5 Triggers for New Business Software Investment

Inquiries and conversations with clients about market conditions, trends, opportunities and actions are some of the most important factors shaping and improving Saugatuck’s research and insights. A new Strategic Perspective published for our clients is one of a series that summarizes a handful of recent inquiries from ISV research and advisory clients.

In this one, we analyze the most common “triggers” for consideration and acquisition of new business management software – and how to utilize them. Other Strategic Perspectives address additional inquiry topics, including how to address key customer concerns regarding Cloud-based software, and understanding the pace of application/workload migration to new Cloud-based resources.

To put it most simply: Significant business change is the primary trigger/cause of consideration of any new business management software – whether Cloud-based or not. Very few businesses of any type or size, from the smallest to the largest, in all markets, consider investing in new business management software without at least one, and almost always more than one, of the following change factors in place: Continue reading 5 Triggers for New Business Software Investment

IBM, MSFT, GE – Reinventing for Digital Business Realities

What is Happening?          

IBM, GE and Microsoft: Three very established firms with very traditional business models, customer bases, and revenue streams. All three have faced weighty, accumulative challenges to their core markets, original business models, and value propositions, resulting in substantial share price devaluation and negative effects on revenue and profitability, as well as unrest among partners and customers, leading to many defections and strained relationships.

But if there are to be “poster children” for the rethinking and re-invention of 20th-century business for the 21st century of boundary-free Digital Business, these would be great candidates.

GE has brought us the “industrial internet,” one of the most lucid visions of the IoT, translating the value and opportunity of Digital Business into some of the most traditional marketplaces, including industrial manufacturing, machining, and supply chain management.

IBM this week announced their massive “Cognitive Business” positioning, leveraging existing consulting, Cloud, software, and hardware portfolios with the Watson cognitive computing/analytical engine(s), ironically to help enterprise customers understand how to alter their own businesses in the face of changing markets.

And Microsoft has reinvented its core Windows strategy (and offerings) while shifting to Cloud-based delivery and revenue streams for its critical desktop business apps – and expanding a nascent computing / communications hardware presence (including signing up traditional PC partners Dell and HP as sales outlets) to help expand both of these.

What Saugatuck sees in all three of these cases is massive, long-established, and very threatened 20th-century technology firms and industrial conglomerates are rethinking and re-inventing themselves in a remarkable manner, and in a remarkably short amount of time. Whether or not they will be successful is still an open question. Continue reading IBM, MSFT, GE – Reinventing for Digital Business Realities

Asian IT in the Time of Uncertainty

Information technology in Asia Pacific continues to develop at an enthusiastic pace despite the slowdown in the Chinese manufacturing sector. Asia is tremendously varied and faces innumerable impacts from both new technology and economy. Recently, we have seen the Trans-Pacific Partnership Agreement signed by 12 regional countries–but excluding China. There are innumerable free-trade agreements existing within the region particularly associated with ASEAN. These agreements are aiding trade in the region and promoting growth. But recent economic movements have had a direct impact upon the ability to spend. The Chinese manufacturing sector slowdown has created problems throughout the region, particularly for suppliers of raw materials and components. The recent issues with the Chinese stock market are likely to have further implications, stifling some investment within the region.

In addition to the economic moves, the Asian area faces issues of technological change. For example, the Indian Business Processing Outsourcing area, which is the bulwark of IT in India, has seen some serious readjustments, which have led to mass layoffs. This has created follow-on implications for IT in India. Meanwhile, the region is moving heavily into Artificial Intelligence, Cloud, Digital Business, and, most particularly, the Internet of Things. As with Cloud, these new areas are greeted with enthusiasm and initial buildout has begun. But many of these buildouts begin from a greenfield situation; but the abilities of new technologies to reduce costs, produce efficiencies, and develop entirely new concepts that are useful to the region is particularly significant. Continue reading Asian IT in the Time of Uncertainty

Dell + EMC – Pluses and Minuses

The blogosphere is abuzz this morning with rumors of an impending Dell – EMC merger (see Wall Street Journal article here), with Dell seeming poised to acquire the much-larger EMC, likely using a mix of cash on hand and cash borrowed from investment bankers, hedge funds, and other sources.

On the surface, a Dell + EMC combination could make sense. EMC’s market-leading physical storage, storage management, security, virtualization technologies, et al, would all add great capabilities to the enterprise-first portfolio that Dell has been building and refining for years. They could also help provide improved capabilities for Dell’s increasing Cloud-first strategy – primarily for Private Clouds (mostly at the lower layers of Saugatuck’s EcoStack, but enabling more services in the middle and upper layers).

But there are some potentially large challenges in such a combination.

One is that EMC has not been able to leverage enough of its core technologies into Cloud-first solutions that can or do deliver the types of revenue needed to counter declining sales of traditional, on-premises solutions. While EMC has made great strides in evolving to software revenues, much of their software is for use in on-prem Continue reading Dell + EMC – Pluses and Minuses

GE’s Minds + Machines Focuses on Industrial Change for Survival

This week GE met with customers and partners for the fourth annual Minds + Machines conference. In his keynote, available for replay online, CEO Jeff Immelt said that Industrial Internet value is nothing fancy — it’s doing substantive things that customers appreciate: no unplanned downtime, asset optimizations, and enterprise optimization.

GE focused much of the discussion on its Predix cloud-based platform, saying it is core to GE’s business, and essential for melding physical and digital assets. GE reasserted what it said in August — that Cloud computing is an enabler for innovation in industry, now enabling its key customer segments – aviation, energy, healthcare and transportation – to improve their use of data, increase timeliness of analysis, and improve their asset performance (1618RA, GE Drives into Cloud Services Market with the Roar of its Predix Engine, 6Aug2015). GE also announced a bevy of new features and partnerships and said its software business has revenues of $6 billion today and will grow to $10 billion by 2020.

Both Immelt and GE Chief Digital Officer Bill Ruh portrayed the Industrial Internet as more important than the consumer Internet of Things (IoT). Ruh quipped that GE provides the “Internet of Really Important Things” and the Industrial Internet could become twice the size of the consumer IoT. Perhaps this is posturing. While we agree on the importance of the Industrial Internet, (1575STR, IoT Platforms: Where’s the Apps?, 8May2015), we also Continue reading GE’s Minds + Machines Focuses on Industrial Change for Survival

ISG SIC 2015 – The New, Scary, IT Services Reality

It’s unlikely that any type of enterprise IT vendor will be more important than IT services providers to the changing face of business IT, and to the digital-first reshaping of global business.

The big question is, will the leaders be today’s most influential providers, transitioned to the new realities, or will it be another group or type of services providers built around today’s nascent, digital-business-first technologies and innovative business practices?

This week, Saugatuck CEO Bill McNee, Sales VP Al Vanek, and I participated in “Future Smart. Achieving Success in the Digital World,” the Sourcing Industry Conference (SIC) hosted in Dallas by Saugatuck parent Information Services Group (ISG) along with more than 170 sourcing industry providers from all markets. We spent time discussing enterprise business changes – especially the emergence of Cloud, mobility, analytics, and Digital Business – and their impacts on IT outsourcing of all types with longtime Saugatuck clients Accenture, Cognizant, IBM, and Wipro, along with representatives from Atos, Genpact, HCL, HP, Infosys, TCS, Xerox and too many others to list here.

Ongoing clients of Saugatuck’s CRS subscription research service will see more in-depth insights from these conversations over the coming weeks. The net for this blog post is this: The business IT world is, right now, changing faster and creating more new types of opportunity for IT services providers than we have ever seen previously. But at Continue reading ISG SIC 2015 – The New, Scary, IT Services Reality

Seven Key Takeaways from Workday Rising

What is Happening?          

Earlier this week, Saugatuck attended Workday Rising 2015 at the Mandelay Bay in Las Vegas. Compared to last year, the event has grown dramatically – from approximately 3500 attendees last year to over 5500 this year, including more than 3000 customers, 400+ prospects, and nearly 1,000 partners (according to Workday). This reflects that fact that not only is the business and customer base growing rapidly, but so is their partner ecosystem.

The core of the event showcased the growth in their product on many fronts, with improvements and new capabilities added across their existing products and platform. Additionally, Workday seems committed to taking on not just HCM and Finance, but also vertically-focused applications that play to their strengths. It is clear that they are moving toward more and more ERP functionality, starting with the industries least served by current options, or industries where the Cloud is of particular benefit.

Overall, we took away seven major points from this year’s event:

  1. Workday Planning – Though Workday already has strong relationships with Tidemark, Anaplan, and Adaptive Insights (including direct investments in Tidemark and Anaplan), they are now working on a planning application inside their core application environment, that is deeply integrated within their HCM and Finance solution sets.
    The new planning capabilities take advantage of their acquisition of Gridcraft to deliver a planning application inside of the familiar spreadsheet interface, which borrows heavily from the look of Google Sheets or Excel. While this planning application is a nascent feature for Workday we expect this to become a core area for them, as it will likely benefit in the future from Workday’s expertise in machine learning and predictive analytics.
    In the future, we expect Workday’s planning capabilities will be bolstered by Insight Applications. While there was little mention of new Insight Applications this year the concept is not one that Workday has abandoned, but instead one that has necessarily been slowed as they worked on performance improvements in the platform to enable these capabilities. However, the launch of the Planning application does raise some questions for the future. This is an area where Workday has build many strong partnerships, and we are uncertain how Workday plans to chart the balance between developing new capabilities, and competing with existing partners.

Continue reading Seven Key Takeaways from Workday Rising

Managing Enterprise Customer Concerns

Saugatuck’s ongoing research in the adoption and use of Cloud-based business management software includes regular assessment of what enterprise IT and business leaders, along with planners and buyers, consider to be their top concerns regarding Cloud-based business software. And our analysis of that research indicates that Cloud-based business software is already considered to be strategic to the enterprise.

We can see three basic tiers in the data as shown in Figure 1: Security/Privacy, which will (almost) always be top-ranked in all cases; Integration, which is increasingly challenging given the broadening mix of solutions, device types, data formats, user interfaces, and compliance requirements; and “the rest,” e.g., provider lock-in, performance-related issues, customizability/configurability, and so on.

Figure 1: Ranking Top Cloud Software Concerns, 2004 – 2014

Enterprise Leadership Concerns Regarding Cloud-based Business Software Typical % of Leaders Selecting as a Top 3 Concern
Data security and privacy 75% – 85%
Integration with existing systems and software 60% – 65%
Solution customizability 35% – 40%
Performance/Availability/Reliability 30% – 35%
Provider lock-in 25% – 30%

Source: Saugatuck Technology, an ISG business; annual global surveys, 2004 – 2014

Continue reading Managing Enterprise Customer Concerns

Data Insanity Will Slow the IoT

The promise of the IoT is improved service interactions between business and their customers, and between governments and their citizens. Realizing these promises relies on collecting, managing, and analyzing data. But the IoT generates data streams in unprecedented volumes, frequency, and variety. These data streams can choke the networks, applications, and target systems. The data goes into data management systems that are in many cases unable to process adequately.

With existing systems often unable to support IoT demands, enterprises assume they must add new infrastructure. IoT deployments require infrastructure expansion: new devices and applications are the norm. But the IoT data streams define the scale.

Just because we can collect data from connected objects frequently, should we? It’s not a secret that most IoT data remain underused, misused, and unused. Data misuse means added deployment costs and project time. Adequate and appropriate data planning is critical to attractive ROI of IoT deployment.

Instead of assuming the need to collect as much data as possible and then filter it later, more attention should go into planning the data lifecycle. Users, developers, and providers of IoT-related offerings need to consider the potential costs of careless data collection. Planning questions should start with the application requirements. Continue reading Data Insanity Will Slow the IoT

Managed Services: The Cloud Catalyst

What is Happening?           

On 15 September, Accenture announced it had entered into an agreement to acquire Cloud Sherpas, a cloud advisory and technology services firm that had specialized services related to Google, Salesforce and ServiceNow. According to the press, the 1,100+ professionals acquired from Cloud Sherpas will join a newly created Accenture Cloud First Applications team. Accenture hopes that the acquisition will strengthen Accenture as an enterprise cloud services provider and enhance its ability to provide cloud strategy, technology consulting, and cloud application implementation, integration and management services.

Saugatuck views Accenture’s acquisition of Cloud Sherpas as being another indicator that the importance of Managed Services is increasing as enterprises transition to various forms of Cloud-based infrastructure. This Research Alert focuses on the increasing importance of Managed Services and offers some factors to consider during evaluation and selection of Managed Services.

Why is it Happening?

In early April Saugatuck published the findings from its 2015 Cloud Infrastructure Survey. The survey results clearly show that:

  1. IT infrastructures are transitioning rapidly from traditional On-premises resources to alternatives that include various forms of Cloud-based resources;
  2. The infrastructure transition results from and enables both the migration of conventional application workloads to the Cloud, and the deployment of new application workloads designed for Cloud; and
  3. Enterprise executives are focusing on increasing the value of their IT organizations.

These are a few of the findings from our global web survey of 327 IT execs spanning major geos and business sizes. (For more information about the survey, go to Saugatuck’s 73-page Strategic Report 2015 Infrastructure Survey: Next-gen IT – Cloud on the March, 1553SSR, 01Apr2015). Continue reading Managed Services: The Cloud Catalyst