I read Larry Dignan's summary of Nash/KPMG IT leadership survey yesterday which shows a leadership core in the IT industry that has, as Dignan puts it, "...one eye on the exit." Between voluntary departures and nerves over high numbers of failed projects, CIOs seem to be unsettled these days... and no wonder, considering the uncertain state of the industry. Between off-shoring, SaaS/utility computing, and the increasingly broadly recognized failures of traditional project management approaches in IT, it's a hard world for executives and vendors alike. And it's only going to get harder.

I had an interesting conversation with Dustin McNabb, VP of Marketing at Business Service Management solution provider Managed Objects a couple of weeks ago concerning the future of the industry and what happens to traditional enterprise software vendors if "cloud," or utility, computing becomes the prevalent mechanism by which enterprises consume information technology. To that end they've started a blog, which is a fine read if you're keeping up with BSM techniques and solutions.

Obviously this is of some concern to vendors such as Managed Objects, which counts almost the entirety of its business among enterprise customers, and McNabb had obviously given some thought to addressing it. "We want to be part of the conversation," he said, regarding where the industry is headed. But where is it headed? And how can it be influenced along the way?

I'm going to posit that it is heading for the utility/cloud computing model, which Nick Carr has aptly detailed in his book "The Big Switch." There's room for disagreement, as there usually is with Nick's ideas, but I believe that he is more or less correct and that on an arbitrary timescale this is the outline of the system that we will see.

That being the case, what do you do if you are an enterprise software vendor or IT executive?



One option is for these vendors to sell to the cloud providers and for executives to look for employment with them. After all, it's not as if software is going away; it's just being executed somewhere else. Of course this is a bit of a hitch for Managed Objects, since their software is largely to manage other hardware and software, and presumably utility services will have both less need and more of their own resources to fill this sort of niche. But on the whole, this seems like a viable port in the storm for vendors and executives both.

The drawback is that, if this is in fact the model that will evolve, it will do so because of increased efficiencies over the current model. That being the case, there isn't going to be a requirement for nearly as many jobs with cloud providers as there currently are in the enterprise. So while this approach may bring solace to the cream of the IT leadership crop, it's certainly not going to suffice for everyone.

Another option, and I think this is more likely, is that enterprise vendors will continue to work directly with enterprise customers, and that many IT executives will still work in the enterprise. Part of the myth that has grown up around utility computing is that it will involve only a handful of major players, the Google's and Amazon's of the ecosphere, and that there will be little room for third parties to develop or sell software/services. But I think that instead, while we may see only a relative few base utility providers, we will also see an ecosystem of third party service providers who simply create software to run on those platforms. We're already seeing this sort of evolution with Salesforce's open API and the AppExchange marketplace, and more subtly with Amazon's Web Services, which are being used increasingly as the back-end of choice by SaaS providers, probably to an even greater extent than enterprises themselves are using them.

I think it's inevitable that the enterprise software market will shrink, and that in time there will be an overall loss in IT jobs, both as systems become easier to use and maintain and users become more sophisticated. Thus far we've avoided an implosion of this sort out of overall market growth, but it seems to me there is a global limit on that, and that we're likely to run into it with the cloud computing paradigm coming on. But at the same time, I think there will be a thriving ecosphere of niche SaaS players and a core of in-house enterprise jobs which will provide landing spots for the best and the brightest in the industry.

Don't stop polishing your resumes.