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Walmart's Reinvention Keeps It Fighting the Good Fight

Walmart's Reinvention Keeps It Fighting the Good Fight

Walmart's story of reinvention has been unfolding over the past couple years, and recent financial results show that it's still a company to watch. In April, I mentioned that Walmart's CEO, Doug McMillon, had been revamping this established retailer in How To Become a Reinventor Like Walmart's CEO. He's been doubling down on Walmart's digital efforts among other key initiatives, and it looks like that choice is paying off, although he clearly has some ground to cover before Walmart shows that it's taking a serious run against Amazon, one of America's most popular digital darlings.

CEO McMillon's hard-fought reinvention shows progress, according to the latest first quarter results where Walmart is up 16% this year. Learn what McMillon shared yesterday in his video interview with CNN Money, Walmart Investors Are Smiling Once Again, where he talked about what his team's doing to focus on learning, listening to the customer, and being inventive. 

Chris Kanaracus, our Managing Editor of Constellation Insights, captures a couple of our leading analysts' perspectives on how Walmart can compete against the likes of Amazon with last-mile fulfillment in this post, Walmart Partners with Uber, Lyft for Grocery Delivery in Strike Against Amazon as stated in The Wall Street Journal. 

Time will tell on how Walmart fares in playing catch-up on last-mile fulfillment, considering that Amazon's already had a head start has been willing and able to take a hit on shipping costs, in order to stay ahead of its competition. Meanwhile, Amazon has been strategically taking aim at traditional brick and mortar clothing retailers to earn their market share by wooing clothing shoppers with online purchases. On that point, MarketWatch just came out with an article citing the obvious for many, Customers Hate Fitting Rooms and Clothing Retailers Are Paying the Price

Related articles

Wal-Mart Profit, Revenue Beat Expectations; US. Sales Up More Than Expected. Yahoo Finance 
Big Box Throwdown: Target Vs. Walmart. Forbes

To find out more about leadership advisory on driving digital transformations of all shapes and sizes, consider joining the Constellation Executive Network.

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Alteryx Inspire 2016 - Enabling change agents in data management

Alteryx Inspire 2016 - Enabling change agents in data management

We have the opportunity to attend Alteryx Inspire 2016 in San Diego, held from June 6th till 10th 2016. The conference is well attended with over 1200 participants, coming from customers, prospects and the ecosystem, a significant growth over the same event a year ago in Boston. 

 
So take a look at my musings on the event here:
 
 

No time to watch – here is the 1-2 slide condensation:

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

Growth shows strong market position – Alteryx has successfully expanded its portfolio from data preparation to enrichment, analysis and sharing of results. Growth on both the customer, partner and overall eco system side show that Alteryx has mastered the ‘land and expand’ model well. Now the vendor will have to go beyond the US / North America – where this model is less adopted and understood at this point. But the strong value proposition for data analysts should help Alteryx in this processes.

Rich Roadmap is investment in the future – Alteryx is innovating on all aspects of its product value proposition, not just the newer functions post data prep. That is key for propelling future growth and attending users value the speed of product expansion. Particular good to see is that Alteryx is working on usability, as in some cases the product’s look and feel comes over more pedestrian than where it should be. . Equally good to see that Alteryx can also do this with usage logs from users, despite the tooling being deployed on premises. Amongst many planned enhancement, an uptake of Machine Learning stands out, as it will help to automate more repetitive tasks for data analysts. More automation can quickly become table stakes and is key for success of any ‘land & expand’ model in the industry.

From asking IT for forgiveness to IT enablement – For a long time using products like Alteryx was outside the ‘approved’ tooling that IT provided to their business. That did not deter business analysts – often with cover of their superiors – to uptake tools and products like Alteryx – asking IT for forgiveness later. That practice is still in place for many technologies, but it was good to learn from attendees as well as Alteryx, that the tide has turned… now IT is the ‘enabler’ of the business, and Alteryx has become part of the official tooling for enterprises. A good move for all involved, business analysts are empowered, IT is an enabler and not a blocker, and Alteryx … grows.

 

MyPOV

Good to see the success for Alteryx, empowering its customers to connect, move, prep, blend etc. data in an easier way and fashion, than most vendors who try to achieve the same. Users are fired up and like to use the tool, as some tweets (see below in Storify) in CEO Stoecker’s keynote showed. Also good to see the vendor is not resting on the laurels, but investing in product roadmap and new capabilities. The move to cloud seems to be well underway with partnerships with AWS and Microsoft. Usability and machine learning enhancements will be key for Alteryx going forward so that the vendor can keep operating on the ‘land & expand’ approach – keeping sales costs down, and investing into product instead.

On the concern side Alteryx must master these technology shifts, needs to start thinking of moving the tooling to the cloud and not missing the trend to enable the business end user (with no / limited data know how) as the next user category which will change how enterprises work with data.

But for now there are only very few alternatives to Alteryx when looking for a data prep, data automation solution in the enterprise, good to see IT departments taking, note too. Stay tuned.


Want to learn more? Checkout the Storify collection below.

And read more on Alteryx and other vendors in Integration / BigData:
  • Event Report - Alteryx Inspire 2015 - Positive Growth on Product, Go to Market and Customers - read here
  • Event Report - Informatica World 2016 - The Cloud is the new platform - read here
  • Event Report - Google I/O 2016 - Android N soon, Google assistant sooner and VR / AR later - read here
  • News Analysis - SAP and Microsoft usher in new era of partnership to accelerate digital transformation in the cloud - read here
  • Event Report - OpenStack Summit 2016 - Austin - OpenStack matures, grows up - read here
  • First Take - Workato’s Workbot cuts business users some slack with Slack integration - read here
  • Progress Report - Cloudera is all in with Hadoop - now off to verticals - read here
  • First Take - SAP Cloud for Planning - The next spreadsheet killer is off to a good start - read here
  • Market Move - Oracle buys Datalogix - moves into DaaS - read here
  • News Analysis - SAP commits to Cloud Foundry and OpenStack - Key Steps - but what is the direction? Read here
  • Event Report - MongoDB is a showcase for the power of Open Source in the enterprise - read here
  • Musings - A manifesto: What are 'true' analytics? Read here
  • Future of Work - One Spreadsheet at the time - Informatica Springbok - read here
  • Musings - The Era of the no-design Database - Read here
  • Mendix - the other path to build software - read here
  • Musings - Time to ditch your datawarehouse .... - Read here

Find more coverage on the Constellation Research website here and checkout my magazine on Flipboard and my YouTube channel here.
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Apply for a Constellation SuperNova Award - Recognizing Leaders in #DisruptiveTech

Apply for a Constellation SuperNova Award - Recognizing Leaders in #DisruptiveTech

The Constellation SuperNova Awards
Every year the Constellation SuperNova Awards recognize individuals for their leadership in digital business. Nominate yourself or someone you know before August 8, 2016. Learn more and apply here: https://www.constellationr.com/events/supernova/2016

About the SuperNova Awards (#SNA2016)

The SuperNova Awards honor leaders that demonstrate excellence in the application and adoption of new and emerging technologies.

In its sixth year, the Constellation SuperNova Awards will recognize individuals who demonstrate leadership in nine categories:

•  Internet of Things - A network of smart objects enables smart services. (sensors, smart ‘things’, device to purchase, artificial intelligence)

•  Data to Decisions - Using data to make informed business decisions. (big data, predictive analytics) 

•  Digital Marketing Transformation - Personalized, data-driven digital marketing. 

•  Future of Work: Social Business - The technologies enabling teams to work together efficiently. (enterprise social networks, collaboration, digital assistants)

•  Future of Work: Human Capital Management - Enabling your organization to utilize your workforce as an asset.  (talent management, benefits, HR core)

•  Matrix Commerce - Commerce responds to changing realities from the supply chain to the storefront. (digital retail, supply chain, payments, 'ubiquitous-channel' retail)

•  Next Generation Customer Experience - Customers in the digital age demand seamless service throughout all lifecycle stages and across all channels.  (crm, customer experience)

•  Safety and Privacy - Strategies to secure sensitive data (blockchain, digital identity, authentication)

•  Technology Optimization & Innovation - Innovative methods to balance innovation and IT budgets. (innovation in the cloud, ENSW cost savings, cloud ERP, efficient app production)

The SuperNova Awards are seeking leaders and teams who have innovatively applied disruptive technolgies to their business models as a means of adapting to the rapidly-changing digital business environment. If you have what it takes to compete in the SuperNova Awards submit your application today: https://www.constellationr.com/events/supernova/2016

Data to Decisions Digital Safety, Privacy & Cybersecurity Future of Work Marketing Transformation Matrix Commerce New C-Suite Next-Generation Customer Experience Tech Optimization Innovation & Product-led Growth AR Executive Events Leadership Chief Customer Officer Chief Digital Officer Chief Executive Officer Chief Financial Officer Chief Information Officer Chief Marketing Officer Chief People Officer Chief Procurement Officer Chief Supply Chain Officer Chief Experience Officer

Order starting to emerge in the Blockchain chaos

Order starting to emerge in the Blockchain chaos

I’ve been a critic of Blockchain. Frankly I’ve never seen such a massed rush of blood to the head for a new technology. Breathless books are being churned out about “trust infrastructure” and an “Internet of Value”. They say Blockchain will keep politicians and business people honest, and enable “billions of excluded people to enter the global economy”.

Most pundits overlook the simple fact that Blockchain only does one thing: it lets you move Bitcoin (a digital bearer token) from one account to another without an umpire. And it doesn’t even do that very well, for the Proof of Work algorithm is stupendously inefficient. Blockchain can't magically make merchants keep up their side of a bargain. Surprise! You can still get ripped off paying with Bitcoin. Blockchain simply doesn’t do what the futurists think it does. In their hot flushes, they tend to be caught in a limbo between the real possibilities of distributed consensus today and a future that no one is seeing clearly.

But Blockchain does solve what was thought to be an impossible problem, and in the right hands, that insight can convert to real innovation. I’m happy to see some safe pairs of hands now emerging in the Blockchain storm.

One example is an investment being made by Ping Identity in Swirlds and its new “hashgraph” distributed consensus platform. Hashgraph has been designed from the ground up to deliver many of Blockchain’s vital properties (consensus on the order of events, and redundancy) in a far more efficient and robust manner.

And what is Ping doing with this platform? Well they’re not rushing out with vague promises to manufacture "trust" but instead they’re making babysteps on real problems in identity management. For starters, they’re applying the new hashgraph platform to Distributed Session Management (DSM). This is the challenge of verifiably shutting down all of a user’s multiple log-on sessions around the web when they take a break, suffer a hack, or lose their job. It's one of the great headaches of enterprise identity administration and is exploited in a great many cyberattacks.

Ping’s identity architects have carefully set out the problem they’re trying to solve, why it’s hard, and how existing approaches don’t deliver the desired security properties for session management. They then evaluated a number of consensus approaches - not just Blockchain but also Paxos and Raft – and discussed their limitations. The Ping team then landed on hashgraph, which appears to meet the needs, and also looks like it can deliver a range of advanced features.

In my view, Ping Identity’s work is the very model of mature security design. It’s an example of the care and attention to detail that other innovators should follow.

Swirld’s founder Dr Leemon Baird will be presenting hashgraph in more detail to the Cloud Identity Summit in New Orleans tomorrow (June 7th).

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News Analysis: Acquisition Brings Salesforce Customers To The Commerce Party

News Analysis: Acquisition Brings Salesforce Customers To The Commerce Party

Salesforce Announces Intent To Acquire Demandware For $2.8B

On June 1st, 2016, Salesforce signed a definitive agreement to acquire Burlington, Massachusetts based Demandware for $75.o0 per share or around $2.8 billion in cash.  Constellation predicts a $10.01B market for matrix commerce solutions as new digital platforms and network economies emerge.  Constellation’s quick merger analysis considers the impact on customer, market coverage, product road map, partnership programs, and the competition:

  • Customer impact should be mostly positive.  Most Demandware customers sought the product as an alternative to the legacy on-premises based solutions.    Demandware uses a revenue sharing pricing model.   Based on Constellation’s vendor selection and contract negotiations experience, most customers pay anywhere between .5% to 3.5% of monthly sales.  Customers can use Demandware to power custom websites or work with Demandware LINK partners to build the .

    Point of View (POV): The acquisition expands the natural definition of CRM and expands the relevance of Salesforce to its customers.  Demandware customers gain an end to end commerce play with Salesforce.  Conversely, Demandware provides Salesforce customers with a rich and compelling story to deliver on campaign to commerce.  From an impact to the customer perspective, Salesforce has shown a positive track record for customers with mergers and acquisitions.  Constellation sees minimal impact to the retention of top talent, additional investment in product road maps and integration, and transition assistance for partners and channels with many of the larger acquisitions.
  • Market coverage should increase.  Demandware leads the commerce cloud market and brings over 300 brands in their B2C cloud commerce platform.  Marquee customers include Adidas, Brooks Brothers, Burton, Callaway, carters’s, Columbia, Crabtree & Evelyn, crocs, ecco, Ethan Allen, Fila,  Godiva, GoPro, Hurley, kate spade, Lancome, Land’s End, M&S, NewBalance, Nine West, Panasonic, Pandora, Quicksilver, Reitmans, Rockport, Roots, S.Oliver Samsonite, Scotch & Soda, Skullcandy, Space.NK, Speedo, Stonewall Kitchen, Tory Burch, Traeger, Trina Turk, True Religion, UGG, Urban Decay, Vibram, Vineyard Vines

    (POV): Salesforce.com and Demandware have many joint customers.  As customers bring their front office transactional systems together, the value will come from the insights in customer network.  Commerce is the outcome of good customer experience.  Keep in mind, while there may seem little customer upside in the transaction, commerce will drives the future of long term growth for Salesforce.com and increase over total addressable market (TAM) as the acquisition adds to the network and platform business.  Moreover, salesforce.com global reach should pair up well with Demandware in providing global coverage for customers.
  • Expect a smarter product road map. Demandware brought a battle tested B2C commerce platform to the masses.  As the basis of the Commerce Cloud, core capabilities include a content management, merchandising, marketing, order management, interaction history/transaction management, store ops, and analytics platform. The retail data model brings orders, customers, product, inventory, and promotion together.  Both Demandware and Salesforce have built on top of Oracle databases running on their own infrastructure with extra capacity running on Amazon Web Services.

    Point of View (POV): Demandware started out in 2004 when the co-founder of Intershop, Stephan Schambach, left to form a cloud based ecommerce solutions for retailers.  One of they key assets Salesforce gains is the predictive analytics and machine learning investments.  When paired with the MetaMind technology, customers can expect some advances in artificial intelligence for the overall force.com platform.   With the recent Salesforce partnership on AWS, Constellation expects a mild expansion to more AWS over time for international expansion and newly acquired company platform integration such as Demandware.  Depending on the future analytics strategy, customers can expect 12 to 18 months before a replatform discussion on AWS takes hold.
  • Channel and partnership programs . Demandware brings a robust partner program for technology, services solutions, services affiliate, and end-to-end partners.  With over 220 LINK marketplace partners, customers gained from the overall ecosystem and appreciated the overall Demandware community as a key resource for insight

    (POV): Salesforce makes another acquisition into a space that partners have carved out into the ecosystem.  From Apttus to ServiceMax to Veeva, partners continue to raise concerns about cannibalization.  While Cloud Craze, one of the first B2B commerce solutions running natively on the Force.com platform, is not directly impacted as they are B2B not B2C, growing concerns continue as Salesforce.com expands TAM through M&A.  Moreover, customers saw value in the community as a resource for best practices sharing and will expect this community to move forward with the acquisition.
  • Competitive landscape.  Large enterprise competitors IBM, Oracle, and SAP already have proven B2C commerce solutions to the table. Salesforce’s lack of a commerce option pointed to an obvious gap in customer need.  Adobe and Microsoft remain among the large players without this key commerce capability.  While down market in most deals, Magento Enterprise, Elastic Path, Episerver, Sitecore, and Shopify could be acquired as a result of the Demandware acquisition by Salesforce.com.

    (POV): Salesforce outbid many competitors to win over Demandware.  The acquisition gives Salesforce.com ammo to fend off IBM Smarter Commerce and Hybris deals, despite Hybris mostly being on-premises based. The future of CRM includes commerce because at the end of the day, conversion rate optimization matters.  Going forward, Salesforce could include the B2B commerce space adding partners such as Avangate, Cloud Craze, and Digital River as part of the overall industry vertical strategy.  Meanwhile, expect Adobe and Microsoft to step up their efforts around B2C and B2B commerce.

*Key customers of Demandware include 2XU, adidas, American Golf, Anya Hindmarch, Avenue, Bare Escentuals, Brooks Brothers, Brooks, Browns, Burton, Callaway, carters’s, Clarins, Cole Haan, Columbia, Converse, Cortefiel, Crabtree & Evelyn, crocs, Deckers Brands, ecco, EMU Australia, Ethan Allen, Fila, Gaiam, Godiva, GoPro, Gore, HotTopic, House of Fraser, Hurley, Jack Wolfskin, Jewlery Television, JoAnn, Karstad, kate spade, Kiehl’s, L’Oreal, Labelux, Lacoste, Lancome, Land’s End, Liebeskind, Life is Good, London Drugs, Lush Fresh, M. Gemi, Marc O’Polo, M&S, Michael Hill, Micheal’s, mothercare, Mountain Hard Wear, NewBalance, Nine West, OVS, Pacsun, Panasonic, Pandora, PartyCity, Pentland, Perry Ellis, Picard, Pier1 Imports, Poppin, Puma, Quicksilver, Reitmans, Rituals, Rockport, Roots, S.Olive,r Samsonite, Scotch & Soda, Skis.com, Skullcandy, Sleepys, Solstice, Sorel, Space.NK, Speedo, Stoenwall Kitchen, Tory Burch, Traeger, Trina Turk, True Religion, UGG, Urban Decay, Vibram, Vineyard Vines, and others.

Recommendation to Customers And Prospects

Constellation makes the following suggestion to Demandware customers

  • Lock down existing contracts and renewals before close.  For those with advantageous revenue share rates, lock down larger volume discounts before the merger.  Factor in the post merger costs of adding to the overall cost per user and consider extending longer term discounts.  As a best practice, identify performance SLA’s to carry over into the Salesforce.com transition.
  • Identify feature functionality requests.  Make clear in contract renewals key functional requirements.   Have demandware provide guidance on feature delivery dates.
  • Consider integration options.  Determine how the Demandware retail data model will integrate back to the Salesforce customer model.  Identify core order capture and order management process and workflow integration points.
  • Explore the functionality of a combined salesforce.com and Demandware.  Map out the campaign to commerce journey. Identify gaps in channel, customer journeys, analytical insights, and customer profiles.  Determine a build, buy, or acquire strategy.

The Bottom Line: The Future Of CRM Is Campaign To Commerce

Digital technologies have transformed CRM. Since the early days of CRM, the core components have revolved first around sales, then service, and then marketing. The next wave focused on systems of engagement. Social CRM, mobile enablement, and the consumerization of technology led this era.  In the shift to “systems of experience,” digital transformation takes CRM to the next level. Here, the focus is not on selling products and services, but on delivering brand authenticity and outcomes, or experiences, from campaign to commerce engagements.  The ultimate result is either a conversion rate or click through.  Commerce is the outcome of good CRM and CX not vice versa.

Disclosure

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

Copyright © 2001 – 2016 R Wang and Insider Associates, LLC All rights reserved.

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The post News Analysis: Acquisition Brings Salesforce Customers To The Commerce Party appeared first on A Software Insider's Point of View.

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News Analysis - Microsoft opens Windows Holographic to partners for a new era of mixed reality

News Analysis - Microsoft opens Windows Holographic to partners for a new era of mixed reality

Earlier this week, when day broke in Asia, Microsoft used the Comdex event happening in Taiwan to make a major announcement around its holographic product plans, making Windows Holographic available to partners.

 
 
 
 
So let’s dissect the press release in our customary way, it can be found here:
Microsoft Corp. invited its Windows 10 hardware partners to create virtual reality (VR) devices, augmented reality devices and everything in between with Windows Holographic, the platform that powers Microsoft HoloLens. In opening up Windows Holographic to partners, Microsoft shared its vision for mixed reality — a world where devices interact with each other to change the way people work, communicate, learn and play.
MyPOV – Microsoft move back to its DNA, going back to the OEM model that has served the vendor and partners well in the past for the PC. Back at Microsoft’s Build conference earlier this year, we pointed out who Hololens was the first new category platform that Microsoft has completely built from scratch. Microsoft now abandons this exclusive (Apple style) strategy now, which is probably a good move, as it goes back to the Microsoft DNA, working with hardware manufacturers to produce devices, while maintaining the standards and control of the software platform.

“With Windows 10, we’ve been on an incredible journey with our partners, and today we usher in the next frontier of computing — mixed reality,” said Terry Myerson, executive vice president, Windows and Devices.
MyPOV – Good quote by Myerson, good pitch on Microsoft’s vision for the future of enriched experiences, that Microsoft calls ‘mixed reality’, differing the offering from augmented and virtual offerings with other vendors in the market.
 
Windows: The only holographic platform
With over 80 million virtual reality devices expected in the market, per year, by 2020, the business opportunity for virtual reality is vast. Yet, today’s devices are built with related but differing technologies — ranging from virtual to augmented reality. These devices and experiences do not work together today, because of different user interfaces, interaction models, input methods, peripherals and applications. Most virtual reality experiences can’t mix real people, objects and environments into the virtual world, making creation and collaboration difficult.
MyPOV – Good description of both the market opportunity and the challenge, the confusion and different standards, of course pitching the Microsoft direction of ‘mixed reality’. My hope would be so to see more device diversity as a consequence of this move for the Microsoft ‘mixed reality’ ecosystem – it’s the diversity that has propelled Android to the clear leader as mobile OS. Doing this around a common standard is a very important move to make sure that the still to be created software can reach enough customers.
 
Windows Holographic unites these worlds and enables innovation across a range of devices. Windows Holographic offers a holographic shell and user interface, perception APIs, and Xbox Live services, enabling a familiar experience across apps and content. All Universal Windows apps can run on the Windows Holographic platform. Today there are nearly a thousand Universal Windows Apps that run on Windows Holographic.
MyPOV – Good description of what Holographic is, effectively a platform for Microsoft’s mixed reality vision. Surprising in our era, that strongly emphasizes platforms, that the word platform is missing here. And good to see the link to the Universal Windows Apps, a key value proposition from Microsoft to developers, as these apps run across different Windows devices and form factors.

In a mixed reality world, devices can offer experiences that extend beyond the virtual world. Imagine wearing a VR device and seeing your physical hands as you manipulate an object, working on the scanned 3-D image of a real object, or bringing a real-life holographic representation of another person into your virtual world so you can collaborate. In this world, devices can spatially map your environment wherever you are; manipulating digital content is as easy and natural as it is in the real world. Interested partners can learn more at http://www.winhec.com.
MyPOV – Unusual to see use cases for products in press releases – obviously Microsoft was compelled to describe the advantages of the mixed reality proposition.
 
In addition to opening up Windows Holographic to its partner ecosystem for the future, Microsoft is working with Intel Corporation, AMD Inc., Qualcomm Inc., HTC Corp., Acer Inc., ASUS, Dell Inc., Falcon Northwest, HP, Lenovo Group Ltd., MSI and many others to build a hardware ecosystem supporting great virtual reality experiences on Windows 10.
MyPOV – This is an impressive list of partners and it is good to see Microsoft tapping into the partner ecosystem.
 

Overall MyPOV

There are two schools of thought when bringing new platforms to market – there is the Apple model – that controls all aspects of the platform, including manufacturing… the alternative is Google’s Android (or Microsoft Windows) model, defining the spec for the platform but leaving it to the market and competition of many manufacturers to provide the devices. There are pros and cons for both approaches, what is hard is when vendors who follow e.g. the Google / Android model switch to the Apple model. I saw that being the case with Microsoft and Hololens, but with this announcement Microsoft has headed back to familiar waters. And maybe it was all creating enough of a proof point for Hololens to create attention, attract demand and test and validate the platform.

And maybe Microsoft planned it that way, maybe it had to react to Google, which equally went into a partner spec model for its AR / VR offerings – see my event report of Google I/O here. And for Microsoft Build below.

Overall this is a key first step for Microsoft to make its mixed reality platform reality in the markets. First you need to sign the partners up, then they need to make money etc. – The good news for enterprises is that the partner model creates choice and competition. Chances that an attractive Hololens offering comes along in a second tier market have gone up. Purchasing managers are sleeping better knowing there will be more of competition for devices. Developers can already see uptake of the Windows Universal Apps, an important promise that Microsoft came through from the last Build conferences. Now the main challenge remains – as with all of augmented / virtual and mixed reality – time to create the new apps that these platforms need. With this announcement Microsoft has done a key step towards success for the Holographic platform… stay tuned for more.



More on Microsoft:
 
  • News Analysis - SAP and Microsoft usher in new era of partnership to accelerate digital transformation in the cloud - read here
  • Musings - Will Microsoft's Hololens transform the Future of Work? Read here
  • Event Report - Microsoft Build 2016 - A platform vision and plenty of tools for next generation applications - read here
  • First Take - Microsoft Build 2016 - Day 1 Keynote Takeaways - read here
  • Event Preview - Microsoft Build 2016 - Top 3 Things to watch for developers, managers and execs...  read here
  • News Analysis - Microsoft - New Hybrid Offerings Deliver Bottomless Capacity for Today's Data Explosion - read here
  • News Analysis - Welcoming the Xamarin team to Microsoft - read here
  • News Analysis - Microsoft announcements at Convergence Barcelona - Office365. Dynamics CRM and Power Apps 
  • News Analysis - Microsoft expands Azure Data Lake to unleash big data productivity - Good move - time to catch up - read here
  • News Analysis - Microsoft and Salesforce Strengthen Strategic Partnership at Dreamforce 2015 - Good for joint customers - read here
  • News Analyis - NetSuite announced Cloud Alliance with Microsoft - read here
  • Event Report - Microsoft Build - Microsoft really wants to make developers' lives easier - read here
  • First Hand with Microsoft Hololens - read here
  • Event Report - Microsoft TechEd - Top 3 Enterprise takeaways - read here
  • First Take - Microsoft discovers data ambience and delivers an organic approach to in memory database - read here
  • Event Report - Microsoft Build - Azure grows and blossoms - enough for enterprises (yet)? Read here.
  • Event Report - Microsoft Build Day 1 Keynote - Top Enterprise Takeaways - read here.
  • Microsoft gets even more serious about devices - acquire Nokia - read here.
  • Microsoft does not need one new CEO - but six - read here.
  • Microsoft makes the cloud a platform play - Or: Azure and her 7 friends - read here.
  • How the Cloud can make the unlikeliest bedfellows - read here.
  • How hard is multi-channel CRM in 2013? - Read here.
  • How hard is it to install Office 365? Or: The harsh reality of customer support - read here.
Find more coverage on the Constellation Research website here and checkout my magazine on Flipboard and my YouTube channel here
Tech Optimization New C-Suite Innovation & Product-led Growth Data to Decisions Future of Work Microsoft Chief Information Officer Chief Experience Officer

What is an IoT Platform, and why does it need an AoT Engine?

What is an IoT Platform, and why does it need an AoT Engine?

As IT departments start to consider how to provide suitable quality support for their enterprises' IOT initiatives the adoption of a ‘Platform’ to reduce deployment times and costs is a logical move, but what exactly is an IoT Platform? Even more important than the technology definition is capabilities that a new generation of IoT business requirements will demand.

IT practitioners have had much of their thinking and understanding of 'Platforms' shaped over the last few years by their experiences with provisioning Applications, Apps, and some Services onto Clouds Platforms. It has taken more than five years for clarity to emerge on Cloud Platforms, partly due to technology maturing, but largely due to the new, and largely unforeseen in the early days, Business capabilities that became possible by using Cloud technology capabilities.

The shift from IT department initiatives to lower operational costs of traditional IT Enterprise Applications to creating business competitive value by Apps and Services caused many Enterprise investments in ‘Cloud Platforms’ to become ‘troublesome’. Planned moves for simplification with flexibility in provisioning delivery around Platform as a Service, PaaS, started to have to integrate with ‘Everything as a Service’, or XaaS at which point both Vendor and Architecture lock-in became issues.

Unfortunately deploying an IoT Platform looks likely to run through the same pattern as initial views on the use of IoT are most likely to be internally dominated around straight forward use of sensors for monitoring buildings, machines or expense assets. The longer term will see IoT as ‘anything and everything’ connected and interactively responsive in near ‘Real-Time’ heralding the new competitive Digital Business era.

The danger therefore is to take initial technology, (and first generation business), requirements to define an IoT Platform requirement. The IT department needs to some through research to understand IoT, (Internet of Things), and AoT, (Analytics of Things), in order to see beyond these initial requirements.  Thankfully there are now enough early adopter excellent business case studies published to be able to get a relatively clear picture.

Business Management sites are usually the prime source for case studies on how IoT and AoT are transforming Business, rather than Technology sites that by their very purpose are there to provide technical descriptions of the functionality of the current products.

In a way the very term IoT focuses the Platform requirement at the wrong end of the Business value chain. Yes, its true that without the ubiquitous connectivity of IoT devices of all types there would be no new capabilities. As ever the business value comes from the data flows from the IoT Devices, hence the increasing use of the term AoT, Analysis of Things. But its not more ‘Big Data’ to be analyzed in batches, instead the Business value is in as near to ‘Real-Time’ as possible ‘Reading’ of the Data Flows in order to create optimal individually ‘reactions’.

The ‘Digital Economy’, ‘Internet Economy’, or Services Economy’ are all terms for the same transformation; Changing the basis of market competition by using ‘real-time’ intelligence allied to a new generation of ‘Smart’ Services. Think of the impact of Social CRM around interacting and reacting with People, and then add the reaction to events fed by machines, events, and locations to understand how IoT/AoT will shape the future.

Those initial starting internally oriented requirements around connecting a finite number of defined sensors to on screen displays will soon be replaced by demands to deploy sophisticated externally oriented competitive Smart Services to compete in the market places.

This should read as a familiar pattern to those who have worked through the various stages of the adoption of Cloud technology, and the refocus of its capabilities into new Business value creating Enterprise advantage. The simple tool for internal cost reduction moved to becoming a key element in competitive business survival.

There are many pages of independent advice on choosing, operating, even contracting, for Cloud Platforms, but there is very little independent advice to be found on the topic of IoT Platforms. So what are the general characteristics that make an IoT/AoT Platform, or deployment environment, different?

Is there an equivalent to a Cloud Platform? A definition of a Platform as being able to facilitate the deployment of business software by hiding the complexity of the common underlying hardware and software layers. Key to this definition is that a Platform is generally ‘infrastructural’ by nature, provides constant connectivity between various elements, and has a stable set of common core functions. Indeed the whole concept of a Platform is tied to the stability, even predictability, of the environment.

In direct contrast with the stability of Cloud Platforms, and their environment, IoT creates its new business values from the ability to optimizing individual responses from dynamic, unpredictable, events. The often quoted ‘IoT/AoT Insightful Outcomes’ provides value simply because there is no previous foreseeable, or planned, relationships.

An IoT Platform has to simultaneously provide the simple, abstraction, of core technology elements for Developers of Smart Services; and the operational management of Data Flows occurring from unique dynamic event based activities.

An example may help to illustrate the point; Based on a group of IoT sensors triggering to report various event conditions from an Air Conditioner installed in an Office Building. The sensors are connected to an IoT Platform that collates the individual sensor event Data Flows into the recognition that the Air Conditioner has failed. The IoT Platform is supporting multiple IoT/AoT Smart Services, each providing a different and individual set of ‘Read and Response’ functions for some operational aspect of the Office Building.

Only one of those Services activates and manages the activities of an Air Conditioning Engineer and needs to recieve this particular Data Flow, with continuous ‘real time’ analysis optimizing the ‘smart’ operational reactions. However, in parallel there may well be several such event triggers and Data Flows invoking different Smart Services taking place at the same time.

An IoT ‘Platform’ has to support a complex, dynamic, multi functional capability covering both conventional Platform connectivity and common abstracted functions, AND, in addition to provide AoT ‘read and react’ with intelligent switching of Data Flows to individual Services as well.

This is most definitely not a description of the capabilities normally associated with a Platform, in fact the critical dynamic functionality closely resembles the definition normally applied to an ‘Engine’. In traditional computer programming the term Engine refers to a program that performs a core, or essential function for other program stating an ‘Engine’ to be an application program that coordinates the overall operation of other programs.

Architecturally an Engine is the central, or focal, program in an operating system, or subsystem. Once again the definition suits the role of an IoT/AoT Platform that in the decentralized ecosystem of IoT is performing the role of coordinating disparate activities into recognizable functional outcomes.

The simple Platform model derived from Clouds with their structured predictable use simply doesn’t fit with the requirements for the dynamic real time ‘Platform’ role needed to support Business valuable Smart Services driven by IoT/AoT ‘read and react’ optimizations.

The requirement IoT Platform definition comprises of three elements combining Platform, and Engine, into a sophisticated Enterprise and Business operational environment;

  1. Common IoT connectivity with associated levels of device management
  2. Abstraction of common functions to simplify delivery of Smart Services
  3. AoT Data Flow real time analysis with intelligent switching Smart Services

Additionally, IoT is, by definition, based on ever growing massive numbers of a huge variety of devices coming into use. An increasing majority of which will not be chosen, defined, or controlled, by the Enterprise that wants to make use of their data. Vendor lock in element of IoT/AoT architecture is a further risk to be considered.

Initial specifications for an IoT Platform will be to support initial IoT deployments and will often favor a particular vendor product that has been optimized for the installed IoT sensors, and data analytics. As Vendor lock has usually proved to be a major issue in successful long-term investment, and, with the recent experience of Cloud Platforms to offer further guidance, appreciation of the real functionality of this important Enterprise Business investment is essential.

The danger of early IoT requirements with direct-coupled simple Services masking the reality of the fast developing Business use of IoT/AoT with real-time Smart Services is all too obvious. The wise IT department will remember the opening part of this blog around how the role of Clouds changed and expanded redefining the requirements and uses of ‘Cloud Platform’.

As the era of IoT mass connectivity and real time AoT data drives market competitiveness based on Smart Services it will become imperative for an Enterprise to be able to have an IoT Platform, but it has to be close coupled to an AoT Engine.

Footnotes;

1)This blog refers to a fully functional integration Enterprise Platform capable of supporting interactions between multiple Smart Services by connecting IoT Sensors with AoT Dataflow analysis in an intelligent manner. This is NOT the same as an App Shop style Platforms currently in use and featured in the blog; Introducing market disruption strategies for market leaders based IoT platform collaboration

2) This blog is intended primarily to be read as part of the ongoing series of Blogs on the development of IoT, and now AoT, as Business Solutions supported by Technology integration and deployments. As such it uses terms and concepts explored in previous blogs; See for the full Blog series https://www.constellationr.com/users/andy-mulholland - profile2_main_account_group_research_agenda

New C-Suite

One Big Step for Commerce, One Giant Step for Salesforce

One Big Step for Commerce, One Giant Step for Salesforce

Salesforce’s $2.8 billion acquisition of Demandware will serve as the company’s Commerce Cloud. Demandware and Salesforce have a series of joint customers. This acquisition will enable more e-commerce for Salesforce along with Salesforce’s customer relationship management tools. CEO’a are realizing the value of platforms vs. point solutions and the trend is going towards the vendors creating more holistic platforms that offer a continuous marketing, sales, service process. In truth, only companies separate those aspects of their companies into different departments. But customers don’t see a company as separate departments. So the departments really need to act as a whole and software as a platform can be the key to that.

The acquisition will grow the sales “funnel” for Salesforce. There is the possibility to expand the relationship with existing customers. So it gives Salesforce a new group of customers to upsell for the other services that it already offered, from marketing and online analytics through to back-office software for sales and other IT functions. Who is Demandware working with now? Some customers include Design Within Reach, Lands’ End, L’Oreal and Marks & Spencer.

With more and more people buying on their phone and online, commerce and e-commerce is more and more important. This is a smart move by Salesforce.

@DrNatalie Petouhoff, VP and Principal Analyst, Constellation Research

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News Analysis: Marketo Acquired by Vista Equity Partners for $1.8b, What It Means For Customers

News Analysis: Marketo Acquired by Vista Equity Partners for $1.8b, What It Means For Customers

Acquisitions Continue as Marketing Automation Space Consolidates And Slows In Growth

 

The consolidation of the Marketing Automation world continues with the latest news that one of the remaining independent enterprise marketing automation providers, Marketo, will be acquired by Vista Equity Partners for $1.8b.  Trading on Marketo stock has haulted this am.

Marketo Vista Analysis from Constellation Research on Vimeo.

News around Marketo engaging investment firm Morgan Stanley to prepare for a potential sale broke May 9th 2016, at the beginning of their annual conference, the Marketo Marketing Nation Summit.  Multiple suitors including Microsoft and SAP were rumored to be part of the bid process with Vista sealing the final deal. Here's Constellation's analysis to current Marketo customers and prospects.

*Disclosure: I was a happy Marketo customer at two different companies for a total of 5 years, and a 2016 finalist for the “Marketing Executive of the Year” Revvie Award. 

Vista Equity Partners Heavily Targeting CMO Spend

Vista Equity Partners focuses on enterprise software company investments and according to prior media interviews, has a track record of delivering 30% plus shareholder return.  To deliver this type of return, Vista is known to have their portfolio companies follow a “playbook” approach to maximize EBITDA.  This is often at the expense of talent retention and investments in marketing and R&D (just read some of the Glassdoor reviews of Vista companies).  Vista recently invested $1.65 billion to take event management software provider Cvent from public to private on April 18th, and they also own another event software company Lanyon and advertising technology company Media Ocean.  All of these acquisitions make Vista the PE company with the biggest stake in the Marketing and Advertising technology space.

My POV: Vista’s acquisition strategy could be to combine the digital marketing base of Marketo with Cvent and Layon’s physical event expertise to create an end-to-end marketing platform with the ability to provide analytics on customer behavior from digital to physical.  Add in Media Ocean for ad tech and done right, this could be a marketing customer journey analytics juggernaut.  I like the concept as there hasn’t been a smooth way to integrate the customer journey and behavior from physical events into a marketing automation platform without leveraging integration tools.  Most of the options today require much manual intervention and clunky at best. Even if Vista keeps all the companies operating separately, the opportunities for collaboration and integration still has much potential.

With the Lanyon, Media Ocean, Cvent and now Marketo acquisitions, Vista is making a big bet on the Chief Marketing Officer’s (CMO) growing budget authority and influence over technology decisions that involve customer engagement.

What It Means For Customers And Prospects

Advice for current Marketo customers:

  • Customers in a renewal cycle should lock in pricing and terms ASAP.  Customers who wait must be prepared to sign multi-year agreements during renewal time as part of Vista’s playbook approach.  Those 1-year renewal options that Marketo customers enjoyed will cease to exist.   For those looking for a good deal, sign a multi-year agreement with minimal CPI price increases as Vista's team will try to build price increases into future multi-year deals.
  • Expect delays on Project Orion and more.  The product releases Marketo announced at Summit such as their upcoming Orion platform re-write and new Account Based Marketing features should continue to be delivered, but expect delays as the Marketo leadership goes through the deal process.  Vista tends to slow R&D investment at portfolio companies, but if they look into the Marketo + Cvent + Media Ocean idea, that will likely be the innovation in the future. 
  • Prepare for the unique culture of Marketo to fade away.   The “fun” aspects of how Marketo has been marketing to customers and engaging the broader marketing community will likely suffer as Vista tends to scale back on portfolio company expenses and in particular Marketing expenses. Employee satisfaction has a track record of dropping under Vista (see Glassdoor reviews) and customer support is likely to suffer as talent retention will be an issue.  Try to build in SLA’s around support into renewals to ensure quality of service.

If you are a Marketo prospect:

  • Marketo remains a robust and attractive marketing automation solution. Marketo currently prices by package and database size (number of customer email contacts).  Get a good estimate on  database size and lock in  pricing and contracts asap.  Try to have language included for price protection on future license renewals. 
  • Work with a Marketo services or a partner to help in implementation planning.  Talk to other customers to get a sense of the real scope and impacts
  • Feel free to work with Constellation on how to negotiate that price into deals.   Many customers focus on the software subscription and forget services, which can be a costly mistake.

 

The Bottom Line: Expect Negative Impact From Vista In Short Term, Potential Positive Synergies In Mid-Term

With the Vista deal, Marketo can continue to operate independently and customers won’t be deluged with the cross-selling of various “clouds” by companies like Oracle, Salesforce and Microsoft.  This is positive for customers that take a best-of-breed approach to their marketing and sales tech stack, and good for Marketo’s ecosystem of partners. Constellation remains cautious on the future development of the company under Vista and their strict playbook.  One could expect a mass exodus of key leadership and talent as innovators and early employees struggle with Vista’s various employee tests and focus on expense reduction. As a former customer, I've enjoyed being a part of the “Marketing Nation”, and hope that the vibrant, fun culture Marketo has built doesn’t diminish too much. 

The consolidation of the Marketing automation space begun with Oracle’s acquisition of Market2Lead then Eloqua, Salesforce’s pick up of ExactTarget and Pardot, and don’t forget IBM’s Unica and Silverpop.   Now all eyes turn to Microsoft and SAP as they are both in need to beef up their marketing solution to round out their solution set.  Will HubSpot be the next?

Marketing Transformation Sales Marketing Tech Optimization New C-Suite Revenue & Growth Effectiveness Innovation & Product-led Growth Data to Decisions Digital Safety, Privacy & Cybersecurity Future of Work salesforce SAP Microsoft Marketing B2B B2C CX Customer Experience EX Employee Experience AI ML Generative AI Analytics Automation Cloud Digital Transformation Disruptive Technology Growth eCommerce Enterprise Software Next Gen Apps Social Customer Service Content Management Collaboration SaaS PaaS IaaS Enterprise IT Enterprise Acceleration IoT Blockchain CRM ERP CCaaS UCaaS Enterprise Service Chief Customer Officer Chief Marketing Officer Chief Information Officer Chief Technology Officer Chief Information Security Officer Chief Data Officer Chief Executive Officer

Cloud Foundry Cloud Foundry Summit - It's good to be king of PaaS

Cloud Foundry Cloud Foundry Summit - It's good to be king of PaaS

We had the opportunity to attend Cloud Foundry’s Cloud  Foundry Summit in Santa Clara, held from May 23rd till 25th 2016. The conference was well attended with over 2000 participants, coming from customers, prospects and the ecosystem.

 

So take a look at my musings on the event here:



 
 
 
 
No time to watch – here is the 1-2 slide condensation:
 


Want to read on? 

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

Growing, growing – staying humble – The part that strikes me the most with Cloud Foundry is that despite its substantial success in the PaaS market, the vendor remains humble… certainly kudos go to the management team and certainly the combination with open source on the foundation side helped. But a commercial software vendor, with similar success, would have a different attitude and conference. The humble approach maybe well the secret that attracts so many enterprises to make Cloud Foundry their PaaS of Choice.

It’s not about cloud only and not about single cloud – Cloud Foundry is also a data point that shows that enterprises don’t want a cloud only strategy, speaking to a number of attending customers and prospects, the on premises capabilities of Cloud Foundry are a point of attraction. And by now it is clear that cloud lock-in is something enterprise want to avoid, too. Right after on premise delivery option, the multi-cloud capability of CloudFoundry were the next mentioned reason for interest in the vendor.

No serious competition (for the moment) – Cloud Foundry is in a unique positon - for now. Much has been said and written about IaaS ‘eating’ the PaaS layer, and a number of PaaS players disappeared that way. Apart from large technology stack vendors e.g. Oracle and Microsoft making a big move, Cloud Foundry is setup very well in the PaaS market. The vendor has basically established itself as the ‘Switzerland’ of PaaS, with investment and uptake of almost all major players in the enterprise software and services market. And ecosystem adoption has ‘flywheel’ effects that are even strengthening this momentum. E.g. when the largest enterprise software vendor (SAP) chooses Cloud Foundry as its PaaS tool, that’s a major win for the platform, as it drags the probably largest services ecosystem in enterprise software on the platform.

 

MyPOV


There is very little not to like about Cloud Foundry at the moment. The multi-cloud support path the vendor has embarked on about 2 years ago is paying off. Breaking away from the VMware / EMC architecture was certainly a key move, making Cloud Foundry one of the (few) diamonds in the rough of the combined Dell / EMC portfolio. Now it is going to be key to make the next wave of partners and customers successful on the platform to continue the momentum.

On the concern side, much to this analyst’s dismay who always tries to paint a balanced picture, there is very little to be concerned about. Not being too religious on the paradigm of pair programming is a key course for Cloud Foundry, and I heard almost no ‘this way or the highway’ messaging on this at the summit. So the analysis needs to go more into the platform direction, where trends like AI / Machine Learning and the size of compute virtualization (VMs vs micro services) are features / capabilities that the vendor needs to approach and implement the right way, in order to avoid missing out on future ‘attraction’ point to other PaaS players.

But overall a very good Cloud Foundry Summit, vendor, partners and ecosystem are growing, very few, almost no things not to like at the moment. We will keep watching.

Want to learn more? Checkout the Storify collection below.


More on Pivotal / Cloud Foundry
  • News Analysis - Pivotal makes Cloud Foundry more about multi-cloud - read here
  • News Analysis - Pivotal pivots to OpenSource and Hortonworks - Or: OpenSource keeps winning - read here
  • New Analysis: Pivotal Now Makes It Easier Than Ever to Take Software from Idea to Production - read here

More on Next Generation Applications::
 
  • Event Report - Google I/O 2016 - Android N soon, Google assistant sooner and VR / AR later - read here
  • News Analysis - SAP and Microsoft usher in new era of partnership to accelerate digital transformation in the cloud - read here
  • Event Report - OpenStack Summit 2016 - Austin - OpenStack matures, grows up - read here
  • First Take - Workato’s Workbot cuts business users some slack with Slack integration - read here
  • Progress Report - Cloudera is all in with Hadoop - now off to verticals - read here
  • First Take - SAP Cloud for Planning - The next spreadsheet killer is off to a good start - read here
  • Market Move - Oracle buys Datalogix - moves into DaaS - read here
  • News Analysis - SAP commits to Cloud Foundry and OpenStack - Key Steps - but what is the direction? Read here
  • Event Report - MongoDB is a showcase for the power of Open Source in the enterprise - read here
  • Musings - A manifesto: What are 'true' analytics? Read here
  • Future of Work - One Spreadsheet at the time - Informatica Springbok - read here
  • Musings - The Era of the no-design Database - Read here
  • Mendix - the other path to build software - read here
  • Musings - Time to ditch your datawarehouse .... - Read here

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


 
 
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