Event Report - Google Next 2017 - Google makes progress - but is it fast enough?

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 Google’s Google Next conference, happening in San Francisco from March 7th till 11th at Moscone West. San Francisco ‘dressed’ up in Google Next colors already way ahead of the event, it was clear that this would be a much bigger event than last year’s Google Cloud Platform event. And a difference it was, also aided by the combination of Google Cloud and GSuite, the number of analysts jumped from 20 or so to estimated 80+. No official attendee numbers, with a lot of Googlers lining up to attend, too, my estimate is well over 2000, when all are counted. 

 

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):
 

 

Event Report - Google Next 2017 - Good progress by Google - but is it enough? from Holger Mueller

Want to read on? 

 

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

 

Schmidt shares his 3 step program for moving to the cloud

Google is serious about Enterprise – It was already clear from the hiring of Greene and last year’s event. But it’s one thing to say it and then to deliver on it. Greene shared that the division is the fastest growing in headcount with over 1000 new hires, Schmidt shared today that over time Google has invested 30B+ US$ into the cloud infrastructure. As Greene shared earlier the ‘business’ things are easy – the basic ‘blocking and tackling’ – but it still needs to be executed. So Google for the first time had a partner event with the conference and showed it has attracted interest from all the large SIs. It’s a lot of progress on the partner numbers, but a totally different ball game than with the other two key players. It was also good to have more enterprise customers on stage, talking to Greene on different carefully selected use cases – Disney for an ‘All in’, HSBC for a data warehouse decommission an move to cloud, Home Depot as a website / commerce reference and eBay as an enterprise showcase for an inhouse built next gen app – a Google Home powered eBay application. 

 

Greene talks Google Cloud

Machine Learning remains the carrot – Not surprisingly, Machine Learning remains the core attraction for Google Cloud. Disney’s CTO clearly labelled it as the reason why Disney is building apps on Google Cloud. Newly minted head of AI / Machine Learning Fei Fei Li shared the visions and unveiled (next to the Cloud Speech, Vision, Translate and Natural Language APIs) the new Video Intelligence API. No surprise given YouTube is part of Alphabet, but very powerful to index and find things in video, e.g. all the beach scenes in your vacation videos. Can’t wait for it to come to Google Photos. Or find out how many of my videos where in cars, at airports or somewhere else. But the key announcement – with long term impact – is Google’s acquisition of Kaggle, the analytics, machine learning, AI community, famous for its competitions. A key acquisition that could – if well executed – further bolster the Machine Learning / AI leadership of Google: It’s not enough to have great software capabilities, you also need to educate people about them and win their hearts and minds as a community. The strategy is clear here, now Google will have to show that it can create, foster a vendor independent ecosystem around Machine Learning. 

 

Google'e Fei Fei Li announces the Kaggle acquisition

Google gets SAP HANA – The major news in regards of ‘meeting the enterprise, where the enterprise is’ (the slogan from last year) was that SAP HANA is now certified on Google Cloud. Leukert was there to unveil the news with Greene, certainly a good move, that shows SAP’s multi vendor cloud strategy. You can / will be able to run SAP products on all three major IaaS. The SAP Hana Express developer product is available, too, with SAP Cloud platform coming later. And when Colgate came on stage, it was clear that SAP to GSuite integration is also on the roadmap. More options for SAP customers is a good development, it may make it easier for SAP to sell more HANA going forward. And Google gets load for Google Cloud. The usual ‘SaaS vendor picks IaaS’ move. The only downside: SAP is working hard to get its customers to HANA – so it is not the bulk of the current load where SAP customers are from an on premises install base. That would be SAP customers running mySAP ERP etc. – mostly on Oracle. 

 

Google's Greene and SAP's Leukert on SAP HANA coming to GCP

MyPOV

A lot of good progress from Google on the Google products for the enterprise, both Cloud and GSuite. The conference has only started – so more is going to come for both products in the days to come. The Google Enterprise team is working hard, no doubt and has made progress in the last 12 months with partners, support and create more unique offerings e.g. the site reliability engineer for customers, a start up program etc. etc.

On the concern side, it is not clear if this will be enough, I asked the Greene leadership team on what they will do to catchup from ‘Bronze to Gold’ and they all came up with good and plausible answers (check out my Storify of the analyst event here). But in a year where we may see VMware running on AWS and Oracle making its cloud work first time – this may not be enough for Google to get on premises load of scale. So it all comes back to the speed of Google being able to attract enterprise load for the next few years, and the speed of the enterprise moving to cloud.

In the meantime, when enterprises have to build new software, the Google capabilities are very attractive for the next generation application use cases the 21st century demands. So in the short run this could well mean that Google can attract more next generation application use cases than attract traditional enterprise IT loads. We will be watching, stay tuned.

Want to learn more? Checkout the Storify collection below (if it doesn’t show up – check here). And if interested in the Analyst Summit from Tuesday this week - there is a Storify collection here.



 

More about Google:

• New Analysis – Google enables citizen developers and developers with Google App Maker - read here
• First Take - Google enters enterprise software space with Google Jobs API - read here
• Event Report - Google I/O 2016 - Android N soon, Google assistant sooner and VR / AR later - read here
• First Take - Google Google I/O 2016 - Day #1 Keynote - Enterprise Takeaways - read here
• Event Preview - Google's Google I/O 2016 - read here
• Event Report – Google Google Cloud Platform Next – Key Offerings for (some of) the enterprise - read here
• First Take - Google Cloud Platform - Takeaways Day #1 Keynote - read here
• News Analysis - Google launches Cloud Dataproc - read here
• Musings - Google re-organizes - will it be about Alpha or Alphabet Soup? Read here
• Event Report - Google I/O - Google wants developers to first & foremost build more Android apps - read here
• First Take - Google I/O Day #1 Keynote - it is all about Android - read here
• News Analysis - Google does it again (lower prices for Google Cloud Platform), enterprises take notice - read here
• News Analyse - Google I/O Takeaways Value Propositions for the enterprise - read here 
• Google gets serious about the cloud and it is different - read here
• A tale of two clouds - Google and HP - read here
• Why Google acquired Talaria - efficiency matters - read here

 

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

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

Digital Business Distributed Business and Technology Models Part One; Understanding the Business Operating Model

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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Any definition of a Digital Business emphasizes the requirement to be marketplace responsive with Enterprise wide dynamic agility to optimize reactions to events, and opportunities. As business buyers and consumers both become adept at finding exactly what they want mass volume product and distribution becomes configurable software Products and Services. To increase revenues Enterprise have to become equally adept in the finding, and aligning the people, knowledge and operating assets to match.

The Digital Enterprise is driven by market ‘pull’, recognizing its assets in a granular model with orchestration of its capabilities and assets to meet the demands. In many ways this is a reversal of the focus on optimizing the ‘push’ model delivering a narrower range of more standardized products efficiently through defined streamlined processes. Revenue models based on Services can have wider consequences across the Enterprise in many areas, a point clarified latter.

Enterprise management is naturally concerned that this granular, orchestrated approach de-centralizes the Enterprise and risks its carefully constructed management governance. If the same controls were maintained this would be true, but the increased visibility of assets, the use of enhanced intelligence, and the use of OpEx financial management all increase management operational efficiency. The foundation of the Digital Business is built on, and maintained by, a similar change through deploying the new Technologies together to form what could be termed a ‘Business Infrastructure’.

A recognizable current change in Go to Market Business activities introduces increasing number of Cloud based Apps; Less recognized is the impact of distributed Apps requiring both localized Enterprise Edge Clouds in addition to large scale centralized Clouds. The addition of IoT provides both hyper connectivity internally, and externally, as well as the Digitization of physical objects/events supporting interactive ‘read and respond’ Smart Services. AI is just starting to make its commercial presence felt bringing near real-time optimization of these new Enterprise operations supplementing the historic reporting role of BI reporting.

Added with other changes in working practice through the adoption of Collaboration and Social Tools, Drag and Drop composition of localized processes by Line of Business managers, etc., to see the full impact in the role of Technology in enabling Enterprise Business activities. The existing Enterprise IT infrastructure was designed to support the stability of centralized Enterprise Applications. It can be cost reduced, and made more efficient, but it’s a challenge to believe it can operate in support of such a fundamental change in both Business and Technology use.

Business Technology is becoming the term used to describe the technologies of Apps, Clouds, IoT, and AI, deployed in an integrated combination to enable Digital Enterprises. A McKinsey outline of eight ways in which Business Technology trends are radically changing the capabilities of an Enterprise also serves to demonstrate how Business Technology differs from traditional IT.  It logically follows that Business Infrastructure would be the logical term for the Infrastructure that supports Business Technology. For simplicity the term Business Infrastructure is used as broad and general reference, and for similar convenience the converged technologies of Clouds, Apps, AI, Services and (io)Things are referred to by the acronym CAAST.

The technologies of CAAST together provide the transformation in capabilities that create Digital Business.  The market place, business activities, events, and assets are all represented as Digital data that an Enterprise can read and make the optimized responses in reply.

The Business advantage lies in the Enterprise becoming part of the real World able to directly relate marketplace events to internal operations. An Enterprise business model based on product selling does not have the extended relationship requirements that a Services business model requires.  To successfully maintain a service revenue stream from the installed products requires IoT connectivity, with Cloud event processing, using a new approach to Business Infrastructure.

Consider the shift from Sales to Services against the example of a manufacturer of Air Conditioning units supplying the Building Management market, a notable early adopter of IoT based solutions.  The design and manufacture of air conditioning units continues, but the revenue stream changes from selling the ownership of units to providing the market with ‘cooling’ as a Service. This business model shift introduces not only a whole range of activities necessary to keep air conditioners at work, but also changes to existing core activities.

The consequences of the shift from a Product Sales business model to a Services business are more than is perhaps immediately obvious. Selling an Air Conditioner as a product places the design and manufacturing focus on the sales price and on marketable competitive features. Continued product ownership with revenue from low cost operation changes the design and manufacturing emphasis towards increased reliability, durability and serviceability, with initial cost and additional features becoming of less importance.

The Air Conditioning unit naturally gains inbuilt IoT sensor connectivity to manage operational deployment, and provide data for predictive service maintenance, or to report a breakdown. Additionally the Digital Enterprise will need to use the full scope of the capabilities provided by CAAST to support new Enterprise wide range of Operational activities. The reorientation towards a Services model, as an example, may introduce Digital Twin models, and drive a new effort towards flexible and Lean Manufacturing. Market led Service-provisioning calls for tailoring the units produced to match the exact conditions of deployment, rather than batch production for stock or distribution.

The organizational structure of a Digital Enterprise has to accommodate an increased number of functional activities able to operate in loose-coupled relationships driven by events. (As opposed to the tight coupled fixed relationship of a process driven Back Office Enterprise IT). The diagram below illustrates;

Those familiar with the organization of complex manufacturing will recognize the concept of ‘cells’, (used to allow different manufacturing tasks to achieve individual optimization, within a synchronized environment), but now expanded across the Digital Enterprise beyond manufacturing. The term Activity Pool is used to avoid confusion with the term Cell as defined in Industrial Automation.

Some obvious examples of major activities Pools are shown, note that this can include externalized, even shared, activity Pools such as the Building Management System, BMS, in which “cooling as a Service’ is deployed. A BMS is an integrated set of Services providing a Building with the cohesive infrastructure functions ranging from Heating, Cooling, Lighting, Plumbing, Security, etc. In a Smart Building these Services may come from several companies, but must operate 24/7 integrated as an independent Pool using localized interactions and processing. The Services providers will receive periodic historic data uploads on performance of their Services items, or event alarm triggers.

A Digital Enterprise will have deployed Services in many such external Activity Pools, as well as its own internal distinct Activity Pools. In each CAAST provides the Business Infrastructure of interactive connectivity within the Activity Pool supported by necessary local, or edge, based processing, and rules to identify event data streams to be forwarded to other Activity Pools.

Localized, or Edge processing, (sometimes called Fog Computing), reduces latency in responses, can increase security, as well as offering standalone reliability. In the Building Management example emergency situations, such as a fire, or flood, could cut external links, and are sensitive to latency in responses, would benefit from localized Cloud* processing. More common benefits are a reduction in the amount and cost of network traffic flooding across network links.

* Cloud technology should be recognized for its ability to provide ‘run anywhere on demand’ processing technology rather than thought of as being solely linked to massive data center consolidation of operations.

In the diagram below the Activity Pools are shown as Localized CAAST deployments allowing individual optimization, together with an Enterprise IT large scale Cloud, (probably from an external Cloud Service Provider). The red lines indicate the Activity Pools that would interact through an event data stream indicating Service Maintenance is required for an Air Conditioner located in the Building Control Group.

A further important addition is the use of AI to optimize the huge number of real-time events and circumstances that would be happening across the entirety of a Digital Enterprise. BI continues to provide the intelligent historic data analysis on which many of the Enterprise operating Rules will be based.

The Business and Technology models of a Digital Enterprise are effectively a single common model, deployed as a true loose-coupled Business Services architecture to provide optimization operational responses to real World events and circumstances. This is a radically different environment from Transactional IT, which has, and will continue to have, the task of providing stabile compliance in recording, maintaining and using the Enterprise Data records.

CAAST provides event driven orchestration of the Enterprise responses to the real World through the management of its Assets and capabilities. IT manages the integration of optimized processes to ensure the Enterprise tracks and maintains its compliant governance and core data.

The Business Infrastructure capable of supporting the inherent dynamic flexibility of the Digital Enterprise and its business model is crucially important as is the training and knowledge of how to assess its deployment in association with the Business model.

Part Two; The Technology and Business Infrastructure identifies three leading Technology vendors, outlining their vision and the capabilities each currently provides.

Cisco Converged Infrastructure a combination of Cisco Software Defined Networking and Cisco ASAP Hybrid Cloud Data Centre.

Dell Internet of Things Infrastructure citing the benefits of the merged product portfolios of Dell and EMC; whilst

HPE Composable Infrastructure aiming to support both traditional IT as well as the new demands of Business Technology.

New Release: Latest Lists for Q1 2017 Constellation ShortList Program

Aubrey Coggins

Constellation Research

Aubrey (Levinstone) Coggins manages Constellation's marketing and communications programs and is the producer of DisrupTV, a weekly Web series on innovation and the enterprise.  She previously served as a senior manager of corporate communications at Egnyte and held account roles at Access Communications and The Hoffman Agency. Born and raised in Texas, she received a bachelor's degree in Public Relations from The University of Texas at Austin – Hook ‘em!   ...

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Back in October, we announced the new Constellation ShortList™ program. It offers guidance across our different coverage areas and helps buyers of technology identify the services and products they need to achieve digital transformation.

As a company, we advise early adopters using disruptive technologies on how to achieve business model transformation. Products and services named to each Constellation ShortList meet the threshold criteria as determined by our analysts through client inquiries, partner conversations, customer references, vendor selection projects, market share and internal research.

We are unveiling our new and updated lists today and will continue to provide valuable updates each quarter. Why so frequently? Most of these markets change frequently with mergers, acquisitions and other company changes. We will provide the latest updates to help you make decisions with the most up-to-date information available.  

Below are the lists we released today:

• B2B Marketing Automation
• B2C Marketing Automation
• Campaign to Commerce
• Cloud-Based Business Intelligence
• Cloud-Based Performance Management
• Cloud Customer Service and Contact Center Software
• Cloud Identity Management
• Configure Price Quote (CPQ)
• Customer Experience (CX): IOT Platforms
• Customer Experience (CX) Services: Global
• Customer Experience (CX) Services: SMB
• Customer Loyalty
• Data Cataloging
• Data Lake Management
• Digital Asset Management (DAM) for DX
• Digital Asset Management (DAM) for High Volume Commerce
• Digital Experience (DX) Integrated Platforms
• Digital Performance Management
• Distributed Ledger Technology Labs
• Enterprise Cloud Finance Apps
• Enterprise File Sharing: Niche
• Enterprise File Sharing: Suites
• Enterprise Group Messaging: Standalone
• Enterprise Group Messaging: Unified Communication
• Field Service Management
• Global HCM Suites
• Integration Platform as a Service (IPaaS)
• Matrix Commerce Order Management
• Meeting Management Tools
• Partner Relationship Management (PRM)
• Sales Force Automation
• Sales Productivity
• Self-Service Advanced Analytics
• Smart Services Digital Monetization Platforms
• Social / Digital Media Listening / Monitoring / Engagement Platforms
• Social Task Management: Enterprise Suites with Project Features
• Social Task Management: Niche

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

A new global player emerges in Continuous Authentication

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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Persistent Systems - an Indian e-business product engineering firm, serving global customers in digital business transformation, banking and healthcare - today announced a breakthrough deal with the USAA group of American financial services companies to access and productize USAA’s patent portfolio in secure authentication. The immediate outcomes of the agreement will be diverse new Risk Based Authentication (RBA) methods available across multiple channels and multiple devices. 

This development crystalises USAA’s strong commitment to the FIDO Alliance www.fidoalliance.com and leverages Persistent’s long relationship with Nok Nok Labs and other authentication specialists.

USAA’s market mainly comprises military personnel in need of banking, insurance, investments and retirement fund.  This is generally a highly mobile customer base, and certain online expectations are particularly hard to meet.  Help desk and password resets are especially challenging when defence personnel are in the field; network connectivity can’t be taken for granted, and classical “Knowledge Based Authentication” (KBA) breaks down when you are far from home and can’t access paperwork.  Some six years ago, USAA started a search for end user identity management components to deploy to its people, but were not satisfied by anything on the market.  So the company decided they had to build their own capability, and from the ground up, they researched and developed a dynamic risk based authentication platform.  This technology will now be available to Persistent’s global user population.

We will likely see Persistent emerge as a new and powerful player in the ever-evolving Identity Management marketplace, with innovative authentication options appearing as standard in Persistent’s wide range of original branded and OEMed e-business solutions.

USAA has amassed a major patent portfolio and now desires that its IP become available across the financial services sector, to its competitors, and far beyond.  USAA CSO Gary McAlum explains “we are stronger together than we are apart”.

In my view this is a ringing endorsement that security is like public health – it’s in the interests of everyone to be safe.  Really no company should compete on the basis of safety (or hygiene) for that it not the sort of world we want to live in.

Going forward, Persistent’s work in Risk Based Authentication (RBA) is guided by Five Principles:

1. Customer access should be simple and secure, regardless of the channel they choose.
2. Better knowledge of individuals will reduce authentication overhead when recognising customers.
3. Authentication should adapt dynamically according to risks quantified from the customer’s context, history and behaviour.
4. Modular ongoing risk assessments allow organisations to adjust authentication as real world environments continue to shift.
5. Authentication technologies must be pluggable and configurable in the infrastructure, to best mitigate new threats as they unflold.

From what I’ve seen, the early fruits of Persistent’s deal with USAA will include password-less logon for multiple devices and network environments, and new continuous authentication capabilities.  From truly mobile apps through to the Internet of Things, continuous authentication will be one of the most crucial security capabilities.  

These sorts of authentication tools bring privacy benefits too. Most obviously they help cut the extraneous flow and retention of personal information entailed by KBA. More fundamentally, systems which deal in low level authentication signals help designers break the identification act down into minimal information exchanges. The focus shifts from a default interest in who someone is, to a more precise inquiry about what they are (in terms of less personally revealing attributes). 

Increasingly, devices and applications will constantly monitor what their users are doing and where they are doing it, the state of their hardware and even their surroundings, to enable automated risk-based decisions about what it is safe for them do next.  USAA’s solutions integrate different signals about how users access services, the history of access, geolocation, multi-modal biometrics, and diverse second factor mechanisms.  The focus is on the types of signals that cannot be stolen or easily spoofed (after all, in the push to get rid of passwords, we must not open up new and even more subtle vulnerabilities to identity takeover).  A key element of USAA’s IP is new scoring algorithms for weighting combinations of signals, to quantify the true state of the user, in context, in real time.

We are witnessing the slow but steady embedding of intelligent authentication into applications and personal devices.  The need for human intervention (be it by the user themselves or their supporters) will keep falling, as new digital technologies deliver the right services to the right people at the right time in the right place. 

Are Robots Coming For Your Job? Adobe Think Tank 2017 - The Future of Work

Alan Lepofsky

Vice President & Principal Analyst
Constellation Research

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

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On Feb 9, 2017 Adobe Document Cloud hosted their 2nd annual Future of Work Think Tank. I was honoured to be the moderator for this hour long discussion, with an amazing group of participants:

• Mayor Sam Liccardo of San José, CA
• Dr. Frankie James, Managing Director - GM Advanced Technology Silicon Valley Office
• Brian David Johnson, Futurist in Residence at Arizona State University - Center for Science and Imagination
• Kate Kendall, Founder & CEO - CloudPeeps
• Jeff Vijungco, VP of Global Talent, Technology and Insights - Adobe

Some of the topics we discussed were: What motivates people to work?  Where do they work? Who do they work with? Are robots coming for our jobs?

My friends at Acrossio have kindly annotated the video of the event, making it easy for you to see what was discussed.  

If the embedded video does not work, you can view the standard Youtube playback here.

I'd love to hear your thoughts on what the Future of Work may look like.

IoT – Understanding market revenue reporting to identify the real Business market that is emerging

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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It seems to have become fashionable in some circles to suggest that IoT market is failing. Certainly if you were one of those people who just two years ago was predicting amazing numbers then, yes, IoT has failed to achieve those over ambitious levels. Business Market valuable solutions were never likely to match predictions that included numbers of household objects such as Toothbrushes. This blog aims to be a reality check by taking different reports each using different criteria to define IoT deployments.

To start, Forbes contributor Louis Columbus provided an excellent round up of the latest IoT market statistics and predictions in a Forbes online article published in November 2016. Entitle Roundup Of Internet Of Things Forecasts And Market Estimates, 2016, the article included, amongst other statistics, McKinsey estimating the 2015 shipped market for specialized IoT devices, i.e. sensor, gateways and dataflow management, to have been $900million. The article concluded by drawing attention to a new generation of ‘operational’ improvements using data originating from sensing, ending before ending with the statement;

It’s these sensor-driven strategies that drive the most reliable IoT and IIoT forecasts and predict the future of this industry.   This statement by Louis Columbus, who publishes constantly thoughtful work on Business and Technology, clearly identifies where the first generation impact of IoT on business is being felt.

However if we measure the ‘success’ rate of IoT adoption solely in terms of sensors deployed, devices connected, terabytes of data moving, or any technology factors, then we miss the scale of the overall impact. The value of IoT technology lies in the value/scale/expenditure of Business solutions that it enables, and these are an integration of Clouds, and Apps, and new forms of Data Analytics.

Digital Economy Business solutions use all these technologies, and are even starting to add AI to the integration. Tracking the value of the IoT market as part of the Digital Business technology is a more accurate way to understand the Business value IoT is enabling/delivering. For though each technology is incorporated IoT is the crucial interconnection/interaction enabler of the whole. The relative success, even importance, of IoT to the technology market looks very different when viewed for its role in Digital Business solutions, rather than as a standalone technology.

This may explain the huge difference in the value of the ‘IoT market’ as reported in Business Cloud Review stating that Technology Business Research (TBR) has found IoT’s revenues grew 14.8% to $6.7 billion over the course of Q4. The article carries on to point out that; IoT solutions will drive increased use of diverse IT and OT products and services in addition to building interest in established IT products, commercial IoT will create growth in specialized business consulting, hardware, network, development, management and security components.

However there is still a further Business valuable technology to come, and once again IoT plays a major part in enabling its Business deployment. The hype wave is now firmly focused on Artificial Intelligence, AI, as the new creator of business competitive advantage. AI is a complex technology with many definitions, but none of them allow AI to function as a standalone technology. Conceptually AI is not new, but its recent transformation to becoming a usable commercial business tool relies on integration with the same group of technologies; IoT to transform the physical analogue environment into Digital representation for AI to process; Clouds to provide low cost abundant processing power on demand; and Apps that have changed Software development and deployment.

Enterprises don’t need to wait for AI to gain the benefits of better, and more timely data flows to improve their operational efficiency. At this stage of market maturity it is in Operational Technology, OT, rather the Information Technology, IT, where business benefit is most readily found. Benefits in OT have always been more closely linked to near real time ‘read and respond’ to Physical events via Industrial Automation. The role of IT has been to automate Office Automation, the recording of the commercial ‘paperwork’ transactions, required for compliance and to power Business Intelligence, BI, historical reporting.

OT, with its alignment to Industrial Automation, has long been associated with the use of sensors and sensing technology. IoT has updated and increased the capabilities as well as lowering costs, which added to the existing skills in deploying with business justification has led to the rapid take-up of IoT.

Fortune Magazine reported on this shift quoting Barclays Bank research stating that expenditure on ‘Business Technology’ is expected to rise 6.7% to $2.1 trillion by 2017 compared with last year. The same article went on to state that it's music to the ears of some technology companies, but not all of them as it introduced the shift away from many traditional IT related technology products.

Whilst there is no agreed name yet, the term ‘Business Technology’ works well to define Enterprises that apply technologies in a coherent manner across traditional boundaries. Digital Enterprise business models in Manufacturing are successfully blending new capabilities for increased operational efficiencies in OT, with the Enterprise commercial management of IT. Claims of up to a quarter of all IoT deployments being related to manufacturing industry fuel the statement by Klaus Schwab Founder of the World Economic Forum that IoT is driving the Fourth Industrial Age.

Does this answer the question as to what is driving the IoT market, and its (strategic?) importance as a key technology to enable the next generation of Digital Business? The advent of Business Technology demonstrates why many IT led IoT deployments are ‘add-ons’ to existing IT solutions, and cannot recognize the strategic capability. In contrast Industry Sectors where OT is strong are able to more easily grasp the value, and the ongoing potential.

This realignment of technology’s role across the Enterprise calls for a complex management initiative to form a partnership between their experts in Operational Technology and those of Information Technology. At the same time the Enterprise must execute on their strategy to develop a new business model to complete in the Digital Business economy. Leading Technology Systems Integrator Wipro has coined the term ‘Strategic Integrator’ to define the complex skills and relationship required.

Before examining the Wipro answer on how to achieve this, it is well worth spending the time to read an article written in Automation World based on the actual experiences of a CIO charged with bringing OT and IT teams and capabilities together. Entitled Creating a new breed of Manufacturing IT the following brief excerpt is provided for the sole reason of encouraging readership of the full article!

People trained to work in IT are focused on computer systems, networks and enterprise applications. They are used to reacting to trouble tickets and troubleshooting problems to get systems back online to avoid inconveniencing end users. OT folks, on the other hand, work proactively and in real time; their machine downtime doesn’t mean the company will miss a few emails, but rather a few hundred thousand dollars...

… Not only do these two groups work in different ways, but they also speak different languages—from the technology lingo to the actual communication protocols. As a result, traditionally, there’s been a clear line between these two domains, and never the twain shall meet—until now.

The full article covers includes the experiences of other Enterprises, comments from the head of Strategy at GE Predix, and an important link to the Control System Integrators Association (CSIA). For those from an IT background this organization has much to offer from its work to identify and standardize good practice for OT and Industrial Automation.

Wipro, a global leader in System Integration, believes it has developed an answer through an approach it calls Strategic Integration. The core skill of bringing together disparate technology elements, and vendors, to deliver a business requirement remain the right foundation. However, the past focus has been too much on technology, and the relationship with the IT department, now more direct engagement with the overall Business is required.

Rapidly emerging Digital Business models, usually accompanied by a strategic transformation, require direct business knowledge and engagement as much as the ability to deliver through Technology. Wipro define Strategic Integration as incorporating the Business Activities in the layer above the traditional IT operations in a single Enterprise cohesive approach. The result is a holistic approach to the entire enterprise – IT, OT, business, processes, products and services – progressing as an integrated whole, delivered through a continuous cycle of individual deployments occurring across the enterprise.

Wipro Strategic Integration offers an attractive approach both at Enterprise level as well as directly to individual Business Managers in developing their transformational thinking. Wipro offers a new level of relationship that combines the knowledge of the latest technology capabilities with the experience of business sector transformation.

The result is delivers substantial value in individual deployments and accumulative value to the Enterprise from the individual deployments working in an integrated manner. This could over come many of the difficulties currently reported of individual Business projects achieving their aims, but in isolation leading to a new level of Enterprise discontinuities. The approach aims to make full use of the value of existing IT, accumulated data and practices, with the addition of the direct business experience, combined to deliver fully integrated and optimised Business Transformation.

IoT, in its role of connecting Business Activities and Services, with the technologies of Clouds, Distributed Apps and AI, is perhaps the key enabler to all of this. The sheer scale of connected IoT Devices and orchestrations of Services working in a Stateless, loose-coupled architecture requires as much transformation of the IT department and the System Integrator as any other Business activity or sector.

Summary

It’s not just the market for IoT that is evolving to become better defined, its also becoming clear that a transformation in the relationship between Business and Technology is occurring as well. The Digital Enterprise is emerging through both internal improvements to near real-time Operational management and the external shift towards creating revenue by Smart Services.  Enterprises are finding the need to create a new agility between Business and Technology staff; internally with the IT department and externally with Providers.

Hybridization is not just a desirable trait in Managers, it is equally necessary in Partners and their own staff, and the old model of IT and SI working together in set piece engagements has to change. Partners who work as collaborators, understand your industry, and can work to create an end-to-end blueprint for strategic integration, coupled with rapid flawless implementation are going to be very valuable. A new round of appraising System Integrators to understand how they have transformed their own approach seems likely!

A True Multilingual Internet Starts with Universal Acceptance

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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