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.

One thought on “Google’s Faulty IT Innovation Logic

  1. I think Girouard’s point is different (my assumption based n experience) – technology costs are drowned by depreciation from prior years. ROI costs generally fail to take into account the aggregate of other projects, and their costs. What matters is all depreciation.

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