Saugatuck attends and participates in a large number of vendor conferences around the globe and a Saugatuck analyst recently was present at a New York City conference hosted by a leading Infrastructure provider. During the festivities, we were astonished to hear that “With Docker all you really need is coders. It effectively eliminates the need for DevOps.”
We should first say it was not Docker making that claim. We are certain that no one at the Cloud technology vendor, least of all Solomon Hykes, Docker’s Founder & CTO, would make that claim. Nevertheless, Docker does change the way Digital Businesses will develop and deploy Cloud solutions. Hykes makes the analogy of the shipping container and how it has eased moving cargo from place to place.
One of the capabilities that organizations long have needed to ensure their investment in the Cloud is the easy migration of workloads. Docker solves this problem by providing a multi-language, agile, and cost-effective containerization solution. Furthermore, Docker delivers an open platform for developers and IT operations to build, ship, and run distributed applications, and enables the continuous delivery and integration of solution components.
On the other hand, Docker doesn’t wash your windows, cut your grass or walk your dog. And, for the moment, it runs only on Linux. However, before long we expect to see Docker available for Windows and for Continue reading
What is Happening?
Spending on security is always a low priority. After all, it’s not visible and when nothing’s occurring it’s easy to assume the budget for security can be reduced. Until after it becomes visible when something goes awry. And when things go wrong, spending on security escalates in response to everything hitting the proverbial wall.
The research shows average spend on security is a pitifully low, less than one-quarter of one percent of revenue or operating budget. Although sending is low, the risks are high, as much as 14 percent of revenue with a 1-in-20 to 1-in-40 chance (or better) of being struck by cyber-crime or cyber-espionage.
These are some of the key findings found in a new 16-page Saugatuck Strategic Report (SSR) published earlier today entitled “Cyber Risk and Spend on Security: How Do You Compare?” The research summarizes our insight and recommendations regarding: Continue reading
The recent rollout of Apple Pay has precipitated some behind-the-scenes machinations among competing efforts in the marketplace, most notably MCX (see 1438MKT, Digital Business Models and Monetization, Part 2 – Mobile Payments, 12 September 2014, for background information).
While Apple has negotiated partnerships for Apple Pay with credit and debit card companies (American Express, MasterCard, and Visa) and with several leading US banks (American Express, Bank of America, Capital One, Chase, Citi, Wells Fargo), the MCX consortium steers clear of the credit and debit card companies and NFC and goes direct to customer bank accounts and loyalty programs, using bar codes and QR readers for its CurrentC platform.
So while Apple has 800 million customer credit/debit cards already on iTunes, and signing up for Apple Pay is simple and painless, Apple Pay’s success still depends Continue reading
What is Happening?
On October 20th IBM announced its 3Q2014 earnings, which were down 4 percent year-over-year and missed analyst consensus EPS by a sizable margin. This is the 10th consecutive quarter of declining earnings at IBM. Not surprisingly, the NYSE reacted quickly to the news of another IBM revenue and profit decline. Most financial and industry analysts focused on the details of the earnings and opined that IBM has been woefully slow to capitalize on the growing popularity of Cloud computing, which is gaining traction across both software and infrastructure IT spending.
More importantly, Saugatuck sees IBM’s earnings announcement as representative of the challenges all traditional IT providers are facing. Unique to IBM, however, was the announcement that IBM would back down from the RoadMap 2015 EPS plan put in place by former CEO Sam Palmisano – which has caused a broad array of financial engineering as the firm has attempted to meet its very aggressive targets, including significant share buybacks.
What the announcement indicated or stated:
- This earnings announcement was no doubt significant as evidenced by the fact that Ginni Rometty, Chairman, President, and CEO, personally participated in the announcement. This was a first for an IBM CEO.
- On the earnings call, and in a subsequent CNBC interview, Rometty emphasized that the shortfall was due to an execution failure in the month of September. She reiterated that the core business was solid, in her opinion.
- At the same time, IBM re-emphasized its commitment to its strategic growth areas of Cloud, analytics, and Watson, and announced that to help focus its efforts it will create a new Cloud division – and will trim staff (eliminate layers of middle management) as it focuses resources on growth areas, and moves to become more agile in response to changing customer requirements.
Progress has entered into a definitive agreement to acquire privately-held Telerik AD – a leading provider of application development tools – for $262.5 million. Telerik is headquartered in Sofia, Bulgaria, but has over 200,000 paying developer customers worldwide, including over 450 of the Fortune 500. Telerik tools enable developers to create compelling cross-platform user experiences across Cloud, web, mobile and desktop applications.
Approximately 50 percent of Telerik’s sales are currently generated through a self-service, web-based platform, making it possible for the tools provider to price extremely competitively and still achieve profitability. Telerik’s revenue for the last twelve months was over $60 million, with annual bookings growth of over 20 percent. Progress expects the addition of Telerik to be slightly accretive on a Non-GAAP basis in the first year following the acquisition.
More than 4 million users and 47,000 businesses in over 175 countries run applications on the Progress OpenEdge platform and Continue reading
It’s no secret that IBM’s financial performance has disappointed investors and company leadership. We see part, if not much, of the blame being placed on a perception that IBM has been late in, or unable to, transition to being a Cloud-first provider of IT.
A new Strategic Perspective research note for Saugatuck subscription research clients examines this perception through the lens of the recent IBM-SAP HANA deal, providing insight into how both firms have been reinventing and repositioning themselves to be very competitive with Cloud-based business IT offerings. For example: Continue reading
As a result of ongoing discussions with IT managers and providers, Saugatuck has identified the increasing popularity of Private Clouds particularly among large enterprise IT organizations. In a recently published Strategic Perspective, Saugatuck offers guidance to any Enterprise IT organization considering a Private Cloud. Assessments are provided for areas of comparison between Private Clouds and infrastructure virtualization.
Saugatuck characterizes two basic factors to that make Private Cloud attractive to typical enterprise IT organizations: Continue reading
What is Happening?
The recent leak of 7 million Dropbox passwords has raised the inevitable blog posts and questions regarding Cloud security. It’s another round of questions including “Can the Cloud be secured?” and “Will advances in security technology protect our data?”
Saugatuck’s take, with apologies to the classic science fiction film “Soylent Green,” is this: ”Cloud security is people!”
While technologically, Cloud-based resources remain more secure than most enterprise data centers, the widespread, boundary-free utilization of Cloud-provided IT and business resources increases the likelihood of human error because it removes traditional boundaries in IT and business. Initiatives such as Cisco’s Intercloud, and similar Cloud aggregation / integration efforts by HP, IBM, Microsoft and others, extend the range and scope of not only Clouds and everything linked to them, but of the number and type of people using, managing, and connecting through them.
When more resources are used by more entities, some of which may be unknown, more of which are removed from any centralized or fixed environment, and many of which are used sometimes in new and innovative ways, the potential risk for security failures increases dramatically because human involvement increases. Technology won’t save us when the people using and managing the technology fail to use and manage it correctly. Continue reading
Most people are risk-averse. Growing up, my parents certainly were. And it has long been clear that most large-enterprise CFOs are. So it has not been that surprising that the Office of the CFO has been cautious in adopting Cloud-based solutions, regardless as to whether any of their fears are substantially justified or not.
No doubt, pockets of next-gen solution adoption have been occurring for some time throughout Finance, although mostly around the periphery. Cloud players such as Adaptive Insights, Host Analytics and Tidemark are having strong success in the business planning and budgeting space. Niche players such as Avalara and Kyriba are likewise enjoying strong demand in the Sales / Use Tax and Corporate Treasury segments respectfully. And providers of Cloud-based core Accounting / Financials targeting SMBs and mid-market firms have likewise seen some solid success, including firms such as Intacct, Kenandy, FinancialForce and especially NetSuite – as well as newer next-gen versions from Sage, Epicor and Infor, all of whom have been heavily investing in / reinventing their solution sets.
For the largest of enterprises, though, we still haven’t yet seen the explosive growth in core financials anticipated only a couple of years ago. To some degree we have viewed this as a “chicken or the egg” issue – as until the last year or two, large enterprises lacked robust / fully fleshed out / credible financials / accounting offerings to evaluate and choose from.
However, that has been changing – as four options are now available to serve the unique needs of this high-end market segment. NetSuite has been having some success going upmarket with its two-tier financial consolidation play for a couple of years now. Oracle has come to market with its Fusion Financials Cloud Service, and both Workday (see recent Lens360 blog post) and SAP now have much richer and more powerful solutions that can support the needs of the largest of enterprises.
As part of our focused 2014-2015 research program on Cloud Financials, last Continue reading
The rallying cry for system integrators (SIs) and professional services organizations (PSO) attached to today’s vendors of Cloud and other Digital solutions is “modernization.” It sounds logical to want to bring systems up to date, and there may be multiple motives for a provider to recommend such activity. These align with the three basic forms of modernization services:
- Porting to a new system platform,
- Upgrading to a new software release,
- Renovating the system architecture.
Porting to a new system platform may involve a hardware upgrade (or downgrade), as one possibility, or for another, it may entail moving to a private or public Cloud or to a colocation data center. If the underlying system platform is inefficient or unreliable, the value of this alternative is clear. Porting to a new system platform may also be part of a more complex modernization strategy requiring a new software release or a renovation of the system architecture. Continue reading