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Google Forms New Patent Pool for Android: The Enterprise Implications

Google Forms New Patent Pool for Android: The Enterprise Implications

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

Google has created a new patent cross-licensing effort in the interest of stemming litigation within the burgeoning Android ecosystem. It's called PAX, which means "peace" in Latin. Here are the key details from Google's official blog post on PAX:

Under PAX, members grant each other royalty-free patent licenses covering Android and Google Applications on qualified devices. This community-driven clearinghouse, developed together with our Android partners, ensures that innovation and consumer choice—not patent threats—will continue to be key drivers of our Android ecosystem. PAX is free to join and open to anyone.

PAX members currently include Google, Samsung Electronics, LG Electronics,Foxconn Technology Group, HMD Global, HTC, Coolpad, BQ, and Allview. The members collectively own more than 230,000 patents worldwide. As more companies join, PAX will bring even more patent peace and value to its members through more freedom to innovate.  

It's important to note a couple of things here. One, there are indeed some big names signed onto PAX at launch, but they represent only a small percentage of Android OEMs. As the blog notes, the Android ecosystem now has more than 400 partner manufacturers and 500 carriers, with greater than 4,000 devices created in just the past year. There is plenty of room for PAX's ranks to grow, and no doubt they will as word gets out.

Don't expect Microsoft, which at one point was reportedly earning $2 billion per year licensing its patents to Android device makers, to join up. 

Second, PAX's launch companies may possess more than 230,000 patents but that doesn't mean all of them will pertain to PAX or Android. It also appears that PAX will focus on software, not hardware patents. 

PAX is not Google's first patent pool. Past initiatives include the LOT Network, which focuses on combating patent trolls. Google also participates in long-standing patent pools such as the Open Invention Network. 

Google has set up a website for PAX, but it contains very little specific information. In fact, visitors are asked to submit a request if they want to see a copy of the PAX license. The site offers no guarantee one will be received, but in the case one is, asks that recipients keep it confidential save for employees, board members and attorneys, or if compelled by law.

While still in its early days, the emergence of PAX is good news not only for the Android partner and developer ecosystem, but for enterprises. Despite Android's nearly 90 percent smartphone market share, it has lagged Apple dramatically in the enterprise market for a number of reasons, chief among them the Android ecosystem's rampant fragmentation and a resulting perception (or reality) of inferior security. 

While most every iOS device gets updated with new operating system versions within a matter of weeks or even days, that's never been the case with Android, with many carriers taking years to make updates available to customers. This makes BYOD initiatives much tougher to do for enterprise IT with Android devices, given users may be running earlier, less secure versions of Android. 

Google has taken significant steps in the past year to make Android more enterprise-friendly, adding an array of security features in Android 7.0 (Nougat), which was released in August. (Go here for a comprehensive rundown). Google also sees enterprise overall as its next big path to growth, and has invested accordingly. Expect Google to spend plenty of energy educating the market on where Android stands as an enterprise solution over the course of this year and beyond. 

While PAX doesn't draw a direct line toward spurring enterprise adoption of Android, if successful it can only help. An Android partner ecosystem focused more on creating new innovations than fending off intellectual property claims could help reduce fragmentation and thus coalesce around enterprise mobility opportunities, which are already vast. 

There's a broader view to consider, as well. "A digital economy built around a new generation of interactive, high-value business and consumer apps and service orchestrations calls for levels of shared and integrated technology operations that massively surpass that of the Web," says Constellation Research VP and principal analyst Andy Mulholland. "The recent battle around protecting patents on smartphone features has shown just how difficult it can be to simultaneously add patented features while in parallel allowing user interactivity with other technology and apps."

"Multiply that many times over the next several years as hundreds of successful startups add their claims to those of the established vendors in the rush to win a share of the new digital markets and the results will be at best chaotic, and at worst could lead to users find their purchases are banned from use," he adds. "Revising both patent and commercial law may not be easy but its very necessary."

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Tech Optimization Chief Information Officer

Does Oracle and Accenture make sense - or never ever!

Does Oracle and Accenture make sense - or never ever!

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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So before I get more questions on Oracle possibly buying Accenture and getting back on the road this - week... better to have a blog post out there on the topic...

 
First things first - quick thoughts in the video: (if the video doesn’t show up, check here)



 
 
No time to watch - here is the one slide update:
(if the slide doesn’t show up, check here)



 
 
 
Definitively, because
 
  • The Future is Services - We know services are the future - vs. CAPEX style perpetual licenses. Combos of software and human services (aka BPO, more modern BPaaS) have a future, not doubt.
     
  • Accenture can bring cloud load - The idea would be that Accenture can 'persuade' most of its customers to move to Oracle products, and provide the services. Stands and falls with 'client leakage'. But Oracle needs load for its cloud to be competitive.
     
  • The 21st century "IBM" needs services - Ellison wants Oracle to become the IBM of the 21st century - what the IBM of the 20th century had was services. So Accenture is the missing piece.
     
Never ever, because
  • Product vs Services DNA - These are like fire and water - they need each other but never live well together.
     
  • Accenture dilutes Oracle's margin - It's all about P/E ratio, less E means a smaller P... not good for Oracle shareholders, who may not be happy.
     
  • Services under pressure - There is a lot of talk about digital disruption - but a function that has been thoroughly disrupted by software - is system integrator services. Gone are the 1000+ FTE projects, a dozen consultants is a large project these days. So why would Oracle acquire a player in a systematically struggling industry - and one that Oracle disrupts itself with its cloud products?
 

MyPOV

I would be very surprised if this merger would happen. It’s unlikely that Oracle / Larry Ellison will make the mistake from the 90ies twice – when the integrated product and services Oracle offering feel short in the market when competing with the SAP (product only) and SI combo (back then the Big 7 in case you remember). Basically, the Big 7 influenced customers to implement… where there would be revenue stream for them.
On the flip side one could argue that the market is no longer the same as in the 90ies. Customer want all in one shot, and want it as fast as possible, maybe even need their solution as fast as possible to keep operating. But what has not changed is the stock market: Predictable revenues with predictable margins – and that is so much more attractive with (cloud) software than with cloud related services.
 
What’s your POV?



 
 
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Updated Constellation ShortLists - Cloud identity and Blockchain

Updated Constellation ShortLists - Cloud identity and Blockchain

Steve Wilson
Former Vice President and Principal Analyst
Constellation Research

Steve Wilson is former VP and Principal Analyst at Constellation Research, leading the business theme Digital Safety and Privacy. His coverage includes digital identity, data protection, data privacy, cryptography, and trust. His advisory services to CIOs, CISOs, CPOs and IT architects include identity product strategy, security practice benchmarking, Privacy by Design (PbD), privacy engineering and Privacy [or Data Protection] Impact Assessments (PIA, DPIA). Coverage Areas: -  Identity management, frameworks & governance-  Digital identity technologies-  Privacy by Design -  Big Data; “Big Privacy”-  Identity & privacy innovation Previous experience: Wilson has worked in ICT innovation, research, development and analysis for over 25 years. With double…...

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Last year Constellation Research launched a new analysis product, the Constellation ShortList.  As part of the research lifecycle, our analysts periodically capture the state of play of particular vendor sub-categories, and short list the companies we think are most important at that time.  The ratings are based on the characteristics that make a certain technology transformative or disruptive.  We update the shortlists regularly not only because new products and players constantly emerge, but because the metrics themselves change as categories evolve. 

Constellation ShortLists are free to download.

I’ve recently updated two ShortLists, for Distributed Ledger Technology Labs, and Cloud Identity Management.  Both of these have been relatively stable for the past three months, but please stay tuned for a step change in the Distributed Ledger landscape.  The recent announcements of Hyperledger Fabric, IBM’s Blockchain-as-a-Service built on Fabric, and the Enterprise Ethereum Alliance prove how dynamic this field has become. 

The next Distributed Ledger Labs shortlist will almost certainly see several new players, from tech companies and the consulting houses, and maybe even a start-up.

If you have any news in the blockchain technology or identity management ecosystems, new applications we should look at, or R&D that is coming out of the labs, do let me know.  Reach me at [email protected]. And check out my latest analysis at https://www.constellationr.com/users/steve-wilson.

Digital Safety, Privacy & Cybersecurity Future of Work Matrix Commerce New C-Suite Tech Optimization Innovation & Product-led Growth Distillation Aftershots Blockchain AI Security Zero Trust SaaS PaaS IaaS Cloud Digital Transformation Disruptive Technology Enterprise IT Enterprise Acceleration Enterprise Software Next Gen Apps IoT CRM ERP CCaaS UCaaS Collaboration Enterprise Service Chief Executive Officer Chief Information Officer Chief Supply Chain Officer Chief Digital Officer Chief Technology Officer Chief AI Officer Chief Data Officer Chief Analytics Officer Chief Information Security Officer Chief Product Officer Chief Privacy Officer

Digging Into Cloudera's IPO Filing: Key Takeaways

Digging Into Cloudera's IPO Filing: Key Takeaways

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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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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Constellation Insights

Cloudera has filed its long-awaited S-1 form with the U.S. Securities and Exchange Commission, paving the way for an IPO in the next several weeks.

S-1 forms serve a dual purpose: First, they seek to sell potential investors on the company’s value and future prospects. Secondly, S-1s include a vast amount of caveats, laying out all the potential risk factors the company faces, from competitive pressure to natural disasters.

Apart from that, S-1s can shine a light on interesting, heretofore undisclosed details about a company’s operations. In all three respects, Cloudera’s S-1 delivers. Here are some of the key takeaways customers and potential prospects should know.

Profitability remains elusive: The big data platform vendor has operated at a loss and will likely continue to do so for the near term. In its fiscal years ending Jan. 31, 2016 and Jan. 31 of this year, it had revenue of $166 million and $261 million, respectively, for an impressive 57 percent growth rate. However, it posted a net loss of $203.1 million in fiscal 2016 and $187.3 million in fiscal 2017. One silver lining is that losses shrunk while revenue grew. It remains to be seen whether Cloudera can continue on that path.

Cloud revenue shift underway: Cloudera sells its platform through term subscriptions on the cloud or on-premises, as well as with a consumption model for the cloud. It focuses sales efforts on Global 8,000 enterprises, and currently 18 percent of its Global 8,000 customers are running its technology in the cloud. As Constellation Research VP and principal analyst Doug Henschen notes, cloud deployments are the fastest-growing part of Cloudera’s business. Post-IPO, cloud should come into even greater focus for the company, but it will have to navigate the revenue-model shift under public scrutiny from investors.

Cloudera noted the challenge ahead in the S-1:

[A]s an increasing amount of our business may move to our cloud‑based solutions for transient workloads and the use of our consumption‑based pricing model may represent a greater share of our revenue, our revenue may be less predictable or more variable than our historical revenue from a time period-based subscription pricing model. Moreover, a consumption‑based subscription pricing model may ultimately result in lower total cost to our customers over time, or may cause our customers to limit usage in order to stay within the limits of their existing subscriptions, reducing overall revenue or making it more difficult for us to compete in our markets.

Broad coverage: Cloudera has done a good job of spreading out its business across verticals, with “significant” revenue in banking, technology, business services, telecommunications, public sector, consumer, healthcare and life sciences, according to the S-1. More than a quarter of its revenue came from outside the U.S. in its fiscal year ended Jan. 31, and no single customer accounts for more than 10 percent of its overall revenue, the document states.

Big deals, but hard-won: Most Cloudera customers aren’t just kicking the tires. Those spending more than $500,000 on annual subscriptions represent greater than 60 percent of Cloudera’s customer base, according to the S-1.

However, Cloudera has had to work for that business, as the S-1 notes. Its sales cycles are typically four to nine months but can take more than 18 months in some cases. Post-IPO, Cloudera will be pressured to squeeze down those sales cycles.

Headcount rising fast: Cloudera added 330 employees between Jan. 31, 2016 and Jan. 31 of this year. That’s a 29 percent increase in a 12-month span—a significant number, to say the least. The S-1 does not break down the headcount into job roles, such as engineering or sales and marketing, but other numbers show that Cloudera has invested more heavily in the latter of late.

In its fiscal 2016, Cloudera spent $99.3 million on research and development. That rose only slightly, during its fiscal 207, to $102.3 million. In contrast, sales and marketing spend was $161.1 million in its fiscal 2016 and $203.1 million in its fiscal 2017.

Intel inside: Intel has invested $766.5 million to date in Cloudera stock, and is also a paying customer of its platform. The relationship goes beyond investment, as the S-1 notes:

Among many tangible examples of joint development, Intel and Cloudera collaborated on optimized data encryption speed through use of arithmetic acceleration built into the Intel architecture. Intel and Cloudera also collaborated to develop Spot (incubating project), an open source cybersecurity analytics platform built on open data models that provides advanced threat detection using big data analytics and machine learning.

Cloudera achieves “differentiated performance” on Intel architecture today and will in the future, according to the S-1.

Despite the close relationship, Intel faces some restrictions over its ultimate influence on Cloudera. Under terms laid out in the S-1, Intel can only hold up to a 20 percent share in Cloudera post-IPO. It can get around this if another investor buys more than a 20 percent stake, or by acquiring Cloudera outright.

Constellation’s Henschen recently attended Cloudera’s analyst day event in San Francisco. Go here to read his in-depth analysis of the company’s strategy, market position and the road ahead.

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Data to Decisions Tech Optimization Chief Information Officer

Digital Business Distributed Business and Technology Models Part 3a; Distributed Service Management (Technology)

Digital Business Distributed Business and Technology Models Part 3a; Distributed Service Management (Technology)

Andy Mulholland
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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Service Management is a very broad term, and in the framework of Digital Business has a particularly broad and crucial role. A further complication is that the role is split between the Service Management of the enabling technologies, overlaid by the Service Management of distributed Business interactions/transactions. In the short term the Distributed Service Technology Management will dominate, and must support/integrate both on-premise Enterprise owned infrastructure, and the use of external ‘As a Service’ Cloud Service provider infrastructure.

However for a Digital Business, as defined in Part 1 of this series, to trade in the Digital Economy does require the implementation of an external Distributed Service Business management capability as well. Part 3b of this series provides a briefing on the requirement, and in particular, the potential role of Blockchain technologies.

The preceding part two, see appendix for details, focused on the first layer of simple four layer abstracted framework defining the technologies supporting a Digital Enterprise. Dubbed ‘Dynamic Infrastructure’ this base layer provides on demand access to networking and computational resources with the necessary Service Management directly associated with provisioning. The Distributed Service Technology Management Layer sits above this layer to provide and manage a wide range of sophisticated functions that enable the delivery of Business value.

The separation between the Service Management of the Dynamic Infrastructure and the Distributed Service Technology Management may seem odd, but it is important. The provisioning infrastructure may be provided by the enterprise, but increasingly a large portion will be provided ‘as a Service’ by market leading vendors such as AWS, Google or Microsoft, amongst many others. Enterprises can expect to operate across both Private and Public Infrastructure, and as such their Distributed Service Technology Management must operate seamlessly across both.

Distributed Service Technology Management should be used as a term to refer to those functions that must operate in an independent manner above the Dynamic Infrastructure layer. The over used popular term ‘Platform’ is frequently used to describe these capabilities, but the differences between various Platforms is so large as to render the term meaningless as a requirement definition.

The comparison of ‘Platform’ products is difficult due to the wide range of functions contained in this layer, some of which are very focused on a particular aspect. In addition most Platforms are continually developing in line with deployment experience and market demands. Discussion on standard may be actively underway but it will take both time and market maturity before significant impact. The definition of an IoT Platform started around the connectivity of sensors with associated functionality for data management, but today a Platform are increasingly seen as an integral part of CAAST, (Clouds, Apps, AI, Services & Things). High function Platforms from leading technology vendors support the integrated operation of these technologies as the enabler for Digital Business.

Specialized Platforms, particularly as part of final mile IoT connectivity, are still required and as a further complication these are usually designed to connect into the sophisticated high function Platforms. With such wide diversity in capabilities it makes the term ‘Platform’ effectively meaningless as a capability definition. To gain an insight on the numbers of products defined as an ‘IoT Platform’ then visit a product-listing site such as Postscapes.

Platforms can be broken into four major groupings, a methodology that allows the positioning of major technology vendors to be more readily identified in alignment with their core market focus;

  1. Enterprise operated Dynamic Infrastructure; examples; Cisco, Dell, HPE
  2. Cloud Services providers+; examples; AWS, Google, Microsoft, Salesforce, SAP,
  3. IoT ‘final mile’ focused; examples; Labellum, PTC, ThingsWorx
  4. Open Source Development*; examples; AllJoyn, GE Predix, OpenIoT

+IBM, Salesforce and SAP all offer Platforms that connect to their respective Clouds, but their focus is on providing Business Apps, not Cloud capacity. They have been included to avoid questions that would occur if their names were omitted.

*See a list of 21 Open Source Projects here

As is usually the case in the initial stages of a new technology market Vendor proprietary solutions are likely to provide the most attractive solutions for the requirements of first generation deployments. Such deployments tend to be focused and do not require the full range of functions that will be required later when maturity and scale drive product selection. Not unnaturally there will be concern as to vendor lock-in, and/or, restrictions on the development of a fully functional Distributed Services Technology Management layer, but this may be less concerning then it might seem.

For any Digital Enterprise the successful implementation of an independent Distributed Service Management of Technology layer able to integrate ‘any to any’ combinations of Private or Public Dynamic Infrastructure provision into advanced operational Services in support of the higher business layers is a crucial success factor.

A great deal of Technology attention is focused upon the architecture and standards necessary to achieve this as by definition the Distributed Service Management layer be based on standardized principles to ensure ‘open’ operation. Leading technology vendors are active in addressing the requirement for standards. Almost all references to IoT Architecture are in reality references to the Architecture of the Distributed Services Technology Management layer, and have relatively little to contribute to the remaining three layers of the Digital Business framework.

If the number of Platforms, each with different features, available in the market are confusing, then the confusion is made worse when the numbers of communities developing architectural models and standards are added into consideration. This is not the place to examine, even list, each individually. This blog is aimed at providing an informed overview to build understanding of the necessary considerations for enterprise deployment and product evaluation.

Commercially sponsored standards activities often have a scope, or point of view driven by the market positioning and products of particular vendors. This often fragments the overall architecture required as well as making it difficult to use for objective evaluation. Those charged with managing the introduction of the Distributed Services Technology Management into their enterprise need a comprehensive future framework to help them ensure the various tactical deployment choices will come together in a cohesive transformation of capabilities.

Perhaps the best example of an independent approach but with a scope to cover the entire architectural framework comes from the IoT Forum. This body took over the work of the EU on IoT Architecture and extended the reach to be global, as well as to more inclusive with a series of events held around the world. EU funding has reduced reliance on technology vendor sponsorship, enabling the production of detailed report on what is required, and why, under the title of ‘Architectural Reference Model, or ‘ARM’ introduction.

The IoT Forum work on ARM provides an excellent background to understanding this complex requirement, as well as offering a strategic definition as a longer-term target for the development of an Enterprise Distributed Services Technology Management layer. Current deployment requirements can be assessed against this framework to establish requirement definitions for product choice. This is particular useful given the lack of reliable standards to guide choice.

The value of the work on Architectural Frameworks by various bodies on across the Technology industry currently provides guidance on incorporating the first standards. However, in determining how the Technology elements will support interworking internally, and externally, it is easy to lose sight of the real question. The technology aspect is there to support and enable the Distributed Services Business Management capabilities.

The Digital Business Enterprise only exists because it is part of the Digital Economy conducting business through exchanging Services with its industry ecosystem of partners. In this continuously dynamic model with ever changing Business partners and transactions a distributed, and decentralized, commercial transaction recording capability is a necessity.

In a decentralized distributed Digital Business ecosystem operating in a loose coupled, stateless format existing forms transaction management based on predefined close coupled relationships and managed state cannot be applied. The huge interest in Blockchain technology is to provide this new and radically different capability.

It should be noted that BitCoin, often quoted as an example of Blockchain, is not indicative of the overall capabilities that can de developed using Blockchain technologies. BitCoin is a particular implementation that uses the technology in a certain manner with corresponding limitations.

Part 3b of this series provides a briefing on decentralized Distributed Services Business management.

 

Summary; Background to this series

This is third part in a series on Digital Business and the Technology required to support the ability of an Enterprise to do Digital Business. An explanation for the adoption of a simple definition shown in the diagram below to classify the technology requirements rather than attempt any form of conventional detailed Architecture is provided, together with a fuller explanation of the Business requirements.

 

 

 

 

 

 

Part One - Digital Business Distributed Business and Technology Models;

Understanding the Business Operating Model

Part Two - Digital Business Distributed Business and Technology Models;

The Dynamic Infrastructure

 

 

 

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Machine Learning Is The New Proving Ground For Competitive Advantage

Machine Learning Is The New Proving Ground For Competitive Advantage

1
  • 50% of organizations are planning to use machine learning to better understand customers in 2017.
  • 48% are planning to use machine learning to gain greater competitive advantage.
  • Top future applications of machine learning include automated agents/bots (42%), predictive planning (41%), sales & marketing targeting (37%), and smart assistants (37%).

These and many other insights are from a recent survey completed by MIT Technology Review Custom and Google Cloud, Machine Learning: The New Proving Ground for Competitive Advantage (PDF, no opt-in, 10 pp.). Three hundred and seventy-five qualified respondents participated in the study, representing a variety of industries, with the majority being from technology-related organizations (43%). Business services (13%) and financial services (10%) respondents are also included in the study.  Please see page 2 of the study for additional details on the methodology.

Key insights include the following:

  • 50% of those adopting machine learning are seeking more extensive data analysis and insights into how they can improve their core businesses. 46% are seeking greater competitive advantage, and 45% are looking for faster data analysis and speed of insight. 44% are looking at how they can use machine learning to gain enhanced R&D capabilities leading to next-generation products.
If your organization is currently using ML, what are you seeking to gain?*

If your organization is currently using ML, what are you seeking to gain?

  • In organizations now using machine learning, 45% have gained more extensive data analysis and insights. Just over a third (35%) have attained faster data analysis and increased the speed of insight, in addition to enhancing R&D capabilities for next-generation products. The following graphic compares the benefits organizations who have adopted machine learning have gained. One of the primary factors enabling machine learning’s full potential is service oriented frameworks that are synchronous by design, consuming data in real-time without having to move data. enosiX is quickly emerging as a leader in this area, specializing in synchronous real-time Salesforce and SAP integration that enables companies to gain greater insights, intelligence, and deliver measurable results.
your organization is currently using machine learning, what have you actually gained?

If your organization is currently using machine learning, what have you actually gained?

  • 26% of organizations adopting machine learning are committing more than 15% of their budgets to initiatives in this area. 79% of all organizations interviewed are investing in machine learning initiatives today. The following graphic shows the distribution of IT budgets allocated to machine learning during the study’s timeframe of late 2016 and 2017 planning.
What part of your IT budget for 2017 is earmarked for machine learning?

What part of your IT budget for 2017 is earmarked for machine learning? 

  • Half of the organizations (50%) planning to use machine learning to better understand customers in 2017. 48% are adopting machine learning to gain a greater competitive advantage, and 45% are looking to gain more extensive data analysis and data insights. The following graphic compares the benefits organizations adopting machine learning are seeking now.
If your organization is planning to use machine learning, what benefits are you seeking?

If your organization is planning to use machine learning, what benefits are you seeking?

  • Natural language processing (NLP) (49%), text classification and mining(47%), emotion/behavior analysis (47%) and image recognition, classification, and tagging (43%) are the top four projects where machine learning is in use today.  Additional projects now underway include recommendations (42%), personalization (41%), data security (40%), risk analysis (41%), online search (41%) and localization and mapping (39%). Top future uses of machine learning include automated agents/bots (42%), predictive planning (41%), sales & marketing targeting (37%), and smart assistants (37%).
  • 60% of respondents have already implemented a machine learning strategy and committed to ongoing investment in initiatives. 18% have planned to implement a machine learning strategy in the next 12 to 24 months. Of the 60% of respondent companies who have implemented machine learning initiatives, 33% are in the early stages of their strategies, testing use cases. 28% consider their machine learning strategies as mature with between one and five use cases or initiatives ongoing today.
Data to Decisions Innovation & Product-led Growth Future of Work Tech Optimization 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 People 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

Microsoft Moves Up the IoT Value Chain with Hardware Co-Innovation

Microsoft Moves Up the IoT Value Chain with Hardware Co-Innovation

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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Andy Mulholland
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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Constellation Insights

While many new connected devices are being made by established companies, countless more are getting hatched by startups, many of which have only a handful of employees and limited technical and financial resources.

In a bid to help out, Microsoft has opened up IoT and AI Insider Labs in Redmond, Wash., and Shenzhen, China, with another set to open in Munich next month. The labs are staffed by Microsoft experts who help participating companies fine-tune their hardware, debug device drivers, develop related software and perhaps most importantly, how to achieve last-mile connections at scale. In other words, the labs are about completing the journey from proof-of-concept to production-ready.

Microsoft hasn't made much fuss about the labs until now. This week, it published a lengthy feature that takes readers inside the labs. Here's a key excerpt from the piece:

Companies of all sizes can work in the labs at no cost. They get access to Microsoft technology and its engineers’ expertise in machine learning, AI and the cloud, all in one-stop shops. During stints that typically span from one to three weeks, visiting development teams learn how to refine their product architecture, unblock technical issues and build the skills to create a full-stack IoT solution.

Four-person, full-time teams of engineers versed in custom hardware, embedded software, industrial design, secure telecommunications and cloud development walk invited guests through sprint planning, tooling and testing – tasks that typically require a company to pay six or seven vendors. Ultimately, the labs help large enterprises and tiny startups alike scale and accelerate their IoT solutions to market.

Given the dubious quality of IoT security practices, particularly in the consumer device market, that part of the lab's work is especially welcome. 

Naturally, there's more to Microsoft's effort than benevolence; the longer-term goal is getting more devices ready to connect to and consume Azure cloud services. By aligning and co-innovating with IoT device makers early on, there's a much better chance of gaining their business on Azure. 

Any company is open to apply to the program, which overall is a smart move by Microsoft. 

"It is normally considered good business practice to invest in moving up the value chain from your current position," says Constellation Research VP and principal analyst Andy Mulholland. "Currently many tech vendors' investment seems to be in the direction of AI, and for most of the last year it's certainly been focused on the business value part of IoT. The result has been to leave the sensors, and final mile, services of IoT in something of a vacuum, yet everything up the value chain depends on the availability of good-quality sensing and data flow management. Microsoft is making an excellent move to encourage and breathe more support into what seems to have become a 'Cinderella' market."

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Oracle Looks to Differentiate from AWS, Azure with Cloud Converged Storage

Oracle Looks to Differentiate from AWS, Azure with Cloud Converged Storage

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

Oracle has designs on taking significant share from the likes of Amazon Web Services and Microsoft Azure in the IaaS (infrastructure as a service) market, and is now touting what it calls an industry-first offering as a differentiator. Here are the details from Oracle's announcement:

Oracle today unveiled the industry's first Cloud Converged Storage, representing the first time a public cloud provider at scale has integrated its cloud services with its on-premises, high performance NAS storage systems. Oracle ZFS Cloud software, included in the latest Oracle ZFS Storage Appliance release, enables organizations to easily and seamlessly move data and/or applications to the cloud to optimize value and savings, while eliminating the need for external cloud gateways and avoiding the costs of software licenses and cloud access licenses--AKA "cloud entrance taxes"—charged by legacy on-premises vendors for the right to access the public cloud from their infrastructure platforms.

Oracle claims its Cloud Converged Storage setup results in an 87 percent lower total cost of ownership when compared to "one industry competitor."

Again and again, Oracle's announcement focuses on the benefits of linking on-premises and cloud storage from the same vendor. ( It's worth noting that Oracle's public cloud storage is built with ZFS appliances.)

Oracle's approach removes the burden on users to do their own on-premises to public cloud integration, manage environments comprised of different security requirements, support teams, industry standards, and skill sets, as well as the struggle with end-to-end visibility, diagnostics and support.

In addition, on-premises NAS (network attached storage) vendors don't have public clouds, while public cloud vendors don't have on-premises NAS systems, Oracle claims. While this is true to an extent—helped out by the fact that Dell and Hewlett-Packard both scuttled their public cloud offerings in 2015—one can argue that IBM has offered rough equivalents to Oracle's new offering for some time.

Use cases for Cloud Converged Storage include backup and recovery, dev and test, archiving and workload migration, Oracle says. Oracle is also shipping some new features aimed at improving the performance of its database when used in conjuction with its storage technology. Intelligent Storage Protocol 2.0 can increase OLAP (online transaction processing) by up to 19 percent and RMAN backup performance by up to 33 percent, without the need for adminstrators to do anything, according to a statement.

Every vendor engages in chest-beating about the raw power of their products and Oracle isn't acting any differently here. What should perk up the ears of ZFS customers is the idea of those "cloud entrance taxes" going away, as well as no need for a gateway.

On the other hand, if you're not currently a ZFS storage shop, Cloud Converged Storage doesn't make much sense without a significant investment in on-premises hardware. Oracle's announcement didn't speak to any incentives related to ZFS hardware acquisition. 

In addition, Cloud Converged Storage is tightly coupled to Oracle's public cloud; don't expect the company to create similarly seamless tie-ins to the likes of AWS or Azure. ZFS customers can still integrate with other public cloud services but this will require a separate gateway. Once the numbers get crunched, ZFS customers may find it makes more financial, as well as technical, sense to stick with Oracle's public cloud.

In hindsight, Oracle's Cloud Converged Storage announcement was inevitable following last year's release of the ZS5 version of the ZFS appliance. The system was originally  designed for IaaS but Oracle kept on-premises deployments in mind, as Constellation VP and principal analyst Holger Mueller writes in an in-depth report accessible here.

It's not clear how much impact Cloud Converged Storage will have on Oracle's bottom line, but its messaging, focusing on tight integration and the removal of unfriendly additional costs, may have a ripple effect in the market. 

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New Google Open Source Project Portal Is A Gift to Enterprises

New Google Open Source Project Portal Is A Gift to Enterprises

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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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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Constellation Insights

Google is the canonical example of a company that found commercial success through the use of open-source software. It's undertaken more than 2,000 open source projects over its 18-year history, and in turn has released millions of lines of code to the public.

But such a sprawling array of open-source efforts can be difficult for interested third parties to navigate. To this end, Google has launched a new portal that ties together all of its open-source projects while also providing a window into its internal practices around open source. Here are the details from a blog post by Will Norris of Google's Open Source Program Office:

This new site showcases the breadth and depth of our love for open source. It will contain the expected things: our programs, organizations we support, and a comprehensive list of open source projects we've released. But it also contains something unexpected: a look under the hood at how we "do" open source.

Inspired by many discussions we've had over the years, today we are publishing our internal documentation for how we do open source at Google.

These docs explain the process we follow for releasing new open source projects, submitting patches to others' projects, and how we manage the open source code that we bring into the company and use ourselves. But in addition to the how, it outlines why we do things the way we do, such as why we only use code under certain licenses orwhy we require contributor license agreements for all patches we receive.

Making it easier for companies to get a big-picture view of what Google is doing in open source makes plenty of sense, says Constellation Research VP and principal analyst Holger Mueller. Next steps could see Google do more with regard to unification of project documentation as well as the development of synergies across different projects, he adds. 

Norris cautions that in Google's view, the documentation doesn't constitute a "how-to" guide for an open source software strategy, as Google's approach has been informed by its own experiences. That being said, an enterprise struggling with how to develop an open source framework could do worse than to follow Google's lead—far worse. 

Google is involved with an industry group, TODO, that counts Red Hat, Facebook, IBM, Microsoft, Netflix and many other prominent tech companies as members. TODO members work together to develop best practices and common tooling around open source; Google's new open source portal urges visitors to check out TODO's work, but the value of the documentation Google has released shouldn't be downplayed, despite Norris's caveat. 

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Tech Optimization Chief Information Officer

Event Report - SAP Ariba Live - The quest to make Procurement awesome

Event Report - SAP Ariba Live - The quest to make Procurement awesome

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 SAP Ariba’s Live user conference in Las Vegas, held from March 21st till 23rd 2017, at the Cosmopolitan. The event was well attended with over 3200 attendees, good partner representation and influencer selection.
 
 
 
So take a look at my musings on the event here: (if the video doesn’t show up, check here)
 
 
No time to watch – here is the 1-2 slide condensation (if the slide doesn’t show up, check here):

 
 
Want to read on? 

Here you go: Always tough to pick the takeaways – but here are my Top 3:

Ariba is on a roll – A few years ago it seemed that Ariba (add an SAP in front of every time you read Ariba going forward) maybe in the state of a being the sleeping beauty of enterprise software. Always there – but not going anywhere. That has changed in the recent year and Ariba now has the momentum to show it: Even for SAP adding 10 of the Top 100 Global Businesses in 12 months is quite a feat – and both a testament to the market position that Ariba has achieved as well as the attractiveness of what Ariba has recently provided and plans offer soon. And suppliers will pay attention when hearing that Ariba has added B300US$ in 2016 in network volume. Similar to e-commerce we can see the networks synergies playing in favor of Ariba.
 
SAP Ariba Live Holger Mueller Constellation Research
Atzberger - Make Procurement Awesome

Functionality Push – Last year Ariba unveiled the Guided Buying approach, both a simplification on the product side and usability improvement for the UX. The combination has worked well for Ariba and proven popular with customers. Spot Purchases were announced, too and are available now, the upcoming implementation at Latin American trading powerhouse Mercado Libre is a proof point that Ariba has built good functionality. When asking Mercado Libre for the reasons for selecting Ariba, they first mentioned the synergy effects of using SAP already – something that bides well for further sales of Spot Purchases into the SAP install base.

 
 
 
SAP Ariba Live Holger Mueller Constellation Research
Ariba 2016 Momentum

That the combination of UX improvement and simplification is working out for Ariba, is also seen by the plans to bring the same concept to bear on the Supplier side with the Light Account: During the keynote, we saw the demo of onboarding a new supplier in 2 minutes, something as unthinkable as well as un-achievable in today’s business practice.

 
SAP Ariba Live Holger Mueller Constellation Research
McDermott & Atzberger Q&A

Blockchain meets Purchasing – In a sign of times, this was also a conference with a Blockchain announcement, and SAP picked Hyperledger for its first dabs into distributed ledger technology. Certainly, a good choice, though SAP likely will also have to support other blockchain technologies, but Hyperledger is a good start. And few places lend themselves more to the blockchain scenario than purchasing, so it’s good to see SAP innovating.
 
 

MyPOV

It is remarkable how fast SAP Ariba is moving, especially when one considers (which was not much part of the public talks at the conference) that Ariba is in the midst of a major re-platform endeavor – moving off Oracle and onto SAP HANA. Usually vendors take a noticeable pause while undergoing exercises like these – not so much SAP Ariba. It is good to see the vendor doubling down on things that work, e.g. the UX improvements and the overall process simplifications, while at the same time innovating with blockchain, team productivity software (Microsoft Teams was shown) and speech recognition. Still a tall order – to make a traditionally boring administrative software like Procurement awesome… to get there Ariba has shown the willingness to partner and be an open platform and finally has embraced lofty goals such as diversity, or even more ambitious – the quest of ending modern age slavery, a topic near and dear to the heart of Ariba boss Alex Atzberger.
On the concern side, Ariba has to deliver a lot while a lot is happening. Never an easy scenario for any vendor, so we will be keeping an eye, especially on the platform side, how Ariba will progress in the next quarters.
Finally, it was good to see that SAP seems to have found the right length of ‘leash’ for the Ariba subsidiary – not too close to stop innovation, and allowing freedom (e.g. manifested in Ariba using angular.js and not Fiori) but also have leverage (e.g. with HANA). That SAP CEO McDermott said in a Q&A (see a Storify Tweet Story here) that he would be open to e.g. integrate with perennial co-opetitor Oracle, speaks signs of the flexibility and pragmatism that is lived now at the top of both companies, always a good sign for customers.
 

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Want to learn more? Checkout the Storify collection below (if it doesn’t show up – check here). Don't miss the Day #2 keynote Storify collection here.

 

 
 Future of Work Tech Optimization Matrix Commerce Marketing Transformation Revenue & Growth Effectiveness Next-Generation Customer Experience Data to Decisions Digital Safety, Privacy & Cybersecurity Innovation & Product-led Growth SAP Supply Chain Automation Cloud Digital Transformation Disruptive Technology Enterprise IT Enterprise Acceleration Enterprise Software IoT Blockchain ERP Leadership Collaboration M&A SaaS PaaS IaaS Next Gen Apps CRM CCaaS UCaaS Enterprise Service Chief Information Officer Chief Procurement Officer Chief Supply Chain Officer Chief Experience Officer Chief Technology Officer Chief Information Security Officer Chief Data Officer Chief Executive Officer
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