Published on October 8, 2013 by R "Ray" Wang
2013 Marks A Change Of Guard In The HR Technology Conference
Over 8,000 attendees gathered for the industry’s biggest and baddest event around human resources technology and the future of work at the Mandalay Bay Hotel in Las Vegas. This year marked a few key milestones:
- Legendary HR icon, Bill Kutik steps down from the conference chair role but will still be very active
- Steve Boese takes over as the new HR Tech conference chair
- HR Tech category pioneer Naomi Bloom announced her transition to a new business model
- A record 303 vendors versus 257 from last year
- 20% increase in buyers at the event
- HR tonight show with co-hosts Bill Kutik and Naomi Bloom was a hit with Leighanne Levensaler, Brian Sommer, Patricia Milligan, and John Sumser.
The Buying Cycle Is Back!
From the level of attendees, quality of questions in the booth, conversation in the hall, and the number of prospect conversations about technology selection, it’s obvious the conversation has turned from kicking the tires to can we buy by Q4. Some observations and trends from speaking with hundreds of attendees at the event:
Published on October 2, 2013 by R "Ray" Wang
This post comes from Sachin Gosavi, our Vice President for South Asia
A First Peek Into Dell’s Private Affair
Constellation Research attended the DAACIndia 2013 on 26 and 27 Sept 2013 in Bangalore. Having won the go-private mandate barely a fortnight ago, ‘The World’s Largest Start-up’ message dominated the conference theme. Alok Ohrie, President and Managing Director, Dell India, dedicated a sizable chunk of his keynote to sharing Dell’s focus and priorities post mandate (see Figure 1). Moreover, Dell’s India customers speaking on the panel expressed a sense of relief that the uncertainty had passed.
Figure 1. Dell Unveils It’s World’s Largest Startup Messaging to India
Source: Dell India
Dell’s Future Is “Transform, Connect, Inform, Protect”
Dell continues to weave together it’s global theme of “Transform-Connect-Inform-Protect” for its customers in India, and is making investments in areas such as delivering new services/solutions, Continue Reading…
Published on September 10, 2013 by R "Ray" Wang
General Catalyst, Summit, and Yuchun Lee To Take Clarabridge To Next Phase Of Growth
Rapidly growing Reston, VA based Clarabridge, announced on September 10, 2013 a $80 million round of capital. Founded in 2006, Clarabridge is a leading provider of customer experience solutions. The funding announcement is significant as Clarabridge:
- Invests into global expansion and product innovation. General Catalyst Partners, Summit Partners, and Yuchun Lee invests in the latest round . Clarabridge intends to apply the investment towards global expansion, accelerate product innovation, and execute strategic transactions. Key customers include B/E Aerospace, Best Buy, Charming Shoppes, Inc., Choice Hotels, Dell, Expedia, E.ON, Fidelity, Gaylord Hotels, Government of British Columbia, Intuit, J.D. Power, L’Oréal USA, Marriott International, PetSmart, QVC Inc., Sage North America, United Airlines, Walmart, Walgreens, and Wendy’s International.
Point of View (POV): With over 150% of revenue growth over the past 3 years, Clarabridge plans to expand beyond it’s latest entry into San Francisco and London. The CEM vendor has the opportunity to build out new geographical markets while expanding industry reach in auto, cpg, finance, healthcare, hospitality, insurance, manufacturing, pharma, restaurants, retail, technology, telecommunications and travel. Moreover, as the CEM space continues to evolve, Clarabridge now has a war chest to acquire new technologies or engineering talent as the market continues to expand and large legacy vendors acquire to consolidate.
- Brings on experienced investors and board level expertise. Previous board members included David Blundin of Link Ventures, Don Raine of Grotech ventures, John Glushik of Intersouth Partners, Jonathan Perl of Boulder Ventures, and Sanju Bansal COO of MicroStrategy. Larry Bohn of General Catalyst Partners and Tom Jennings of Summit Partners will join as part of the board. Meanwhile, Yuchun Lee will serve as Chairman of the Board.
Point of View (POV): While the previous board and investors provided the initial catalyst to Clarabridge’s success, in order to take it to the next level, the company needed new energy and direction. David Blundin and Sanju remain on the board from the previous set of investors. With Yuchun as chairman, expect innovative approaches to partnerships, OEM relationships, and positioning of Clarabridge in a broader customer experience context.
The Bottom Line: Clarabridge Poised For Growth
Published on September 5, 2013 by R "Ray" Wang
Zuora Rides The Wave In The Subscription Economy
On September 5th, 2013, Foster City, CA based Zuora, announced $50 million in Series E capital. The announcement has significant ramifications not only for Zuora’s self proclaimed subscription economy category, but also the broader business theme of matrix commerce because Zuora:
- Expanded the investor pool. Zuora successfully added Next World Capital, Northgate Capital and Vulcan Capital to existing investors. Benchmark Capital, Greylock Partners, Index Ventures, Redpoint Ventures, Shasta Ventures, Tenaya Capital, Workday founder and co-CEO Dave Duffield and Marc Benioff, chairman and CEO, salesforce.com all contributed to the existing round.
Point of View (POV): The quality of the investment round and the amount indicate significant affirmation that the subscription economy thesis carries a gravitas among the A-list of Silicon valley investors and angels. With $132.5M in funds raised to date, Zuora is sitting on tremendous amounts of cash from fundraising. While Zuora could wait well into 2014 for an additional round, the move to raise additional capital will provide Zuora with an advantage over any new entrants or potential direct competitors. Buyers can expect Zuora to be around for quite some time.
- Added new board members with deep experiences. CEO and founder Tien Zuo adds Abhishek Agrawal of Vulcan Capital and Craig Hanson of Next World Capital to the board.
Point of View (POV): Craig Hanson brings significant experience in mergers and acquisitions of late stage and public companies. Successful acquisitions include MXLogic, LeftHand Networks, NexGen Storage, Nimsoft, PSS Systems, and SenSage. Abhishek Agrawal brings deep consumer experience from his General Atlantic heritage including Alibaba Gropu, Bazaarvoice, Dice, Facebook, Gilt Groupe, and Network solutions. Buyers can expect more expertise in supporting vertical markets. Buyers can expect new partnerships and entry into new geographies.
- Demonstrated continued growth in a new market category. Since 2007, Zuora’s core solution provides subscription commerce, billing, and finance solutions for pay-as-you-go pricing models. The Continue Reading…
Published on August 14, 2013 by R "Ray" Wang
There’s Always More To The Obvious
Source: Bloomberg/Getty Images
Over the past few weeks many have discussed the state of old media. Since Jeff Bezos announcement to buy the Washington Post, the theories have run wild. I thought I’d add to the analysis with a different point of view. A few facts:
- The Washington Post is not a national paper like USA Today and Wall Street Journal but has the full potential.
- Amazon is rapidly building distribution capacity for physical goods in North America.
- Similar to cloud model, Amazon will have excess capacity to ship hard goods
The Bottom Line: Business Model Distruption Part Deux
Massive opportunities exist to disrupt multiple business models. One can speculate Jeff Bezos to:
- Take WaPO national. The full potential of the Washington Post is a content and advertising play. The challenge has been distribution to physical and digital channels. Combining the excess distribution capacity of Amazon with the Washington Post can resolve some of the excess capacity, similar to the cloud services in AWS.
- Bridge between digital and physical ad networks. The paper’s advertising revenues can be improved with a link back to commerce. A convergence of advertising, media, and commerce can be created. More over, the future of commerce is at stake.
- Use assets to commoditize same day shipping networks. At this point, FedEx and UPS can not provide any additional capacity for Amazon. While the addition of the Washington Post will not add enough capacity, the ability to provide same day shipping networks and offers via media will provide a significant longer term growth engine. Think Amazon Supply on steroids.
Do you see these trends in Amazon’s and Jeff Bezos’ future? What’s your point of view? Add your comments to the blog or send us a comment at R (at) SoftwareInsider (dot) org or R (at) ConstellationRG (dot) com
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Published on August 12, 2013 by R "Ray" Wang
Non-US Based Organizations And Even Some US Organizations Will Not Tolerate Snooping In A Post PRISM World
Since the Edward Snowden PRISM revelations, Constellation has received a steady stream of inquiries on cloud strategy. In fact, nervousness runs high among many non-US based companies using services from US based cloud companies across the cloud stack. In early August 2013, the Information Technology & Innovation Foundation put out its report “How Much Will PRISM Cost the U.S. Cloud Computing Industry” Assuming that 20% of current clients switch to a non US based provider, the report estimates a loss of $22 to 35B by 2016.
Constellation agrees. All signs point to an anti-US stance until the security issues is addressed. The odds on the US government moving fast on this issue are as good as Major League Baseball players or Tour de France Cyclists honoring a performance enhancement drug use ban. In fact, Constellation is aware of at least 50+ contracts that have been put on hold or cancelled in the past 30 days. With the EU’s Nellie Kroes already sounding the alarm bells in a way she only can, cloud buyers have taken notice.
The Bottom Line: Clients Should Consider Alternatives To Pure Cloud Models And Encryption Technology
Interesting enough, fifteen years into the cloud revolution, talk has rekindled about building on-premises software in light of this scandal. Unfortunately, the last major on-premises software company to receive funding squandered it all in 2005 and retooled to the cloud. Furthermore, a few entrepreneurs are looking at VC funding to take some key systems back on-premises.
However customers do not have time to wait for new software to arrive in the on-premises deployment option. In the meantime, a few near term strategies have emerged:
- Continue Reading…
Published on August 9, 2013 by R "Ray" Wang
Unchecked Bad Behavior Plagues Both Vendors And Analysts.
I’ve dreaded writing this post for a long time. I normally think the best of everyone. Yet, in the course of building our business at Constellation Research, I have to say I’ve seen everything that can go wrong with the industry analyst business. I’m almost embarrassed to reveal the shady tactics on both the vendor and analyst side that perpetuate. But for the sake of airing it all out so that we may have a better industry, I’d like to start the conversation and then invite those analysts and vendors who agree to come up with a solid code. Once we have something, let’s take the pledge on cleaning up the profession.
Examples Abound And We Have Had To Say No.
To be clear, there is a massive self-interest in my putting this out there. Now some of you may still be asking why would I do this? What’s in it for me? I’ll be very transparent, we’ve built a business that has:
- Shrugged off writing white papers for hire;
- Avoided pay to play for content;
- Covered vendors who were not clients;
- Cancelled contracts when our objectivity would have been compromised;
- Rejected stock in start-ups in lieu of payment, even a few pre-IPO’s that would have made us millions;
- Fired clients who threatened to cancel our contracts despite our putting out factually accurate defensible research;
- Refused the pay for lead business;
- Turned down pay for quotes and refused to endorse vendors in quotes unless we had evaluated their products in a side by side comparison;
- Fired sales people who alluded to pay for play;
- Fired analysts who did not understand we were not a pay to play white paper shop even after repeatedly telling them this.
I’ll be honest. In order to uphold our integrity, we’ve lost a lot of business. I’d estimate in the order of $2 to $3M a year. Now, I am comforted in the fact that I do know we are not the only ones who have done so. However, I have sadly discovered that this is few and far between in the business. I am both shocked and disappointed.
Integrity of the Industry Is At Stake.
Now at times, competitors have laughed at us for doing so. But, we have worked hard to uphold our code of ethics. We have stayed objective. We have remained fiercely independent. Talk to our sales folks. They live it every day. Talk to our analysts who wonder why they have to work harder.
We can continue doing this alone and have a differentiation in the market, but I think it’s time the industry takes a pledge to end this bad behavior. It’s important for buyers to know that there is a professional code. Why? It’s critical to the survival of the industry analyst profession.
Published on August 5, 2013 by R "Ray" Wang
Infosys Puts Its Best Foot Forward
Constellation attended Infosys’ 2013 Global Analyst Summit from July 29th to July 30th in Boston. Despite the below industry average growth of the previous year, conversations with key executives and top customers indicate an imminent shift. In fact, Infosys has added 100+clients not including customers from Lodestone. Retention is 98% for about 800 clients. The client list includes more than half of the Fortune 500. Repeat business is between 95 to 96%. Most clients represent the top 5 or top 10 of each major industry. All is not gloom and doom.
While Core Business Is Solid, Non-Body Count Growth Is the Long Term Challenge
Infosys S.D. Shibulal
Consequently, Infosys faces a similar challenge all global IT services firms must overcome – remaining relevant with clients facing business model disruption and a rapid pace of change. In one-on-one conversations with:
- S.D. Shibulal – Co-founder, Member of the Board, Chief Executive Officer and Managing Director
- Vishnu Bhat – Vice President and Global Head, Cloud
- Paul Gottsegen – Chief Marketing Officer
- Sanjay Purohit – Senior Vice President and Head of Products, Platforms, & Solutions
- Suketu Patel – VP, Head of Strategic Global Sourcing
- and several key customers in banking, consumer packaged goods, healthcare, high tech, and retail
At the Global Analyst Summit and through client conversations over the past 6 months, Constellation gained insights in how Infosys is addressing their client’s challenges. Both the Infosys executives and the clients recognize that Infosys must make significant market shift and take the lead in co-innovating and co-creating intellectual property.
Infosys 3.0 Is Alive And Well And Part Of The Required DNA Transformation