Enterprises today want to mix technology from multiple vendors at their will. But they don't want a mix of multiple service companies to integrate and support these technologies, to crowd their management time, or to "fingerpoint" when problems arise. And the winners, of course, will be those vendors who can do it all and do it all very, very well.
Vendors today need other vendors to survive. Any vendor who is not preparing for and forming partnerships with the "industry leaders" will quickly face an unfortunate fate.
But then no single company comes to mind, that does it well today.
Vendors can no longer afford to be an island. On the user front, forging successful relationships that cross company lines depends on an ability to deliver value. Meeting customers' dynamic demands through a flexible adaptable computing infrastructure is essential.
Building an agile IT environment enables stronger internal and external partnerships.
Rate of change
Business today is changing at a dizzying pace. The comfort and stability that characterised industries in the 1970's, 80's and even the 90's has been swept away. Product and service lifecycles are shrinking and competitive advantages are eroding at an ever increasing speed as competitors become more capable and varied.
Vendors are also reorganising, downsizing, rightsizing, merging, allying, acquiring, divesting, specialising and branching!
This is now an environment where the rules of business are just about rewritten weekly, change is the only constant and a turbulent, unstable marketplace is its manifestation.
Over the next two years every single business process of any size is going to be forever altered by the continued sophistication of Internet technologies. And the only vendors that are truly going to have the resources to deliver tightly integrated solutions, capable of fulfilling the real promise of these technologies, are the larger enterprises.
It used to be that vendors could compete effectively with a product that covered just one aspect of business, but now those separate small ponds are being connected into one big lake as users demand interconnected applications.
In response to all this heightened competition, vendors are expanding their offerings by setting strategic alliances or buying a company with features they currently lack. This trend towards broader product offerings promises more efficient, profitable operations for users and growth for vendors that are big or flexible enough to fill those needs.
But there are also downsides for smaller niche players and for system integrators who make their money "bolting" together applications from different vendors as large vendors fill out their lines.
Today we have big IT consulting shops pairing with carriers to become application service providers. Partnerships is the new mantra in the consulting business with a recent rush of new alliances between Big 5 firms and IT suppliers. These are a result of the top consultancies scrabbling to fill a gap in their combined consultancy/product offerings in the rapidly expanding areas of e-business.
Group against group
Also we're now seeing the start of groups of companies competing with groups of companies. The alliance boom is most prevalent in industries with rapid change. They include pharmaceuticals, biotech, chemicals, plastic, cars, airlines and high technology, amongst many others.
Management consulting expert Peter Dicken says "this is not jut a merger boom but above all, a worldwide restructuring".
Chemical companies across the world have agreed to create a new business-to-business e-commerce company that will serve as an online marketplace for the chemicals industry. Institutions today are developing their futures through a wide range of previously unlikely alliances. It is not uncommon to see vendors/users "partnering" among themselves or with consulting firms and/or IT vendors to create new products or to launch co-development efforts.
Further moves also suggest that the IT utility is not that far away, although it does conjure up images of more bloated, monopoly-like institutions that have their own unique definition of service. Instead of buying, installing and operating your own hardware and software products you simply contract from various software, server and storage farms through a range of network providers.
If this takes off we would experience further scurrying by today's leaders to form new partnerships as they make the transition from products to services. But then billion dollar utilities still have to deliver a quality of service and be competitive in local things like knowledge, relationships and motivation.