It's no secret that database companies regularly partner with a decision support, online analytical processing (OLAP), campaign management or query and reporting tool vendor to offer integrated solutions to their customers.
In fact, over the past two years, companies have taken full advantage of the open-platform products most of these vendors offer, and, as a result, have been forming relationships so they can offer a whole new database marketing solution.
This year, however, a new trend has emerged. Instead of the partly integrated arrangements, database companies and vendors are joining forces to offer fully integrated solutions across vertical industries.
Packaged solutions mean different things to different companies. Depending on the companies' relationship and the market space they want to reach, they can be everything from an entire data warehouse combined with a specific set of analytical data tools to a full selection of database tools — such as a campaign manager, data mining, OLAP and ad hoc reporting tools — that work with a customer's in-house database.
Some use many different vendors to put their solutions together; others use their own in-house tools and partner with just one company. Some focus on reaching a vertical market; others focus on the needs of smaller and medium-sized companies. Some come partly customized; others are fully customized.
Most packaged solutions, however, have one thing in common: They are designed to give companies a one-stop shop to get the database marketing tools needed to do the job. And what is the job? A more efficient way to manage their customer data and the ability to target customers and prospects with maximum effectiveness.
Many full-service database marketing companies today are offering — or plan to offer — these packaged solutions, including Epsilon, Burlington, MA; Acxiom Corp., Conway, AK; and IBM Global Business Solutions, Somers, NY. They are partnering with direct marketing technology companies like May & Speh, Downers Grove, IL; OLAP vendors such as MicroStrategy, Vienna, VA, and Information Advantage, Eden Prairie, MN; campaign management vendor Exchange Applications, Boston; other utility vendors like SAS Institute Inc., Cary, NC; and even large relationship database vendors like Oracle, Redwood Shores, CA.
Customer need is what's really driving the trend.
“Companies are starting to put the pieces together. Before, companies would offer parts of the solution, like a data-warehouse tool and a campaign manager, but they didn't offer a data-mining tool,” said Scott Nelson, an analyst with the Gartner Group, Stamford, CT. “The customer would buy a data-mining tool, but that tool didn't talk to the campaign manager. Customers would want things more tightly integrated, and this is where we start to see packaged solutions.”
Dave Wilson, who handles Acxiom's strategic technology partnerships, said customers really want a “turnkey packaged solution that still has an open architecture to it so that if they, at some point in the future, want to customize or tailor it based upon different needs within the organization, they can.”
Most recently, Acxiom announced its acquisition of May & Speh, which will meld Acxiom's proprietary data products, data integration and delivery with May & Speh's data mining, modeling and other information management services. Soon, the company plans to offer integrated industry-focused packaged direct marketing solutions.
Lisa Henderson, vice president of Epsilon's retail and catalog division, agreed with Wilson.
“The customer will always buy a packaged solution over something that has to be built for them,” she said. “Everyone that built a system before understands that there are risks, but, if you buy something that is tried-true and tested — as these solutions tend to be — then you eliminate some of that risk. In addition, packaged solutions tend to be cheaper. Sometimes they are half the cost [of full-service solutions].”
Another driver, according to Nelson, is the fact that real marriages between database companies and utility vendors are emerging.
“Before, we would see what we like to call the Bud Light approach, with a sort of 'I love you, man' kind of relationship between vendors that means literally nothing,” Nelson said. “They would send out a press release that basically says, 'We are now good friends,' but it meant nothing. Now, they are working at a high level.”
Since companies have been working together for a while, these alliances are getting stronger. Vendors also are realizing the importance of partnering with these companies and being able to offer total solutions to customers.
“The technology companies are starting to see that the real value-add of these packaged solutions is going to be on the integration of these technologies,” Wilson said, “so the IT organizations don't have to spend inordinate amounts of time evaluating the different products and then trying to integrate the products into their own solution.”
In short, database companies are betting these solutions will give their customers just want they want: a quick setup with a short turnaround time, at a lower price, that allows them to make their marketing campaigns more effective. Database companies are happier, too. They can offer more focused services and not spend as much time consulting customers on how to set up the system's infrastructure.
“Offering packaged solutions like these gives companies the ability to get the infrastructure on the back-end complete in a couple of months,” Henderson said, “as opposed to spending 12 to 18 months on it.”