The international expansion long awaited by CXP International SA, the French specialist in comparative software products analysis (CI No 2,039), has finally come about with its partnering this week with Meta Group Inc, one of the fastest growing consulting companies in the US. The two have formed a joint venture company in the US, Meta CXP, with total investment of $500,000 split 50- 50. Meta CXP, in Reston, Virginia, will begin adapting between 20 and 30 of CXP product evaluations a year for the US market, as well as marketing them to US customers. Meta and CXP will work together on adaptation; the two retain exclusive distribution rights in North America and francophone countries, respectively. They project revenues of $1m for the first year, from June, and $7m in the third year of operation. Both Armand Gambert, chief executive of CXP, and Dale Kutnick, president and research director for Meta Group, pointed out that the ability to advise users on which products will fit their system strategy is and will continue to be an important business over the next few years. Gambert noted that, while the cost of software licenses has dropped over the last three years, to 19% of the total system budget, from 24%, costs of installation and adaptation and customization still take 46%. Kutnick said the two major trends in the software industry – expansion and, paradoxically, consolidation – bode well for Meta-CXP. We’re seeing a dramatic expansion in the number of software companies, due to lowered entry barriers and easier distribution on the Internet; at the same time, you have the old guard who either don’t have the intellectual capital or entrepreneurial vitality to do the new products, who are buying the pieces they need. In an aside, he noted that Meta expects IBM Corp to continue in acquisition mode, after Lotus, and Tivoli in particular, they’ll need to buy more pieces to make Tivoli a more complete product. Due to these two factors, the job of the IT professional will increasingly be integrating all of these components, he said. One of the things I think is powerful about this alliance is that we do in-depth analysis of products and the suppliers, getting a lot of our information from the users, while CXP actually tests products in its detailed analysis to help users make decisions. Gambert noted that, although CXP had negotiated similarly with Gartner Group Inc, the partnership was more equitable with Meta, which at $30m annual sales, is only three times the size of CXP. Kutnick said Meta looked for a company similar to CXP in the US. It doesn’t exist. There are a few small companies who do some product evaluations, but they don’t have feature-by-feature analysis or testing. As research director, I was impressed with CXP’s methodology, he said.
