Kristin Moyer

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Kristin R. Moyer
Research Director
11 years at Gartner
18 years IT industry

Kristin Moyer is a research director in Industry Advisory Services/Banking and Investment Services. She has more than 17 years of experience across the global high-technology industry in a variety of roles. Ms. Moyer's research coverage includes card… Read Full Bio

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“Deer in the Headlight” Approach Will Not Work

by Kristin Moyer  |  October 14, 2008  |  Comments Off

David Furlonger here from the Gartner Symposium in Orlando, Florida. I am increasingly concerned about the mindset of vendors in the current financial services crisis. It seems to me from multiple interactions that many vendors still have a fairly naive view as to the ramifications for their business. While several tell me they have cancelled travel for the rest of this year and are watching the markets for signs of impact on their business, there does not seem to be much focus on 6-12 month strategic planning.  Although many recognize they may suffer hits to revenue – indeed many have told me of contract cancels – they seem to be acting like a deer in the headlights when it comes to planning for tactical and strategic responses to the situation.

It seems imperative that vendors plan for a number of potential outcomes:

  • Significant pressure on pricing (this was reinforced by bank CIOs at a recent workshop).
  • Significant pressure on maintenance contracts – vendors should expect to be asked to provide relief to regular maintenance terms, even for the next year. They need to plan for the impact to cash flow.
  • Significant reengineering of their business models with respect to standard licensing contracts and press to move to SaaS as well as shared risk/reward models.
  • Significant pressure to put skin in the game by sharing in the cost of fulfilling existing contracts.
  • Significant pressure to manage bank relationships – while the short term environment may turn extremely ugly for vendors and they could be caught in a centralized pricing/procurement squeeze, their long-term survival depends on being flexible enough to work with their clients regardless of lack of immediate financial reward.
  • Significant pressure on their need to provide transparency into product margins, domain expertise, pricing, product roadmaps.
  • Significant pressure to execute flawlessly – the merest hick-up at this moment will kill a client relationship.

These are going to be challenging times for vendors.  Bottom line is that most vendors will have less than 3 months to figure this out.

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