Posts Tagged ‘IT Strategy’

Research Summary: Next Generation CIOs Aspire To Focus More On Innovation And The Chief Digital Officer Role

Executive Summary

Constellation shares with its clients the fourth annual groundbreaking survey of CIOs later this week.  The 2014 survey interviews respondents about their priorities by CIO persona.  Constellation identified infrastructure, integration, intelligence, and innnovaiton as the four personas of the next gen CIO in 2011.

Survey results show that while CIO’s prefer to spend more time on innovation projects, most CIOs must spend their time battling the reduction of cost in IT delivery.  In the shift towards dominating digital disruption, CIOs can only move as fast as their organization’s DNA will allow while driving transformation. Using Constellation’s organizational DNA framework, CIOs can understand how much change they can expect their organization to consume and gauge their ability to impact the thought process and culture.  An excerpt of some of the findings can be found below:

A. CIOs Must Battle Keeping The Lights On Despite A Desire To Focus On Innovation

In Constellation’s recent CIO survey of 119 respondents, over 44% expressed that reducing the cost of IT delivery remained the number one priority (see Figure 2).  However when asked what should be the number one priority almost 44% expressed that bringing innovation to the business was the number one requirement (see Figure 3).

Figure 1. CIOs Still Prioritize Reducing IT Costs

Figure 2.  Bringing Innovation to the Business Is Top Of Mind On The CIO Agenda

B. CIOs Must Overcome Three Barriers To Bringing Innovation To The Business

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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.

Market Maker 1:1: Steve Miranda, Oracle Fusion Applications Update – The Inside Story

The Inside Story On Oracle Fusion Apps At The End of 2012


Constellation sat down with Steve Miranda, Oracle’s Executive Vice President of Oracle Applications Product Development to discuss the state of Oracle Fusion Apps in a no-holds barred honest conversation about what’s working, what’s not, and what to look forward to in 2013.

R “Ray” Wang (RW): Steve Miranda is Executive Vice President of Oracle Applications Product Development. He is responsible for leading all aspects of product strategy, product development, and product delivery for Oracle’s applications and related cloud services. This includes Oracle Fusion Applications and Oracle’s newest products for customer service and support, commerce, and talent management.

Mr. Miranda joined Oracle in 1992 and has held a variety of leadership positions within the development organization. In 2007 he was asked to lead the engineering of Oracle’s next-generation suite of software applications, Oracle Fusion Applications. Under Mr. Miranda’s leadership, Oracle has continually delivered on its promise to help its applications customers innovate and remain competitive while leveraging their existing IT investments and increasing the value of those investments with new Oracle products and services.

Prior to Oracle, Mr. Miranda worked at GE Aerospace. He holds degrees in mathematics and computational sciences from Stanford University.

 

CATCHING UP ON ORACLE FUSION APPLICATIONS TRACTION

(RW): As 2012 is coming to an end it is a good time to reflect on how Oracle Fusion Applications has been doing this year. It would seem that Oracle’s been quite quiet about Oracle Fusion Applications throughout the year. Is the product selling? What’s the state of the Oracle Fusion Applications product lines?

Steve Miranda(SM): Oracle Fusion Applications is doing very well. We’re actively selling the product. In fact, we already have over 400 customers on Oracle Fusion Applications. We’re doing better than Salesforce.com when they started. Keep in mind, we have a rich customer base looking for innovation.

RW: When you say “Oracle Fusion Applications is selling well”, is that the whole suite or components of Oracle Fusion Applications?

SM: We are actively selling the product. More than 400 customers are on Oracle Fusion Applications, that’s any part of Oracle Fusion Applications, not including RightNow, Taleo, Oracle Business Analytics, or Oracle Fusion Middleware. Two thirds of the customers have chosen to deploy in a SaaS model. Then the second largest deployment model but far below are on-premise and the rest are hosted in our managed services.

RW: Does “managed services” means they own their own license, right?

SM: That’s correct. What’s powerful about these deployments patterns is that customers are accessing innovation faster than before. We are at over 100 live customers and are averaging one go-live a day right now.

RW: I understand that Oracle deployed Oracle Fusion Applications internally? How was that experience in “drinking your own champagne”?

SM: Ray, that’s correct. We did drink our own champagne and we are now using Oracle Fusion CRM internally instead of Siebel.. We have a global single instance for the business. When we deployed, we started out with 2 instances to show case a co-existence approach and an end-to-end Oracle Fusion Applications approach. As of June 1, 2012, Oracle Fusion CRM was up around the world. All the territories, forecasting, quotas, sales force automation, and contacts are in Oracle Fusion CRM globally.

RW: Is it one instance now?

SM: Yes. We also went live w/ Oracle Fusion Financials Accounting Hub on the back end. We replaced Hyperion and Oracle E-Business Suite GL and also went live June 1, 2012. We’ve already done several month-end closes and we also have Oracle Fusion Talent Performance Management up live. Employees and managers are now doing goal setting and appraisals.

RW: To be honest with you Steve, we aren’t seeing Oracle much in head to head competitive new deals. We don’t see big press releases about new wins. Where are the customers? Who’s buying what and why?

SM: Well, first of all, many of our existing customers are coming to us about Oracle Fusion Applications. Second of all, and you may not believe this, we’re not focused on publicity, but rather we want to ensure customer success.. Each go-live is very important to us. In our first set of go-lives, we have 10,000 customers who want to talk to the first 10 go lives. We also don’t want to overwhelm our initial customers.

Let me give you some details and examples so you understand the breadth and depth of what the Fusion Apps base looks like and so there’s no confusion. Here’s a selected slice:

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Press Release: Veteran Technology Infrastructure Strategist and Academic Dr. Alea Fairchild Joins Constellation Research, Inc.

Brussels, Belgium – November 7th, 2011
16:30 pm (GMT +1:00) Central European Time

Constellation Research Inc, an award winning, specialty research and advisory firm that serves business leaders who seek to unleash the power of emerging and disruptive technologies, announced today that Dr. Alea Fairchild has joined as a Vice President & Principal Analyst for Technology Infrastructure Strategy, Legacy Optimization, and EMEA policy.  Fairchild will provide strategy and counsel to key Constellation client types: Chief Information Officers, Chief Technology Officers,  investment analysts, VCs, technology policy executives, and technology buyers.

Dr. Fairchild has eighteen years experience in global IT market analysis, and has worked for the major market research agencies as both an analyst and as a consultant. She has also been a consultant for the European Commission, as well as to major multinational IT companies throughout Europe.

Alea’s research will explore key business themes such as intelligent data management and the changing view of the data landscape from the Cloud, value chain data management: insuring partners’ data protection policies, n ext gen government: data privacy and best practices, Internet of things: connected real estate: facilities management as a service provider, and co-creation: time window delivery options in e-commerce.

Topic areas will include technology infrastructure strategy, including data security and privacy, innovation, governance and compliance. As our resident e-Europe specialist, Dr. Fairchild provides insight on best practices in data protection in the value chain.  She is a proven thought-leader who provides clients information and ideas backed with significant marketing expertise, specifically in banking, biotech/healthcare and the public sector.

Previous work experiences include serving as a professional technology consultant at The Constantia Institute bvba.  She is also an Associate Professor of Management at Vesalius College, as well as faculty in the Economics department of Vrije Universiteit Brussel. She was previously been a Senior Researcher at Tilburg University in The Netherlands in the Department of Information Management. Her technical expertise lies in open architectures and interoperability. Recent areas of research have included knowledge management and productivity metrics for technology. Her academic training is in the area of information economics.

Alea has authored several conference papers and articles and five books: “Interoperability for Enterprise Information Systems”, September 1996, “Year 2000 Compliance: The Guide to Successful Implementation”, May 1997, and “Reengineering and Restructuring the Enterprise”, February 1998, all published by CTR. Her book, “Technological Aspects of Virtual Organizations”, was published by Kluwer and her latest book, “Entrepreneurship: Introduction to Business Plans” was published by die Keure.

“Driving business objectives with innovative technology solutions in a dynamic market environment requires good advice and solid support”, says Fairchild.  “Joining a well -respected team such as Constellation Research is a terrific opportunity for me to mesh my work in technology policy and implementation with other experienced research professionals in facilitating enterprise technology decision making.”

Alea’s coverage addresses key themes in legacy technology optimization and innovation, next generation commerce,  for areas such as:

  • Servers, storage and middleware (infrastructure)
  • Information security, data security, and privacy solutions
  • Process innovation in services
  • Governance and compliance
  • Virtual communities for governance issues (value chain),information security
  • e-Europe
  • Public sector
  • EU technology policy

“Constellation’s EMEA clients expect significant business experience along with delivery that respects a cultural point of view”, said  R “Ray” Wang, Principal Analyst and CEO, “Alea’s ability to mesh technology strategy with both innovation and policy will help clients translate from the art of the possible to the practical and doable.  I’m personally excited to have someone as knowledgeable as Alea on board for our global client base!”

Please join us in welcoming Alea Fairchild to the Constellation Research family and our growing EMEA presence now in Brussels, London, Madrid, and Tel Aviv!

COORDINATES

Twitter: @afairch
Linked In: http://be.linkedin.com/pub/alea-fairchild/0/236/819
Geographical Location: Brussels, Belgium
Email
: alea (at) ConstellationRG (dot) com.

ABOUT CONSTELLATION RESEARCH, INC.*
Constellation Research is an award winning, specialty research and advisory firm that serves business leaders who seek to unleash the power of emerging and disruptive technologies.  Our analysts start by understanding the business objective, applying real world experience and insights, and then incorporating disruptive technologies and business models as appropriate.  We cater to board of directors and c-suite executives looking for an edge in business model and technology innovation.  Research outputs always provide an insightful buy-side point of view.

Why Your Mission Is Our Mission

In today’s business environment, the rate of change is not only constant, but also rapidly escalating.  New business models by upstarts disrupt competitors with increasing frequency in all industries and markets.  In just 10 years, even 5 years, or dare say 24 months, many established companies have been left vulnerable, beaten down, and toppled by new upstarts.  Why? Business leaders have been too slow to react to their customers and the changes happening in the societal, technological, environmental, economic, and political fronts.

In business models, products are now excuses to sell services.  Product innovation cycles have shortened from years to months to weeks.  On the work front, five generations in the workforce disagree on where to work, how to work, when to work, and why to work.  Add the current trend of consumerization of IT  to the pace of change and business leaders must strategically determine which new technologies should be considered.

Unfortunately, the legacy research analyst firms and advisory firms continue to fail their clients when faced with these new challenges. Why? Their myopic focus on an IT centric point of view ignores the realities of the market.  In fact, Constellation estimates that the average IT budget is down 5% year over year and at best up 2% among the most innovative companies.  However, tech spending is up on average 18 to 22% at the most innovative firms.  What’s happened? The buying power has shifted and business leaders increasingly take control of how they are applying technologies to their business while whittling down the corporate IT budget for operational efficiencies.

Why Your Success Is Our Objective

We’re business leader and business value focused. Constellation differentiates itself in the market in two ways by:

  1. Focusing on the board room and C-suite point of view. Constellation’s research addresses the needs of boards, CEOs, CFOs, CIOs, CMOs, CHROs, CPOs, CSCOs, and COOs.
  2. Addressing the business problem first.  Research starts by addressing business value and then applying where disruptive and emerging technologies may play a role.

The result – Constellation serves as a coach and advisor to senior business leaders working on tough business problems including:

  • The future of work
  • Next generation customer experience
  • Cross channel commerce across the supply and demand chain
  • Digital marketing transformation
  • New organizational models including People-to People Networks
  • The new C-suite
  • Big data, decision systems, and information management
  • Business value frameworks and metrics for success
  • Energy management and green tech
  • Legacy technology optimization

We look forward to serving you with Insight, Inspiration, and Impact.

*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.

Press Contacts:

Contact the Media and Influencers relations team at Press (at) ConstellationRG (dot) com
for interviews with analysts.

Sales Contacts:

Here’s how to reach our sales team:

Kieran Barr
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Kieran (at) ConstellationRG (dot) com
Office:
+1.206.409.5009
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Alexandre Mesquita
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Alexandre (at) ConstellationRG (dot) com.
Phone:
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: @amesquit

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Monday’s Musings: Putting An End To The Conflict Of Interest Among Some Sourcing Advisors

Many Services Firms Seek Unfair Advantages With Market Makers

Service providers continue to battle it out in the über competitive market for large annual multi-million dollar contracts.  Market makers who serve as sourcing advisors, (i.e. management consultants, analysts, or vendor specialists) often influence the outcome of large sourcing contracts and system integration projects.  Consequently, more and more service providers seek to influence sourcing advisors.

Now let’s be honest, influence through consulting engagements around positioning, competitive intelligence, and go-to-market strategy is nothing new.  Most firms make it transparent to the buyer who they work with.  However, in the past few months, we’ve uncovered several new techniques that cross the line on both objectivity and transparency.  These approaches include both formal and informal contractual guarantees across three major areas:

  • Number of blog posts or written research about a vendor. Sourcing advisors commit to writing certain amounts of research in exchange for a contract with the service provider.  In some cases, the research may require editorial approval by the service provider.
  • Number of invitations to bidders conferences. Sourcing advisors commit to inviting the contracted service provider to a short listed group of candidates.  Some contracts even include a tiered scale for greater payouts based on the number of invitations to deals.
  • Kick backs and referral fees for closed business. Sourcing advisors collect a financial reward for recommending a buyer to a service provider.  Fees work similar to referral models with alliance partners.

The Bottom Line:  Ask These Five Questions Before You Engage With Your Sourcing Advisor

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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.

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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.

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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.

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Research Report: The Upcoming Battle For The Largest Share Of The Tech Budget (Part 2) – Cloud Computing

Welcome to a part 2 of a multi-part series on The Software Insider Tech Ecosystem Model.  Part 2 describes how the cloud fits into the model.  Subsequent posts will apply the model to these leading vendors:

      The aggregation of these posts will result into a research report available for reprint rights.

      Cloud Computing Represents The “New” Delivery Model For Internet Based IT Services

      Technology veterans often observe that new mega trends emerge every decade.  The market has evolved from mainframes (1970′s); to mini computers (1980′s); to client server (1990′s); to internet based (2000′s); and now to cloud computing (2010′s).  Many of the cloud computing trends do take users back to the mainframe days of time sharing (i.e. multi-tenancy) and service bureaus (i.e cloud based BPO). What’s changed since 1970?  Quite plenty — users gain better usability, connectivity improves with the internet, storage continue to plummet, and performance increases in processing capability.

      Cloud delivery models share a stack approach similar to traditional delivery.  At the core, both deployment options share four types of properties (see Figure 1):

      1. Consumption – how users consume the apps and business processes
      2. Creation – what’s required to build apps and business processes
      3. Orchestration – how parts are integrated or pulled from an app server
      4. Infrastructure – where the core guts such as servers, storage, and networks reside

      As the über category, Cloud Computing manifests in the four distinct layers of:

      • Business Services and Software-as-a-Service (SaaS) – The traditional apps layer in the cloud includes software as a service apps, business services, and business processes on the server side.
      • Development-as-a-Service (DaaS) – Development tools take shape in the cloud as shared community tools, web based dev tools, and mashup based services.
      • Platform-as-a-Service (PaaS) – Middleware manifests in the cloud with app platforms, database, integration, and process orchestration.
      • Infrastructure-as-a-Service (IaaS) – The physical world goes virtual with servers, networks, storage, and systems management in the cloud.

      Figure 1. Traditional Delivery Compared To Cloud Delivery


      More…

      Research Report: The Upcoming Battle For The Largest Share Of The Tech Budget (Part 1) – Overview

      Welcome to a multi-part series on The Software Insider Tech Ecosystem Model.  Subsequent posts will apply the model to these leading vendors:

      • Overview
      • Cloud Computing
      • Cisco
      • Dell
      • HP
      • IBM
      • Microsoft
      • Oracle
      • Salesforce.com
      • SAP

      The aggregation of these posts will result into a research report available for reprint rights.

      Business Models Converge During Recessions

      Is your technology provider a hardware vendor or a software vendor? Does your System Integrator now provide solutions in the cloud? These questions will continue as models converge.  Hardware, software, and system integration vendors must reinvent new models of revenue.  The economic recession has forced business model shifts at the major technology companies.  The goal – own the largest share of both the business and IT technology budget,  As these sellers attack new profit pools, buyers can expect continued convergence of business models because:

      • Hardware companies seek higher margins. Most hardware vendors face single digit margins in their core business.  To bolster margins, many vendors acquired system integration firms.  For example, HP purchased EDS and Dell acquired Perot Systems.  The next logical step requires the hardware vendors to get into software.  Software margins hover from 10% to 50% depending on the market.  Expect a hardware vendor such as Cisco, Dell, or HP to acquire a SaaS based company to move into the software business.
      • Service providers build differentiated intellectual property (IP) using the Cloud. Service providers 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.  Service providers can take market share through SaaS 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.
      • Software companies use Cloud to transform into 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 in the Cloud.  Three areas of growth will include benchmarking, trending, and prediction.
      • Companies by-pass software vendors for competitive advantage. Roper Industries acquisition of iTrade Networks on July 26th, proves a key point.  Smart and innovative companies will put custom development in the cloud to meet last-mile solution needs that packaged apps vendors or system integrators fail to deliver.  Companies may also acquire software vendors if they can’t build the solution.

      More…

      Tuesday’s Tip: Dealing With Vendor Threats To Charge For Back Maintenance Fees

      Four Common Customer Scenarios Will Trigger Vendors To Raise The Back Maintenance Fee Discussion

      Back maintenance fees describe the amount an organization would have paid for maintenance if they would have continued to pay the usual stream required to access support, bug fixes, patches, and upgrade rights.  As economic conditions have worsened, many organizations have turned to self-support, third party maintenance (3PM), or dropped support.  Discussions with 43 enterprise software customers reveal four common scenarios (see Figure 1):

      1. Scenario 1: Self supporting customers looking to upgrade to next release. Customers (44.19% n=19/43) in these scenarios typically run mature systems and are in businesses that do not face dynamic change .  They stopped paying maintenance years ago and rarely make major changes to the system.
        Catalyst:  Something happens in the business and the need to upgrade arises.
        Typical vendor response:
        Upgrades can only be provided to customers who pay for maintenance.  Upon payment of back maintenance, upgrades will be provided.  In some cases, vendors also levies a penalty.
      2. Scenario 2: Self supporting customers seeking a major bug fix or regulatory update. Organizations (27.91% n=12/43) in this dynamic have self-supported for years without incident but run into scenarios where their own teams can not resolve an issue.
        Catalyst: Bug fixes and major regulatory changes can not be supported by the internal team.
        Typical vendor response: Bug fixes and regulatory updates can only be provided to customers who pay for maintenance.  Upon payment of back maintenance, patches and regulatory updates will be provided.  In some cases, vendor also levies a penalty. More…

      Tuesday’s Tip: 2010 Apps Strategies Should Start With Business Value

      Begin Apps Strategy Projects With Bite-Sized Entry Points

      Complexity often plagues today’s apps strategies.  With tight budgets, limited resources, and little time, organizations need to find bite-sized entry points. The need to meet ever changing complex business requirements requires a four-step, basic (A,B,C,D) approach:
      1. Align your business requirements with the hierarchy of business needs. Every project and initiative can be placed into one of the five stages.  Use the organizational hierarchy of needs to classify and prioritize the importance of each project.  With a clear sense of how the priorities stack up, you can begin crafting your apps strategy around organizational readiness, business process optimization, technology strategy, and vendor ecosystems.
      2. Base decisions on the identification of 3 major types of business processes. As organizations begin that process of documenting business processes, they must differentiate among the 3 major types of business processes.  In key flows such as order to cash, hire to retire, incident to resolution, procure to pay, etc, remember to categorize key processes into three buckets: mission critical, commoditized, and innovative.
      3. Choose your entry points to business value. It makes no sense to boil the ocean.  Clients often start with departmental and work there way to cross-departmental initiatives.  Advanced customers focus on external entry points such as customers and partners.  Keep in mind processes cross functional fiefdoms but you do have to start somewhere. (see Figure 1.)
      4. Define the metrics that matter. Begin with the end in mind.  This Coveyism always rings true in transformational activities.  Metrics should be aligned with your entry points.  Quantify the baseline and determine the effort.  Adjust your ROI targets to align resources with efforts to move the needle.  The goal – drive business value. (see Figure 2.)
      Figure 1. Choose Your Entry Points To Business Value

           (Copyright © 2009 by R Wang and Insider Associates, LLC. All rights reserved.)

      (Copyright © 2009 by R Wang and Insider Associates, LLC. All rights reserved.)

      Figure 2. Define The Metrics That Matter
      Copyright © 2009 by R Wang and Insider Associates, LLC.  All rights reserved.)

      (Copyright © 2009 by R Wang and Insider Associates, LLC. All rights reserved.)

      The Bottom Line – Sketch The Big Picture, But Paint By Number

      With the pace of adoption much slower than the pace of technology innovation, organizations will have to complete small tactical projects that build out the larger picture.  Apps strategies should include tactical road maps that achieve strategic goals.  Don’t hesitate to plan ahead and build in flexibility.  Plans will change, so apps strategies must take an “agile” approach.   Iterate every 6 months as business needs change and new disruptive technologies emerge.  Keep focused on the goal in mind – business value.

      Your POV

      Have you planned your 2010 strategy?  Which entry points have you prioritized?  How are you defining business value?  Got a scoop or something to share? Please post or send on to r at softwareinsider dot org or rwang0 at gmail dot com and we’ll keep your anonymity.

      Copyright © 2009 R Wang and Insider Associates, LLC. All rights reserved.