“We’re extremely busy, and so are all the other vendors.”

This is what I heard from a number of the vendors at the recent Open Publish conference in Sydney. More than just being busy, many vendors now have their “pipeline” of work fully committed through to October, or beyond.

As a consequence, many of the vendors are now focusing their efforts on just a few market segments, whereas previously they would’ve taken on any work that came their way. They are now passing up work because it doesn’t fit with their core focus or strategic direction. They are also consolidating their existing customer base (whether it be local councils, state government, marketing websites, etc).

This is something that I’ve been predicting for some time now. Whereas some of the industry analysts have been claiming that the marketplace is consolidating and converging, I’ve been seeing the opposite. Vendors (and their products) are still diverging, each looking for the “killer feature” that will knock off their competition.

Instead of consolidation, what we’re now starting to see is crystallisation. Individual vendors will group around specific market segments, so there becomes the six major vendors each for healthcare, intranets, events, etc. By necessity, this must be an organic process, in the absence of any overarching marketplace strategy.

This crystallisation will take some time, will be painful and confusing, but inevitable. It is simply not viable for each vendor to try to see to all prospective customers, when there are so few good channels to raise the visibility of products.

I’ll watch with interest over the coming year to see how this unfolds…