Research Report: Trends - Inside The MIndset Of The Midmarket Buyer

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…...

Read more

Research Report: Trends - Inside The MIndset Of The Midmarket Buyer rwang0 Tue, 02/22/2022 - 07:58

Data Shows Priority Shifts From Pre-Pandemic To Post-Pandemic

Midmarket executives have always been challenged by a culture of scarcity. Limited access to funds, talent, and innovation has often created a barrier to entry into and exit from new markets, industries, and ecosystems. During the COVID-19 pandemic, these leaders have made shifts in their buying behaviors and technology investments. Constellation’s latest midmarket analysis chronicles these findings and identifies the shifts during the 2020-to-2022 budget cycles. This emerging postpandemic strategy signifies the first steps to the Great Refactoring ahead.

Tech Budgets Shifting From Peak Operational Efficenty To Revenue And Growth

Prior to the pandemic, midmarket leaders invested tech budgets primarily in operational efficiency and cost. During the pandemic, both operational efficiency and cost (41.6%) and regulatory compliance (31.5%) saw higher-than-normal investment. The shift to a focus on revenue and growth (24.0%) in 2022 comes as reductions in investment for operational efficiency and cost (31.5%) and regulatory compliance (25.8%) drop from 2021 peak highs (see Figure 1).

This budget shift to revenue and growth and strategic differentiation indicates an optimism for those enterprise that survived the economic onslaught of the pandemic. Winners and survivors have seen the impact of digital channels, digital business models, and digital monetization. Constellation believes this frameshift from old models to new models built on analytics, automation, and artificial intelligence (AI) will play out in continued investments in technology and platforms.

Figure 1. Operational Efficiency Drives Budget Decisions As Revenue And Growth Gain Steam

To access the report: go to the Constellation website

Your POV

Trying to understand the mindset of the mid market buyer? Wondering how peers are prioritizing tech budgets?

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 strategy efforts. Here’s how we can assist:

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

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

Disclosures

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

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

Copyright © 2001 – 2022 R Wang and Insider Associates, LLC All rights reserved.

Contact the Sales team to purchase this report on a a la carte basis or join the Constellation Executive Network

New Release: Week Two Q1 2022 Constellation ShortList™ Portfolio Updates

Hannah Mason

Marketing Director
Constellation Research

Hannah Mason is a marketing director at Constellation Research. She oversees brand positioning, creative direction, and content development across digital platforms, events, and campaigns. Her work spans branding and design—including graphics, sales collateral, and event presentations—along with website content management, newsletters, and Constellation Insights. Mason also manages surveys and produces Constellation’s video collateral, including ConstellationTV. Her role ensures that the Constellation brand is communicated with clarity, creativity, and consistency across all channels. Contact Hannah at [email protected]. ...

Read more

Elle DeRosa

Director of Marketing, Communications & Operations
Constellation Research

Elle is the Director of Marketing at Constellation Research and producer of the weekly enterprise tech show, DisrupTV. She leads marketing and communications efforts across all avenues while also managing an array of programs including the SuperNova Awards, Business Transformation 150, AX100, AI150, S50 and ShortLists. She has previous experience in public relations and has a strong passion for the marketing world. Contact Elle at [email protected] ...

Read more

Today, we launched the final set of updates to our Constellation ShortList™ portfolio, including 26 new and updated lists.

Each technology vendor on this list has been chosen based on their products and services offering. Our analysts consider technology investment, use cases, strategic vision, customer value, executive leadership and price when anointing a vendor to the ShortList™.

Check out the 26 new and updated lists:

• Blockchain Technology Platforms
• Cloud-Based Planning Platforms
• Contact Center as a Service (CCaaS) – NEW
• Customer Loyalty and Retention
• Digital Adoption Platforms
• Digital Asset Management (DAM) for DX
• Digital Canvas Workboards
• Earned Media & Communication Cloud Platforms
• Enterprise Cloud Finance
• Enterprise Low-Code Tools and Platforms
• Field Service Management
• Global IaaS for Next-Gen Applications
• Healthcare ERP
• Hybrid-Cloud and Multicloud Analytical Relational Database Management Systems
• Learning Marketplaces
• Master Data Management
• Microsoft End-to-End Service Providers
• MLOps - NEW
• PaaS Suites
• Product-Centric Cloud ERP
• Quantum Computing Platforms
• Quantum Computing Software Platforms
• Sales Engagement Platforms
• Sales Force Automation
• Talent Management Suites
• Unified Communications as a Service (UCaaS) - NEW

This program is part of our open research library. You can download and view each list and the criteria for free. If you missed last week’s updates, be sure to check them out here. To engage us in a rapid vendor selection process, please contact [email protected].

We will update the rest of the portfolio in Q3 2022. Some lists may get updated twice a year depending on market changes and based on each analyst’s discretion for each area. If you see a list that was not updated this quarter, it will be updated later this year.

We know the Shortlists™ are starting points in your vendor selection process. If you would like to take advantage of our expertise with software vendor selection, contract negotiations, and partner selection, please reach out to [email protected].

For more information, visit https://www.constellationr.com/shortlist.

Real-Time Data: A Key Cloud Trend for Enterprises in 2022

Dion Hinchcliffe

Vice President and Principal Analyst
Constellation Research

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

Read more

The unfortunate reality of today’s highly digitized and cloud-powered organizations is that most continue to struggle to reach anything close to the full potential value of their data. Yet for most companies, their data remains the single most under-leveraged, high value asset they have. The CIOs I’ve spoken to in the last several years about challenge this still decry that they still cannot buy or build systems that fully tap into what the organization actually knows from the information already on hand.

The Prime Challenge: Getting Data to Where It Needs to Be

Yet properly unleashing the value of data has long been the primary end goal of enterprise digitization and transformation in most organizations. Building capabilities to manage its growth, velocity, scale, and agility are and will continue to be a foundational activity of a strong business, as well as strategic, future-looking activities like digital transformation. Enterprises have spent the better part of the last decade starting to open up their data silos to unleash data across the organization, all while powering more and more automation with that data. CIOs and tech leaders must now be a strategic "enabler to ensure data fully serves the organization", as I noted recently.

In short, much progress has been made with putting data to work, but it’s still not enough. A large gap remains between what is possible and what many organizations are actually achieving. What's more, this gap has significant disruptive and competitive implications.

In recent years, there have been several generations of market activity around the tools and technologies to improve how well we can actually use the data that directly informs and empowers our businesses. These cycles have variously included data lakes, data warehouses, backward-looking data analytics, and business intelligence.

More recently, many companies have also begun to aggregate and transform their data storage ecosystems by moving to the cloud. Most recently, the push has been to adopt cloud-native architectures, to tap into better models for using the cloud and make new IT investments more future-proof, among other benefits.

Yet all of this is not sufficiently addressing the core challenge in getting value from an organzation's data estate. One key trend is to use data to enhance analytics capabilities and improve increasingly personalized digital customer journeys. But a surprisingly small number of enterprises have genuinely harnessed the power of the relevant data to achieve the revenue potential that is possible.

The reasons for this, after observing a great many different efforts and their stable of data technologies and techniques over the years: Companies’ most valuable data, created through the countless interactions they have with their customers, still remains too-firmly trapped in the next generation of silos, or if it’s unleashed, cannot be tapped into in sufficient timeframes.

Despite all the investments we’ve made, the very platforms and tools we use to harvest data for our systems themselves can actually foster new silos of operational data. Unexpectedly, these new data farms have expanded rapidly to support urgent and important activities like digital transformation. And that’s not all: As application and IT systems became ever-more decoupled and finer-grained, they have proliferated in number, creating new silos faster than we can eliminate them. Finally, even if data can be accessed, it often cannot be reached rapidly enough to support today’s increasingly fast-moving digital business processes. The key mantra here is simply that data in silos tends to be data not used.

What then can help organizations make the next major functional leap to close the gaps that remain in taking full value from our data? The key to unlocking this major step in progress is realizing that the dramatic increase in the complexity of our data architectures is counterintuitively making it harder to optimize for scale and speed. It is also just layering on costs to optimize for often-narrow scenarios. This sprawl of interlocking of databases and repositories is also quite expensive to license and maintain.

The Value of The Data of Now

Instead, to compete today, it's simply not enough to capture and store bottomless streams of data from the hundreds of applications that power the typical enterprise, then hope to eventually mine it for intelligence at some later date. A new approach is growing in popularity: Tapping into the streams directly as the data moves (or otherwise being able to treat enterprise data in an in-motion manner.) Data innovators have begun to run their businesses and outcompete using real-time data. This is creating real-time intelligence and actions tied to important events or vital changes in the operating environment.

For example, Barracuda Networks, a worldwide leader in threat detection security, application delivery and data protection solutions, has been employing a real-time approach to data using a multicloud-friendly, serverless capability known as Astra DB from DataStax, built on Apache Cassandra, the popular very high-scale NoSQL database. Astra DB’s ability to scale  thousands of simultaneous data flows from around the world to deliver real-time threat detection services literally defines Barracuda’s competitive advantage. Barracuda protects customers with its Advanced Threat Protection (ATP) service, which analyzes traffic across all major threat vectors, including email, web browsing, web applications, remote users, mobile devices, and the network perimeter. They use this low-latency, high-throughput, high-scale data capability to directly enable millions of simultaneous customers to stave off security issues in real-time around the globe with zero latency or downtime.. The ability to tap seamlessly into thousands of simultaneous data flows from around the world into a real-time service is the strategic capability that makes this possible.

The Future Belongs to Simple, Streamlined, Real-Time Cloud-Native Data at Scale

I recently hosted a LinkedIn Live session with my latest predictions on data and digital transformation. In the session I noted that “just having data in all our SaaS systems and our various public clouds and data centers isn’t enough. It's activating that data, it's reaching into it and using it” that matters most at the end of the day. Organizations seeking to make the next big leap in progress will move to new real-time data architectures in the cloud. Businesses that can tap into the real-time windows of their data will be engines of the next generation of innovation and growth. They will better automate operational decisions when it matters most. They will offer compelling, in-the-moment digital experiences that customers now expect and demand.

The enormous challenge – and sustainable advantage -- of turning real-time data into revenue is one that’s faced by most enterprises today. But now there is a new generation of capabilities available – explicitly designed for the highly dynamic and limitless world of the cloud and edge that we are moving rapidly to. Technology leaders can now move to best-of-breed capabilities that enables organizations to break our most vital assets out of their silos, create open and shared operational capabilities that unleash it all, and wield it to its fullest potential.

Additional Research and Analysis

The Cloud Reaches an Inflection Point for the CIO in 2022

CIOs Talk Data Strategy (with quotes from Dion)

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

How DataStax is Emerging as a Strategic Anchor in Cloud Data Management

What is Web3 and Why It Matters

New Release: Q1 2022 Constellation ShortList™ Portfolio Updates - Week One

Hannah Mason

Marketing Director
Constellation Research

Hannah Mason is a marketing director at Constellation Research. She oversees brand positioning, creative direction, and content development across digital platforms, events, and campaigns. Her work spans branding and design—including graphics, sales collateral, and event presentations—along with website content management, newsletters, and Constellation Insights. Mason also manages surveys and produces Constellation’s video collateral, including ConstellationTV. Her role ensures that the Constellation brand is communicated with clarity, creativity, and consistency across all channels. Contact Hannah at [email protected]. ...

Read more

Elle DeRosa

Director of Marketing, Communications & Operations
Constellation Research

Elle is the Director of Marketing at Constellation Research and producer of the weekly enterprise tech show, DisrupTV. She leads marketing and communications efforts across all avenues while also managing an array of programs including the SuperNova Awards, Business Transformation 150, AX100, AI150, S50 and ShortLists. She has previous experience in public relations and has a strong passion for the marketing world. Contact Elle at [email protected] ...

Read more

We are thrilled to reveal the latest updates to the Constellation ShortList™ portfolio.

The Constellation ShortList™ portfolio highlights the key players when considering investments across all of our coverage areas, including HR tech, healthcare, AI, marketing, customer experience, analytics, machine learning, and more. We update the lists once per year to every six months depending on the category. Our goal is to match the rapidly changing requirements with customer needs and demand.

Today we released 25 new and updated lists:

• Automated Cloud Data Warehouse Services
• Citizen Developer Low Code Tools and Platforms - NEW
• Configure Price Quote (CPQ)
• DevOps
• Digital Customer Support Operations - NEW
• Digital Transformation Target Platforms
• Employee Digital Workspaces
• Enterprise Application Platforms
• Healthcare Medical Device Security
• Hybrid-Cloud and Multicloud NoSQL Databases
• Hybrid-Cloud and Multicloud Relational Transactional Database Management Systems RDBMS
• Innovation Services and Engineering
• Integration Platform as a Service (IPaaS)
• Location Technology Platforms
• Next-Gen Databases: RDBMS for On-Premises
• Next-Generation Computing Platforms
• Observability - NEW
• PaaS Tool Suites
• Price Optimization Solutions
• Quantum Full Stack Players - NEW
• Sales Performance Management
• Services-Centric Cloud ERP
• Social Advertising Management
• Social Engagement & Listening Platforms
• Work Coordination Platforms

Each offering meets the threshold criteria as determined by our analysts through client inquiries, partner conversations, customer references, vendor selection projects, market share and internal research. These reports are part of Constellation’s open research library and are free to download. For more information, visit https://www.constellationr.com/shortlist.

We know the ShortLists™ are starting points in your vendor selection process. If you would like to take advantage of our expertise with software vendor selection, contract negotiations, and partner selection, please reach out to [email protected].

If there’s a coverage area we are missing that you think we should start coverage, please let us know with a short note to ([email protected])

Be sure to check back next Wednesday for the final updates for the quarter.

HOT TAKE: Automation Anywhere acquires Fortress IQ. How does it change the RPA landscape?

Andy Thurai

Vice President and Principal Analyst
Constellation Research

About Andy Thurai Andy Thurai is an accomplished IT executive, strategist, advisor, enterprise architect and evangelist with more than 25 years of experience in executive, technical, and architectural leadership positions at companies such as IBM, Intel, BMC, Nortel, and Oracle. Andy has written more than 100 articles on emerging technology topics for publications such as Forbes, The New Stack, AI World, VentureBeat, DevOps.com, GigaOm and Wired. Andy’s fields of interest and expertise include AIOps, ITOps, Observability, Artificial Intelligence, Machine Learning, Cloud, Edge, and other enterprise software. His strength is selling technology to the CxO audience with a value proposition rather than the usual technology sales pitch. Find more details and samples of Andy’s work on his…...

Read more

Photo by UX Indonesia on Unsplash 

What happened?

SoftBank-backed Automation Anywhere, an RPA company, (currently valued over $7B+) recently acquired FortressIQ, a process mining company, for an undisclosed sum. FortressIQ, founded in 2017 by an ex-GenPact (a BPO outsourcing firm) executive, has technology partnerships with Automation Anywhere’s direct competitors – Blue Prism and Microsoft Power Automate. 

Why does it matter?

To understand why this is important, you need to understand the Robotic Process Automation (RPA) concept and what is involved in making RPA successful as well. RPA is generally about automating manual work processes by analyzing the inefficiencies, cost, and wastage and improving them by automating them. For any RPA project to be successful, identifying inefficient processes is key. Unearthing the processes to automate, analyzing it, and justifying automation costs to senior management to get approval is a lengthy and expensive process – especially if you bring in outside consulting firms to execute on it. This is where process mining tools come into play. AI-based process mining tools can analyze the data, workflow, and model workflow processes as close to real-life as possible with very little effort. 

With the pandemic and work from home (WFH) in full swing, a lot of IT processes have also moved online – whether it is rolling out digital applications or applying for a mortgage loan application, etc. Many enterprises were not ready for this forced digital maturity. Many of them hired as many warm bodies (aka IT consultants) as they can, to solve this problem in the back office by having many humans in the loop to create a “semi-automated” solution. Many enterprises are tired of paying exorbitant rates to those consultants and are now trying to optimize the loop by automating wherever they can. I wrote a couple of reports about emerging trends in SRE and Incident Management recently on how enterprises are trying to cope with this situation (see the further reading section below).

Business process identification and process mining are about learning the unknowns in the process of mapping known business processes. 

Where do legacy tools fail

Legacy process mining tools mine data logs from ERP, CRM, BPM (Business Process Management), Invoicing systems, etc. to model a business process workflow. The problem with those tools is that they just identify the processes, and the automation tools can automate it, without removing the inefficiencies in the process flow first. These process mining tools read the logs that are generated by the transactions in a specific process. By combining the logs, over many transactions, these tools can map out the process as it is done today. It can get difficult if the logs are dispersed across many systems for a single process. Unless all of the data is fed properly, the tool might land up creating a partial process map which can result in failure. In addition, the tools also assume all of the processes are done in real-time, and in chronological order. If portions of the process are executed in batch mode, those timestamps can create an improper process map as well.  

How Fortress IQ is different

Image Source: FortressIQ. 

Fortress IQ takes a slightly different approach to process mining. They deploy a Virtual Process Analyst (VPA) which is a sensor embedded in user desktops to visually record all activities. Later the recordings are analyzed using AI technology. A combination of computer vision, natural language processing (NLP), and Machine Learning (ML) technologies try to understand the process flow and map out the processes. When deployed across multiple desktops, by capturing various analysts doing the same work, the analysis can reveal the differences and potentially unearth the inefficiencies in the process. After filtering out the noise, and side activities, AI can come out with a clear view of the current process and make recommendations for the most optimized process that can be automated using RPA. One of the major issues is redacting sensitive information from the screenshots/processes captured – AI can help in that front as well while making recommendations. Fortress IQ’s DevOps accelerator packs for industry verticals are a good addition for process mining in old-school industries with a closed mindset.  

Understanding the current processes and identifying inefficiencies is key to figuring out the optimal process to automate, hence FortressIQ’s motto “understand today, plan for a better tomorrow with process intelligence” makes a lot of sense. Most of the RPA projects fail because they fail to identify the unknowns properly during the process identification which is a very complex work including interviews with process workers, stakeholders, business analysts, and creating process diagrams that may not reflect the true picture with the true hidden nuances.  

Current Landscape

The field is getting competitive with many smaller players popping in the market - Celonis, Kryon, MiniT, SmartSense, ProDiscovery, ABBYY, Kofax, PuzzleData to name a few. Though some of these players with unicorn valuations are not that small anymore.

This space has been acquisition galore for the last few years: 

1. In Aug 2019, ABBYY acquired TimelinePI 
2. In Oct 2019, RPA company UIPath acquired Stepshot and ProcessGold 
3. In May 2020, Microsoft acquired Softomotive to be part of Microsoft Power Automate. 
4. In Jul 2020, IBM acquired RPA company WDG Automation 
5. In Jan 2021, SAP acquired gemmal process automation company Signavio 
6. In March 2021, ServiceNow acquired an Indian RPA company Intellibot.io.  
7. In April 2021, IBM acquired process mining software company MyInvenio  
8. In Aug 2021, Salesforce/MuleSoft acquired RPA company Servicetrace 
9. In Aug 2021, Appian acquired process mining software company Lana Labs 
10. In Oct 2021, Microsoft acquired Clear Software 
11. In Oct 2021, process mining software company Celonis acquired Lense.io 

Constellation POV 

We at constellation think this is a good acquisition by Automation Anywhere to justify businesses’ money spent in RPA by showing the inefficiencies in current processes without spending a lot of money upfront. We also expect M&A to continue and will consolidate the smaller players to join hands with the bigger backer for business expansion and survivability. There is a lot of VC money is flowing into this space in the last few years, obviously, they will expect to get returns sooner than later.  

Many RPA projects fail because of poor process identification. In addition, many of the inefficient front and back-office business processes still remain undiscovered as no one thought of it. This is where AI-driven process mining tools such as Fortress IQ can help to identify many processes to automate in a very short period. If you don’t know what is broken, it is hard to fix it. 

Recommendation

Given that the announcement just came out, and the fact that Automation Anywhere and Fortress IQ are not fully integrated one needs to exercise caution before going full onboard. It is also worth exploring other tools in the market to figure out how to identify inefficient processes faster, and with all hidden nuances, before engaging in full-blown RPA projects. This will increase the success rate of such projects.

Further Reading

Constellation Short List for RPA tools

2022 Trends in Incident Management

2022 Trends in Site Reliability Engineering