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Web services acquisition and loyalty
Collective wisdom once dictated that in a tight economy IT shops move increasingly toward a conservative posture placing best-of-breed vendors out of favor and renewing a focus on turnkey solutions. Dealing with a single vendor is the perhaps hoped for, at least by incumbents, future modus operandi. However, Web services, it seems, will not be pushed into this mold. The best-of-breed product vendors have a very reasonable chance to succeed, at least as the market is defined today. While most companies are looking for a single Web services vendor, they also expect to mix in best-of-breed products. Moreover, the second most frequent approach reported by companies in a recent survey is to only consider best-of-breed vendors. While companies may not be aligning themselves exclusively to best-of- breed, they are reporting a preference for multiple vendors. They want and need to piece things together in ways that fit their company. It is possible that it's not only a best-of-breed issue it's an issue of best fit with existing assets.
Buyers are clearly open to best-of-breed vendors either in combination with products from a key supplier or as the primary way to purchase Web services products. The good news is that suppliers are already assuming that a best-of-breed approach will more times than not be necessary to win in the Web services market. In fact, they may be overly optimistic that a best-of-breed offering is the key to success. The emphasis on best-of-breed from suppliers may need to be tempered. On the other hand, financial analysts are anticipating that buyers will use vendors for different aspects of the solution, but will not necessarily gravitate to a best-of-breed scenario. Nor does Wall Street believe that buyers want one key vendor to provide a total solution. Looks to us like the financial analysts need to get in step with the Web services market.
A hurdle correlated with the best-of-breed issue that suppliers of Web services face is loyalty or the lack there of in the marketplace. Loyal customers are the smallest slice of the market pie. When asked who are the suppliers your company will buy Web services technology from, tried and true technology vendor relationships did not rise to the top of the list. In fact, it appears that overall there is only about an 8% loyalty factor. The rest of the population is considering new players. Thus, it's a relatively open field at this point. Web services is new enough that buyers are at least willing to consider alternatives. This trend appears to be feed, in large part, by the business unit buyers and a little less so by the IT professionals, but IT professionals offer no safe haven for the incumbent supplier.
Copyright 2002 Hurwitz Group Inc. This article is excerpted from TrendWatch, a weekly publication of Hurwitz Group Inc. - an analyst, research, and consulting firm. To register for a free email subscription, click here.
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