Tag Archives: trends

1190RA Recent Events Point to Cloud Maturation

What is Happening? On 15 February, Amazon announced broad availability and new partners for Redshift, a Cloud-based data warehouse offering. On 4 March, IBM announced that all of its cloud services will be based on an open source cloud architecture. And, in a more low-key fashion, Dimension Data has been increasing sales emphasis of services offerings for managing their customers’ Cloud-resident workloads.

Viewed individually, each of the above items denotes a significant strategy by a major vendor in the Cloud IT market. Saugatuck’s view is that, taken together, the above items indicate how the overall market for Cloud IT is maturing and evolving.

Why is it Happening? The evolution of any IT market typically takes the form of trends in user/buyer requirements and propensities and/or in vendor/provider offerings and strategies. Currently, Saugatuck has observed three trends in the Cloud IT market which have significant implications for Cloud IT providers. The trends and their implications for vendors are:

  1. Increasing focus on differentiation. Motivated by competitive pressures and more sophisticated/experienced buyer decisions, Cloud IT vendors are increasingly focusing on differentiation of their offerings. Since users are increasingly adopting Cloud-based solutions, the number of Cloud IT providers continues to expand and competition continues to heat up. Functional differentiation is a conventional means of creating an advantage in a market. Such differentiation is illustrated by Amazon’s Redshift offering and by Dimension Data’s services (e.g., Tech Ops and App Ops) for management of Cloud-based workloads.
  2. Growing impact of price competition. When differentiation is not compelling and/or a vendor is not adequately articulating a winning value proposition, vendors typically resort to price as a means of winning business. However, a strategy of “race to the bottom” in pricing may yield short-term benefits for the buyer. But, it will eventually yield long-term financial instability for vendors. Occasionally a product strategy can be crafted which provides lower costs for the vendor and offers attractive function to the user. IBM’s adoption of OpenStack for all Cloud offerings is an example of such a strategy.
  3. Expanded partnering. Similar to differentiation, partnering enables enhanced offerings. However, unlike differentiation, partnering also provides expanded sales coverage and potentially greater market penetration. Amazon’s partnering with Birst, Cognizant, IBM, Informatica, Pentaho, Pervasive Software, SAP, etc. for analytics built on Redshift illustrates this trend.

Market Impact  Having tracked and analyzed Cloud services development, emergence, expansion, and adoption since 2003, Saugatuck is in a good position to gauge most trends involving Cloud, from our original SaaS market analysis through the much more integrative platform and business process-focused offerings now spreading through markets.

The bottom line? Cloud maturation is becoming very predictable, and it looks to be following our original “four wave” model first published almost five years ago, in July of 2008 (658SSR, Enterprise Ready, or Not – SaaS Enters the Mainstream, 28July2008). We reproduce that original four-wave trend graphic in Figure 1.

Figure 1: Four Waves of SaaS/Cloud Evolution and Impact, 2001 – 2016
1190RA Figure 1

Source: Saugatuck Technology Inc.

If we consider the totality of developments characterized by the recent Amazon, Dimension Data, and IBM moves – along with many others – we can see how, in 2013, we are right on the cusp of developments and maturation predicted in 2008 to occur right about now. The key developments in Wave III are reaching maturity, and we’ve already begun to flow into Wave IV.

At this point, Cloud IT has reached a level of maturity that allows it to readily integrate with almost all forms of traditional IT systems and operations. To us, this suggests that Cloud today should be considered as a viable alternative to, or extension of, practically any type or application of enterprise IT.

For enterprise IT leaders: If Cloud is not relatively significant in your enterprise portfolio, you need to re-examine and reconsider your IT strategy. Cloud in all its forms is the enabler of massive savings and business improvements in Mobility, Analytics, Social Business, and is increasingly the best source of Integration across all these and traditional enterprise systems (1075MKT, Integration: The Glue of the Boundary-free Enterprise™, 25May2012).

For providers, especially ISVs: If you’re not “all-in” and offering Cloud-based capabilities or offerings, you’re losing market share. Saugatuck urges every provider of Cloud IT offerings to consider the above trends as categories of product and/or marketing strategies. Every Cloud IT provider should map out a product strategy which utilizes the above trends as foundational guides.

Saugatuck has published a wide range of ISV-to-Cloud guidance for our clients; see our Research Library for more. Access to our library is open to clients of our Continuous Research Services; non-clients interested in our research should contact Chris Macgregor at +1.203.454.3900 or chrismacgregor@saugatucktechnology.com.

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Development Dimensions for Mobility

Mobile development is at the center of current evolutionary trends in enterprise software development, energizing agile concepts that have emerged from issues in large-scale monolithic projects. Trends toward smaller and more focused applications created in brief cycles and updated continuously ideally fit with the needs of smaller mobile devices with focused consumer-based usage patterns. Adding Cloud to the mix creates a model for development that can be used across all workstations, bringing new efficiencies and development requirements that lead to new ways of viewing the software creation, management, and deployment processes.

As the new development environment continues to emerge, it presents a range of intriguing possibilities for vendors and IT users alike. Vendors need to incorporate mobility and heterogeneous devices in their development and deployment tools. Management of mobile and conventional applications also needs to be unified, and tools will need to incorporate both mobile management and DevOps.

For IT users, mobile development trends require establishment of a strategy that embraces mobility without leading to fragmentation and inefficiency in corporate development efforts. One path toward unification is use of the Cloud for management as well as for development. But limiting the development platforms and languages supported can also play a critical role in ensuring efficient development and a reliable maintenance effort.

The impact of mobility upon overall development strategy is only beginning to gather steam. The synergies between Cloud, Agile and Mobility are already beginning to yield benefits, however, and creating what amounts to a virtuous cycle of improvement.

Development trends are of increasing importance as we move into the era of the Boundary Free Enterprise™. Development, deployment, and management processes provide the framework around which the diverse models of programming adhere. As devices, ecosystems and methodologies continue to fragment, it will become important to standardize to reduce costs and training burdens. This will favor Cloud deployment and unification, which are already creating opportunities for tools and solutions. As mobility becomes more important, these trends will continue to grow.

Note: Ongoing Saugatuck subscription clients can access this premium research piece (1182MKT) by clicking here, and inputting your ID and password. Non-clients can purchase and download this premium research piece by clicking here.

Re-engineering Application Development

Saugatuck has gone on record that the phenomenon of Cloud IT is forcing vast changes in the responsibilities and roles of the traditional enterprise IT organization. In published research for our CRS clients this week, we took a look at how these changes affect enterprise IT from an applications development point of view. Figure 1 summarizes the key characteristics of Cloud IT that impact enterprise AppDev, as follows:

Figure 1: Summary Changes – Cloud IT and Enterprise Application Development
1169STR Figure 1
Source: Saugatuck Technology Inc.

How to address and overcome these changes and challenges is a story that requires further reading and examination, beyond our abilities in this simple blog post. To net it down: The role(s) of in-house application development resources will change, no disappear, due to widespread use of Cloud IT (whether IaaS, PaaS, or SaaS). AppDev costs should decline on a per-instance basis while the range and scope of AppDev resources escalates – just in time to help in-house developers find and learn new skills and technologies needed to manage proliferating solutions, interfaces, providers, and data formats.

Note: Ongoing Saugatuck subscription clients can access this premium research piece (1169STR) by clicking here, and inputting your ID and password. Non-clients can purchase and download this premium research piece by clicking here.

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IT Organizations are Ending; Long Live IT Organizations.

Volumes have been written about the ways in which Client-Server architecture caused and/or enabled sweeping changes across the IT landscape. Those changes ranged from how IT solutions were acquired, through how solutions were implemented, to how the solutions and their underlying infrastructures were managed. In 2007 Saugatuck began publishing insights into how Cloud IT would also cause and/or enable major changes in IT organizations. Saugatuck has just published Strategic Perspective projecting that Cloud IT is becoming the third near-universally adopted IT infrastructure and will catalyze a total re-invention of the traditional IT organization.

Note: Ongoing Saugatuck subscription clients can access this premium research piece (1160MKT) by clicking here, and inputting your ID and password. Non-clients can purchase and download this premium research piece by clicking here.

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Live From CES – Four Usage Trends Shaping Enterprise IT Right Now

What is Happening?

The Consumer Electronics Show (CES) in Las Vegas is the big tech news this week. As usual, the focus in most media and analyst coverage has been on the latest end-user gadgets, with a side interest in how Microsoft, Google, and others are planning to enable and support those. There’s been relatively little coverage and insight regarding how what we see at CES will affect enterprise IT, IT markets, and IT providers.Saugatuck believes that the well-established consumerization of IT trend over the past years means that the trends and vision of what’s considered impactful at CES will affect enterprise IT markets within the next 24 months. In short, core CES trends, especially as regards usage of technologies – not specific gadgets, not specific vendors – are a leading indicator of enterprise IT and business change. Continue reading Live From CES – Four Usage Trends Shaping Enterprise IT Right Now

Windows Use Slides 2% Per Year; Mobility May Wedge It Farther and Faster

Ongoing Saugatuck subscription research clients might be interested in looking at a piece just published at the end of December that looks analyzes EOY 2011 OS usage data, and sees some significant challenges for Microsoft Windows and Linux as Mobility enters the traditional PC domain (see 1004MKT The Thin Edge of the Wedge: Mobility and Personal Computing OS Trends Through 2012, 30Dec2011).

Saugatuck’s review of personal computing operating system usage by developers has long shown that Microsoft Windows – in all its traditional versions – has been gradually losing market share to Linux and Mac/iOS, especially among developers. Latest review indicates that trend continuing, along with an additional player that may be the thin edge of the wedge that eventually drives Windows out of relevance. This Strategic Perspective analyzes the latest data regarding OS usage around the world in the context of Saugatuck’s core focus: What’s going to change how we do business, and how will that affect this marketplace?

We can see that Linux and Mac/IOS have been enjoying significant growth since 2008, mostly at Microsoft’s expense. Unfortunately for Microsoft, usage share for Windows overall has been declining since YE 2008, a slide which Microsoft has not yet been able to turn around. Our analysis indicates that Windows’ usage share slide has been occurring at a steady pace of between two and three percent per year – which can be expected to continue without significant change and improvement from Microsoft in how it develops and delivers Windows 8 across all popular form factors.

Looking at and understanding what developers are working on, and working with, is the best indicator of where the business of IT is heading, and what IT strategists within user enterprises need to be aware of. Developers are the key to IT ecosystems, from Master Brands down thru and to individual users. If developers don’t support a core technology such as an OS, it does not get bought or used. Any significant change in OS growth or decline among developers is an important indicator of emerging IT ecosystem change.

Note: Ongoing Saugatuck subscription clients can access this premium research piece (1004MKT) by clicking here, and inputting your ID and password. Non-clients can purchase and download this premium research piece by clicking here.