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Big Idea: Compete on Data Supremacy

Big Idea: Compete on Data Supremacy

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Data Supremacy

DDDN's Are The Heart Of Data Supremacy

Here’s what I mean, because data is the foundation and first priority of every Data-Driven Digital Network (DDDN) that wants to grow, you have to understand how the data is shared, monetized, and controlled–so identifying the biggest pools of quality data and how that data is consumed is essential.

Data supremacy isn’t so much about having the most data in quantity but having the most qualitative, well-curated, high context data. If you can learn how the data interacts with each other and pick up on the patterns that arise from these interactions, you’re set up for success.

These insights come from their “interactions” among all the data produced and captured. Successful DDDNs are masters at identifying the patterns that emerge from these interactions. These patterns lead to “precision decisions,” from how much to charge for a product to what product should be recommended to which customers.

My book, "Everybody Wants to Rule the World," starts here with DDDNs and ends with winning in the age of the new monopoly. Available for pre-order now: https://amzn.to/3uR9Q9I

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The Work of Marketing Is Hard, and Adobe Is Totally Here for It

The Work of Marketing Is Hard, and Adobe Is Totally Here for It

Marketing—or more specifically the act of designing, developing, and deploying engagements to foster (profitable) relationships—is hard work.

The role of marketing is clearly defined in titles, job descriptions, and organizational charts. The act of marketing, however, can spread across any number of departments and functions and, in reality, can be executed by anyone.

Fundamentally, it is the act of marketing that directly affects the cross-functional team sport known as customer experience. In fact, Constellation Senior Vice President and Principal Analyst Nicole France often calls customer experience a mindset—a unifying strategy for the entire organization based on and in the service of the customer. It is not a toolset or a platform. This is why the act of marketing is so critical: It can deliver moments that influence customers, respond to them, and—when done well—inspire them to traverse the path between their investigations and their transactions.

Modern marketing isn’t just about engaging with the connected customer. It is also about meeting the rising tide of an experience-starved economy. The old mindset of command-and-control marketing, where marketers build journeys for obedient customers to follow, is being set aside. The new foundation for engagement is less about the rigidity of a funnel and more about being ready to reach and meet customers where they expect brands to appear and interact.

Overall, Adobe Summit 2021 reinforced Adobe’s understanding of this increasingly complex world of marketing—and clearly telegraphed that Adobe, just like marketing, intends to bring the CIO and the IT teams driving digital transformation along for the ride. Adobe Summit reclaimed a bit of the optimism that had been understandably lost in the chaos of 2020. Arguably, the spirit of fun and unbridled joy still seems centered on Adobe Creative Cloud. Only time will tell if Adobe Summit, and Adobe Experience Cloud, can celebrate the business of marketing as openly as Adobe Creative Cloud celebrates creators.

Here is a quick peek at the Adobe Summit 2021 announcements that turned my head:

Adobe Journey Optimizer: Built on Adobe Experience Platform, Adobe Journey Optimizer benefits from a unified and normalized data model, allowing for dynamic and event-based response to a customer’s signal. With some nice artificial intelligence (AI) and machine learning (ML) services and capabilities on top, Adobe Journey Optimizer takes the old vision of “set it and forget it” campaign drips and pivots into that journey-of-you mindset that experience-hungry marketers have been discussing for years.

Why it matters: Despite our best intentions, establishing journeys for an audience of one can be painful, landing more squarely in the realm of sending email blasts to an audience-of-one segment. Building out and perfecting a journey can be time-consuming, and to be frank, that is time many marketing teams don’t have. Yet it is exactly the holistic engagement experience that customers crave. When you extend the expectation for relevant and contextual journeys to reach beyond the walls of marketing, execution—let alone optimization—can feel impossible. The importance of tools such as Adobe Journey Optimizer is the capacity to expand the view of where and how behaviors and events can influence the customer’s journey, especially when those events reshape or redirect a customer’s path. We can’t afford to assume that our only triggers for engagement come from marketing-driven channels. Adobe Journey Optimizer sets out to do just what it claims to do—optimize the journey that the customer is firmly in control of.

Adobe Customer Journey Analytics: If Adobe Journey Optimizer puts touches in the context of the customer, Adobe Customer Journey Analytics puts omnichannel journey data in the context of the business. With flexible dashboards that are relevant across multiple teams and stakeholders, everyone contributes and stays informed of the insights and key performance indicators (KPIs) that are most relevant to and for them. Simplified data collection, governance and privacy controls, and dashboards that can address both the customer’s and the business’s needs in real time are just the start of the analytics journey.

Why it matters: Analytics, and more specifically marketing analytics, is turning a corner. No longer the realm of tactical measurement and tracking of operational performance, marketing analytics is maturing to define specific KPIs informed by the business, by the strategic goals of marketing itself, and finally by the tactics and points of operational execution. In the old view of marketing metrics—a world in which tactical measures sufficed—old tools for balancing and predicting media mix and accounting for marketing resources gave some peace of mind to finance officers tired of that sinking feeling that marketing investments were akin to burning money. However, through the lens of a true growth-driving chief marketer, those analytics were just operational goalposts purpose-built for tactical optimization. What is needed is tools that quantify engagements—regardless of origin—that, when connected and analyzed as a whole, can truly quantify the value and impact of experience. Tools such as Adobe Customer Journey Analytics take that leap, with the firepower of an end-to-end platform that can turn the insights of journey analytics into actions.

Adobe Real-Time CDP for B2B: It should not come as a big surprise that CMOs have put the customer data platform (CDP) at the top of their tech wish list in 2021. What is surprising is how few CDPs have taken on the critical data issues that haunt many B2B organizations. Built on Adobe Experience Platform, the Adobe Real-Time CDP B2B edition extends the unified and normalized understanding of the customer, with a distinct focus on unifying data around people and accounts. The important piece of the puzzle here is the flexible Adobe Experience Data Model, which has been updated to natively support B2B data and allows for account hierarchies, unique B2B data objects, B2B enhanced profiles, and support for data from connected applications. B2B data can be ingested in a more secure framework, thanks to some pretty-well-thought-out data governance and identity capabilities that label sources and assign and enforce policies.

Why it matters: In the many flavors and sizes of CDPs on the market, most favor the scale and sheer velocity of data cascading across systems focused on executing B2C engagements. Few understand, let alone work to demystify, the specific issues that face B2B organizations looking to personalize engagements across an increasingly complex web of influencers, buyers, and users. This offering is likely to get heads turning among large enterprises that don’t fit into the perfectly defined lines of B2B or B2C. For the hybrid organization—and for those organizations with both B2B and B2C lines of business—this becomes an attractive single CDP for all scenarios, with the Adobe offering supporting both use cases with a single, unified profile.

Adobe Experience Manager Assets Essentials: I hesitate to call this a “lite” version of Adobe Experience Manager Assets. It is aptly dubbed “Essentials,” delivering the rightsized toolkit for the individual user just trying to make experiences happen. It comes packed with plenty of power under the hood—the difference being that Adobe Experience Manager Assets Essentials brings the right power, not watered-down power. Adobe Experience Manager Assets Essentials will be the default asset management solution across several Adobe Experience Cloud applications, starting with Adobe Journey Optimizer (June 2021) and Adobe Workfront later in 2021. The solution delivers a workspace that is easy to set up, easy to use, and built with collaboration in mind. It just makes the act of finding common, consistent images; videos; and a growing library of rich media assets easier. Organizations have focused on the democratization of data; Essentials looks to give that same open, flexible, and collaborative spirit to asset collaboration, access, and utilization. As the newly acquired Workfront solution becomes more deeply integrated and aligned across the Adobe portfolio, I expect to see Adobe Experience Manager Assets become an even more intentional bridge across the Adobe Creative and Adobe Experience Cloud applications, but for now, Adobe Experience Manager Assets Essentials is a lot to chew on, especially for organizations that have not taken the critical pivot to a digital asset management (DAM) strategy and solution to power that last mile of experience delivery.

Why it matters: Let’s say it for the record: For some organizations, asset management is achieved by email or mass storage “boxes” where an asset is more likely to go to die than achieve its intended outcome. The beauty of Adobe Experience Manager Assets Essentials isn’t just in the toolset or functionality. There is also a stunningly smart business need for a smaller, more readily available and potentially more budget-friendly resource that can be implemented in nonmarketing functions such as sales, service, and support. Essentials rightsizes for the real work of delivering consistency of experience in lockstep with relevance and context. In the spirit of full transparency: This was the announcement I was most excited about in a sea of interesting launches. It is woefully easy to discount the importance of a DAM solution and even easier to assume there is no such thing as a DAM strategy. You’d be DAM wrong.

The individual product announcements at Adobe Summit were in and of themselves important and impressive. But the biggest unveiling that should not be ignored is the reveal of Adobe’s new “marketecture” that shifts away from Adobe Experience Cloud’s serving as an umbrella for a loosely connected portfolio of acquisitions and legacy services. What was unveiled at Adobe Summit was a new view of Adobe Experience Cloud as a foundational system for engagement, built on data while having been created for organization-wide execution and engagement and bolstered with significant services such as AI/ML, identity, and governance, to name a few. Instead of being an acquisition showcase, Adobe’s view of the world starts with a unified data model in which an increasingly powerful portfolio of applications can coexist and, dare I say, connect far beyond the walls of the department known as marketing.

Adobe sits poised to serve as the unapologetic champion of the work of marketing. This new structure and vision for Adobe Experience Cloud is a starting point, which is interesting for a brand that has been synonymous with marketing since the 1980s. Then again, this might be the exactly right posture for Adobe as it races toward its 40th anniversary in 2022—reimagined to power the engagements of tomorrow without sacrificing its enduring legacy of creativity.

Marketing Transformation Matrix Commerce Next-Generation Customer Experience Tech Optimization Chief Executive Officer Chief Information Officer Chief Marketing Officer Chief Digital Officer Chief Data Officer

Big Idea: Decision Velocity

Big Idea: Decision Velocity

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Alexander The Great

Guess what Alexander the Great's success on the battlefield is often credited to?

SPEED of decision-making or decision velocity.

Most of his opponents had bureaucratic decision architectures, where minor decisions would travel up multiple levels of command before traveling back down to be executed. Compared to Alexander the Great's decentralized command structure enabled by trust, his troops beat their enemies by simply "out-decisioning" them.

I think you know where I'm going here...

Any organization that can make decisions twice as fast or one hundred times faster than its competitors will decimate them. Time is a friend to those who can make faster, more accurate decisions. While the human brain may take minutes to decide, and it takes hours for a decision to work through an internal organizational structure, machines and artificial intelligence engines can make a decision in milliseconds in the digital world.

Whoever masters these automated decisions at high velocity will have an exponential advantage over those who don't.

Pre-order here: https://amzn.to/3utStwF

Get the latest book Everybody Wants To Rule The World

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News Analysis: Amazon Sidewalk Ups The Battle For Last Inch Connectivity

News Analysis: Amazon Sidewalk Ups The Battle For Last Inch Connectivity

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Amazon Sidewalk  

Key Features Extend Last Inch Network

On Friday May 7th, 2021, Amazon announced a series of updates to Amazon Sidewalk.  Sidewalk delivers last mile connectivity via a network bridge protocol on Amazon's smart home devices.  The Sidewalk Bridge devices such as Echo products and Ring Floodlight Cams use a 900 MHz band and Bluetooth Low Energy (BLE), to extend WiFi networks .  The partnership with Tile announced in the Fall of 2020 can connect with any Bridge device to deliver not only the last mile, but the last inch inside community wide networks build on these Bridge devices.

Sidewalk Bridges

Sidewalk Bridges are devices that provide connections to Amazon Sidewalk. Today, Sidewalk Bridges include many Echo devices and select Ring Floodlight and Spotlight Cams. A comprehensive list of Sidewalk devices includes:

  • Echo (3rd generation and newer)
  • Echo Dot (3rd generation and newer)
  • Echo Dot for Kids (3rd generation and newer)
  • Echo Dot with Clock (3rd generation and newer)
  • Echo Plus (all generations)
  • Echo Spot
  • Echo Studio
  • Echo Input
  • Echo Flex
  • Ring Floodlight Cam (2019)
  • Ring Spotlight Cam Wired (2019)
  • Ring Spotlight Cam Mount (2019)

Sidewalk devices

  • Tile
  • Ring Car Alarm

New Announcements Extend Devices And Reach

The Amazon Sidewalk neighborhood network gained three new features:

  1. Tile joins Sidewalk to help customers find lost items.  Users can find items tagged by Tile via Alexa.  Echo devices will extend the coverage area to find Tiles bluetooth tagged objects.
  2. Level partners with Sidewalk to control smart locks.  The range of Amazon Sidewalk makes it easier for any smart device in connected homes.  Level lock connects directly to Ring Video Doorbell Pro devices.
  3. CareBand improves quality of life.  CareBand is helping dementia pateints with wearable technology that can provide indoor and outdoor activity racking.  Help buttons and automated analysis of activity patterns provide 24/7 monitoring.  With Amazon Sidewalk, no mobile devices are needed.
  4. Sidewalk supports compatible Echo devices on June 8th.  Echo devices can extend the reach of Sidewalk.  Amazon has provided smart privacy provisions.  Shared data is protected with three levels of encryption. Users decide which devices have access.  Data is automaticaly deleted every 24 hours.

 

Amazon's product boss Dave Limp has been quoted in multiple media outlets stating, "Sidewalk is all about the next billion things that are going to get on the network".  Amazon's attacking the gap between where celluar ends and where home WiFi begins.  Amazon's Sidewalk network will being support for Tile Bluetooth trackers on June 14th.

On the privacy side, Amazon has shipped the products with opt-in requirements for location based services to protect user privacy.  They've also shipped the connectivity with opt-out to make it easier to adopt.  This balance between privacy and convenience will improve adoption and also help customers easily experience the benefits but manage privacy issues.

The Bottom Line: The Battle Of Last Inch Connectivity Is Here

From Starlink to Comcast and Verizon, delivering on the last mile has been a goal.  Reaching the last inch has come with Apple AirTags with Bluetooth tracker and Amazon Sidewalk with Tile.  As tech giants double down on neighborhood and micro mesh connectivity, expect more partnerships and innovations.  Amazon has smartly enabled many of its Echo devices and all of its Ring devices to extend these networks providing mesh coverage and keeping its devices sticky and deliver more value added digital services.  This latest battle for the last inch will result in only a handful of players, creating the next opportunity for connected services.

Get the latest book Everybody Wants To Rule The World

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News Analysis: Crypto FOMO and Bitcoin's Rise Into the $1 Trillion Club

News Analysis: Crypto FOMO and Bitcoin's Rise Into the $1 Trillion Club

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The Road to $1 Trillion in Market Cap 

Crypto FOMO Drives Capital Flows Out Of Big Tech (For Now)

Retail investors have taken money out of the equity market and rotated into crypto to catch the wave.  With all crypto's now worth more than $2 Trillion in market cap and Bitcoin standing out at $1 trillion, this poses a risk to the US dollar dominance as the reserve currency.

  • Bitcoin ($57,000), $1T market cap
  • Ethereum ($3,491), $404 B market cap
  • Binance Coin ($643.74), $98 B market cap
  • Dogecoin ($.597), $77 B market cap
  • XRP ($1.67), $75 B market cap
  • Tether (.9999) $53 B market cap
  • Cardano ($1.63) $52 B market cap

The current rush into crypto and NFT's creates a casino atmosphere and "gold" rush into the next big thing.  Only a few crypto assets will survive in the long run.  Bitcoin's finite limit of 21 million coins, Ethereum's role in commerce, and Cardano seem to have the best prospects.  Expect this trend to continue into the summer and taper off as the reopen rotation gains traction.

The Bottom Line: Don't Count Big Tech Out

The first quarter of 2021 showed how the digital giants continued to grow at break neck paces.  While stock prices reflect a reopen rotation and crypto FOMO trend, few asset classes can show this type of year over year performance.  Don't count big tech out.  Big tech should remain a key component in portfolios.  However, not all big tech stocks are created equal.  Only the digital giants will continue to create competitive moats, invest in innovation, and play the long term game of global domination.

For the year:

  • Google up 30%
  • AirBnB up 22.68%
  • Oracle up 17.42%
  • IBM up 13.93%
  • SAP up 11.16%

Buying big tech stocks on the dip have often boded well for the long term investor.  Tesla, Apple, and Amazon are currently under performing for the year but have long term upside and most likely may be undervalued in the past week.  Take note, Honeywell's entry into the NASDAQ reflects how the company's portfolio is geared for more growth with Quantum Computing and Connected Buildings.

Get the latest book Everybody Wants To Rule The World

Your POV

Are you in the repoen rotation or the crypto FOMO?  What are you investing in next?  Ready to find the next set of digital giants?

Add your comments to the blog or reach me via email: R (at) ConstellationR (dot) com or R (at) SoftwareInsider (dot) org. Please let us know if you need help with your AI and Digital Business transformation efforts. Here’s how we can assist:

  • Developing your digital business strategy
  • Connecting with other pioneers
  • Sharing best practices
  • Vendor selection
  • Implementation partner selection
  • Providing contract negotiations and software licensing support
  • Demystifying software licensing

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales.

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Big Idea: Prioritize Long Term Investment Mindset Over Short Term Profits

Big Idea: Prioritize Long Term Investment Mindset Over Short Term Profits

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American Airlines OneWorld

Short Term Thinking Crushes Traditional Companies In Fight Against Digital Giants

If legacy companies want to compete with data giants in the age of extreme capitalism, spending capital on innovation needs to STOP being sacrificed for short-term profits.

In 2005, a survey by the Duke Fuqua business school showed that 55% of CFO's at 400 of America's largest public companies would rather sacrifice their firm's economic value to meet a quarterly expectation. Sadly, not much has changed since then.

Don't believe me? Look no further than the airline industry post-COVID-19.

Take American Airlines, which filed for bankruptcy in 2011 but became profitable again by 2014. During six years of record profits, the airline still failed to put together a rainy-day fund for a crisis. It also failed to modernize its technology systems, aircraft, and operating procedures to improve digital channels, enhance analytics, and develop better planning capabilities. Instead, it spent $12 billion of its positive cash flow since 2014 in stock buybacks. American isn't alone, either. Most airlines spent 97% of their free cash flow on buybacks from 2010 to 2020.

Get the latest book Everybody Wants To Rule The World

Your POV

Does your organization take the long view or prioritize short term profits?  Are you reinvesting enough into innovation? Add your comments to the blog or reach me via email: R (at) ConstellationR (dot) com or R (at) SoftwareInsider (dot) org. Please let us know if you need help with your AI and Digital Business transformation efforts. Here’s how we can assist:

  • Developing your digital business strategy
  • Connecting with other pioneers
  • Sharing best practices
  • Vendor selection
  • Implementation partner selection
  • Providing contract negotiations and software licensing support
  • Demystifying software licensing

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales.

New C-Suite Matrix Commerce Data to Decisions Innovation & Product-led Growth Revenue & Growth Effectiveness Future of Work Tech Optimization Insider Associates Leadership AR AI ML Machine Learning LLMs Agentic AI Generative AI Analytics Automation B2B B2C CX EX Employee Experience HR HCM business Marketing SaaS PaaS IaaS Supply Chain Growth Cloud Digital Transformation Disruptive Technology eCommerce Enterprise IT Enterprise Acceleration Enterprise Software Next Gen Apps IoT Blockchain CRM ERP finance Customer Service Content Management Collaboration M&A Enterprise Service Chief Analytics Officer Chief Customer Officer Chief Data Officer Chief Digital Officer Chief Executive Officer Chief Financial Officer Chief Information Officer Chief Information Security Officer Chief Marketing Officer Chief People Officer Chief Privacy Officer Chief Procurement Officer Chief Revenue Officer Chief Supply Chain Officer Chief Technology Officer Chief Operating Officer Chief Experience Officer

Marketing’s Complex Reaction to Ending the War

Marketing’s Complex Reaction to Ending the War

When Carl von Clausewitz penned On War in 1873, I seriously doubt he had marketing in mind, but in his articulation of the “fog of war” he proves that he gets us.

War is the realm of uncertainty; three-quarters of the factors on which action in war is based are wrapped in a fog of greater or lesser uncertainty. A sensitive and discriminating judgement is called for; a skilled intelligence to scent out the truth.

Now…go back and replace “War” with “Marketing.” I’ll wait here.

Our reality, as a culture, is that we have based our actions and language around war. We execute campaigns. We target. We blast. We relish when small actions go viral: like handing out smallpox infected blankets, we enjoy when something we knowingly unleash infects an unwitting population. We draw battle lines and segment our enemy, carefully noting their behaviors to exploit weaknesses. We hide code in the pixels and stalk our prey.

In military war games, the application of intelligence and enemy tracking, especially through friendly force tracking systems, is key to developing a winning strategy by understanding the behaviors and context of a target to determine the optimal time, attack vector and defense posture needed to win both the battle and the war. Go ahead and let me know when this stops feeling like a MarTech pitch.

In marketing’s culture of war, who is the enemy combatant? The customer is our enemy.

Now. Imagine that in this decades long game of war, someone comes along and says, sorry but we intend to cut off a key stream of skilled intelligence. In fact, we are going to demand that you must proclaim openly and clearly to your enemy what ammunition you have collected, how you will be using your ammunition and give clear opportunity for your enemy to walk off the battlefield with zero penalty or threat of attack. Not only that, but we are also going to cut off your supply of ammunition you obtain through other parties.

The death of the 3rd party cookie and the introduction of Apple’s App Tracking Transparency (ATT) has sent some marketers (and more than a few ad and social platforms) into a tailspin. The demise of the cookie, in particular, has been slowly ratcheting up the stress levels as brands and agencies come to terms with just how often 3rd party cookie data is leveraged for everything from “personalization” (yeah, I put it in quotes…) to campaign optimization.

But let’s take a breath and just look at consumer behaviors in the wake of the ATT launch in iOS 14.5. According to a study from Flurry Analytics, a whopping 96% of users in the US are opting OUT of ad tracking. Their tracking notes that from a sample of 2.5 million daily active users, about 4% are allowing apps access to the Identifier for Advertisers (IDFA). On the other side of the data-shock canal is a study from the team at AppsFlyer in which over 13.2 million instances of a prompt being shown to an end-user. In this study, 39% of those prompts resulted in the user tapping the ALLOW button. The highest rate of “allow” opt-in were across apps like photography (64%), Shopping (44%), finance (42%), food & drink (42%) and non-gaming apps (42%).

Two dramatically different data points from dramatically different points of view. What IS clear, regardless of data source: apps and brands that hold a pre-existing level of affinity with their user are enjoying the benefit of the relationship. Casual gamers, who are typically transient and bounce from farm to farm or puzzle to puzzle, are not typically brand-loyal…and their opt-outs are demonstrating that. For these developers, we are seeing an increase in requests for account sign-ups or pre-ATT prompt content that provides more space to share messages that are in context to the app and displayed at a time that feels less dire and intrusive than the ATT prompt.

Those developers who have taken the time to articulate the VALUE of this requested exchange are also avoiding falling off the cliff. It could be argued they are, for the first time, having an open and honest value exchange discussion with their new partner, the customer.

Customers are tired of being treated like the enemy, being forced to dodge and weave their way through brand’s interpretation of “personalization” that can often be more impersonal and aggravating than mutually valued and valuable. This new age of the customer is asking marketing as an industry and a strategy to rethink our posture of war. In the absence of certain weapons, is there another way to build points of connection between the goals of our businesses and the goals of our customers.

Marketing’s job is shifting from being the General perched on top of the fill looking to pierce the fog of war to craft winning strategy and more like a seasoned host or hostess that can understand that exact moment our guests could really use another glass of wine…and be ready with the perfect sip to keep the relationship and revelry going. It is about knowing who is and isn’t lactose intolerant…and accepting those last-minute curveballs of Kelly being vegan. Afterall, you don’t blast Kelly with information about burgers when she is telling everyone about Veganuary…yet that’s exactly what you do if Kelly is the enemy and you need to control her and force her to eat chicken.

It is easy (and understandable) to have big and bold reactions to the new path of privacy and customer-valued and defined identity. These shifts can feel like the rug is being pulled out from under our strategies. But they are also an opportunity to lean into the behaviors, intentions and higher-fidelity signals our customers are leaving across our own 1st party sources. This is why we’ve seen so many technology solutions from B2B like Demandbase to B2C like Criteo leaning into better ways to deliver efficient and effective engagements through 1st party data stores.

Regardless of where the cookie crumbles, the first thing we need to accept and change is our culture. We need to admit we have been fighting a war. We need to wave the white flag so we can see just how many of our customers are relieved and ready to welcome us to a new party.

New C-Suite Marketing Transformation Next-Generation Customer Experience Chief Marketing Officer Chief Digital Officer

Big Idea: It took 50 years for markets to consolidate down to a few dominant players. Now it takes ten.

Big Idea: It took 50 years for markets to consolidate down to a few dominant players. Now it takes ten.

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Big Idea: It took 50 years for markets to consolidate down to a few dominant players. Now it takes ten. Everybody Wants To Rule The World July 13, 2021 rwang0 Wed, 05/05/2021 - 12:55

The Pace Of Change Continues To Accelerate

It took 50 years for markets to consolidate down to a few dominant players. Now it takes ten.

Countless industries went through gradual reorganization from hundreds or thousands of small players down to a couple of giants. But until very recently, the keyword was “gradual.” There’s no longer going to be a monopoly in each industry. In the next ten years, I expect to see about 100 dominant players in 50 distinct markets worldwide, in most cases with a duopoly of two giants per market.

Those giants won’t be equally strong. The first company to establish a Data-Driven Digital Networks (DDDN) will usually apply its first-mover advantage to take about half of the total addressable market. A second, more reactionary player will take about a quarter of the total addressable market. The remaining 30% (give or take) will go to small players who find ways to survive but have no hope of catching up to the giants. The monopoly has now become a duopoly.

My forthcoming book, Everybody Wants to Rule the World, outlines the very ways in which our playing field is changing and how you can compete to not only keep up but to win. It will be available everywhere on July 13th.

Get the latest book Everybody Wants To Rule The World

Your POV

Do you see your industry collapsing around value chains?  Who are the duopolies in your space? Add your comments to the blog or reach me via email: R (at) ConstellationR (dot) com or R (at) SoftwareInsider (dot) org. Please let us know if you need help with your AI and Digital Business transformation efforts. Here’s how we can assist:

  • Developing your digital business strategy
  • Connecting with other pioneers
  • Sharing best practices
  • Vendor selection
  • Implementation partner selection
  • Providing contract negotiations and software licensing support
  • Demystifying software licensing

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales.

Disclosures

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy,stay tuned for the full client list on the Constellation Research website. * Not responsible for any factual errors or omissions.  However, happy to correct any errors upon email receipt.

Constellation Research recommends that readers consult a stock professional for their investment guidance. Investors should understand the potential conflicts of interest analysts might face. Constellation does not underwrite or own the securities of the companies the analysts cover. Analysts themselves sometimes own stocks in the companies they cover—either directly or indirectly, such as through employee stock-purchase pools in which they and their colleagues participate. As a general matter, investors should not rely solely on an analyst’s recommendation when deciding whether to buy, hold, or sell a stock. Instead, they should also do their own research—such as reading the prospectus for new companies or for public companies, the quarterly and annual reports filed with the SEC—to confirm whether a particular investment is appropriate for them in light of their individual financial circumstances.

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Monday's Musings: Long Term Loyalty Is Gone!

Monday's Musings: Long Term Loyalty Is Gone!

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Long Term Loyalty Is Gone 

Long-term loyalty is gone.

Your customers will trade loyalty for convenience, value, or status.

Consider Domino's. Even though they managed an A+ digital transformation in the 2010s, the company now faces a new existential threat. The enemy is no longer Pizza Hut; it's the new wave of food delivery companies like Uber Eats and DoorDash moving into its sector.

While these food delivery "aggregators" don't own their own kitchens, they do own the customer experience. They can analyze tons of customer data on food preferences and price elasticity. They then partner with "ghost kitchens"— commercial facilities that prepare meals from different cuisines (such as Chinese, Thai, Indian, and pizza) from a single physical location and different online brands.

This agility and data mean the Dominos of the world are about to get their butts kicked! Every company must constantly re-evaluate its business and monetization model and value proposition if they hope to survive.

Otherwise, it's easy to win one war but lose the next.

 

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Not too much identity technology, and not too little

Not too much identity technology, and not too little

The World Health Organisation (WHO) has released the first of a series of design documents concerning digital proof of COVID-19 vaccination, as the start of a process to standardize digital versions of existing paper “home-based” records and the international “certificate of vaccination or prophylaxis” aka the Yellow Card: “Interim guidance for developing a Smart Vaccination Certificate” (SVC). 

The WHO position so far can be summed up as “Not Too Much Technology; Not Too Much Identity”.

Digitizing proof of vaccination

WHO sets out a worthwhile set of reasons for wanting digital proof of vaccination.  This is a contested policy arena; there are plenty of concerns that vaccine passports would lead to discrimination in employments and travel.  The WHO emphasizes that the making of rules for the use of any SVCs remains a matter for other policy makers. 

So, bearing in mind that proof of vaccination has policy problems, this is how WHO describes the motivation for digital proof:

SVCs can enhance existing paper home-based records and the [Yellow Card] by combining the functionality of both. Additionally, SVCs can provide a way to mitigate fraud and falsification of “paper only” vaccination certificates by having a “digital twin” that can be verified and validated in a reliable and trusted manner, for health, occupational, educational, and travel purposes (as per national and international policies); without depending on an individual verifier’s subjective interpretation. Once an individual’s vaccination record is available in a digital format, additional functionality can be built to support things like automated reminders for the next dose or linkages to other immunization information systems (though these are outside the scope of this document). An SVC is intended to allow for multiple types of use without requiring an individual to hold multiple vaccination records.

Verifiability of vaccination credentials

Until WHO released its guidance, the endeavour to digitize proof of vaccination had been dominated ? almost captured ? by two movements: Self Sovereign Identity and blockchain. Dozens of press reports through 2020 positioned “Verifiable Credentials” as the key to managing vaccine rollouts and “reopening economies”. Some pundits seem to think the long-awaited killer app for digital identity has finally arrived; see e.g. “Coronavirus jumpstarts race for digital ID”.

Several digital proofs of vaccination are being piloted, most of which boast blockchain, including the Evernym IATA TravelPass and IBM’s project in New York City. One of the leading programs in this space is the COVID Credentials Initiative (CCI) formed a year ago by 60 or so companies almost all focused on blockchain. CCI’s messaging today centers on verifiable credentials and minimizes blockchain references.  Yet nevertheless, verifiable credentials are seen by most commentators and technologists as synonymous with ‘identity on blockchain’.

In my view, the technological task of digitizing proof of vaccination is straightforward. Blockchain is neither necessary not sufficient, and no new order is needed for “user-centric” identity management in healthcare (especially in the midst of a pandemic where the priority must be to deliver health services without complicating the way healthcare is managed). 

Verifiable credentials on the other hand are a very good idea indeed, in digital proof of vaccination.  Let’s unpack what is really needed here. 

In essence, any verifiable credential is an assertion about a data subject ?such as “This person had a COVID Type ABC vaccination on April 1, 2021” ? which is digitally signed by or on behalf of the party making the assertion ? such as “Nurse 12345678, ACME Central Vaccination Clinic”.  Ideally the verifiable credential contains a key pair bound to a data carrier controlled by the subject (typically a cryptographic wallet) so that each time the credential is presented, it is signed afresh by the subject’s private key, giving the receiver confidence that the presentation was made with consent of the individual. The fresh dynamic signature also conveys information about the type of wallet the credential was presented from.

Despite the excitement around the new W3C verifiable credential standard and the popular association of verifiable credentials with blockchain, we have had cryptographically verifiable credentials for many years.  The original verifiable credentials were in fact smartcards and SIM cards.

Whenever you use a Chip and PIN smartcard, the merchant terminal cryptographically verifies the digital signatures of the card-issuing bank (proving the account details are genuine) and of the cardholder (proving the transaction was created afresh on the spot, under the cardholder’s control). The same sort of thing happens when you place a mobile phone call: the SIM card digitally signs a packet of account details, proving to the network that you are a legitimate subscriber.  These attributes about end users in different systems are cryptographically verified at the edge of the networks, without ‘calling home to base’.

What has WHO decided?

WHO convened a Smart Vaccination Certificate Working Group  to publish standards for SVC security, authentication, privacy and data exchange.  The interim guidance is the first in a series of three drafts and public consultations leading to a final specification in mid 2021. The Working Group has deliberated already and closed off a number of design decisions, around medical terminology, clinical coding standards, the format of the patient vaccination record, and the technology of the SVC global trust network which will make the certificates widely available and recognizable.

In my view the WHO work has two serious and most welcome implications.  

Firstly the Working Group has expressly endorsed PKI as the technology for a new WHO trust framework for global interoperability of digitized proof of vaccination.  They drew on decades of ICAO e-passport experience and consider the issue of trust framework technology to be "closed " [Ref: line 218 of the consultation paper]. Nevertheless they appreciate that implementing PKI is a significant undertaking, reporting that several countries have called for “assistance related to the establishment of their [public health authority's] national public key infrastructure” [Ref: lines 208-214].  The role of the WHO to facilitate PKI availability and deployment is a work in progress.

Secondly, WHO has stressed that digitized vaccination proofs will not supersede the time-honoured Yellow Card: “vaccination status should still be recorded through the paper-based International Certificate for Vaccination, and Prophylaxis”.  Furthermore, identification of vaccination recipients will be undertaken under existing practices.  That is, WHO sees no need to intervene in identification practices and is not entertaining any idea of a new digital identity framework. The interim guidance spells out that it is expected that a “health worker is able to ascertain the identity of a subject of care, as per the norms and policies of the public health authority” [lines 381-382] and “the identity of the subject of care SHALL be established as per Member State processes and norms” [line 501]. Furthermore, “the SVC is not an identity” [line 382].

In a nutshell, WHO has decided that digitization of the Yellow Card will not entail too much technology (such as the new and unproven blockchain methods or exotic verifiable credentials) and neither will it entail new identity philosophies (such as Self Sovereign Identity, which has untold impact on the way patients and healthcare systems interact).

My analysis and proposal for a Digital Yellow Book

These positions set out by WHO are most welcome, given the tendency for new digital identity movements and technologies to complicate public policy.  I recently wrote a short paper on just these issues and presented it to an IEEE symposium on public interest technologies: “A digital Yellow Card for securely recording vaccinations using Community PKI certificates” (IEEE International Symposium on Technology and Society, 12-15th November 2020, Tempe Arizona).

We should digitize nothing more and nothing less than the fact that someone received their vaccine.  A verifiable credential carrying this information would include the place, date and time, the type of vaccine, and the medico who administered or witnessed the shot.  The underlying technology should be robust, mature and proven at scale ? as is PKI and public key certificates ? and available in a choice of form factors ranging from passive universally accessible 2D barcodes through to contactless electronic certificates in smart phones and medical devices.

Above all, digitizing the fact of a vaccination must be done within the existing contexts of public health administration around the world. No new patient identification protocols should be imposed on health workers.  Let us assume that they know what they are doing today when assessing patients, administering vaccines and keeping records.  There is no call for a new digital identity framework, even if “user centric” seems appealing.  The digitization effort should focus on taking vaccination events and representing them digitally faithfully, accessibly and in-context.

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