Enterprise Software Vendors and Integrators Brace for New Competitive Landscape

ITSMA study shows full-suite providers leading in awareness; niche vendors and integrators winning positioning wars

LEXINGTON, Massachusetts—July 19, 2005—Recent research from ITSMA reveals that buyers of enterprise software applications and services are more aware of, more familiar with, and more likely to call a full-suite software vendor like SAP or Oracle than a smaller niche vendor or a third-party integrator such as Accenture or Capgemini. However, the report also indicates that third-party integrators and smaller, more specialized software vendors are making strong moves to position themselves head-to-head with software industry giants, particularly in the Enterprise Resource Planning (ERP), Supply Chain Management (SCM), and Business Intelligence/Analytics (BIA) markets.

In fact, ITSMA's new study, Enhancing Customer Value from Enterprise Software Applications and Services, shows that 40% of the 501 U.S.-based decision makers surveyed prefer to work with smaller, specialist vendors rather than full-suite providers. It also shows that, when implementing the software, more customers rely on a third-party consultant or integrator than a software company. Both findings can be attributed to the strong market positions many specialist firms and integrators have carved out for themselves, along with the positive qualities customers associate with them. The data also signifies that buyers are doing their homework and not simply selecting the company with which they're most familiar.

"Although the large software companies own more mindshare, customers look very favorably on the smaller niche vendors and third-party integrators, and many buyers prefer to work with them, too," says Lori Weiner, study author and senior director, ITSMA. "It goes to show that achieving favorability with a small but targeted market is becoming more and more essential. Today, customized marketing messages, relevant value propositions, and, of course, a seamless customer experience are trumping mass advertising."

According to the study, there is a real opportunity for companies to gain a competitive edge in the enterprise software market by better addressing customer priorities such as:

• Responding to customer needs
• Enabling regulatory compliance
• Mitigating risk

Based on interviews with 501 U.S.-based IT and business executives involved in the purchase of software applications and solutions, Enabling Customer Value from Enterprise Software Applications and Services explores the customer decision process and assesses the brand awareness and market positioning of the major software applications services providers.

Specifically, the study:

• Benchmarks the brand equity of full-suite application providers, integrators, and niche application providers
• Explores the customer decision process for buying enterprise software applications overall and in each of the following categories:
          - Enterprise resource planning (ERP)
          - Human capital management (HCM)
          - Customer relationship management (CRM)
          - Supply chain management (SCM)
          - Business intelligence/analytics (BIA)

The following nineteen software and services providers are evaluated in the report: Accenture, Avaya, BearingPoint, Capgemini, Cognos, Hyperion, i2, IBM, Intentia, Kronos, Lawson, Manugistics, Microsoft, Oracle, PeopleSoft, SAP, Siebel, and Workscape.

For more information about this report, visit http://www.itsma.com/research/abstracts/BSS001.htm

About ITSMA
ITSMA specializes in helping companies market and sell services and solutions more effectively. As a membership organization, we work with the world's leading technology, communications, and professional services providers to generate increased demand, strengthen customer relationships, and improve brand differentiation. ITSMA members include business leaders such as Accenture, BT, Cisco, Hewlett-Packard, IBM, Microsoft, SAP, and Tata Consultancy Services, among others. Our comprehensive research, consulting, and training on topics including ITSMA Account-Based Marketing ^SM, Brand Positioning, and Solutions Development provide the insight and experience companies need to improve business results. ITSMA is based near Boston, and has offices in London and Tokyo. Learn more at www.itsma.com.