On November 3, 1998, three of the computer industry`s biggest names announced that they would be teaming up to deliver e-business services. EDS, Cisco, and Hewlett-Packard announced an alliance to provide a single source for establishing a Web-based business. The announcement highlights a tack that some e-commerce service providers are taking -- the development of repeatable Internet solutions.
Offering repeatable solutions has the potential for service providers to deliver e-commerce sites to customers fast, with a high degree of consistency and quality. Marketing and delivering these repeatable solutions often require the efforts of multiple parties. EDS will be able to leverage the sales and marketing efforts of computer industry giants Cisco and HP.
On November 3, 1998, EDS, Cisco, and Hewlett-Packard announced an electronic business alliance. The alliance, known as the Interactive Commerce alliance, is led by EDS`s Electronic Business Unit. It is intended to provide a single source for establishing a Web-based business by delivering both business-to-business and business-to-consumer applications.
EDS`s Electronic Business Unit is leveraging the experience it has gained in its Internet-based engagements to deliver five repeatable Web-based commerce solutions. Three of the solutions are industry-specific; the other two cut across all industries. A list of the unit`s solutions follows:
- Industrial products distribution
- Procurement
- Financial
- Sports/entertainment
- The employee store
EDS will be responsible for the delivery of the solution. In developing these Web-based commerce sites, EDS will draw on Cisco`s networking products and HP`s server and security products. Although the engagements are based on repeatable applications, EDS will customize any offering for a client.
EDS will also provide customized Web features such as EDI services, support for audio and video applications, multiple languages, multiple foreign currencies, or back-office integration.
EDS also announced its Electronic Business Competency Center, in which joint testing and integration of e-business service offerings can be conducted. Testing and verification, technology integration, and a demonstration showcase will take place in the Center. Initial Competency Center locations are at EDS headquarters in Plano, Texas, and at the EDS`s European headquarters in Stockley Park in the United Kingdom.
The alliance will leverage all three companies` sales and marketing efforts. While adding another distribution channel for EDS, the alliance will also serve to expand HP`s and Cisco`s service offerings, assisting both companies in breaking away from their traditional IT reputation.
The services are available immediately.
Specific Web-Based Application Commerce Solutions
The following details explain the specific application solutions that this alliance will deliver:
- Industrial Products Distribution (IPD). This application solution is designed to allow customers to review a company`s product pricing and to place an order over a password-protected intranet.
- Procurement. This is an electronic procurement solution designed to enable large companies, school districts, and government agencies to use Web-based catalogs to buy items ranging from office supplies to computer equipment.
- Financial. This solution enables the quick creation of Internet retail banking and bill presentment Web sites. EDS will target retail banking with this service.
- Sports/entertainment. This application solution results in the creation of an electronic storefront environment, which allows organizers of major sporting and entertainment events to sell tickets and promotional items and to provide a source of event, team, and personnel news.
- The employee store. This solution provides a corporate intranet from which employees can purchase discounted products and services ranging from corporate recognition items to steaks and flowers. Employees can also put profiles of themselves in the system to be reminded of a special purchasing occasion, such as an anniversary.
Deploying Repeatable Solutions
EDS says it chose to offer repeatable solutions for Web-based commerce sites because these solutions enable the company to develop commerce sites rapidly and more cheaply than a custom Internet engagement. EDS is also able to leverage the efforts of its development staff because of the reuse of application code.
EDS chose to bring these five solutions to market because it had gained experience in these areas and felt it could fit a market need. In putting together the application solutions, EDS aligned itself with HP, after what it describes as a successful experience working together to develop the World Cup France 1998 Web site. EDS describes HP`s server and security offerings as the main strength HP will bring to the alliance. It says Cisco was chosen to be part of the alliance because it is an important player with networking capability. The alliance among EDS, Cisco, and HP is bound by a formal nonexclusive agreement that spans multiple years.
Despite the alliance, EDS maintains that it will still be agnostic when it comes to equipment choice. It says it will recommend the use of HP and Cisco equipment when it makes sense for the customer.
The Alliance`s Sales and Marketing Efforts
While the vertical solutions will lend themselves to the sale within particular industries (like the sports/entertainment, financial, and IPD solutions), EDS says it will not target any specific industry for its horizontal solutions (i.e. procurement and the employee store). EDS notes that there may be some qualifiers for prospective customers. For example, with its "Company Store" solution, EDS will be targeting customers that already have an intranet. For all solutions, EDS will target companies that are seeking a rapid commerce site deployment.
The solutions will be sold through EDS, Cisco, and HP`s sales force. Sales personnel from all three companies will offer the solutions by going to market through their traditional means. Leads generated by Cisco and HP will be passed back to EDS. EDS will be responsible for ownership of the engagement and for delivery of the solution.
IDC Analysis
EDS`s Interactive Commerce Alliance emphasizes the growing trend of using repeatable solutions to deliver Internet sites. In October, MCI Systemhouse`s Electronic Commerce practice introduced its Internet Procurement Automation (IPA) solution, a managed service for establishing Internet-based electronic purchasing. In the future, the practice is planning to introduce an electronic bill presentment offering that will also be a repeatable solution.
Repeatable solutions were also prominent in IBM`s Global Services division`s most recent e-business service announcement -- in which IBM announced a series of industry-specific strategy workshops and solutions to manage business partner relationships, corporate knowledge management, and information and messaging technologies.
The use of repeatable solutions enables service providers to deliver projects rapidly. This becomes especially important when they are delivering Internet-based projects. Organizations seeking to deploy a Web-based solution are often under the gun to get an Internet project up and running quickly in order to maintain a competitive advantage. Leveraging code that has already been written and using proven methodologies help a service provider deliver the project faster. For example, EDS says it was able to develop the World Cup Store in two months.
The repeatable solutions also enable a service provider to deliver a project with greater consistency and for less expense. By using prewritten code, the service provider is able to leverage the work already performed by its high-priced and often hard-to-find programmers. Ultimately, this drives down the costs compared to the costs of a custom Internet project.
Marketing and delivering these repeatable solutions may require the effort of multiple players. Behind the obvious benefits gained from bringing together the products and services of multiple companies is the potential marketing and sales strength of these alliances. One of the strongest parts of EDS`s announcement is the additional distribution channel it will gain. Through the Interactive Commerce Alliance, EDS has expanded its feet on the street to include the Cisco and HP sales force. EDS is also able to leverage two of the industry`s most prominent IT players` mighty marketing dollars and brand reputations.
For these types of industry alliances, the proof is in the pudding. Both Cisco and HP must manage the potential ramifications of being perceived as too closely aligned with EDS, one of the largest and most dominant IT services players, to the detriment of its other services partners. At the same time, EDS must manage the same issue with regard to its other technology and service partners. The fact that this alliance has been structured around five distinct repeatable solutions will help to focus any cooperative marketing and sales initiatives, but overall execution will require additional coordination. Partners, as well as customers, will be closely monitoring the effectiveness and objectivity of solutions developed under this alliance.
The downside to repeatable solutions is the lack of customization. Companies using Internet-based technologies as a competitive advantage may shy away from solutions that are common to their competitors.
Because customers need to get to market with Internet-based marketing and services as quickly as possible, typically within two to nine months, IDC believes the market will continue to see more service providers introducing repeatable solutions as they seek out ways to deliver faster, cheaper projects and as they seek out ways to leverage their internal resources most effectively.
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