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Posted 9 years ago in Xero news by Gary Turner
Posted by Gary Turner

male_silhouetteWhen I joined in August, the kind folks at Xero welcomed me with the promise of a new life and identity under their witness protection and rehabilitation programme for veteran software business execs. Almost two months into the therapy, I’m now at stage five of their twelve-step recovery plan; the main thrust of which is to publicly renounce my old ways.

In doing so, I fully accept that I will never again be able to re-join the ranks of my old software brotherhood, such a profound act of disloyalty it is to reveal their tightly guarded secrets.

What follows may shock some but I’m sure will be no surprise to others. These brief snippets and insights speak of the dubious practices and standards of behaviour of a now ancient order, over which the bright new world of Software-as-a-Service will eventually prevail, I have no doubt.

  1. Shelf-ware Syndrome: This is the result of (deliberately) inflexible software pricing models; or software salespeople discounting licenses of one product to secure the sale of another; leading to many customers purchasing – and paying ongoing maintenance for – more software than they actually require.
  2. The Disposable Razor Blade Business Model: The reality is that most legacy accounting software companies derive a significant majority (in some cases over 75%) of their revenue and profits from the associated software maintenance and consulting services than from actually selling their software. Makes you wonder why we still call them software companies.
  3. Enterprise Software Is Deliberately Difficult To Use: And the reason for maintenance and services revenues outstripping software licenses? – let’s turn to Bob Cringely for the answer; “If SAP could make R/3 easier to use they would do it, right?” – Yeah, sure they would, Bob…
  4. Turning Pig Lipstick Application Into A Fine Art: The blistering pace of technological innovation during the 1980’s and 1990’s and the resulting redundancy of technology platforms (MS-DOS, Windows 3.X, Windows 9.X…), meant that software companies used not to have the option of keeping their old products alive beyond five or so years – today the software engineering equivalent of cosmetic surgery profitably keeps even the eldest monolithic code looking moderately contemporary, however illusory or superficial the effect may be. Oh, and a couple of visionary white papers on your website peppered with vague references to SOAP architecture won’t go wrong either.
  5. Beware Fake Rolexes: At twenty paces it can be hard to tell which accounting software product is the genuine article – “…well it looked like it could add up properly during the demo….” – and which one will break down in one or more fundamental respects two months after you purchased it. At which point you discover to your horror that under its apparently fragrant cover it comprises a piece of string, two sticks of chewing gum and a broken roller-skate. Today’s rapid application development world means any fool can build software on weeknights on his dining room table. Caveat emptor anyone?
  6. You Want Your Money Back? Um, Didn’t You Read Our Terms & Conditions, Sir? : Legacy software companies don’t like giving refunds but they very much like to be paid in full up-front – hence the financial risk lies with the buyer to ensure fit – and if not then you’d better get cosy with the finer details of accounting write-off treatment. Try before you buy? You must be joking, sir…
  7. Maintenance = Money For Old Rope: The incidence of material defects in old software products effectively diminishes to zero over time. So why is it that the law of software maintenance charging is inversely proportionate to this fact?
  8. SaaS?, Oh Yeah That….We Think Old Software & SaaS Will Co-Exist: According to the late American author, Upton Sinclair, “You can’t make somebody understand something if their salary depends upon them not understanding it.” And therein lies the very nucleus at the centre of the so-called ‘is the world ready for on-line software?’ debate.

Phew, good to get that lot off my chest. I’m feeling better by the second – now back to basket-weaving with strips of old 5.25″ floppy discs….


September 25, 2009 at 11.58 am

Very enjoyable post Gary. I wish you all the best with your rehab. I have yet to admit to my problem and seek out the local ‘Saas Anonymous’ group.

Two points in particular strike a chord with me. #4 in particular, as I have witnessed one vendor (who will remain nameless) try and perform palliative care on their rotting, 25 year old codebase with ever more liberal application of lip gloss.

Also #5, because as you have it, I am one of those *ahem* fools who wrote an ERP application on his dining table during nights and weekends. If you are interested, step into this dark alley, where I have a nice collection of Cartier’s and Bulgari’s within my overcoat…

Stuart G Hall
September 27, 2009 at 2.42 am

Would be fun to cross-post this to IT Counts and see what the accountants make of your revelations 🙂

Tony Law
September 29, 2009 at 8.57 pm

Agree a very enjoyable post and I’ve seen examples of many of these issues.

It makes you wonder though why enterprises don’t take two simple steps: (a) ask the vendor for user references, and follow them up; (b) talk to the analysts (that’s *really* talk to, right through the project, not just selectively quote research to confirm a decision already taken). And perhaps (c) get the analysts to provide other links to existing users for a more independent view.

Gary Turner Xero
September 29, 2009 at 9.55 pm

Thank you for the positive comments – I had fun writing it.

I intentionally wrote this post up as a cynical caricature of the old business apps world however, as simplistically exaggerated as much of it is, the basic points I illustrate are broadly accurate as observations and frustrations I have felt over the last five to ten years.

Classic business software does seem to have driven itself into something of an investment cul-de-sac out of which it cannot escape without incurring serious damage to its collective Balance Sheet. The result is an industry which has eschewed its past adherence to the principles of invention and innovation in favour of a somewhat downbeat make-do-and-mend philosophy. There are too many legacy vendors – in my experience as well as my opinion – who have very quietly all but shut down their R&D functions and remain solely focused on over-extending the profitable lives of elderly products while on the surface pretending, frankly, that it’s business as usual.

Of course, gravity always prevails and in the case of the technology world, maturity and profitable prudence seem to have replaced the frontier spirit of adventure, some might say misadventure. In part this is a good thing.

Call me an old romantic but that doesn’t feel quite right or, I may say, anywhere near good enough.

PS. There are lots of good solutions and easy(ish) to use small business and enterprise class apps out there – always do your homework and as in the previous comment, make sure you get good references.

Dennis Howlett
September 29, 2009 at 10.15 pm

Following Mr Hall’s excellent suggestion, I shall use my incredible super exec writing powers to cross post (at least some) of Gary’s post to IT Counts

Stacy Knights
October 13, 2009 at 1.51 am

Whistleblower or Trumpet blower Mr Turner?

According to the late American author, Upton Sinclair, “You can’t make somebody understand something if their salary depends upon them not understanding it.” How very apt in your case!

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