IT Rediscovers Novelty, The Venture-Backed Muse - InformationWeek

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7/6/2007
10:20 AM
John Foley
John Foley
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IT Rediscovers Novelty, The Venture-Backed Muse

Bright ideas are easy to come by in the tech industry. Wrapping business models around them, and getting budget-pinched, risk-averse IT pros to buy in-that's been much harder. But after years of slamming the door on tech entrepreneurs, IT execs are once again warming up to their pitches. What's changed? Businesses, it turns out, can't live on legacy systems and cost cutting alone.

Bright ideas are easy to come by in the tech industry. Wrapping business models around them, and getting budget-pinched, risk-averse IT pros to buy in-that's been much harder. But after years of slamming the door on tech entrepreneurs, IT execs are once again warming up to their pitches. What's changed? Businesses, it turns out, can't live on legacy systems and cost cutting alone.IT departments are emerging from a six-year period during which they were more focused on reducing the number of tech vendors with which they did business than on adding new ones. They did so in a wave of pragmatism brought on by the dot-com bust and an economic recession, but they went too far, a realization that has begun to sink in.

"After a while, you don't take risks anymore," one CIO bemoaned recently in a candid conversation with a dozen of his peers. "It's a sad state for the industry. And it's not a good thing for innovation." Another added that "if CIOs don't take a chance on new technology, it becomes a self-fulfilling prophesy." In other words, don't support small companies and their new approaches, and you're stuck with yesterday's technologies. That's obvious, but it's a trap many IT departments fell into.

The good news: There was universal agreement among the IT buyers who were part of the above conversation that it's time to re-engage with new companies promoting different ways of doing things. CIOs have rediscovered tech startups-or want to.

To chronicle this dynamic-the unconventional thinking, the promising-but-unproven technologies, the venture-backed push, and the CIO-mandated pull--InformationWeek is launching Startup City, a Weblog devoted to the world of bootstrap tech vendors, the people behind them, and the products and services ahead. This entry represents our first posting, with many to follow.

IT shops have wrung all the cost savings they can from internal efficiencies; they're looking for a jolt of The Next Big Thing. What's that going to be? A thousand Marc Benioff wannabe's think they know, but only a few will be right. If you're an up-and-coming company with an idea, a prototype, and maybe even a few customers, we want to hear from you. Send your napkin pitches to me at [email protected] Be sure to tell us why your way is a better way.

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