E-Services Providers: Who’s Hot, Hip, Hype, and High Priest? Susan Scrupski, ITSA WebSourcing Conference, Atlanta 12/13/99

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About ITSA (IT Services Advisory, LLC) Dedicated to Research/Publishing/Consulting on the IPS Market Founded 1999, Susan Scrupski Blue Ribbon Advisory Board of Luminaries Regular Columnist since 1994. Editor since 1991. Research Associates: Lisa Maio Ross, formerly IDC Tom Rodenhauser, “Inside Consulting” and “The Rodenhauser Report” www.ConsultingInfo.com Web address: www.ITServicesAdvisory.com Insider News Alerts: www.ITSinsider.com

Dedicated to Research/Publishing/Consulting on the IPS Market

Founded 1999, Susan Scrupski

Blue Ribbon Advisory Board of Luminaries

Regular Columnist since 1994. Editor since 1991.

Research Associates:

Lisa Maio Ross, formerly IDC

Tom Rodenhauser, “Inside Consulting” and “The Rodenhauser Report” www.ConsultingInfo.com

Web address: www.ITServicesAdvisory.com

Insider News Alerts: www.ITSinsider.com

Study Participants AT Kearney Arthur Andersen Andersen Consulting AnswerThink AppNet CSC Cambridge Technology Partners Context Integration Deloitte & Touche Diamond Technology Partners EDS Emerald Solutions Fort Point Giant Step IBM Global Services iXL KPMG Keane Lante Logical Design Soltuions Luminant McKinsey & Co. Mercer Management NerveWire Organic Online PriceWaterhouseCoopers Proxicom Razorfish Sapient Scient US Interactive USWeb/CKS Viant Zefer

AT Kearney

Arthur Andersen

Andersen Consulting

AnswerThink

AppNet

CSC

Cambridge Technology Partners

Context Integration

Deloitte & Touche

Diamond Technology Partners

EDS

Emerald Solutions

Fort Point

Giant Step

IBM Global Services

iXL

KPMG

Keane

Lante

Logical Design Soltuions

Luminant

McKinsey & Co.

Mercer Management

NerveWire

Organic Online

PriceWaterhouseCoopers

Proxicom

Razorfish

Sapient

Scient

US Interactive

USWeb/CKS

Viant

Zefer

Survey Categories e-Services “One-Stop” Shop : performs all phases of e-Services business from consulting to back end integration (excludes hosting). e-Strategy Consultant : advises (exclusively) on e-Services alternatives e-Designer : emphasizes web design of e-Business solutions e-Integrator : implements e-business solutions including back end integration Web Hoster/ASP : hosts e-Business applications/businesses

e-Services “One-Stop” Shop : performs all phases of e-Services business from consulting to back end integration (excludes hosting).

e-Strategy Consultant : advises (exclusively) on e-Services alternatives

e-Designer : emphasizes web design of e-Business solutions

e-Integrator : implements e-business solutions including back end integration

Web Hoster/ASP : hosts e-Business applications/businesses

E-Services providers: Who are These Guys? What’s happening in the Sleepy IT Services/Consulting Marketplace?

a.k.a. I-Builders See 11/8/99 issue of Industry Standard magazine Systems Innovators Scient, adopted by Yankee Group Full Service Providers Breakaway Solutions E-Services/Consultants USA Today Top 100 Internet companies IPS (Internet Prof. Svcs.) providers

I-Builders

See 11/8/99 issue of Industry Standard magazine

Systems Innovators

Scient, adopted by Yankee Group

Full Service Providers

Breakaway Solutions

E-Services/Consultants

USA Today Top 100 Internet companies

IPS (Internet Prof. Svcs.) providers

A History Lesson IT Services was once the dull, sleepy sector of the Technology marketplace. A “safe haven” for investors Strong steady growth, generally free from wild swings in the stock market… ZZZZzzzz! . C/S, Y2K, ERP, and Megadeal Outsourcing were catalysts for growth in the 90s. Management Consultants got Rich(er) reaping big fees off BPR, TQM, Change Mgmt.

IT Services was once the dull, sleepy sector of the Technology marketplace.

A “safe haven” for investors

Strong steady growth, generally free from wild swings in the stock market… ZZZZzzzz! .

C/S, Y2K, ERP, and Megadeal Outsourcing were catalysts for growth in the 90s.

Management Consultants got Rich(er) reaping big fees off BPR, TQM, Change Mgmt.

“ Who is Garth Brooks?” FEBRUARY At the Goldman Sachs Technology Conference : the stark contrast between Sapient and CSC . MARCH At the Gartner Predicts Conference ; a panel of luminaries including Bert Ellis from iXL , The “Outsourcer .” APRIL Dick Brown debut at EDS Securities Analyst Briefing – no comment. MAY Karl Kierstead, Lehman Bros ., ITS analyst publishes on Razorfish. RAZORFISH! “That’s not an IT Services firm; that’s a grunge band from Seattle…!” JUNE At an Outsourcing Conference ; a panel question from the audience: “What Impact Will the Internet have on Our Business?”

FEBRUARY At the Goldman Sachs Technology Conference : the stark contrast between Sapient and CSC .

MARCH At the Gartner Predicts Conference ; a panel of luminaries including Bert Ellis from iXL , The “Outsourcer .”

APRIL Dick Brown debut at EDS Securities Analyst Briefing – no comment.

MAY Karl Kierstead, Lehman Bros ., ITS analyst publishes on Razorfish. RAZORFISH! “That’s not an IT Services firm; that’s a grunge band from Seattle…!”

JUNE At an Outsourcing Conference ; a panel question from the audience: “What Impact Will the Internet have on Our Business?”

It’s the INTERNET, stupid! The Haves The Have-Nots (Market Cap$) M Caution: P E R C E P T I O N Rules!!

Growth Comparisons Median Year-Over-Year Quarterly Revenue Growth Source: R.W. Baird, 1999

Livin’ la Vida Loca! Nov. 4, 1999

Pass the Viagra? Nov. 4, 1999

“ CATP Spawns Fine Young Cannibals” ITSInsider.com

Index Comparisons Source: R.W. Baird

Huh? *as of 12/10/99

THIS IS NOT A TEST… IT’S A REAL EMERGENCY! Source:Scient

Un-fair competitive advantage is still legal. Source: Scient

Anyone who stands still in eBusiness eats exhaust. Source: Scient

This Is About… Innovation ! Be the first mover Be the smart mover Go big or go home Own mind share Cultivate relationships Dominate or die Create a New Bottom Line ™ Drive market capitalization Any-to-Any ™ computing Strategies For Innovating Source: Scient

Be the first mover

Be the smart mover

Go big or go home

Own mind share

Cultivate relationships

Dominate or die

Create a New Bottom Line ™

Drive market capitalization

Any-to-Any ™ computing

eSuccess Indicators You want to dominate -- think big or go home not niche.com or wedontwannasuck.com You are going after a very big market. You can get big market share quickly. You want to wreak channel violence. You can muster the resources to get it done. You accept that your idea is incomplete. You don’t have a detailed business plan. Source: Scient

You want to dominate -- think big or go home

not niche.com or wedontwannasuck.com

You are going after a very big market.

You can get big market share quickly.

You want to wreak channel violence.

You can muster the resources to get it done.

You accept that your idea is incomplete.

You don’t have a detailed business plan.

Premium Valuation Drivers: Management Positioning within the Space People– Recruiting and Retention Performance Track Record Margins Top and bottom Line Growth Revenue Per Person Merits of Growth– Organic or Acquisition Visibility of Referencable Clients Source: FBR, 1999 Source: Scient

Management

Positioning within the Space

People– Recruiting and Retention

Performance Track Record

Margins

Top and bottom Line Growth

Revenue Per Person

Merits of Growth– Organic or Acquisition

Visibility of Referencable Clients

Pok é mon and IPS vendors Charmander Charmeleon Charizard In order for Pok é mon characters to evolve, they must learn special tactics and skills in each stage of evolution In short, experience and ability to learn is the gating factor for both.  

In order for Pok é mon characters to evolve, they must learn

special tactics and skills in each stage of evolution

In short, experience and ability to learn is the gating factor for both.

Skip IPO upside, trading cards! Can’t invest anyway The market obsession is the same The “Fad” will last at least 24 months More fun; the parties! , the merchandising! Razorfish

Can’t invest anyway

The market obsession is the same

The “Fad” will last at least 24 months

More fun; the parties! , the merchandising!

A word of caution… From ServiceSmarts column 5/1/98: “ The ambition worm will turn, and turn badly, if not kept in check. Ambition rewarded time after time breeds arrogance. And arrogance is the unruly adolescent of greed. Arrogance can hurt a company, but greed will kill it every time.” Susan Scrupski