Why Mergers Happen in IT

Prices can be set according to the benefits a seller thinks they provide, or they can be set to optimize profitability. At least option two is market driven, but that often leads to nothing but a pricing war. So if vendors want to avoid commoditization, they can either differentiate their product in a way that gets through to customers or they can reduce their customer's choices. Everyone knows that monopolies can charge whatever they want. That is why we dislike them and why even Adam Smith's invisible hand needs to be smacked on the knuckles like an ornery nun's ruler from time to time - a smack we call antitrust.

Sometimes mergers are good. They can allow a company with a broader reach to deliver innovative services previously only delivered by a more nimble upstart. They can also coalesce standards and mature products in a world previously chaotic from over-choice. This is usually early in a product life-cycle, however. Once a market matures and products are at risk of becoming commodities, mergers become the defensive maneuver to protect market share and profitability rather than a way to deliver better products and services.

This is where it can get tricky for IT managers. The easiest time to simplify to a preferred vendor is when the market is mature. This is also the ripest time for a "mad merger" to happen; the kind that happens simply to reduce choice. This mad merger can be especially bad if your vendor is acquired by another company with no previous relationship with you. Your best option may be to continue your efforts to simplify along the routes of preferred vendors, but keeping a 4th and 10 playbook in your back pocket just in case this mad merger ever happens. Consider things like 3rd party support for for your environment which will give you time to prepare your next move. You may also consider a backup vendor you can go with. This may sound unimaginable, but it is far easier to migrate a simple well oiled environment if you want to than to manage a kludgy patchwork of interconnected chaos because you have to. So in a nutshell, be mindful of the mergers and have a plan just in case, but do not stop simplifying!

Why BI is Primed to be BIg

The ideas behind Business Intelligence (BI) go back decades. Online Transaction Processing and Decision Support Systems are the predecessors of something whose time has come. BI is primed to be the single competitive advantage that makes or breaks companies. Here are five reasons this is true:

1. Simplifying the Environment - IT environments are way too complex. There are too many applications running on too many systems being supported by too many people. This house of cards is being held together by a patchwork of home grown solutions and over customized out of the box middleware. Sound familiar? Reducing complexity can seem daunting and this keeps many shops paralyzed. The good news is that executives are getting the memo. The tough economy has taught us that less is more. Plus, the more you simplify, the easier it becomes to simplify more. Be tough on taking things out of the environment. Don't let politics dictate which pet technologies get to stay.
2. Virtualization - Virtual machines have drastically shortened infrastructure planning. They also allow data warehouse environments to be set up quickly for project managers to see how technologies will play together for their pilot or proof of concept before full scale Production deployments. Computing resources are also allocated more efficiently, allowing unused memory and CPU to be assigned dynamically to whatever needs it. Cloud computing will only accelerate this trend.
3. Database abstraction - New tools and programming practices are insulating users from the database details, freeing IT to set up data in business terms one time rather than writing reports for each type of decision that needs to be made. This empowers business users to get the answers they seek, creating BI analysts in their respective business areas of expertise.
4. Social networking - There are new sources of data available directly from existing and potential customers. Business Intelligence systems can meld customer interests, friend networks, and buying behaviors from traditional point of sale sources to generate new leads, improve forecasting, and guide product development. These days, product life cycles are short, public sentiment can turn on a dime and competitors can come out of nowhere. To stay on top of things, intuition and fact based decision making need to be partners.
5. Mobile Computing - Today's business leaders and sales people want their information from anywhere on all of their devices. This creates a headache for information security, but real opportunities for BI since better data is created when it's entered in real time and tagged with location metadata.

These five things will enable BI to be big, but that won't necessarily make it big for you. For you it should start with goals (start with your mission statement and go from there). Once you know the goals of your organization, you're equipped to look for answers that can enable you to achieve those goals. Along your data mining journey, you will come across many interesting things, but if you don't use your goals as the foundation, these interesting nuggets can just as easily lead you astray, so stay focused and happy mining!