Not yet.
Ariba or Commerce One?
August is still young, and I reserve the right to pen another Break Down on one of these top-tier marketplace builders -- Ariba or Commerce One (Nasdaq: CMRC) -- before it's all over, but, at the moment, I cannot do so in good conscience. The more I read about Commerce One, the less certain I am that Ariba is the clear "top dog."
In the last two months, Commerce One has announced three compelling alliances. Most recently, it paired up with one-to-one Web marketing leader Broadvision (Nasdaq: BVSN), extending its software reach all the way from suppliers to consumers. A deal with German-based application software leader SAP AG (NYSE: SAP) adds strength to Commerce One's enterprise planning and supply chain offerings. The SAP deal also adds marketing muscle, which is further toned by a partnership with General Electric (NYSE: GE), nothing less than the biggest company around.
Ariba certainly has the early momentum (a characteristic of successful Rule Breakers), but Commerce One may have the truly Rule Breaking business model by virtue of its grand plan to join the world's online marketplaces in its Global Trading Web. Before I can nominate one as top dog, I have to develop a strong opinion on which business model will eventually dominate. I'm not there yet.
A convergence of Rule Breaking forces
If not Ariba or Commerce One, who am I going to nominate for our Breaker Break Down? I'll answer that question tomorrow night, but by way of introduction, I'm going to leave eight strong hints. I see these as the eight most disruptive -- but inevitable -- forces at work today in the world of business computing. In my opinion, one company sits at the crossroads of all eight.
Force 1: Business-to-business Internet commerce is here to stay
As much as we all have grown tired of the buzzwords, it's clear that the trend toward the business Internet is accelerating, not going away. Before too long, anybody with any interest in selling anything, from Wal-Mart (NYSE: WMT) to the metal-working shop by the railroad tracks, will have a Web presence. Advanced companies will also do their buying on the 'Net.
Force 2: The demand for software integration is exploding
Although the Extensible Markup Language (XML) is billed as the solution for everything, the sheer volume of connections that will be made -- both within and between companies -- will produce gobs of work for integrators. Early disappointing reports from 'Net market makers clearly highlight, as key challenges, the nuts and bolts of tying sell-side into supply-chain planning, buy-side into internal procurement systems, and every side into marketplaces. Without these integration efforts, a lot of the higher-level services that everyone is touting -- like streamlined payment, shipping and production planning -- won't happen.
Force 3: Severe shortage of skilled software professionals
If you live in any major U.S. city, you've seen the sidewalk newspapers and Sunday employment sections stuffed with technology employment rags. And I have news for you: It's getting worse. Companies are forced to bust budgets or give away large chunks of equity to keep their best technical talent. A stable software workforce and long-term departmental continuity are just a dream in all but the best businesses.
Force 4: The office PC will soon be dead
I know. You've grown attached to the little feller. But with all the work to do in the corporate data center, it just doesn't make much sense anymore to support PCs on the office desktop. For a fraction of the cost and support headaches, businesses can simply buy "dumb" machines outfitted with sophisticated, customizable Web browsers. Software support and data storage will move back to the computer center -- back to the future.
Force 5: Broadband
The arrival of mega googa-bit 'Net connections will, of course, open the world of business computing to entirely new opportunities, many as yet unimagined. Primarily, though, they will simply speed the demise of the personal computer. Processing power will un-distribute itself as it heads back to intelligent central file servers.
Force 6: Outsourced Web hosting and data storage
It's no accident that "scaleable" has become overused business-speak. If I were to Web-sell my wife's hand-crafted hats for toddlers, I would be smart to prepare for the awesome initial buzz. This means I need plenty of backup server power ready on a moment's notice. Does it make sense for me actually to buy all these servers? Heavens no. My project could be a dud, and servers don' t make good coffee tables.
The same dynamic applies to data storage. Sure, nobody wants to store their data "out there" on the Web. Nobody wanted to store their data on their office network either, but it is slowly coming to pass. Web data storage is already a booming business and it will only get bigger. It even wants to store your desktop. Make no mistake. Take a deep breath. It's coming.
Force 7: Nimble business models are not hype
See Cisco (Nasdaq: CSCO). See Lucent (NYSE: LU). See Cisco nimbly hop from one networking hot-spot to the next, with plenty of investment cash at the ready. See Lucent move slowly and get caught with a warehouse full of old-technology switches and a market hungry for new-technology switches but no parts with which to make them.
What's the difference? One word: Focus. Cisco doesn't pay much for research. They don't actually make much. They are as untraditional as an equipment "manufacturer" can be, the "new" in the new economy. The focus is customer relationships, cutting-edge knowledge, and the brand. Everything else is out-sourced.
Think it ends at Cisco? Think again. Nortel Networks (NYSE: NT) just outsourced its computer center. If Nortel doesn't need a data center, does Procter & Gamble (NYSE: PG) really need one? Is the world of business finally ready to abandon the endless, numbing distraction of sweeping technological changes in the data center? I think so.
Force 8: Increased collaboration among businesses
The Internet is leading to a flurry of company alliances, opening up even traditionally anti-social, old-line businesses. To achieve the coveted build-to-order manufacturing dream, companies will have to learn to share. It will start slowly and cautiously. Inevitably, though, companies will begin to share production and sales data across business commerce networks.
Where to from here?
By now, I hope you're mumbling, "Dude, what a convergence of Rule Breaking business forces!" To which I reply, "Indeed." At the point of convergence, where all these forces meet, lies our next Rule Breaker candidate. Anybody want to guess? If so, post it on the Rule Breaker Companies discussion board. Tune in tomorrow as I break this company down in Rule Breaker style.
Until then,
Buster
Related Links:
