Cambridge has been working to overcome this perception. In July, the company reorganized its executive staff, hiring Jack Messman, as president and chief executive officer. Messman replaced James Sims, who held the position since the company's inception in 1991. In June, the company named Bruce Culbert as VP of interactive solutions North America, a unit that focuses on helping clients develop E-business strategies and Web-technology solutions. The company is also implementing training programs to ensure its IT staff strengthens its knowledge in strategy, technology, cognitive, and creative approaches to projects, says Brendon McLaughlin, director of operations.

The company's ability to quickly devise a plan and implement technology for E-commerce Web sites is what drove online shopping site Cybuy LLC, a subsidiary of NatWest Market, to Cambridge Technology. "Cambridge had the expertise that we were looking for, which we didn't find in many of the traditional vendors that we looked at," says Sandra Robinson, Cybuy's president and acting CEO. Cambridge linked Cybuy's software packages, including Open Market Transact and an Engage applications suite, to create the E-commerce applications, which are now being tested.

Cambridge reported revenue of $163.5 million for the quarter ended June 30, up 8% from the same period a year earlier. But net income plunged to $1.2 million from $13.5 million for the second quarter of 1998. The company says it's reorganizing its project-staffing model and is working to reinforce policies and procedures involving its pricing structure and sales-force compliance systems.

Viable Competition
Meanwhile, other service providers continue to push forward. Scient is proving to be a viable competitor, with strength in areas spanning strategic business direction to creative services, application development, integration, and IT strategy. Its weakness lies in its approach, according to ARM's Parker. "Scient stays very practical about things," he says. "This can be both a strength and a weakness, because sometimes you need to drive out of the box, and they are not always good at that."

Scient has shown strong growth, with first-quarter revenue of $16.4 million, up 75% from revenue of $9.4 million from the fourth quarter of fiscal 1999 and up 753% from revenue of $1.9 million for the same period last year. But it posted a loss of $8.4 million vs. a $523,000 loss last year, which it attributed to infrastructure investments for long-term growth. The recent completion of its initial public stock offering, which netted about $62.9 million, provides additional resources.

According to Justin Behar, an analyst with Dataquest, Scient is spending not only to gain valuable infrastructure but also to gain expertise in several areas, including business strategy and application integration. In the first quarter, the company more than doubled its head count to 415, up from 260 in the fourth quarter of fiscal 1999. The company also recently expanded its vertical expertise when it created a retail and consumer- products business unit, led by Ed Spangler, former head of Andersen Consulting's Senn Delaney retail subsidiary. Scient also launched a media and entertainment unit, headed by Dan Stone, a former executive VP of Turner Broadcasting Systems International.

Online real estate auctioneer Homebid.com chose Scient to bring to market its Web service for the real estate industry. The site lets sellers list their homes and allows buyers to preview houses and bid on them. Jean Luc Valente, Homebid.com's director of marketing and operations, says he chose Scient because it understood what his company wanted to do and quickly devised an implementation plan. "They're able to think in terms of Internet company strategy," says Valente. "The traditional players, such as IBM, knew the Internet but couldn't offer us the technical expertise we needed. They also didn't appear as nimble and willing to walk through things with us as Scient does." Scient is involved in all phases of the project, from the conception to architecture, to engineering and the launch.

Homebid.com and other companies that are launching or transforming their businesses for the Web are finding that picking the right services partner is as crucial to their success as selecting the right business strategy and technologies.

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Photo of Valente by Reed Rahn