I’ve cited enterprise views, and those of operators as well, in past blogs, but I’ve gotten over 150 comments on technology from technology vendors so far this year, commenting on past blogs and just expressing their views. This group of people is different from the enterprises in that I know most of them, and in many cases have known them for years. I want to point that out because it creates a potential bias; since these are people familiar with me and my views, they may favor them more than a random sample would. Keep that in mind, but also note that in some cases, the vendor contacts have a view very different from mine.
The thing I’ve gotten the most comment on, and in fact that every one of these vendor contacts has commented on, is tech hype. I tend to see hype as a force that, if anything, is destructive to tech value in the long run. Enterprises also hold that view, perhaps not as strongly as I do, but vendor employees are more likely to see hype as neutral or even positive, for a couple of reasons that vary depending on the job of the person making the comment.
Salespeople and marketing people both tend to speak out in favor of hype, the former being the most favorable. According to sales types, hype is what gets them appointments in many cases. “If I don’t have anything new to say,” one said, “I’d never be able to get in to see someone.” These sales types admit that often, even usually, the hype doesn’t stimulate a sale of the specific thing that’s being hyped, but rather something that’s related.
The marketing people who favor hype say that without it, it would be difficult or impossible to get media coverage for anything. “You understand I’m sure that most publications use SEO [search engine optimization],” said one CMO. “We have to align with what they’re finding are the most-searched terms, and if we don’t they won’t pay any attention to press releases.”
Both sales and marketing people agree on one thing, which is that hype generates leads. Whether they’re aimed at getting “editorial” notice or an appointments with prospects/customers, leads are critical to a successful sales strategy, particularly for vendors who don’t have dominant strategic influence in their target accounts, or perhaps even a presence.
Of 101 sales/marketing comments I got on hype, only 32 came from a source that was comfortable using the term “hype”; most preferred to think of it as “positioning” or a similar neutral term. They don’t even like to say that they “exaggerate”, but rather say that emphasizing positives and minimizing negatives has been a part of tech sales for decades, and maybe of sales for centuries.
One of my Wall Street friends noted that hype in sales/marketing is like “bubbles” are to Wall Street, and I think that’s true. Wall Street loves a bubble, and in fact the thing they really love is volatility, “You can’t make much money in a market with nothing moving,” he said, and I think that may be what the sales/marketing types are saying too. But if that’s true, then why isn’t it working now? As I’ve pointed out in past blogs, we’ve had three wave periods when IT spending growth was sharply above GDP growth, but none in this century.
I think this may be the on-ramp to something important. If I’m right saying that hype is destructive to building a new set of business justifications for tech, why has it worked for so long? Has something changed? It’s hard to answer that from either enterprise or vendor comments, so I’ll have to give it a try myself.
Might hype be a kind of trial balloon? I personally worked through the three waves of the past, and in all of them the drivers of the waves were promoted aggressively. The difference was that they stuck, but was this just random chance, was it an indication that there’s gold in some shovels-full of dirt but only worms in most? Or might it be the old cry-wolf story?
One enterprise CIO told me in 2020 “You can’t have a tech revolution every week. We need a three to five year useful life on [our IT] equipment, and a revolution is a paradigm shift that by definition would render a lot of gear obsolete.” Could hype waves be cresting too often, to the point where there’s really little choice but to ignore them? I also remember writing that if you added up the total amount of dollars people said they were responsible for spending on tech, when they filled out controlled-circulation qualifications, it exceeded the GDP of the US, and that there were over four times the number of influencers on those lists than there were actual technical professionals. Could things like SEO be tricked by “amateur clicks”, from people who have no real role in decision-making and are only looking for entertainment?
Yes to all these things, but that still leaves us with the question of why those waves of IT spending growth, having occurred in a regular symmetry for four decades, suddenly ceased. If all this was random, you’d expect to see a lack of regularity in the pattern of hype-to-reality conversion. If there’s a pattern that’s been broken, something has been added or removed. Maybe several “somethings”.
To me, the flex point in everything was roughly around the year 2000, and that may be one of the “somethings”. The Y2K craze was one of the first truly nonsensical hype waves. I remember getting calls from reporters looking for me to validate the claim that elevators would plummet and kill all aboard; same with airplanes, on the critical second of transition. It generated a lot of buzz, and that may have offered the first proof that tech hype could be a profitable thing.
The second thing was the dot-com bubble, and the resulting legislation (Sarbanes-Oxley or “SOX”). What SOX did was to effectively focus Wall Street on the current quarter’s numbers rather than letting Street analysts run wild and free in speculating on what was going to create the thing that would have been the fourth wave. You can’t leap tall strategic buildings if you’re forced to stare at your feet.
The third thing was the dilution in strategic influence we saw. The prior two waves of IT had decentralized IT, taking it from a giant data center to a distributed mesh of systems of multiple types, and exploded the number of vendors. Prior to that, IBM was the IT giant, the benevolent dictator of strategy for the major accounts, and then by osmosis to others. Even the PC was an IBM success, until others jumped on the space. The problem this created was a dilution of beneficial opportunity; why push a ten-year strategy when you’ll get only a small piece of the riches? Watch your feet instead.
Revolutions are hard, and hype postulating one is easy. To me, that’s the net of what vendors are telling me. Yes, we’d love another wave of IT spending, but we’ll settle for getting a meeting with the buyer, or getting a mention in a relevant trade rag or analyst report. I think that ultimately this stalemate in IT will end, but to be candid, I didn’t think it would go on this long, and obviously I was wrong.
