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As GRC platform sales increase, will GRC vendors improve quality?

Things are looking up in the GRC platform market as users appear to be finally putting their money where their mouths are. Many organizations talk about the importance of GRC technologies and how they could better harness the behavior of deviant executives, but much of it so far has been about it just talking the talk but not walking the walk.

But according to a recently released Forrester Research Inc. report looking at the market’s 2010 performance, sales jumped an impressive 15% to $749 million, following two dismal years. In even better news, Forrester believes sales could remain strong throughout 2011.

“After talking with some of the larger vendors we cover as well as the indications we get from the buyers, next year looks like it is going to be a big one for this [GRC platform] space,” Forrester analyst Chris McClean told us when we talked to him about his yearly report.

McClean added that this steady growth is contingent on GRC vendors delivering more value to users in future offerings, particularly in the area of risk and compliance content, as well as integrating those products more tightly with existing infrastructure.

I have little doubt that many smaller GRC vendors will put in an honest effort to improve the content quality of their products, many of which are narrowly focused point solutions. I think they will also put in the time to maintain close relationships with customers and really listen to what they need to better their particular GRC solutions.

But whether the larger vendors, most of them armed with sweeping soup-to-nuts product suites, put in a good-faith effort to improve features for vertical markets with each release, well, we’ll have to see. I am certain they will do their very best to integrate these suites tightly with users’ existing IT infrastructure products, since they are the ones who also sold users many of those key pieces of infrastructure.

Now, I am hardly ready to indict companies such as Oracle, SAP, EMC and IBM, four larger companies showing heightened interest in the GRC platform market, for using their GRC products to simply promote sales of their more profitable, enterprise-class products. There is genuine value they can add, such as stitching controls and monitoring capabilities into corporate databases, business intelligence applications and Web-based servers.

Like it or not, these larger companies will bring more credibility to the GRC market and make once hesitant Fortune 1,000-class companies feel more comfortable about aggressively investing in these products. They may push many smaller competitors out of the market or outright acquire them, but their presence has a lot more upside than down over the long haul in terms of growing the market.

But knowing the pressures facing larger public companies that must keep revenues and stock prices up, the temptation is there to produce just-good-enough GRC products that serve as loss leaders and worry about their quality only when they need to.

Hopefully, the fast-moving armada of 40 to 50 smaller GRC competitors will keep the bigger boys honest the old-fashioned way — producing innovative but practical products.

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