What is Happening?
Earlier this week, Saugatuck hosted its fourth annual Cloud Business Summit, an intimate gathering of 100+ large-enterprise CIOs/CTOs, CMOs, and CFOs at the Yale Club of New York City. As with previous Summits, the event explored how these leaders are realizing the most from the Cloud today. However, the key focus this year was the significant impact that Cloud is having in shaping core business strategy, as we evolve into the era of Digital Business.
Throughout the day, it was very clear that the “Cloud Experiment” is over for all but the most laggard IT shops. Up and down the Cloud technology stack and across the new master architecture (that includes mobile, social, and advanced analytics) we are moving toward mainstream adoption. Even the Finance organization is coming around, as our soon to be released CFO / CIO research will demonstrate. Given this, a key issue for business and IT leaders is how best to exploit the new frontier to build profitable and sustainable Digital Enterprises, which has now become a top-tier CXO agenda item.
Why is it Happening?
Saugatuck founder and CEO Bill McNee kicked off this year’s Summit by unveiling the results of its just completed CXO survey on Digital Business engagement, success, and key challenges. The research, conducted with 102 SVP+ IT, Finance, and Marketing leaders in McNee’s LinkedIn network – illustrates just how rapidly the shift to Digital Business is occurring.
While Saugatuck will soon be publishing more in-depth results of the research, find below some key highlights. It should be noted that the research is biased toward very large North American enterprises, as 50% of the respondents work for companies with greater than 10K employees. The insights are also reflective of very senior business and IT leaders, with nearly 60% maintaining a C-level title, with another 20% SVP+.
- A quarter (26%) of the enterprise leaders stated that their firms were already “Fully Engaged” or “Established” in Digital business, with 74% either having “No Digital Footprint” (4%), in an “Experimental / Learning” mode (32%), or “Committed / In Process” (38%) today, although not yet generating meaningful revenue.
- However, by 2018, more than half of these execs believe their firms will be fully “Established” Digital Businesses (57%), with another 33% fully “Engaged” – with Digital Business central to business organization, management and brand, including engagement with customers, partners, and suppliers.
On Wednesday, November 12th, Saugatuck Technology announced the 2014 winners of Saugatuck’s annual Beacon Awards for business and IT innovation. The winners were presented with their awards during Saugatuck’s annual Cloud Business Summit, held that day at The Yale Club of New York City.
This year, Saugatuck recognizes three pioneering enterprises whose innovative applications of Cloud and related IT not only improved their business, but also created new abilities to build, and compete in, Digital Business arenas. Those firms are as follows:
- Johnson & Johnson, for its “sandbox”-driven, “skunkworks”-style comprehensive development and business improvement operations that enabled new opportunities, new business, reduced costs, and an improved ability to innovate in everything from product development to sales to customer support.
- MFG.com, which has utilized Cloud and related technologies to improve and expand global service availability and improve regulatory compliance, including ITAR and SOC 2 compliance, while reducing operating costs by as much as 30 percent, and cutting down internal resources dedicated to compliance and security by half.
- Roland Berger Strategy Consultants, for its innovative use of hybridized, two-tier business management software to enable measurable, global standardization and improvement of business management, from interfaces, apps, and data, to reporting, localized compliance, resource management, and customer support, from headquarters down through the smallest, resource-constrained remote offices.
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
Last week we had the opportunity to get briefed by Workday on its Workday 23 release, with a focus on its Financials suite. On Friday, I also took the time to fully absorb the transcript from Workday’s second quarter fiscal 2015 earnings call, as published by Seeking Alpha (good read – highly recommend).
It is clear that the company remains on a tear, as it reported second quarter revenues of $186.8 million, up 74 percent from a year ago – with “anticipated total revenue of approximately $760 million to $770 million” for the year (up 62-64 percent year-over-year), and subscription revenues ranging from “$592 million to $602 million, reflecting year-over-year growth of 67 to 70 percent.” Total derived billings for the year are anticipated “to be approximately $940 million to $960 million.” That is right – nearly $1 billion!
There is little doubt that the HCM product line continues to drive the boat, with an expanding arsenal of add-on products (e.g., recruiting) that is significantly increasing the average contract value per customer. Workday now reports that it has over 700 HCM customers, which is a good jump up from the 500 + reported at the analyst event associated with Workday Rising last September. On the HCM side they clearly can now scale to the largest of enterprises, having announced Bank of America as a new customer with 300,000 seats.
On the financials side, Workday is likewise gaining traction – reporting that it now has 100 customers for its Financial Management application. This is up from the roughly Continue reading
Source: Saugatuck Technology
It’s the early days of Digital Business at most enterprises, with much left to learn and experience regarding how it is to be accomplished and success measured. No doubt, new strategies, skills and metrics are needed to realize the major promises of Digital Business. This includes successfully leveraging all of the tools associated with enhanced customer engagement, implementing new business and operating models, new customer targeting techniques and creating entirely new digital products, services and revenues, among other things.
As part of our ongoing research agenda, we recently reached out to more than a dozen senior IT, marketing and finance executives in our network and conducted deep-dive briefings around their Digital Business experiences, and best practice guidance.
Readers can listen to a podcast summary of one of these conversations in a recently published LENS 360 blog post – Executive Insights with Vinay Mehra, CFO at WGBH. Continue reading
Many of our regular Lens360 and weekly Research Alert readers are aware of Saugatuck’s CRS subscription research service; excerpts from our premium research appear regularly in our Lens360 blog, and slices or summations of premium Saugatuck research reports also appear in both media. All of these have garnered terrific interest, including comments and questions that help to guide our ongoing research, and we thank you for that.
Research clients, CRS subscribers, blog readers, and other interested parties have suggested that regular updates and reviews of recently-published work would be helpful in determining how and where Saugatuck can best assist them, as well as providing a window into the breadth and depth of our research library and activity.
Beginning here, we will provide a regular summation of some of the top Saugatuck research pieces published in the past three months or so, and offer a peek ahead at what’s in store for the next few months as well.
- Active Saugatuck premium CRS clients can access any of the listed research articles by signing in to the website, or by clicking on any of the links below and signing in.
- While only a small portion of our premium research is for sale a la carte, non-CRS clients can purchase select individual selections by clicking on the links and following instructions for purchase. For a full listing of select premium research available for sale a la carte, click here.
- Anyone with any questions about our CRS offering or specific research topics, programs, or pieces can call us at +1.203.454.3900, or by emailing Chris MacGregor at Chris.MacGregor@saugatucktechnology.com.
THIS QUARTER’S SELECT PREMIUM RESEARCH INCLUDES THE FOLLOWING:
5 Questions Every CISO Should Ask About Digital Business
Lead Author: Jim Hurley, Published: 30July2014, Doc Number: 1412STR
CRS Clients: Click here to access. Non-CRS Clients: Click here to purchase.
The transformative power of Digital Business may be as simple as using web applications to automate online purchases, or as disruptive as information Continue reading
The rapid global expansion and integration of Cloud for business advantage has helped to catalyze a global shift toward Digital Business – a core theme for this year’s Cloud Business Summit, and the focus of the 2014 Beacon Awards for business excellence.
“Digital Business” is defined by Saugatuck as follows:
A digital business integrates digital technologies, assets, and capabilities with business development, management, and operations, to create and adapt offerings and experiences that generate revenue and competitive advantage.
– Saugatuck Technology Inc., 2014
2013 Beacon Award Winners – Click Here for Details
To make this happen, significant and ongoing IT and business investment and innovation need to occur, along with significant changes in culture, organization, operations and management outside of IT, including procurement, training, security, ecosystems, and provider management. Simply adding digital technologies to existing operations does not create a digital business.
Beginning in 2014, the Beacon Awards will recognize user enterprises that have not only made measurable progress toward becoming Digital Businesses, but which also have helped to shape the future of their company, their markets, and Continue reading
I am pleased to announce some of the details surrounding our fourth annual Cloud Business Summit, which will be held November 12, 2014 at The Yale Club in New York City.
Our conference theme this year is “Innovation, Opportunity, Risk and Reward,” with the event focusing on the journey that large enterprise CIOs, CTOs, and senior marketing and finance executives are on as they optimize their Cloud investments, and begin to remake their companies as Digital Businesses. For a short overview of the event, go to: http://cloudbusinesssummit.com/about-the-event.html.
We’ve moved the Summit to a new venue this year. The Yale Club of New York has a spectacular Grand Ballroom that we will be using, along with its elegant Rooftop Dining Room. Both will provide an optimal setting for the peer-level learning and interaction that are hallmarks of our events, fostering an intimate, C-level setting.
Our program / agenda is coming together nicely, with our keynotes and panels offering unique first-person experiences, insights, and best practices Continue reading
What is Happening?
Earlier this week, Saugatuck attended the SAP Sapphire NOW conference in Orlando, Florida. We value coming to the conference each year as it, like several others that we attend, provides great signposts as to the current state of business computing. This year more than 20,000 attended the event live, with thousands more accessing the keynotes remotely. In this Research Alert, we emphasize three key takeaway threads from the event: “Simplicity”, “HANA Front and Center”, and “Ariba: Key to SAP’s Future.”
Why is it Happening?
With many of the key technological foundations having already been laid, SAP is at an important juncture to begin to significantly monetize on the vision it has built over the past few years. We see the company pursuing that in the following ways: Continue reading
What is Happening?
Earlier this week, Saugatuck participated in the new SIIA Maximize conference in San Francisco, as both a speaker and panel moderator. Formerly called “All About the Cloud” – the new name change appropriately reflects the maturing of the Cloud market, as providers and buyers alike have clearly moved well beyond the early adopter phase. Given this, the SIIA has appropriately refocused the event for its members on how best to win in the evolving landscape that is emerging. This Research Alert provides a brief overview of the event, and highlights new research that Saugatuck shared at the conference.
Why is it Happening?
As noted, Saugatuck participated both as a panel moderator and as a featured speaker at SIIA Maximize. On Wednesday May 21st, Bill McNee, Saugatuck’s founder and CEO was joined by Carolee Gearhart, VP International Sales & Channels at Adaptive Insights, Richard Dym, CMO of Gagein, and Fritz Veltink, Managing Director of SaaS Energy in a high-energy breakout panel entitled “Unlimited Growth: Beyond Borders and Verticals.” The panel discussed a number of topics, but the core focus was around 1) when is the right time to expand, and 2) what are the key best practices in doing so. While the panel concluded that the decision to put the pedal to the metal was situational, a clear understanding of market opportunity and metrics, combined with maintaining laser-like focus are often keys to success.
On Thursday May 22nd, Saugatuck’s McNee delivered a morning featured presentation entitled “Beyond the Cloud Experiment: Three Key ISV Opportunities.” In keeping with the theme that the Cloud market is evolving, McNee shared some new research that clearly shows that buyers are now moving well into the early mainstream phase of adoption. As Figure 1 highlights, more than 60 percent of enterprises we surveyed will have at least half of their infrastructure and apps in a Cloud by 2018, up from less than 30 percent in 2014.
Figure 1: Cloud Adoption – Going Mainstream
This clearly reinforces our view that the “Cloud Experiment” is over now – and that a new “Master Architecture” (or architectures) has emerged (that includes Cloud, Mobile, Social, and Analytics). While migrating workloads is part of the story here, the bigger part continues to be the rapid growth