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Gartner CEO gets Darwinian

Shrinking IT biz gene pool

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If it's an IT company and your mum's heard of it, chances are it won't exist "in its current form in three years".

That's what Michael Fleisher, chairman and CEO of Gartner, the IT analyst firm, reckons. The HP-Compaq combo is simply the first of many mega-mergers that will be seen in the next few years, he predicts.

Speaking at Gartner Symposium/ITxpo 2001, Fleisher pronounced that CEOs and CIOs need to anticipate "incredible consolidation - both in your own industry as well as in your suppliers. Your most trusted partner may suddenly be subsumed by another company that you chose not to do business with."

This is a fairly commonplace observation; household-name companies - as opposed to brands - rarely survive too long. They get bought or broken up by the survivors - the Shells, the IBMs, the GEs, the Nestles.

In times of economic stress/market contraction/market maturity this process accelerates. We all know this: The clever thing is to work out which are predators and which are prey. Aside from one Bear Stearns analyst at the start of the year, no-one predicted that Compaq was in the latter camp.

Active Buyer: Screw the Supplier

One of the things we like about Gartner is its focus on the user. It is unafraid to diss vendors in public - as its recent spats with Microsoft over licensing fees and IIS demonstrate. This is rare for an IT analyst firm.

In his speech at ITxpo, Fleisher called on business leaders will need to understand how their company not only generates revenue but generates cash flow.

"As we come into increasingly difficult times, understanding how your company generates and leverages cash earnings will be critical Your focus on changing the nature of your relationship with suppliers and customers is so important because those are the only places where you are going to increase your company's cash flow."

Sounds like a call to arm to us. With KPMG this month releasing a report last month, showing that the companies waste £17bn a year on IT - in the UK alone, and that's because of crap purchasing practice only - think what could be achieved by getting a bit strategic.

"If you are a CIO, 100 percent of your strategic focus needs to be on using IT to change the nature of your relationship with your suppliers and your relationship with your customers," Fleisher says. "You must completely delegate nonstrategic business processes. This is the only way CIOs can be sure to use their intellect and horsepower on strategic business issues." ®

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