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Future Trend - X-Ray into the upcoming
(based on "Fused IT", a CMP Technology Group CMP Media LLC Study presented by Charles Humphrey on XChange Tech Builder 2003. For more information please go to www.CMP.com )

The current IT landscape is divided into two major categories with many sub-categories. There are many firms specialized in only one category, however, in the upcoming years, the SP (Solution Provider) that can maximize IT value and serve the customer the best will be the one that can perform in all areas. Companies that team up with these ESP s (Enterprise Solution Providers) will be able to realize the best return on their investments. It is important to make a distinction between professional ESP consultants and your local computer shops. Unlike your over-night local computer retail shop that competes mostly on price, ESPs spends a large amount of time testing products and has your best interest in mind. ESPs do not sell you what you don't need or can not use. This actually results in lower overall total cost of ownership.

In the past, a business relied on accountants to keep its accounting and taxes in good order while lawyers keep the company out of legal trouble or pursue the company's interest. Why do these professions exist? Simple, taxation and legal system are such that they are too complex and difficult for most of businesses to handle themselves. In today's technology age, ESP has emerged as another important consultant. Just like taxation and legal system, technology is becoming too complex and moving too fast for business to handle. ESPs use their experience to recommend, deploy and support proven technologies so you don't have to experiment with unknown technologies, costing you valuable time & money and impact on your operations. It is also a trend that more businesses think of using a ESP consultant before using any other professional services. Why? In order to be an effective ESP, the consultant must have good understanding of business, technology and financial aspect and a good ESP will empower you to control your operation more effectively make help you make more money. An ESP engages the customer long before the product is introduced to the solution. Under the old Solution Provider model, which focused on product sales that dragged service behind, the predominant services were software maintenance & support, hardware maintenance & support and education & training. But the ESP model has made a 180 degree shift to a services driven sale which drags along products as part of a total solution. Each one of these front-end services, such as consulting, application development and integration, management services, business process outsourcing and transaction management services are all projected to grow by at least $13 billion through 2005. And they're not growing organically. They are growing because that's what customers want. An ESP can integrate many back end systems (i.e. PeopleSoft, SQL, Oracle, SAP, SCADA or manufacturing machines) with front end system (i.e. enterprise web portal, BroadVision) to create a complete user experience. Essentially no islands of information. Power is shifting - ESP is emerging as a brand and manufactures of hardware or software will become sub-brands. ESP holds the role of influencers and specifiers - who drive product and brand decisions for strategic technology deployments, but never take title to product.

This is a look at the future. The future relationship that will emerge between end customers and their third-party solution provider partners. Unlike many of the sea changes in the history of the industry, however, this one will be driven by the imperatives of the customer: his or her requirements to truly leverage the value of their investment in information technology.

We can think of this next inflection point as the Fifth Wave. The first four were driven by technological innvovation. The emergence of the Personal Computer as a productivity tool. The development of networking technology, first at the local and later at the wide area level. Then, the emerge of the Internet as a business productivity platform capable of transforming business. The difference is that these first four waves were top-down developments that were by-products of technical innovation. Fused IT is on the cusp of emerging because of macro economic issues, market dynamics and, ultimately, the imperatives and requirements of the end customers. The common denominators of these inflection points is that each changed the role of the channel in its relationship with customers-the value the channel represented to the customer and the service proposition the channel delivered to the customer. Fused IT will be the most dramatic shift as far as this relationship is concerned.

What are Fused Solutions?
The complete alignment of the customer's business strategy with the current infrastructure and company's technology vision and the seamless merging of internal resources-executive management, line of business managers and IT professionals-with external resources-Solution Providers-to identify, define and implement those goals and objectives.

You have to think of the concept of Fusion on two levels. One is the fusion of the end customer's near-term business goals & objectives and the longer-term business strategy with the existing IT infrastructure. But the second level is the Fusion of third-party Solution Providers into the end customer organization on an outsourced basis in which the customer requirement will be for the Solution Provider to not only understand the intricacies of the infrastructure, which the SP probably had a hand in creating, and the technology vision, which the SP is probably helped define, but to truly understand the business and to bridge the two-business with technology.

The emergence of front end services as the real growth opportunities is a result of customer imperatives, combining with market dynamics to produce Fusion. For example, the economic downturn has resulted in downsizing of IT departments. In fact, the government has reported that of the 2 million jobs lost in the U.S. in the past two years, 500,000 were in IT positions. With this skill set shortage, business managers have had to redeploy their IT staffs, where they exist, to focus on keeping the existing infrastructure up and running and to support business strategies with technology planning. But their most important role is to keep the company running. Therefore, businesses are turning to third-party Solution Providers to help identify their business goals and objectives and to leverage business opportunities and eliminate business challenges with technology solutions. This is Fusion.

Another key customer imperative is speed to market. This is clearly a result of the internet revolution that resulted in all companies worrying about being "Amazoned" in their own competitive set. Regardless of the hype about the dot com implosion, which is no less hyped than the early forecasts for the dot com explosion, the Internet has proven to be a tremendous tool for re-engineering businesses to operate more productively and efficiently. And the Internet also brought entirely next technologies to market that internal IT departments were unfamiliar with. To take advantage of the Internet to achieve their business goals and objectives, end customers had to turn to third-party experts-the Solution Provider community. Why did dot com failed in 2000? It is because all the manufactures thought they can sell products over the Internet without supporting them. Well, by now we all know how that ended. Businesses/consumers no longer want to only buy a product (because of bad product or bad integration experiences), without an ESP, the value of a software or hardware is minimal. But delopyed properly with superivision, training and support from ESP, this same software or hardware can be invalueable to the same business.

One way to illustrate how collaboration is currently working is to look at where the resources are focused. As mentioned, IT's primary role is focused on the existing infrastructure while supporting strategy with planning. Both line of business and executive management, along with IT, is focused on platform discussions because these become the foundation for opportunities to drive business initiatives. Executive management and line of business managers are primarily focused on solutions because these are what deliver those business initiatives. The common denominator across all three levels is the outsourced Solution Provider. He is dealing with the infrastructure on a collaborative basis with IT, is deeply involved in platform decisions, and is working with executive management and line of business managers, along with internal IT, in identifying business challenges and opportunities that can be rectified or leveraged through technology solutions.

Why does collaborative IT currently exist. In surveys of end customers we have found that many of the imperatives discussed early drove this dynamic. The trusted advisor role of Solution Providers as far as technology is concerned, the speed to market imperative, the need to do more with less resources, and, of course, the inherent efficiency of Solution Providers. Interestingly, when we did similar studies in the past, cost efficiency was the number one response of end customers and each time exactly 81% of the customers said it was a major motivation for partnering with Solution Providers. So on a percentage basis, it's not that cost savings are any less important today. It's just that other issues have become that much more important.

So why do we believe that the customer imperatives and market dynamics that we discussed earlier will drive us toward Fused IT? Well, in surveys of end customers, when you ask them what are the value propositions they want Solution Providers to bring to the table, four of the top five responses deal with the trusted advisor role. But the key response that has emerged, and one we've never seen before, is number 4: "They are invaluable in helping us identify new business possibilities." This is the customer telling the market that they want Solution Providers to understand their businesses and longer-term business direction and recommend IT deployments that can help them accomplish their goals.

As we've seen, customer imperatives and requirements are driving something even closer-Fused IT-where the third-party Solution Provider becomes a seamless, integrated extension of the customer organization.

So how is Fused IT going to look from a skill sets perspective? What we know is that the deployment of strategic technologies requires business expertise, technology expertise and financial expertise. So imagine a scenario where Solution Providers are expected to identify the business challenge or opportunity within the customer's organization. The customer then validates the issue and sets the business objectives. The Solution Provider aligns that objectives with a solution and develops the architecture or schematic while also providing the ROI analysis. The client refines the solution and, simultaneously where possible, both the client's IT department and the SP begin evaluating the products and brands and the integration considerations. Out of that comes the short list and the the final technology and brand decisions. The Solution Provider either sources the technologies or recommends the source while the client gets the funding. The SP and and internal IT implement the solution and then maintain the solution, ensure that it's being used to meet the business objectives and, in some cases, actually manages the technology and processes as an outsourced partner.

In Fused IT, the focus extends outward at both ends. To need identification, which requires the indepth knowledge of the client's business goals and objectives and longer-term strategy, through the technology expertise phases, to the post deployment management services. We are already seeing the emergence of Fused IT in how Solution Providers address new technologies that have been marketed to their clients. Vendors want their marketing to drive brand awareness during Stage 4-the final brand decision stage. One would assume that they should really focus on Stages 2 and 3, where the short lists are developed, but that's not how where they see ROI. So they want to be top of mind when brand decision times rolls around. That approach does build brand awareness for technologies, such as web services. What we see Solution Providers doing in increasing numbers, is taking that brand awareness of new technologies back to Stage 1. They are refocusing the customer on the need, business goal and objective. And then they're moving the client back down the deployment stages. Assuming there was a need, your brand may still be top of mind in Stage 4. But it's just as likely that the deployment will have moved into an entirely new direction, or that your standalone brand has become transparent to the client in the total multi-vendor solution.

In fact, in the Fused IT world, brands may become even more transparent to the end customer. Years ago, the brand was the product. Indeed, we're an industry that was defined by a single brand-IBM PC compatible. Today, the Solution is the brand. Afterall, what's the brand in CRM, ERP, Storage Resource Management? There are any number of brands involved, but to the customer the solution is the brand. In the Fused IT future, the role of the Solution Provider will become so integrated into the organization, that the Solution Provider will play the reassuring role that "no one ever got fired for buying IBM" once played. Standalone brands will still be important. They will be especially important to Solution Providers who will be making the decisions on what building blocks are to be integrated into the solution because the client will rely on the technology and brand recommendations of his Fused partner-the Solution Provider. That's the partner that knows and understands his business and knows and understands his technology vision. Sound far-fetched? Consider this. How many of you have ever worked for a company where your paycheck arrived with an ADP logo on it? That was your payroll department. But it was also a separate company whose function and expertise had been fused into your organization. Or have you ever worked for a small business where the accountant was the trusted advisor on issues far beyond taxes? Issues such as business strategy, acquisitions, human resources and even technology decisions. Those are the models for the roles Solution Providers will play in the Fused IT future.

Finally, what do we know about computer life cycle and you as our customer?

International Technology

International
Technology