Can Companies Afford 'Innovation?'


One of my coworkers complains that "innovation" is perhaps one of the most overused terms in technology, and also one of the fuzziest, rendered practically meaningless by its frequent use.


It's applied most often to the "ah-hah" development of new products and services. But I agree with Gartner's Kathy Harris, who noted a few months ago that incremental process improvements that shave costs, improve performance and help companies become more flexible are also pretty darned innovative. Sometimes innovation results when folks operate outside the usual business channels.


Still, rightly or wrongly, many folks associate innovation with increased spending. That's often true, but not always. As my recent post about a Boston Consulting Group report on innovation points out, companies like Vodafone, which invites its customers to create and test new mobile applications, are finding ways to bring users into the innovation loop. Not only is this cost-effective, it helps assure that dollars are being spent in areas most relevant to customers.


Unfortunately, neither seem to be the case with Oracle, which CIO.com's Thomas Wailgum writes is promoting innovation in the 100 days leading up to its OpenWorld event. With IT budgets under laser scrutiny and CIOs looking to contain costs where they can, it's bad timing, he writes:


...Do customers want to read 100 press releases about Oracle "innovation" (and that term, in this context, is highly debatable) when there's not a snowball's chance in hell that many could a) afford all this new "innovation"; b) find the resources or business desire to implement it; c) actually implement on time/on budget; and d) really care about this nonsense?


Oracle has been guilty of this before. (Although to be fair, it's hardly alone among software vendors.) When I pulled up a post about technology jargon, one of the examples came from an Oracle press release, which advised that its new "integrated solution" could help communications service providers "manage growing IP service complexity, scale operations efficiently and facilitate ongoing network change."


These kinds of pronouncements are especially galling, writes Wailgum, when Oracle recently raised prices on some of its services, and certainly hasn't offered its customers any breaks on support and maintenance fees. In fact, as I wrote recently, such fees are helping Oracle beat Wall Street's expectations. Investors are happy, but customers are not. (Again, let's note that Oracle is not alone here.)


IT Business Edge blogger Dennis Byron called it earlier this year, prior to the OracleWorld Conference:


It looks like operating expenses were held down to make previously promoted profitability goals. Financial analysts were pleased but that might not be good news for users. Larry (Ellison) explained that maintenance is now the largest part of Oracle's business. Maintenance is the most profitable business too, he said ... That just fans the flames of Oracle users' concern that they are being gouged by Oracle and other vendors' maintenance pricing and service deliverables. I don't agree in principle but if the supplier keeps emphasizing it, there may be something to it.