At least when it comes to the vendors providing Web applications, according to an analyst report.
A study of Global 2000 companies released this week by Stamford, Connecticut-based Meta Group found that the Web application development services market is scattered, with no single vendor providing the best of everything.
While large IT service firms excel in technical skill and systems integration, they often lack creative content and design capabilities.
Smaller firms, on the other hand, provide better creative services, yet stumble on project management and technological expertise, particularly with tricky legacy computer system integrations.
Nonetheless, the firms ranked best by customers are typically smaller, more nimble boutique companies, as well as specialized Web consulting firms, such as USWeb, the Meta report states.
"There's still a tendency for companies to look at the more boutique oriented provider," said Meta Group analyst David Yockelson. "I think a lot of angst gets down to price, [and providing] a fixed fee for work--and the boutiques have been better to work with."
That said, Yockelson added that companies still want end-to-end services and a lot of hand-holding that a larger integrator with more resources is more likely to offer.
In the Web-business outsourcing free-for-all, larger competitors include Computer Sciences, PricewaterhouseCoopers, KPMG, Andersen Consulting, EDS, and Cambridge Technology Partners. Newer upstarts include Inforte and Proxicom. Web application integrator USWeb, with a pending merger with Web marketing firm CKS, is also a key player.
All vendors are scrambling to position themselves to capture new Web business as the market continues to grow. By 2003, more than 75 percent of Global 2000 companies will outsource part of their Web development projects, according to Meta Group.
"I think that now you see electronic business looming as the biggest single opportunity that's emerged with ERP and enterprise customer management," said Bill Martorelli, analyst at the Hurwitz Group in Framingham, Massachusetts.
Computer Sciences, for example, is projecting revenues of at least $100 million next fiscal year from Web-based business applications, executives said.
"This is our future," said Christopher Davis, a vice president with CSC's consulting group. "This will be half our business within two and a half years."
To firm up the companies' Web-business commitment, CSC announced this week a suite of five Web services, including customer relationship management, electronic bill presentation, collaborative planning, electronic procurement, and secured extranets. While CSC's strength is in providing back-end systems integration and getting projects up and running quickly, the company often hires smaller firms to help design a company's Web site or marketing initiative.
"They'll work with [creative] firms where necessary," which is a perfectly acceptable strategy, said Ben Tanen, analyst at Giga Information Group in Cambridge, Massachusetts.
CSC and others are also quickly gobbling up smaller players to give them what they need, as exemplified by CSC's April acquisition of Web-business systems integrator Onward Technologies.