Cool Vendors in IT Services and Sourcing, 2009

This research does not constitute an exhaustive list of vendors in any given technology area, but rather is designed to highlight interesting, new and innovative vendors, products and services. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

This year's research describes two groups of companies. The first group excels in the way that it leverages new technologies and concepts, such as social networking and Web 2.0, to create new services. This changes how organizations do business together. The second group has developed global solutions, including products and services that offer small and midsize organizations access to global markets.

Claraview, Reston, Virginia, USA (www.claraview.com )

Analysis by Alex Soejarto

Why Cool: Claraview has operated as a division of Teradata since being acquired in 2008. It now serves as a consulting brand, creating platform-independent solutions, for BI solutions. Claraview offers clients the best of a boutique provider — agility, responsiveness and client intimacy — with the expertise and intellectual property of a large technology provider. This combination signals Claraview's objectivity in BI initiatives that complements a broad portfolio of BI applications and tools.

Overall, the company is well-positioned to compete in the BI market in domains and industries, such as education, gaming, healthcare, financial, retail and telecom, where it can present its credentials. Claraview can also enhance Teradata innovations, such as starting from a Teradata logical data model and creating a hospital data-warehousing solution that is platform-independent. The vendor plans to apply this same strategy to other solutions, including the midmarket gaming industry where homegrown systems lack the technology innovation to provide a real-time response. In addition, Claraview solutions for the education (K-12) market offer transparency and performance management to schools, which differentiates the company.

Challenges: For buyers wanting a small independent boutique consultancy, being owned by Teradata is Claraview's biggest challenge. Claraview has begun to broaden its client base across the U.S. beyond its East Coast locations. This expansion will require changes in its operations. As its brand recognition grows, clients will want access to its services across North America — changing the working environment that consultants have come to expect. Claraview needs to manage this growth and retain its ability to react nimbly to client needs, especially in a challenging 2009 market. In addition, clients will closely watch Claraview's ability to maintain a point of view that is platform-independent of Teradata products.

Who Should Care: BI service buyers that prefer to work with a boutique provider will find Claraview a strong market competitor. Its offerings — ranging from BI applications in data warehousing to advice on establishing a BI competency center (BICC) — may appeal to buyers in specific vertical sectors.

e-Docs UK, Essex, U.K. (www.e-docsuk.co.uk )

Analysis by Cathy Tornbohm

Why Cool: e-Docs UK provides an Accounts Payable Automation solution delivered as a service. This enables flexible, highly competitive pricing models. e-Docs UK is cool because it has used significant amounts of optical character recognition for processing and automating finance and accounting invoices as a fully managed service. e-Docs UK services range from automated data capture to advanced workflow and enterprise procure-to-pay solutions. These solutions have a common user interface, a standardized data repository, and a contract covering multiple countries and languages.

Founded in 1988, e-Docs UK is a privately held company with more than 50 employees. It provides ERP-neutral finance, accounting and HR business process outsourcing (BPO) services. It uses scanning and image processing to input invoices and documents to support U.K. companies' account processing. e-Docs UK targets U.K. firms across all industries but specializes in construction, real estate and the retail sectors.

Challenges: Building brand recognition is this vendor's biggest challenge in a market where even the leaders — Accenture, IBM, Capgemini, Genpact, Infosys and WNS — are not very well-known in finance circles. These leaders focus on multinational corporations, while e-Docs UK targets midsize U.K. businesses. This is strongly linked to the second challenge, which is how e-Docs UK will conquer expanding the service offerings of its business and competing at scale.

Who Should Care: U.K. corporations with multiple locations for processing accounting transactions should consider evaluating e-Docs UK's offerings. Organizations that need to comply with accounting regulations, such as Sarbanes-Oxley, in multiple locations should evaluate e-Docs UK. International BPO vendors that want to partner with a local, onshore service provider should also consider e-Docs UK.

Impetus Technologies, San Jose, California, USA (www.impetus.com )

Analysis by Gilbert van der Heiden

Why Cool: This product engineering service provider has invested heavily in R&D at its emerging technology labs to deliver innovative onshore (in the U.S.) and offshore (in India) development capabilities to companies in the telecom, media, financial, software and healthcare sectors. Software and technology companies can partner with Impetus to create innovative products, while limiting their investment in R&D and improving the time to market of their products. It uses its software product development maturity model to offer clients specialized product research, design and development skills in new mobile platforms, SaaS and Web 2.0 technologies. It differentiates itself through its focus on new and emerging technologies, including Ruby on Rails, Java EE, .NET 3.0, OpenLaszlo, Flex, representational state transfer (REST), Binary Runtime Environment for Wireless (BREW), Java ME, Symbian, Flash Lite, voice over IP and Internet Protocol Television.

With 18 years' experience, Impetus provides the necessary skills to help more than 30 software and technology companies to research, design and develop products that use embedded software to deliver innovative product features to end users. A major Impetus client that provides clearinghouse services stated that some of its product lines would not be viable or as successful without Impetus' capabilities and support. An Impetus e-commerce client values the quality of Impetus' staff and services, but stated that Impetus stands out because of its capability to bring new technology to the market faster at a lower cost, which has enabled the client to create newer products with more functionality faster.

Challenges: Staying abreast of emerging technologies in the product development arena and exploring new technology domains are major challenges for Impetus. This is highly relevant in the offshore product development (OPD) business, because software and hardware vendors need to innovate while lowering the cost of R&D during the economic slowdown. Although Impetus' business is sustainable, it will face increasing competition from other OPD organizations and IT service providers. Furthermore, the same clients that value Impetus' high quality indicate that Impetus needs to connect more deeply with its clients' industry dynamics to provide direct applicable solutions and products. Impetus' proactive behavior, which is embedded in its transparent working model, also increases the risk of intellectual property leaks, which has required and still requires the company to continuously invest in and diligently manage against measures to retain employees and secure information during its rapid growth.

Who Should Care: Software or technology product companies looking for a transparent offshore technology partner to create innovative software development products should evaluate Impetus. The vendor could be a good choice for organizations operating in English. Although Impetus provides local language services and support to clients outside the U.S. and India, enterprises should evaluate Impetus' capabilities more carefully if they require on-site or non-English language development support.

Quickstart Global, San Francisco, California, USA (www.quickstartglobal.com )

Analysis by Frank Ridder and Michael von Uechtritz

Why Cool: Quickstart Global helps companies quickly establish captive operations around the world. Through its global delivery model, it takes only 8 to 12 weeks to set up client operations in other countries, depending on the chosen location. With the In-House Anywhere platform, organizations own their own team through a Quickstart Global legal entity in a chosen country. The model can recruit staff in an agreed time frame, provide scalable office real estate, and enable clients to retain control of their intellectual property and key delivery processes. This means potentially faster time to market and reduced burn rates for startups. Clients can give 90-days of notice and take on their teams in their own legal entity to reduce risk.

Many companies still source internally and set up their own in-house operations. As cost pressures increase, these companies investigate ways to cost-effectively set up operations in low-cost countries. Quickstart Global services also offers fixed pricing — from $60,000 for setup and from $18,000 per month for an established center with a 10-person team. Founded in 2006, Quickstart Global addresses today's sourcing market needs through delivery centers in Bulgaria, South Africa, Vietnam, Taiwan, India and Nicaragua. Clients include Solbright, Play.com and eCommera.

Challenges: Growth is Quickstart Global's biggest challenge. In its first two years, it grew at a 343% compound annual growth rate and closed 2008 with revenue of $8.9 million. With about 35 customers today, the company's ambition is to grow its customer base to 350 customers by 2011. To achieve this goal, Quickstart Global needs to identify new sales channels and increase visibility in its target markets. Slowed growth in the offshore markets and the current economic situation might pose other challenges.

Who Should Care: HR and IT executives, and CFOs of small and midsize businesses in the U.S. and in Europe, that recognize how global advantage can positively contribute to cost-efficient operations and top-line growth, should consider this vendor as an alternative to working with global IT service providers. Organizations from all industries that lack the experience and capacity to expand their operations into low-cost countries, as well as well-funded startups that want to be global from the beginning, should also consider Quickstart Global.

whereIstand.com, New York, New York, USA (whereIstand.com )

Analysis by Frances Karamouzis

Why Cool: whereIstand.com represents the consumerization of IT services. It has developed a social networking product that enables strategic and tactical marketing to be sold as a service. This is like outsourcing of a social networking function, so organizations can incorporate community-based marketing into their products or services. whereIstand.com enables commercial and public-sector organizations to externally source the dynamic capture of real-time market data. The service sources consumer opinions and trends from the Internet and a social network.

Its Web site's social networking function enables the dynamic real-time capture of market data on a continuous basis. It presents users' opinions and, through a user-generated process, the verified opinions of public figures and organizations. It enables participants to take a stand on consumer, industry and political issues, and then quickly see how they compare with other participants, public figures and organizations, even when their opinions are in other languages. Thus, market data includes consumer opinions, which enterprises can convert to trend analysis. This enables organizations to understand and garner analytics about their products, policies and the public opinion of their brand. whereIstand.com reliably presents and compares opinions in English, Spanish, Portuguese, French, Russian, Chinese and Japanese without automated translation or the participant needing to have any foreign language knowledge.

Challenges: Building content, significantly growing its community and boosting user loyalty are whereIstand.com's greatest challenges. The value clients will gain depends on a broad range of participants widely accepting and adopting the service. whereIstand.com is still only emerging, with less than one million visitors per month. However, it has gained significant stickiness with its Comparison Wizard, which appeals to new visitors, who have spent an average of more than six minutes of viewing time, combined with an average of more than 20 page views. Given whereIstand.com's stage of maturity, this is a respectable level of reach, but to deliver on its long-term value proposition, whereIstand.com needs to attract a larger set of new visitors who stay on the Web site and continue to share their opinions.

Who Should Care: Enterprise buyers that want to use new consumerized outsourcing options to proactively use digital communities and social networks should consider whereIstand.com. The service is also ideal for companies that need to dynamically capture real-time trend analysis of user wants and needs. Enterprise buyers can also use whereIstand.com to respond to negative events about their products or engage in constructive dialogue with their global customers in the most complex and fluid channel (the Internet). The resources and financial hurdles organizations have to overcome to independently deliver this functionality through their internal IT departments involve a multiyear commitment, which can cost many times more than outsourcing this function. If whereIstand.com has enough critical mass for an organization's target market, then it can deliver significant return on investment on the outsourcing investment.

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