I have seen similar sentiments in loose talks with some of the CEO's I have talked to recently. it makes a great deal of sense if we think about it.

I think (for what it is worth) that consolidation of some of these entities is inevitable and really desirable. Thanks for putting this in concise and graphic form!

This is an important article for anyone who is contemplating a new start-up. I suspect that there is one underlying motivation behind Forrester's findings: CIO's at big companies are paid to be risk averse. A central aspect of their jobs is to ensure that the network and it's attendant activities are always functioning. So, they are very wary of taking a risk on a new sart-up that (from their perspective) may not be around in a year or two.

This suggests an important hurdle for everyone involved in getting new businesses off the ground: Here's the perspective it suggests for the entrepreneru: "Even if what we set out to do functions perfectly, saves users money, and increases productivity, will potential buyers view us as too risky to build into their infrastructure." The next question, of course, is how start-ups can work to overcome this potential perception from the outset of their actvities.

Once again, thanks for highlighting this very important news.

Bruce Judson
Ventures Without Capital

But I think that as the new generation of CIOs come through this will change significantly. That said, partnership will still indeed be key.

It's pretty clear CIO want to deploy the technology, they just don't want to risk their job on investing in a smaller cap company.

This does not mean they do not have influence especially in the larger more conservative part of the marketplace. It does mean that it is a good idea to take what they are saying with a grain of salt. Innovation is happening all over. When new technologies "prove" themselves, these guys will be on board telling everyone how they predicted this etc., etc.

I think it is important for new startups to figure out what they can do better than the larger more established vendors. Find someone who has a big need and a small budget. A sucessful engagement like this will speak louder than any stodgy pontificator and is a far more important key to success than a Forrester endorsement.

In fact to get Forrester or Gartner to endorse, a startup needs more capital than it can afford anyway. These organizations only endorse vendors who have made it. I would not worry about what they say if I was at the early stages of development. Anyone who pays close attention to them is probably not a good client at the beginning anyway.

What I see though is college/universities moving en masse to the web 2.0 world. That is a BIG deal, guys. That's the first step to broad corporate adoption.

As has been said, large companies are risk averse and are therefor by nature less progressive. It takes them longer to adopt new, useful technologies.

That comment is typically made about potential customers, but it is no less true about vendors. The large suites developed by established software companies do add some convenience and reduce risk, but they also carry with them longer development times and less cutting-edge.

In other worss, large software developers -- just like large potential customers -- are risk averse and less likely to have what will become the future.

If I were a start-up with a njew, cutting edge product, I'd openly acknowledge the potential risk but then focus on the lower cost and cutting edge nature of the technoloies.

Incidentally, I appreciate Stephane's comments about colleges and universites adopting the newer startup technologies. That indeed is the place to foster the future (read the histories of Unix or Linux or Mosaic, as examples). Universites want to be hip, and should be a primary market for strat-ups.

I was an analyst at Forrester from 1992-1994 in their "networking" service (e.g. IP network gear / services). During this time, Forrester analysts "took a stand." When George Colony (the CEO/founder) hired me, he said "Every day, try to figure out what makes you different from a PC Week reporter. They report; we think hard and try to make smart recommendations to CIOs."

In that light, this report sounds like Forrester finally fails that test. The conventional CIO wisdom is ALWAYS that the big guys will provide the desired solutions. And it's rarely right.

In our case, IBM's SNA networks were the "safe" bet, and CIO's nearly universally said they preferred to rely on IBM to eventually supply them with IP-based networks.

In that light, we analyzed IBM and others, and said that the networking technology was moving too fast, cannibalized too much of their existing business, and these (and other) factors would mean the big vendors wouldn't help CIOs get where they needed to go as fast as they needed to get there.

So we recommended CIOs bet on startups called Cisco, 3Com, Wellfleet, and others, *despite* what CIO's "said" or "preferred." This was the role of Forrester - to buck the conventional wisdom to provide *analysis*, not reporting.

And we didn't advise the startups to "partner" to penetrate enterprises; this would slow the fast-moving startups down, and be fatal to the industry. Instead, we advised the enterprises to take the startup risk.

Though I haven't read the Forrester report cited here, if the comments accurately reflect the report -- that the report simply warns startups that CIOs want big suppliers and startups need to partner -- then Forrester has reached the end of its useful life, IMHO. They've become an expensive PC Week - not an insightful partner in making strategic decisions to advance their enterprise customers' businesses.

Who would have of thunk Intel would be driving Web 2.0 software innovation in the enterprise?

Who would have of thunk Intel would be driving Web 2.0 software innovation in the enterprise?