Vendor Value Survey: The CompetitionBy Allan Alter | Posted 11-14-2007
Vendor Value Survey: The Competition
How do vendors stack up to their rivals? In this part of the Vendor Value report, CIO Insight compares vendors in eight different product categories.
This year's headlines:
Apple has fallen behind Dell in every major category, as more IT executives asking where's the ROI?
Red Hat caps off the software industry with an impressive 97% loyalty rate, but SAP may be the biggest winner.
Hewlett Packard shows it's possible to offer a wide variety of products and still get high marks.
Cisco continues to dominate this category, coming in first five years in a row.
Palm's plummeting scores allow RIM to widen its lead in this category.
IT executives think highly of their security firms, but none more than VeriSign and Check Point Software.
Reliability ratings improved in this low-scoring sector, but there's still plenty of room for improvement. T-Mobile beat out Verizon Wireless for the top spot.
Only a handful of vendors have come in first place every year; click on this category to see the list.
VeriSign's rise shows security pays off. CIOs feel most security vendors are doing an even better job of protecting them than last year. No category scores higher on average at "solving the business problem paid to solve." VeriSign and Check Point Software each enjoyed a nine-point increase in its overall rating from 2006; even Symantec, which trailed the other four ranked security vendors, saw a modest increase across the board increase. VeriSign's largest increases came in "meeting expectations for increasing revenues" and "meeting ROI expectations"--a sign that companies assuring customers their customer data and transactions are secure reap financial benefits. Check Point's customers gave the company a 15-point boost each for lowering costs and meeting quality expectations. Only Trend Micro saw their overall ratings drop; while its loyalty score rose, its value and reliability scores fell.
T-Mobile takes the top spot. Telecom firms scored better overall than in 2006 on reliability--a major weakness for several of these companies last year--and that was rewarded with a five-point average increase in customer loyalty. Still, this is the lowest-scoring industry category; there's plenty of room for improvement. By focusing on its business customers' needs, the American division of Deutsche Telekom AG noses out two U.S.-based telecoms for the top spot in this category; T-Mobile saw a 10-point rise in solving its customers' business problems, and a 14-point boost in flexibility and responsiveness. BellSouth and Quest deserve credit for their five-point rise each from last year. The "new AT&T" dropped seven points, dragged down apparently by its acquisition of Cingular; in 2006, Cingular earned an overall rating of 49.
Cisco continues to dominate the networking industry. For five straight years, Cisco Systems has ranked highest in this important category--an extraordinary accomplishment. But unlike any other networking vendor, Avaya saw a large boost in customer loyalty. That score rose 8 points from 2006 to 85 percent, most likely because of a five-point increase in "meeting commitments on time and on budget." Nortel Networks' loyalty score remained about the same, but it's overall score fell seven points, due largely to a 10- to 12-point drop in meeting expectations for increasing revenues, reducing costs, and quality. Motorola's overall score also slipped a few points, mostly due to a nine-point fall for "meets ROI expectations."
Palm's failures widen RIM's edge. Last year, Palm landed the Most Improved Vendor spot in our survey. Palm reversed course in 2007, dropping eight points in its overall score. The biggest drops came in its reliability scores: 11 points lower for quality, 15 for meeting commitments. The result: Of the pure-play PDA vendors, RIM improved its customer loyalty score by six points while Palm lost five points.
Hardware, Software and Services
Hardware, Software and Services
Hewlett-Packard keeps improving. It's tough to excel at providing hardware, software and services, but Hewlett-Packard is doing it. Between 21 percent and 30 percent of its customers rate HP as excellent in our seven value and reliability categories. HP's overall score increased four points from 2006, boosted in large part by a nine-point shot in the arm for being flexible and responsive to its customers. IBM, by comparison, hasn't shown any major changes from last year, but its customers are standing by it--Big Blue's loyalty score is 22 points higher than its overall rating. While its 65 percent overall score is not inspiring, Sun deserves credit for a four-point rise; it's biggest gain is a 10-point rise in "solving the business problem paid to solve." EMC scored five-point gains in meeting ROI and quality expectations.
Apple vs. Dell
What's eating Apple? Apple's overall rating, which was 83 percent two years ago, is now down to just 70 percent. The problem is value: Despite all the kudos for its operating system and superior security, Apple isn't providing the same level of ROI for corporate buyers it has in the past; it's score fell 10 points since 2006. Apple also lost five points for solving business problems and six points for quality. The iPhone may also be a drag; Apple teamed up there with AT&T, the lowestscoring telecom company. The end result: Apple has fallen behind Dell in every major category, even customer loyalty. Dell was also helped by an eight-point increase in its score for quality. However, Dell's scores are lower than those of HP, its main competitor for Windows-based PCs.
Red Hat caps off the software industry, but SAP's the big winner. Red Hat's overall score dropped seven points last year, but the company regained most of the ground it lost, thanks to improvements in customer service: It saw increases in meeting commitments on time and budget, and flexibility and responsiveness. That helped the firm enjoy an astounding 97 percent loyalty rate. But the biggest success story this year is SAP, which rose from seventh to fourth place in the enterprise software category, and enjoyed a seven-point rise overall. The big improvements came in lowering costs (12 points) and ROI (8 points), helping raise its loyalty score from 82 to 89. The two companies at the bottom of the list, CA and Cognos, scored a five- and eight-point increase, respectively, in loyalty. The upshot is that enterprise software vendors, under threat from the open source movement and SaaS vendors, improved this year.
Only a handful of vendors have come in first in their respective categories every year they have appeared in our survey.