Red Hat CEO Says Software Vendor Model Is Broken

alphadogg writes "The current model of selling commercial enterprise software is broken, charged the CEO for Red Hat. It is too expensive, doesn't address user needs and, worst of all, it leaves chief information officers holding all the risk of implementing new systems. 'The business models between customer and vendors are fundamentally broken,' said Jim Whitehurst, speaking Wednesday at the Interop conference in New York. 'Vendors have to guess at what [customers] want, and there is a mismatch of what customers want and what they get. Creating feature wars is not what the customer is looking for.' Whitehurst estimated that the total global IT market, not including telecommunications, is about $1.4 trillion a year. Factor in the rough estimates that half of all IT projects fail or are significantly downgraded, and that only half of all features in software packages are actually used, then it would follow that 'easily $500 billion of that $1.4 trillion is fundamentally wasted every year,' he said."

Comments

Re:WHAT vendors?

[h4rr4r]

So then you have never worked with Oracle, SAP, or Symantec, so which vendors are you talking about?

Re:Actively used features

[snowraver1]

Easy, just make a menu item for them and then every time it's clicked, send usage data. That way you can have the worst of both worlds: A convoluted menu system and lack of functionality.

Cloud will kill the model

[Mephistophocles]

Whitehurst touches on the emergence of cloud computing in the enterprise as well, and this is integral to an intelligent discussion of the imminent death of the traditional licensing system of enterprise software. From TFA:

""People say [they are interested in the] cloud but what they are really espousing are frustrations with existing IT business models," Whitehurst said in an interview with IDG News Service after the presentation. Whitehurst kicked off his talk by asking a seemingly simple question: "Why are costs of IT going up when the underlying costs to deliver those services halves every 18 months?" The cost of computing should come down, he reasoned, thanks to improving processing speeds and storage capacities. New, more powerful development tools and frameworks should also ease the cost of deployment. Yet IT expenditures continue to go up by about 3 percent to 5 percent a year.

That ease in the cost of deployment, coupled with the flexible infrastructure the cloud supplies, will eventually mean the death of the traditional "per-proc" style of enterprise licensing. Happily, it likely means fantastic opportunities for open-source to take back a large share of the market. I've spent the last year migrating my medium-sized enterprise to the cloud AND a near-100% opensource infrastructure. In my particular sector (healthcare) that's becoming a trend - it's not a coincidence that the move within the medium to medium-large enterprise to the cloud often goes hand-in-hand with a serious investigation of open-source software within the mission-critical, production infrastructure.

Re:Cloud will kill the model

[Surt]

This seems like a pretty fundamental misunderstanding of enterprise licensing costs. Costs are calculated per cpu or per seat because that's a convenient proxy for the size of the system, not because of any actual deployment expenses associated with the number of cpus or seats. If you think your licensing price is going to magically head downward because of cloud computing, you are in for a nasty shock. Instead prices will head up because the cloud providers now have more lock-in. In any case, the licensing cost goes to development and profit. Which of development and profit do you think the enterprise software provider wants to give up when they move to a cloud model?

Re:Broken how?

[DarkOx]

But out side of ERP systems which almost always get customized, getting a commercial vendor to modify the product to suit your specific needs is nearly impossible, unless your are an F500. That is where Open Source can be a win.

Open source is great when you want some special behavior in the sales quoting tool that only a tiny fractions of others anywhere would want but you otherwise want the base set of features the mass market wants. If you select an open source tool you can make those modifications. If you select a product with a fairly mature code base its probably not even that costly in terms of developer time to keep your patch set applying cleaning against version latest.

 

Waste is what drives the economy

[m94mni]

Just like war, commuting and other essentially completely worthless phenomena, waste of programmer time makes money exchange hands, and therefore increases GNP.

In this case: who would want to be the first to go out on a limb publically and say "I want to decrease the IT sector by 50%"?

Don't blame me, I didn't design that stupid measure.

Re:Waste is what drives the economy

[seifried]

uh... exchanging money does not necessarily increase GNP.

Actually it does:

A variety of measures of national income and output are used in economics to estimate total economic activity in a country or region, including gross domestic product (GDP), gross national product (GNP), and net national income (NNI).

http://en.wikipedia.org/wiki/Measures_of_national_income_and_output

Re:Waste is what drives the economy

[jfengel]

Actually, you're the idiot here. GNP is a technical term, and you were pointed to the definition of it. It's a mechanism for estimating production and productivity.

It's not a perfect measure, for a number of reasons, including the one you pointed out. But that's the fault of the measure, and you were the one who brought it up.

If you mean productivity, say "productivity". Use the wrong technical term and people will generally ignore it, but when you call them an idiot for validly correcting you, it means you're the idiot in the conversation.

Re:WHAT vendors?

[Archangel Michael]

Real world example, and why I don't do software development:

A customer was using a text field in a database for a "date". They wanted to have that field usable to send out notices (dog tag renewals) on a date. I was wondering why the database field wasn't set to the "Date" type proceeded to convert the field to that type. Proceeded to setup a query and template to generate the notices automatically, rather than manually doing it as had been.

I then proceeded to show the primary user that made the request the changes, how to enter the dates and thought I had done a awesome job making the software better (it was better). The user used the system for a week or so, but couldn't for the life of her figure out why it wasn't working.

So I make a house call out to the facility and watch her as she enters a new date 10/20 into the database. Well the software beeps and tells her the date is invalid (duh), and she complains that she has to type in the year.

Customers are fickle, ask for things they want, but aren't willing to implement. I had to unwind the changes even though they made the database much more functional and saved time, all because the primary user didn't want to type two extra characters, it was easier compiling the notices by hand.

No, I'm not kidding.

Maybe.

[khasim]

But from his original statement:

The cost of computing should come down, he reasoned, thanks to improving processing speeds and storage capacities. New, more powerful development tools and frameworks should also ease the cost of deployment. Yet IT expenditures continue to go up by about 3 percent to 5 percent a year.

That's because as it because possible to do more in X hours ... more is demanded by management.

As more space becomes available, more data is stored. Older data is not discarded.

Re:WHAT vendors?

[Anonymous Coward]

I hope their sales engineers were wearing name badges. It would have been unnerving for them to have you stand next to them yelling "YOU ARE NOTHING!" in their ears.

Re:WHAT vendors?

[PhunkySchtuff]

This is a prime example of not listening to what the users want.

It is trival for the software to figure out what the current year is. With a small amount of effort done once on the part of the programmer to convert a day/month (or month/day) date into a full date, the user would have been happy, the software would have worked as they wanted it to and it would have been quicker and less error-prone for them to enter the data.

Instead the software vendor implemented what they thought the user wanted and more importantly didn't listen to the user completely, they implemented half of what the end user wanted and this resulted in more work having to undo the work that had been done to revert the system back to the "old 'n busted" way it was before.

Customers ask for things they want, but the developer needs to be willing to listen to them,

I had a similar thing happen recently, however this was for a database I was developing for my own purposes.

It has a field type of time, but it's really strict - you must enter a time as hh:mm[:ss] AM|PM anything else beeps at you as being invalid (duh)

With some coding effort and a liberal amount of google searching, I was able to have this field exhibit a lot more intelligence and be infinitely more user-friendly. I now have it so that you can enter just about anything that can be interpreted as a time and it'll sort it out. I get the computer, not the user, to do the hard work.

Now, I can enter 800 and it will be 08:00 am (I have a range of hours defined that are AM or PM - 700 is 7pm for instance - this is completely arbitrary and works perfectly for the intended use)

I can enter 1525 and it will enter 3:25 PM, I can enter 4 and it will enter 4PM, I can enter 9 and it will enter 9am. I can enter 12:34 and it will also take it...

It's now a lot quicker for me to quickly enter a few numbers rather than enter numbers separated by colons and an explicit am or pm. It's also a lot less error prone as there's less thought involved, less keystrokes and no need to use a shift+key stroke combination.

In your example, a few more minutes of coding effort to detect a supposedly invalid date (I know what 10/20 is, the user knows what 10/20 is, you know what it is, so tell the computer what it is) and everyone would have been happy.

Re:WHAT vendors?

[MichaelKristopeit 64]

because string comparison and integer math to determine yesterday's date are too difficult for you?

why else have a text field? let them type in "2 weeks ago" and make it work... IT'S TRIVIAL.

i'd make the interface with a calendar popup and navigation buttons to jump days and weeks and months and years.

Re:WHAT vendors?

[Archangel Michael]

that all works until someone needs 4 to mean AM sometimes and PM all the other time.

Defaulting the current year makes sense, until you have cards for December being entered in January (11 months difference), a common yearly adventure.

Did you miss the part that she would rather manually sort through the records than type two characters?

Re:WHAT vendors?

[timeOday]

No, simply listening to what users want will almost never work - because they don't know. Almost always, they have some vague idea, but that's it.

Re:WHAT vendors?

[MagikSlinger]

Amusing. I work for a large utility up here in Canadia, supposedly one of the top 3 purchasers of Oracle & SAP in my province, and we've only seen the sales reps walking around, usually cracking down on not-enough-licenses issues.

Talk to them about an issue or feature you need, and it becomes a chorus of NO's followed by sales people trying to convince us Package X does all that (it doesn't) for a low, low price of Y (it isn't low, and it's always more than Y when the bill comes).

Re:WHAT vendors?

[frosty_tsm]

that all works until someone needs 4 to mean AM sometimes and PM all the other time.

Defaulting the current year makes sense, until you have cards for December being entered in January (11 months difference), a common yearly adventure.

Did you miss the part that she would rather manually sort through the records than type two characters?

Your heart was in the right place, but failed when you fixed a pain the customer didn't mind by creating one they did.

Re:WHAT vendors?

[h4rr4r]

In what dream world will they keep paying for all these one off solutions?

Users want cheap, good and fast. Providing all three is impossible.

Re:WHAT vendors?

[cyphercell]

http://thedailywtf.com/Articles/Extensive-Date-Parsing.aspx

STFU.

Re:WHAT vendors?

[PhunkySchtuff]

Did you miss the part where I said:

(I have a range of hours defined that are AM or PM - 700 is 7pm for instance - this is completely arbitrary and works perfectly for the intended use)

If I'm booking an onsite technician for instance, they are not going to be onsite at 7am, I'm not sending anyone out that early in the morning, yet it's completely possible they'll be doing work after hours starting at 6 or 7.
In the same light, I'm not sending anyone out to start work at 8pm, but would quite happily have someone going out at 8am.

In this case, what is "retarded" about having a rule that determines that 8 .. 11 is AM and 12, 1 ... 7 is PM?

In the extremely rare situation that this rule doesn't apply, enter the time as "7" for instance and it gets corrected to 07:00 AM, change the A to a P and you're done. Either that, or enter the time as "7p" and it's put in as 7:00 PM

Or would you rather have to enter every single time value as hh:mm:ss AM|PM explicitly?

Re:WHAT vendors?

[MagikSlinger]

Never seen them (vendor engineers). Seriously. Where did you work where they would talk to you?

There are medium to smallish companies we buy software from, and they have sent their engineers to observe & talk to us. But none of the big boys have ever sent any engineer to us.

Re:WHAT vendors?

[AVee]

I actually worked at a software company in that league (a Top 10 software vendor). Those companies are big, weird and certainly not to be regarded as a single entity. Whether or not they are going to spend time on your needs really depends on loads of factors, the biggest ones being politics between the big shots in both companies and the amount of money you bring in. If your CTO is very good at the politics you may get above average attention. If the amounts you get invoiced are big enough to be noticed in the quarterly results you will get above average attention.

But if your just 'Joe Sixpacks Beer Store' you are generally screwed. But in that case you probably also wouldn't want to pay for the costs of proper attention, if you would be willing to pay for all the hours spend to accomodate your needs you would be served (and go bankrupt). Building software isn't cheap, an you are going to pay the full price for anything that is build just for you one way or another.

And the of course there are the governmental projects, but those are in a league of their own. Those are the projects where you send the people you wouldn't dare sending to any of your bigger customers. Government officials spending tax dollars will always pay, regardless of how badly things get screwed up. (The amount you get to spend seems to be a dick size issue, and it's all just tax money anyway...).

Re:WHAT vendors?

[MagikSlinger]

perhaps they overlooked your company when the sales reps reported that you distrust them.

LOL! Good one. :-)

Proximity is entirely the reason you saw them.

Although for the small to mid sized vendors I mentioned, they did fly in and stay for a few weeks.

Re:WHAT vendors?

[h4rr4r]

He who trusts sales reps is a moron. Software, hardware or new cars, sales people alway lie.

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Comment removed based on user account deletion

Re:WHAT vendors?

[mysidia]

then when the user asked for a trivial feature to return the workload back to what it was before, the vendor gave up and trashed all their work

Obviously... the vendor couldn't take even the smallest criticism, and apparently decided they wanted to make a point out of the whole thing, rather than address things in a reasonable manner.

This is not a technology problem, this is a customer service problem. The parent did have one thing right, however, he obviously should not be in software development working for a customer.

Re:WHAT vendors?

[mysidia]

No, simply listening to what users want will almost never work - because they don't know. Almost always, they have some vague idea, but that's it.

You have to listen to what they say, and intuit what they want, then formulate it, and ask them if that is right.

If you can't do that much, software development for a customer is probably the wrong field for you. Though you might manage to do code monkey / slave to the designer work, who works to someone else's precisely defined spec.

Since that doesn't require intuit'ing that much, and if your code is wrong, it will just get kicked back to you by the reviewer (aka slavedriver)

Re:WHAT vendors?

[mysidia]

Ideological arguments have no place in developing software for your boss.

If they ask you for feature X, you can inform them of the issues and give them a choice. The choice to avoid "feature bloat" is not your choice, if all the features are demanded or wanted by the customer.

Nothing really excuses failing to validate input, whether 'abbreviations' of some sort are allowed or not.

Checking for a 'year value not provided' and appending a default in the user interface code is so trivial and relevant to the problem, that it seems absurd to claim that it is not the best solution here.

Creating software vs purchasing

[Billly Gates]

In the early 80s 2 groups existed. One was to only use prepackaged software and the other is to use your programmers to create your own solution. His rant backs the former group but unfortunately it is viewed as an expense commodity that does not add value to a ROI. The battle to use prepackaged software has won. Until investment is viewed as a profit center and not a cost center no business will bother to hire programmers to create software to do what it is they need to do rather than buy a prepackaged bloatware that may or may not work.

Re:Broken how?

[Cylix]

Actually, vendors that have their shit together will listen to their customers.

This morning I'm trying to push a feature we would like to see (rather need) for some hot backup operations. While there are several documented work arounds that will mostly work it does not offer a consistent solution. While we certainly do not drive the features from this particular vendor they will at least listen. At heart most software shops are driven by a need to solve a problem. Now, unless you have money pouring out your ear holes it pays to see how many people really want this feature. Thus, the guy who is more or less the expert in our given area is going to go beat some drums and see if he can find a few others who are in our same boat.

Thus if there is a collective need (which I believe there is) then we can see more drive on this particular goal. Open source works pretty much the same way and the more popular the problem then the more likelihood of seeing it corrected. Anyone who does not listen to their customers either doesn't need to or will simply suffer from it. I suspect that statement has some gray to it because with enough marketing and salesliars it should be possible to get cash from anything.