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May 20, 2009


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I have enjoyed the interview with Lee.

Slightly different POV from Lee on innovation though. There is little innovation from established, larger SIs and outsourcers because they invest less than 2% on R&D (even less really because even that is in things like solution centers which are more marketing that R&D or methodologies to keep some consistency in their practices ).Also majority of their revenue stream comes from large sw, hw and telecom vendors who themselves have not been innovating. So their revenues from SaaS, clouds, VoIP, virtualization, telemetry, mobility etc is small compared to traditional ERP, older data center, desk top, legacy apps support revenue streams.

You cannot squeeze blood from a turnip - quit expecting innovation from majority of larger outsourcers. Find a way to shave 20-30-40% of their fees for their aging services and spend those savings on innovation. And bring in new generation SaaS SIs and cloud providers. That breaks the vendor consolidation mindset of many sourcing execs, but that's what needs to happen.

Vinnie Mirchandani

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