Self-proclaimed “pioneers of the portal” are chartering some new – and already claimed – territory in Canada.
Yahoo! Canada has announced its first portal solutions agreement in Canada with the Smart Choices Society of British Columbia, a three-year, federally funded program created by Industry Canada.
The Smart Choices Community Portal, designed to drive eCommunity development in the communities of Coquitlam and Port Moody, B.C., will use tools from Yahoo’s business communications and corporate portal division, Yahoo Enterprise Solutions.
While Michael Zahra, general manager for Yahoo Canada, knows this represents a new direction for consumer-focused Yahoo, he said it’s a logical move for the company. “We launched Yahoo enterprise solutions in the United States about a year ago and had tremendous success there,” he said. “It made sense for us to do it in Canada as well because there are good opportunities in Canada.”
Zahra said Smart Choice’s mandate made the project a good choice for Yahoo and, because of Yahoo’s visibility, he thinks Yahoo was the smartest choice for the government organization as well. “We have the content and the applications,” he said. “We have a number of initiatives, all of which we launched about a year and a half ago, to diversify our revenue stream.”
Smart Choices will include an Internet gateway to local information and services. To facilitate use of this online community, Internet access will be provided through community access points (CAPs) and through a Smart Community and Business Centre.
Jennifer Wilkie, change management manger for Smart Choice in British Columbia, said the premise for the project lent itself well to using Yahoo. “Yahoo had a number of tools and contents that enabled us to bring the community content on-line and to move outside the local community as well,” she said, adding that the first phase of the community portal will be in place by the end of the second quarter. “It’s the critical mass of locally focused content that has to drive this.”
Zahra said despite Yahoo’s consumer-based image, the company is keen to break into the business-to-business (B2B) market. “We have premium consumer services and free services that you see on the site,” he said. “There is a whole B2B opportunity that, a few years ago, we realized we hadn’t explored and thought we had the tools to invest in.”
Mark Quigley, Internet analyst at Kanata, Ont.-based Yankee Group Canada, said the announcement means more than Yahoo just moving into the portal market. It is also an opportunity to get into the rapidly expanding e-government trend that Industry Canada is so interested in.
“Certainly getting a contract like this, one that has the potential to be a fairly visible one given the role that Industry Canada has played in rolling out Internet services across the country, is important in the Canadian context,” Quigley said. “This is a very important announcement for them.”
Yahoo will come up against some tough competition – companies like IBM have had a stronghold on this market so far in Canada, but Zahra said Yahoo has an advantage because it is a “pioneer” in developing Internet portals.
“It was a good extension of an expertise that we already had in a B2B offering,” he said. “We feel that the advantage we have is the expertise we have in running a portal. Our business is the portal business. IBM has expertise in hardware and other things here and there, but as for this field, we are well positioned to have a competitive offering. Nobody has content that we have.”
The appearance of a new company in the market doesn’t worry IBM. To the contrary, Larry Boden, vice-president of portal solutions at IBM’s software group, said IBM and Yahoo are playing in two different fields. “There are certain vendors in the marketplace that have the ability to support someone,” he said. “There is a certain wherewithal and technology breadth and size to be able to participate in this portal space.”
Boden, based in San Jose, Calif., just down the street from Yahoo’s headquarters, describes the market as being separated into two buckets.
“Who do I worry about the most? It’s a certain size. It’s the Microsofts and the IBMs and the Oracles and those kinds fall in the first bucket,” he said. “Others who have 200 people in the company or portals are a satellite business or they are of a consumer nature, well, today I haven’t considered them as something that our customer sets have described as something that is of interest to them.”
Boden does think the Yahoo brand will get the company some customers, but he said he expects them to appeal to a lower end of the market.
“But as Yahoo comes in, people are asking what is the foundation, what is the application server they are resting on, what’s the messaging backbone, do they have secure delivery, what is their collaboration environment? If they are entering with a whole bunch of miscellaneous technologies, I will doubt their success.”
Quigley doesn’t harbour as many doubts about Yahoo’s success as Boden does, but said there is probably lots of room for both companies in the Canadian market.
“Certainly Yahoo would enjoy a reputation as being a new economy company as opposed to an IBM, which would have a different reputation,” he said. “If you look at the marketplace as a whole, there is a lot of work to be done. There are a lot of businesses that have not yet gone down the road of opening up to the Internet world.”
Yahoo Enterprise Solutions in Toronto is at http://www.enterprise.yahoo.com.
Smart Choice in Coquitlam and Port Moody, British Columbia is at http://smartcommunities.ic.gc.ca.
IBM Canada, based in Markham, Ont., is at http://www.ibm.ca.
Yankee Group Canada, based in Kanata, Ont., is at http://www.yankeegroup.com.