News Analysis: Global Indian IT Services Firms Q4 Wrap Up

R "Ray" Wang

Principal Analyst and Founder
Constellation Research

R “Ray” Wang is the CEO of Silicon Valley-based Constellation Research Inc. He co-hosts DisrupTV, a weekly enterprise tech and leadership webcast that averages 50,000 views per episode and blogs at www.raywang.org. His ground-breaking best-selling book on digital transformation, Disrupting Digital Business, was published by Harvard Business Review Press in 2015. Ray's new book about Digital Giants and the future of business, titled, Everybody Wants to Rule The World was released in July 2021. Wang is well-quoted and frequently interviewed by media outlets such as the Wall Street Journal, Fox Business, CNBC, Yahoo Finance, Cheddar, and Bloomberg. Short Bio R “Ray” Wang (pronounced WAHNG) is the Founder, Chairman, and Principal Analyst of Silicon Valley-based Constellation Research Inc. He…...

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Temporary Slow Down Ahead

All indications from Constellation's 1000 person executive network show a temporary 3 to 6 month slowdown ahead.  This pause in general IT spending impacts mostly the North American markets.  The Middle East and Indian markets continue to show strong market conditions.  Despite the doom and gloom, clients continue to invest in rojects related to optimization, regulatory compliance, and modernization.  Pressure on Europe, South America, and APAC (sans India) continue to hamper growth. The Middle East remains a highlight along with the ANZA and the India market. North America will slow down despite providing the largest market opportunity.

Operational Efficiency and Regulatory Compliance Drive Hot Projects

Despite headwinds, Cloud, Automation, AI, and Regulatory Compliance continue to grow. In the cloud, CXO's focus on spend rationalization.  Key projects include contract negotiations, cloud optimization, code refactoring, and in some cases a move back to on-premises workloads.  Customers ask service vendors to renegotiate deals with software vendors and consolidate spend. Increasing scrutiny from CFO's drive operational efficiency budgets.

Automation and AI are working hand in hand. Every customer finds new ways to automate and reduce human interaction. Meanwhile, budget continues to grow for exponential opportunities with AI.

On the regulatory compliance, cyber security remains top of mine.  Constellation sees a lessening priority on the regulatory burden of ESG reporting and investment.  Many CXO's see AI as a means to reduce compliance risk and mitigate future risks.

Services Firms Show Mixed Results

The IT services firms that move nthe quickest will gain market share despite the current slow down.  Quarterly results show that decision makers have slowed down decision making.  Deals that took months now take quarters to close.  Here's a quick summary of the Q4 earnings of Indian majors:

• Tech Mahindra is in crisis. Tech Mahindra has had a tough time retaining talent and keeping clients.  The company really needs the big deal expertise of the incoming CEO Mohit Joshi.  Mohit has a good reputation for designing large deal solutions with clients and inspiring staff.
   
• Wipro increased revenue 11.5% YoY, though the quarter was flat.  Thierry Delaporte, Wipro's CEO has engineered a horizontal realignment strategy to service cloud, data and analytics, bio, product engineering, infrastructure sevices, and consulting with more focus.  The strategy is beginning to pay off for clients.
   
• Cognizant dropped 9.6% in Q4. With a $59 million "impairment of capitalized costs" related to a large volume-based contract with a life sciences customer and 1% decline in financial services revenue the arrival of new CEO Ravi Kumar S, could not come sooner. Customers have seen attrition slow and a change in morale as Ravi Kumar S sets the stage for an internal transformation of the once venerable services firm.
   
• HCLTech showed some sales finesse in winning 13 large deals. Despite a great showing, Europe and Rest of World continued ot lag. Attrition rates dropped from 21.7% in q3 to 19.5% in Q4, reflecting worsening economic conditions.
   
• Infosys showed a weaker Q4 and spooked the market along with TCS. With 8% net profit growth, the numbers were impressive. However,  Q4 revenue and profit numbers were below estimates.  Operating margins were down 1.9% YoY.  Guidance at 4 to 7% was seen as disappointing.  Attrition at 20.9% was within the industry average range.
   
• TCS showed very slow revenue growth.  With the slowest in 11 quarters, the market reacted to the industry leader's bellwether forecasts  TCS saw a number of projects defer to the next quarter as the current CEO, Rajesh Gopinathan transitions to K Krithivasan on June 1, 2023.

The Bottom Line: Expect A Pickup In Late Q3 and Early Q4

CXO's will most likely take a pause over the late Q2 and early Q3 summer time frame.  Savvy CXO's will start their negotiation processes over the slowdown to consolidate spend. Constellation forecasts increasing demand for projects in:

• Cloud rationalization
• Analytics
• Automation
• AI
• Cyber Security
• Contract Negotiations
• Vendor consolidation

These projects show the biggest opportunities and must be completed in order to achieve operational efficiency and exponential growth

News Analysis: Big Tech Shows Signs Of Stability

R "Ray" Wang

Principal Analyst and Founder
Constellation Research

R “Ray” Wang is the CEO of Silicon Valley-based Constellation Research Inc. He co-hosts DisrupTV, a weekly enterprise tech and leadership webcast that averages 50,000 views per episode and blogs at www.raywang.org. His ground-breaking best-selling book on digital transformation, Disrupting Digital Business, was published by Harvard Business Review Press in 2015. Ray's new book about Digital Giants and the future of business, titled, Everybody Wants to Rule The World was released in July 2021. Wang is well-quoted and frequently interviewed by media outlets such as the Wall Street Journal, Fox Business, CNBC, Yahoo Finance, Cheddar, and Bloomberg. Short Bio R “Ray” Wang (pronounced WAHNG) is the Founder, Chairman, and Principal Analyst of Silicon Valley-based Constellation Research Inc. He…...

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The Q1 Tech Earnings Breathe Life Among The Digital Giants

With just Apple left to report in the tech earnings season, three major trends have emerged

1. Digital Ad Winter Is Thawing.  Alphabet, Meta, and Amazon are the big 3 in digital ads.  Alphabet showed declines in ad revenue but posted $69.79B a 3% YoY increase and $1B above what analysts were expecting.  YouTube dropped 2.5% YoY in ad revenue but paid subscription sales showed a 9% increase., Meta surprised the market with a 3% increase in the ad business hitting $28.6B for the first quarter.  This reversed its trend of three quarters of decline. Meanwhile the 3rd largest player, Amazon showed continued growth in ads with a 27% growth rate at $31 billion.
   
   The winners in ad monetization not only have the eyeballs but also are the dominant player in each business model. Google - search, Meta - social networks, and Amazon - commerce are showing that they are fierce competitors for digital advertising.
    
2. Cloud Revenues Slow Down But Are Not Insignificant.  Cloud adoption continues to power growth for Microsoft, Alphabet, but not Amazon. While the growth is slowing, double digit gains are nothing to sneeze at. Google Cloud gave Alphabet profits with 28% growth at $5.82 billion and finally was break even after 15 years.  Microsoft showed 22% growth in cloud revenues.  Amazon's more mature clientele shows that the market is about to enter an era of cloud optimization which means cloud revenues could take a hit. Amazon’s AWS showed this with a 16% cloud growth rate.
   
   The era of cloud optimization is coming.  Customers are starting to refactor workloads to optimize for data ingress and egress charges.  Expect more rationalization in the next few quarters.
    
3. AI Story Drives Valuations - A Tale Of Two AI Stories
   The war for AI mind share in a post ChatGPT world is what’s driving tech valuations higher. While Microsoft kick started a war with Google earlier this year with Satya Nadella, MIcrosoft's CEO telling partners in Q1 that he would "bury" Google. Though Microsoft took the fight to Google in public, the reality is that Microsoft may not win the war as its servers are the oldest and it’s not taking a responsible approach to AI. The exponential amount of disinformation and misinformation will create massive cost to customers and society without the proper controls.
   
   Meanwhile, Google has the best team, the best tech, but has been too slow to roll out offerings due to its bulkanized organizational structure and internal incentive system.  Unlike Microsoft's command and control structure, collaboration is nearly impossible at a very federated Google.  Google believes that creating a new "division" may help expedite innovation.  However, Google must move faster, despite the realization that trust is important for AI adoption.

The Bottom Line: Tech Is Alive And Well Despite The Fed

The major tech players known as MATANA (i.e. MIcrosoft/Meta, Apple, Tesla, Alphabet, Nvidia, and Amazon) have shown much resilience despite interest rate hikes, massive cuts in valuations, a reset in earnings forecasts, and layoffs.  MATANA stocks are poised for a rebound but will they move past their trading ranges in Q2?  All eyes on the Fed Rate discussion this week and Apple's earnings to see what's next.

AWS, Microsoft Azure, Google Cloud themes: Optimization, generative AI and the long game

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

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The big three cloud providers--Amazon Web Services (AWS), Microsoft Azure and Google Cloud--all appear to be hitting similar themes as they continue to battle for workloads, artificial intelligence supremacy and enduring customer relationships.

With Amazon, Microsoft and Alphabet, parent of Google, all reporting earnings, enterprise tech buyers are able to gauge just how much their companies were contributing to margins. The talking points among the big three appear to be led by Microsoft CEO Satya Nadella, who has leveraged the company's investment in OpenAI and ChatGPT to turbo charge its Azure and SaaS roadmaps.

Here's a look at the common themes from AWS, Microsoft Azure and Google Cloud.

See: Constellation ShortList™ Global IaaS for Next-Gen Applications

Optimization

In cloud computing and SaaS models, customers rarely cut budgets, according to vendors. These cloud buyers simply "optimize." Cloud vendors say they are helping customers optimize their spending to play the long-game with customers.

Nadella said:

"Optimizations do continue. In fact, we are focused on it. We incent our people to help our customers with optimization because we believe in the long run that the best way to secure the loyalty and long-term contracts with customers when they know that they can count on a cloud provider like us to help them continuously optimize their workload. That's sort of the fundamental benefit of public cloud, and we are taking every opportunity to prove that out with customers in real time."

Nadella added the enterprise customers were all about adding new cloud workloads and scaling during the COVID-19 pandemic. Historically, enterprise customers were balancing optimization with new workloads. Today, customers are moving back to optimization, but will ultimately regain balance, said Nadella.

Amazon CFO Brian Olsavsky said on the company's first quarter conference call that customers are clearly in optimization mode.

"Given the ongoing economic uncertainty, customers of all sizes in all industries continue to look for cost savings across their businesses, similar to what you’ve seen us doing at Amazon. As expected, customers continue to evaluate ways to optimize their cloud spending in response to these tough economic conditions in the first quarter. And we are seeing these optimizations continue into the second quarter with April revenue growth rates about 500 basis points lower than what we saw in Q1. As a reminder, we’re not trying to optimize for any one quarter or year. We’re working to build customer relationships and a business that will outlast all of us."

Andy Jassy, CEO of Amazon, added that there is a difference between cost optimization and cutting. "Customers are looking for ways to save money however they can right now," said Jassy. "They tell us that most of it is cost optimizing versus cost cutting, which is an interesting distinction because they say they’re cost optimizing to reallocate those resources on new customer experiences."

Alphabet CEO Sundar Pichai said Google Cloud is "leaning into optimization." "It is an important moment to help our customers, and we take a long-term view," he added. "We are leaning in and trying to help customers make progress in their efficiencies when we can."

Ruth Porat, Alphabet's CFO, said customers are slowing cloud consumption as they optimize costs.

These cloud giants are optimizing today to set up growth in the future. Microsoft CFO Amy Hood noted that new workloads will play in the quarters ahead. "At some point, workloads just can't be optimized much further," said Hood. "And when you start to anniversary that, you do see that it gets a little bit easier in terms of the comps year-over-year."

Generative AI

Microsoft is rallying Azure and its entire cloud product line around OpenAI, ChatGPT and generative AI tools. Nadella is clearly pressing its advantage in generative AI mindshare.

Nadella said:

"We have the most powerful AI infrastructure and it’s being used by our partner, OpenAI, as well as NVIDIA and leading AI start-ups like Adept and Inflection to train large models.

Our Azure OpenAI Service brings together advanced models, including ChatGPT and GPT-4 with the enterprise capabilities of Azure. From Coursera and Grammarly to Mercedes-Benz and Shell, we now have more than 2,500 Azure OpenAI Service customers, up 10x quarter-over-quarter. Just last week, Epic Systems shared that it was using Azure OpenAI Service to integrate the next generation of AI with its industry-leading EHR software.

Azure also powers OpenAI API and we are pleased to see brands like Shopify and Snap use the API to integrate OpenAI's models."

Generative AI guide: ChatGPT: Hype or the Future of Customer Experience?

• What to Expect from Generative AI in Analytics and Business Intelligence
• Don’t Kill Innovation, But Apply Guardrails For AI
• How Generative AI Has Supercharged the Future of Work

According to Nadella, the Azure OpenAI Service is growing workloads for its CosmosDB, but also landing new customers. Microsoft is also making Copilot for Business broadly available. If you're keeping score at home, Microsoft executives mentioned OpenAI 14 times during its earnings conference call.

Pichai also talked up generative AI but focused on its own large language models (LLMs). Pichai noted Google launched its Bard conversational AI service and updated it to help with programming and software development.

"A number of organizations are using our generative AI large language models across Google Cloud platform, Google Workspace and our cybersecurity offerings," said Pichai.

Pichai's message is that Google has been using AI for years to improve search, ads, Maps, YouTube and other services. Meanwhile, Pichai said Google will make its infrastructure more efficient to optimize its own costs and bolster AI efforts. Google has a big optimization effort underway and is focusing on external procurement and its real estate portfolio.

Case Study: AWS Propels the Bundesliga Fan Experience to the Next Level

Amazon's Jassy said AWS is tackling LLMs and generative AI by focusing on enabling it with managed services. AWS recently announced Amazon Bedrock, new instances and Amazon CodeWhisperer to enable enterprise generative AI.

"Few folks appreciate how much new cloud business will happen over the next several years from the pending deluge of machine learning that’s coming," he said.

Amazon's plan is to use its savings from streamlining fulfillment and transportation operations and investing in AWS infrastructure for generative AI.

Jassy, like Pichai, said generative AI has hit an inflection point, but has been part of Amazon's DNA for years. "I think if you look at what’s happened over the last 9 months or so is that these Large Language Models and generative AI capabilities, they’ve been around for a while, but frankly, the models were not that compelling before about 6, 9 months ago," he said. "And they have gotten so much bigger and so much better, much more quickly that it really presents a remarkable opportunity to transform virtually every customer experience that exists."

Value

Cloud providers are also pivoting to ensure they provide value to customers. The big three all said they are playing the long game with customers.

"We’re going to do whatever it takes to help customers be successful over a long period of time because we’re trying to build relationships in a business that outlast all of us," said Jassy. "We’re spending a lot of time with customers trying to help them think of smart ways, not short-term ways, but smart ways to optimize their costs and to be able to scale up and down."

Nadella said:

"We are focused on continuing to raise the bar on our operational excellence and performance as we innovate to help our customers maximize the value of their existing technology investments and thrive in the new era of AI."

Hood said Microsoft said its Copilot effort should deliver some productivity improvement to customers.

On Alphabet's conference call, the word "value" was mentioned as much as it was on Microsoft's call. Executives, however, talked more about delivering value to industries, notably retail.

Pichai's talk about value revolved around customers, but also creating returns for shareholders. Google Cloud delivered profits in the first quarter.

Part of the value from cloud providers will be providing the scale needed for generative AI. Jassy said:

"All of the Large Language Models are going to run on compute. And the key to that compute is going to be the chip that’s in that compute. And to date, I think a lot of the chips there, particularly GPUs, which are optimized for this type of workload, they’re expensive and they’re scarce. It’s hard to find enough capacity."

AWS' bet is that its investment in chips such as Trainium will provide value as customers look for underlying compute.

The numbers

• AWS reported first quarter operating income of $5.12 billion on revenue of $21.35 billion, up 16% from a year ago. In the year ago quarter, AWS had operating income of $6.52 billion on revenue of $18.44 billion.
• Microsoft Cloud reported fiscal third quarter revenue of $28.5 billion, up 22% from a year ago. Microsoft doesn't break out its operating income for Microsoft Cloud, which includes Azure, Office 365 Commercial and the commercial portion of LinkedIn, Dynamics 365 and other cloud properties.
• Google Cloud reported first quarter operating income of $191 million on revenue of $7.45 billion, up 28% from a year ago. In the first quarter a year ago, Google Cloud had an operating loss of $706 million.

Welcome to Constellation Insights, here's our plan

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

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Welcome to Constellation Insights, the news and analysis arm of Constellation Research. With the launch, we'll be bringing the enterprise technology market breaking news and analysis complemented by Constellation Research's team of analysts and community of hundreds of CXOs.

Here's a look at what we're planning in the days and months ahead.

• Constellation Insights will cover the buy side and sell side of enterprise tech with news, analysis, profiles, interviews and event coverage of vendors as well as Constellation Research's community and conferences. The buy side stories in enterprise tech are everywhere. After all, every company is going digital.
• We'll curate and surface contextually relevant research and community CXOs. We'll harness the brainpower of our analysts on multiple formats including Constellation TV.
• Constellation Insights will help vendors and thought leaders tell their stories.
• And we'll tap into Constellation Research's community of CXOs to surface thoughts on emerging tech trends.

Simply put, this'll be a fun adventure. Constellation Research shares my passion for enterprise tech, sits in the middle of the buying cycle and features personalities and brain power that’ll only expand my horizons (and hopefully yours). Stay tuned.

The Future of Money: Digital Assets in the Cloud for Public Sector CIOs

Dion Hinchcliffe

Vice President and Principal Analyst
Constellation Research

Title: About Dion Hinchcliffe Dion Hinchcliffe is an internationally recognized business strategist, bestselling author, enterprise architect, industry analyst, and noted keynote speaker. He is widely regarded as one of the most influential figures in digital strategy, the future of work, and enterprise IT. He works with the leadership teams of large enterprises as well as software vendors to raise the bar for the art-of-the-possible in their digital capabilities. He is currently Vice President and Principal Analyst at Constellation Research. Dion is also currently an executive fellow at the Tuck School of Business Center for Digital Strategies. He is a globally recognized industry expert on the topics of digital transformation, digital workplace, enterprise collaboration, API…...

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To any objective observer, it’s evident that the digital world has recently undergone a remarkable cycle of innovation -- with very tangible and widely felt results -- in new forms of digital value, including money itself. From cryptocurrency and non-fungible tokens (NFTs), to central bank digital currencies (CBDCs) and other blockchain-based digital assets like stablecoins, the world of finance is currently in the midst of evolving rapidly like few times in history.

Yet not many topics also conjure up such strong sentiment as ones concerning finance. So I find that there is either too much hype or unwarranted skepticism on this subject, when rational consideration is needed instead. This is particularly true when it comes to governments and non-governmental organizations (NGOs) starting to innovate with and wield the powerful new technologies that underpin these new advances. There is also the risk of inaction, as the Center for Capital Markets notes, which is "trailing other countries developing a favorable regulatory environment for digital assets" which can result in ceding the substantial financial and innovative potential they can deliver to our economies.

In order to provide the most approachable, neutral, and therefore readily applicable understanding of the possibilities, I’ve developed a new in-depth report, which I’m pleased to announce below, based on extensive research into the possibilities of the two most important foundational technologies involved in the future of money and digital assets.

The Foundational Digital Asset Technologies in the Cloud

These two cloud technologies are a) blockchain and b) distributed ledgers. Both provide the strongest basis for breakthrough new digital systems to better serve citizens, that can either store value intrinsically and/or account for value in the real-world. They have been proven on the largest global scale to be safe, effective, highly secure, and trustworthy in next-generation financial systems when used properly.

Both of these technologies are extensively validated by real-world use in some of the most challenging operating environments in the world, reliably conducting trillions of dollars in transactions every year in the private sector in a way that is extraordinarily difficult to disrupt or exploit.

Now they have become the leading options for public sectors technology leaders to use to blaze a new trail to offer citizens better ways to engage in financial activity or store, use, verify, and trust public sector records.

Thus, I am very pleased to formally announce the recent release of my major new research report, “The New Digital Assets Imperative for CIOs in the Public Sector” It is designed to specifically help top IT leaders in government grapple with the enormous opportunity of digital assets to improve public services, while fully addressing and properly managing head-on the reputational and operational risks.

This 47-page report explores the growing imperative – a strong word, but a reality that my research also shows is the most likely path – for the digital transformation of finance as well as public sector services. For transform it will. Government agencies with the most insight into these new technologies, fluency in their full capabilities/nuances will be the ones that gain the ability to create strong visions that can be well-realized. These realizations can be incremental or they can be major, durable new re-imagining of what is possible to serve the public, suppliers, peers, and other stakeholders. Many now believe that doing so will is becoming essential to be a modern digitally-enabled government.

For its part, the White House has been clear over the last year in a major executive order and related frameworks that responsible innovation in digital assets is encouraged and even necessary for global competitiveness and to protect the public. For their part, various Federal Reserve banks have engaged in initial pilots for the digital dollar, which is explored in the report. As part of this narrative, my new research paper explores the journey the government has taken in providing specific directives including the ramifications of the guidance it has given.

To these ends, my report is intended to provide public sector CIOs and their staffs with a guide to exploring, reasoning about and then capturing the opportunities inherent in the increasingly fertile world of modern digital finance. It explicitly helps IT leaders navigate the overarching need to manage risk while balancing that with the immense potential rewards.

On the technology side, commercial cloud offerings for blockchain and distributed ledgers have emerged, grown in maturity, and have become well-established and extensively vetted options for digital assets. Some of these offerings are now capable of supporting robust public sector scale operations. The report explores the specific qualities needed in such platforms to achieve a world-class digital assets infrastructure, whether it is public cloud, hybrid, or private.

A CIO's Guide to Digital Assets

This report covers:

• A pragmatic exploration of the U.S. public policy environment that has matured around digital assets, including CBDCs, to manage risk while capturing the benefits.
• Explores the fundamentals of digital assets and their significant potential benefits to stakeholders, especially the general public.
• Articulates the range of modern digital assets that can be developed by the public sector.
• Forecasts the size of the public sector digital assets infrastructure industry through 2032.
• Examines the attributes of a cloud-based digital assets infrastructure that can safety used as a basis for public sector offerings and services.
• Makes specific recommendations on how to navigate the selection and adoption of a modern digital assets infrastructure.

You can find the full research report available to our Research Unlimited subscribers.

I’m also very pleased to announce that Amazon Web Services and their Gov Cloud team has made a courtesy copy of the report available to the general public, which can be found here. Please don’t hesitate to reach out to me if you have questions or comments about this report or to share your experiences on the forefront of public sector digital assets.

My Related Research

What is Web3 and Why it Matters

How Decentralization and Web3 Will Impact the Enterprise | ZDNet

An Update on IBM Cloud for the CIO

An Oracle NetSuite Roadmap for the CIO and CFO

AWS re:Invent 2022: Perspectives for the CIO

The Cloud Reaches an Inflection Point for the CIO

How a Transformation Platform Reimagines Success

Digital Transformation Blueprint for the Office of the CFO

The CIO Must Lead Business Strategy Now

Building a Vision for Government 2.0 | ZDNet

The Strategic New Digital Commerce Category of Product-to-Consumer (P2C) Management

Truly Confusing? Truly Different. Truly Zoho.

Liz Miller

Vice President & Principal Analyst
Constellation Research

About Liz Miller: Liz Miller is Vice President and Principal Analyst at Constellation, focused on the org-wide team sport known as customer experience. While covering CX as an enterprise strategy, Miller spends time zeroing in on the functional demands of Marketing and Service and the evolving role of the Chief Marketing Officer, the rise of the Chief Experience Officer, the evolution of customer engagement, and the rising requirement for a new security posture that accounts for the threat to brand trust in this age of AI. With over 30 years of marketing experience, Miller offers strategic guidance on the leadership, business transformation, and technology requirements to deliver on today’s CX strategies. She has worked with global marketing organizations to transform everything from…...

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It is difficult to describe Zoho. You can use terminology you might use to describe any other organization and feel like you are failing. You can talk about culture, corporate social responsibility, innovation or sustainability until you realize how big the gap between “what Zoho means” versus “what everyone else means” comes into view. You can try, but in the end, you are left with a sense that you failed to accurately and fairly describe Zoho. At least that’s what happens to me.

In early 2023 I joined a rogue gaggle of industry analysts to trek to Zoho’s campus just outside of Chennai for an event dubbed Truly Zoho. Panel after panel of Zoho leaders shared an insider’s view and we analysts tried to accurately and fairly describe what we were hearing, seeing and experiencing. I’ve read article after article beautifully sharing the experience…but for some reason I was struggling. It wasn’t because there wasn’t plenty to share. I was struggling to document things in a way that was fair, accurate and, well, truly about Zoho.

Here is where I landed: Talking about Zoho is easy. Understanding Zoho is an entirely different experience and endeavor.

As a company Zoho is outright defiant in their individuality. What do you do when, ethically, you do not believe in tracking users or consumers with cookies? Build your own infrastructure and cloud to guarantee privacy is a baseline expectation and core to the business value of every product and offering. When opportunities and a lack of R&D is holding a country back, what next? You invest in rural revival to bring globally in-demand skills and innovation to India despite the assumptions of the world that innovation only happens in places like the Silicon Valley.

For some this brazen, maverick nature is frustratingly confusing. "How can you scale this?" "How will you keep this pace of growth?" "You can't possibly mean you building that from scratch?" "You can't do that."

These are all statements those of us who follow Zoho are used to hearing. I’ve heard people say, with earnest concern, that Zoho might not know what they are doing. They can’t possibly understand where their decisions will lead. There is an earnest worry that a group of good people will learn a hard lesson.

None of this is an accident. It is, however, the outcome of hundreds if not thousands of experiments. Zoho is happy to be home to teams of dreamers willing to experiment. Unlike other organizations where experiments are isolated or contained to reduce risk, Zoho removes any assumption that a failed experiment is a total failure. Failings are valued lessons, not grounds for termination. If an idea bubbles up and aligns with a customer’s need or request, teams are empowered to try…. empowered to experiment.

One early and lasting experiment: finding a new way to identify, educate and train the next generation of experimenters. For 17 years, Zoho Schools of Learning (informally called Zoho University by some,) has seen over 1,400 graduates advance across technology, design and business. Built as an alternative to traditional college or university programs that can often exclude students from far-flung rural villages across India, Zoho Schools focuses on the often-overlooked student that may not have the means to attend University but has the curiosity and will to learn and experiment.

This is most noticeable in the Zoho School’s boot camp style career re-entry program for women looking to return to work after a career break. During the Truly Zoho sessions, we had the opportunity to hear from women who had left the technology workforce. Most of these women told an all too familiar tale of leaving work to start or raise a family. The Marupadi program provides an intensive immersive retraining program to empowers these women for a comeback, brushing up on the latest technologies and skills during a full-time 3-month program. After a supervised internship program where graduates are placed with mentors to help guide them back into a role, Marupadi graduates are invited to interview for full time roles with Zoho.

While meeting the leaders of Zoho was an insightful glimpse into how and why Zoho exists today, it was the chance to meet with the students at Zoho Schools and especially the students and teachers at Kalaivani Kalvi Maiyam, the rural school teaching children as young as 2, that gave me the chance to see what Zoho will be in the future.

Zoho has not just existed but thrived by rejecting a berth in the global game of business dominance. It isn't that they don't want to play a game on the global stage...they just want us to come and play THEIR game. They want the rest of us, the rest of modern business, to stand up and fight for the future of innovation and experimentation. It is a bold and brazen dare: start a school, invest in tomorrow’s research and development, make the choice to sacrifice profit in order to power progress.

Sacrifice profit??? Zoho’s leaders decided to sacrifice growth to make a bold promise: nobody would be laid off as the world grappled with the threat of global financial recession and decline. For months we have seen headline after headline announcing layoffs. In order to appease Wall Street, investors, backers or shareholders, companies have made tough decisions to lay people off, cut back on research investments and implement austerity measures to keep ledgers in the black and ensure growth percentages did not fall. Zoho decided that the growth velocity they had consistently enjoyed over several years could slow if people could be prioritized.

Everyday management decisions in how to lead defy traditional business thinking. Decision making is pushed down into the teams and individuals closest to where those decisions turn into actions, especially when those decisions directly impact a customer’s experience with Zoho.

For those heading to an upcoming Zoholics event (I myself will be heading to the Austin whistlestop) these are the things I urge you to keep in mind:

• Ask why. It is OK if you think (possibly more than once) that what you see or what you think about Zoho doesn’t make sense. Instead of trying to fit Zoho or their technologies into a pre-existing mold, take a chance and jump into a conversation around WHY a new technology makes sense.
• Ask the strange questions. Ask the questions other vendors might think are irrelevant including where a Zoho employee is from or what path brought them to Zoho. The answers are as relevant to WHY a tool or solution exists as the market or technology itself.
• Ask what. In a world where words (especially buzzwords) are freely batted around, it can be easy to let things gloss over. Instead of assuming a phrase is being used for the buzz, ask what Zoho means. I especially encourage you to ask this anytime someone mentions privacy…trust me…they have a very intentional and foundational point of view on this that is totally intentional.

Perhaps the most important advice is this: suspend your disbelief. Just like my time in India, it will be totally worth it to learn who Zoho truly is.

FinancialForce Unleashes Spring '23 Release, Strengthening Opportunity-to-Renewal

Finding new ways to improve opportunity-to-renewal is core to any services business's growth.

FinancialForce has long bet its business on the belief that it could streamline opportunity-to-renewal for people- and software-centered businesses better than any other vendor. In delivering their Spring '23 release, they're proving how adept they are at delivering new features on a faster release cadence of three major releases a year. Out of its workforce of 1,000 people, FinancialForce has 400 full time employees in DevOps, engineering, product management, and quality, and nearly 100 outside resources in R&D.

FinancialForce's overarching goal with the Spring '23 release is to strengthen the customer's ability to excel at opportunity-to-renewal. The feature refresh for Spring '23 includes 18 different areas of their platform, with the most, eight, being in Services CPQ. Dan Brown, Chief Product and Strategy Officer at FinancialForce, says, "Opportunity-to-renewal is core to companies that deliver services. It's an area that has been dramatically underserved by classic vendors in this space. Most are fairly product-centric, and that tends to hold companies that are service-oriented back."

Services-as-a-Business is gaining traction

FinancialForce's Spring '23 release shows how Services-as-a-Business is closing gaps and improving the opportunity-to-renewal process. Tight labor markets, spiraling costs and prices due to inflation, and blind spots in opportunity-to-renewal cycles continually jeopardize services revenue. As a result, professional services and software companies relying on service revenue risk losing Annual Recurring Revenue (ARR) and seeing reduced Customer Lifetime Value for every account. The Spring '23 release provides a more granular, 360-degree view across eight core areas of the opportunity-to-renewal process to help services businesses meet new growth challenges.

"Our new Spring '23 release is designed to give organizations the kind of certainty they need in these very uncertain economic times," said Scott Brown, President, and Chief Executive Officer at FinancialForce. "Given the pace at which market and business conditions change, services businesses need confidence in their ability to manage estimates, skills and resources, and solve complex problems. This new release gives organizations a complete, customer-centric view of their business to turn continuous disruption into a competitive edge."

Spring '23 release doubles down in the areas of Service CPQ and Resource Management, which are the areas where the majority of new features have been added to this release.

Improving Services CPQ process performance protects margins

FinancialForce is prioritizing Services CPQ, first introduced in the Winter '22 release, to help customers get more in control of their margins and time management. The number and depth of new features in this area and Dan Brown's insights into how popular Services CPQ has become with enterprise accounts demonstrate that prioritization. FinancialForce's enterprise accounts are adopting Services CPQ to save time during sales cycles by providing their prospects with the visibility to identify resources available for quoting work, their billable rate, skills, and previous experience.

Dan Brown said that "in (quote) estimation, you now can reach into your PSA (Professional Services Automation) system and identify the resource that you're going to quote, what's their billable rate, what's their skills, what's their capabilities. A big issue our customers have is that the As Quoted versus the As Delivered are almost always materially very different."

He continued, emphasizing, "And that's where you end up with margin erosion, that's where you end up with revenue leakage for our customers. Now with Services CPQ, the As Quoted and As Delivered features are tightly linked together. And that has driven enormous improvements.”

Scott Brown added, “When I was a customer, this was a big pain point. For me, the capability to connect your pre-sales activities to your post-sale delivery is a real game changer for us."

Underscoring how vital Services CPQ is to FinancialForce's opportunity-to-renewal strategy, the Spring ‘23 Customer Overview notes that "with usability improvements in Services CPQ, support for additional pricing and costing scenarios, and streamlined estimate export for correct Statements of Work, services teams will be able to create accurate and competitive proposals faster, leading to higher win rates on projects, with much lower risk profiles."

Among the many enhancements to Services CPQ are usability enhancements to the Estimate Builder, helping to reduce errors in As Quoted and As Delivered Results.

New features to optimize resources and projects

Additional goals of the spring '23 release are to provide customers with improved workflows for optimizing resources and streamlining project management. Given how every professional services firm and software company today is under pressure to continually find new ways to optimize resources and be more done with less, the timing of Resource Optimizer Enhancements and introducing Resource Manager Work Planner is excellent. FinancialForce allows assigning multiple resources to project enhancements, integrating with MS Outlook and Google Calendar, as well as mass deletion of pass utilization results. FinancialForce also delivers task-based scheduling of held resource requests.

The Spring '23 release is designed to help enterprises optimize resources from small-scale to multi-location projects by adding Resource Work Planner and Enhanced Skills Maintenance that can scale across multiple global locations.

How FinancialForce's Spring '23 Release Strengthens Opportunity-to-Renewal

"This new release gives organizations a complete, customer-centric view of their business to turn continuous disruption into a competitive edge," remarked Scott Brown during a recent briefing. FinancialForce aims to help services businesses more efficiently monetize their time and resources by concentrating their development efforts across opportunity-to-renewal.

The release shows how services companies are looking to real-time financial analytics, including new risk management features, as guardrails to keep their businesses on track to margin and profit goals. The Spring '23 release shows FinancialForce's view of the opportunity-to-renewal process and what strengths it can offer customers, from a new Scheduling Risk Dashboard that provides early intervention and project course corrections in real time, to streamlined estimate exports for accurate Statements of Work (SOWs).

The following table uses the opportunity-to-renewal process as a framework to put the new release into context. It compares each phase of the opportunity-to-order process, how FinancialForce defines their role, how the Spring '23 release strengthens each area, what the people and software-oriented benefits are, along with their leading customer references. You can also download a copy of the Opportunity-to-Renewal Process comparison here.