SAN MATEO (04/18/2000) - In these heady economic days, it seems all of business follows the stock market: only going up and only getting bigger. It's gotten to the point that we barely bat an eye at another multibillion-dollar deal. The merger of Kana and Silknet Software Inc. and i2 Technologies Inc.'s acquisition of Aspect are just two recent megadeals that brought relatively low-profile vendors into the limelight.
The fact remains that no one ever got fired for buying IBM Corp. or Microsoft Corp. products, but the speed of business makes the financial gyrations of business-to-business start-ups a pressing issue for IT executives. More than ever, businesses need to seek innovation and competitive differentiation with small, and sometimes unknown, cutting-edge vendors. If their own financial bubble gets pricked as the Wall Street euphoria for all things Internet turns sour, customers pay the price.
That's why savvy IT executives not only need to measure the effectiveness of a new technology but also have the business smarts to spot a solid business model.
As our Page One article by Eugene Grygo and Brad Shewmake explains, customers of dot-com pioneers need to act as if they are start-ups; nimble business models and adaptability will prevent a customer from getting stranded on a sinking ship.
Financial advisors will tell most consumers to stay put and ride out the wild swings of the stock market. But businesses don't always have that luxury.
Smaller companies looking to cash in on the tech-IPO frenzy of the past few years could become bait for a cheap purchase from the IT industry's larger players.
Many of the anticipated failures will happen because of a glut of consumer-oriented Web sites. But the burgeoning business-to-business trading exchange industry is vulnerable as well. Talk about unproven business models.
Hosted catalogs are one thing, but the real business revolution will happen when partners' back-end applications automate processes such as supply chains, fulfillment, and billing. That integration requires more than a Web site and lots of buzz.
Do IT executives need to become finance gurus?
Write to me at firstname.lastname@example.org.