Only 6 Vendors to rule them all!

[Alex Snyder]

Now here is some "ballsy" speculation by Chuck Parker: http://www.automotivedigest.com/Aut...omotive-industry-providers-and-soon-only-six/

Wow What do you think?

If ADP, Autotrader, Dealer.com, DealerTrack, Dominion and Reynolds are what's left then Chuck asks...

But what does this really mean?

1. One “Does-It-All†provider for a dealer or dealership group;
2. Multiple sales, training, and consultants from one of these providers in the dealership working right alongside showroom and Internet sales teams;
3. Five or six consolidated technology-based systems companies dominating the automotive dealer services market;
4. Higher systems cost for dealers, justified by more services, great support, and whiz bang systems upgrades;
5. The gradual demise, absorption, and hopefully acquisition of small systems and services companies over the next two years;
6. There will be headaches and heartburn for both dealers and these consolidated providers as they spend more money and commit more people to the process of integrating the systems technology, organizations, and egos into each dealership;
7. Many of these acquired companies “worked†because the founders and a team of exceptionally hardworking, bright people delivered what dealers needed— solutions, sales successes, and 24/7 support. It will be virtually impossible to retain this consultative, participative, and supportive “touch†that these teams and their inspired founders provided;
8. The corporate “mothers,†“bean countersâ€, and either the VCs or the banks that put up the “cash†to buy these companies will soon by demanding financial and payback results. Where did all this money to buy come from anyway? How much was it?
9. Where are Microsoft, Oracle, IBM, SAP, Google, and even eBay in all of this? Is the automotive industry delivery channel finally appealing to the major technology companies? Will one of them be buying DealerTrack one of these days?
10. Who is next? OneCommand, DealerSocket, CallSource, VinTek, DealerMine, DealerRater, Valuinsight, FirstLook, ActivEngage, AutoSoft, Compli and or maybe even JM&A Group?

 

[yagoparamo]

7. Many of these acquired companies “worked” because the founders and a team of exceptionally hardworking, bright people delivered what dealers needed— solutions, sales successes, and 24/7 support. It will be virtually impossible to retain this consultative, participative, and supportive “touch” that these teams and their inspired founders provided;

8. The corporate “mothers,” “bean counters”, and either the VCs or the banks that put up the “cash” to buy these companies will soon by demanding financial and payback results. Where did all this money to buy come from anyway? How much was it?

To me that those two points are the key.

Just before I start... please those largecompany employees that came from a smaller company notice that this is acompliment.

The entrepreneurial spirit, and 24/7customer support, the life style immersion in your own company, gets lost onceyou join the large investor world. Is not you, is them! After a short honeymoon belonging to the large company becomes painful; the politics, the layers, thedifferent priorities, and even the internal competition for the same revenue. Lookat autotrader with carspot, CDMData, Homenet, vinsol, and vauto all of them offering data collection tools or look at Dominion with 2-3 different website companies.

 

[Jeff Kershner]

Where are Microsoft, Oracle, IBM, SAP, Google, and even eBay in all of this? Is the automotive industry delivery channel finally appealing to the major technology companies? Will one of them be buying DealerTrack one of these days?

I don't see that happening.

 

[yagoparamo]

I don't see that happening.

Agreed and... eBay?!

In general, eBay only works for a small handfull of dealers nationwide. I think they have lost a lot of relevance for the auto biz.

 

[Alex Snyder]

I don't see that happening.

that is a bit far-fetched for most of the companies on the list.

 

[Chris Cachor]

For dealers, I think it really means: higher costs, less choice, less control, and more stagnation. The consolidation among these vendors, in my opinion, is to please manufacturers. Nobody gets fired for hiring IBM, right? Technology companies have a horrible track record of consolidating technologies purchased from separate companies because they were never conceived to work together in the first place. I think it's fantastic that dealers have a full-service option, but I don't think it should be the only game in town. And over the long run, I think it's taking a step backwards.

 

[yagoparamo]

For dealers, I think it really means: higher costs, less choice, less control, and more stagnation. The consolidation among these vendors, in my opinion, is to please manufacturers. Nobody gets fired for hiring IBM, right? Technology companies have a horrible track record of consolidating technologies purchased from separate companies because they were never conceived to work together in the first place. I think it's fantastic that dealers have a full-service option, but I don't think it should be the only game in town. And over the long run, I think it's taking a step backwards.

AMEN!

 

[joe.pistell]

For dealers, I think it really means: higher costs, less choice, less control, and more stagnation. The consolidation among these vendors, in my opinion, is to please manufacturers. Nobody gets fired for hiring IBM, right? Technology companies have a horrible track record of consolidating technologies purchased from separate companies because they were never conceived to work together in the first place. I think it's fantastic that dealers have a full-service option, but I don't think it should be the only game in town. And over the long run, I think it's taking a step backwards.

Great read Chris.
I'll jump on your thoughts!

For some dealers, this mega-vendor will be an upgrade. These dealers are filled with aging dinosaurs that are finally going digital because... they have to.


For most dealers, the ones in the middle, this will all be invisible... and that's the way they want it. Their franchise sign in on wall, the inventory is there, the Dealer Principal has 3 vacation homes and no one can remember the day when the dealer rolled up his/her sleeves felt the pulse of the business. To this dealer principal, the "all in one" solution is completely logical.


For the few dealers that dare to be different, self management is in your blood stream. Custom is your middle name. HIGH EXPECTATIONS is the sign on your door and everyone knows it. These dealers are the thought leaders, they test and stress "legacy systems" by wanting more results from themselves and more than their competitors. These pioneers are high maintenance. Custom solutions and custom upgrades and "front of the pack" customer service is expected. The only way a mega-vendor can win these dealers is to have this customer in mind on the very first day the architecture is built.

 

[yagoparamo]

Great read Chris.
I'll jump on your thoughts!

For some dealers, this mega-vendor will be an upgrade. These dealers are filled with aging dinosaurs that are finally going digital because... they have to.


For most dealers, the ones in the middle, this will all be invisible... and that's the way they want it. Their franchise sign in on wall, the inventory is there, the Dealer Principal has 3 vacation homes and no one can remember the day when the dealer rolled up his/her sleeves felt the pulse of the business. To this dealer principal, the "all in one" solution is completely logical.


For the few dealers that dare to be different, self management is in your blood stream. Custom is your middle name. HIGH EXPECTATIONS is the sign on your door and everyone knows it. These dealers are the thought leaders, they test and stress "legacy systems" by wanting more results from themselves and more than their competitors. These pioneers are high maintenance. Custom solutions and custom upgrades and "front of the pack" customer service is expected. The only way a mega-vendor can win these dealers is to have this customer in mind on the very first day the architecture is built.

Joe,

I mostly agree with you on this but the car busienss is also changing and you and I are middle aged men now. There is a new generation of mpeople, like your kid looking for work, that will push technology to make the biz more profitable and the work easier to handle by less people. Those will become the majority.

I'm actually 37 so as a vendor for 300+ dealers where I know a lot of my clients I have seen just small but important changes: 10 years ago the used car managers argued with me about putting photos on the cars on the web, nowadays almost every used car manager has a smart phone and they use it for biz. I know that this is a small point but it exemplifies that the new generations live with technology and will push for new and better systems.

 

[mattwatson81]

Bigger companies move a little slower but most usually provide a more stable product. Larger companies also have problems smaller companies don't have. When you have 100 customers and a few employees you don't have to worry about massive server infrastructures, security, performance, testing, support documentation, training employees, customer issues, etc. You also don't worry about what your legal department thinks because you don't have one... When you get to 1000+ customers and have a lot of employees, it is a whole different ball game. VinSolutions is starting to have resources and manpower I could only dream of years ago. AutoTrader has provided resources where we needed it and stayed out of the way where we didn't need help.