Larry’s Digital Transformation Stroke of Genius – Digital Leadership Associates

This week @CBROnline posted an article about Oracle investigating $70 Billion to takeover Accenture. Some people thought it was a slow news day or a rehash of the rumours that came out 20 years ago when there was talk of Oracle buying Arthur Anderson. The piece by James Nunns, Deputy Editor goes into detail but tends to stick with the IT market benefits rather than the some of the wider aspects. If you want to read the article the link is here.

Is Oracle looking to acquire Accenture? via @

If we go back to why Oracle nearly purchased Arthur Anderson it was pre-Y2K. There was disruption in the air, driven by the compelling reason of a change of systems for the year 2000.

SAP and Oracle had a different strategy for Y2K

SAP decided to partner with the likes of PWC, KPMG and all the companies advising the big companies in the world. If companies choose SAP, the advisors would get big fat implementation contracts. (Don’t forget this was a pre-Enron world). Oracle went down the route of either buying a consultancy or building a consultancy. The rest is history.

But there is something here bigger than who is number one in the ERP market.

First let’s put some of the noise to one side.

If we take a “here and now” argument in IT right now, the talk is very much about Cloud and “my cloud is bigger than yours’. While this is where most of the IT companies are making money today (or losing it if you are a hardware vendor) it is very much about replacing legacy. Often wrapped up as “digital transformation” but it’s very much “rip and replace” or add a cloud system to legacy. IT companies call this “edge” I understand. As in some changes at the edge of legacy. Realistically, this changes little to a companies business dynamic. And most companies still spend 80% of their IT budget on maintaining their legacy systems.

Any IT company is investing in customer services teams to make sure all their legacy systems are “nailed down” in the IT departments and they maintain the support and maintenance revenue streams so they can invest for the company battle.

Cloud Vendor Squeeze

This means that if you are selling Cloud, and while your shareholders will want to get more and more growth. The replacement market you once worked in will grow smaller and smaller. Unless you are in a commanding position, where you are market leader. Any middle of the road vendor will be squeezed more and more between companies making “no decision”, so staying with the current vendor or the market leader.

Leap Frogging into the Future

So what can companies do? OK, let’s fast forward 3 years to a world where the internet covers three quarters of the worlds population and three quarters of the world are on social media. The “digital transformations” of 2017 will be seen as purely systems replacement. Stripping out cost and some people by moving from legacy to cloud isn’t rocket science. But most boards will take it and quite rightly too.

But nobody is talking about using social and digital to increase revenue, give you competitive edge, disrupt the market.

Look at the purchase of LinkedIn by Microsoft. They had a choice do I buy a company like which is in the present, or do I leapfrog everything and imagine a future where CRM merges with social media. They took a leap into the future and purchased LinkedIn. The first nail in the Salesforce coffin.

So if you are Oracle and you want to be number one in applications you need to convince a lot of people with existing systems to replace and why would they? So how will they do it?

The Future

According to Markets and Markets the digital transformation market size is estimated to grow from USD 148.04 Billion in 2015 to USD 392.15 Billion by 2021

This makes Y2K seem like a children’s party. The winners will win big, very big. What is up for grabs is to be THE biggest IT company in the world ever.


What is interesting about the article is the fact there has been little or no comment. Are the other IT vendors napping, part of the social and digital is about posting photos of cats and your lunch or are they just better at keeping the talks confidential?


The winners in all of this are world beating companies that can demonstrate case studies in digital and social today. But we are biased.

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