Internet Professional Svs '99

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This preso is an oldie, but goodie. I compiled some stats on the wild speculation going on in the IT sector involving Internet startups.

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  • These are very gut driven -- versus analytical we don’t wanna -- typically if it is in response to something BDC Bigger market-- more room for mistakes - all make them Music RIAA, MP3 -- evets that create large market share don’t care re: pricing, your bonus recruiting, cntrol, where Snad Hill or 128 is If they come in kjnowing everything -- usually they are wqrong -- high % in terms of change of plan sigifixabnr % startd without a bplan
  • Internet Professional Svs '99

    1. 1. E-Services Providers: Who’s Hot, Hip, Hype, and High Priest? Susan Scrupski, ITSA WebSourcing Conference, Atlanta 12/13/99
    2. 2. Sorry! Under Construction….
    3. 3. About ITSA (IT Services Advisory, LLC) <ul><li>Dedicated to Research/Publishing/Consulting on the IPS Market </li></ul><ul><li>Founded 1999, Susan Scrupski </li></ul><ul><ul><li>Blue Ribbon Advisory Board of Luminaries </li></ul></ul><ul><ul><li>Regular Columnist since 1994. Editor since 1991. </li></ul></ul><ul><li>Research Associates: </li></ul><ul><ul><li>Lisa Maio Ross, formerly IDC </li></ul></ul><ul><ul><li>Tom Rodenhauser, “Inside Consulting” and “The Rodenhauser Report” www.ConsultingInfo.com </li></ul></ul><ul><li>Web address: www.ITServicesAdvisory.com </li></ul><ul><li>Insider News Alerts: www.ITSinsider.com </li></ul>
    4. 4. Study Participants <ul><li>AT Kearney </li></ul><ul><li>Arthur Andersen </li></ul><ul><li>Andersen Consulting </li></ul><ul><li>AnswerThink </li></ul><ul><li>AppNet </li></ul><ul><li>CSC </li></ul><ul><li>Cambridge Technology Partners </li></ul><ul><li>Context Integration </li></ul><ul><li>Deloitte & Touche </li></ul><ul><li>Diamond Technology Partners </li></ul><ul><li>EDS </li></ul><ul><li>Emerald Solutions </li></ul><ul><li>Fort Point </li></ul><ul><li>Giant Step </li></ul><ul><li>IBM Global Services </li></ul><ul><li>iXL </li></ul><ul><li>KPMG </li></ul><ul><li>Keane </li></ul><ul><li>Lante </li></ul><ul><li>Logical Design Soltuions </li></ul><ul><li>Luminant </li></ul><ul><li>McKinsey & Co. </li></ul><ul><li>Mercer Management </li></ul><ul><li>NerveWire </li></ul><ul><li>Organic Online </li></ul><ul><li>PriceWaterhouseCoopers </li></ul><ul><li>Proxicom </li></ul><ul><li>Razorfish </li></ul><ul><li>Sapient </li></ul><ul><li>Scient </li></ul><ul><li>US Interactive </li></ul><ul><li>USWeb/CKS </li></ul><ul><li>Viant </li></ul><ul><li>Zefer </li></ul>
    5. 5. Survey Categories <ul><li>e-Services “One-Stop” Shop : performs all phases of e-Services business from consulting to back end integration (excludes hosting). </li></ul><ul><li>e-Strategy Consultant : advises (exclusively) on e-Services alternatives </li></ul><ul><li>e-Designer : emphasizes web design of e-Business solutions </li></ul><ul><li>e-Integrator : implements e-business solutions including back end integration </li></ul><ul><li>Web Hoster/ASP : hosts e-Business applications/businesses </li></ul>
    6. 6. E-Services providers: Who are These Guys? What’s happening in the Sleepy IT Services/Consulting Marketplace?
    7. 7. a.k.a. <ul><li>I-Builders </li></ul><ul><ul><li>See 11/8/99 issue of Industry Standard magazine </li></ul></ul><ul><li>Systems Innovators </li></ul><ul><ul><li>Scient, adopted by Yankee Group </li></ul></ul><ul><li>Full Service Providers </li></ul><ul><ul><li>Breakaway Solutions </li></ul></ul><ul><li>E-Services/Consultants </li></ul><ul><ul><li>USA Today Top 100 Internet companies </li></ul></ul><ul><li>IPS (Internet Prof. Svcs.) providers </li></ul>
    8. 8. A History Lesson <ul><li>IT Services was once the dull, sleepy sector of the Technology marketplace. </li></ul><ul><ul><li>A “safe haven” for investors </li></ul></ul><ul><ul><li>Strong steady growth, generally free from wild swings in the stock market… ZZZZzzzz! . </li></ul></ul><ul><li>C/S, Y2K, ERP, and Megadeal Outsourcing were catalysts for growth in the 90s. </li></ul><ul><li>Management Consultants got Rich(er) reaping big fees off BPR, TQM, Change Mgmt. </li></ul>
    9. 9. “ Who is Garth Brooks?” <ul><li>FEBRUARY At the Goldman Sachs Technology Conference : the stark contrast between Sapient and CSC . </li></ul><ul><li>MARCH At the Gartner Predicts Conference ; a panel of luminaries including Bert Ellis from iXL , The “Outsourcer .” </li></ul><ul><li>APRIL Dick Brown debut at EDS Securities Analyst Briefing – no comment. </li></ul><ul><li>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…!” </li></ul><ul><li>JUNE At an Outsourcing Conference ; a panel question from the audience: “What Impact Will the Internet have on Our Business?” </li></ul>
    10. 10. 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!!
    11. 11. Growth Comparisons Median Year-Over-Year Quarterly Revenue Growth Source: R.W. Baird, 1999
    12. 12. Livin’ la Vida Loca! Nov. 4, 1999
    13. 13. Pass the Viagra? Nov. 4, 1999
    14. 14. “ CATP Spawns Fine Young Cannibals” ITSInsider.com
    15. 15. Index Comparisons Source: R.W. Baird
    16. 16. Huh? *as of 12/10/99
    17. 17. THIS IS NOT A TEST… IT’S A REAL EMERGENCY! Source:Scient
    18. 18. Un-fair competitive advantage is still legal. Source: Scient
    19. 19. Anyone who stands still in eBusiness eats exhaust. Source: Scient
    20. 20. This Is About… Innovation ! <ul><li>Be the first mover </li></ul><ul><li>Be the smart mover </li></ul><ul><li>Go big or go home </li></ul><ul><li>Own mind share </li></ul><ul><li>Cultivate relationships </li></ul><ul><li>Dominate or die </li></ul><ul><li>Create a New Bottom Line ™ </li></ul><ul><li>Drive market capitalization </li></ul><ul><li>Any-to-Any ™ computing </li></ul>Strategies For Innovating Source: Scient
    21. 21. eSuccess Indicators <ul><li>You want to dominate -- think big or go home </li></ul><ul><ul><li>not niche.com or wedontwannasuck.com </li></ul></ul><ul><li>You are going after a very big market. </li></ul><ul><li>You can get big market share quickly. </li></ul><ul><li>You want to wreak channel violence. </li></ul><ul><li>You can muster the resources to get it done. </li></ul><ul><li>You accept that your idea is incomplete. </li></ul><ul><li>You don’t have a detailed business plan. </li></ul>Source: Scient
    22. 22. Premium Valuation Drivers: <ul><li>Management </li></ul><ul><li>Positioning within the Space </li></ul><ul><li>People– Recruiting and Retention </li></ul><ul><li>Performance Track Record </li></ul><ul><li>Margins </li></ul><ul><li>Top and bottom Line Growth </li></ul><ul><li>Revenue Per Person </li></ul><ul><li>Merits of Growth– Organic or Acquisition </li></ul><ul><li>Visibility of Referencable Clients </li></ul>Source: FBR, 1999 Source: Scient
    23. 23. Pok é mon and IPS vendors Charmander Charmeleon Charizard <ul><li>In order for Pok é mon characters to evolve, they must learn </li></ul><ul><li>special tactics and skills in each stage of evolution </li></ul><ul><li>In short, experience and ability to learn is the gating factor for both. </li></ul> 
    24. 24. Skip IPO upside, trading cards! <ul><li>Can’t invest anyway </li></ul><ul><li>The market obsession is the same </li></ul><ul><li>The “Fad” will last at least 24 months </li></ul><ul><li>More fun; the parties! , the merchandising! </li></ul>Razorfish
    25. 25. 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

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