zdnet.com
Net Consultants Challenge
IT Giants
By Mel Duvall
March 16, 1999 12:57 PM ET
The systems integration landscape appears
to be in for a major shake-up, as a raft of
Internet consulting firms makes serious
advances into corporate America.
No longer content to build Web storefronts
and corporate intranets, the fleet-footed firms
are bidding on, and winning, contracts that
once were considered the exclusive territory
of the information technology (IT) services
giants.
Last week, Scient, a San Francisco Internet
specialist that bills itself as "The eBusiness
Innovator," upped the ante by announcing it is
forming a business unit to go after the
telecommunications sector. Randall
McComas, vice president of
telecommunications at IBM Global, has been
lured away to head the company's effort.
McComas said now that the world's telcos
have resolved most of their year-2000 (Y2K)
issues, they'll be turning their full attention to
streamlining their operations through Internet
technologies and jumping on e-business
opportunities. Scient (www.scient.com) thinks
it, and not the IT services giants, is better
suited for the task.
"This is not the old classical integration
market anymore," McComas said. "You're
reinventing these companies, their entire
go-to-market strategies, or you're inventing
them from scratch."
Upstart Internet consulting firms in recent
months have sealed wins with a long list of
blue-chip clients and quickly are becoming
the new darlings of Wall Street.
IXL (www.ixl.com), an Atlanta-based Internet
integrator that signed a $50 million, five-year
deal with Delta Airlines in January, has filed
with the U.S. Securities and Exchange
Commission to raise $86 million in an initial
public offering.
Joining iXL on the public offering floor are
Proxicom (www.proxicom.com), a
Virginia-based Internet integrator that hopes
to raise up to $75 million, and Razorfish
(www.razorfish.com), a quirky New
York-based company that is looking to raise
$50 million.
Part of the reason for the investor interest is a
continuing stream of forecasts, which show
the business-to-business electronic
commerce market is set to explode.
The forecasts should benefit all areas of the
IT services industry, including the Big Five
consulting/ accounting firms and the likes of
Andersen Consulting and EDS, not just the
Internet upstarts. But while Internet specialists
such as USWeb/ CKS and CMGI have
experienced spectacular gains, the big IT
firms' shares have been languishing.
Scott Smith, an analyst at Current Analysis
(www.currentanalysis.com), said the giants
haven't exactly been asleep at the wheel, but
may have been too busy with Y2K computer
problems, Euro currency conversions and
enterprise resource planning implementations
to fully combat the new threat. |
