Understanding Perceptions of IT Vendors (Customer Focus)

Publication Date	March 2008
Publisher	Datamonitor
Product Type	Report
Pages	17
ISBN Number	not applicable
Product Code	DAT10756

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Summary

Introduction

Vendors can benefit greatly from understanding prospective customers' evaluation of IT selection criteria and vendor reputation. This brief discusses the assessment of vendor reputation and IT solution selection criteria provided by 800 IT managers interviewed during 2006 as a part of Datamonitor's Technology Trends Service.

Scope

Compares the average rating of nine IT selection criteria across ten vertical markets and five enterprise size bands. Assesses the relative importance of technical and strategic selection criteria. Analyses vendor mindshare in eight principal technology markets. Explains the market dynamics behind the mindshare fragmentation in eight principal technology markets.

Highlights

The average rating of technical and strategic selection criteria is closely matched. A successful vendor offering should combine technical, financial and support features in one attractive package. Although solution preferences do vary between market segments, criteria ratings are broadly similar. A comparative analysis of mindshare fragmentation within a technology market reveals the principal market dynamics within a market. Two principal market fragmentation parameters, monopoly tendency and market fragmentation, can be used to classify market forms into four types, each implying specific market conditions and competitor behaviour. The mindshare fragmentation pattern of most technology markets explored qualifies them as oligopolies, highly consolidated and competitive market forms. Other market forms are discernible as well, namely monopolies and duopolies, particularly prominent in less mature technology markets.

Reasons to Purchase

Refine your market approach by appreciating prospective clients' rating of IT selection criteria in terms of their importance. Improve market positioning through a comparative overview of market mindshare fragmentation across eight principal technology markets. Understand and adapt to the competitive landscape in various technology markets.

Content

CATALYST
SUMMARY
METHODOLOGY
ANALYSIS
- Technical and strategic selection criteria are rated equally, with price and functionality ranked the highest
- Functionality and price are the most important criteria when choosing an IT solutions provider
- Leading edge technology and contract flexibility are secondary selection criteria
- The importance of technology and strategy IT solutions selection criteria is finely balanced
- Leading-edge technology and price criteria decreases with larger enterprises
- Small enterprises are interested in price and leading-edge technologies
- Sector-specific variations do exist, but attitudes to the selection criteria are comparable
- Industry-specific volatility and budget pressures are most likely to impact selection criteria
- Vendor mindshare fragmentation reflects market dynamics within a particular technology market
- A comparative analysis of mindshare fragmentation reveals interesting variations in market forms
- Monopoly and market concentration indices define the mindshare fragmentation and market form matrix
- Oligopoly is the most common mindshare fragmentation form in the eight technology markets
- Mindshare fragmentation forms differ considerably among the technology markets under investigation
- Voice / Data convergence - Ciscopoly?
- Business Intelligence - towards a perfect market
- Mobility - consolidated duopoly
- Enterprise applications - consolidated oligopoly
- Summary: Vendors can fine-tune their market approach through better understanding of market dynamics and selection criteria
APPENDIX
- Further reading
- Ask the analyst
List of Tables
- Table 1: Please rate the importance of the following criteria in choosing an IT solutions provider?
- Table 2: Please rate the importance of the following criteria in choosing an IT solutions provider?
- Table 3: Please rate the importance of the following criteria in choosing an IT solutions provider
- Table 4: Mindshare fragmentation and market form matrix
- Table 5: Monopoly index and concentration ratios for the eight technology areas investigated
- Table 6: Please pick two firms which you believe to be 'leaders' in the field of voice / data convergence
- Table 7: Please pick two firms which you believe to be 'leaders' in the field of business intelligence
- Table 8: Please pick two firms which you believe to be 'leaders' in the field mobility
- Table 9: Please pick two firms which you believe to be 'leaders' in the field of enterprise applications
List of Figures
- Figure 1: Price and specific functionality are rated as critically important selection criteria
- Figure 2: When choosing an IT solution smaller enterprises value leading-edge technology more
- Figure 3: Market volatility accounts for a specific pattern of selection preferences in energy / utilities
- Figure 4: Monopoly index and concentration ratio tend to be inversely proportional
- Figure 5: A long tail of vendors trails behind dominant Cisco
- Figure 6: Business intelligence mindshare is highly fragmented and distributed relatively evenly
- Figure 7: Mobility mindshare fragmentation forms a duopoly of IBM and HP
- Figure 8: Microsoft, Oracle and SAP dominate mindshare in the enterprise application market