Making Buying Fun

Earlier this month, I was speaking with a top sales executive at a large enterprise software vendor. The executive was champing at the sales bit, eagerly anticipating his company's annual user conference, where he was certain the cash would be flowing.

He spoke animatedly about how every year at the conference, customers come up to him and say, "OK, what do I buy?"

"The consumer in them comes scratching to the surface," he said with unbridled delight.

Sure, we're in a recession, he continued, but his top customers "are all still consumers. They're looking for things to buy." And the executive was determined to come to their aid. "Buying is supposed to be an enjoyable thing," he said. "It's not supposed to be a tooth extraction." His goal, he said, was to "make buying fun again."

I appreciated his enthusiasm, but I found myself raining on his parade.

"It's not all that much fun when you don't have enough money," I said.

The executive blew off the negative vibe. "Let's face it -- we're all big companies; we always have money," he said. "It's just [a matter of] what are we spending it on."

I spoke with another senior executive from the same software vendor a couple of weeks later. By that time, Wall Street was quaking, and Lehman Brothers -- one of the vendor's key customers -- was teetering on the brink. This executive said he was hoping that Bank of America would acquire Lehman. He noted that his company has a strong relationship with BofA, so as long as that acquisition panned out, the damage would be minimal.

Of course, the acquisition didn't happen, and Lehman collapsed into bankruptcy less than 72 hours after our conversation. The crash and burn of one formerly highflying customer isn't catastrophic for the software vendor, by any means. But it was a sobering development, especially in view of the broader Wall Street meltdown. At this writing, I'm unaware of how the sales exec I'd spoken with earlier is dealing with the mess, but I have a feeling he's not quite as flip about the economy and IT budgets as he was earlier in the month.

No doubt, he has good reason for concern. IT vendors as a whole depend more on financial services than on any other sector for their revenue. According to a Gartner report released in July, IT spending by financial services companies worldwide was projected to increase from $568 billion in 2008 to $593 billion in 2009. Government came in a fairly distant second, with projected worldwide IT spending of $434 billion in 2009, and communications came in third, at $380 billion.

While it's difficult to assess the full ripple effect of the Wall Street calamity on the IT sector, the swiftness of the tanking is dizzying. In August, I became acquainted with a guy who was working at a large storage vendor as the global account manager for the vendor's Lehman Brothers account. A month ago, he was jetting to exotic places around the world to ensure that his Lehman accounts were well cared for. Today, he's probably canceling whatever plans he had for spending his annual bonus.

To make matters worse, many IT vendor reps with financial services accounts are going to have to start from scratch with their relationship-building. Last week's announcement that Fannie Mae CIO Rahul Merchant had left the company may well herald an exodus of senior IT executives from financial services posts.

Yet what's bad for IT vendors isn't necessarily bad for IT managers. Already, there are indications that vendors are willing to deal in order to get a foot in the door of whatever new Wall Street house is constructed. Last week, for example, Microsoft was in New York wooing companies like Morgan Stanley with details of its newly released high-performance computing offering, Windows HPC Server 2008.

To the extent that IT vendors start seeing revenue tied up in customers' bankruptcy and bailout proceedings, they may well be forced to bargain. If so, they really do stand to make buying fun again.

Don Tennant is editorial director of Computerworld and InfoWorld. Contact him at, and visit his blog at

Copyright © 2008 IDG Communications, Inc.

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