Summary
While core infrastructure, telecom, and enterprise system maintenance revenues have been relatively stable even in this market, discretionary tech spending is challenged.
However, tech buying is strong with a few interesting technology solutions that can provide tangible short term benefits.
Analysis
VMWare is a great example of technology spend with great short and long term benefits. It continues to be strong because it is easily justifiable on many levels, even at its premium price point.
SuccessFactors and other niche solutions however are doing well for some different, more subtle reasons. In the SuccessFactors case, companies are minimizing salaries and bonuses, yet need to keep and develop key employees. Many firms are not functionally strong in this area, and need significant help in the difficult task of appraising and communicating employee strengths and weaknesses. SuccessFactors and some of their competitors like Salary.com, have built solutions encompassing both software and content to SIGNIFICANTLY improve and facilitate this process for organizations.
Sold as a Software as a Service (SaaS) model, minimizes the up front capital requirement, and implementation time-frame. Making this extremely attractive compared to a traditional large HR-ERP project.
Finding these niche solutions whether in HR management, Data privacy, or Customer service delivery in this economy is possible, if the solution can provide ROI or Value in short time-frames with reasonable capital costs.
Howard Bruck consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
