Posts Tagged ‘Cloud BPO’

News Analysis: Rimini Street Vs Oracle Ruling Has No Negative Impact on Third Party Maintenance Rights

Recent Oracle vs Rimini Street Ruling Is About Customer Software License Rights Not Third Party Maintenance

On February 13th, 2014, the United States District Court , District of Nevada Judge Larry Hicks issued a partial summary judgment in the Oracle vs Rimini Street Case. Here’s the executive summary to key questions about the ruling*:

Is Third Party Maintenance still valid for Oracle products or anyone else? Yes.  Users should make sure this right is explicit in all future software deals.

Can a customer give a copy to a third party? Yes if you have this in your license agreement.   Users should negotiate this in  contracts to ensure this right exists and remains as part of the ownership experience.

Do you have to read every contract detail before a third party maintenance provider can host the software? Yes. If there are site restrictions  and if you want to host it in a vendor’s own data center.  Make sure you have the right to a site change or site license change.

Can copies of software from customers that are loaded onto the server that are identical to what another customer’s rights be used or reloaded. Yes, the software license goes to intellectual property not to the media.  Third party maintenance vendors can use the same instance in setting up their clients and this will drive down the cost.

Does this ruling impact other businesses? Yes.  If you have no site specific rights, you can’t have a third party outsource or host.  This could have major legal ramifications for Oracle and other vendor’s existing hosting and outsourcing businesses.

Four Customer Cases End In A Draw For Oracle and Rimini Street Based On Contract Law Technicalities

The ruling includes cases from four customers each with unique contract language:

  • City of Flint – US District Court rules In Oracle’s favor. “Based on the court’s ruling s above, none of Rimini’s asserted license provisions (Sections 1.2(b), 1.2( c), or 14.2) expressly authorize Rimini ’s copying of Oracle’ s copy righted PeopleSoft branded software a s a matter of law. Therefore, the court finds that Oracle is entitled to summary judgment on Rimini’s express license affirmative defense as it relates to the City of Flint, and the court shall grant Oracle ’s motion accordingly.

    Point of View (POV):
    The City of Flint’s PeopleSoft contracts were pre-Internet and did not allow for third parties to copy licenses onto other servers on their behalf.  In fact, the licenses only allowed for the City of Flint to provide “access to and use of the Software” to a third party.  The ruling makes sense and is based on how the license contract is written.
  • Pittsburgh Public Schools – US District Court rules In Oracle’s favor. “Based on the rulings above, the court finds that none of Rimini’s asserted license provisions (Sections 1.1, 1.2, or 10.2) expressly authorize Rimini’s copying of Oracle’s copy righted PeopleSoft branded software as a matter of law. Therefore, the court finds that Oracle is entitled to summary judgment on Rimini’s express license affirmative defense as it relates to the Pittsburgh Public Schools, and the court shall grant Oracle’s motion accordingly”.

    (POV):
    Despite Oracle granting the Pittsburgh Public Schools “a nonexclusive, nontransferable license to make and run copies of the Software, “the right to access and use the Software is a separate right from the right to copy or reproduce software”.  The ruling makes sense as with City of Flint based on the language in the original PeopleSoft contract.

Trends: 10 Trends for #Cloud Computing in 2014 To Dominate #Digital Disruption [Slide Share]

Ten Trends For Cloud Computing In 2014 To Dominate Digital Disruption

Constellation’s cloud computing research falls under the Tech Optimization and Innovation business theme and throughout other areas where applications are applied.  The trends for 2014 cover across the entire cloud stack.

Holger Mueller, VP and Principal Analyst, covers the impact of Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) as well as HR Technologies in the Future of Work.  R “Ray” Wang researches the impact of Cloud Computing on business strategy and the application landscape.

Below are the 2014 trends for Cloud Computing.  Join the Constellation experience as we set to help our clients dominate digital disruption.

<iframe src=”http://www.slideshare.net/slideshow/embed_code/29546510″ width=”600″ height=”400″ frameborder=”0″ marginwidth=”0″ marginheight=”0″ scrolling=”no” style=”border:1px solid #CCC;border-width:1px 1px 0;margin-bottom:5px” allowfullscreen> </iframe> <div style=”margin-bottom:5px”> <strong> <a href=”https://www.slideshare.net/rwang0/10-trends-for-cloud-computing-in-2014-to-dominate-digital-disruption” title=”10 Trends for #Cloud Computing in 2014 To Dominate Digital Disruption” target=”_blank”>10 Trends for #Cloud Computing in 2014 To Dominate Digital Disruption</a> </strong> from <strong><a href=”http://www.slideshare.net/rwang0″ target=”_blank”>R “Ray” Wang & Holger Mueller</a></strong> </div>

Your POV.

Do you have a cloud strategy?  Can you see how the cloud will help enable digital business disruption?   Add your comments to the blog or reach me via email: R (at) ConstellationR (dot) com or R (at) SoftwareInsider (dot) org.

Please let us know if you need help with your Cloud and Digital Business transformation efforts.  Here’s how we can assist:

  • Assessing cloud computing readiness
  • Developing your digital business strategy
  • Connecting with other pioneers
  • Sharing best practices
  • Vendor selection
  • Implementation partner selection
  • Providing contract negotiations and software licensing support
  • Demystifying software licensing
Resources

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales .

Disclosure

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy, stay tuned for the full client list on the Constellation Research website.

* Not responsible for any factual errors or omissions.  However, happy to correct any errors upon email receipt.

Copyright © 2001 -2014 R Wang and Insider Associates, LLC All rights reserved.
Contact the Sales team to purchase this report on a a la carte basis or join the Constellation Customer Experience

Event Report: Infosys Global Analyst Summit – Awaiting The Post Infosys 3.0 Emergence

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

CEO and Co-Founder

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

More…

News Analysis: Infosys Buys Lodestone for $350M

Global outsourcing and Bangalore Infotech bellwether Infosys (NASDAQ:INFY), announced its agreement to purchase Zurich-based Lodestone Management Consultancy for $350M.  A quick analysis of the news reveals:

  • Infosys strengthens its EMEA and SAP vertical presence. Lodestone brings 850 employees which 750 are front line delivery personnel. Lodestone’s 200 clients span industries such as life sciences, consumer goods, automotive, financial Services,  banking and industrial equipment. across a profitable and strategic SAP customer base.

    Point of View (POV):
    The Lodestone acquisition gives Infosys a profitable and strategic SAP customer base.  While some may say this acquisition, which has taken some time to complete, is a late response to the July 2009 HCL – Axon acquisition, Constellation believes this is part of a larger but more conservative approach to shore up Infosys’ EMEA strategy.  In the short term, the economics of EMEA will work against Infosys as Eurozone concerns amplify into 2013.  Long-term, the acquisition may prove itself out as Infosys gains a greater foothold through consolidation.  Constellation estimates $1B in revenues from SAP alone post merger.
  • Lodestone methodology and culture will transform Infosys. Lodestone brings it’s trademark IDEA methodology.  IDEA represents insight, design, execute, and achieve.  This approach aligns with Six Sigma standards and SAP ASAP to improve the quality of implementation outcomes.

    Point of View (POV):
    Infosys can gain from learning the IDEA approach in achieving business transformation across the project life cycle.  More importantly, Infosys gains deep local expertise in a wide range of SAP dominant industries.  Constellation believes the goal is to build out the Infosys 3.0. strategy, which is about expanding into management consulting and systems integration and away from outsourcing.

The Bottom Line: Traditional BPO Models Have Run Their Course and Traditional Outsourcers Must Act Quickly Or Suffer

With the growing backlash on outsourcing in the US elections spreading to continental Europe, traditional BPO models may no longer provide growth.  India’s info-tech giants must take the path to the next level and focus on IP innovation and creation (see Figure 1).   While these are new skill sets required to deliver the next generation of IT services, the shift will take time and a cultural revolution.  Can India’s infotech companies make the shift to a cloud meets subscription economy?  Will the shift from trusted advisor to innovation partner happen quickly enough?  Every global outsourcer faces these same questions amidst consumerization of IT, the rise of cloud computing, and oppression and domination by the mega software ecosystems.

Figure 1.  The Path From Body Shop Provider to High Value Creator

Your POV.

Are you ready for the new Infosys? Do you think they can make the shift from outsourcer to management consultancy?  Let us know your experiences.  Add your comments to the blog or reach me via email: R (at) ConstellationRG (dot) com or R (at) SoftwareInsider (dot) com.

Related Constellation Research

Wang, R. “Best Practices – Three Simple Software Maintenance Strategies That Can Save You Millions” Constellation Research, Inc. March 8, 2012

Scavo, Frank & Wang, R. “Big Idea: Constellation’s Business Value Framework” Constellation Research, Inc.  January 31, 2012.

Wang, R. “Best Practices: Why Every CIO Should Consider Third-Party Maintenance.” Constellation Research, Inc. August 7, 2012.

Wang, R. “Market Overview: The Market For SAP Optimization Options” Constellation Research, Inc. May 11, 2011.

Wang, R. “Best Practices: The Case for Two-Tier ERP Deployments” Constellation Research, Inc. February 28, 2011.

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales .

Disclosure

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy, stay tuned for the full client list on the Constellation Research website.

* Not responsible for any factual errors or omissions.  However, happy to correct any errors upon email receipt.

Copyright © 2001 – 2012 R Wang and Insider Associates, LLC All rights reserved.
Contact the Sales team to purchase this report on a a la carte basis or join the Constellation Customer Experience!

Press Release: Twenty-nine Protostars Recognized In The Constellation SuperNova Awards

First Inaugural Awards Designed to Celebrate the Explorers, Pioneers, and Unsung Heroes Who Successfully Put Technology to Work

SAN FRANCISCO, CA, September 20, 2011—Constellation Research, Inc., announces 29 Protostar winners, representing the 2011 SuperNova award semifinalists.  Chosen from a pool of more than 70 applicants, these individuals are recognized as among the few that have overcome the odds in successfully applying emerging and disruptive technologies within their organizations. SuperNova finalists will be recognized at a gala dinner on October 28, 2011 in Scottsdale, Arizona hosted by Constellation Research.

The Process of Picking Protostars

Most award programs recognize technology suppliers for advancements in the market. Few programs recognize individuals for their courage in battling the odds to effect change in their organization. The Constellation SuperNova Awards celebrate the explorers, the pioneers, and the unsung heroes who successfully put new technologies to work. Most importantly, these leaders have created disruptions in their market.

An allstar cast of judges have identified and selected applicants who embody the human spirit to innovate, overcome adversity, and successfully deliver market changing approaches. Applicants were subjected to a vigorous set of criteria that reflect real-world and pragmatic experience. The Protostar semifinalists were selected in five categories: social business, mobile enterprise, cloud computing, advanced analytics, and emerging technologies.

The ProtoStar Winners:

EMERGING TECH

• Imrana Ghani, Sales Operations Manager – ITS

• Mike O’Neill, CEO – Preferred Unlimited

 

ADVANCED ANALYTICS

• Charles (C.J.) Wehlage, VP Supply Chain Solutions – Sony Electronics

• Chris McLatcher, Director of Business Intelligence – Ultimate Software (NASDAQ: ULTI)

• Vernon Meyer, The Social Business Team for IT – AMP Pty Ltd

 

CLOUD COMPUTING

• Anthony L. Chirchirillo, CEO – Chirch Global Manufacturing

• Ben Doyle, Director of IT – Enterasys

• Christopher Johansen, Senior Marketing Communications Manager – Christiana Care Health System

• Daniel E. Retzer, Managing Director & Chief Technology Officer – XSP

• David Smoley, Senior Vice President & CIO – Flextronics

• Dennis Hodges, CIO – Inteva Producds

• Joe Drouin, SVP & CIO – Kelly Services

• Joe Palmer, CIO – Jefferson County Colorado

• Molly Hunting, Director of IT- Shape Corporation

• Phillip Tomczak, Vice President – Bordine’s

• Rick Parker, Cloud Architect, Activision (formerly IT Director, Fetch Technologies)

• Zahid Afzal, CIO, Huntington Bank

 

MOBILE ENTERPRISE

• Chris Perret, CEO – Nukona

 

SOCIAL BUSINESS

• Henry Ho, Partner – CORE4 Research

• Jeff Koski, Senior Director of IT – API Healthcare

• Joe Robens, IT Account Manager – Aristocrat

• John Quinn, VP of Engineering – Gilt

• Jonathan Brayshaw & Lee Hunt – Global Leader Digital Communications and Social Business & Digital Strategy Manager – Psion

• Liz Bullock & Amy Tennison, Dell Social Media Director & Dell Social Media & Community University – Dell Computer

• Matthew Ladin, Community Manager – Texas Instruments

• Scott Moore, Senior Manager College and University Initiatives – AICPA

• Vernon Meyer, The Social Business Team for IT – AMP Pty Ltd.

• Vincent Boon, Head of Community- giftgaff

“The judges have spoken and these are the best of the best among the 70 submissions”, noted R “Ray” Wang, Principal Analyst and CEO, Constellation Research, Inc., “The competition was fierce and the Protostars selected have what it takes to be the next stage – SuperNova.. Both judges and the general public will have a chance to vote and we look forward to recognizing the Finalists.”

REWARDS INCLUDE ACCESS TO INNOVATION, NETWORKING, AND RESEARCH

All Protostars will be awarded a 16th month membership in Constellation’s SuperNova Community for early adopters and innovators. In addition, Protostars will be invited to attend Constellation’s Connected Enterprise 2011 (#CCE2011), an invitation only innovation event in Scottsdale, Arizona from October 28th to 30th, 2011.

#CCE2011 is a three-day executive retreat will include mind expanding keynotes from visionaries and futurists, interactive best practices panels, The Constellation SuperNova Awards event, a golf outing, and an experiential spousal/partner program.

A select group of semi-finalists will be chosen to present on one of five best practice panels at the event. The panelists will receive one innovation retreat invitation and one spousal/partner experiential invitation.

SuperNovas (Finalists) in each category will win a one -year subscription to Constellation’s Research Library and complimentary tickets to the Connected Enterprise 2012 event, an estimated value of $120,000 per winner.

CONSTELLATION RESEARCH

Constellation Research (@ConstellationRG) is a research and advisory firm focused on disruptive and emerging technologies. This renowned group is a collection of prestigious analysts that bring real world experience, independence, and objectivity client solutions to span cross-role, cross-functional, and cross-industry points of view. Supporting a dizzying array of disruptive business models and technologies for middleware to software to services, the Constellation Research team advices the entire ecosystem of buyers, partners, solution providers and vendor clients. For more information about Constellation Research, please visit http://www.constellationrg.com.

***

Constellation Research, Constellation SuperNova Awards and the Constellation Research logo are trademarks of Constellation Research, Inc. All other products and services listed herein are trademarks of their respective companies.

Monday’s Musings: Q1 2011 State of Social CRM and CRM From An EMEA Point Of View

Greeting from London!  It’s been a great surprise to enjoy the sunny and warm weather (by UK standards) as I readjust my body clock.  Thankfully, I’ve had a chance to catch up with a few new and old clients, several analysts, media moguls, and in real life meetups w/ close relationships (i.e. @grahamhill and @buchanla) built over Twitter.  Nothing beats in-person conversations and I’m thankful we could connect on the state of disruptive technologies such as Social CRM, CRM, Cloud optimization, gamification, and mobile enterprise.  A few trends from some great discussions and debates:

  • Social CRM (SCRM) adoption picking up in the UK for marketing and support/service. Conversations with Laurence Buchanan, CapGemini’s chief dude on CRM and Social CRM, indicated that clients are interested in SCRM for both an offensive and defensive strategy.  Offensive strategies focus on social media monitoring and marketing.  Defensive strategies mitigate risk in public relations disasters from support and service incidents.  Talking to a few utility and public sector prospects and clients, it became quite apparent that Laurence’s experiences proved out true.  A regulated industries CIO confided in me and said, “We’re doing this b/c we don’t want to end up as the top BBC story.”  Talks with a retail prospect focused on shifting marketing budgets to digital marketing.
  • Design thinking a key differentiator in successful SCRM adoption. Over some great Earl Grey and Matcha GreenTea latte’s, rockstar strategist and CRM guru, Graham Hill, discussed some of the key elements of successful implementations.  The introduction of services design thinking presents a key factor in success.  Success requires balancing the left brain and right brain points of view.  Moreover, his experiences from working at Toyota and other quality focused enterprises prove out why it’s better to get the design right the first time.  Good design embodies input in organizational culture, business processes, and of course technology.  One of the memorable quotes from the day stuck with me – “Consume as little technology as you need”.
  • The cloud will play a key role in social media monitoring. As media monitoring evolves from a highly paid, skilled craft to a high volume mathematical data crunching exercise, BPO offerings will emerge to address big data crunching.  Companies such as Wipro and Capgemini are already building such service lines.  Also, these Cloud BPO services such as CapGemini’s Immediate gain traction with clients who want a set of unified CRM and Social CRM services delivered in the cloud.  It’s also healthy to note that the EMEA clients have gained confidence in privacy controls and cloud security provisions by EMEA providers.
  • Salesforce.com and Microsoft Dynamics CRM gaining traction in UK. In 29 conversations over the past 2 quarters, CRM discussions lead with Salesforce.com and Microsoft Dynamics CRM. Salesforce.com dominates the CRM replacement buy-side decisions among large enterprise CIO’s.  Meanwhile Microsoft Dynamics CRM leads discussions among net new buyers in small and medium sized businesses, public sector, and divisions of large enterprises with Microsoft centric IT shops.

Your POV.

Are you in EMEA and deploying Social CRM?  What’s working? What lessons have you learned?  Share your thoughts here or send a private email to rwang0 at gmail dot com or r at softwaresinsider dot org and we’ll keep your anonymity.

Please let us know if you need help with your Social CRM/ Social Business efforts.  Here’s how we can assist:

  • Assessing social business/social CRM readiness
  • Developing your social business/ social CRM  strategy
  • Vendor selection
  • Implementation partner selection
  • Connecting with other pioneers
  • Sharing best practices
  • Designing a next gen apps strategy
  • Providing contract negotiations and software licensing support
  • Demystifying software licensing

Resources And Related Research:

Reprints

Reprints can be purchased through the Software Insider brand or Constellation Research, Inc.  To request official reprints in PDF format, please contact r@softwareinsider.org.

Disclosure

Although we work closely with many mega software vendors, we want you to trust us.  For the full disclosure policy, stay tuned for the full client list on the Constellation Research website.

Copyright © 2011 R Wang and Insider Associates, LLC. All rights reserved.

Research Report: Constellation’s Research Outlook For 2011

Organizations Seek Measurable Results In Disruptive Tech, Next Gen Business, And Legacy Optimization Projects For 2011

Credits: Hugh MacLeod

Enterprise leaders seek pragmatic, creative, and disruptive solutions that achieve both profitability and market differentiation.  Cutting through the hype and buzz of the latest consumer tech innovations and disruptive technologies, Constellation Research expects business value to reemerge as the common operating principle that resonates among leading marketing, technology, operations, human resource, and finance executives.  As a result, Constellation expects organizations to face three main challenges: (see Figure 1.):

  • Navigating disruptive technologies. Innovative leaders must quickly assess which disruptive technologies show promise for their organizations.  The link back to business strategy will drive what to adopt, when to adopt, why to adopt, and how to adopt.  Expect leading organizations to reinvest in research budgets and internal processes that inform, disseminate, and prepare their organizations for an increasing pace in technology adoption.
  • Designing next generation business models. Disruptive technologies on their own will not provide the market leading advantages required for success. Leaders must identify where these technologies can create differentiation through new business models, grow new profit pools via new experiences, and deliver market efficiencies that save money and time.  Organizations will also have to learn how to fail fast, and move on to the next set of emerging ideas.
  • Funding innovation through legacy optimization. Leaders can expect budgets to remain from flat to incremental growth in 2011. As a result, much of the disruptive technology and next generation business models must be funded through optimizing existing investments. Leaders not only must reduce the cost of existing investments, but also, leverage existing infrastructure to achieve the greatest amount of business value.

More…

Research Report: 2011 Cloud Computing Predictions For Vendors And Solution Providers

This blog was jointly posted by @Chirag_Mehta (Independent Blogger On Cloud Computing) and @rwang0 (Principal Analyst and CEO, Constellation Research, Inc.)

Part 1 was featured on Forbes: 2011 Cloud Computing Predictions For CIO’s And Business Technology Leaders

As Cloud Leaders Widen The Gap, Legacy Vendors Attempt A Fast Follow
Cloud computing leaders have innovated with rapid development cycles, true elasticity, pay as you go pricing models, try before buy marketing, and growing developer ecosystems.  Once dismissed as a minor blip and nuisance to the legacy incumbents, those vendors who scoffed cloud leaders now must quickly catch up across each of the four layers of cloud computing (i.e. consumption, creation, orchestration, and infrastructure) or face peril in both revenues and mindshare (see Figure 1).  2010 saw an about face from most vendors dipping their toe into the inevitable.    As vendors lay on the full marketing push behind cloud in 2011, customers can expect that:

Figure 1. The Four Layers Of Cloud Computing

General Trends

  • Leading cloud incumbents will diversify into adjacencies. The incumbents, mainly through acquisitions, will diversify into adjacencies as part of an effort to expand their cloud portfolio. This will result into blurry boundaries between the cloud, storage virtualization, data centers, and network virtualization.  Cloud vendors will seek tighter partnerships across the 4 layers of cloud computing as a benefit to customers.  One side benefit – partnerships serve as a pre-cursor to mergers and as a defensive position against legacy on-premises mega vendors playing catch up.
  • Cloud vendors will focus on the global cloud. The cloud vendors who initially started with the North America and followed the European market, will now likely to expand in Asia and Latin America.  Some regions such as Brazil, Poland, China, Japan, and India will spawn regional cloud providers. The result – accelerated cloud adoption in those countries, who resisted to use a non-local cloud provider.  Cloud will prove to be popular in countries where software piracy has proven to be an issue.
  • Legacy vendors without true Cloud architectures will continue to cloud wash with marketing FUD. Vendors who lack the key elements of cloud computing will continue to confuse the market with co-opted messages on private cloud, multi-instance, virtualization, and point to point integration until they have acquired or built the optimal cloud technologies.  Expect more old wine (and vinegar, not balsamic but the real sour kind, in some cases) in new bottles: The legacy vendors will re-define what cloud means based on what they can package based on their existing efforts without re-thinking the end-to-end architecture and product portfolio from grounds-up.
  • Tech vendors will make the shift to Information Brokers. SaaS and Cloud deployments provide companies with hidden value and software companies with new revenues streams.  Data will become more valuable than the software code. Three future profit pools willl include benchmarking, trending, and prediction.  The market impact – new service based sub-categories such as data-as-service and analysis-as-a-service will drive information brokering and future BPO models.

SaaS (Consumption Layer)

  • Everyone will take the SaaS offensive. Every hardware and system integrator seeking higher profit margins will join the Cloud party for the higher margins.  Software is the key to future revenue growth and a cloud offense ensures the highest degree of success and lowest risk factors.  Hardware vendors will continue to acquire key integration, storage, and management assets.  System integrators will begin by betting on a few platforms, eventually realizing they need to own their own stack or face a replay of the past stack wars.
  • On-premise enterprise ISVs will push for a private cloud. The on-premise enterprise ISVs are struggling to keep up with the on-premise license revenue and are not yet ready to move to SaaS because of margin cannibalization fears,lack of   scalable platforms, and a dirth of experience to run a SaaS business from a sales and operation perspectives. These on-premise enterprise software vendors will make a final push for an on-premise cloud that would mimic the behavior of a private cloud. Unfortunately, this will essentially be a packaging exercise to sell more on-premise software.  This flavor of cloud will promise the cloud benefits delivered to a customer’s door such as pre-configured settings, improved lifecycle, and black-box appliance. These are not cloud applications but will be sold and marketed as such.
  • Money and margin will come from verticalized cloud apps. Last mile solutions continue to be a key area of focus.  Those providers with business process expertise gain new channels to monetize vertical knowledge.  Expect an explosion of vertical apps by end of 2011.  More importantly, as the buying power shifts away from the IT towards the lines of businesses, highly verticalized solutions solving specific niche problems will have the greatest opportunities for market success.
  • Many legacy vendors might not make the transition to cloud and will be left behind. Few vendors, especially the legacy public ones, lack the financial where with all and investor stomachs to weather declining profit margins and lower average sales prices.  In addition, most vendors will not have the credibility to to shift and migrate existing users to newer platforms.  Legacy customers will most likely not migrate to new SaaS offerings due to lack of parity in functionality and inability to migrate existing customizations.
  • Social cloud emerges as a key component platform. The mature SaaS vendors that have optimized their “cloud before the cloud” platform, will likely add the social domain on top of their existing solutions to leverage the existing customer base and network effects.  Expect to see some shake-out in the social CRM category. A few existing SCRM vendors will deliver more and more solutions from the cloud and will further invest into their platforms to make it scalable, multi-tenant, and economically viable.  Vendors can expect to see some more VC investment, a possible IPO, and consolidation across all the sales channels.

More…

Trends: 2011 Cloud Computing Predictions For CIO’s And Business Technology Leaders

This blog was jointly posted by Chirag Mehta (Independent Blogger On Cloud Computing) and R “Ray” Wang (Principal Analyst and CEO, Constellation Research, Inc.)

Cloud Adopters Embrace Cloud For Both Innovation and Legacy Optimization

Once thought to be the answer to deployment options for just the SMB market, early cloud adopters proved otherwise.  Stereotypes about industry, size of company, geographies, and roles no longer hold back adoption.  Cloud adoption at all 4 layers of the cloud passed the tipping points in 2010 as a key business and technology strategy (see Figure 1).  For 2011, we can expect users to:

Figure 1. The Four Layers Of Cloud Computing

General Trends Reflect Natural Maturation Of The Cloud Market

  • Replace most new procurement with cloud strategies.  Preference in deployment options and lack of availability of innovative solutions in on-premises options will result in a huge shift for 2011.  Add capex swap out for opex, and most CFO’s will be singing the praises of Cloud along with the business and IT leaders.
  • Start with private clouds as a stepping stone to public clouds.  Conservative CIO’s looking to dip their toes into cloud computing will invest into private cloud while evaluating the public cloud at the same time.
  • Get real about security. Customers will move from “the cloud is not secured” to “how can security be achieved in the cloud?”.  They will start asking real questions about security.  The result — cloud vendors must further showcase various industry-specific compliance approaches.
  • Move to private clouds as a back up to public clouds.  Forecasts in cloud security breaches will call for partly cloudy cloud adoption.  Despite the woes in on-premises security and the march to the cloud, cyber attacks will force companies to mov e from public clouds to private clouds in 2011.  Concern about cyber gangs hacking into commercial and military systems leads to a worldwide trend that temporarily reduces public cloud adoption.  Hybrid models for apps in the public cloud and data in the private cloud emerge as users migrate from on-premises models.  Data integration and security rise to key competencies for 2011.  The bottom line – improved data security reliability will drive overall cloud adoption in the latter half of 2011.  Organizations will keep private clouds for both security and back up.

SaaS (Consumption Layer) Emerges As The Primary Access To Innovation

  • Begin the transition from best of breed purpose built solutions to cloud mega stacks. Customers will still need stacks to be augmented by best of breed purpose built solutions.  As with the early days of ERP and CRM, expect su ite consolidation to occur for SaaS apps vendors.   However, the vendors with both the best PaaS platform and ecosystem will win.  Mature cloud customers will bet on several emerging platforms and apps as well as content driven cloud platforms complemented by strong integration solutions.  Access to deep industry vertical solutions will play a key role in this migration.  The need to quickly innovate will hasten SaaS adoption.
  • Superior user experience and scale won’t be mutually exclusive. The customers, especially the line of businesses (LOBs) will demand superior user experience as well as the scale in the SaaS applications and the tools that they will use. Ease of use will be on top of the list while evaluating a SaaS application and will help the SaaS vendors win a deal against on-premise incumbents whose products may have more features but poor user experience.

More…

News Analysis: New HP Leadership Indicates Interest In Enterprise Software

Two Seasoned Software Veterans Join Hewlett-Packard

On September 30th, 2010, Hewlett-Packard (HP) announced two significant changes in its leadership structure.  Former SAP CEO Léo Apotheker was named as CEO; and Kleiner Perkins partner and former Oracle COO, Ray Lane was named as non-executive Chairman.  These two appointments signal a seriousness to shake things up for the better at HP because:

  • Cloud computing and consolidation forces hardware companies such as HP to seek higher margins. Most hardware vendors face single digit margins in their core business.  To bolster margins, many vendors acquired system integration and BPO firms.  For example, HP purchased EDS and Dell acquired Perot Systems.  The next logical step requires the hardware vendors to get into software (see Figure 1).  Software margins hover from 10% to 50% depending on the market.  Expect a hardware vendor such as Cisco, Dell, or HP to acquire a cloud based company such as Salesforce.com or Rackspace to move into the software business.  HP should go on the SaaS/Cloud offensive if they want to deliver rapid innovation to customers and break the cycle of dependence on packaged apps vendors such as Oracle and SAP.  HP can challenge Oracle through a complete cloud stack of SaaS, Paas, DaaS, and IaaS by investing in white spaces in the solution road map with verticals and other pivot points that have not been well served.  In addition, expect forms of SaaS BPO to emerge as clients seek best of breed SaaS and hybrid deployments.
  • Oracle’s acquisition of Sun follows the 1970′s IBM playbook and HP will compete with Oracle in the long run. Oracle’s going after the “golden age of computing”.  The impact — the tech industry reverts back to the beginning of a 40 year innovation cycle.  For example, mainframe time sharing manifests as SaaS/Cloud.  AS/400 and integrated computing evolves into appliances or cloud in a box.  Oracle’s strategy takes silicon to software and signals a need to deliver turnkey verticalized, integrated offerings.  Should HP continue to just serve in the commoditized infrastructure market, Oracle will beat HP in joint accounts for thought leadership and mind share.  Oracle’s going after the high end server market and the verticalized appliances market.  HP must have something to offer business leaders other than faster, better, cheaper boxes.  Software solutions are admission to the party.  HP could and should partner more closely with SAP in the short term to double up and battle Oracle.

News Analysis: Capgemini Immediate Delivers Cloud Services To Royal Mail Group

Capgemini Changes The Rules Of The Cloud Game

On July 27, 2010, Capgemini announced a six-year cloud computing deal with Royal Mail Group (RMG).  The partnership brings the capabilities of Capgemini’s Infostructure Transformation Services (ITS) and Capgemini Immediate to RMG.  As the UK’s second largest employer, RMG employs 188,000 people, handles over 80 million items per day, and delivers over 150,000 parcels per day via ParcelForce, its worldwide express parcel business.  Analysis of the deal reveals two key points:

  • Royal Mail Group chooses cloud computing for concrete business value. RMG sought a new eBusiness platform.  Through the RFP process, RMG determined that traditional on-premise software and hardware solutions on single stack technologies (e.g. Microsoft, Oracle, and IBM) did not meet current and future business requirements.  Requirements included decreasing the time to market to deliver new solution offerings, delivering pay-as-you-go services to meet the needs of the organization’s personal and small or medium business customers, and supporting RMG’s innovative parcel delivery services to keep up with the UK’s online shopping boom.  After careful analysis, RMG realized they would have to go best of breed.

    Point of View (POV):
    With over 3000 web pages and 100 applications, RMG felt the dual weight of transforming legacy applications and the need to free up resources for innovation.  As with many legacy systems, changes to their current eBusiness platform most likely took too long to implement and the integration challenges of managing a specialized and aging e-business environment became too cumbersome to manage.  RMG chose Capgemini Immediate because the solution delivered an ecosystem of solutions as one offering with Capgemini acting as both the services integrator and prime contractor.  RMG gained both the business value in best of breed solutions and the flexibility of the cloud computing model.
  • Capgemini Immediate mitigates the challenges of managing SaaS best of breed “hell”. Capgemini’s integrated best of breed cloud offering includes 18 initial SaaS and open source suppliers across the software-as-a-service (SaaS) and platform-as-a-service (PaaS) layers of cloud computing.  Key examples of core PaaS components delivered immediately to the customer include Drupal (Content Management), Apache Software Foundation (Common UI service), IBM Infosphere Datastage (ETL), Cordys (Business process orchestration), Attenda (Business activity management), and Talis (Semantic data management).  For example, the marketing and eBusiness SaaS offering includes Salesforce.com (Customer transactions), Demandware (eCommerce), Kognitio (Data Warehousing-as-a-Service), Ominiture (Web analytics), Eloqua (Online marketing) and Google (Search) see (Figure 1).

    POV:
    Leading companies who seek best of breed approaches often face challenges in integration and managing multiple vendor contracts.  The Capgemini Immediate offering reduces the risk of best of breed because clients sign one contract and Capgemini manages the delivery risk, SaaS and hybrid integration, and the management of partners.  In addition, the on-demand pricing and delivery model enables organizations to manage seasonal peaks such as holidays that may require excess capacity.  Best of breed solutions can link back to the RMG ecosystem with ease allowing for more choices among application solutions.

Figure 1. Capgemini Immediate Provides A Best Of Breed E-Business Platform In The Cloud

Source: Capgemini

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