Retail is the breeding ground for NextGen Apps

Holger Mueller

Vice President and Principal Analyst
Constellation Research

Holger Mueller is VP and Principal Analyst for Constellation Research for the fundamental enablers of the cloud, IaaS, PaaS and next generation Applications, with forays up the tech stack into BigData and Analytics, HR Tech, and sometimes SaaS. Holger provides strategy and counsel to key clients, including Chief Information Officers, Chief Technology Officers, Chief Product Officers, Chief HR Officers, investment analysts, venture capitalists, sell-side firms, and technology buyers.  Coverage Areas: Future of Work Tech Optimization & Innovation  Background: Before joining Constellation Research, Mueller was VP of Products for NorthgateArinso, a KKR company. There, he led the transformation of products to the cloud and laid the foundation for new Business Process as a…...

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The yearly circus called NRF is upon us, and frankly I am glad to be watching from the fences (that is, not attending the hoopla, but watching from abroad, social, hear from colleagues on the ground etc.).

 

Retailers have always been challenged, from whenever the first sortiment decision had to be made – maybe by the Phoenician traders, who had to decide what to load on their ships. As such retailers always had to anticipate what their customers would buy and at what price point.

Fast forward to today and the industry is in turmoil. Even brick and mortar leader Walmart is closing stores. The whole retail business has gone to become more of an online business – starting with the display ad served to a consumer. But then consumers still flock to malls, my ground check this weekend at the Fashion Island mall in Las Vegas showed a well populated mall. And then the consumer of 201x is different than any consumer before – well armed with smartphones, tablets, comparison shopping sites, coupon clubs etc. Finally it looks like the battle for the consumer is seeing a new dimension when they are out and about. While it was only the airwaves that with a radio commercial may have directed a consumer to retailer A vs B while the consumer was already in the car – the self-driving car will give consumers even more time – to prioritize shopping. The good news is that today – the way how to dominate the ‘drive to the mall’ is well known. Display ads and apps.

In summary – retailers have been very good at dealing with uncertainty, but there is likely more uncertainty facing retailers than ever before. So what is a retailer supposed to do?

Far from having a complete answer – there are a few technology strategies that are certain:

 

• BigData strategy – It is clear that retailers need to process and exploit more data than ever. Likely across multiple ‘data lakes’. It is probable that the days of the ‘single’ source of truth are gone and done. Being able to exploit BigData across multiple sources, without a central single repository and still action on the transactional side is key (for those missing Social - the digital exhaust is kept here - in my view social 'sprinkles' across all the below trends).
• Analytics strategy – It is likewise clear that ‘true’ analytics (more here) need to be used to make sense of the data volumes. Retailers can no longer rely on humans to find trends and action, but need software to find and predict buying interests and patterns. That requires the ‘trashing’ of models, i.e. running all predictive models one can get hold off and apply them to a problem. The only place where this can be done is in the (public) cloud. 
• Cloud strategy – As a third ‘clear’ strategy pillar it is clear that retailers need to operate in the public cloud. Retail is one of the most seasonal industries and seasonality means elasticity of IT resources, and that means public cloud. Nice to see that best practices from the ‘old world’ apply here – don’t have a single supplier like in the real world. 
• Apps strategy – It is clear that the current providers of enterprise software are in the midst of moving to the cloud, so they are understanding the move to ‘unlimited’ computing resources themselves. Retailers that want to be leaders in the next years cannot afford to wait for them to move to the cloud, understand the best practices of the 21st century and codify them. That means in consequence that strategic applications for retailers need to be built in-house, so retailers need to look for a PaaS strategy and developers. 
• Mobile strategy – More and more retail business will be attracted and done on smartphones. Smartphone presence and apps are going to be more important to retailers than stores. It’s time for retailers to spend the same amount of time to build their mobile applications as they did for their storefronts. Similar to the Apps strategy it means in-house building of these mobile apps. 

MyPOV

All industries are facing disruption these days, but retailers may be more exposed. Operating already on thin margins, the risks only go up, the industry sees new lateral entries into their market. Even more important to have an overall and IT strategy that takes advantage of the new capabilities technology offers.

Germany rules Facebook’s “Find Friends” function unlawful

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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The highest court in Germany has ruled that Facebook’s “Find Friends” function is unlawful there. The decision is the culmination of legal action started in 2010 by German consumer groups, and confirms the rulings of other lower courts in 2012 and 2014. The gist of the privacy breach is that Facebook is illegitimately using details of third parties obtained from members, to market to those third parties without their consent. Further, the “Find Friends” feature was found to not be clearly explained to members when they are invited to use it.

My Australian privacy colleague Anna Johnston and I published a paper in 2011 examining these very issues; see "Privacy Compliance Problems for Facebook", IEEE Technology and Society Magazine, V31.2, December 1, 2011, at the Social Science Research Network, SSRN.

Here’s a recap of our analysis.

One of the most significant collections of Personally Identifiable Information (PII) by online social networks is the email address books of members who elect to enable “Find Friends” and similar functions. This is typically the very first thing that a new user is invited to do when they register for an OSN. And why wouldn’t it be? Finding friends is core to social networking.

New Facebook members are advised, immediately after they first register, that “Searching your email account is the fastest way to find your friends”. There is a link to some minimal explanatory information:

Import contacts from your account and store them on Facebook's servers where they may be used to help others search for or connect with people or to generate suggestions for you or others. Contact info from your contact list and message folders may be imported. Professional contacts may be imported but you should send invites to personal contacts only. Please send invites only to friends who will be glad to get them.

This is pretty subtle. New users may not fully comprehend what is happening when they elect to “Find Friends”.

A key point under international privacy regulations is that this importing of contacts represents an indirect collection of PII of others (people who happen to be in a member’s email address book), without their, knowledge let alone authorisation.

By the way, it’s interesting that Facebook mentions “professional contacts” because there is a particular vulnerability for professionals which I reported in The Journal of Medical Ethics in 2010. If a professional, especially one in sole practice, happens to have used her web mail to communicate with clients, then those clients’ details may be inadvertently uploaded by “Find Friends”, along with crucial metadata like the association with the professional concerned. Subsequently, the network may try to introduce strangers to each other on the basis they are mutual “friends” of that certain professional. In the event she happens to be a mental health counsellor, a divorce attorney or a private detective for instance, the consequences could be grave.

It’s not known how Facebook and other OSNs will respond to the German decision. As Anna Johnston and I wrote in 2011, the quiet collection of people’s details in address books conflicts with basic privacy principles in a great many jurisdictions, not just Germany. The problem has been known for years, so various solutions might be ready to roll out quite quickly. The fix might be as simple in principle as giving proper notice to the people who’s details have been uploaded, before their PII is used by the network. It seems to me that telling people what’s going on like this would, fittingly, be the “social” thing to do.

But the problem from the operators’ commercial points of view is that notices and the like introduce friction, and that’s the enemy of infomopolies. So once again, a major privacy ruling from Europe may see a re-calibration of digital business practices, and some limits placed on the hitherto unrestrained information rush.

The Weekend Before Davos And The Dawn Of The Fourth Industrial Revolution

R "Ray" Wang

Principal Analyst and Founder
Constellation Research

R “Ray” Wang is the CEO of Silicon Valley-based Constellation Research Inc. He co-hosts DisrupTV, a weekly enterprise tech and leadership webcast that averages 50,000 views per episode and blogs at www.raywang.org. His ground-breaking best-selling book on digital transformation, Disrupting Digital Business, was published by Harvard Business Review Press in 2015. Ray's new book about Digital Giants and the future of business, titled, Everybody Wants to Rule The World was released in July 2021. Wang is well-quoted and frequently interviewed by media outlets such as the Wall Street Journal, Fox Business, CNBC, Yahoo Finance, Cheddar, and Bloomberg. Short Bio R “Ray” Wang (pronounced WAHNG) is the Founder, Chairman, and Principal Analyst of Silicon Valley-based Constellation…...

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 It's time to pack your bags ( at least virtually). The weather outside is 20F/ -7C and folks are starting roll into Zurich and the train ride into Davos. For those lucky ones, the private jets are starting to pile up as guests come in to mingle. It's the weekend before Davos. Everyone's starting to digest the theme around the 4th Industrial Revolution.

Now, many of us have not even succeeded in the digitization of business, let alone surpassed the 3rd Industrial Revolution. However in true Davos fashion, the theme on the 4th Industrial Revolution is set with a pace and fury unsurpassed in time. The theme takes a futuristic look on the impact on society, business, technology, and the economy. According to the manifesto:

"The First Industrial Revolution used water and steam power to mechanize production. The Second used electric power to create mass production. The Third used electronics and information technology to automate production. Now a Fourth Industrial Revolution is building on the Third, the digital revolution that has been occurring since the middle of the last century. It is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres."

We are at the dawn of the convergence of biological and digital. Not at the point to impact business, commerce, and the economy. Yet, the signs are clear as a civilization where we will most likely head. This gives us the ability to plan our journey in the third industrial revolution as we encounter digital transformation. Over the next few days, get ready for some insight and discussion around these topics:

• The Transformation of Finance
• The Transformation of EnergyThe Transformation of Healthcare
• The Transformation of Business and Society
• Around the World without Fuel or Fear
• Going Digital
• The Fintech Revolution
• The Growth Illusion
• The Promise of Precision Medicine
• The State of Artificial Intelligence
• Stop to Think: Big Data vs Human Touch
• The Future Drives and Flies Itself
• The Future of Energy

We'll talk more later. I want to hear your points of view!

Your POV.

Are you ready for the 4th Industrial Revolution? What are your questions from Davos? Add your comments to the blog or reach me via email: R (at) ConstellationR (dot) com or R (at) SoftwareInsider (dot) org.

Resources

Salesforce AppExchange Celebrates 10 Years of Platform Success

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 January 14, 2016 the Salesforce AppExchange turned 10 years old.  That makes it more than 2 years older than the iPhone App Store, which opened on July 10, 2008!  For those of you unfamiliar with the AppExchange, it's a catalog of applications built by Salesforce partners that enables customers to add functionality to their use of Salesforce. Do you want to add Human Resources (HR), Supply Chain (ERP), or financial features? There's an app (well dozens) for that. On the collaboration side, do you want to add web-conferencing or task management? There's an app for that.

When choosing a vendor, one of the most important things to consider is how vibrant the company's business partner ecosystem is. The more partners a company has, the more features and functionality will be available. A flourishing partner ecosystem shows that developers have faith that the platform is a leader, and someone they want to invest their time and money on. With close to 3000 apps now available for Salesforce, it's quite clear that 3rd party developers feel confident Salesforce is a company they need to build products for.

To get started building applications for Salesforce, visit their developer site named Trailhead for documentation and tutorials.

The Salesforce AppExchange created the model that several other software companies have strived to emulate. Collaboration vendors such as Box, Clarizen, Google Apps, Microsoft Office, Podio and Slack now offer integrated catalogs of their own.

Here is an infographic that Salesforce created to highlight some key milestones.

NRF16 Retail’s Big Show – what I expect to hear this year.

pending

Guy Courtin was formerly Vice President and Principal Analyst at Constellation Research covering Matrix Commerce and how the Internet of Things drives the evolution of commerce.  Guy has over 15 years experience in the technology space and specifically in the supply chain space. Most recently he was the Vice President of Research at SCM World. Where he focused on the service providers that empowered supply chains. Prior to SCM World, Guy held numerous senior positions. He was responsible for product marketing at RSi, a retail supply chain solution provider. There managed RSi’s go to market strategy around their leading cloud based supply chain solutions. He also spear headed Progress Software’s supply chain group. Where he was responsible for driving revenue and market share as well…...

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Every January for the past few years I have made the trek to the Big Apple and spent the better part of the week at the cavernous Javits Center for the National Retail Federations Big Show. The event feels like the official kick off for the year. While I know many who grudgingly make their way to NRF, I have always enjoyed my time at the event. So what about this year? What will I be looking for from the show?

• The continued evolution towards the endless aisle – Matrix Commerce, is all about the merging of physical retail with eCommerce in all its forms. Where commerce is thought of without the distinction between what happens in a store or in cyberspace – it is just commerce. Obviously this is not a new concept, more an evolution of omni channel retail. One key need for Matrix Commerce is to be able to meet customer demands anywhere those demands emerge from – understanding inventory availability is the key. However, this remains a major challenge for retailers and holds back Matrix Commerce to take full flight. Too often retailers are still struggling to merge multiple systems, those that serve physical stores and those that may serve eCommerce, catalog driven sales and other channels. Often times these issues stem from past decisions made to treat eCommerce as separate from their traditional business – brick and mortar. Today more retailers are struggling to find ways to consolidate these systems and begin to gain greater visibility into their overall inventory positions. I will be interested to see what are the solutions and processes being offered for retailers. Without the ability to gain this visibility, the ability to achieve the endless aisle retailers are looking for will remain a major hurdle. Retailers cannot expect to be flexible and capable of meeting customer demands, regardless of which channel generates that demand, if they do not have true view into their inventory positions. This is not simply where inventory is, but what inventory has been promised and how to match order priority with accessible inventories. I am curious to see how the likes of Infor, Software AG, IBM, Aptos, Oracle and others are tackling this challenge.
• Workforce empowerment picks up momentum – An area that has picked up in intensity over the past year is the ability to bring smarter solutions, information and insights down to the store associate and even distribution center employee. How to bring more insights and tools to the store associates runs in parallel with the redefinition of the store itself. Stores are being asked to do more – become destinations through hosted contextual experiences within the stores, leveraging store inventory to fulfill orders, act as return depots and embrace show rooming. A key aspect of these new store uses will also change the store associate role within this infrastructure. In order to maximize both the store as well as the associate, retailers are looking for solution providers to offer ways in which technology and other solutions can be integrated with the store associate daily activities. Think mobile tools, wearables, greater system integration and better business processes all being put on the floor of retail brick and mortar locations – right in the hands of store associates and managers. This is also true for distribution center labor. With continued rise of eCommerce, fulfillment takes on a new dimension where distribution center labor is asked to not only package inventory to be delivered to stores but to provide direct to consumer fulfillment as retail supply chains are more flexible with regards to where they service demand. Look for more discussion, from such players as Salesforce, Netsuite, Kronos, and others, around new solutions and efforts made by those attending NRF on how they can empower retailers’ workforces with enhanced tools and insights.
• Tackling last mile logistics – All one has to do is look back a few weeks and realize that the crush on logistics, especially the last mile portion, continues to be a strain on the retail supply chain. Stories such as the one from the University of Connecticut’s mail room that is overwhelmed by package delivery, that Jet.com had to apologize to some of their customers for not being able to meet holiday order deadlines and real estate management firms such as Camden Property putting in policies that restrict and even prohibit package delivery to their properties, are all examples of the last mile retail crush. As we see more retailers offering free shipping and returns or the likes of Amazon and Jet.com incentivizing customers to look to receiving a wider array of products delivered to home – this issue will not go away. I am looking to NRF to learning of new and innovate manners vendors are looking to address this issue with their customers. How are traditional logistic solution providers such as JDA, Manhattan Associates, Oracle to name few are tackling this issue and what innovate strategies are they helping their customers implement?
• The revolution in customer relationships, beyond CRM – I hesitate to call this CRM…reason is that I believe that the connotation associated with CRM is limiting to what is really being offered to retailers. What is key in today’s retail world is getting a rich view of the customer, and not only at those customers’ interactions with the brand. Retailers, just like they do with their inventory, must approach customers across all channels that they touch the brand through. Similar to understanding your inventory position, knowing all the touch points and the context of those interactions are not easy to achieve. As retailers must pull from multiple and often time isolated systems, it is a daunting task to create a clear picture of consumers. Understanding goes beyond creating the 360 view of the customer but also how to apply this within the context of the store and even beyond. What are the technologies that can be leveraged within the store to build on this customer knowledge and help convert and build deeper relationships between the customer and the brand. Looking at NRF16, I am interested in seeing how the likes of Salesforce, Oracle, Engage.cx, SAP Hybris, Zebra Technologies to name a few are taking on this challenge.

I am bracing myself for busy and hectic 4 days in New York, but I am also looking forward to absorbing a lot of great information, seeing old friends and meeting new ones. Will I see you there? I hope so! What are you hoping to see at NRF this year?

Report: Software Challenging the Status Quo in the Way People 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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One of my favourite parts of my job is meeting with collaboration software vendors to discuss with them how they are going to improve, or in the rare case change, the way people work. I have hundreds of briefings each year, some with billion dollar software companies and others with brand new startups. To organize all their products, I've created three categories:

• Evolving Email, Calendar and Contacts
• Creating, Coordinating and Collaborating
• Seamless Communication Experiences

In my new report, Collaboration Vendors Shaping the Future of Work, I've highlighted 18 products that show vision in improving the way people get work done. These companies were chosen based on the number of inquiries from Constellation Research customers, information gathered via company and product briefings, customer references stories, growth in partner ecosystem, and breadth of coverage and momentum in the press. Not all of these products will become market leaders. Some may fade away, some may be acquired, some may rise to the top... but all of them deserve accolades for attempting to shape the future of work. 

In the report we take a quick look at each product, discuss what they are doing and list a few of their competitors. Of course no list is ever complete. What is your favourite new product that is doing something a little bit different to make it stand out from the crowd?

Click here to purchase: Collaboration Vendors Shaping the Future of Work.

The IoT Market – 2015 laid down the direction for 2016 Massive numbers of well-financed IoT startups are attacking current market leaders

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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Back in January it seemed as though 2015 would be the year of Hype for the Internet of Things, as industry pundits competed to claim how many billions of IoT devices there would be in the coming years. At the end of 2015 many people in IT can state that for them there was no sign of IoT happening, and if you work in the IT department that’s arguably true. IoT is happening, and just like the Internet after the 2002 bust, it’s changing some sectors slowly but surely.

If IoT is happening then why do many people in the IT industry see no sign of it, making Industry analysts’ predictions look like so much hype? The simple answer is just like Social Marketing its not led by, or even happening very much within, the IT industry.

The most obviously visible IoT markets are consumer, but that doesn’t mean IoT isn’t happening elsewhere. Smart Homes top the list as in 2015 consumers drove this market into furious growth deploying a wide range of IoT Devices delivered via Smart Phone or Tablet based Apps that made their lives easier or more fun. A very conservative estimate, based on multiple Venture Capital Investment tracking reports indicates more than $1 billion has been invested in over 250 startups in the Smart Home, or Buildings sector.

Current consumer market leaders are well aware of this new market factor and have joined together in different consortiums each seeking to maintain their members market dominance through a new standard. Sadly ambitious consortium goals coupled to a membership more normally in competition with each other take time, and investment to achieve.

A closer examination of this market suggests that 2016 might be remember for being the year when the startups dismembered and disrupted the market leaders status faster than they could adapt. Its not only speed that is on the startups side, its also the amount invested. IoT Startups have more to spend on product development than market leaders are able to allocate for their IoT initiatives.

Smart homes are a well-researched sector able to provide some interesting feedback to other sectors and markets concerning key principles as to the disruptive progression of IoT based Smart Services. Whether a Consumer or Business markets the following characteristics can be seen;

• A wholly new set of ‘values’ over turns traditional grounds for choice of product          
• There are many startup players creating a wave of interest within the market
• Smart Apps delivered on Smart Phones and Tablets are the user interface
• Considerable Venture Capital Investments are supporting these disruptive players.

It’s the stunning amount of investment creating a massive number of startups covering any, and all, aspects of IoT that is the most striking feature of 2015. Venture Capitalists clearly believe not only in IoT, but that it will be a disruption to existing markets and create much new business value. The total across all aspects of the IoT provides more than enough investment to attack the current market and sector leaders across their entire product ranges, as well as introduce innovative new capabilities.

A recent Venture Capital investment report analyzed Honeywell’s product range in the building controls industry to name 31 startups specifically targeting one or more Honeywell products or changing their functions to Smart Services. In the Automotive sector another report named more than 600 startups vying for parts of the market, and overall there is a claimed $8.3 billion of investment in IoT.

The obvious question is why should the startups succeed against the established market leaders who have experience, resources and a customer base on their side? Some would argue that their very legacy positioning and experience makes it difficult to tackle such a level of disruption. This is not true as the example of John Deere detailed later shows. More pragmatically levels of investment in IoT startups is running several orders of magnitude ahead of the investments the existing players can afford to make. Added to this is the speed with which the startups can react and seize opportunities constantly innovatively and optimizing their products. The startups have skills, fast decision making, and most important of all, the democracy of the Internet on their side.

Time and again within a few quarters a new innovative Smart Service from an unknown startup has been catapulted into a scale of market awareness that conventional Brand based marketers can only dream about. The democracy of the Internet allows the meritocracy of a product, usually an innovative Digital Service, in outperforming the previous alternatives to be recognized, and promoted globally, fast!

Even those Enterprises born out of the Internet and Digital Business era such as Google, Facebook, and others, now risk being out classed in some important aspect of their business by a well-focused startup. Fortunately their corporate culture of fast reactive leadership, coupled with a buoyant share price, allows acquisitions as a strategy to aggregate their leadership. Intel and Cisco standout for their early stage investment programs that encourage promising startups that can add value to their business in one way or anther, but can traditional Enterprises manage the same, or is there another route?

The obvious question for 2016 in respect of current sector, and market, leaders is their ability to acquire the key IoT startups diminishing the most successful attackers, and accelerating their own market disruptive transformations? If not the alternative suggests that the startups will succeed in breaking the traditional competitive market pattern of two or three leaders holding 80% plus of the total market to create a new Internet meritocracy market place in its place.

In support of this argument remember that the number of Black Swans, or Unicorns, defined as companies that rise above a $1 billion valuation has never been higher as Digital Business introduces new market opportunities. A point that is clearly driving Venture Capitalists willingness to invest!

That’s not the only way and there are examples of sector, and market, leaders who have realized how to use the IoT startup market to reinforce their own value rather than allow an alternative platform, or a clutch of startups to triumph. In these cases there is an understandable progression in their use of each wave of new technology to create business value. In the last five years the route has been through Mobility into Smart Phone Apps and recognizable innovative Services, as part of this journey the adoption of IoT sensors has seemed a natural inclusion. These three stages of development characterize a three, or even five, year journey of growing experience; today at the start of 2016 this has to be an eighteen-month fast follower transformation to remain competitive.

Market place transformation is often initiated by customers, this certainly true in respect of the uptake of Apps, and App Shop distribution following the uptake of Smart Phones and Tablets. In parallel Mobility projects may have been more Enterprise focused providing useful experience, and often even more valuable data, in a wide range of sectors. A strategy to rapidly move into IoT Smart Services can successfully build on these foundations as the following example in the Farming Agri Business sector proves.

Farmers were quick to move into Mobility and Smart Phone, or Tablet Apps, with examples such as mobilefarmer.com described as ‘written by farmers for farmers’, or mobilefarmapps.com. As in other markets the arrival of these Apps stimulated the interest in, and acceptance of ‘Digital’ capabilities. Over time new Apps got smarter, more comprehensive and better integrated.  The use of sensor and sensing technology added new functionality and became a feature of a new generation such as efarmer.mobi. Starting with the multi sensing functionality of a Smart Phone for location, (as with so many Smart Services, i.e. Uber taxi cabs), efarmer.mobi and others built a range of more sophisticated real time services.

Venture Capitalists have been quick to see the opportunities in using IoT to transform farming with $269 million invested in 41 startups in Q3 2015 alone. As is the case in other sectors existing IoT Technology startups such as ThingsWorx have been quick to extend their core IoT Platform capabilities to include a focus on farming ecosystems. The terminology Smart Farming, or Precision farming, is now the generic recognized term. As in other sectors a host of startups are now competing with various forms of IoT sensor based Smart Services placing market leaders under attack.

It’s not only Farmers and Startups driving the market, other Agri-Business such as Farm Supplies have seen a competitive advantage in helping their customers to gain more yield at lower cost by precision control of seeds, fertilizers, and sprays. To discover exactly what form this takes read the story of Wilbur Ellis' Agribusiness division developing it’s own Smart Service platform complete with labor task management and worker collaboration tools. The platform was built  by Aditi a new breed of IoT technology integrator whose case study provides the story.

In might be a very different set of markets to the Smart Home/Buildings sector, but it’s a similar story with large numbers of well-funded startups surrounding and attacking established market leaders. (The common story that will become visible through 2016).  In this case a market leader, John Deere farm machinery, has turned the presence of IoT Startups to their advantage in creating their own market place disruption against their new and traditional competitors as well.

John Deere executed a classic Mobility to Smart App to IoT Platform progression strategy through a series of tactically beneficial business moves. The third stage, creating an IoT Market Sector Platform is crucial to both maintaining market leadership and creating a new innovative competitive IoT ecosystem that provides unique value to the whole industry market from end customer to other market suppliers.

There is urgency to introducing Smart Services as experience shows users are reluctant to delete and load a latter competitive App even if it has new features. Late entrants, even as fast followers, will find it very difficult to persuade users to change to their Smart Services, and even more so their new IoT Ecosystems platform.

There is true first mover advantage in establishing an Industry Sector, or local Market, IoT Ecosystem Platform and attracting as many as possible IoT Smart Services Startups to use your Platform. Early winners see numbers of connections, data points and complex event processing capabilities multiplied ever faster leaving later followers, unable to create the necessary volume.

IoT Smart Services are totally dependent on an adequate volume of events and data flows to be able to provide the basis to calculate Smart actionable insights. Startups and Smart Service developers will flock to an IoT Ecosystem Platform that can provide them with the best quality volumes. The John Deere IoT Ecosystem Platform has succeeded by aggregating the data, connection and Apps together with earlier Telematics and Mobility activities to create the necessary volume.

John Deere started in 2011 with the introduction of the John Deere Strategy around using sensors and data to increase the value that that ‘JDLink telematics’, as it was referred to at the time could add to John Deere customers. The valuable experience gained led smoothly into improved delivery and user interactions with the launch in 2012 of John Deere Mobile Farm Manager. Farmers showed themselves to be more than willing to adopt the advantages of Smart Phones and Tablets to run a new generation of Sensor based Mobility capabilities and associated Apps all of which were able to directly contribute to more profit per acre/hectare. By 2013 John Deere was realizing the power of connecting up its own ecosystem of John Deere dealerships into a range of Smart Services for reliable operational maintenance branded as John Deere Farm Sight.

By the end of 2013 John Deere was ready to go ahead with opening its myjohndeere platform to the agri-business industry as a whole creating a data and connection rich IoT Ecosystem platform that would attract Startups and established Agri-Businesses to make use of its unique positioning and capabilities.

It would be nice to end this journey with John Deere recording record revenues and profits, but Farming is a tough business with the last couple of years seeing farm prices for a wide range of commodities falling, as have sales of farm equipment. Against this background John Deere have performed as well as could be expected and are the 70^th most valuable brand in the global brands survey. The question is what would have happened if John Deere had not taken action to transform themselves, their sector and value offered to their customers? The best answer lies in the story published by Data Science which charts the change from “Farming to big data; the amazing story of John Deere” in reading this article reflect on how many other market sectors the story applies to as well!

2015 looks to have been the year for IoT startups to build their products with 2016 becoming the year that a series of market visible disruptions will occur. Collectively well-financed startups will certainly be present in many sectors and localized markets in 2016, the extent that this will impact Market leaders is the big question. How many global sector leaders will seize the initiative to become IoT Ecosystem disruptors is the second question.

As ever predictions are hard, but as its the customers who are driving the market disruptions as they see new business values change is certain to occur, it’s the extent that is the real question.

Unit4 announces integration with Slack - News Analysis

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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This morning Unit4, a rising ERP player with European origins, announced its partnership with the 'hot' collaboration startup Slack. As such its the first partnership of Slack, which has covered more than mindshare in SiliconValley, becoming the 'de-facto' collaboration tool for many local enterprises, and an enterprise software vendor. So well worth a blog post. 

 

 

 

So let’s take apart the press release in our customary style (it can be found here):

 

Utrecht, Netherlands, January 12, 2016 – Unit4, a fast growing leader in enterprise applications for service organizations, today announced a new integration with Slack.com, the messaging app for business teams. Slack delivers service industry professionals using Unit4’s people-centric ERP software a useful communications extension so that updates in Unit4’s Communities workspace become part of their Slack stream and vice versa.

MyPOV – Good synopsis of the partnership. Unit4 has put collaborative capabilities into it platform for people centric ERP, and the collaboration spaces of the platform are now getting integrated with Slack streams. Remarkably it’s a bi-directional interface and information from Slack finds a home in Unit4. Bi-Directionality is important to enable the way how people work, with two solutions and no need for manual synching.
 

The two-way integration enables Unit4 customer teams to bring together all communications in one place, replacing the need for project-related in-team email. Teams can organize conversations in open channels related to a specific project, topic, team or customer for example, increasing productivity and efficiency. As Unit4 achieves its vision of self-driving ERP, where applications self-learn to deliver real business insight, in-team collaboration and rapid response to opportunities will become a competitive differentiator.

MyPOV – Good formulation of the need for rigidity for scale (as often found in ERP software) and the flexibility for agility (as often found in collaboration software) and how Unit4 plans to deliver on these. Mastering the integration in a light weight ‘automagical’ fashion in one of the holy grails in enterprise software – often searched for – not really fully reached - so far.
 

Both Slack and Unit4 Business World are available via mobile applications making this a powerful solution for distributed teams across different geographies.

MyPOV – Good to mention the mobile aspect. More than half of work of business professionals now happens in a mobile setting and enabling work in a mobile setting is key. Achieving efficient mobile integration is not trivial – so it will be interesting to see

“Slack has become a popular collaboration tool for business as it is simple to use and ties together the many other disparate tools we use today like Dropbox, Google Docs and Twitter etc.,” said Erik Tiden, Unit4 CTO. “It won’t replace business email anytime soon but is a powerful alternative to in-team email. Teams can be up and running in seconds working together in open and private groups around any project or initiative. It again underlines our people-centric approach to ERP. For service teams working with our Business World ERP, it means they don’t always have to be logged into the system but can keep up on project status through the Slack.com mobile app, and conversations can be extended to customers and other external stakeholders.”

MyPOV – Good summary by Unit4 CTO Erik Tiden, supporting the people centric vision of Unit4.
 

Overall MyPOV

A good move by Unit4, delivering a proof point of people centric ERP. A compelling vision is one thing, delivering on it is harder but key to create both value for customers and differentiation in the marketplace. Slack is the collaboration tool that has captured a lot of mind share and is highly desirable for enterprise users to use. Traditionally both enterprise IT and enterprise vendors have been slow at offering support for these tools, creating frustration in the user base. With Unit4 supporting bi-directional integration with Slack it not only shows people centricity in product, but also in user appreciation. A welcome change for enterprise software and hopefully an inflection point creating a new attitude of both corporate IT and traditional enterprise software (ERP) vendors to people needs. 

This capability is a win for both vendors, more importantly for busy users in enterprises that need to connect their enterprise processes with collaboration capabilities. 

 

More on Unit4:

• News Analysis - Unit4 picks Microsoft Azure for ‘Self-Driving’ ERP vision - Cloud, Machine Learning, Office and PaaS are the attractors - read here
• Progress Report - Unit4 lays out a big vision - now it needs to execute - read here
• News Analysis - Unit4 acquires Three Rivers Systems - read here

More on Future of Work

• Musings – Time to re-invent email – for real! - read here
• Musings - Future of Work – Is voice part of it? Post Cortana debut reflections.... - read here

For much more on the Future of Work, with a focus on social business and collaboration, check out my colleague Alan Lepofsky's blog 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 (C) Holger Mueller - All Rights Reserved

Salesforce Reboots Wave Analytics, Preps IoT Cloud

Doug Henschen

Former Vice President and Principal Analyst
Constellation Research

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

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Salesforce Analyst Summit 2016 highlights Wave Analytics Cloud makeover and work in progress on the Internet of Things strategy and Salesforce Thunder.

Salesforce has successfully rebooted its Wave Analytics Cloud. It’s also apparent that company is trying to avoid the sorts of missteps that plagued Wave as it prepares Salesforce Thunder and the Internet of Things (IoT) strategy.

These are my two key takeaways from the January 5-7 Salesforce Analyst Summit in San Francisco, where executives discussed the company’s strategy and laid out product roadmaps for 2016. Execs also acknowledged some of the mistakes that were made in the launch of Wave, which was introduced 15 months ago at Dreamforce 2014.

The first iteration of Wave was, by most accounts, too expensive, too enterprise focused and packaged too much like a traditional BI platform. Starting with a platform (rather than pre-built apps) was essential, execs here insisted, because partners and customers would ultimately want and need a way to build vertical-industry and custom apps. But the market balked at the cost and complex packaging of the first-generation offering.

The second generation of Wave, introduced in September at Dreamforce 2015, is greatly simplified. For starters, Salesforce ditched separate Builder and Explorer licenses (priced at $250 and $125 per-user, per-month, respectively) and settled on an all-purpose platform license priced at $150 per user, per month. The company also introduced Sales Wave, the first of several planned prebuilt apps priced at $75 per user, per month. The apps are designed to speed and simplify deployment with user- and task-specific data flows and dashboards and templates for customizable analyses and actions.

Sales Wave templates, for example, provide a head start on analyzing sales levels, team performance and pipeline health. Prebuild historical analyses assess revenue by quarter, year-over-year rep productivity, and the length of sales cycles, among other measures. Administrators can set up triggers for recommended actions, such as resetting forecasts or prioritizing deals.

Detailing the Wave roadmap for 2016, Stephanie Buscemi, COO of the Analytics Cloud, said the previously announced Service Wave app will be available in April while a Marketing Wave app is in development. On the platform front she said Salesforce is working on a data-connector framework as well as scheduling capabilities and self-service data-prep options for Salesforce data.

MyPOV on Salesforce Wave

I believe Salesforce is finally on target with Wave’s packaging, pricing and a tighter, clearer focus on offering what Buscemi called “the best analytics option for Salesforce.” Some of the original attractions of Wave, including its user-interfaces and native mobile apps, still stand apart. And from what I hear about the appeal of prebuilt Wave apps (both from Salesforce and from customers), I expect the Salesforce Wave reboot to be a success.

Stay tuned on this front as Salesforce recently hired Microsoft veteran Bob Stutz to service as Chief Analytics Officer. Stutz won’t start until February, but I’d expect more tweaks to Wave as soon as April if adoption isn’t building as quickly as Salesforce would like. Keep in mind that third-party vendors BIRST and GoodData, among others, have been working on their versions of “the best analytics for Salesforce” for quite some time, but they would stress that they can provide insight beyond Salesforce.

Salesforce Thunder and the IoT Strategy

Salesforce announced its IoT Cloud Powered by Salesforce Thunder at Dreamforce 2015. The company even announced initial customers, but at that stage Thunder and the IoT Cloud were nowhere close to testing, let alone general availability. Last year I predicted we wouldn’t see Thunder until Dreamforce 2016, and based on IoT presentations and discussions at the Analyst Summit, I’m convinced that timing will hold.

What’s taking so long? Well, for starters, Thunder had its first customer pilot tests over the recent holidays, according to Adam Bosworth, Salesforce's Chief Strategic Officer, who is spearheading the development of Thunder and the IoT Cloud. (Bosworth is a storied veteran of Microsoft and Google who’s “a Johnny Appleseed of sorts in the tech industry,” according to a recent profile in the New York Times.)

Bosworth stressed at the Summit that the company “has many months to go” before Thunder and the IoT cloud will be ready. For now he says he’s asking early customers “lots of dumb questions,” like how they intend to make money off of IoT. With so many firms “wallowing” with big data investments, he said Salesforce is intent on starting with practical, revenue-driving use cases.

Salesforce Thunder was described as a kind of enterprise service bus capable of handling high-scale batch data as well as data streaming at rates in excess of 50,000 events per second. Thunder is based on open-source components including Kafka, Cassandra and Spark, but the point is not to establish Salesforce as an IoT infrastructure player.

“When we work with industrial, automotive and connected-device companies, what they are lacking is a way to drive [IoT] adoption,” said Alex Dayon, president of products. “We have to connect IoT with the customer business processes. Our value proposition is to bridge the IoT world – the signals from the machines — with the experience of the customer.”

Talking to execs at the Analyst Summit, it clear that there’s still internal debate about just what Salesforce will deliver with its first-generation IoT offerings. There’s a real danger with IoT offerings, said Bosworth, that customers will expect much more than what companies will be able to deliver. He cited the example of his wife’s connected car, which needs to go to the shop much more frequently than his much older analog car of the same brand. What’s more, the dealer never offers predictive insight into what’s wrong with his wife’s car even though the vehicle is loaded with so-called “smart” sensors.

MyPoV on Salesforce Thunder and the IoT Cloud

Meeting high customer expectations is one challenge. But Salesforce also has formidable internal technical obstacles to overcome. For example, overnight data latency is currently the standard where Wave insights are concerned, while cutting-edge deployments have reduced that data-update latency to about one hour. The trouble is that many IoT scenarios will demand near-real-time analytics, and that’s something Salesforce is still working on.

Dayon and others said the company’s IoT play will be focused exclusively on CRM-centric use cases, but in my book, big-data scalability, streaming-data processing and related analytical capabilities all have to be there as Wave and IoT platform-level capabilities. It’s another area where Salesforce will have to decide what it can should offer itself, what it can leave to partners and where, in future, it might have to rely on hyper-scale cloud partners such as Amazon or Microsoft Azure.

We’re venturing deeper, here, into questions that relate to the future of the entire company (and why there was talk of a Microsoft acquisition last year). Where our data-to-decisions research is concerned, suffice it to say that Salesforce has to do more than dabble with IoT and data-science capabilities.

Related Insights:

Salesforce Makes Wave Analytics More Accessible, Affordable
Salesforce IoT Cloud Awaits Thunder Real-Time Engine

The CMO Club and Oracle Deliver New Solution Guide to Help CMOs Transform Their Marketing Organization

Vice President and Principal Analyst, Constellation Research
Constellation Research

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

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The complexity of marketing has increased exponentially. The question on many CMO’s mind’s range from:

• Do I have the right technology?
• Am I using what I have well?
• What else do I need?
• Are my processes efficient and effective to take advantage of the technology?
• Do my people have the right skills, mindsets and capabilities to deliver on all the various aspects marketing has expanded into – from SEO, to demand gen, to lead conversion, to e-commerce, to branding, storytelling and brand personas, to email, social and digital marketing…?
• Are my strategies going to create the kind of lead conversion rates that will enable to expansion of my team and the respect that they should garner from the senior leadership team?
• Do I have the right customer analytics strategy and can I execute on the data and data warehouses that are required to really know my customer and service real-time information where (channels & devices) when they need it?

To help CMOs meet skyrocketing customer and boardroom expectations, The CMO Club, along with Oracle,  released “The CMO Solution Guide for Building a Modern Marketing Organization.” The guide, which is based on interviews with CMOs and digital marketing leaders from major brands including Dow Chemical, JetBlue Airways, MasterCard, PayPal, Quiznos, The Hershey Company and Viking River Cruises, includes insights and best practices that CMOs can apply to build customer-first marketing teams that drive measureable results.

To help marketers successfully manage this transformation, the new CMO Solution Guide provides practical advice from 20 in-depth interviews with CMOs and digital marketing leaders from organizations of various sizes and different industries.

Pete Krainik, CEO, The CMO Club said, “While the number of tools and amount of data available to marketers continues to multiply, the age old challenge of capturing and leveraging the right data to create engaging customer experience across all channels still exists. The first step they must take is to establish the appropriate organizational alignment to successfully create this type of customer experience. While no organization is exactly the same, this guide helps provide easy-to-implement changes that any marketer can use to drive transformation.”

While there is no organizational model that fits every company universally, four key themes emerged during the course of the interviews that informed the organizational decisions that CMOs make: Acumen, Alignment, Agility and Accountability. More on those below:

• Acumen: To become more effective modern marketers, respondents reported that enhancing the skills within their department has become a top priority. From developing valuable customer insights through data mining to investing in content creation and the need for greater evaluative analytics, leading marketers are investing heavily in helping their teams learn new skills.
• Alignment: From top to bottom and across all functions, the guide shows that it is critical for all departments to follow the same processes and company culture in order to effectively engage customers across all touchpoints.
• Agility: To meet consumer demands for exceptional customer experience, the guide noted how important it is for businesses to have strong cross-functional teams and the flexibility to pilot something new to test and learn best practices.
• Accountability: To demonstrate marketing’s impact on the bottom line, the guide recommends establishing the right measures from the outset and instilling a culture of personal accountability around those parameters.

Along those lines is a larger question that looms in most organizations. That question is who should be the general manager of the overall customer experience? CMO’s are well positioned to be that person, but there are risks as well as rewards in taking on that responsibility. I’ve outlined some of them in a new report Should the Chief Marketing Officer Oversee the Whole Customer Experience? And I look forward presenting  the accompanying webinar coming up later 2016.

While most brands may not realize it, they are competing on one important variable: customer experience. With all other things being equal, we are in a service economy and there’s nothing that is more important than the experience customers have with companies. And it’s not the brand promise creating by marketing that makes up that customer experience, but also the experience customers have with sales, service and back office operations. It’s not an easy question, but one that must be answered by every senior leadership team and their board of directors. That is what digital disruption is all about and companies not understanding this will go out of business or be acquired or merged for their customer list and cash flow. Poor customer experience, no business. Period. It’s that simple.

@DrNatalie, VP and Principal Analyst, Constellation Research

Covering Customer Facing Capabilities of Organizations to Deliver on Better Customer Experiences