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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: Uncle Frank who started this subject7/22/2002 6:38:32 PM
From: paul_philp  Read Replies (1) of 54805
 
BEA and Siebel.

There was a question regarding the potential disruptive threat that BEA (Web Services) presents to Siebel (client/server applications).

There are two levels of threat: small and immediate, and large and longer term.

The smaller threat comes from the building of CRM-like components into the portal frameworks being used to create newer web-based applications. Instead of presenting the end use with a number of complete applications the portal presents the end user with an integrated view of the components of the application she needs to do her job. This trend weakens the C/S vendors lock on the end user. Since end user switcing costs are part of the competitive advantage of the C/S vendors anything which lowers these costs weakens their position.

However, this is only a minor problem. The big issue is data. The C/S vendors have a lock on their customers because the vendors control the structure of the clients key information. Any time the customers get a little upitty the vendor just needs to change to SQL tables a bit and they settle right back down.

In the Web Services world there will be more value placed on 'analytic data' than simply 'process data'. By this I mean that data from multiple applicatins, different sources and even multiple companies will be combined into higher level information tuned to the end user's specific job. To accomplish this transition, the data exchange formats will need to be expressed in a standard - XML. Over time, more and more investment will be placed into these XML standards and the code for exchaning data. At some point it will be too expensive for companies to change all this data and code to accomodate data structure changes from the C/S vendors. At that point, the companies will begin dictating to the vendors the format they will accept for their data. This will be the death of their architectural control.

I see this as a classic disruption a la Christensen and I don't see any C/S vendor managing the transition. They will fight the transition with all their Gorilla powers and by the time they decide to support the new paradigm it will be too late.

I see this as a very likely outcome (as opposed to inevitable or 50/50). The only issue is when and what the techonology mix is between J2EE and .NET.

Paul
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