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|In: Industry Commentary|Last Updated:

Two years ago I predicted hard times for Palm. Hard times have arrived, in the form of plummeting marketshare and negative profits.

It was not a difficult prediction. When I wrote the column, Palm hadn’t given customers any reason to buy a new PDA in years, and there are still only two reasons to replace a Palm PDA: (1) You dropped your old one; or (2) you want to upgrade to something better, which means either a Windows CE-based device or a Symbian-driven PDA/telephone combo.

Palm’s meiotic “strategy” is to reorganize, separating its devices and operating systems into two separate businesses. Which, although this is probably too obvious to bother saying, means Palm is exiting the device business. The problem, of course, is that in a marketplace driven by innovation, the Palm OS is the least innovative of the contenders. Even the upcoming Palm OS 5 is basically a me-too offering, providing a subset of what Windows CE and EPOC/Symbian have offered for years. Yesterday’s features tomorrow — impressive.

Meanwhile, back at the ranch, a lot of IT organizations are equally backward, at least if Gartner Dataquest is to be believed. In Wireless Newsfactor, Gartner analyst Todd Kort said, “IT managers have generally been dragging their feet in endorsing the use of PDAs.” It’s a year-old story but given the events of the past year I doubt many IT managers have aggressively embraced new end-user technologies. More likely, most have been battening down their proverbial hatches.

It’s like a bad habit: End-users bring in technology they find personally useful; IT says no. Why? “Do you know how often we have to recover PCs that were destroyed by end-user-installed software?”

Actually, I have a pretty good idea. While the anecdotes are colorful, the numbers aren’t large, and PDA synchronization software is rarely the culprit. Is it worth it, when refusing to endorse PDAs gives IT an image of being sand in the gears of progress?

In the interest of providing solutions, not just criticism, here, for your use if you’ve been one of the foot-draggers, is your new PDA support policy:

“Install anything you want. Call for help if you need it and we’ll make a reasonable effort to get your PC up and running. If we can’t, we’ll restore it to a standard build.”

It’s an old saying: If you can’t lead and can’t follow, at least get out of the way.

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|In: Industry Commentary|Last Updated:

It isn’t as if this is a new idea.

Rental software models are hot these days, not because customers are clamoring for them but because software vendors want more revenue and are determined to persuade us all that this is an inescapable trend, and good for us besides.

It can be, too. More than twenty years ago the SAS Institute kept its customers very happy this way, with an annual rental fee that was maybe a quarter of what, for example, Information Builders charged for a comparable Focus license. SAS had it figured out.

Rentals should benefit both parties. Buyers should pay lower prices (35% of the purchase price is break-even). By renting software instead of selling it, sellers benefit too, because each new sale became an annuity, increasing annual revenue instead of depleting the supply of future purchasers.

But we don’t see any vendor propaganda promising that we’ll save money by renting. Instead, we get nonsense like that spouted by Computer Associates’ CEO Sanjay Kumar at Gartner’s ITXPO conference in San Diego. In case you missed the press reports, Kumar extolled this exciting benefit: Because your spending isn’t all up-front, you’ll be able to switch from one vendor to another without difficulty.

Here’s my suggestion: Disqualify any vendor making this claim from your future software considerations on the grounds that the vendor is way, way too ignorant of IT to be trusted with anything important. When you think about software conversions, does loss of the up-front purchase price even appear in your top-ten list of concerns?

I didn’t think so. Minor matters like business re-engineering, data conversion, integration, and retraining probably crowd financial friction right out of your consciousness.

Is Kumar really that dopey? Of course not. When he and his ilk make ridiculous claims like this, my guess is they’re blowing smoke to try to distract you from what’s really going on.

What might that be? Once you’ve built a piece of software into your technical architecture it’s awfully hard to pull it out again. Computer Associates built its entire business on this premise, buying failing software companies at bargain prices knowing their customers would rather pay premium maintenance fees than face the cost of a conversion.

Which means once you’ve decided to rent a company’s software, it will be very difficult to keep that company from jacking up the fee.

Then you’ll have the worst of both worlds.

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