When times get tough, you'd rather be surrounded by a handful of close allies than an army of fickle soldiers. This is true whether you're talking about a street fight or running a business. (For those at the top of the corporate food chain, running a business today and a street fight may seem synonymous.) In any event, current economic conditions are forcing a consolidation of power within companies and a consolidation in the number of vendors with which companies want to deal. Vendors that offer point solutions are at a distinct disadvantage when this takes place.
Recognizing this corporate climate change, it's easy to understand why vendors that offer point solutions would want to suddenly be aligned with much larger total-solution-provider vendors. That's why the latest news about Legato Systems and Compaq makes so much sense, and why you will have to constantly monitor the newswire for more alliances/partnerships that will affect how you do business.
Big Partners Bring Big Credibility
The news on Compaq and Legato revolves around the teaming of Compaq Global Services with Legato in implementing complete backup solutions. This means that Compaq customers will no longer need in-house expertise to configure, install, and test the Legato NetWorker software. Instead, Compaq, with support from Legato, will provide complete implementation services. This is good news for customers, but better news for Legato. Not only does this mean service revenue for Legato, which is a traditional software developer, but it also makes this point solution provider part of the total solution sale.
"When the new executive team came on board at Legato a year ago, we understood that our credibility in the marketplace - with customers and Wall Street - was not good. That's why building relationships with bigger OEM players were so critical. These companies have the credibility to get in the front door, and we become a part of that solution sale," explained Greg Clock, vice president of Consulting Services for Legato, in a recent conversation. And, you don't have to be clairvoyant to see where Legato is heading in the future. End users will probably see Legato trying to form service partnerships with players like EMC, Sun Microsystems, and IBM Global Services in much the same way it is working with Compaq.
The Many Faces Of One Vendor
There is little doubt that your choice of vendors is being narrowed by internal directives that stem from easier procurement processes or vendor accountability issues. But, the number of software and hardware products that you implement may remain the same. Compaq may be the one storage vendor your company chooses to work with, for instance, but you're getting Compaq and Legato tied together by a ribbon of services.
You can count on this trend continuing as long as the economy remains in a holding pattern. Those point solutions that seemed so attractive 18 months ago are still attractive. But the cost of those point solutions, which was once considered small enough to escape the attention of the CFO, is now an issue to be examined. As a result, you're sure to see more partnerships and more services supplied by a smaller number of vendors. If you're not used to working with the big integration players, then you're about to get a crash course.