Benoit Lheureux

Ok, its not really *that* bad but for dramatic effect I could make a case that alliances and M&A activity involving IT providers in the B2B market segment are occurring faster than we can respond to them in our published research. Its been a busy year!

Recent events include:

• Ariba partners with Hubspan — Debbie Wilson and I are working on our response to this now (crisply: its synergistic)
• IBM acquiring Sterling Commerce — my thoughts here, our published analysis here (license required)
• Ipswitch acquiring MessageWay — Thomas Skybakmoen led our published analysis of that here
• GXS closed on the Inovis merger — my thoughts here, our detailed published analysis here

So,… why so much B2B activity?

Well, for one thing B2B integration — for too long a secondary concern for many IT end users previously focused on internal integration and SOA projects — is now a higher priority. Those companies need to modernize their B2B infrastructure to match recent investments in internal application infrastructure (middleware). An additional key factor is middleware convergence as companies increasingly seek one solution to support A2A, B2B, EDI, SOA, MFT and Cloud services (no, really). And there’s the increasing proliferation of multi-enterprises processes as companies increasingly shift from traditional “stove-piped” B2B process such as procure-to-pay to more collaborative ones such as VMI. IT providers are responding to these trends by filling gaps in their portfolio of B2B products or services and by forming alliances or consolidating the market to strengthen their position to better serve growing demand.

So,… is all this *good* for you?

That’s where the rubber hits the road, right? For better or worse IT end users are right to be concerned about the potential impact of these commercial activities on products or services they use — and the viability of their IT providers. Over the years we’ve published extensive research to assess the impact of commercial transactions on product / service roadmaps and vendor viability, often for major providers like Oracle / Sun, GXS / Inovis, and IBM / Sterling Commerce, but also for many events involving smaller vendors.

What I’ve learned from covering such events for 10+ years is that quality of execution matters, a lot. A good product roadmap helps all users on old consolidating product or service lines move forward. A bad one turns someone’s IT investment into a legacy. A viable merger or acquisition grows market share and drives revenue growth. A bad one simply doesn’t. It’s kind of that simple, coupled with Devil in the Detail. Which is why we advise our clients to ask for detailed roadmaps as soon as possible — and in some cases even to hold off on significant deals — until the provider offers enough roadmap details to ensure that end users can make informed buying decisions.

Ultimately the covergence of B2B capabilities from point solutions into more holistic solutions will be good for IT end users — this leads to more product / service feature and price bundling, and it also reduces the number of vendors you need to manage. But as business wages its battle in B2B this also means there will  occaisonally be some product and service casualties of war. Though we can’t prevent that, we can help you along the way with timely, informed speculation on the likely long-term impact to B2B product and service roadmaps, and with predictions on the likely long-term impact to vendor viability. We can also offer you advice on how you can best protect and evolve your own B2B investments throughout this volitale period of B2B vendor activity.

- bjl

3 Comments »

Category: Uncategorized     Tags:

Share

Tweet