Posts Tagged ‘next gen CIO’s’

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

More…

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.

Monday’s Musings: Understand The Four Organizational Personas Of Disruptive Tech Adoption

Pace of Innovation Exceeds Ability To Consume

Rapid innovation, flexible deployment options, and easy consumption models create favorable conditions for the proliferation of disruptive technology.  In fact, convergence in the five pillars of enterprise disruption (i.e. social, mobile, cloud, big data, and unified communications), has led to new innovations and opportunities to apply disruptive technologies to new business models.  New business models abound at the intersection of cloud and big data, social and mobile, social and unified communications, and cloud and mobile.

Unfortunately, most organizations are awash with discovering, evaluating, and consuming disruptive technologies.  Despite IT budgets going down from 3 to 5% year over year, technology spending is up 18 to 20%.  Why?  Amidst constrained budgets, resources, and time limits, executives are willing to invest in disruptive technology to improve business outcomes.  Consequently, successful adoption is the key challenge in consuming this torrent of innovation.  This rapid pace of change and inability to consume innovation detract organizations from the realization of business value.

Organizations Fall Into Four Personas Of  Disruptive Technology Adoption

A common truism in the industry is “Culture trumps technology”.  As organizations apply methodologies such as Constellation’s DEEPR Framework in improving adoption, leaders must first determine which of the four personas best fits their organization’s appetite for consuming and innovating with disruptive technologies.

The personas of disruptive technology adoption assess organizational culture in two key axes (see Figure 1).  The first is how incremental or transformational an organization looks at applying disruptive technology to business models.  The second assesses how proactive or reactive an organization is in carrying out new initiatives.  Based on these dimensions, the four personas include:

  1. Market leaders. Market leaders prefer to drive transformational innovation.  They look at technologies as enablers in disrupting business models.  They see competitive differentiation in delivering outcomes to customers. Market leaders accept failure as part of the innovation process.  They fail fast and move on.
  2. Fast followers. Fast followers prefer to react to the success of market leaders and their experiments.  When they sense success, they tend to jump in.  Fast followers do not like to fail and rapidly apply lessons learned from market leaders into their road maps.  Fast followers tend to deliver scale in the markets as a counter balance to arriving later in the market.
  3. Cautious adopters. Cautious adopters proactively deliver incremental innovation.  They tend to take a more measured approach and spend more time studying how they can improve an existing success than creating a transformational change.  Cautious adopters often come from regulated industries where security and safety are paramount objectives.
  4. Laggards. Laggards tend to procrastinate on applying innovations to their business models.  They prefer not be bothered by trends and will only react when the trends have moved beyond mainstream.  They see value in waiting as prices will drop over time as success rates increase over time.  Laggards enjoy waiting.

During the interviews and discussions with the 2012 Constellation SuperNova award participants, key questions emerged in the decision process on whether to adopt or pass on a disruptive technologies.  These questions aligned well with the four personas of disruptive technology adoption.

Figure 1.  Organizations Should Understand Which Persona Of Disruptive Tech Adoption Describes Them Best

More…

Monday’s Musings: Why Are Innovative CIO’s Betting Less On Cloud And Virtualization?

Innovative CIO’s Betting On Disruptive Technologies That Impact Enterprise Business Value

In the Four Personas of the Next Gen CIO published March 3, 2012, four personas of the CIO were identified: Chief Infrastructure Officer, Chief Integration Officer, Chief Intelligence Officer, and Chief Innovation Officer (see Figure 1).  This research of 79 progressive CIO’s identified the key projects for each of the personas.  As part of the survey, respondents were asked what key disruptive technologies would make an impact in the enterprise in the next year.

Figure 1. The Four Personas Of The Next Generation CIO

Source: Constellation Research, Inc.

In Constellation’s latest update (to be published May 2012), 105 innovative CIOs participated in the survey.  The results indicate a shift away from cloud  (56.4%-2012) and virtualization (29.6% – 2012) to mobile (60.2%-2012) and big data and analytics (48.7%-2012) (see Figure 2).  Despite being the top projects in 2011, the drop in priority of virtualization (51.9%-2011) and cloud (69.6%-2011) doesn’t reflect the lack of interest.  In fact, these projects have matured and innovative CIOs have now prioritized the next wave of innovation.

More…

Event Report: The Sentiment At Microsoft Convergence 2011

Refresh Cycle Reflects Bullish Outlook By Partners and Customers

Microsoft Convergence kicked off over the weekend in Atlanta, GA at the Georgia World Congress Center.  With an anticipated increase in attendance, many new product announcements, and a technology refresh cycle in play, attendees seemed upbeat.  The event kicked off in true tradition including the must attend Randy and Andy (IBIS, Inc) welcome party.  Anticipated cloud announcements, new features, and industry extensions dominate discussions among partners.  Through a survey of over 60 customers, we found the following observations:

  • Customers expect to upgrade ERP and CRM in 12 to 18 months. Good news for Microsoft partners.  Most ERP and CRM customers plan to upgrade within the next 12 to 18 months (see Figure 2).  Many plan to upgrade ERP (18.0%) and CRM (13.1%) in the next 6 to 12 months.
  • Cloud adoption remains partly cloudy. While there are numerous benefits to cloud adoption for clients,  34.4% of ERP customers showed no interest.  Most CRM customers expected to make the shift to the cloud (see Figure 3).  As for the shift to office in the cloud, 18.0% planned to make the shift 24 months from now.
  • Attendees seek to leverage Microsoft investment. Informal conversations highlighted interest in mobile development, greater sharepoint adoption, and interest in Power Pivot.  Most customers felt Microsoft had turned the corner and began to innovate as of the Windows 7 launch.
  • Large customer prospects explore Two Tier ERP. In speaking with 13 divisions of large enterprises at the event, most attended to explore the option of adding Microsoft Dynamics ERP into their subsidiaries.  Eight of the ten companies ran SAP while three ran Oracle, and another two ran custom legacy systems.  Surveyed prospects believe that Two-tier ERP strategies will dominate future apps strategy.

Figure 1.  Flickr Feeds From Microsoft Dynamics Convergence 2011

(Tag your images with #softwareinsider or #rwang0 to include into the feed)

Figure 2. Most Microsoft Dynamics Customers Plan To Upgrade ERP & CRM In 12 to 18 Months

(Right click image to expand)

More…

Monday’s Musings: The Race For Enterprise Class Consumer Tech

Start Ups Chase Enterprise Dollars As Freemium Model Plays Out

I’ve been spending time with emerging technology start ups over the past 3 months.  The good news – innovation in the valley is alive and well.  Most of these ventures start with solving a consumer problem and hope for massive viral success in the freemium model.  The bad news – the VC’s hope for quick turnarounds that result in exit strategies to the deep pockets of Google, FaceBook, Microsoft, and Zynga.  The sad truth -  you and i know most will never make it.  When that realization hits, the VC’s hurry and move to the obvious next step – find an enterprise angle.

Consumer Tech Must Meet Five Elements To Earn Enterprise Class Status

To make it in the enterprise requires a mindset change.  Business models focus on well… making money!  We’ve spent much time coaching clients on how to move from freemium to premium.  We also have to explain how an enterprise customer (i.e. CIO, CMO, Line of Business exec) may make a decision.   Inevitably, our buy-side clients will ask, “Is this solution fit for the enterprise?”  In a post from October about how consumer tech trends will enter the enterprise, we discussed the 5S’ of for enterprise class software:

  1. Safe. Organizations expect these solutions to not only integrate with ease but also, not harm existing systems or jeopardize how users perform daily work and operations.
  2. Secure. More than just role based security mechanisms, these solutions should pass encryption requirements, prevent data intrusion, and protect key intellectual property assets.
  3. Scalable. Solutions should work in a wide range of environments, meet wide ranges of usage demands, and perform well across the globe.  Users should be able to grow demand and scale down as well as up.  Scaling up should lead to a lower cost per unit.
  4. Sustainable. Consumer technologies must meet requirements for flexibility and adaptability over longer periods of time (e.g. 7 to 10 years).  Training programs, knowledge transfer mechanisms, and support communities should be readily accessible.
  5. Simple. Software vendors should employ design thinking to build solutions based on how people want to use mobile, social, analytics, video, and cloud in an enterprise context. Enterprise software should deliver in an easy to roll out and use manner.

There are probably more criteria to add here and I encourage you to add your thoughts to the 5S of enterprise class. Kudos to Christian Pantel for his addition of the 5th S – Simple!

More…

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…

Research Report: How The Five Pillars Of Consumer Tech Influence Enterprise Innovation

Most Enterprise Software Vendors Fail To Deliver Innovation

Despite hundreds of billions wasted on failed research and development projects, most market influencers would agree that enterprise software vendors have produced a dearth of innovation over the past decade.  Vendors often cite UI re-skins, major functionality additions, integration of acquisitions, technology re-platforms, and weak attempts at faking cloud computing as innovations.  In fact, let’s call it what it is.  Only a handful of enterprise software vendors have truly innovated.   Many enterprise software vendors are fast followers.  Most are innovation laggards living off fat maintenance revenue streams.  Ask any product strategist where they gain their inspiration and they will all cite advancements in consumer technology; and not peer enterprise competitors.

Innovative Enterprises Push Forward Mostly On Their Own

During this year’s Information Week 500 event, conversations with over 50 leading business technology leaders highlighted the growing gap in innovation.  These next gen leaders demonstrated how they were turning to consumer tech advancements to influence their custom development efforts; and/or seeking emerging vendors with innovative offerings.

For example, Bill Martin, the CIO of Royal Caribbean showed how design thinking coupled with real-time analytics and on-board mobility could improve the cruise experience on the largest ship ever built.  Shawn Kleim, Director of Development at WetSeal, provided proof points on mobility and social convergence in driving retail sales and eCommerce in the highly competitive teen apparel market.  Dave Bent, Senior VP of eBusiness services and CIO of United Stationers, proved how a company could deliver cloud services to partners and create competitive advantage across a value chain.

A number of CIO’s showcased how they were taking advantage of the cloud with SaaS apps and private clouds. Others discussed their efforts to optimize costs using third party maintenance to pay for innovation.  The common lessons learned – most did not expect to gain market advantage from their existing and legacy vendors.  Innovations came from the consumer tech side and next generation solution providers.  Consumer tech advancements influenced business driven technology advancements.

Software And Tech Vendors Rush To Incorporate The Five Pillars Of Consumer Tech

Ten elements drive key design points for next generation apps.  These design points showcase how advancements in consumer tech now permeate the enterprise.  Design thinking concepts drive dynamic user experiences, business process focus, and community connectedness.  Based on existing research, deep dives into major vendor road maps, and validation with clients, five pillars of consumer tech have emerged as the foundation for future inspiration in the enterprise (see Figure 1):

Figure 1.  Five Pillars Of Consumer Tech Will Influence Enterprise Software Throughout The Next Decade

More…