European IT buyers want one-stop shop

By Jeanette Borzo, Computerworld |  Business

PARIS -- Corporate buyers in Europe increasingly want one vendor that can
procure all of their company's necessary computer products and services, which is part
of what is spurring merger mania among IT companies today.

That was one of the conclusions at a panel discussion of CEOs and technical officers
at Dataquest's Predicts '99 conference here this morning.

"If we want to sell our services, we have to compete with a complete solution," said
Jean-Paul Figer, chief technology officer at France's Cap Gemini Group, an information
technology services and consulting firm.

Today, customers demand that you build, maintain, outsource, finance and share risk
on IT projects, said Thomas Rambold, CTO for the information and communications
networks group at Germany's Siemens AG.

In order to offer products or services that they don't have in their arsenal,
vendors such as Automatic Data Processing Inc. (ADP) seek out partnerships through
which the vendors can offer a technology they didn't develop, the panel noted. "The
environment will be more and more around partnerships," said Philippe Gluntz, president
and CEO of ADP Europe.

"The customer is demanding this change," agreed Gary Donahee, president for Nortel
Networks' carrier solutions in Europe. "Can you invent it? Buy it? Partner it?" Those
are three ways vendors such as Nortel are putting together complete product and service
offerings for customers, he explained.

One advantage to acquiring a company -- rather than partnering to use its
technology -- is that the infusion of start-up blood into a large company can help keep
market giants agile, the panel suggested.

"Many breakthrough technologies come from start-up companies," Rambold said, adding
that the challenge is to "grab and pick and choose the best of them."

At the same time, all the acquisition and merger activity poses a basic challenge of
the most efficient way to offer products from within such a large organization. In such
cases, the challenge for vendors is more organizational than technical, according to
one panel member.

In addition to being organized well, successful partnerships and mergers between
vendors require "understanding different cultures and people," Rambold said. "And not
just cultures from the East and West Coasts of the U.S. Understanding culture becomes
more and more important. You need to leave them in their entrepreneurial space but get
the results you need from them."

If you've already found that the rate of mergers between IT products and service
providers is moving too rapidly to track, prepare yourself for more of the same, the
panel advised.

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