While almost every computer systems manufacturer is trying to figure out how to make a buck on the desktop and/or in mobile computing, Sequent Computer Systems, a devoted Intel partisan, has forsaken those wars in favor of a strategy that concentrates on the enterprise data center. And while the company has nowhere near the resources of an IBM, HP or even a Sun Microsystems, it managed a rather astonishing 40 percent growth in revenues--1997 over 1996. Take that, big guys. One of the main reasons for this state of affairs is that Sequent is focused on the data warehousing/DSS market. For fiscal 1997 (ended 1/3/98), 18 percent of Sequent's revenues of $834 million were attributed to DSS, and the company tells me it expects that to grow to at least 25 percent for fiscal year 2000. That percentage is at least twice as high as that of any other systems company. Translation: Sequent is betting most of the farm on DSS.
It is appropriate that Sequent is located in Beaverton, Oregon, because it will take a lot of beavers to keep the company at the forefront of the DSS market. (Oooh, I couldn't resist!) The company intends to meet the challenge by attacking the DSS market from three perspectives: First, by providing a data center infrastructure, which means addressing issues like reliability and availability, performance, system management, etc.; second, by supporting multiple operating systems simultaneously on top of its NUMA hardware architecture; and, third, by dedicating development efforts on methodologies required for integrated DSS solutions.
To support the latter effort, Sequent is building a professional services organization that offers in-depth expertise on several aspects of DSS development such as business requirements and benefits analyses. Out of a 300-person professional services organization, some seventy individuals--about a quarter of the lot--are devoted to DSS and the number is growing rapidly. In the Sequent model, its professional services organization provides core skill sets in such areas as computing infrastructure and business modeling that are aimed at helping a customer rapidly develop and deploy appropriate DSS solutions.
Sequent professional expertise is concentrated in four areas: user requirements analysis (what should you do), computing infrastructure (what you need to get the job done), database analysis and design, and project management. Sequent's typical MO is to project manage a DSS program, relying on partners (tools vendors, Big 5, ERP software providers, customer's in-house staff, etc.) to do the actual implementation.
Presently, Sequent is focused on four vertical industries where the company has an established presence and where it can provide specific value propositions. These are retail banking, insurance, retail and telecommunications globally and others based on local geographic market needs. Within each industry, Sequent focuses on specific types of solutions. Examples are fraud detection, risk management and customer relationship management. Sequent calls these industry/application-specific initiatives collectively by the clever moniker agile enterprise.
I think most would agree that this phrase has a lot of positive connotations, but what does it mean to be an agile insurer or an agile telco? By Sequent's definition, such a company would have an IT infrastructure (architecture, if you will) that integrates three key elements:
- A decision support platform used to analyze, for example, customer behaviors.
- An interactive platform that provides the interface mechanism for customers, sales and marketing, suppliers, etc.
- Production systems, including finance, HR, product management, etc.
The idea is that if an appropriate level of integration between these three macrofunctions is present, a company will be considerably more agile than it would be otherwise. In our study last year, Large-Scale Data Solutions, a high percentage of users that we surveyed indicated that they would like to achieve this kind of integration. Sequent claims to have accomplished this successfully and cites a couple of customers to prove the point.
I conclude that Sequent has more than a few DSS arrows in its quiver, that it has chosen the right markets to go after and has correctly identified many hot buttons to push. My question, however, is: Will Wall Street allow companies like Sequent to accumulate the resources they will need to move ahead with their plans?"
Many companies that are highly dependent on database-based solutions are, at this writing, persona non grata in the investment community. Stocks in the tank at this writing include those of all the independent DBMS vendors and those of lots of other companies that are highly dependent on DBMSs. We can only hope that a turnaround occurs before much innovation is lost.
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