Oracle Open World 2017: 9 Announcements to Follow From Autonomous to AI

Doug Henschen

Former Vice President and Principal Analyst
Constellation Research

Doug Henschen is former Vice President and Principal Analyst where he focused on data-driven decision making. Henschen’s Data-to-Decisions research examines how organizations employ data analysis to reimagine their business models and gain a deeper understanding of their customers. Henschen's research acknowledges the fact that innovative applications of data analysis requires a multi-disciplinary approach starting with information and orchestration technologies, continuing through business intelligence, data-visualization, and analytics, and moving into NoSQL and big-data analysis, third-party data enrichment, and decision-management technologies. Insight-driven business models are of interest to the entire C-suite, but most particularly chief executive officers, chief digital officers,…...

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Oracle highlights machine learning and artificial intelligence for running cloud services, delivering smart applications and driving data-driven decisions. Here’s what’s coming.

Oracle’s new Autonomous Database Cloud will be cheaper, faster and, with the addition of the Oracle Cyber Security System, safer than anything from Amazon Web Services (AWS). At least that’s the assertion Oracle Executive Chairman and CTO Larry Ellison wants everyone to remember from last week’s Oracle Open World 2017 (OOW17) event in San Francisco.

Whether Oracle’s claims are fair and accurate remains to be seen, as the first release of the Oracle Autonomous Database, through a Data Warehouse Cloud Service, won’t be available until December. Count on it being at least a few more months before independent reviewers can do independent tests against rival cloud services.

It should be about that same time – six months from now – that several other data-related announcements from OOW17 will actually be available. Some notable OOW17 announcements are generally available today, such as the Oracle Big Data Cloud, Oracle Event Hub and Stream Analytics Cloud services, and the Oracle Analytics Cloud Data Lake Edition. But whether it’s the next round of Adaptive Intelligent Apps, coming artificial intelligence (AI) and machine learning (ML) Platform as a Service capabilities, or a series of Oracle Analytics Cloud upgrades, many of the more interesting announcements from OOW17 will emerge over the next three to six months.

Here’s a rundown on 9 announcements to follow over the coming months.

Oracle Autonomous Database Cloud

Winning the cloud war is, of course, crucial for Oracle. Oracle has 480,000-plus customers, and it’s number-one product, hands down, is Oracle Database. If there’s a cloud equivalent to the domino theory, it’s that as cloud database selections go, so go the rest of a customer’s cloud choices. Thus, Ellison’s better-faster-cheaper performance and cost claims were on display all over OOW17. He also told attendees that with discounts, the database service will start at as little as $300 per month — though the 1-CPU to 1 terabyte-of-data specification seemed anemic, to say the least.

In CEO Mark Hurd’s keynote we heard that only about 14% of production workloads are now running in public clouds, but given growing cloud momentum he predicted that 80% of production workloads will be in the cloud by 2025. The lion’s share of today’s database marketplace is Oracle’s to lose, so there’s huge pressure to prevent customers from even thinking about alternatives like Amazon RedShift or Amazon Aurora. The (according-to-Oracle) cost and performance claims flashed all over OOW17 were a “stick with Oracle” message to on-premises customers now considering the cloud.

Analysis: It’s important to recognize that the Oracle Autonomous Database Cloud is just that, a cloud-based service. Oracle Database 18c software, when it arrives, won’t have inherent Autonomous capabilities. To be Autonomous it has to be delivered as a service by Oracle. The same goes for the on-premises deployment option, which won’t be Autonomous unless it’s delivered “Cloud at Customer” style, with an Oracle Cloud Machine deployed in customer data centers but managed by Oracle.

Oracle has been talking for at least a couple of years about the efficiency it can offer through automation in the cloud, but the Autonomous Database Cloud is said to bring these advantages to a whole new level. Time will tell just how much extra oomph the ML-driven Autonomous tuning and optimization delivers compared to like-for-like Oracle 12c database services.

As for those tests results, the comparison of Oracle Database on Oracle Cloud vs. Oracle Database on Amazon is a shoe-in for the home team given Oracle’s ability to run the database on Exadata, which is not an option for Amazon and which which pushes down query processing to the storage layer, thereby reducing the load before the query even gets to the database engine. Oracle DB on Exadata vs. Redshift on Amazon is more of an apples to apples comparison. Here’s where I’m eager to see independent test results.

Assuming that ML-driven database automation offers advantages – and I’m sure there will be many — the good news is that Oracle has a slew of other Autonomous database services in the pipeline, including Autonomous OLTP, expected next June, and Autonomous NoSQL and Graph database services likely to show up by OOW18.

Oracle Adaptive Intelligent Apps

Announced rather quietly at OOW16, Oracle Adaptive Intelligent Apps are a family of cloud-based, machine-learning powered apps that are integrated with Oracle cloud applications. The company spent the first half of 2016 putting the required machine learning data pipelines in place. Using a combination of customer-specific SaaS data and third-party enrichment data from the Oracle Data Cloud, Adaptive Intelligent Apps will deliver customer-tailored recommendations that will improve decisions, outcomes and business results.

Generally available today are Next Best Offers and Recommendations, a subset of Adaptive Intelligent experiences coming to the Customer Experience (CX) Cloud. Following the roadmap laid out last year, Oracle announced Adaptive Intelligent Apps for HR, ERP and Supply Chain Management at OOW17, but nobody was predicting release dates for this next wave of smart apps.

Analysis: Oracle Adaptive Intelligent Apps for CX are just getting out of the gate. Two customers on hand at OOW17, Team Sportia of Sweden and Moleskin of Italy, both said their deployments were just getting started. This is later than I anticipated in my 2016 report on Adaptive Intelligent Apps, but Oracle always conservatively said these apps would debut “within the next 12 months.” Oracle’s chief rival on this front is, of course, Salesforce Einstein, which saw lots of splashy announcements in 2017. I’m anxious to hear testimonials and deployment details from Salesforce Einstein customers at the upcoming Dreamforce event in early November.

I’ll be surprised to see new Oracle Adaptive Intelligent Apps outside of the CX arena  through the first quarter of 2018. I’ve learned to be cautious, so I’m guessing those HR, ERP and SCM smart apps are at least six months away and likely to debut in limited release.

Oracle Big Data and AI Advances

Oracle is in some cases keeping up and in some cases catching up with the market on big data and artificial intelligence. This summer Oracle announced the Oracle Big Data Cloud, which is a big data platform based on Hadoop and Spark and closely aligned with the ODPi standard also used by Hortonworks, Microsoft and IBM. Oracle’s previous offering, the Big Data Appliance based on Cloudera, is still available both on-premises or as a hosted service. But the future focus is clearly on Oracle Big Data Cloud, which separates storage and compute decisions and offers object storage as a low-cost alternative for high-scale data lakes.

To address streaming, real-time applications, Oracle has added the Oracle Event Hub, which is based on open source Apache Kafka, for routing and processing. Oracle Stream Analytics is a rewrite of the company’s complex event processing technology that now runs on Apache Spark.

On artificial intelligence, Oracle President Thomas Kurian introduced a new AI & ML PaaS that will offer GPU compute capacity (both bare metal and VM) and a variety of open source AI frameworks, including Caffe, Keras and Tensorflow. Developers will be able to work with a variety of languages and notebooks.

Analysis: The Oracle Big Data Cloud is generally available immediately and puts Oracle more in step with the big data services available from AWS and Microsoft Azure. The Event Hub and Stream Analytics services are also both generally available today and fill a gap that Oracle had versus the AWS Kinesis portfolio and the Event Hubs and Stream Analytics on Microsoft Azure.

As for the AI & ML PaaS, it was announced at OOW17, but it’s not yet available (as per Oracle’s site). Based on the roadmaps I’ve seen, I’d expect the AI & ML Pass to be available within three to six months. In contrast, AWS, Google Cloud Platform and Microsoft have all had GPU capacity available for some time. On model development and deployment, Microsoft last month introduced the beta preview of its next-generation Azure Machine Learning portfolio, which promises end-to-end model lifecycle management. In short, my take is that Oracle is still catching up on AI cloud services and capabilities.

Oracle Analytics Cloud

Here’s another area where Oracle is moving quickly to stay in step with the market. Evolving beyond the Oracle BI Cloud Service and Oracle Visualization Cloud Service announced three years ago, the Oracle Analytics Cloud combines these two services and adds more to create a more comprehensive collection spanning data discovery, preparation, analysis and prediction. Standard and Enterprise Edition subscriptions were previously available. Oracle introduced a Data Lake Edition at OOW17 with subscriptions based on CPUs rather than users, thereby encouraging broad adoption.

Oracle announced a series of machine-learning and natural-language-processing-based enhancements to the Oracle Analytics Cloud at OOW17 and they’ll be available over the next three to six months. Automated Data Diagnostics is an “Explain” capability that will surface hidden drivers and guide users to data and analyses that they might not otherwise investigate. Natural Language Insights will generate plain-text analyses of salient points on a chart, helping uses to focus on what matters. Improved “Ask” Natural Language Query capabilities will support synonyms and abbreviations and will dynamically correct and reinterpret queries as you type. Oracle is also working on Enhanced Data Catalog capabilities, including search and navigation across metadata and social tags, as well as automated recommendations of related and relevant datasets to promote discovery.

Analysis: Oracle Analytics Cloud seems to be on a path that’s similar to Microsoft PowerBI and Azure ML. Both vendors have created comprehensive portfolios and are seeking to leverage the strengths of their respective clouds and data platforms. The updates and enhancements announced at OOW17 mostly match state-of-the art capabilities that are already available in the market. For example, Oracle’s “Explain” feature is akin to Salesforce BeyondCore and a similar feature embedded in Microsoft PowerBI. Natural Language Insights is akin to Narrative Sciences and Automated Insights capabilities that Qlik and Tableau have both leveraged. State-of-the-art natural language query is available from multiple vendors, including Microsoft, IBM (Watson Analytics) and others.

My Overall Take on OOW17

As always, I came away from OOW17 impressed by the sheer breadth of applications and technologies available from the company. Oracle may not always be the first to introduce state-of-the-art capabilities, but it’s always the top competitor cited by rival database and data-platform vendors. The company’s sheer market presence in data platforms and applications puts it in a great position to also lead in analytics and coming smart applications. The key question, as with so many vendors these days, is how successful the company will be in transitioning existing customers to the cloud.

The surprise in the applications arena has been just how many all-new, greenfield customers Oracle has won with its SaaS applications. CEO Mark Hurd insists that Oracle’s core database business is outpacing the rest of the market, but that’s a licensing and subscription measure whereas I’m seeing a lot of open source growth that can’t be measured by the same math (even if the software is commercially supported).

Refreshingly, Oracle’s big data, data integration and analytics executives all seem to be hip to the open source movement. OOW17 saw a broad embrace of open source software, from Hadoop, Spark, Kafka and Cassandra (the latter by way of a partnership with Datastax) to Python, R and various open source deep learning frameworks. There will always be that Oracle bravado about its most successful commercial offerings, but I see a company that’s increasingly moving in step with a changing world of data platforms and technologies.

Related Reading:
Inside Oracle Adaptive Intelligent Apps
Microsoft Stresses Choice, From SQL Server 2017 to Azure Machine Learning
Salesforce Launches Einstein Analytics: What It Means

Data to Decisions Tech Optimization Innovation & Product-led Growth Future of Work Next-Generation Customer Experience Digital Safety, Privacy & Cybersecurity ML Machine Learning LLMs Agentic AI Generative AI AI Analytics Automation business Marketing SaaS PaaS IaaS Digital Transformation Disruptive Technology Enterprise IT Enterprise Acceleration Enterprise Software Next Gen Apps IoT Blockchain CRM ERP finance Healthcare Customer Service Content Management Collaboration Chief Information Officer Chief Digital Officer Chief Executive Officer Chief Technology Officer Chief AI Officer Chief Data Officer Chief Analytics Officer Chief Information Security Officer Chief Product Officer

What to Expect at Connected Enterprise 2017

There are just four weeks until Constellation's Connected Enterprise! Get ready for the innovation summit for the enterprise. This is where the most innovative leaders, tech revolutionaries, and futurists gather to break paradigms and generate ideas that will become the big innovations in enterprise tech in 2018 and beyond.

Headliners announced

• Kim Scott, author of the best-selling book "Radical Candor: Be a Kickass Boss Without Losing Your Humanity" The must-see leadership talk for the digital era.
• Marco Tempest, techno-illusionist who has captivated audiences at TEDGlobal WEF.
• Tricia Wang, global technology ethnographer and co-founder of Constellate Data, helps companies understand people with data.

Call for speakers

There are a few panel speaking slots available. If you have an interesting case study about AI, blockchain, the internet of things, or disruptive change management--we want to hear your story.Please contact us to secure a panel slot.

Networking

Expect to meet members of the Business Transformation 150, SuperNova Award finalists and past winners, Constellation analysts, and executives leading innovative transformation projects at organizations like the SF Giants, Walmart, Spotify, Samsung, Estee Lauder, UPS, Dominos Pizza and more.

View agenda here

Looking forward to seeing you there!

Data to Decisions Future of Work Innovation & Product-led Growth New C-Suite Tech Optimization Connected Enterprise Chief Experience Officer

Event Report - Oracle Open World 2017 - Top 3 Positives / Top 3 Concerns - Overall good

Holger Mueller

Vice President and Principal Analyst
Constellation Research

Holger Mueller is VP and Principal Analyst for Constellation Research for the fundamental enablers of the cloud, IaaS, PaaS and next generation Applications, with forays up the tech stack into BigData and Analytics, HR Tech, and sometimes SaaS. Holger provides strategy and counsel to key clients, including Chief Information Officers, Chief Technology Officers, Chief Product Officers, Chief HR Officers, investment analysts, venture capitalists, sell-side firms, and technology buyers.  Coverage Areas: Future of Work Tech Optimization & Innovation  Background: Before joining Constellation Research, Mueller was VP of Products for NorthgateArinso, a KKR company. There, he led the transformation of products to the cloud and laid the foundation for new Business Process as a…...

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We had the opportunity to attend Oracle OpenWorld, Oracle’s yearly mega user conference, held in San Francisco from October 1st till 5th 2017, at Moscone Center. Moscone is under construction, so it was tough to gauge attendance, but it seemed to be a tad down year over year. Massive press, analyst and influencer presence, as usual. 

 

 

Here is the 1 slide condensation (if the slide doesn’t show up, check here):

 

 

Event Report - Oracle OpenWorld 2017 - Top 3 Positives / Concers from Holger Mueller

Prefer to watch - here is the run down in video format:
 

Plenty of more video to watch if you prefer to consume content in that form:
 

• On Oracle unveiling 18c - watch here.
• My takeaways of Monday - watch here.
• My takeaways of Tuesday - watch here.

 

Want to read on? Here you go:

Top 3 Positives

The Autonomous Database and Oracle Management and Security Cloud – This was the key topic of CTO Ellison’s keynotes- database on Monday, Cybersecurity on Tuesday. And the timing could not have been better, on a day Verizon has to share that all Yahoo user accounts were compromised, the ex-Equifax CEO gets grilled in Congress – there was certainly an open ear in audience and media for cyber security. Ellison drove home the point that Machine Learning, he called it as revolutionary as the Internet, will change security and software management. Oracle will start shipping the autonomous database for data warehouse loads in early 2018, transactional will come later.
 

Oracle 18c

AI Vision in keynote – As usual most product was announced in Thomas Kurian’s keynote. But what caught most of my attention was how well Kurian articulated the fundamental transformation that AI is bringing to enterprise software. Enabling Machine Learning on the IaaS layer, adding a Machine Learning service to PaaS and using Machine Learning in SaaS and DaaS was well articulated and understood – more than in other executive keynotes in the last years. And the keynote was nicely held together by an overarching demo, well done.
 

Ellison on Machine Learning

Oracle SaaS is ready – The key takeaway of Kurian’s (for SaaS) and Miranda’s demo was that they expect all Oracle customers to now look at the current versions of SaaS cloud and to consider upgrading. Functional parity if not superiority has been achieved. Manufacturing (finally) is there and good enough to make the statement. Now future will tell how well Oracle can get customers to upgrade out of its heterogenous ecosystem. Definitively an area to watch.

 

Miranda and the Oracle SaaS Suite

 

Top 3 Concerns

Mega ERP vendor 10 years off-cycle – We are witnessing a unique situation for the ERP buyer. While in the past the major vendors would miss a technology change by a few years at max, we now have market where Oracle and SAP are 10 years apart. Oracle announced Fusion in 2004, SAP announced S4/HANA in 2014. If this means that buyers may change to the relative newer suite in the era of cloud and machine learning remains to be seen. The question for Oracle customers is – is Oracle ready to upgrade from Oracle e-Business Suite, Peoplesoft, JD Edwards, Siebel etc. and the question for SAP customers is – does a look at Oracle make sense. 
 

Oracle Management and Security Cloud

Can Oracle attract the load – Oracle is late to the IaaS game, but has used the opportunity to redefine some IaaS best practices, e.g. having three data centers at a specific location. It has built a nested hypervisor to be able to attract heterogenous load. But Oracle still needs to show that it can attract the enterprise load – both organic – from existing customers – and external – from net new customers. The reason AWS gets so much attention in the keynotes is not only because AWS is the IaaS market leader, but also because Oracle must show a clear value proposition over AWS, to capture that load that is moving from on premises. When congressional representatives can ask ‘why don’t you put this on AWS?’ – fellow CxOs will as the CIO / CTO the same question. Verdict is still out.
 

Leone introducing Oracle Recruiting Cloud

Can Oracle become gentle? The SaaS Business is different to the perpetual license business. Enterprises and vendors need to work together directly and on a day to day basis. That means a certain degree of affinity does not hurt, but helps the relationship. And while Oracle is certainly respected, it is seldom liked by CxOs. Oracle cannot rely on technological superior products only to win over customers. It has to become more customer oriented, more gentle. The good news for customers and prospects is – that it is not hard. It usually means to give up margin. And Oracle has plenty of that.
 

Ellison introducing 18c

 

MyPOV

A good OpenWorld for Oracle customers. The vendor took the next step that ultimately all enterprise software have to take – the step to make products self-running and autonomous. The highest frequency of change for a RDBMS is going to be a security measure, even more as database load moves to the cloud. Automating both is attractive to enterprises, and Oracle is the first RDBMs vendor out of the gate with that vision and a tangible product roadmap. But more than the RDBMs needs to be supported, also more of the Oracle tech stack, so addressing that larger scope will be a key area to watch. We also witnessed what is most likely the largest upsell opportunity Oracle has created, as almost every production (and maybe also development and test database) will need the self-driving, autonomous features of Oracle 18c (that’s an upgrade) and the cybersecurity announced with Oracle Management and Security Cloud.

Beyond RDBMs Oracle has made progress on all layers of the stack. New Sparc / Exadata servers have been announced already before OpenWorld. IaaS gets cheaper storage, cheaper / better networking and more. Dyn seems to have been inherited. PaaS gets a Blockchain, Data Science Service and a serverless product. And Oracle can even partner with Microsoft, that re-iterated its commitment to Java. On the SaaS side, we will have to see that Oracle has reached functional parity or even a lead, that is easier said at OpenWorld than delivered with real customers. So, watch customer upgrades and adoption to the Oracle SaaS products.

On the concern side, Oracle needs to find a better way with customers and improve its image and day to day standing. Betting solely on the better product is risky. And with the overall bet of Oracle on the large, integrated, chip to click stack (from the Silicon to the user click in SaaS) – enterprises will even more think twice before they do business with a vendor of Oracle’s wreputation. Doing right and better with customers is always a good true North – but it seems it is not (yet) a priority for Oracle executives, as none of that was mentioned in the critical keynotes. More needs to be happen than just statements, programs and initiatives. And I know that Oracle executives know this – they just think they can get away with it by having the better product. That gamble will only work out if the product is so clearly superior, that enterprises have no alternative than use Oracle. To be fair, the Oracle integrated stack has that potential. There was a time when customers could only get a mainframe from IBM – like the vendor or not. But that’s not a long-term strategy, unless your product stays ahead of the pack – by miles. Fascinating to watch.

Overall, a good OpenWorld for Oracle customers. All product categories are being invested in and growing. Synergies in the layers of the Oracle stack emerge, e.g. in SaaS. Across the layers in e.g.Iaas and PaaS. And Oracle is plugging remaining gaps in HCM (for Taleo) and CX (for Siebel) on a single platform. At the same time Oracle is offering new capabilities, like multi environment deployment, serverless and more that make Oracle PaaS a serious contender for next gen applications. The AT&T deal, with Oracle’s Cloud at Customer deployment, may be a lighthouse opportunity after which more Oracle customers will continue their future with the vendor. So, it’s all about execution in Redwood Shores, once again. Stay tuned.


Want to learn more? Checkout the Storify collection below (if it doesn’t show up – check here) - all the major keynotes are covered:

• Larry Ellison Sunday - Autonomous Database - read here
• Mark Hurd Monday - Predictions - read here
• Steve Miranda - SaaS - read here
• Chris Leone - HCM Cloud - read here
• Donatelli / Kurian - IaaS, PaaS, SaaS and DaaS - read here
• Larry Ellison Tuesday - Oracle Management and Security Cloud - read here

More on Oracle:

• News Analysis - Oracle Unveils New Programs that Transform how Customers Buy and Consume Cloud – Gloves Off - read here
• Summer 2017 News Analysis - Oracle invests in IaaS (or at least CAPEX) - read here
• News Analysis - Oracle empties the barrel - Revolver style (6) Cloud News Analyses - read here
• Musings - Does Oracle and Accenture make sense - or never ever! - read here
• Progress Report - Oracle HCM Analyst Summit 2017 - Oracle HCM stronger and stronger - read here
• Event Report - Oracle OpenWorld - the HCM perspective - Almost no news, but wait... - read here.
• First Take - Early Oracle OpenWorld 2016 Keynotes - read here
• Event Preview - Oracle OpenWorld 2016 - What to expect, what to watch for ... will IaaS start Clicking? - read here
• Market Move - Oracle acquires NetSuite - Oddly consolidation means more options for customers - read here
• News Analysis - Oracle Unveils Suite of Breakthrough Services.. or short: Oracle Cloud Machine - read here
• Progress Report - Oracle Cloud - More ready than ever, now needs adoption - read here
• Event Report - Oracle Openworld 2015 - Top 3 Takeaways, Top 3 Positives & Concerns - read here
• News Analysis - Quick Take on all 22 press releases of Oracle OpenWorld Day #1 - #3 - read here
• First Take - Oracle OpenWorld - Day 1 Keynote - Top 3 Takeaways - read here
• Event Preview - Oracle Openworld - watch here

Future of Work / HCM / SaaS research:

• Event Report - Oracle HCM World - Innovation around the Core - read here
• Event Report - Oracle HCM World - Full Steam ahead, a Learning surprise and potential growth challenges - read here
• First Take - Oracle HCM World Day #1 Keynote - off to a good start - read here
• Progress Report - Oracle HCM gathers momentum - now it needs to build on that - read here
• Oracle pushes modern HR - there is more than technology - read here. (Takeaways from the recent HCMWorld conference).
• Why Applications Unlimited is good a good strategy for Oracle customers and Oracle - read here.

Also worth a look for the full picture

• Event Report - Oracle PaaS Event - 6 PaaS Services become available, many more announced - read here
• Progress Report - Oracle Cloud makes progress - but key work remains in the cellar - read here
• News Analysis - Oracle discovers the power of the two socket server - or: A pivot that wasn't one - TCO still rules - read here
• Market Move - Oracle buys Datalogix - moves more into DaaS - read here
• Event Report - Oracle Openworld - Oracle's vision and remaining work become clear - they are both big - read here
• Constellation Research Video Takeaways of Oracle Openworld 2014 - watch here
• Is it all coming together for Oracle in 2014? Read here. 
• From the fences - Oracle AR Meeting takeaways - read here (this was the last analyst meeting in spring 2013)
• Takeaways from Oracle CloudWorld LA - read here (this was one of the first cloud world events overall, in January 2013)

And if you want to read more of my findings on Oracle technology - I suggest:

• Progress Report - Good cloud progress at Oracle and a two step program - read here.
• Oracle integrates products to create its Foundation for Cloud Applications - read here.
• Java grows up to the enterprise - read here.
• 1st take - Oracle in memory option for its database - very organic - read here.
• Oracle 12c makes the database elastic - read here.
• How the cloud can make the unlikeliest bedfellows - read here.
• Act I - Oracle and Microsoft partner for the cloud - read here.
• Act II - The cloud changes everything - Oracle and Salesforce.com - read here.
• Act III - The cloud changes everything - Oracle and Netsuite with a touch of Deloitte - read here. 

Find more coverage on the Constellation Research website here and checkout my magazine on Flipboard and my YouTube channel here.

2012, 2013, 2014, 2015, 2016 and 2017 (C) Holger Mueller - All Rights Reserved

Data to Decisions Future of Work Tech Optimization Innovation & Product-led Growth New C-Suite Next-Generation Customer Experience Openworld Oracle SaaS PaaS IaaS Cloud Digital Transformation Disruptive Technology Enterprise IT Enterprise Acceleration Enterprise Software Next Gen Apps IoT Blockchain CRM ERP CCaaS UCaaS Collaboration Enterprise Service AR AI Analytics Automation CX EX Employee Experience HCM Machine Learning ML Leadership HR Chief Information Officer Chief Technology Officer Chief Digital Officer Chief Data Officer Chief Analytics Officer Chief Information Security Officer Chief Executive Officer Chief Operating Officer Chief Experience Officer Chief Customer Officer Chief People Officer Chief Human Resources Officer

Six Years of Guiding the Future of Work

Alan Lepofsky

Vice President & Principal Analyst
Constellation Research

Alan Lepofsky - VP and Principal Analyst, Constellation Research. With almost two decades of experience in the collaboration software industry, Lepofsky helps organizations improve the way their employees work together to get their jobs done. Lepofsky’s primary research area The Future of Work, focuses on: integrating collaboration and business processes (Purposeful Collaboration), structuring work via Social Task Management, leveraging analytics and digital assistants to work more productively, the strategic impact of mobile computing on business transformation, and measuring workforce culture based on Digital Proficiency instead of age. Twitter: @alanlepoLinkedIn: https://ca.linkedin.com/in/alanlepo     , Title: Big IdeasIntelligent Collaboration: The Intersection of…...

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Yesterday I celebrated my 6th anniversary at Constellation Research. I want to thank Ray Wang and my colleagues for all their support and how much I learn from them everyday. Also, to our amazing clients, you're why I do this. Since I began here my goal has been simple: to provide pragmatic advice about what's coming next for the way individuals and teams get work done. I'm not a cheerleader for change just for the sake of it, nor do I criticize new ideas just because they seem a little out there. I look for trends and patterns in technology and culture and try and extrapolate how they will apply to the business world.

One of the first things I worked on was advancing the conversation around "social business" from "reducing email" or "working transparently" to be more about focusing on real business processes. This is an area I dubbed Purposeful Collaboration and something I'm glad to see is a major topic today, as almost all collaboration tools are now focusing on integrating with business applications, enabling people to work together around a business object or process.

As the popularity of collaboration platforms grew, I realized that "working transparently" was going to cause a great deal chaos and noise, leading to information overload. To combat this challenge, work needs to be organized and structured. This is an area I originally called Social Task Management, or sometimes Structured Collaboration... which is now more often referred to as Collaborative Work Management. This is an incredibly hot space right now, with several vendors securing huge funding rounds, a few acquisitions, and new products being launched. Pay attention here, as focusing on work, prioritizing what needs doing, accountability and repeatability are keys elements to getting work done. 

Another project I really enjoyed was working with Ray on debunking the whole "millennials work differently" conversation. After extensive interviews we came up with a framework that categorizes employees not by the generation they were born, but instead via their "Digital Proficiency". We've used this framework to work with clients all around the world to help them better understand their employees and plan their strategies accordingly.

Now you can't read a single IT article these days without a mention of Artificial Intelligence, or AI. I actually presented a session at Salesforce Dreamforce in 2014 called "From Clippy to Jarvis" which talked about how our software was becoming more automated, more intelligent, more helpful. The intersection of AI and personal productivity / team collaboration is still nascent, but there is no doubt it will become a standard (ideally invisible) part of every tool we use.

So what comes next? I'm more excited now that I was 6 years ago when I started. We've barely scratched the surface in truly helping people get work done. We're at the dawn of new ways to create, share, discover, visualize, and interact with context, colleagues and customers. The chart below provides a glimpse into some of the things I'm working on. The Future of Work is going to be amazing, I hope you'll join me on the journey.

 

Future of Work

73% of Executives Are Researching & Launching IoT Projects In 2017

1

• Manufacturing-based IoT connections grew 84% between 2016 and 2017, followed by energy & utilities (41%).
• 73% of executives are either researching or currently launching IoT projects.
• The IoT platform market is expected to grow 35% per year to $1.16B by 2020.
• B2B uses can generate nearly 70% of the potential value enabled by IoT.

These and many other fascinating findings are from Verizon’s State of the Market: Internet of Things 2017, Making way for the enterprise (16 pp., PDF, free, opt-in). The Verizon study found that the Internet of Things (IoT) gained significant momentum in 2016, with 2017 IoT investments accelerating. The majority of investments today are in IoT projects that are still in the concept or pilot phase, concentrating on tracking data and sending alerts. While easier to initiate and manage, the majority of pilots aren’t providing the depth of analytics data and insights IoT has the potential to deliver.

Key takeaways from the study include the following:

• Manufacturing-based IoT connections grew 84% between 2016 and 2017, followed by energy & utilities (41%). Transportation and distribution (40%), smart cities and communities (19%) and healthcare and pharma (11%) are the remaining three industries tracked in the study who had positive growth in the number of IoT connections. The following graphic compares year-over-year growth by industry for the 2016 to 2017 timeframe.

• Manufacturing is predicted to lead IoT spending in 2017 with $183B invested this year. Verizon’s study predicts that transportation and utilities will have the second and third-largest capital expenses in IoT this year. Insurance, consumer and cross-industry IoT investments including connected vehicles and smart buildings will see the fastest overall growth in 2017.

• The IoT platform market is expected to grow 35% per year to $1.16B by 2020. From well-established enterprise service providers to startups, the platform market is becoming one of the most competitive within the global IoT ecosystem. The design objective of all IoT platforms is to provide a single environment for enabling API, Web Services and custom integrations that securely support enterprise-wide applications. Please see the post What Makes An Internet Of Things (IoT) Platform Enterprise-Ready? for an overview of the Boston Consulting Group’s recent IoT study, Who Will Win The IoT Platform Wars?
• Improving the customer experience and excel at customer service by gaining greater insights using IoT leaders enterprises’ investment priorities. 33% of enterprises interviewed prioritize using IoT technologies and the insights it’s capable of providing to excel at customer service. 26% intend to use IoT technologies to improve asset management and increase Return on Assets (ROA) and Return on Invested Capital (ROIC). Consistent with how dominant manufacturing’s investment plans are for IoT this year, production and delivery capabilities are the top deployment priority for 25% of all businesses interviewed.
• IoT has the potential to revolutionize pharmaceutical supply chains by drastically reducing drug counterfeiting globally. It’s estimated that counterfeit drugs cost the industry between $75B to $200B annually. The human costs of treating those who have been sold counterfeit drugs back to health are incalculable. IoT platforms and systems have the potential to drastically reduce the costs of counterfeiting, both on a personal impact and market standpoint. Drug manufacturers operating in the United States have until November 2017 to mark packages with a product identifier, serial number, lot number and expiration date, plus electronically store and transfer all transaction histories, including shipment information, across their distribution supply chains. Pharmaceutical manufacturers have a high level of urgency to make this happen and stay in compliance with the US Drug Supply Chain Security Act. IoT solutions are flourishing in this industry as a result.

Filed under: Cloud Computing, Internet of Things, Internet of Things Forecast, IoT, Louis Columbus' blog Tagged: Internet of Things, IoT, Louis Columbus' blog

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Increasing Digital Competitiveness in your current Business model The lessons from GE and Industrie 4.0

Andy Mulholland

Vice President and Principal Analyst, Constellation Research
Constellation Research

Andy Mulholland is Vice President and Principal Analyst focusing on cloud business models. Formerly the Global Chief Technology Officer for the Capgemini Group from 2001 to 2011, Mulholland successfully led the organization through a period of mass disruption. Mulholland brings this experience to Constellation’s clients seeking to understand how Digital Business models will be built and deployed in conjunction with existing IT systems. Coverage Areas Consumerization of IT & The New C-Suite: BYOD, Internet of Things, IoT, technology and business use Previous experience: Mulholland co authored four major books that chronicled the change and its impact on Enterprises starting in 2006 with the well-recognised book ‘Mashup Corporations’ with Chris Thomas of Intel. This was followed in…...

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Business is being disrupted, your Enterprise must transform! Variations of this message appear widely throughout the media, from business press, through general interest publications and into social media and events. The message that change is underway has been received, and noted. Boards and senior management are thirsty for more clarity as to the extent and speed of the ‘transformation’ and want more clarity to provide a bench mark for their own changes.

What is Digital Business and why does it both Disrupt and Transform is a question seldom asked, indeed definitions are usually, and obviously driven, but the context in which the question is posed. There is a simple answer, and keep this in mind when reading the rest of this piece;

A new generation of ‘Digital’ Technology is ‘Transforming’ the supply and consumption of assets, products and services and in so doing ‘Disrupting’ the established business models and markets for those items.

Similarly, it’s worth reminding what is ‘Transformation’ in when applied to Business. The Business Dictionary definition says. In an organizational context, a process of profound and radical change that orients an organization in a new direction and takes it to an entirely different level of effectiveness. Unlike 'turnaround' (which implies incremental progress on the same plane) transformation implies a basic change of character and little or no resemblance with the past configuration or structure.

This links to, and aligns with, the term ‘Disruption’ as defined by Clay Christensen, a Harvard Business School professor, in his much acclaimed book ‘The Innovator’s Dilemma’; A disruptive product addresses a market that previously couldn’t be served — a new-market disruption — or it offers a simpler, cheaper or more convenient alternative to an existing product — a low-end disruption.

Tech Crunch wrote a great article on Silicon Valley startups love of claiming ‘disruptive’ capabilities for their products entitled ‘What “Disrupt” really means’. Building upon the basics of the Innovators Dilemma with real examples to illustrate how products can disrupt markets, ending with the statement; Business models, not products, are disruptive.

Hopefully those three statements help clarifies the Enterprise objectives or actions, but competitively successful execution, is all about timing. Established Enterprises with successful business models rightly see change as a risk to their established position, delaying action until their market has been disrupted, which forces their belated response to be focused on their challenger’s terms, not their own strengths.

Startups see market disruption as their opportunity to grab a slice of the newly defined market, and consciously build their business model from day one to deliver in a Transformed manner. Second Tier Industry Sector players also see market disruption as an opportunity to rapidly increase their revenues at the expense of the market leaders. Both Startups and smaller second tier players can use their size, even their culture to transform quickly, even repeatedly.

Digital Business has the capability to disrupt and destroy established Industry sector markets simply because existing players find their established Business models to potentially handicap their ability to compete in the changed circumstances. Customer loyalty evaporates fast if the benefits of the disruptive change are high enough. For nearly 100 years the iconic Black Cab in London has been a byword for high quality service, but Uber has disrupted their market totally with 3.5 million Londoners holding Uber accounts.

Unionized Black Cab business operators attempt to force the Uber out through persuading the City of London to legislate in their favor, resulted in nearly 1 million of their customers petitioning for Uber to be allowed to continue. Demand for Taxi services remains high, or has become even higher through Uber, but Digital Business has disrupted the supply and consumption business model, resulting in Taxi operators facing the need to transform their enterprise business models.

Competent Boards and Senior Management no longer need convincing there is a potential ‘game change’ underway, the challenge is to assess, and plan responses. Quick win projects are naturally popular and can be thought to indicate progress, but to be meaningful a succession of ‘individual’ initiatives have to add up to an Enterprise wide transformation of their Business model. Much, much, more important is whether such initiatives convince customers and shareholders of the value of their actions.

Consider the following two statements, and recognize that the first dubbed ‘Evolutionary’ should be a planned path to prepare for the inevitable moment when it becomes necessary to launch the second, a Revolutionary counter attack. There is no denying that it is extremely difficult to predict when, even how, your market and its business model will be disrupted. Building a wide foundation of capability, culture and understanding using a planned Evolutionary path massively improves the ability to recognize the early market signs as well as successfully organize a response. Sadly, Evolutionary can become a mechanism to contain change to selected areas and allow denial to flourish across the majority of the Enterprise.

Evolutionary; An Enterprise can choose an Innovation program to develop new capabilities within its current Business Model as an Evolutionary move. In which case the timing, extent and pace of the change is entirely under the control of the management team.

Revolutionary; An Enterprise is forced to react to the competitive threat of one or more competitors disruptively transforming the market for your business model. In this situation, the Enterprise Management has lost the advantage of controlled innovation, and is in a forced pace Business model transformation.

The Manufacturing and Industrial Sectors provide an example of how Evolution is driving adoption rather the Revolution, even if the terminology used, (transformation and disruption), suggest otherwise. The two sectors provide many of the examples that are used to illustrate the adoption of IoT, and various innovations such as Digital Twins, Outcome based charging, etc. The sector has been boosted in the USA by the declaration by GE of their strategy to use the new Digital technologies to improve margins directly related to a campaign to gain a 1% reduction in direct costs. The strategy starts with an Evolutionary stage to improve competitiveness within existing Business models. There will come a Revolutionary moment when with the time, experience and understanding gained, GE, or one of its competitors, will launch a market disrupting move, using a transformed Business model.

Europe has experienced a similar boost driven by The German Federal Ministry for Economic affairs Industrie 4.0 initiative, so called to indicate the entry into the fourth Industrial age driven by new technologies. The dependence of the German economy on Manufacturing, particularly in specialist mid range sized companies, is endangered by the potential disruption of markets. The goal was to prepare German Industry through initially assisting the development of Evolutionary improvement to increase existing competitiveness in the World economy. Practical tools such as The Industrie 4.0 Maturity Index; Managing the Digital Transformation of Companies provide progress milestones, and naturally the skills gained increase the likelihood of German Industrial companies becoming the market disruptors.

Manufacturing and Industrial Enterprises certainly have benefited from some unique factors, including the established use of sensing and automation in production. The resulting duality in technology skills from Operational Technology and Information Technology brings direct experience in deploying Evolutionary initiatives. Conversely the sector has suffered badly from the Globalization of production into low cost economies and needs to find a new route to improved Business competitiveness. Short term goals to re-energizing the value from current business models by the use of new Digital technologies positon Evolutionary change as the obvious strategy. The lessons to learn from the sector lie in the successful Business execution of Evolutionary initiatives, rather than searching for examples of Revolutionary disruption and transformation.

In the coming years Product Manufacturers will change the ‘supply’ of products, into a supply of Outcomes and Buyers will have new choices in how they ‘consume’ the capabilities of the product. The shift from selling/ suppling air conditioning units with a maintenance contract to the users buying/ consuming the provision of a required temperature will disrupt the market and will force the transformation of Business models. Small pilots show the way, but a disruption at market level hasn’t happened yet, but Digital Technologies have provided big benefits to in field Service Maintenance.

It’s a big mistake to take the over enthusiastic use of the terms Transformation and Disruption look around your industry sector, and conclude there is no need to act as nothing like this has happened. Low key Evolutionary moves don’t create headlines, but they do change existing completion and lay a foundation for the inevitable sudden shift that will occur. Probably it won’t be an existing competitor, but an entrant intent in disrupting the current market to the consternation of many of the existing market leaders and niche operators.

That’s when the investment in Evolutionary initiatives as an organized strategy will suddenly be the basis of competitive survival. Until then the Evolutionary initiatives will improve current competiveness, put that way it’s hard to understand why any Board should be in denial of the need to act.

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