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SI packages lack customer appeal

by David Longworth
March 17th, 2003

The proposition sounds compelling. Instead of developing web services from scratch, use a ready-made development platform built and hosted by a top systems integrator.

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SI's web services environments look to offer customers a cost-effective route into application development. But why should customers buy into them in the first place?
  • Several SIs have created web services development platforms
  • The hosted platforms are pre-integrated with third-party tools
  • They aim to cut the cost of large-scale projects
  • But customer adoption is low

Glossary terms: SI, development, hosted, lookup tool

SIs including Accenture, Dimension Data and BT all had the same thought last year. They saw it as an opportunity to package their traditional skills in a cost-effective offering, tailored to match their customers' newly constrained budgets.

But the platforms have proven more difficult to create than SIs first imagined — and even harder to sell.

Accenture announced in May 2002 it was piecing together a platform, then dubbed internally Pine Lake, on which customers could base their web services-driven application development. The platform was to include vertical expertise, application development through its Avanade joint venture with Microsoft, and all the software, hosted by the systems integrator so customers could immediately begin developing applications.

The platform was due to be launched in September 2002 and Accenture executives briefed on the possibilities in the intervening months. Come December, the company could only say it was "still on schedule to launch later this month" after beta testing appeared to be taking longer than expected. The platform finally launched in February 2003 but, despite the SI's best efforts, it still could not name any customer references.

Of course, delays in product launches are legendary in the software market but then Accenture is not strictly speaking a software vendor. Developing pre-configured technology platforms is a new departure for SIs, and customers are entitled to ask what those platforms actually set out to provide, and why.

Breaking with tradition
The pre-packaged platforms differ from traditional SI offerings in two principal respects.

The first difference is the pre-configuration. Accenture's offering is based on the way it would develop a service for a client, but whereas in a traditional engagement the SI would meet the client first and then develop the service, its packaged offering pre-empts this step, presenting a ready-made package for which the SI has done all the groundwork in advance. It consists of a component library, a development environment and utilities to certify standards compliance, and incorporates a suite of development tools: Microsoft Visual Studio.NET, Merant's version control and management tools, and Mercury Interactive's testing and performance management.

BT has signed up with a software partner, Flamenco Networks, to provide the core web services management layer of its offering. It emphasizes security, monitoring, fault logging and fault resolution as crucial services that are not found in the bare-bones application layer. Dimension Data, on the other hand, has developed these utility services itself for its pre-configured hardware and software platform. Although the platform will primarily be used by Dimension Data's own in-house teams, it will also sell the individual utilities, and any other components of its offering, separately if required.

The second difference is that the platform is hosted. Hosting allows the SI to guarantee the integrity of the offering without having to go through further implementation and testing at the customer site. A further side-benefit for the SI is that it keeps all of the intellectual property on its own turf.

Naturally, the SIs talk up the customer benefit, estimating that because all the components in their hosted offerings are pre-integrated and pre-tested, customers can save as much as 50 percent on up-front investment. In the case of BT, for example, its charges are £10,000 ($16,000) for set-up and thereafter £20,000 ($32,000) per month.

Michael Condon, an Accenture partner heading up its web services initiative, says: "We can leverage both hardware and software licences, so for people who could never justify buying Mercury's software, for example, we can share the costs." There's a lot to be gained, he adds, by integrating all an enterprise's development efforts around one platform.

In a quandary
What SIs have traditionally offered to customers is skill and expertise in complex application implementation and integration. Web services, however, places them in a quandary, since implementation can be done in much smaller incremental steps, and integration is standards-based and thus not dependent on proprietary knowledge. The hosted platforms are designed to bring the SIs' strengths back to the fore by encouraging customers to leap directly into more complex web services projects, but so far they have resisted the temptation, preferring to experiment on a smaller scale.

A spokeswoman for Dimension Data says: "Customers are definitely interested in understanding what web services are about but not getting into full web services initiatives. Customers are looking to experiment with short-term projects and then identify what to do in the long-term. But they want to test it out first."

Using hosted platforms certainly reduces the overhead of dipping a toe in the water. Once the completed web services have been certified for standards-compliant interoperability, in theory that means the customer can then move on, without fear of getting tied into an unwanted long-term relationship with the SI in question.

"All we are saying here is that when we show we will bring a tool that improves efficiency," says Accenture's Condon. "Once we've tested that and deployed it, we take the tool away. If you need to modify it, you can use the same tool, different tools or you can maintain it yourself. After it's done, there's no way to tell whether it was developed on our own platform or on yours."

In practice, the ability to modify and maintain the code using alternative tools may not be as straightforward as Condon suggests. But that may not be the main reason why customers are holding back.

Some SIs believe that removing the technology barriers to implementing web services is not enough on its own for today's market. "People are not buying into web services. That's only interesting if you are a technologist," says Andy Mulholland, CTO of Cap Gemini Ernst & Young.

The key is to sell improved business processes, he explains: "Where there's a reason to do web services is where you take all of the people, companies and systems that were previously faced with a challenge about cost and take that challenge away."

By offering hosted packages, SIs are attempting to reduce the costs of embarking on large-scale web services projects, but that's a cost challenge of their own industry. To be successful in selling their offerings, they'll have to show how the technology will help solve the challenges their customers face.

More on this topic


Hosting comes naturally to web services
A recurring theme this week ...


Accenture press release
Launches hosted development environment for large-scale web services projects (Feb 25th 2003)

BT press release
Launches 'business class' web services environment (Sep 26th 2002)

Dimension Data press release
Launches turnkey web services development and deployment platform (Sep 24th 2002)


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