By Dr.Mitul Mehta

[ Article done for Electronic Business Europe - JUNE 2001 http://www.eb-mag.com ]

Watch Out IBM!!...Here comes the Pack.

Why that headline?----- in one answer its SOLUTIONS!

The IT and Technology market is starting to change rapidly in terms of selling and partnering. Vendor companies have started to move towards something they call total solution sales.

Some people would ask ‘So what’s new, a lot of companies have been trying to do this for a while?’. Well, not quite- although IBM has. IBM has used the total solution strategy since its major restructuring several years ago. Since then, it has been leading with its offering of Global services and making money in the process. IBM understood this model quite well; it has also migrated it to the e-business theme quite quickly, integrating it in various vertical solutions. This early lead secured the company a very strong market positioning.

However the rest of the vendors are learning this game too. And not just learning but moving it a peg or two higher up the stack and redefining the ‘total solution’ sale. Nowadays, they are more likely to promote offerings with ‘ECO-SYSTEM solution partners’.

But, there are two types of companies forming; companies that are marketing as total solution providers and companies that cannot migrate to full offerings and are more box, software or service suppliers only. Companies like Cisco Systems have developed their concepts of end-to-end solutions to include eco-partners and now have a good understanding of how to leverage their partners by various parameters. Over the next few months you will see Hewlett-Packard, Compaq and other companies positioning themselves more as solution companies and try and ditch the Hardware or Software tag. HP has demonstrated this with its recent launch of SuperDome and the way it positions that as a solution offering (including servers, high availability, Instant capacity on demand, services, etc). They have also made a bid for Pricewaterhousecoopers(PWC) demonstrating that the market will need a lot of feet and consultants on the ground. Cisco has just pumped a billion in KPMG and is doing deals with other consultancies which shows the significance of having a services and partner strategy.

So how does this affect the market? Well first of all it creates a much more competitive playing field with companies incurring into other areas previously off limits too them. Next it creates lots of pressure on the existing leaders to look, understand and leverage their partner’s strategy and respond to these changes in a global environment. And finally however big marketing plays a role; fulfillment becomes key with very tight service level agreements and an emphasis on after care services. A key point also being a single touch (deal with one contact) so that vendors can’t finger point with no solution forth coming.

The biggest effect is to push companies like IBM, Andersen, and EDS to re-evaluate their internal structures and evaluate how to respond to new competition from a variety of alliances. The key question being can they react and respond as fast and as nimbly as the various alliances that are forming. Signs so far suggest that IBM has done a very good marketing job but is slow in understanding how to create an eco-system of partners itself. It seems also slow in understanding the need to encourage new very small players to the market especially in Europe unlike HP or Compaq.

The traditional consultancies seem to be heeding the changes and are reacting quite fast to change their internal and external outlooks and come up with the right alliances. A lot of single point vendors are also moving and migrating up the value chain and these new companies within the span of eighteen months will become key in integration and fulfillment especially those coming from the ISP, ASP area and leveraging the huge install base they have.

Whilst this is all happening get ready to be bombarded with a lot of new marketing hype and different explanations to simple solutions. Also notice the trend of companies using new buzz words as a ‘me too player’ even if their products really don’t have a lot to do with the solutions - especially true in the CRM and Business Intelligence world and the whole e-mania.

With marketing hitting us soon around words like 'Inspiration', 'Agility', 'Services', etc we are in for a treat! So for all of you out there, Now is the time to ask deeper questions from a lot more players and not just the traditional leaders and ensure that the solution providers are tied into some future risk agreements on your returns. Before all that, make sure that you are getting the right solutions for your tasks in the first place.

Dr Mitul Mehta is managing director of business transformation and strategic direction consultancy firm TekPlus Limited. He can be reached at mitul@tekplus.com

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