ZapThink to be Zapped?

I was very surprised that in ZapThink’s 2008 predictions, they predicted that they will be acquired:

Our prediction for 2008 is that one of these firms will acquire ZapThink, as well as other SOA thought leadership firms, because we can establish the winning acquirer as a global SOA leader

I wasn’t so much surprised that ZapThink would eventually be acquired, but I was surprised at the public announcement. Now, I’ve never been an entrepreneur, have never been involved with a startup, and have never gone through an acquisition, but a statement like this in an open forum sent out to ZapThink’s mailing list (beyond paying ZapThink clients) would seem to indicate one of two things:

  1. An acquisition is already in the works.
  2. The company is struggling and has just raised a huge banner saying, “We’re for sale. Please come save us.”

I’d be very surprised if it was the latter case, as a public statement like this would seem to kill any negotiation position. So, I’m going to assume that the former is the case and that it won’t be long before this “prediction” is reality.

It certainly brings up an interesting topic for companies in the SOA consulting space, one area where I do have past experience. Obviously, consulting companies make money by having billable resources. If you’re a consultant and you’re not billable, the revenue is not coming in to pay your salary. The owners of the company ultimately want your salary to be paid by clients, not by them. At the same time, this makes the development of intellectual property very difficult when the consultants are 100% billable. While intellectual property is certainly an indirect source of revenue, as it can help close deals, it’s not a direct source of revenue. So what’s a consulting firm to do? It would seem that bringing in a set of experts in intellectual property development that also have experience in creating non-consulting revenue streams (training, vendor marketing) could be a very potent combination that gets around the revenue challenge. The risk here, however, is that the “vendor neutrality” that an independent ZapThink has provided becomes challenging, given that many consulting firms get deals through their vendor partnerships, and it’s difficult to be a partner to competing vendors. Even ZapThink themselves have recognized the challenges of consulting and vendor relationships in Dave Linthicum’s recent post on his InfoWorld blog. We’ll just wait and see what the future holds for ZapThink. I wish my friends Ron, Jason, and Dave all the best in 2008.

One Response to “ZapThink to be Zapped?”

  • Just to add some interesting food for thought. We’re *certainly* not in trouble! Especially after we’ve acquired the Linthicum Group and Dave. In fact, we’ve had another banner year last year. So, let me kabosh your thesis #2 😉

    Besides, just how can you lose money in our business? Not at 80% margins 😉

    Keep on the guessin!

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