Professional Services Still Important

Two announcements last week served as reminders that, despite growing interest in on-demand solutions, professionals services remain an essential part of the technology landscape.

On January 30, announced a strategic alliance with Deloitte Consulting to extend the Software-as-a-Service (SaaS) leader’s reach into the enterprise market. already has a similar agreement in place with Accenture. But, the Deloitte alliance confirms the growing interest in SaaS among large-scale enterprises and the desire of a growing number of established consultancies to join the SaaS movement.

As I’ve stated many times, any suggestion that SaaS will eliminate the role of channel organizations in the software industry is ludicrious. However, there is no question that many value-added resellers (VARs) and consultancies will need to shift their focus from technology integration to process or change management projects. A clear example of this shift, as well as the attractive opportunities in the SaaS market for consulting companies is Bluewolf Group who boasts the largest number of deployments despite its relatively unknown name.

Now that is pushing its application development platform, Apex, to third-parties there will be even greater opportunities for consulting companies, like Deloitte, as well as VARs to provide a new layer of integration and customization services to end-user organizations.

Although SaaS will definitely make it easier for many organizations to deploy and administer enterprise applications, there will still be plenty of opportunities for professional services and consulting to continue to flourish in the on-demand world.

Although the network professional services has experienced a contraction since the bust and telecommunications industry downturn, the need for specialized planning, design, project management and infrastructure support consulting skills have not gone away. This ongoing need led British Telecom (BT) to acquire International Network Services (INS) on February 1.

As a former marketing guy for INS who suffered through its first painful acquisition by Lucent in 1999 and watched the company shrink within the withering telecom equipment vendor for three years before being spit out for a penny on the dollar, I’m very pleased with the BT announcement.

I’ve always viewed BT as being far more advanced in its systems integration and outsourcing capabilities than the U.S.-based telcos. And, I’ve always felt that the telcos, along with many other companies vying for a piece of the IT management services market, must offer a combination professional and managed services to win and retain long-term customers.

BT is on its way to building that integrated portfolio of services while also establishing a strong presence in the U.S. with its acquisition of INS and Counterpane, a managed security services provider (MSSP). In addition to INS’ overall network professional services experience and proven processes, it also has a particularly strong security consulting team and experience in the MSS business, having previously acquired Predictive, an INS wannabee with a MSSP capability.

In addition, INS has a software business which BT might also chose to expand into a broader set of SaaS or managed service offerings. It is the combination of strong professional services and intriguing software capabilities which led to BT to acquire for a >2x premium on current revenues.

For INS it is the deep pockets, access to a larger customer base and broader geographic reach which made BT an attractive suitor.

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