Tucson, AZ - November 29, 2000: The I-builder gold rush is ending. In the past, demand for traditional I-builder services was so strong that many firms had to turn away business. The largest firms had a waiting list of clients, and promising "dot-coms" had to sell hard to get the prestigious I-builders to take on their projects. Today, as venture capital attention has shifted away from dot-coms toward wireless and infrastructure companies, many I-builders have had to shift their efforts away from startups.

The I-builder category provides a broad range of e-commerce packages that include strategy, marketing, design and technology. Many of these "end-to-end" agencies have recently warned investors that fourth quarter earnings won't meet expectations. "As large as the market is (Forrester Research expects e-commerce consulting to top $65 billion by 2003), it isn't big enough to support the 25 percent quarter-over-quarter growth rate we've been seeing from the two dozen companies in this space," notes Drew Ianni, IT service analyst at Lazard Freres.

What has become apparent in the space is that I-builders offering "everything under the sun" are losing favor. Forrester recently took an in-depth look at 40 e-commerce consulting shops and concluded "no service provider demonstrates excellence across those strategies." Forrester concluded in a recent report that "To take a leadership role, integrators must cultivate depth by category, not serve up undifferentiated end-to-end services."