State of the Markets

1 2 3 Page 3
Page 3 of 3

"I see this as a big growth area," says Timothy Thomas, director of process excellence at the health imaging division of Eastman Kodak Co. in Rochester, N.Y. "Many companies are realizing how much money is tied up in inventory assets and how much good delivery performance can add value to customers." He is rolling out applications from Optiant to help optimize distribution of Kodak radiology film to hospitals. One hospital network already cut 67% of the stock it kept on hand and will save thousands of dollars. The applications, which have been partially phased in and will be fully operational within the next few months, let Kodak run simulations to decide the right mix of products to deliver customers and the best locations to store them. In addition, Thomas says he actually prefers to work with a smaller software vendor because it's for them to develop applications for his specific needs.

The strategic supply chain planning segment will grow faster than the rest of the supply chain management market, according to Karen Peterson, an analyst at Stamford, Conn.-based Gartner Inc. The supply chain management applications market was $2.2 billion this year and should experience 18% to 20% growth during the next five years, she says. Peterson says enterprises will continue to buy strategic planning software as they "look for ways to leverage technology to be more agile and to plan around potential supply chain disruptions." -- Marc L. Songini

Web Infrastructure Servers, Software and Management

The downturn in the economy could spell trouble for some of the start-ups in the Web hosting market.

Because companies are buying only the IT services they really need, even the big players in the market will have some trouble staying afloat, according to Melanie Posey, an analyst at market research firm IDC in Framingham, Mass. According to Posey, during the dot-com boom, brick-and-mortar companies, afraid of being displaced by start-ups, rushed to put together their e-business architecture and strategies. But now that the dot-coms no longer pose a threat to traditional enterprises, companies are deferring their e-business infrastructure and services purchases and spending more time formulating their e-business plans. That means the smaller, stand-alone Web-hosting companies will most likely go under, she says.

Analysts had predicted that the Web hosting market would grow to $11 billion this year, up $7 billion from last year. But then reality hit: The market for 2001 is expected to be just $5 billion, an increase of only $1 billion over 2000, says Posey.

Even though big players like Santa Clara, Calif.-based Exodus Communications Inc. have filed for bankruptcy, and Dell Computer Corp. is selling its year-old Web hosting business to Sprint Corp., newcomer Rackspace Managed Hosting has still managed to keep its head above water.

Profitable since February, San Antonio-based Rackspace's success can be attributed to its focus on customized, dedicated servers and around-the-clock customer support.

TopHosts.com, a Toronto-based authority on Web hosting, ranked Rackspace No. 9 on its Top 25 Web hosting companies for October. Verio Inc. in Englewood, Calif., tops the list, and Hostway Corp. in Chicago comes in at No 2. According to TopHosts.com, Rackspace is ahead of its time, in part because the company lets customers specify a Web server configuration and then builds it for them from the ground up, has it up and running within an hour and guarantees an uptime of 99.9%.

"We had Web hosting companies prior to Rackspace, but we had problems with them," says Ben Fertic, vice president for information systems at World Triathlon Corp. in Tarpon Springs, Fla. The group sponsors 17 triathlon events around the world each year and broadcasts them in real time over the Internet. "We had issues with the tech support of the other providers," Fertic says. "All our events are on Saturdays and Sundays, and those companies didn't have any technical support staff at those times. With all the companies I deal with, Rackspace has [the best service]." -- Linda Rosencrance

Copyright © 2001 IDG Communications, Inc.

1 2 3 Page 3
Page 3 of 3
  
Shop Tech Products at Amazon