The market for companies that develop and implement technology solutions to solve business problems is just beginning to blossom and will truly expand into an enormous segment as we segue out of Y2K and into the new millennium.
The signs are now real and abundant - from Wall Street, where a reduction in market valuations has sent many of the "old world" channel players into a tailspin, to the cacophony of calls from vendors that are touting the new channel with announcements of new "enterprise" or "integrator" divisions. It's no longer about time-to-market but about time-to-solution.
One surprising piece of validation came from a mainstream business book - a clear sign that the time is ripe and that if you're not onboard, you risk missing the boat. From a recent editorial in Forbes, pondering who will dominate the next era of computing:
The future might well belong not to a company that makes boxes, chips or software, but to a company that integrates these things into solutions to business problems. The future could belong to an outfit like Andersen Consulting.
I agree with this prediction, which was further highlighted at events by IBM and Compaq in the US that I and several SIs recently attended. Here's a quick summary:
Both companies have shifted attention away from small resellers, who push product, and have embraced the service-oriented integrator; Both have placed a premium on the value channel as opposed to the volume channel; Both want you to focus on key markets and increase your services; and Both want to grow their market share with you and are willing to back it up with market development funds, sales leads, etc. At Compaq's event the message was clear: Compaq wants to strengthen its ranks with people who service the enterprise. Moreover, you are now in the vanguard of preferred partner if you have or can acquire a particular vertical-market expertise and a predilection toward Unix/NT interoperability, Alpha systems, or storage solutions.
For Compaq, whose challenge is to win mind share and market share, it was the right time to deliver the message. Several of the integrators I spoke with wanted more proof that Compaq has the arsenal to take on the enterprise (ie, organisational readiness, demand-creation programs, and a sales structure to support partnerships with SIs).
At its major partner summit, IBM was stunning in how singular its focus was: partner with value providers that can deliver e-business-based solutions to enterprise customers. And for those partners that are willing to sell a large percentage of IBM product, there are plenty of incentives, from discounts to training programs to sales referrals.
In fact, IBM chairman Lou Gerstner, who kicked off the meeting, stressed the need to move from mind share, where IBM's e-business branding campaign is very high, to market share. And, although his speech was very partner- centric, he left little room for doubt when he said his concern is not about partners bumping into each other inside an account but about bumping out competitors.
Several integrators I spoke with think IBM needs to be more aggressive in its support of service-centric integrators, who aren't as concerned about selling hardware as they are about meeting customer needs.
Regardless of who has the right model or mindset, both companies are clearly onboard, and their game is moving from concept to execution. Key to winning the next phase is seeing who among all players can ensure the satisfaction of the end-customer and the profitability of the integrator and vendor partners that are providing the solution.