European IT buyers want one-stop shop

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.

"The changes are coming more rapidly, one after another," Rambold said. "Big companies are becoming bigger while being challenged to have small, fast companies" inside their corporate walls. "This helps to keep we dinosaurs evergreen."

This story, "European IT buyers want one-stop shop" was originally published by Computerworld.

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