GM's Eggs

6 PM -- General Motors' decision to put its fate in the hands of six separate vendors today was a bold move, which will either make or break the firms CIO Ralph Szygenda.

Even Szygenda himself admitted that putting all GM’s technology eggs in a half dozen baskets is a risky strategy. (See GM Goes for New Outsourcing Model.) But, quite possibly, putting your faith in one main vendor, in this case, Electronic Data Systems Corp., is even riskier. Like Ashlee Simpson’s singing career, the days of the single vendor mega-deal appear to be numbered.

Scarred by the upheavals of Y2K and years of economic slowdown, customers are now more than happy to dangle vendors’ feet over the fire and get the best deal possible. This may even involve some serious hardball -- just look at JP Morgan, which unceremoniously dumped the mighty IBM a little over a year ago. (See JP Morgan Ends IBM Outsourcing Deal and Will More Banks Bet on Insourcing?.)

Admittedly, both GM and JP have considerable corporate weight to throw around when negotiating contracts. But if the two projects are successful, they could serve as examples for other firms, both large and small, to follow. In a few years' time we may be wondering why anyone in their right mind tied their technology infrastructure to just one or two vendors.

— James Rogers, Senior Editor, Byte and Switch