Gartner warns of emerging 'super vendors'

Vendors using M&A to create integrated offerings that analysts say will likely lack long-term innovation

ORLANDO - Gartner Inc. analysts Monday warned that the tech industry is caught in a "vortex of insatiable mergers and acquisitions" that is creating a category of "super vendors" selling highly integrated offerings.

Peter Sondergaard, senior vice president of research, offered an audience at Gartner's annual Symposium ITxpo here a particularly blunt critique of the accelerating trend by tech firms to acquire innovation though mergers and acquisitions .

"Acquiring innovation is one thing, maintaining it is completely different," said Sondergaard. Integration across an entire stack by one IT provider "is impossible to maintain long term - users will not accept architectural mediocrity," he added.

Freddie Diaz, vice president of technology sourcing at an information and publishing company he asked not be named and one of about 7,000 conference attendees, called Gartner's criticism of such acquisition strategies by technology companies "a pretty bold statement to make, because that's where all these guys (vendors) are headed."

Sondergaard didn't offer a list of "super vendors," and probably didn't need to.

Many of the largest IT firms have recently been acquiring companies as well as buying new product lines. Oracle Corp. is now selling integrated hardware offerings thanks to its acquisition of Sun Microsystems; Hewlett-Packard broadly expanded its storage capabilities with the recent of purchase of 3Par , and IBM earlier this year announced plans to spend some $20 billion on acquisitions over the next five years -- twice the amount it spent to buy companies over the past 10 years. Meanwhile, Cisco Systems Inc. has added servers to its product mix.

"M&A as an innovation accelerator has firmly taken hold," wrote PricewaterhouseCoopers in its second quarter report on merger and acquisition activity.

Underpinning this shift by vendors is a series of trends that Gartner sees as dominating the technology business: cloud computing; social computing, particularly the building of IT architectures to support social networks; context aware system that tie location with user data; and pattern recognition that will bring in new models for gleaning insights.

Tony Moldovan, a lead technical specialist at a metals industry firm he asked not be named, said the idea of social computing has merit.

He said the approach, so far, in the enterprise has been focused on blocking social networking because of productivity issues. But "as we start to open up some of that we can start utilizing some of that information in ways that we might even thought not possible," he said.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags IT industryIT managementCIO roleOracleGartnerData Centerhardware systemsConfiguration / maintenanceIT Leadership

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Patrick Thibodeau

Computerworld (US)
Show Comments


James Cook University - Master of Data Science Online Course

Learn more >




Back To Business Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?