Google’s Faulty IT Innovation Logic

Google’s general manager of enterprise business, Dave Girouard recently told the Mass Technology Leadership Council that:

“the insane complexity of technology is leading companies to spend 75% to 80% of IT budgets simply maintaining the systems they have already.”

And what should they do instead, Mr. Girouard? Simply ignore — or better yet, throw away — these applications?

Mr. Girouard’s comment reflects a naive understanding of the ROI of IT investments. Smart firms build ongoing maintenance and enhancment expenses into their ROI projections. These ongoing M&E costs create new functionality that enables the firm to continue to reap the projected benefits of the app.

Discontinuing these costs in order to “innovate” is foolish and naive.

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