7
Oct

It’s hard for ISVs focused on either enterprise or consumer customers to successfully service both markets at the same time

Over the weekend of October 4, 2014, Hewlett Packard announced its intention to split into two businesses: one servicing the consumer market, and the other providing solutions and services to enterprise business. While a lot of commentators have spoken on this event, few, if any, have highlighted how this decision reflects the difficulties mature, and large ISVs experience servicing both markets at the same time.

In this writer’s opinion the precedent for one computer technology business successfully servicing both consumer, and enterprise markets was set by IBM during the period from the debut of the PC to Armonk’s decision to spin off the PC business in the late 1990s. For these 10-15 years, IBM successfully serviced its enterprise business customer base with mainframe computers and the software required to run them for a wide range of purposes, while, at the same time, it provided the support for lines of business (LoBs), and their stakeholders, who were eager to acquire the computing power required to decentralize processing from enterprise IT organizations.

But since this period no ISV has managed to service both markets, successfully. True, Microsoft is, once again, attempting to follow in IBM’s footsteps, but the comparative lack of success of its efforts to convince consumer markets to solve their burning need for mobile computing devices with Surface tablets, or Windows Phones, or even the Surface 3 as the hybrid device meeting the personal computing needs of its owners, regardless of whether those needs arise in the office, on the road, or even at home, have not done well at all.

At the same time, the Apple IBM alliance looks like a competitive effort to do the same, albeit via collaborative products and services produced by two ISVs opting to partner together. Neither Apple, nor Google has successfully demonstrated the ability to cater to both markets simultaneously.

Perhaps Dell is another example of one tech computer business servicing both markets, albeit at a much smaller scale than was the case for IBM. But Dell (and/or Lenovo) lacks the big software IP to match the kind of deep hooks into enterprise business exhibited by IBM, or Microsoft. Dell and Lenovo are servicing consumer and enterprise markets for commodities, while Microsoft and the IBM/Apple joint venture just mentioned, not only have offers for the same market, but also for much more promising niche markets where higher margins may be possible.

Seen from this perspective, this writer would hope readers will look differently at HPs weekend announcement. At the same time, readers should maintain a very skeptical attitude about any analyst commentary claiming these two highly distinct markets — consumerized IT and enterprise IT — are actually the same. If they were, perhaps Meg Whitman wouldn’t have come to her decision.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved