Because of my involvement with a hot startup software company, I've been doing a lot of research/reading on what Business 2.0 is calling the "Next Net." This raging interest in the the web (again) and new digital platforms is serving up new, explosive opportunities for all firms in the IT Services sector.
"We are in the early stages of what might be better thought of as the Next Net. The Next Net will encompass all digital devices, from PC to cell phone to television. Its defining characteristics include the ability to interact instantaneously with any of the more than 1 billion Web users across the globe — not by, say, instant messaging, but by evolving instant-voice-messaging and instant-video-messaging apps that will make today's e-mail and IM seem crude.
The Next Net is deeply collaborative: People from across the planet can work together on the same task, and products or tools can be rapidly tweaked and improved by the collective wisdom of the entire online world." Business 2.0
Therefore, in the process of refining my focus, I've decided to focus exclusively on this new area of "digital innovation" in the IT Services marketplace. The interactive agency sector will certainly be covered within this spectrum, but I'm expanding my coverage on the blog and for my business to include all client engagements and project work that fits within these parameters.
I finished the GITS story on the econsulting/interactive agency sector. I didn't have enough length to do the story I researched, so pieces of it are going to show up here. A big help in framing the story was Harley Manning, a longtime Forrester Research analyst. Manning got cut from the final edit on the piece, which was unfortunate. There aren't too many analysts covering the sector, or who've been around long enough to put some perspective on what's happened since the dotcom runup.
The big surprise in the reporting was that Advertising Age had named Sapient #2 Interactive Agency in this year's annual ranking of the top 50 Interactive Agencies. The report was published in the April-May time frame and rankled a few competitors that I talked to. Almost unanimously the CEOs and high level execs I spoke with discounted that Sapient was in the sector at all. Only one competitor that had fairly personal knowledge of the company's strategy in interactive, disagreed. Here are some sample remarks:
"No way is Sapient in our space… these guys only make things more interesting for us." CEO, large Interactive Agency
"Sapient is a solid firm, no question… really more of a mini-Accenture than anything else. Great for jobs in the $500k-$1M range, and an attractive alternative to hiring the big, big guys. But an interactive shop? Nah." CEO, small Interactive Agency
However, rounding out the perspective was Alan Osetek, VP Isobar US, who lobbed in this commentary while traveling in South Africa:
"Sapient is an interactive powerhouse to be reckoned with. They were a systems integrator, offshoring house up until about a year, year and a half ago. They've taken a turn to go after companies like Digitas and Isobar and build up their digital marketing capability. They've got about 1000 people in the US [doing this] and about 2000 in India now, a large, significant operation. They're a well-deserved #2."
Now. I called Ad Age to pry into how they arrived at Sapient's number and what they were counting for "Interactive Revenue." I spoke to Craig Endicott at Ad Age who told me the publication sends out a questionnaire and the companies submit their numbers. So, in essence, they accept what the companies submit to them. He told me, however, that Sapient did not respond last year at all to the survey. In the Agency Profiles Supplement, there is more detail on how they arrived at Sapient's number ($176 million). And via Sapient, interactive revenue is reportedly "marketing-related web development, including using the Internet as a medium" according to Ad Age.
So, there you have it. Undoubtedly this arena is where Sapient is interested in moving, but did Sapient deserve the #2 ranking? That is the question.
When my oldest daughter was very young, she used to say to me, "Mom! You can't make up any of your minds!" Of course, that's adorable, but I think of that every now and then when I'm having trouble deciding which course to take on an important decision. The major decision of where to establish myself in the market has been a difficult journey. From my earliest post on this blog (January?), I've been touring around the business, catching up with old friends, meeting new personalities, reading everything that seemed noteworthy. and trying to figure out what the meaningful trends are.
I'm happy to report I'm narrowing down the choices. I'm definitely going to start tracking the web consultancy/interactive agency sector. This is the sector I was tracking before– in 1999-2000. There are obviously new firms in this space, but the entire sector is growing and moving in a direction I want to go. In addition, there are firms who've survived from the early days, well one– Sapient, who has a heritage as a systems integrator. The firms who are building brands online and through all digital meda include companies like aQuantive which owns the category leader Avenue A|Razorfish (remember that name?) and Digitas.
As you're reading this, I want you to think about the answer to this question: When is the last time you watched television? Not HBO, not a pay-per-view movie or something you recorded on your DVR, but a T.V. show? Today's equivalent of Laverne & Shirley? Does it seem like sometime in the 80s? For a lot of us, that's a reality. Chief Marketing Officers of global brands are realizing that spending all their ad budgets on broadcast (t.v.) and print (magazines/newspapers) is old school. (Read how advertising is under crisis.) Billions of dollars, yes billions of dollars, are going to be surging into the digital channel over the next few years as advertisers look to reach consumers where they are– on their laptops, their BlackBerries, their PSPs, their iPods. This spike will flow to the digital agencies. They may party like it's 1999 all over again for a little while, but soon enough, they're going to have to start building capability as their global customers pull them deeper into transaction-oriented e-commerce.
I was talking last week to VP Bill Kanarick who's over in Sapient's London office. He said, "Any one who truly understands these markets would probably concur that delivery of technology capability through the lens of being an interactive agency is going to be increasing important. I think companies that are not able to do that and that exist squarely in the interactive agency space are going to find themselves downstream because clients are going to be asking for more of that and the inability to deliver that is going to hurt them."
So there you have it. Marketing and Technology. And a new generation of users who demand excellence from both. Awesome.
Yep. Sexual Harrassment. Mother's Day special. Read the Globe for the scoop. Incidentally, there were some unsavory comments on the Yahoo Financial Bulletin Board reporting eye witness accounts of Brian Keane's behavior at a recent company event. Regardless, the Keane board elected to remove him after considering all the evidence and allegations. For women everywhere who have been victims of real sexual harrassment, I hope this is a victory.
For the record: I was sexually harassed as a young woman in my early career at EDS. As a young professional woman, not wanting to jeopardize my future, I only talked about it to my peers. Enough women had a problem with this particular manager, and to EDS' management's credit, the manager was fired within the year. And this was in the 80s before litigation was so crippling….
I've read that the problem with blogs is they're hard to maintain unless you're a hardcore blogger. I've been busy these past few weeks, researching a story I'm writing on the Interactive Agency/Web Integrator space. But the big news today is that Brian Keane suddenly resigned as CEO of Keane today amid allegations of "personal misconduct" that the board must have found somewhat serious. You can read the story at today's Boston Globe. I didn't have a lot of time to chase this one down, but the analysts and friends I have in New England mostly speculated it must be sexual harassment. I'm sure the story will come out in the next few days. Keane's a conservative company. C'est dommage. I don't know the Keane brothers. I remember John Keane, the founder, from ITAA. Nice guy. Sheesh– kids.
There's this old yarn about how a bratty kid goes to school one day and comes home to find his family has moved. That's how I felt when I roamed about at HRO World. Although it was an outsourcing conference, it could have been "Automotive World" or "Widget Expo." I understood the underlying business model was essentially the same, but the vendors, the leadership, and the customers were so different from what I've been accustomed to in the IT outsourcing space, I felt like a tourist. I did run into some of the old-timers including Bill Bierce, Mark Hodges, and Joe Vales who were warm and welcoming. Joe Vales was especially helpful and generous with filling me in on what was going on and how I might be involved in the HRO space.
The best fun I had was at a party held at the 21 club by vendor Convergys. I met three analysts there with whom I could commiserate and laugh. One, in particular, has an exceptional blog that I had stumbled upon. If you want to know about HRO, don't come here. Visit Jason Corsello's blog. Jason has a real blog. He promised to teach me how to blog like a pro, so that was definitely worth the trip into Manhattan.