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Software Makers Increasingly Bypass Clients’ Information Chiefs

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April 24 (Bloomberg) -- Technology sellers are increasingly sidestepping their customers’ chief information officers and marketing their wares directly to individual departments, said Peter Levine, a partner at venture firm Andreessen Horowitz.

Makers of software and online services are having more success pitching their products to a client’s sales operations or its engineering department, he said today at the Bloomberg Enterprise Technology Summit in New York. That’s a break from the past, when the CIO acted as a gatekeeper for information technology and had more sway over approving purchases.

“We’re seeing the departmentalization of IT,” Levine said during a panel discussion. “The companies that don’t make that shift, the broad-based changes, are going to be left behind.”

The trend has picked up steam because customers are buying software as a service, rather than signing up for multiyear contract -- deals that may have required more extensive vetting from a centralized executive. Salesforce.com Inc., for instance, sells directly to clients’ sales managers, Levine said. GitHub Inc., meanwhile, is going straight to the engineering side with its collaboration tool for developers, he said.

Levine joined Andreessen Horowitz in 2011 after serving as chief executive officer of XenSource Inc., which was acquired by Citrix Systems Inc. in 2007. Bloomberg LP, the parent of Bloomberg News, is an investor in Andreessen Horowitz.

To contact the reporter on this story: Sarah Frier in New York at sfrier1@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

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