors but I still believe they are bad and the Human Resources departments need to learn how to find qualified people and not hacks. ~Integrity~ ?A true programmer doesn?t have to piece someone else?s work together, they can do it from scratch. ?

fieldb
fieldb

Just now I am going through recovery disk hell on an older HP laptop. No drivers for Win 7, no drivers for XP. No Vista disk. Had to buy a recovery disk (the laptop belongs to my neighbor). DVD is broken. Laptop won't boot from a USB DVD. I have tried for 2 days now to make a USB key that will boot the recovery image. No luck so far. All this due to, in my opinion, that fact that the big vendors don't give a damn! I won't buy a Dell or an HP ever again. As long as PC/laptops have been around, this problem shouldn't even be possible anymore. Especially given that they are now selling machines with no DVD drive. No incentive to change it. No OS disk for an OS that you paid for! shane on the big super vendors. The average user will never be able to maintain their own computers until this nonsense stops.

WebTek2
WebTek2

I don't know about others, but I like to fall back on my grandfather's teachings that you "never put all your eggs in one basket." The same applies to an IT Department. You need diversity and a choice when the preferred vendor is unavailable or unable to attend to your needs.

gordon.rudd
gordon.rudd

An organization is neither good nor bad. Though I'm sure some would argue Oracle is the evil empire. Economically we need industry consolidation just like we needed IBM to prosper then tank in the wake of the proliferation of PCs in the early 1990?s. IBM?s rebirth is the stuff of legend now, though few remember it. IBM management rebuilt the company and a huge amount of innovation followed. The old saying (pre-tanking) ?Nobody ever got fired fro recommending IBM.? may not be true today but we would be hard pressed to name an IT problem IBM could not solve. The same is true for HP and Cisco. Today?s saying should be, ?If you can afford it, nobody ever got fired for recommending IBM, HP, Cisco or Oracle.? and for me that is the beauty of the giant monolithic corporations; there?s more room for the little guy to innovate and cause them to have to rethink and/or rebuild again. I wouldn?t bet against open source...

richslab
richslab

While it sounds nice in theory that you only need to deal with one company my experience is that the big companies give inferior support both before and after the sale. Hence I cringe every time another one of the products I use comes under the umbrella of one of the giants.

Dave Bossi
Dave Bossi

All you get from a BIG name IT supervendor is an even BIGGER invoice!

NickNielsen
NickNielsen

But the options weren't there. It will all depend on the service levels and flexibility of that service. Whoever can maintain both the service levels provided by IBM and Burroughs in the 60s and 70s and the flexibility you used to be able to get from CDW and ADP, will find themselves on top. Otherwise, it will be a stifling experience for all involved.

reisen55
reisen55

When I slaved away at a MicroAge office (remember that dead franchise?) ... vendors were Tech Data, Ingram Micro D and, of course, the memory people. The retail world, MicroCenter, still uses these outfits and most saavy IT purchasing people prefer variety and competition which keeps price low. Any one who has EVER bought from IBM knows they are not cheap. IBM prices were always higher than they had to be or could be. IBM systems in the personal computer world (remember those?) were always higher than the competition, they could never get their manufacturing in-line with their competitors. It may be nice to have power, but too much and you have a monopoly which is a word IBM has long feared. Microsoft too.

codepoke
codepoke

Someone has to do the massive work of integrating systems. Supervendors are profitable because they apply economies of scale to this real problem. They provide a service others want to purchase. Mercedes doesn't build every part in every one of their cars, but they go to a lot of work to make sure all the parts work together. The world would not be a better place if there were a million parts vendors, each producing different levels of quality, and we had to choose the parts we wanted then make them fit. There's a reason Dell could make money putting together commodity parts every consumer could purchase on their own. The analogies apply slightly differently to software, but with validity.

Litehouse
Litehouse

I think it's a bad thing both short term and long term for consumers. As those companies get bought out, how many employees at those companies will be laid off? Less jobs. What happens to competition as competitors are bought out? Less innovation and higher prices.

NickNielsen
NickNielsen

Given that IBM can be traced back to Herman Hollerith's Tabulating Machine Company, (founded in the 1880s), I would say the successes vastly outnumber the failures. If nothing else, IBM should be remembered for the invention of the disk drive. http://en.wikipedia.org/wiki/History_of_IBMshould

jmarkovic32
jmarkovic32

Wal-mart doesn't stifle competition. Nothing prevents a Mom & Pop from lowering prices. However, most Mom & Pops are ridiculously over-priced. It's different in the hardware arena where big vendors buy out the start-ups and kill their products, thus eliminating competition. Wal-mart doesn't do that.

Sagax-
Sagax-

I have read an excellent discussion above. It confirms my first reaction. The Big Guys are needed and so are the independents. As long as there is competition among the Big Guys then the consumer is served. But on the other hand, you do not send a battleship to conquer a rowboat. A small, agile, and adaptable runabout will do.

JCitizen
JCitizen

For laptops with a recovery partition - Just wondering if you tried Ctrl>F12 upon reboot. This is how to get the recovery partition to activate. You'll know when you see the Symantec screen. I'm not sure they used recovery partitions before 2006.

NickNielsen
NickNielsen

If so, is it enabled? You might also try using dd to create the bootable USB drive. For downloads and instructions, try one (or all) of these websites: http://www.bootdisk.com/pendrive.htm http://www.linuxforums.org/forum/miscellaneous/97448-create-bootable-usb-dd.html http://wiki.archlinux.org/index.php/Putting_installation_media_on_a_USB_key Tips: if = input file name of = output file name You will need to know Linux drive naming conventions. If you need detailed instructions, send me a private message.

jasonhiner
jasonhiner

Who would you predict will end up on top?

Weebleswobble
Weebleswobble

I went back and forth on that and wanted a "it depends on the customer's needs" radio button to poke. If you need a rapid-fire Shotgun Sally approach to your problem, then getting a megavendor isn't going to resolve the situation at hand. Process driven, methodical, reproducible results are more the norm, and there isn't a thing wrong with that in my book.

herlizness
herlizness

Concentrations of power are ALWAYS bad. Period.

steve
steve

Hitachi does, or at least used to, make every part of its storage arrays from the chips to the copper and insulation of the wire and the steel in the frame. No middlemen making a profit at every stage, just pure profit to Hitachi. There has to be something to be said for that.

taylorstan
taylorstan

Dell profited becasue they made it possible for the average person to buy a computer by just checking a box. They didn't need to know anything about specs and making sure parts were compatible. Benz does have prefered "vendors" for their parts. But those same vendors and other venders also offer that part at different price points to the consumer made from different materals that meet or excede the Benz specs.

Sterling chip Camden
Sterling chip Camden

People like not having to think, so if they can think of one vendor when they need something and avoid the trouble to comparison shopping, it makes them happy -- and screwed.

robo_dev
robo_dev

Twenty years ago, the 'SuperVendors' were IBM, HP, Sun, and perhaps Microsoft. Today the 'new boss' is a different group of players. In ten years Google may rule the earth, and we will toil as slaves under the evil search empire. From a customer standpoint, the super-vendors may be able to command higher prices, but that opens up an opportunity for smaller companies. Keep in mind that IBM was 'The' PC company, until a company named Compaq (now HP) showed up with the wacky idea that people might want to buy portable computers.

JCitizen
JCitizen

is that usually a big conglomerate is only interested in buying out the company to destroy it piecemeal. [b]Brute force model of competition:[/b] 1) Deny it from the other big players before they buy it first. 2) Rub out the smaller company's products, to avoid competing with them. We will probably see a lot of our favorite apps disappear from the market.

d.shein
d.shein

Good - Economies of scale, research $, large service & sales organizations to leverage. Bad - Innovators from bought out companies often leave; Processes usually introduced that stymie flexibility & dramatically slow the flow of product; customers who were big & important % of small company's revs now less than 1/1000th of a decimal point for the behemoths. Not good for the customers! If done right, some of these big gorillas can make it work really well. Haven't seen much of it though!!!

NickNielsen
NickNielsen

There is a point below which prices cannot be lowered if a business is to remain profitable. Walmart's size allows economies of scale (e.g. bulk purchasing) that can reduce their wholesale costs to below those of a small business. Any small business that tries to compete with Walmart based on price alone deserves to go out of business. Where Walmart fails is the service: a small business can give personalized service that Walmart just isn't equipped (or staffed) to provide.

herlizness
herlizness

> don't know; but I can easily predict who winds up on the bottom: the customer.

NickNielsen
NickNielsen

...doesn't it? Igor, the switch! <CHUNK sound...sizzle...electrical hum> . . . YES! It lives! IT LIVES! (Allow me to misinterpret "power", won't you? ;) ) More seriously, what I see happening is each of the "Big 4" filling a corner of the IT services market: IBM with high-end servers and related services, HP with mid-tier, Cisco on the network, and Oracle in software. While these areas overlap to some extent (moreso with IBM and HP), each of the four will have areas of specialization that don't overlap. How those areas are supported will determine the effectiveness of the power concentration.

slobato_ocampo
slobato_ocampo

Fully agree with your thoughts on the matter. I would only add that 40-30 years ago IBM and HP as well as others such as Digital, Data General, Univac were superpowers. Not being prepared to deal with change, several of them disappear and others were at the brisk of doing it (IBM in early 90s). They have to learn the lesson.

Editor's Picks