Datapro Information Services:
Adding Steak to the Sizzle
interviewed by Wm. Auckerman
Stephen S. Thomas is president of Datapro Information Services Group.
Prior to joining Datapro in 1993, he worked for 15 years at Digital Equipment
Corporation, where he held a number of senior sales, service, and marketing
positions. Mr. Thomas was 1994 recipient of the McGraw-Hill Chairman's Award
for Management Excellence. Computing Japan spoke with him during
his brief visit to Tokyo in April.
Datapro Information Services Group, a division of The McGraw-Hill Companies,
includes Datapro, Northern Business Information (NBI), and National Software
Testing Laboratories (NSTL). With over 500 researchers and analysts worldwide
who continually track and update information on more than 62,000 products
and 8,000 vendors, the company has been covering developments in the global
IT and telecommunications markets for 27 years.
First, tell us a bit about Datapro's business in the Asia Pacific.
Stephen Thomas: Our business here is doing very well, outpacing the
market growth. We have a number of offices in the Asia Pacific, and we're
adding our own resources into those locations as well as appointing new
distributors all the time.
We are a global company, with significant staff around the world. One of
the unique opportunities we have as a division of The McGraw-Hill Companies
is that there is a lot of infrastructure in place, so we can be in any of
the markets we want to be with our own staff and do it faster and with a
greater cost-efficiency than many other information service providers that
have only a US and Western Europe presence.
Do you offer a full range of services in the Asia Pacific?
Thomas: Yes. In fact, we have made a lot of new innovations and
technology investments at Datapro in the past two years, aimed at serving
the global IT market, and many of those services have been started here
in Asia -- particularly in the telecommunications arena. We try to make
our services global at all times by offering our full range of services,
with many of them tailored to the needs of the Asia/Pac-Rim.
Tailored in what way?
Thomas: In the past, a lot of the services had only a US or European
slant. We needed to incorporate market data and perspective from the Asia/Pac-Rim,
and by adding staff in Asia we've been able to do a better job of that.
A couple of examples: We recently released reports on the Thailand telecoms
market and the Australian telecoms market. Our China telecoms report has
been a big hit in the marketplace, as well. So when I say tailor, maybe
it's more of a focused research effort aimed at this market.
Who are your competitors in the Japanese market?
Thomas: The competitive issue for Datapro is unique. Very few companies
focus on providing our level of base technology coverage on products in
the IT industry, and they certainly don't have the comprehensive and objective
coverage that we do. There are a lot of information service providers, but
we're all doing different things in the industry. Very few companies have
the database that we have, or offer the services that we do. So there is
no real head-on competitor for us in Japan.
What we do compete for is customers' budget dollars, which is shrinking.
When people want to learn about IT, they have lots of choices -- they can
buy books, they can read magazines like yours, they can go to trade shows,
get training, hire a consultant -- or they can bring in an information service
provider like ourselves. That's where the conflict comes in; corporate budgets
are getting tighter every year, and companies have to make choices on where
to spend their money.
Based on your trip to Tokyo, what do you foresee for Japanese companies
in the volatile PC market?
Thomas: I've had several client visits and have met with a number
of our distributors and partners. Above all, I believe the US PC market
is going to see a significant reordering of companies, and I think Japanese
companies are going to make significant inroads there.
If the $500 Web PC ever comes about, as a lot of people are predicting,
I believe it will be the Japanese who understand high-volume consumer electronics
that will dominate that market, not the US companies. The US companies do
not have the volume, the channels, the brand name -- they simply do not
have experience at the volumes that will come as a result of having such
an information appliance. It's going to be a completely new market, and
I think the companies here in Tokyo are going to do very well in it.
Would you care to name names?
Thomas: They're all in the planning stages at this point, so there's
no clear-cut winner today. But I like Sony's chances, because the difference
between a television and a PC by 2000 is going to be very, very blurred.
From the notebook PC perspective today, Toshiba is capturing the majority
of the new unit sales, and I think they can expect to continue. I also believe
that NEC has a lot of strength because their success in monitors can be
used in that market.
The $500 Internet PC may have a chance in the US, but what about here
in Japan with its high telecommunications costs?
Thomas: The thing that will change that, and therefore allow a Web
PC to succeed, is competition. If and when deregulation happens in Japan
-- and it probably needs to -- then that changes the economics for everyone.
Competition is good. Let's have more of it in all markets, including the
US market.
The telecommunications market is very volatile right now, with competition
not only between companies, but among technologies. What do you see as the
coming important technologies?
Thomas: The technology I think can bypass all the infrastructure
issues and legacy issues are the innovations that are being made in the
wireless arena. A lot of things that are barriers today can be bypassed;
they will become non-issues as we pursue wireless technologies, and they
become robust and secure and fast.
Today, we're forced to make a choice: Do I want to go fast, or do I want
to go wireless? With multimedia, we're forced to use fiber because we want
to go fast. But that will change over time.
Does Datapro do a lot of custom research?
Thomas: Custom research is a growing opportunity because, as hard
as we try, we will never be able to serve all of our subscribers around
the world by sending them the information we think is important on a monthly
basis. We're always going to miss someone's unique needs. So then they come
back to us and engage us to go get them what they do need.
I believe it's all in concert with the move in our lifestyle to mass customization:
"I want what I want, when I want it, in a form that I want it -- and
at a fair price." That applies whether you're buying clothes or cars
or information. That is the expectation we are starting to place on all
of our buying transactions, and it is going to be one of the challenges
for information service providers.
If we're guilty of anything as an industry, it is contributing to the information-overload
crisis. More is not better; value is not measured in pounds. We need to
give people just what they want, and no more; they already have enough coming
at them.
How is the role of information providers changing? What do you see as
the major trends?
Thomas: In the past, information and knowledge has been a dimension
of power: if I know something you don't know, I have an advantage over you.
And so the tendency was to hoard and hide things, to keep things from each
other because we'd rather compete than collaborate; that's human nature,
it's more fun. But the information highway, the Internet, is changing all
that.
The advantage is going to be to people who can create new information, not
people who possess and hoard information. Speed is an asset, and success
is going to depend on an organization's ability take advantage and to act
upon information quickly. Simply having it is not enough, because everyone
is going to have the same information.
The value point is going to be who can create new information. Beyond that,
customers are placing greater demands on information service providers in
terms of how they want to receive information. It's not good enough to just
give people information in print anymore. Datapro has put a stake in the
ground that says, "We will deliver information in any form that the
customer requires." Today, we are meeting that promise, whether it
is in print, fax-back, CD-ROM, Lotus Notes, HTML....
There is no value to add in the format or in the media, but a lot of information
service providers have missed that point, and still do today. They try to
charge a different price for different mediums. This is fundamentally incorrect,
and you won't be able to get away with that in the future. Your value is
in the content, your analytical and research methodologies, your accuracy
and timing; it's not in how the customer is going to receive it.
There is a lot of free information on the Internet? How is that affecting
information service providers?
Thomas: My first comment to that is that free information is a value
proposition [pause.... forms a "zero" with his thumb and forefinger].
Here is the issue as I see it: There is too much useless information out
there, and the valuable information becomes harder to find.
The Internet, in its current form, is doing nothing but compounding the
problem. Yes, there is a lot of "free" information available,
but as human beings we're lazy; we're accustomed to having information come
our way without having to take any action. In the world of the Internet,
though you have to spend time and go looking for whatever it is you're searching
for. More and more, I hear people saying, "That's not very rewarding.
I don't like sitting at a screen searching and then waiting for the data
to downline load." There's a lot of frustration.
A lot of people are concluding there is a lot of sizzle, but it's not all
that practical today. The issue is going to be one of information that is
customized -- that has some analysis behind it, some objectivity and integrity.
At the corporate level, I understand you provide services like training
seminars?
Thomas: Yes, our training opportunities have really taken off
in the past two years. Every time we'd do a user-rating survey, the number
one issue that would come back -- in every technology segment -- was human
skills deficiencies. The technology is changing faster than people's ability
to keep up, and companies have found no good way to get their people retrained
and reskilled.
We looked at that and said, "This is an opportunity." And so we
use our core of information to build training curricula. In a partnership
with the training company that provides instructors, we're helping companies
to reskill and retrain their people, to keep them current as they grope
with all these new and changing technologies.
What specific types of training needs does Datapro offer?
Thomas: Training is a broad-based issue, one found in every segment
from application development to network management to telecoms issues. In
literally every technology segment, it was the human skills factor, the
user-supportability issue that was coming up. We haven't tried to attack
every one certainly, but with over 100 courses being developed and delivered
today, we do have a broad-based ability to assist large organizations.
What differentiates Datapro courses?
Thomas: Our training differs on two fronts. One is that we develop
a custom curriculum. We don't take a hotel room in Tokyo and announce, "OK,
we're going to train people on client/server technology." Instead,
we'll come and work for, say, NEC; for a class size of 20, we'll do a needs
assessment and figure out what the people's current capabilities are, and
then customize the curriculum to fit their needs.
Secondly, we do it on the customer's site. We don't ask them to travel because
one of the first things to get cut in tough times is travel budget. That
leads to cuts in the training if employees have to travel to get trained.
We get around that issue by delivering training on the customer's site.
A lot of cost-avoidance and a lot of productivity can be gained by having
people trained in their home location.
What do you view as the major near-term issues in IT?
Thomas: Everyone's minds seem to be on China. There's no real leader
there, and the volumes are such that you can't predict a leader. But I can
tell you that everyone is preparing to have their own representation in,
and get a fair share of, that market. That will be very interesting to watch.
And on the technology side, convergence. In Japan, the label is more commonly
"multimedia," but if you look at what people really mean, it's
convergence. Call it what you will, there are a lot of commonalities.
The distinction between technologies as they've been defined traditionally
is getting blurred so you can't tell the difference. What is the difference
between a PC and a workstation? Now, Compaq will have 90% of the performance
on an NT server as Digital's 64-bit Alpha at half the price. And what's
will be the difference between a television and a PC in three years? More
and more, technologies are being combined and integrated.
And to sum up?
Thomas: I always start and end with the same theme: The issue
is not technology, it's money. In the past, a lot of the IT professionals
and organizations, I think, had a bad habit -- we did things because we
could, not because we knew a better business result would be achieved. More
and more, though, companies don't have the luxury of being able to do that;
they don't have the time, don't have the money. So the theme is money, not
technology. There is a reordering of technologies, and players; some are
going to be survivors, and others are going to be displaced.
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