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Smartsheet Acquires Converse.ai

Smartsheet Acquires Converse.ai

Alan Lepofsky
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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One of the main battlegrounds in collaboration this year is going to be around improving the way people coordinate the work they need to get done. Constellation Research has historically referred to this category of products as Social Task Management, but will soon be updating the name to Work Coordination Platforms. There are several vendors (see the Constellation Shortlist) with strong offerings in this space, but Smartsheet has fired the first shot of 2018 with the acquisition of Converse.ai. Below is my quick take on why bringing together task management + automation + natural language processing will usher in the next generation of Work Coordination products. With the first shot fired, it will be interesting to see how the competition (as well as big names like Microsoft and Google) respond.

 

 

Research Report: Constellation's Futurist Framework (PESTEL) & Political Outlook Pre Davos

Research Report: Constellation's Futurist Framework (PESTEL) & Political Outlook Pre Davos

R "Ray" Wang
Principal Analyst and Founder
Constellation Research

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

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2018 Davos Focuses On Creating A Shared Future In A Fractured World

The World Economic Forum (WEF) kicks off January 23rd to 26th in Davos-Klosters, Switzerland.  This year’s theme is about “Creating a Shared Future In A Fractured World”.  From the program notes for this year’s event, WEF sees the following:

At the close of the 20th century, the presumption was that greater economic interdependence among countries, buttressed by liberal democratic institutions, would ensure peace and stability well into the new century. The global context today has changed dramatically: geostrategic fissures have re-emerged on multiple fronts with wide-ranging political, economic and social consequences.
Realpolitik is no longer just a relic of the Cold War. Economic prosperity and social cohesion are not one and the same. The global commons cannot protect or heal itself.
 
Politically, governance is being transformed by new and contending strategic narratives. Such narratives have emerged in response to national, regional and global divides, but many of them are bereft of the innovation, inspiration and idealism essential for transformational change. Economically, policies are being formulated to preserve the singular benefits of global integration while limiting its shared obligations. Yet, such policy prescriptions are fragmented, biased or uninformed when considered in the context of sustainable development, inclusive growth and the Fourth Industrial Revolution.
 
Socially, citizens yearn for responsive leadership that addresses local and national concerns; yet, a shared identity and collective purpose remain elusive despite living in an age of social networks. All the while, the social contract between states and their citizens continues to erode. Changing the situation on the ground requires more responsive governance, but this cannot absolve governments of their regional and global responsibilities.

PESTEL Approach Powers The MegaTrends In Constellation’s Outlook

Ever three to four years, Constellation publishes its futurist framework based on the PESTEL model of systems thinking.  Constellation approaches 2020 with this systemic point of view.  The full PESTEL report examines the political, economic, societal, environmental, and legislative (PESTEL) macro trends that will affect the business disruption ahead.  This framework serve as the basis for Constellation’s research foundation across seven business themes.  These PESTEL trends can be summarized as:

  • Political (P) pressures point to a lack of digital proficiency in the political class
  • Economic (E) trends exacerbate digital business disruption
  • Societal (S) shifts showcase the digital divide ahead
  • Technological (T) trends boost digital opportunities
  • Environmental (E) factors frame long-term scenarios
  • Legislative (L) lethargy drives knee jerk reactions

Success in navigating these trends will require executives to develop a strategy for dominating digital disruption.  Board rooms must be cognizant of such changes in order to make the tough decisions required to thrive in the disruption ahead.  This blog post focuses on the first area Political Outlook.

Political Outlook Reflects Governments’ Quest To Quell Unrest Not Resolve Structural Issues

Global governments face a confluence of forces with worldwide chronic unemployment, stagnant economic performance, growing social program obligations and continued polarization of political ideology.  A generation of voters are jobless at the beginning of their careers.  OECD statistics show over 73 million, or 12.6 percent, of global youth are unemployed.  Political trends play a role in the acceleration or hindrance of business disruption.  Amid those forces, governments seek to address social unrest and quell the impact of failed policies and disenfranchised citizenry:

  • The rural and urban digital divide widens with no remedies in sight (2018).  From BREXIT to the 2016 US election to the German Parliamentary elections, the digital divide between urban areas and the rural citizenry have never been greater.  Rural areas have not seen the direct benefits from high technology and globalism.  In fact, the rural class blames technological advancements and the political ruling classes for creating policies that have disenfranchised the rural areas, resulting in blight, economic depression, senseless regulation, job loss, and a decline in overall opportunity.  On the other hand, the urban class has benefited the most from the technological gains and globalist policies with greater wealth creation, career advancement, and political influence.

    Constellation’s POV: Democratic governments must address this digital divide or face continued populist uprisings and a distrust of government institutions.
  • Digital dictatorships proliferate in the name of security and order (2018).  Expect more countries incentivizing citizens to connect online in order to identify relationships, improve services, encourage commerce, track location, and identify aberrant behavior.  While some countries like China will continue to directly provide digital services in order to control its citizenry, others will encourage private companies to serve as an intermediary to provide those services.  Ten years ago, if someone told you that citizens would voluntarily provide information about all their preferences, all their friends and relationships, and all their whereabouts on a government website, one would have thought this to be crazy.  Today the proliferation of social networks, home assistants and devices, the citizenry is unwittingly providing the data for not only corporations but also governments to mine and spy on.

    Constellation’s POV: The political class and the citizens must define the rules of engagement and the tradeoff among privacy, convenience, security, and freedom.

  • Echo chamber polarization accelerates among the masses (2018).  Fake news, mass personalization of content, and tailored digital experiences have resulted in a more divided electorate.  The application of artificial intelligence to content delivery exacerbates polarization by delivering only the content individuals want to receive to feel good, avoid conflict, and validate their own beliefs.  The result – mass confusion among what content represents fact versus fiction.  The “fake news” phenomenon and the lack of intellectual curiosity will lead to greater political unrest. With no true or objective arbiter of the news, and the reliance on ad dollars to fund media, the role of journalism has died.

    Constellation’s POV: Governments must work hard to help the media reclaim their role in providing a trusted institution and objective voice or face even more polarization and potential revolution in their governments.

  • Dynamic leadership models (2018).  The need to create responsive and responsible leadership is a hallmark for success in digital transformation and jump starting growth inside organizations.  Dynamic leadership describes a model where leaders follow a set of immutable traits and balance foundational attributes of leadership.  This new framework takes into account a multi-dimensional approach and addresses the challenges existing leadership models often neglect

    Constellation’s POV: The global call for responsive and responsible leadership will require a new way to approach the timeless topic of leadership. Instead of taking a classical binary or rigid approach, learn the five immutable core traits and develop a balance of 14 foundational attributes as a guide to successful and sustainable dynamic leadership.

  • Existing policy lags the pace of change in technology and new business models (since 2014).  The impact of digital disruption on the economic, societal and environmental pillars is pushing the limits of today’s existing policy and political models.  From privacy to new people-to-people networks, policy has fallen behind the pace of change and political gridlock hurts citizens.  Just recently in the United States, city governments sought to ban sharing-economy leasing models such as Airbnb by restricting how long and what kind of short and long term rentals a private citizen could allow on his or her own property.  In another example, the Target customer data breach of late 2013 and the Equifax debacle of 2017 highlighted how American privacy legislation is woefully inadequate and needs reform.

    Constellation’s POV: The good news is that in the European Union and elsewhere, the privacy laws have sharper teeth and enhance innovation without trampling on individual rights.  Legislation such as GDPR will provide some protections for the global citizenry.
  • Pay-to-play legislative influence hinders disruptive business models (since 2014).  The high cost of campaigning for public office creates a kleptocracy in places such as the United States and the European Union.   Paying a lobbyist $10 million to create an economic impact in the billions of dollars makes business sense.  However, the pay-to-play influence model only exacerbates a byzantine set of laws that adds to overall business friction through additional accounting, legal and political costs.

    Constellation’s POV: Governments should begin the regulatory reform to update past laws, remove redundant regulations, and streamline rule making to limit excessive costs of government.
  • Technology ignorance plagues the political class in the West (since 2014).  Across the Western economies, few elected officials have science backgrounds.  Meanwhile, scientists hold eight out of China’s top nine government posts.  The lack of science and engineering fundamentals often hinders digital business discussions and the implications of technology policy are unclear to decision makers, who become timid and dependent on lobbyists and other influencers who peddle biased information. For example, lack of understanding around climate change and pollution control technology creates an emotional discussion instead of an objective scientific method approach.   Furthermore, innovative business models often must face entrenched political powers that are, for all intents and purposes, ignorant.

    Constellation’s POV: Foundations and non-profits may want to create new missions that will help provide objective data and insight without poltical biases.  Former Microsoft CEO, Steve Ballmer has led the way with election data from the Ballmer Group as one example to clear the air and bias on planning data for making policy decisions.

Your POV.

Have you taken account a futurist framework in your 2018 to 2020 planning?  Afraid of a business extinction event like Kodak?  Would you like to join a network of other early adopters?  Are you ready to begin your digital transformation journey?   Learn how non-digital organizations can disrupt digital businesses in the best-selling Harvard Business Review Press book Disrupting Digital. 

Join like minded folks at the Constellation Executive Network. 

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 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

 

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Digital Transformation Digest: Rootstock Buys Kenandy in Cloud ERP Consolidation, Microsoft Intros Encryption for Skype, EU Plots Major Supercomputing Investment

Digital Transformation Digest: Rootstock Buys Kenandy in Cloud ERP Consolidation, Microsoft Intros Encryption for Skype, EU Plots Major Supercomputing Investment

Chris Kanaracus
Chris Kanaracus
Managing Editor, Constellation Insights
Constellation

Chris Kanaracus is managing editor of Constellation Insights.  Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members.  Prior to joining Constellation, Kanaracus spent seven years covering the enterprise software industry for IDG News Service, where he frequently broke exclusive stories with a focus on end-customer issues. Kanaracus has also held various managerial and reporting roles at newspapers in New England since 1998. Twitter: @chriskanaracus , Title: Big IdeasConstellation Insights Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members. ...

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Constellation Insights

Rootstock buys Kenandy: There is ERP consolidation happening in the Salesforce ecosystem, with Rootstock's announcement it will buy Kenandy. Both companies have built out ERP applications for manufacturers and distributors using Salesforce's technology platform. Here are the key details from the announcement:

“By combining the talent, skills and intellectual property of both companies, Rootstock will achieve greater economies of scale to compete with the likes of Oracle-NetSuite, Microsoft and SAP, while giving us the ability to create more cutting-edge capabilities for Kenandy and Rootstock customers,” said Patrick Garrehy, CEO of Rootstock.

The combination of Rootstock Cloud ERP, Salesforce Sales Cloud, Salesforce Service Cloud and the underlying Salesforce Platform technologies, such as Salesforce IoT and Einstein Analytics, form a compelling choice for manufacturers, distributors and supply chain organizations aiming to compete more effectively and better serve their customers.

POV: Kenandy was founded in 2010 by Sandy Kurtzig, a Silicon Valley pioneer. It has raised more than $50 million in venture capital and at one point was valued at $350 million. Terms of the deal with Roostock weren't disclosed.

While there are many questions left unanswered, including how Rootstock will rationalize the combined company's product portfolio, the deal is an important additional validation of Salesforce's platform as fit for mission-critical application development. Rootstock competitors include the likes of Plex, SAP ByDesign, Epicor and Infor, which may seek to capitalize on customer uncertainty, as with any acquisition. But Rootstock has been gaining good momentum of late, even managing to replace SAP at Mipox, which makes polishing abrasives. That deal will see the rollout of Rootstock to some 400 users in 12 countries.

As Rootstock noted in its announcement, a key part of growing the business lies not just in application functionality, but smarter and smoother implementation processes. As a combined entity, with a more diverse set of customers the company should be able to mature those processes faster.

Microsoft previews encrypted Skype: Going into 2018, online privacy is a hotter topic than ever. Microsoft is hoping to capitalize on this with the introduction of end-to-end encryption for Skype. Here are the key details from its announcement:

With Private Conversations, you can have end-to-end encrypted Skype audio calls and send text messages or files like images, audio, or videos, using the industry standard Signal Protocol by Open Whisper Systems. The content of these conversations will be hidden in the chat list as well as in notifications to keep the information you share private.

After the recipient accepts your invite, all calls and messages in that conversation will be encrypted end-to-end until you choose to end it.

POV: Microsoft's decision to base Skype encryption on Signal is an interesting one. The messaging protocol has gotten the thumbs-up from the likes of Edward Snowden and to date, there have been no reports of it being cracked or compromised. Overall, encryption is fast become a must-have, rather than nice-to-have feature in messaging applications, and Skype has lagged behind other products in this area.

As of now, only members of Microsoft's Skype Insider program can test out the features, but general availablity will likely follow later this year. Still, there are gaps in the functionality; video and group chats aren't included, and the fact encryption will be an opt-in, rather than fully baked into the product, are weaknesses that Microsoft will hopefully address soon.

EU creating €1 billion supercomputing fund: The European Commission is planning to join with member states to fund €1 billion into supercomputer research, in a bid to keep pace with the U.S. and China and ease privacy concerns. But it appears that due to Brexit, the effort may not include the UK. Here's how the EU described the project in a press release:

Supercomputers are needed to process ever larger amounts of data and bring benefits to the society in many areas from health care and renewable energy to car safety and cybersecurity.

Today's step is crucial for the EU's competitiveness and independence in the data economy. Today, European scientists and industry increasingly process their data outside the EU because their needs are not matched by the computation time or computer performance available in the EU. This lack of independence threatens privacy, data protection, commercial trade secrets, and ownership of data in particular for sensitive applications.

A new legal and funding structure – the EuroHPC Joint Undertaking – shall acquire, build and deploy across Europe a world-class High-Performance Computing (HPC) infrastructure. It will also support a research and innovation programme to develop the technologies and machines (hardware) as well as the applications (software) that would run on these supercomputers.

POV: The goal is to invest €1 billion in public funding by 2020; private contributions will also be solicited. Currently, the EU doesn't have any supercomputers in the top-10 rankings globally in terms of power. The EU wants to acquire two pre-exascale supercomputers and at least two midrange machines by 2020, which is an ambitious but doable goal, particularly given the level of funding it plans to commit. The machines will be jointly owned by participating member countries and private companies and institutions.

As of yet, the U.K. hasn't signed onto the proposal and a government spokesman declined to give a reason why, according to Bloomberg. Resolving the U.K.'s role in the project should be a crucial task for EU officials, but one made uncertain by the prospect of Brexit and exactly what relationship the U.K. will have with EU countries going forward.

Data to Decisions Digital Safety, Privacy & Cybersecurity Future of Work Tech Optimization Chief Executive Officer Chief Financial Officer Chief People Officer Chief Information Officer Chief Digital Officer

News Analysis - SAP HCM On-Prem Option for SAP S/4HANA - or is this S/4HCM?

News Analysis - SAP HCM On-Prem Option for SAP S/4HANA - or is this S/4HCM?

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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It’s a new year and new product announcements are coming out – normally in the consumer space, given CES looming large. Looks like SAP did not want to stand back and had a major announcement in the HCM space: The announcement of a new, on premises (yes you read this right) HCM product, planned to be available in 2023, a record time range of 5 years out. Definitively worth a news analysis, the press release can be found here.



 


So let’s jump into my customary dissection of a press release:

Nearly six years ago, SAP acquired SuccessFactors, providing our customers with the best cloud-based human capital management (HCM) solutions on the market. Since then, the number of customers using SAP SuccessFactors solutions has nearly quadrupled, and we continue to see increasing momentum toward the cloud for HCM globally and across all industries.

MyPOV – Good description of the status quo both in regards of product and go to market strategy and reality. SAP customers had the choice to keep their existing, R/3 based SAP HCM product (which isn’t a bad product btw.) on premises. Many used the SuccessFactors Talent Management functions in parallel, in the cloud. SAP’s strategy was to use EmployeeCentral as the fix point for HCM automation and then gradually move its customers to a cloud based, maybe SuccessFactors based architecture (my speculation) was foiled for reasons outside of SAP HCM product / go to market makings with the overwhelming on premises adoption of SAP S/4HANA. 


Our investment strategy follows this market demand, with the bulk of the planned innovations for our HCM portfolio focused on SAP SuccessFactors solutions.

MyPOV – This is the reassurance statement for the SAP SuccessFactors customers – the last thing SAP wants them to get nervous and look at other cloud based HCM products. 


SAP also continues to support our customers using SAP ERP HCM, our on-premise HCM solution. While an increasing number of them are migrating to SAP SuccessFactors solutions to accelerate their digital HR journeys, we also recognize that every customer journey is unique and must be undertaken at each customer’s own pace. For some SAP customers this includes a desire to deploy their HCM solution in an on-premise environment for the foreseeable future. 

MyPOV – Good for SAP to acknowledge customer reality. Vendors can strategize and build on product as much as they want – they need customers to follow. When they don’t follow – later more – investments have to be adjusted. The ‘some SAP customers’ are the first 1000 (and numbers growing) SAP S/4HANA on premises customers. The foundation of what SAP wants to be the new ERP suite of the 21st century, it’s 21st century version of R/3. 


To support these customers’ needs, we plan to offer a new on-premise HCM option based on SAP ERP HCM with a comparable functional scope (except for the SAP E-Recruiting application and SAP Learning Solution).”  It is intended to be deployed alongside, and integrated with, SAP S/4HANA. The solution is planned for availability in 2023, with maintenance planned at least through 2030.

MyPOV – And the cat is out of the bag… a new HCM “option” (press release aficionados will cherish the absence of naming this “product” or at least “solution”) with a comparable scope to the current SAP HCM solution is planned for 2023. As readers know, the current SAP HCM is supported till 2025. So this will require some precision upgrading by the SAP install base and is pretty much a product road map / deliver plan that allows for very little slippage. The product comes with the ‘default’ 7 years of maintenance, that if there is any success is likely to extended. Also interesting that the new HCM option is going to be deployed next to S/4HANA, SAP calls this ‘side car’. Actively wondering why this HCM option is not offered as part of S/4HANA. Quick reminder: Originally S/4HANA was a copy of R/3, and now simplification and improvements have been and are being added. And no surprise the cloud intensive HCM functions of Recruiting and Learning are being excluded. These would be hard to size from a system capacity perspective for customers, customers are likely going to be happy to keep e.g. the video processing and playback to the cloud. 


To recognize our customers’ existing investments, it is our intent to offer a license conversion program. Details are planned to be finalized in 2018 although the solution will not be available for purchase until eventual availability. At that time, it is intended that customers can license the new solution and start migrating to it using planned SAP-provided migration tools and services. As the underlying solution is intended to be based on SAP ERP HCM, we expect this to be a nondisruptive transition. It is planned that customers running an integrated ERP and HCM deployment in one instance today can move to a partitioned deployment model and run the offering on a separate instance.

MyPOV – No surprise – SAP wants to make it easy for customers to adopt the new product. License conversion on the commercial side, migration help on the implementation side. Will be great to see / learn more details and good to see SAP setting an internal target of 2018… not much will happen till then on the customer side. 


We are pleased to provide options to meet our customers’ preferences across cloud, on-premise and hybrid operating environments and will continue to provide updates on our solution road map and ongoing innovations.

MyPOV – Boilerplate, good – but eventually acknowledging that the customer is king, and vendors have to meet customers where they are, where they want to stay and be. 




 

Overall MyPOV

Pinch me – it’s 2018 and we analyze a press release about an … on premises product. Reality in Europe (and some other parts of the world) is though that customer want a cloud ready product, that could be operated in the cloud if they desire, but then deploy on premises. Data safety, data statutory, privacy and performance arguments are the  most prominent reasons customer want to stay on premises. Of course there is a substantial portion of sticking with what has worked and is familiar since half a century…

At the end of the day the SAP HCM product strategy got run over by the SAP S/4HANA strategy and adoption reality. I have been pointing out the lack of HCM (and CRM) messaging, road map and positioning in S/4HANA (to the point of having an informal bet with the former head of SAP SuccessFactors on SAP needing an on premise adoption option for HCM in 2018 as a consequence, made at the SuccessConnect analyst summit in 2016…). SAP customers bought a suite and want a suite back. At the moment they see fragmentation across the board, at least for HCM, CRM and Procurement. With 9x%+ of 

SAP S/4HANA customers opting for on premises SAP was faced with the option of extending the old R/3 code and maintaining it for longer than 2025. But that would have taken off upgrade pressure on customers to move to S/4HANA… and SAP wants return of R&D from S/4HANA and some revenue. Even if SAP had provided a full suite (incl. payroll) in SuccessFactors, in the cloud today, on premises minded and bound customers would not have taken it. And a customer upgrading to S/4HANA (with no HCM in it) would have to either keep operating some R/3 infrastructure for HCM automation or move to the (non-existing) full automation of HCM in SuccessFactors… that would have opened up potential selection of other HCM suites. And with SAP competition pushing suites (beyond HCM), the overall S/4HANA upgrade could be questioned. 

So SAP customers found themselves in a tough spot: Influence SAP through the user group to extend R/3 based HCM support (and the rest) beyond 2025 – and operate on an aging on premises infrastructure. Or reap the benefits of S/4HANA investments and force / influence SAP to undertake a S/4HCM (my naming!) project. I call it S/4HCM as I expect SAP to undertake the same process it did for e.g. Finance with S/4HANA – now again for HCM. Take R/3 based HCM, move it to a new product / code line, simplify, update to 21st century, take advantage of Leonardo (my speculation) etc. – a repeat of the S/4HANA approach and process, just for HCM. Now tons of branding pros and cons on this one. The SAP user groups had to choose between a rock and a hard place: Keep old R/3 or move forward with S/4HANA. At the end it seems (e.g. in Germany with DSAG) the active customers, using, adopting and planning to use S/4HANA have won inside of the user groups). 

With all the challenges, there are also some kudos for SAP into this. Announcing a new product to be available 5+ years from now is probably a record for the enterprise software industry (for the observers, Oracle held that with a 4 year ETA for the called Oracle Fusion in 2008). This gives customers a chance to plan on the long-term side and monitor SAP’s progress. The other side of the coin is of course that SAP will now push the S/4HANA upgrade path even more. Deploy the new SAP ERP sidecar option and move to the new ‘digital core’ (as SAP calls it). 

At the end of the day this is a great lesson learnt that customer adoption ultimately dictates product investment and road maps. Vendors can only move and entice customers on a value based proposition so far… with the bulk of S/4HANA being on premises the writing was on the wall that SAP needed an on premises strategy for HCM (and likely for CRM and Procurement). Now the question is… what does this mean for SAP’s CRM and Purchasing plans. We can only speculate…


 

 

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Digital Transformation Digest:T-Mobile's New IoT Play, SAP Keeps the On-Premises Flame Burning, Ford Drives Further into Smart Cities

Digital Transformation Digest:T-Mobile's New IoT Play, SAP Keeps the On-Premises Flame Burning, Ford Drives Further into Smart Cities

Chris Kanaracus
Chris Kanaracus
Managing Editor, Constellation Insights
Constellation

Chris Kanaracus is managing editor of Constellation Insights.  Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members.  Prior to joining Constellation, Kanaracus spent seven years covering the enterprise software industry for IDG News Service, where he frequently broke exclusive stories with a focus on end-customer issues. Kanaracus has also held various managerial and reporting roles at newspapers in New England since 1998. Twitter: @chriskanaracus , Title: Big IdeasConstellation Insights Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members. ...

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Constellation Insights

T-Mobile goes narrow, but aims big with new IoT play: Self-styled "uncarrier" T-Mobile is staking a big flag in IoT (Internet of Things) with Magenta, a narrowband network that at $6 per device per year, drastically undercuts that of Verizon's comparable offering for IoT devices:

At one tenth the cost of Verizon’s Cat-M plans ...T-Mobile’s new NB-IoT plan takes advantage of narrowband technology, and the efficiency it provides, to significantly lower the costs of connecting things and unleash the next wave of IoT innovation.
 
T-Mobile’s new NB-IoT plan lights up new capabilities to connect massive numbers of devices with small and steady streams of data at low cost. NB-IoT is much more affordable than Cat-M and is already the globally-preferred standard to power the rapidly expanding world of IoT applications. Because it can operate in guard bands – the network equivalent of driving down the shoulders on the highway -- NB-IoT carries data with greater efficiency and performance and doesn’t compete with other data traffic for network resources.

POV: T-Mobile made the announcement in conjunction with the Consumer Electronics Show, ongoing this week in Las Vegas. It's a splashy move to say the least and is clearly T-Mobile's biggest bid for enterprise business to date. It's worth nothing that the $6 pricing model is on a limited-time basis, but T-Mobile can deliver adequate performance at even two or three times that much money, the network should gain traction quickly. It could also help drive down pricing on IoT networking from other carriers, particularly Verizon. Overall, the market seems set to gain a viable new option, which is always good for customers and competition.

SAP plans new on-premises HCM app: Like all enterprise software vendors, SAP has been pouring resources into building out a cloud application portfolio. But the reality is that many of its customers will keep large parts of their application footprint on-premises for the foreseeable future. SAP has acknowledged that reality in a new announcement about its HCM (human capital management) software strategy.

Nearly six years ago, SAP acquired SuccessFactors, providing our customers with the best cloud-based human capital management (HCM) solutions on the market. Since then, the number of customers using SAP SuccessFactors solutions has nearly quadrupled, and we continue to see increasing momentum toward the cloud for HCM globally and across all industries.

Our investment strategy follows this market demand, with the bulk of the planned innovations for our HCM portfolio focused on SAP SuccessFactors solutions.

However, SAP is also developing a new on-premises HCM application that is comparable in scope to the existing one, with availabilty in 2023 and support extended through at least 2030. SAP will offer a license conversion program, the details of which have yet to be completed.

POV: SAP competitors may seize upon the announcement as somehow evidence of SuccessFactors' inferiority, but the reality is a bit more complicated. The vendor's customer base is deeply rooted in some of the world's most conservative industries and it's not surprising that there's enough demand for a new on-premises HCM application. To that end, SAP is essentially obligated to provide new innovations to customers that have dutifully paid annual maintenance fees, but still have no inclination to move to the cloud.

Ford launches smart cities push with Autonomic: Automaker Ford is teaming up with a startup called Autonomic to shape a new vision for smart, connected cities. The companies see data from autonomous vehicles, bicycles and next-generation public transportation as a crucial wellspring of insight into how future cities will live and breathe, but at the same time, a difficult matter to wrangle. Here are the key details from a Ford blog post:

If we play our cards right, we can help allow for millions of people to move into cities and keep streets less congested, not more. We can connect people living in transit deserts to the city center for better jobs. We can manage our curbs better, remove parked and idling cars, and instead plant more trees and share fresh air with more in our community.

Building an ecosystem such as this requires the large-scale connection of bits of distinct data that flow from a variety of sources. And those sources — public transportation services, self-driving cars, cyclists and even infrastructure — will need to speak the same language and communicate with each other if we’re to realize the true potential of this type of ecosystem.

The first step along that path is to establish a platform that enables that kind of communication. That’s why Ford is working with Autonomic ... This platform can manage information flow and basic transactions between a variety of components in the transportation ecosystem — service providers, personal vehicles, bicycles, pedestrians, mass transit systems and city infrastructure, including traffic lights and parking locations.

POV: CES is a perennial place for brands to lay out ambitious technology strategies; Ford's partnership with Autonomic falls in line with that trend. Ford's plans are promising in their outlines. The company compared its planned collaboration with Autonomic as designed to build "a box of Legos" that can be snapped together to fit differing needs, not a monolithic, one-size-fits-all platform. This is the right approach given how much variety and complexity the world's cities contain. It will be interesting to see how their collaboration unfolds over the course of 2018.

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Embrace the Era of Smart Analytics

Embrace the Era of Smart Analytics

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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Machine learning and artificial intelligence advances in five areas will ease data prep, discovery, analysis, prediction and data-driven decision making.

For ten years the prevailing trend in business intelligence (BI) and analytics has been the move toward self service. That’s about to change. In 2018 and beyond we’ll see a growing list of what many call “smart” capabilities powered by machine learning (ML) and artificial intelligence (AI). These features are sure to help us move beyond the limits of the self-service era.

As I explain in a my latest report, “How Machine Learning & Artificial Intelligence Will Change BI & Analytics,” we’re already starting to see smart capabilities in five areas: data prep, discovery, analysis, prediction and AI-powered, prescriptive applications. My research details investments being made by more than 20 startups and 14 established BI and analytics vendors to advance the state of the art.

Expect a steady drumbeat of announcements throughout 2018 and beyond about ML applied to tasks including cleansing and combining data, discovering new data, and suggesting new combinations of data that could, in turn, uncover important insights. Non-technical business users will appreciate ML-powered suggestions on best-fit data visualizations. Automated modeling features, meanwhile, will help non-technical business users tap into the power of predictive analytics.

As noted, some of these capabilities are already starting to appear. My report details which capabilities are available today, those starting to appear and those we should expect in the future. For example, natural language (NL) querying based on keywords available in column headers has been with us for years. Some vendors are now using more advanced NL capabilities that can discern nuances and intent in complete sentences (whether typed or translated from voice with speech-to-text capabilities). On the cutting edge, systems are starting to retain the context of queries; instead of asking one, isolated question at a time, you’ll have a responsive dialogue with the data, drilling down and exploring from an initial query.

Of course, many business users are more interested in action and outcomes than interpreting reports, dashboards and data visualization. These are the users more likely to take advantage of the growing list of smart, ML- and AI-powered prescriptive applications emerging. Here’s where the context of decisions is built into business applications for sales, marketing, HR, supply chain, logistics and more. In these cases the data analysis can be tuned to deliver recommended next steps or even to automate actions sure to lead to desired outcomes.

These emerging capabilities will make BI, analytics and data-driven decision-making that much more accessible, understandable and actionable for non-technical business users, but embracing the new won’t be as easy as waving a magic wand. I’ve spoken to practitioners who were surprised and dismayed to see employees responding to ML- and AI-powered recommendations in unexpected ways. Salespeople, for example, sometimes stubbornly pursue leads deemed as less than promising by predictive scores. Here’s where change management will be crucial. As I explain in my report, delivering transparent and explainable AI that instills trust will be crucial to making smart systems succeed. Here's a link to a free excerpt of the complete 27-page report.

Related Reading:
Eight Data-to-Decisions Trends to Watch in 2018
Amazon Web Services Adds Yet More Data and ML Services, But When is Enough Enough?
Salesforce Dreamforce 2017: 4 Next Steps for Einstein

 

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How much are businesses actually investing in AI?

How much are businesses actually investing in AI?

Constellation Research is conducting a survey to find out how much businesses are investing in AI and how those investments might impact the organization.

If you are an individual with authority or influence over technology strategy in your organization please take this short survey by January 12, 2018. The survey contains 17 multiple-choice questions and should take less than 10 minutes to complete.

The survey seeks to understand: what are the drivers of business investment in AI; how much are businesses investing in AI; at what stage of implementation are businesses in their implementations; what are businesses using AI to accomplish; is there resistance to the adoption of AI; and how will AI impact the workforce.

For the purposes of this survey, Constellation defines artificial intelligence as the culmination of technologies such as deep learning, neural networks, natural language processing, and big data/predictive analytics to produce software that is self-improving, automatic, and emulates human intelligence.

Take the Constellation Research 2018 AI Survey here. Constellation will send survey participants a summary of the survey data.

Marketing Transformation Data to Decisions

Will Your Job Be Replaced by Artificial Intelligence?

Will Your Job Be Replaced by Artificial Intelligence?

Alan Lepofsky
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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Are you worried about computers, automation, robots or artificial intelligence replacing you? Futurist Brian David Johnson and I chat about the relationship between humans, technology and our careers.

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

Report: Three New Skills Pivotal for the Future of Work

Report: Three New Skills Pivotal for the Future of Work

Alan Lepofsky
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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The tools and techniques employees use at work are very different now than they were just a few years ago. This report examines three of the key areas in which employees will need to be proficient for the Future of Work:

  • Augmenting skills with artificial intelligence and automation
  • Leveraging data to make informed insights and calculated actions
  • Using creativity in storytelling to better engage with colleagues and customers

The full report can be purchased >> here <<.

Future of Work

Digital Transformation Digest: Starry Internet Eyes National Expansion, Macy's Digital Drive Continues, California Struggles to Launch Pot-Tracking System

Digital Transformation Digest: Starry Internet Eyes National Expansion, Macy's Digital Drive Continues, California Struggles to Launch Pot-Tracking System

Chris Kanaracus
Chris Kanaracus
Managing Editor, Constellation Insights
Constellation

Chris Kanaracus is managing editor of Constellation Insights.&nbsp; Insights&nbsp;delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to&nbsp;Constellation Executive Network&nbsp;members.&nbsp; Prior to joining Constellation,&nbsp;Kanaracus spent seven years covering the enterprise software industry for IDG News Service, where he frequently broke exclusive stories with a focus on end-customer issues. Kanaracus has also held various managerial and reporting roles at newspapers in New England since 1998. Twitter:&nbsp;@chriskanaracus , Title:&nbsp;Big IdeasConstellation Insights Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members. ...

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Cindy Zhou
CMO
Level Access

Cindy Zhou is a practicing CMO.&nbsp; Prviously, she was Vice President and Principal Analyst at Constellation Research covering Digital Marketing Transformation and Sales Effectiveness. With over 18 years of practitioner experience in corporate marketing, product marketing, product management, and sales operations, Zhou has spearheaded marketing transformation at multiple technology companies. She advised Constellation’s clients on strategies to light-up demand generation, prove revenue contribution, and maximize sales productivity. Prior to joining Constellation, Zhou was Global Senior Vice President of Marketing and Sales Operations at BackOffice Associates, a global provider of data quality and information governance solutions to the Fortune 1000 and SAP SolEx partner. Before…...

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Constellation Insights
 

Starry Internet eyes expansion in 2018: After a couple of years testing its unique wireless broadband service in the Boston area, Starry Internet is set to expand coverage to Los Angeles and Washington, D.C. in the near future, with plans for more than a dozen other major market additions over the course of the year. 

The company's service uses base stations mounted on rooftops that deliver Internet connections via high-frequency millimeter waves. Devices placed at and inside subscribers' homes capture the signals, convert them to lower frequencies and create a wifi network. Starry says it can offer 200MB broadband for $50 a month, a claim that has drawn its share of skepticism.

Company CEO Chet Kanojia is known for his previous startup, Aereo, which used antennas to capture and stream local TV channels. The company failed when the U.S. Supreme Court ruled its business model was in violation of the law.

POV: The notion of ultra-fast, affordable wireless Internet is a tantalizing one, particularly in light of the recent FCC vote overturning net neutrality laws. In fact, Starry has made net neutrality a centerpiece of its marketing efforts, saying it will never throttle customer data or block any websites. 

But there are serious challenges standing in its way. Any wireless network is at heart a real estate play; it's not trivial to site and build a cellular tower, particularly in expensive urban areas. Starry's infrastructure has a much smaller footprint, but its use of millimeter waves has drawbacks, namely a much shorter range than other technologies. If Starry is going to offer broadband at scale it will need to blanket urban areas with base stations, and each will require negotiations with building owners.

Then there is the question of how entrenched carriers will respond. If Starry's plans work out, they will not stand idly by. To that end, millimeter waves are hardly new or exclusive to Starry. While it has had a couple of years to develop special hardware and run limited beta tests, players with bigger resources pose a clear threat.

Ultimately, innovation in wireless broadband is a good thing, however. It will be interesting to see how the year unfolds for Starry.

Macy's digital drive still work in progress: Venerable department store chain Macy's reported that sales for the November-December holiday period rose 1.1 percent year-over-year, but at the same time announced plans to close 11 more stores, including one in downtown Miami. Four of the stores, including one in Los Angeles, had already been disclosed as slated for closure.

Macy's announced plans to close 100 locations in August 2016 and with the latest batch, will have completed 81 of of them. In total, the chain has shuttered 124 stores since 2015.

There are multiple store brands among Macy's holdings, including Bloomingdale's and Blue Mercury. Holiday sales were spurred by strong performance in areas such as fine jewelry, men's tailored clothing and high-end cosmetics.

Macy's CEO Jeff Gennette said in a statement that the company's store closings are all part of a bigger plan:

“Our primary focus in 2017 has been to continue the strong growth of digital and mobile, stabilize our brick & mortar business and set the foundation for future growth. We’ve made good progress on each, including encouraging trend improvements in our brick & mortar business. A healthy store base combined with robust digital capabilities is Macy’s recipe for success."

POV: Macy's results announcement doesn't mention it, but strong holiday sales on higher-ticket items was likely driven by the chain's Star Rewards loyalty program, which it overhauled prior to the holiday season. Macy's derives half of its annual revenue from the 10 percent of customers who spend at least $1,200 per year there. Those shoppers are now enrolled in the program's Platinum tier, which gives them 5 percent back plus free shipping. It's the brainchild of Gennette, who has been tasked with improving Macy's omnichannel strategy. This element, at least, seems to be working.

Still, Macy's has work yet to do. "They are not doing well with their digital strategy," says Constellation VP and principal analyst Cindy Zhou. "The emails are unfocused and it's challenging to find associates to help in-store. They need to focus more on personalized customer engagement and how to improve their digital-to-in-store experience."

California's marijuana-tracking system has yet to fire up: The Golden State is unfortunately notorious for a long string of wildly expensive, poorly executed government IT projects. The latest could end up being a system that is supposed to track recreational marijuana sales, now that the drug was legalized for that use on Jan. 1. Here are the key details from an Associated Press report:

California’s legal pot economy was supposed to operate under the umbrella of a vast computerized system to track marijuana from seed to storefronts, ensuring that plants are followed throughout the supply chain and don’t drift into the black market.

But recreational cannabis sales began this week without the computer system in use for pot businesses. Instead, they are being asked to document sales and transfers of pot manually, using paper invoices or shipping manifests. That raises the potential that an unknown amount of weed will continue slipping into the illicit market, as it has for years.

For the moment, “you are looking at pieces of paper and self-reporting. A lot of these regulations are not being enforced right now,” said Jerred Kiloh, a Los Angeles dispensary owner who heads the United Cannabis Business Association, an industry group.

POV: State officials say the system has been "implemented," but it's not clear when the necessary training dispensaries need on it will be complete, or when its use will be firmly mandated. Overall, the project has a number of moving pieces, a factor that can often lead to delays and overruns.

The voter referendum legalizing recreational marijuania in November 2016 also dictated that the state begin issuing licenses for it by Jan. 1. Several state agencies are involved in the regulatory process, and the licensing system will actually consist of two software platforms, one from Accela and another from Pegasystems. There are also multiple systems integrators working on the project. Finally, there is a track-and-trace system component, which hadn't even been procured as of last June.

California is banking on recreational marijuana generating substantial tax revenue, so getting the system up and running soon is paramount. But rushing its completion may only lead to more problems; this may be a case when mellowing out a bit is the best option for state officials.

 

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