Happy 10th Birthday iPhone - What Apple Did Right and Challenges for the Next 10 Years

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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The iPhone just turned 10 years, time for a musing on a piece of hardware that has probably transformed the way we work the most since … the PC. Steve Jobs introduced the iPhone at MacWorld 2007 as (notice the sequence) a “wide screen iPod with touch controls, as a revolutionary mobile phone and a breakthrough internet communications device”.
 

So, let’s look what the iPhone ‘parents’ got right, and what concerns me for its next decade:

What Apple Got Right

Smartphones are Status Symbols – If there was one thing Steve Jobs got right, it was realizing that smartphones had the potential to be status symbols. For most of the life of the iPhone – first having an iPhone and then having the latest versions was a huge status symbol. Transferring the mobile phone / smartphone from a work utility (that was the then dominant Blackberry) to a status symbol that was new and innovative – is still fueling the Apple iPhone business today.

People wanted a full browser – Remember the ‘mobile web sites’? People never like them and another thing that Jobs got right was to realize that users wanted to have a full-fledged browser, with the same user experience like on a PC. Didn’t matter that the Telcos did not allow for that, Jobs and Apple managed to ‘break the rules’ with Cingular. And users did not mind the slow speed of Edge originally. They still flocked to the full website, preferring those to the mobile optimized ones.

Touch beat the keyboard – Jobs also bet on touch and allowing a larger screen, better form factor than the keyboard based competition of the time. And while it certainly provided a very appealing design – it cratered productivity. Doing email – once a key driver for a smartphone, took a back seat. Even on the Apple 10 year press release, Apple SVP of Worldwide Marketing cites 11 capabilities … before email (and then mentions 8 more) (see here). Millions of “Crackberry” users with a “Blackberry thumb” became “lurkers” on their email (glance on mobile device, answer later PC), creating a texting boom as an informal outlet for previously working email communication.

Almost a PC replacement – And the iPhone almost became the PC replacement. Many users stating that the iPhone is the new PC. Apple tried to address form fact concerns with the iPad. But only ‘almost’ – as the Microsoft Surface has shown – most people still need a keyboard to function at work and at home – even if their smartphone / iPhone doesn’t have one.

It’s a camera, a media player, a game console ... and then a phone – Apple got (and probably still gets) the camera right, pushing resolution and capabilities of the camera. It never hurt the iPhone that for the longest time it could not take pictures in the dark. The form factor also makes for a great display for consuming video and playing games… basic phone functions taking a back seat. But that was the key secret about the iPhone – it is / was so much more than a mobile phone.

Innovation & Convenience are a powerful combo – The final gamble that Apple and Jobs took was that while being very innovative in the first half of the iPhone’s life – it needed a convenience factor, effectively creating the walled garden. And for the most of it, users have been happy. But it is easier to be happy when your smartphone is the object of envy with your friends and colleagues, then when it lacks behind in regards of what we think today are critical capabilities (e.g. speech). To some iPhone users the walled garden looks now less than a garden, but a closed encampment, if not worse. But creating the stickiness will keep iPhone users on the platform longer. Longer than e.g. Blackberry had the luxury to keep users because of e.g. media stickiness. 

 

10 years of iPhones (from here)

Concerns for the next 10 years

Here is what worries me for the next decade of the iPhone, looking at what the parent (Apple) can or cannot do for the next 10 years.

Voice is the new UI – As much as Jobs / Apple got it right that users will take a keyboard free phone, as much they missed the trend to voice. And to a certain point it is tragic – as Apple lead the space of voice recognition with Siri. But then Siri lost out to pretty much all other players, lacking extensibility (released last) and most importantly, neural network power to understand users. Probably closes related to the next worry.

The parent has no cloud – It is possible that Apple will go down in the history books as the most profitable, most cash rich firm that missed the all transforming trend of cloud infrastructure. It equals to a parent in real life that severely limits the further development of the child at age 10. Reckless abandonment comes to mind. Buying cloud capacity (as we learnt this year) from AWS and GCP is not a solution. But a modern, efficient cloud infrastructure is needed to run several modern services efficiently – e.g. voice recognition, AI etc.

The parent is behind on AI – Along the same lines as cloud, Google is behind in AI. Yes, a first paper has been published – but compare that to e.g. IBM and Google and you know the iPhone is in trouble because the parents missed an important, maybe game changing moment. No surprise – you need a cloud infrastructure to really run this efficiently. Apple makes the point that it can do things locally – but that has a direct cost and will be subpar to a cloud based AI offer.

The parent is behind on AR / VR – It’s like a parent who doesn’t have Internet at home but wants their kid to do well in school… not sure how Apple missed the trend, given the strength in display, owning the whole stack from the CPU upwards … should have been a home run. And the space is important as next are holographic interfaces, that make the small smartphone screen a shared experience. Content / platforms build today by ‘parents’ in the industry put their ‘kids’ on a spot for … high school and college.

The parent struggles with the enterprise – If the iPhone would not have seen success in the enterprise, it is doubtful it would have had the impact that it had. Consumerization of IT became a trend that is real in many other areas of IT. But today it looks like the one time shot that Apple had in the enterprise. iPads started strong but have since then started to fizzle. MacBooks never appealed to most enterprises. So, for the parent to remain relevant – it needs another enterprise success.

Unlimited plans change the handset spec – The rise of unlimited data plans, with all you can eat video, have changed the way what amounts of data can be consumed on mobile devices. Video calling, messaging, real time broadcasting all are setup for faster and continuous connectivity. All areas that a high price handset may not be required for, assuming improvements in compression algorithms. But probably the lowest concern for the iPhone parents at the moment.

The parent has run out of ideas – This one is the biggest concern. The Watch has underdelivered. Rumors of new goggles have spread – but others have tired (and so far, failed), I don’t’ see what Apple may do radically different. As a daily glasses wearer, I see the value add must be substantial for a non-glasses wearer (most of us) to adopt glasses. The bar can’t be much higher than sun glasses. For a 10 year, old that is … the parents have tried to get the kid motivated – but to no luck, and the world around them thinks they have given up.

Software beats beautiful hardware design – Andreesen said it – Software eats the world. When other vendor’s software gets too superior (think voice, AI, AR / VR etc.) a beautiful designed iPhone may no longer make the cut. Software trumps hardware design. Apple must ramp up its software skills and delivery results, as well as it quality efforts. Think for a historic perspective the Apple Maps false start, for recent the defect in Safari uncovered by the Consumer Reports (which basically is sloppy QA).

 

MyPOV

The iPhone is one of the most fundamental pieces of hardware and software that we have seen in our lifetime. Most readers won’t remember the time before PCs. The iPhone has made the smartphone as we know it popular – with great resolution, great camera, good media play, but bad battery life and mostly worse phone qualities than its predecessors.

The forces that worked for the rise of the iPhone are not as powerful as they used to be. Disruptors lurk, e.g. with voice. Apple’s stand on privacy is heroic, but I cannot help that it’s also a position out of weakness: That Apple has not been able to create its own cloud infrastructure. This may hurt Apple not only for AI, AR & VR, Cars and speech – but even more beyond.

The kid had a great 10 years, but the next 10 years don’t look so promising. Time for the grandparents (the Apple Board), the god parent (friends of Apple) to take the parents on the side, who are certainly trying hard to make the 10-year-old future look good, but don’t have a good track record for the last few years. And for now – from what we know – don’t seem to have an inspirational plan for the next 10 years. Let’s start with the next 2-3 years. Rome wasn’t built in one day either, and only what has not happened, can still happen. We will be watching.

Sleeping Giants Take on Fake News and Brands – Is Your Brand Ready?

Gavin Heaton

Founder
Disruptors Co

Gavin is the Founder of Disruptors Co, one of Australia’s leading independent strategy and innovation companies. Gavin advises firms on strategy, marketing, product development and innovation. He is also a member of the Orbits program, the influencer network of  award winning analyst and advisory firm, Constellation Research. Gavin advises boards and leadership on innovation strategy, marketing, data-driven product development and corporate venturing. Gavin is on the board of Vibewire, a youth-led social enterprise based in Sydney, Australia and on the Technology Advisory Group for Good2Give – the workplace giving platform. ...

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We have all heard about the vast network of fake news sites that spread disinformation during the recent US Presidential Campaign. These sites use the same clickbait strategies that propelled sites like Upworthy to the top of the digital media scrapheap – inflammatory headlines, sensationalist stories and catchy hooks that tempt you to click just once more.
What Upworthy’s content strategy revealed was a unique combination of skilled teams, data and insights would help the organisation create content that was “viral ready”. As Joseph Lichterman explained in this Nieman Lab article:

Using the user data it’s collected, Upworthy found that elements like humor and a story structure that built in suspense would draw in readers and keep them on the page and better engaged.

This meant that even to tell a story with real information and verifiable facts, the goal for Upworthy was to grab and own the attention of readers as a priority, delivering news and information as a lower priority. As Amy O’Leary, Upworthy’s Editorial Director explained, “If I were to tell you, ‘Hey, I’ve got a 5,000-word piece on fast-food workers’ wages,’ very few people would be excited about that”. Instead the story would focus on building rapport with the audience, engaging through an imaginative framework of shared experience and emotionally engaging writing and opening up into the ethical challenges that come with enjoying something you eat while knowing the background and facts of its production. As O’Leary suggests, “I think we’re reaching deeper into people, because the approach is one of openness and not judgment”.

It’s worth reading more of the article to learn how Upworthy used data to drive its curation process – but what is fascinating (and concerning) is the way that this model has been co-opted by the fake news movement. By ignoring facts as the basis of news, these fake news sites have effectively defined a whole new genre of content catering to our own sense of digital isolation and disconnectedness. If we have learned anything from the last decade in this Age of Conversation, it is that when we (as consumers) come face-to-face with the vast anonymity of the internet, we rapidly seek our tribe – and we do so through the media at our fingertips – visuals, text, keywords. We seek the connection via keyword and conversation – and naturally enough find ourselves in an echo chamber.

Those of us who work with digital technology and audience strategy have – to be honest – been taking advantage of this approach for years. I often say that both love and hate Facebook and its targeting for I know how useful and powerful it is as a marketer, but equally how invasive and manipulative it is as a consumer. So much so that I consciously manage my engagement and sharing on Facebook and limit what I click on etc. But I also know that even my limited engagement there – and on every other digital channel – leaves enough breadcrumbs to be valuable to the brands and businesses seeking my attention. These days my choice to click comes down to context and location.

Because I know that every click rewards not only the brand but the advertiser too.

With the massive rise in programmatic advertising over the last two or three years, most advertisers and planners are unlikely to even know where their branded advertising will appear. It could appear on alt-right websites (the term used to mask white supremicist oriented websites), pornographic websites or even across the dark web. The powerful retargeting tools now in the hands of marketers and their trained algorithms means that ads that you first see on a mainstream website will follow you wherever you may go online. And while the web has some amazing resources, it also has some deep and nasty crevices.

So what do you do when your brand starts advertising in this murky digital world?
Imagine, for example, that you visited a fake news site with outrageous headlines and you did so out of curiosity. What kind of advertiser, you wonder, would support a platform that knowingly creates fake news and information that demonises your own audiences (the people who are your customers and supporters). This NY Times article explains such a situation:

One day in late November, an earth and environmental science professor named Nathan Phillips visited Breitbart News for the first time. Mr. Phillips had heard about the hateful headlines on the site — like “Birth Control Makes Women Unattractive and Crazy” — and wondered what kind of companies would support such messages with their ad dollars. When he clicked on the site, he was shocked to discover ads for universities, including one for the graduate school where he’d received his own degree — Duke University’s Nicholas School of the Environment. “That was a punch in the stomach,” he said.

Rather than to let this slide, the professor sent a tweet to his Duke questioning its affiliation with a “sexist and racist” site. Eventually this was sorted, as the NY Times revealed.
But in the background, a movement known as “Sleeping Giants” was arising to combat this kind of fake news. This shared Twitter account and network of followers are using a similar approach – naming and shaming the brands that support these fake news networks. The Sleeping Giants publish a list of brands who have discontinued their support for fake news sites – starting with the Breitbart network. But we can expect more of this kind of activity in the coming months and years. The question for brands in all this – do you know where and who your ad dollars go to? And how will you respond when you find your brand in places you don’t expect or want?

#Socbiz and #GTD News: Atlassian Acquires Trello

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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As organizations become "more social" and employees create and share information more openly, it's easy for people to get overwhelmed not only with the amount of information, but also the number of sources. To help alleviate some of this chaos, many organizations are using Social Task Management tools which help people organize tasks around projects and events. Recognizing this trend, Atlassian announced on Monday that they are acquiring Trello, a Social Task Management tool currently used by 19M people, for $425M. Both companies blogged about the new on their respective sites: Trello and Atlassian.

I first wrote about this market in 2012 in the Constellation Research report: Getting Work Done With Social Task Management. More recently we've published two Constellation ShortLists™  Social Task Management: Enterprise Suites With Project Features and Social Task Management: Stand-alone vendors that highlight the key vendors in this space.

Atlassian is not the first collaboration vendor to add Social Task Management to their portfolio via acquisition, as Jive Software acquired Producteev in November 2012, and Microsoft aquired Wunderlist in June 2015. Microsoft also developed their a new application called Planner, which they released in June 2016.

I shared my initial thoughts on the acquisition in this video on Twitter:

Big news in the #socbiz #gtd world... @Atlassian acquires @trello. #futureofwork MyPOV: a lot more to happen in this space in 2017 pic.twitter.com/sKo82VNHw5

— Alan Lepofsky (@alanlepo) 9 January 2017

Dr Natalie Petouhoff looks at the some of the business aspects of the deal in her blog post: Atlassian Acquires Trello for $425M: Will It Remain Free?

So what does this mean for your company?  

Chris Kanaracus and I discuss this in the CRInsights article: Atlassian Buys Trello for Collaboration Tools: What It Means

"As organizations try and shift some of their communication away from email to more social tools, they can quickly find that information overload increases rather than improves," he says. "The abundance of information shared in social networks and chat clients can be overwhelming. Social task management tools can help reduce some of the strain, by providing structure to the content, enabling people to organize, prioritize and act on tasks in a more manageable and repeatable way.  Constellation recommends organizations invest in collaboration platforms that either have native task management capabilities, or support very seamless integration with dedicated task management tools."

Are you using a Social Task Management tool to help you get your work done? If so, which one and how do you like it? If not, let us know how we can help you with your vendor selection process.

News Articles About the Acquisition

• Wall Street Journal: Atlassian to Buy Trello for $425 Million
• Australian Financial Review: Atlassian's Mike Cannon-Brookes talks up Trello buy
• CMSWire: Atlassian to Acquire Trello in $425M Enterprise Collaboration Deal
• IT Business Canada: Trello likely to stay free under Atlassian despite concerns, experts say

Atlassian Acquires Trello for $425M: Will It Remain Free?

Vice President and Principal Analyst, Constellation Research
Constellation Research

Role: Vice President and Principal Analyst focusing on the IOT of Customer Experience and how the cloud is driving more flexible, agile, and robust customer service and customer experiences. In-app or in device customer service is the future. Coverage Areas: Next Generation Customer, Digital Marketing Transformation Bio: As a Vice President and Principal Analyst at Constellation Research, Inc, Petouhoff works with Fortune 100 and 500’s Senior Leadership teams to create strategic customer experience (marketing, sales and service) solutions which engage customers, build brands and grow businesses. Combining her experience as a former Forrester software analyst, PWC systems integrator and change management consultant, Petouhoff leads executive workshops to discuss to not only…...

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As most acquisitions start out with the “ideal” that the product will remain pristine and nothing will change – it will be interesting to see if the acquisition of Trello by Atlassian will be the norm or the exception. From a business point of view Atlassian paid $425M, so they will want their investment to pay off.

What’s interesting in today’s world is that instead of putting a bunch of developers in a room to develop new software, companies like Atlassian, instead buy a company. This is truly an emerging strategy in product development and one that makes sense with respect to acquiring best of breed. We hope that Atlassian will keep its word and Trello will remain free. Proof is always in the pudding.

Often the story during the press release phase is that “The original folks are going to run it, not the new company!” “Things will stay the same.”

WhatsApp and Waze are both pretty good examples of high profile acquisitions. It’s generally unlikely that it will be the executive team from any start-up that ends up sticking around past whatever agreement they signed with buyer. There’s generally some “golden seatbelt” that requires the start-ups executives to stay for a particular period of time. And once that time is up, its not unpredictable that they leave that because they are “start-up” personalities – meaning they like the start-up phase and not so much the growth and maintenance or innovation phase of a company because their jobs will change and hence their interest.

It really takes four types of entrepreneurs/management to make a start-up successful. First the the start-up folks who like the beginning, ideas flowing, do a lot with a little, the adrenal of “can we do this?”

Second, to have a company grow, it takes people who are really good at R&D and growth strategies, which different often greatly from start-up strategies and tactics.

And third, there are the maintenance executives who are really good a making a company run like a well oiled machine; again very different type of personality traits are required for this.

The fourth stage is now required (it had not been as much a part of management theory in the past. But with technology changing so rapidly, innovation to stay relevant and on top requires people to look outside their comfort zone and understand what’s coming next and how can they innovate and transform their company.) Otherwise the company becomes a dinosaur and dies. We’ve seen plenty of that happening to the likes of Tower Records, Circuit City, etc..

We all have our beloved start-ups. And many of us have been part of start-ups. What’s true is that we all hope nothing will change. What is also true is that it takes a lot of effort to go beyond the start-up phase into the growth, maintenance and innovation phases. People get tired; they want their initial investment to pay off; and they truly like doing what they do best. And it may not be the other phases of what a company goes through. It’s not fair to ask people, however idealistic it is, to do things they don’t enjoy or are not good at.

Will Trello stay the same? Or will it change as many other acquisitions have, as they got bought or swollen up, and give into the reality of the phases of what it takes for an initial idea to grow into a company? Only time will tell.

@DrNatalie, VP and Principal Analyst, www.ConstellationResearch.com

Covering customer-facing applications and innovation

Culture as a Differentiator in Corporate and Employer Branding - Learnings from Salesforce

Cindy Zhou

CMO
Level Access

Cindy Zhou is a practicing CMO.  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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Salesforce Takes Apps-First Approach with Einstein AI

Doug Henschen

Former Vice President and Principal Analyst
Constellation Research

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

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Salesforce promises artificial intelligence applications that ‘just work’ out of the box. It’s a contrast to public cloud AI offerings and a lesson learned from Salesforce Wave.

There aren’t enough data scientists in the world to go around, so Salesforce is counting on automation and an apps-centric approach to bring its Einstein artificial intelligence capabilities to the masses.

At last week’s Salesforce Analyst Summit in San Francisco, company executives shared details of the company’s two-plus-year effort to build a highly automated data management and machine learning pipeline to deliver predictions and recommendations at scale. The work started with Exact Target predictive customer journeys, and many (though not all) Salesforce AI acquisitions are being plugged into the same automated pipeline. The system can scale, said company executives, because all data collection, data prep, feature selection, model building, hyper-parameter tuning and scoring is handled automatically.

This data management and machine learning pipeline is already delivering as many as 300 million predictions/recommendations/scored leads per day, according to Salesforce. It’s the engine behind Sales Cloud Einstein, Service Cloud Einstein and Marketing Cloud Einstein apps that are either already available or due out this year (see chart below). Next out will be Sales Cloud Einstein apps due out with the Salesforce Spring 2017 release in February.

“One of our pilot customers flipped the switch [on Einstein Predictive Lead Scoring] and got a 25 percent lift in sales,” said John Ball, senior VP and general manager of Einstein and a KXEN veteran that Salesforce hired for his experience with automated analytics.

The goal with Einstein apps is to help people focus on what matters. Predictive Lead Scoring, for example, helps salespeople focus on the most promising leads. Opportunity Insights, another Sales Cloud Einstein App due out in February, helps salespeople set next priorities. For those still short of their quotas, that will mean spotting the next deals most likely to close; those who have made their quotas can turn to nurturing their pipelines.

Einstein apps won’t be a fit for every company. For starters, it takes lots of data to drive automated, machine-learning-based predictions. If you are dealing with fewer than 100 leads per month, humans can handle the load and they probably have a good sense of which leads to prioritize. It’s when data volumes are overwhelming that Einstein apps will make sense, said Ball.

That’s not to say that Einstein is geared only to big companies. Data volumes depend on the application. Many small marketing teams, for example, send out millions of emails per month. So Predictive Scoring & Audiences and Automated Send-Time Optimization, two apps coming to the Marketing Cloud this year, might make sense even for small companies, so long as they are marketing at scale.

For now, Salesforce is picking and choosing straightforward Einstein apps that will “just work out of the box,” said Ball. But over time the company plans to get to more sophisticated apps that might require a bit of consulting and business process change to deploy. There are also plans to support custom Einstein apps, but here, too, Salesforce said the capability will be a point-and-click affair for developer types without need of data science talent.

Until more sophisticated apps or custom app capabilities show up, Salesforce offers the ad hoc analysis and recommendation capabilities of Analytics Cloud Einstein Smart Data Discovery, which is powered by BeyondCore, acquired in September.  This separate machine-learning-based engine lets you load and explore data sets from Salesforce, relational databases or Hadoop and answer four questions: What happened? Why did it happen? What will happen? And how can I improve?

The answers to these four questions, which are descriptive, diagnostic, predictive and prescriptive analytics, respectively, are delivered in the form of text-based “stories” that can be exported as Word documents or PowerPoint presentations. You can also generate supporting data visualizations through the Salesforce Analytics Cloud Wave engine.

Smart Data Discovery was designed to let business analyst explore data and investigate measures such as cost, profitability and customer lifetime value. As with other Einstein apps you’ll need sufficient data. Beyondcore veterans say the engine needs at least 10,000 rows of data to spot correlations and patterns and generate reliable predictive and prescriptive recommendations.

My Take on Einstein’s Progress and Competition

Salesforce is taking an apps-first approach in part due to lessons learned from the failed initial launch of the Analytics Cloud in late 2014. As I wrote last year, the first iteration of Wave was too expensive, too enterprise focused and packaged too much like a traditional BI platform. Last year’s reboot emphasized ready-to-run Sales Wave and Service Wave apps designed to work out of the box.

Rather than introducing an “AI Cloud,” as in the original Wave approach, Einstein is a capability that’s built into the Salesforce platform. Wave analytics capabilities are also built into the platform, but the original Analytics Cloud packaging and pricing approach, with platform fees and expensive builder licenses aimed at developers, just didn’t work. With Einstein, Salesforce is starting with the apps and adding custom capabilities for developers later.

The big and crucial question outstanding about Einstein is just how much are these apps going to cost? Salesforce execs are still vague about that, saying that some capabilities will be free while most apps will involve per-user/per-month or per-prediction fees. In the case of Einstein apps that were acquired, notably those from BeyondCore and Demandware (now the Commerce Cloud), pricing is said to be in line with what existing customers were paying.

Looking at competitors, Oracle is also taking a prebuilt apps approach with its Oracle Adaptive Intelligent Applications. Oracle announced six planned Adaptive Intelligent Applications in September and said they would debut within 12 to 18 months. Constellation expects to see at least a few of these apps in the first half of 2017.

Public cloud vendors Amazon and Microsoft have taken services library approaches to AI, leaving it to developers to bring together machine learning, natural language processing, machine vision, sentiment analysis and other services together in finished applications. Templates, sample scripts and other content is available to guide the way, but they’re not ready-to-run applications. We expect Microsoft will do more to bring customer-experience specific services and, perhaps, something closer to finished AI apps into its Dynamics application portfolio.

IBM deserves credit for putting AI back on the map with its Watson Cognitive Computing push over the last five years. It now has a bifurcated strategy with IBM itself going after more sophisticated opportunities while also building out Watson platform cognitive services for a growing developer community.

IBM itself offers cognitive marketing solutions around campaign automation, marketing insights, real-time personalization, customer experience analytics, and customer journey analysis. Meanwhile, Watson developer partners, such as Influential, SocialFlow and Equals 3, offer Watson-powered cognitive marketing solutions. Whether from IBM or independent developers, these solutions are likely to require integration with systems of record. Salesforce, by contrast (and Oracle, when it releases its apps), is delivering ready-to-run AI applications that are extensions of its software-as-a-service applications. If Salesforce is your CRM system of record, Einstein will be the easiest and obvious first choice for adding AI.

Related Reading:
Oracle Vs. Salesforce on AI: What to Expect When
Inside Oracle Adaptive Intelligent Apps
Salesforce Reboots Wave Analytics, Preps IoT Cloud

Blockchain Visionaries and Blockchain Awareness - Critiquing The Critics

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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In a Huffington Post blog "Why the Blockchain Still Lacks Mass Understanding" William Mougayar describes the blockchain as "philosophically inclined technology". It's one of his rare instances of understatement. Like most blockchain visionaries, Mougayar massively exaggerates what this thing does, overlooking what it was designed for, and stretching it to irrelevance. If "99% of people still don't understand the blockchain" it's because Mougayar and his kind are part of the problem, not part of the solution.

Let's review. This technology is more than philosophically "inclined". Blockchain was invented by someone who flatly rejected fiat currency, government regulation and financial institutions. Satoshi Nakamoto wanted an electronic cash devoid of central oversight or 'digital reserve banks'. And he/she/they solved what was thought to be an unsolvable problem, with an elaborate and brilliant algorithm that has a network of thousands of computers vote on the order in which transactions appear in a pool. The problem is Double Spend; the solution is have a crowd watch every spend to see that no Bitcoin is spent twice.

But that's all blockchain does. It creates consensus about the order of entries in the ledger. It does not and cannot reach consensus about anything else, not without additional off-chain processes like user registration, permissions management, access control and encryption. Yet these all extras require the sort of central administration that Nakamoto railed against. Nakamoto designed an amazing solution to the Double Spend problem, but nothing else. Nakamoto him/herself said that if you still need third parties in your ledger, then the blockchain loses its benefits.

THAT is what most people misunderstand about blockchain. Appreciate what blockchain was actually for, and you will see that most applications beyond the original anarchic scope for this philosophically single-minded technology simply don't add up.

Salesforce Has A Platform Vision - Progress Report from Analyst Day

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 the analyst meeting of Salesforce, held January 3rd till 5th nicely located at the Four Seasons in San Francisco. Despite the early time, Salesforce got an impressive range of influencers to the event, even travelling as far as Europe. And it was well worth it, as it was the most comprehensive insight into Salesforce I have experienced in my 3.5+ years covering the vendor.

 

So, take a look at my musings on the event here (pardon for the bad lighting, but I really liked the skyline and you know my face ...):
(if the video doesn’t show up, check here)
 

 

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

Progress Report - Salesforce Analyst Meeting January 2017 from Holger Mueller

 

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

Platform Focus is CRM – Salesforce has a substantial PaaS business under the Salesforce App Cloud brand name. Like every traditional application vendor, it has the challenge to position itself as apps vs platform overall (this is more platform at the moment per Parker Harris) and add-on / extend PaaS vs all-purpose PaaS. The interesting insight courtesy of Adam Seligman was that now Salesforce sees itself as PaaS around customer, basically for CRM. 

On the IaaS side of the platform (where Salesforce announced its partnership with AWS – read here), Salesforce is on track to run all its products on AWS in Montreal as announced. As Harris shared, the Oracle portion of the stack will also run on AWS (but on Oracle), though not in RAC mode. A very important step for Salesforce to reduce its CAPEX into infrastructure, a key move for data privacy and residency and last but least for performance of the applications. 

 

Salesforce co-founder Parker Harris with Bruce Richardson

Meta -Tenancy – A lot of confusion (still) exists around multi-tenancy – but Salesforce was not shy to introduce another tenancy term – Meta-Tenancy. With that Salesforce means the process of de-coupling products, exposing more services and allow an overall more composite (remember mesh?) application architecture. It allows Salesforce to e.g. centralize what the vendor runs under ‘trust’ (Security, Single Sign-On etc.) – all very important given the fact that Salesforce runs on a heterogenous system landscape. And that trend will not slow down, given e.g. that Salesforce acquired vendors at the rate of $4B last year. Moving to a more composite, layered, shared service architecture makes a of sense here. 

 

5 Transformers of Enterprise Software per Salesforce

Platform perspective is key for Einstein – The most prominent service of recent time for Salesforce has been and remains Einstein, its AI ambition. So far Salesforce has largely brought together existing offerings, but also shared a roadmap of capabilities coming in the next 12 months related to Einstein. But the vendor understands that there is only a limited number of data scientists, so enabling business users on a platform level will be key. Good to see that understanding, 2017 will be interesting to follow how Salesforce will deliver these capabilities. 

 

5 Gentlemen, 6 Clouds (ltr Blitzer - Sales & Service, Tippets - Marketing, Karkhanis - Analytics, Micucci - Social, Seligman - App)

MyPOV

A good event for Salesforce, good to see the roadmaps for all the different Salesforce products, which were all reasonable, we think attainable and realistic and most importantly deliver value for Salesforce customers. On the differentiation side, we are not so sure if Salesforce has hit the mark, but that would require more detailed product roadmap / plan analysis than a 2 day analyst meeting can deliver. What is clear is that for the first-time Salesforce is offering a strategic path to rid itself of its in-house infrastructure. As founder Parker Harris correctly observed, IaaS was not around when Salesforce was started… but by now it is best practice for a SaaS (and PaaS) provider to be based on an IaaS and leave the heavy lifting (and investing) to the IaaS players. My back of a napkin calculation is that if Salesforce could stop all in-house infrastructure spending immediately, it would be a profitable company… but of course that process will take a few years (if Salesforce really pulls the switch), and I expect Salesforce to invest the infrastructure savings into product capability (as the rest of the industry does). It was also good to see the talent of the Salesforce product bench – we spoke generally with development leaders removed by one or two organization levels from the CEO, many coming from acquired entities and presenting their products in a positive, competent and appealing way. Product talent matter and it is good to see that Salesforce has it.

On the concern side, Salesforce needs to rev up its development speed. As an example, we are seeing Lightning slides and products moving to Lightning now since more than three (?) years. And though Salesforce sits on a massive system, it is probably challenging the record for the lengthiest UX conversion overall, certainly in the CRM industry. But to be fair – these things always take time, and with the competition not delivering superior product either, it is good for Salesforce to focus on platform capabilities, synergies and its internal TCO to operate all of Salesforce applications.

Overall time well spent, the best insight into Salesforce in my analyst career, lots of exciting and value creating capabilities in the bag for 2017. Stay tuned. 

 

Want to learn more? Checkout the Storify collection below (if it doesn’t show up – check here).

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