Ingres CEO's Advice about Enterprise Software Makes No Sense

I've been waiting with bated breath for a week for the second installment of Ingres CEO Roger Burkhardt's advice on how to keep from getting duped by the leading enterprise software suppliers. I hope Fortune gets some of Ingres’ ad money after it let Burkhardt put a free ad on its editorial pages.  The two-part article titled “How enterprise software giants separate you from more of your company’s money” makes no sense.

Burkhardt's targets are suppliers like IBM, Microsoft, Oracle, Sybase and SAP, who he says are “using a set of hardball tactics.” I’m guessing one of the five threw him a hard high one in his last job as CTO of the New York Stock Exchange and he didn’t know how to get out of the batter's box. Of course, Ingres worked the same way as the leading software suppliers until a few years ago when the software supplier formerly called Computer Associates started giving away the aging Ingres database software under open source terms and conditions. CA started doing that when it could no longer sell Ingres the database. Then CA gave Ingres the company away. Ingres is no more a part of the open source culture than Sun; like Sun, it is simply using open source terms and conditions as a marketing technique.

When Burkhardt says, “With the growing popularity of pay-as-you-go and subscription-based software and services, the old way is being exposed for the unfair financial model that it actually is,” he ignores the fact that pay as you go and subscription services ARE the old way of buying software. Hiring a bunch of consultants to change packaged enterprise software into in-house-developed software is the new way, albeit now 15 years old. I discussed the arithmetic involved in using consultants and systems integrators in IT projects in my blog post about the “big SAP contract” at the United Nations.

So here are Burkhardt’s solutions to a non-problem:

First, “Introduce real competition to the software license cartel.” Huh?  His alternative is, of course, the use of open source software. Check with your lawyer, but I think you want all your software contracts to be license-based, even those you deploy under open source terms and conditions. Isn’t open source software licensed?  No, sorry, wait a minute. His alternative is not open source, it’s software-as-a-service (SaaS). So which is it? And don’t IBM, Microsoft, Oracle, Sybase and SAP all offer both open source terms and conditions and SaaS?

But that’s only the beginning of the nonsense.

Second, Burkhardt says. “Understand and adopt the new software business models.” Well actually, it's software suppliers that adopt business models, not you. As part of this nonsensical advice, he suggests “donating your remaining unused software to not-for-profit organizations that could surely use it.” Why would you have any unused software if you used open source and/or SaaS?

Third, Burkhardt wants you to “Strategically avoid technology lock-in.” You do this by adopting “an IT strategy that mandates open standards.” Forgetting the fact that the term open standards is meaningless, how does adopting a standard for Technology A make it easier to switch to Technology B?

Fourth, he says you should “Demonstrate an open competitive environment.” Burkhardt claims that “In order to drive down your software costs, you need to adopt mature alternatives for a significant portion of your software and use this leverage to negotiate better terms overall.” For starters, software is — or should be — a minor portion of your IT budget compared to personnel costs and overhead. But he is right that open source software is something you use as a "mature alternative" in the sense that it replaces mature pieces of technology.  Open source software is commodity software, particularly in places where the software will not provide your enterprise competitive advantage.  Where software can make a competitive difference for your organization, you write your own (using open source tools is a good strategy) or go for the best packaged software you can find, no matter what terms and conditions are used. But then, don't pay someone to change the packaged software.

And you have to love his theory, an interesting new economic dynamic, that if you spend less with company A, you will have more negotiating leverage with that company!

Finally Burkhardt suggests you "Re-read your software contracts." Well yeah.  Read and understand legal documents before you sign them.  One out of five of the Ingres CEO's ideas is a piece of good advice.  But that's a real bad average if you're paying hard ball.