IT snake oil: Six tech cure-alls that went bunk

Legendary promises, little delivery -- IT history is fraught with "transformational" sales pitches that fell far short

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Philip J. Philliou, a principal at payments strategy consulting firm Philliou Selwanes Partners, was working for MasterCard during that era as VP of e-commerce product and technologies. Both MasterCard and Visa invested heavily in new systems and products to facilitate electronic payments and data transfers across these exchanges.

At the height of the dot-com boom Philliou says there were more than 2,500 major b-to-b exchanges worldwide. Today, he guesstimates 90 percent of them are gone. Part of the problem was timing; the other part was the difficulty in getting people to substantially change the way they did business.

"The dot-com implosion took the oxygen out of many of these exchanges," he says. "The other problem was that for these exchanges to succeed, you needed to achieve a certain scale. That meant convincing a lot of buyers and sellers to change well-established business processes."

He says b-to-b markets were a "red herring," but that many organizations are finally starting to realize the benefits using their financial institution's payment gateway in conjunction with their internal electronic invoicing and ERP systems.

David Freschman, managing partner of venture firm Innovation Capital Advisors, says some major VCs bet big on b-to-b markets whose potential never got realized. "Business is still a social function in many respects," he says. "I think a lot of people still prefer to do business face to face. They want to know who they're buying from and develop relationships with them."

6. Enterprise social media

Era: Now

The pitch: "[Our enterprise social media product] improves organizational awareness and fosters cross-functional workflows in ways that collaboration and social networking software alone never will .... helps organizations view and engage in the 'big conversation' -- the sum of all discussions, content creation, and planning activities taking place ... increases organizational effectiveness by providing individuals a 360-degree view of conversations and activities across previously isolated information silos ... while also meeting the enterprise security and data portability requirements of the most demanding CIO." --Unnamed enterprise social media vendor, October 2009

Your employees schmooze on Twitter, Facebook, and countless other social networks; shouldn't they be doing it on behalf of your business? That's the sales pitch enterprises are getting today from the dozens of vendors surfing the social media wave.

The idea: Instead of tweeting about what they had for lunch and engaging in Mafia Family Wars, your workforce can be using these tools to brainstorm new ideas and collaborate on projects.

They're not the only ones who smell a social media boom. IDC predicts the market for workplace "online community software" will grow from $278 million last year to $1.6 billion by 2013.

But those who've heard similar predictions about other technologies are a bit more skeptical. "There's no doubt consumers are embracing social networks to communicate and network with each other," says independent tech analyst Chris Selland. "But it's highly questionable whether enterprise customers will gain much of anything from their rush to 'socialize' their infrastructures."

In fact, they could easily lose more than they gain, notes ICA's Freschman. He believes enterprises may be wary of social networks because of the ease with which employees could inadvertently spill important information. "People on Facebook and other social networks share everything about what they're doing," says Freschman. "A technologist at a company will say he's traveling to such and such a place to meet with so and so at another company. That's too much information. Before they know it, their scientists are talking to the competition and trade secrets are leaking out."

With enterprise social media, the aspect that's truly overhyped is the concept of collaboration, notes Criterion's Hockenberry. Bringing diverse groups of people into a Web setting is not how innovation typically happens, he adds. "Social networks like Facebook are the biggest coffee klatch on earth," says Hockenberry. "They're nice for chatting, but we really haven't figured out the business implementation for them. Just adopting a new technology does not create innovation for you."

Can enterprise social media deliver on all its many promises? History tells us no. But check back with us in a few years and we'll let you know for sure.

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This story, "IT snake oil: Six tech cure-alls that went bunk," was originally published at

Copyright © 2009 IDG Communications, Inc.

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