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July 8, 2009

A Technology or Consulting Company?

How many times have you come across this question in your career? Somewhere along the line someone in a company that makes software starts to have a battle with the concept of Technology versus Consulting.

It has always left me bewildered....

For me there is no dividing line. Microsoft delivers consultancy services on its products, and does a great job at it. So does IBM, Oracle and even the guys from the various verticals of Infor.

By sheltering in the safe confines of software development you are guaranteeing several things.

1) That your income streams will be lumpy, as all large software sales are.

2) That your development spend will be limited by the lumpiness of your revenue streams, and

3) That you will be leaving a lot of money on the table.

The last point is vital. leaving money on the table, in our profession, is just foolish. It limits revenues, limits potential growth, and worst of all it leaves a space for competitors to rush into.

And in the fast moving world of technology development you need to be pretty darn confident of your products before you let competitors into your space.

The advent of SaaS, the increasing commodity nature of the consulting market, and the inrush of low cost knowledge workers from low wage economies threatens anyone who thinks they can bunker down in technology only.

Today we cannot afford to be technology or consulting... merely services.

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