A new McKinsey Global Institute (MGI) report estimates the potential economic value of the IoT (see The Internet of Things: Mapping the value beyond the hype) at $3.9 trillion to $11.1 trillion per year by 2025. B2B will create two-thirds of the value. Factories optimizing their equipment and operations will be the source of about one-third of the value created. Cities will generate about 15 percent of the total value with the IoT applied to applications such as transportation and public health.
But McKinsey cautions that interoperability is critical. MGI estimates 40-60 percent of the real economic value of the IoT will come from interoperability – connecting devices to each other and external systems. Also, most IoT data remains unused, perhaps less than one percent of what’s collected.
And then there’s the incessant problem of security and privacy. In an interview with USA Today, anti-virus company founder Eugene Kaspersky said that Continue reading Internet of Things, Threats, Traffic, and Togetherness
What is Happening?
Saugatuck CEO and Founder, Bill McNee, and Research VP Charlie Burns recently attended IBM’s Cloud Analyst Summit at the new headquarters for the IBM Watson and Cloud business units in New York City. From the get-go, it was clear that IBM wanted to put forth a new vision and image for the company (down to the use of a new color blue) – and for the most part they succeeded. This Research Alert highlights some of the key takeaways from the event.
Robert LeBlanc (IBM SVP of Cloud) kicked the day off, emphasizing some of the key forces helping to shape the new business computing focus at IBM, and more broadly in the Cloud market. IBM called it Cloud 2.0. While we agree that the Cloud infrastructure and related markets are clearly shifting beyond their early focus on efficiency and cheap compute cycles, to a focus on business transformation and enabling innovative new data-driven business strategies – the name sounds so 1998 to us, and does an injustice to the strong and comprehensive vision that IBM unveiled.
Don Rippert, GM Cloud Strategy then provided a very insightful and practical overview of IBM’s emergent vision and strategy, which is best captured in the following 1-liner: “Our job is not to invent the future, but to integrate the future.” While follow-on speakers emphasized how innovative IBM continues to be, Rippert netted it down nicely in our opinion. At the end of the day, IBM will offer amazing choice to customers – with a wide range of Cloud Infrastructure, Integration, DevOps and Analytic offerings based on where the client is at in their journey to the Cloud. Additional speakers such as Danny Sabbah (CTO & GM, Next-Gen Platform) and Jim Comfort (GM, Cloud Services), among others, provided follow-on vision and detail that fleshed this out. Continue reading IBM Cloud: Transforming the Tractor into a Roadster
Recently, Saugatuck has been looking into the continued changes happening in the Master Data Management space. Traditionally, this has been a space primarily concerned with creating a “single point of truth” that would ensure that data updated anywhere would be appropriately synchronized to other systems which relied on the data. In most enterprises, this relies heavily on ETL processes, often run in batches at predetermined intervals.
This insistence on the single point of truth, though, does not work as well once companies begin to rely more heavily on SaaS, Data-as-a-Service, and high-volume data sources like Social and IoT. The strong real-time component from IoT and Social make batch processes impractical, and the volumes of data make real-time processing a necessity – often the data is not useful unless it can be acted on immediately. In these high-volume applications, it is more useful to have metadata be managed, rather than the data itself. Continue reading APIs and Master Data Management
As Big Data continues to develop as a force shaping the enterprise, we can expect to see changes in business processes. Saugatuck has been monitoring the intersection between Big Data and intelligent business processes for the past several years. Developments in Big Data and advanced analytics have already had a substantial impact upon concepts of Business Process Management (BPM) including linkages with Internet of Things (IOT) and the industrial Internet; and the application of advanced analytics to analytic processes themselves. This contributes to a Big Data/Process convergence that is likely to have a continuing effect within the enterprise environment.
The application of Big Data directly to business processes such as manufacturing, finance, and supply chain processes, combined with autonomous operations enabled by real time evaluation and prediction, creates a new fabric for business operations. While much of this area has been focused upon manufacturing and is now being studied by governments and businesses, the digital business surround means that processes created within one domain are easily transferred to others. So, as rapid advances occur in linking processes to the Internet of Things through the Industrial Internet, we can expect rapid application of these ideas to other business areas such as human resources, healthcare, professional services, and the like. Continue reading In the Valley of the Blind, Autonomy is King
Earlier this year Saugatuck executed a global Web-based Cloud Infrastructure Survey of 327 IT executives spanning major geographies and business sizes. The survey results are summarized in a recently published report (see Saugatuck’s 73-page Strategic Report 2015 Infrastructure Survey: Next-gen IT – Cloud on the March, 1553SSR, 01Apr2015). Subsequent, in-depth analysis of the survey responses is yielding additional insights in areas such as executive-level perceptions of the impact of new technologies. A just published Strategic Perspective focuses on our assessment that respondents are underestimating the likely impact of a key new technology: containers.
Almost all IT organizations are facing five simultaneous challenges:
- Increasing user demand both for new functionality and for new application solutions;
- User dissatisfaction over the protracted time and high costs required for new application development;
- Increasing costs for maintaining a continually growing inventory of production workloads and infrastructure;
- Budgets constraints; and
- Diminishing or exhausted “payback” from major infrastructure initiatives in centralization/consolidation, and virtualization.
Continue reading Containers for App Dev
What is Happening?
On Monday June 22 – on the heels of its latest quarterly financial reports indicating small-but-fast-growing Cloud-related revenues – Oracle announced expansion of the Oracle Cloud Platform, basically outlining its rapid and extensive shift toward enterprise Cloud-first IT.
Oracle’s Cloud services are broad, and include SaaS, PaaS, and IaaS. The most notable new services are for database, storage, integration, and mobility. And company leader Larry Ellison put the competition on notice, saying, “Oracle is the only company on the planet that can deliver a complete, integrated, standards-based suite of services at every layer of the Cloud. Those technology advantages enable us to be much more cost-effective than our competitors.”
Saugatuck’s position is:
- Oracle has a broad and deep portfolio of Cloud and Cloud-enabled offerings, yet it faces more significant competition than it seems to be acknowledging.
- Oracle has a huge installed base to sell into, but having a broad portfolio is not necessarily going to drive Cloud sales fast enough to counter the established and growing power of Cloud-first Master Brands like Amazon, or the re-emergent, traditional-to-Cloud Master Brands like Microsoft.
- Oracle knows this, and is turning into a “Cloud-aggressive” enterprise IT provider as a result.
Continue reading Oracle Cloud Moves are an Aggressive Play in Late Innings
The identity management systems of the future are already being used today, look nothing like the corporate networks of yesterday, rely of published APIs and protocols, are being integrated into existing corporate networks, will be driven by the need of each enterprise to solidify the presence of its brand as a provider in the new world order of Digital Business, and will eventually become webs of trust across multiple interconnected value chains. Continue reading Identity and Access Management as a Service
The recent California labor ruling defining Uber as an employer rather than as a service provider for independent contractors has implications far beyond one Cloud services provider in one U.S. state. The case shines a bright spotlight on how fundamental business assumptions and practices by all types of digital businesses can be tripped up by traditional and evolving business “boundaries” like labor definitions. A new Strategic Perspective for clients of Saugatuck technology’s CRS subscroiption research service looks at how such boundary / definition shifts have the potential for creating – or more likely, requiring – more, and likely continual, rethinking and restructuring of digital business regardless of founder / owner / investor intent and assumptions.
Uber, for example, has pointed out via press release and emails that the CA Labor ruling only applies to one driver. In Saugatuck’s view, that equates to someone saying to look only at one small crack of many in a very large dam. As Cloud-engendered business capabilities, and businesses, emerge and adapt, and as marketplaces adapt to them, new boundaries will be drawn and re-drawn; old boundaries will be re-examined, and some will be re-imposed. Business models will change, leading to disruption in strategies, revenue streams, relationships, valuation, and so on.
And speaking of change: Uber has also pointed out that the latest ruling contradicts a 2012 ruling by the same commission that a driver “performed services as an independent contractor, and not as a bona fide employee.” To Saugatuck, this also points out how much Uber’s own business model and approach(es) have changed over the past few years. Digital business creates and fosters very dynamic markets, which over time become only more so. Continue reading Uber Case Spotlights How “Boundary-free” Needs Rethinking
Oracle Corp. (ORCL) issued its quarterly and fiscal year-end financial report this week, and the blogosphere is abuzz with quotes, assertions, and counter-arguments regarding the company’s future and viability. On the one side, we have company leadership asserting that all is well, and that the notable decline in traditional software, hardware, and services business will be more than offset by the continued increase in Cloud-based business. On the other side, we have pundits proclaiming the beginning of the end for Oracle.
Here’s what Saugatuck sees: A very traditional, old-style IT Master Brand in the throes of re-inventing itself, and suffering financially as a result (just like all other traditional IT Master Brands). That doesn’t mean that Oracle is failing, or will fail, just that it, like HP, IBM, and other traditional old-line MBs, is suffering as their businesses and traditional customers and partners turn, almost groaningly slowly, toward Cloud-first approaches.
A radar-style chart helps to show not only how slowly this is happening, but how tough it is to accomplish. Figure 1 uses data aggregated from Oracle’s SEC filings in 2013 and 2015 to illustrate. I combined Oracle’s reported “New Software License” revenue and its “Software License Updates and Product Support” revenue into the “Traditional Software Business” category in Figure 1. Oracle’s reported “Cloud Software as a Service and Platform as a Service” is combined with its “Cloud Infrastructure as a Service” revenues to create “Cloud-based business” in Figure 1. “Traditional Hardware Business” includes the company’s reported “Hardware Systems products” and “Hardware Systems Support” revenues. “Traditional Services Business” in Figure 1 is simply Oracle’s reported “Services Revenues.”
Figure 1: Oracle Revenue Shifts (Almost Imperceptibly) Toward Cloud, 2013-2015
Source: Saugatuck Technology Inc.; figures are in millions of US $
See the little bit of pink/red to the left of center? That’s how much / how little Oracle’s Cloud-based revenue has grown in two years. Continue reading Oracle Financials – Tougher Than You Think
What is Happening?
It was recently reported that privacy campaigners had walked out of talks aimed at creating a code of conduct for use of facial recognition technology. The talks, brokered by the US National Telecommunications and Information Administration (NTIA) included the Electronic Frontier Foundation (EFF), the American Civil Liberties Union (ACLU) and the Center for Democracy and Technology (CDT), among others. The groups were concerned over refusal to accept a need for prior permission from people being identified.
For those watching development of Big Data initiatives, this raises a number of warning flags. Privacy issues in data collection have raged for the past decade, but much of the talk has been theoretical and generalized. Facial recognition, however is very practical, concerns specific technologies, and is about practices that are not only possible, but are in use today. The issues raised by facial recognition are also relevant to a wide variety of other sensor-related items such as geolocation, audio sentiment analysis, M2M data logs, other image analysis, and even some forms of social media analytics. Continue reading Facial Recognition Raises Major Concerns for Big Data Privacy Regulation