FIDO literally becomes the Standard in Authentication

Steve Wilson

Former Vice President and Principal Analyst
Constellation Research

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

Read more

The FIDO Alliance takes a major step today towards its goal of making strong yet easy authentication ubiquitous.  

The consortium has been working for nearly three years now on new authentication protocols which leverage the cryptographic capabilities of modern mobiles. FIDO protocols U2F and UAF allow users of compliant devices to be seamlessly authenticated by remote services, dispensing with passwords, and, under the covers, allowing a variety of vital staristics to be verified in real time by service providers, like the state of the device being used, how it's been activated, the type of biometrics that might have been used to turn it on, the device model, its certification standing, and so on.  FIDO has taken the security world by storm, and has been taken up in rapid succession by Paypal, Alipay, Google, Microsoft, NTT DOCOMO and others, to deliver identity security and convenience at the same time. And for the first time, at scale. 

The FIDO Alliance has a breadth of participation across the “Relying Party” or technology buy-side that other identity consortia can only dream of. FIDO's financial services and e-commerce members include Aetna, Alibaba, American Express, Bank of America, Discover, E*trade, Goldman Sachs, ING, JP Morgan Chase, MasterCard, Netflix, PayPal, USAA and Visa. 

Constellation Research has followed FIDO closely since its inception, producing a regular series of reports.  An update is now imminent. 

FIDO goes standard

The FIDO vision has always been to make strong authentication ubiquitous and standard.  As such, the FIDO Alliance has long promised to transition its intellectual property into an open standards process.  Today FIDO has taken this step, by submitting specifications to the World Wide Web Consortium (W3C) for approval as web standards. 

For the announcements, see the FIDO press release, and W3C's take on FIDO authentication. And for technical detail, see FIDO 2.0: Web API for accessing FIDO 2.0 credentials. 

What does it mean for web users? 

The thing about FIDO is that, along with other security plumbing, it's helping make the user experience of identity management disappear.  

Easy biometric authentication is becoming widespread in various devices, but the experience remains patchy, largely because the technologies aren't easy for service providers to make use of.  The way things stand, each service needs to know the technical details of its end users' possible mobile phones, and then program specific connectors to call device level security features.  After all that effort,  the security and privacy qualities of ad hoc biometrics solutions are, from the outside, unknown.  Biometrics are becoming increasingly important to life online - so vital indeed we need to make sure they're handled with care. A badly integrated biometric is going to lead to worse problems that we have with passwords. 

Thanks to FIDO, service providers can find out all they need to know about a user from the state of their device, without the hassle of passwords.  Note that by being more precise about the attributes that matter in authentication, FIDO helps minimise extraneous personal data collection, and thus improves privacy in general. 

Moreover, FIDO will standardize biometric and other device based security methods. FIDO compliance signifies that hardware-based security and privacy benchmarks have been met, so you can be assured your biometric template is not going to get exposed to a hacker, or leave the device for a database where it might get lost in a breach.  Once individuals register their FIDO compliant devices with the services they use, access to those services becomes seamless, yet more secure than ever against ID theft, phishing and interception.  

Now, the additional power of W3C strandardization is going to mean that FIDO authentication will become automatically available to website developers. 

Analysis

In time, all websites are going to be able to invoke strong authentication natively, by accessing FIDO credentials in end-user devices via regular browser script in any W3C compliant browser.  Technical APIs will be pushed further down the programming stack, so website developers need not worry about authentication technology; in their high level code they will be able to invoke a powerful suite of standard identity management functions. 

Assuming the committee process runs its course, W3C standardization will make FIDO’s style of strong authentication essentially ubiquitous, as per the vision of its founders. 

This latest step validates both the FIDO vision and its business model.  FIDO rewards early adopters participating in the consortium, by giving members first access to draft protocols while under development (and still proprietary) and then moves those specifications in an orderly manner into the public domain.  Thus FIDO will likely shift the whole digital identity ecosystem over time.  

Steve Wilson's latest report, FIDO to be The Standard will be out soon. 

SAP hybris: CRM and data driving digital evolution of retail

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…...

Read more

Last month, SAP hybris hosted a number of analysts, clients and prospects in Forth Worth Texas for their North American Customer Days event. The major discussion point for the event was the impact digital has had on the relationship with the customer. How does the continued disruption created by the digitization of our economy impact the manner in which retailers and brands interact with their customers? SAP hybris emphasized that due to this digital revolution, retailers and brands that employ a “one size fits all” viewpoint is passé. We at Constellation Research couldn’t agree more. On the contrary, retailers and brands in their continued efforts to tailor experiences to the customer of one – lean on the technology and business processes that will permit these contextual experiences for the customer.

There were two points of emphasis at the event that reinforce the evolution of the retail – customer relations:

• CRM is dead, long live CRM. CRM as we knew it, is most definitely gone. The days of the CRM systems we saw arise in the late 1990s, such as Seibel and Onyx, addressed a very specific need – a linear repository for organizing customer touch points. Originally these systems were created to organize and keep track of a limited number of touch points between a sales force and a prospect or client. This sufficed when most of those interactions were in person, over the phone or via email. A finite number of touch points. Increased digital growth has given rise to an ever growing number of dynamic communication points between customer and brand. This evolution requires the systems being employed to keep pace. Traditional CRM systems and the mind set behind them are dated. Of course the notion of customer relationship management remains important, maybe more so than ever. Maybe not the term “management” since the customer has more influence in the relationship. Retailers are no longer driving the relationship, but working to understand and anticipate customer needs. In this light, the solutions are truly dated. As the number of communications points between customers and brands is ever shifting, growing and constantly evolving the necessary systems are asked to do more and do so faster and more efficiently. Brands and retailers, more than ever, must have systems in place that properly track, store and provide inputs into customer relationships. Legacy CRM systems are dead; the goals of CRM are more than ever vital for brands.
• Data is the new fuel. Data is the new oil that drives the digital business; those retailers and brands that will strive in this business environment are the ones that turn this oil into fuel. The importance of data is by no means a news bulletin, but it is the importance of transforming this data that remains the challenge. We all know that retailers and brands have an unprecedented access to data. But, as SAP hybris points out, it is not about extracting the data it is about being able to transform this raw material, in the form of data, into insights. This transformation is multi-faceted. It must be done quickly, efficiently and intelligently. For example, the NHL (the North American professional ice hockey league, National Hockey League) worked with SAP hybris to determine which data sources to focus on, how to leverage the data sources and what growth plan to adopt with regards to adding new data sources. With a large and various number of data lakes – individual team data, NHL.com assets and even fantasy hockey sites – there was no shortage of information for the NHL to choose from. With SAP hybris, the NHL took a structured and disciplined approach – always keeping the customer at the center of the efforts. Which data pools were the most applicable to start with, and which could be brought in to build on the insights that were being drawn out? This approach has allowed the NHL to create a more efficient customized customer experience – being more contextually aware of the customer’s needs and possible experience with the NHL.

SAP hybris understands that it’s more than technology that will help your business, on the contrary the technology becomes less important. The need for new business processes, through the usage of the data is what distinguishes the leaders from the laggards. The technology needs to support, not lead these efforts.

At the core the focus continues to be on the customer, but it always has been. The nuance is that the focus is on the contextual customer interaction, which continues to be honed in more and more down to the individual. Retailers and brands need to be more nimble and willing to experiment with new technologies and allow for new applications – all with the changing business processes in mind. As SAP hybris customer Loblaw stated from main stage – brands and retailers need to own digital, they have to think big, take risks and learn from these efforts. If companies don’t they will be left behind in this ever changing digital economy.

IBM Analyst Forum: A Tale Of Two Titans

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,…...

Read more

IBM displayed two sides of the company at its annual analyst forum last week: the mighty tech titan and the agile new design-driven Big Blue. Here’s my take on a company in transition.

IBM is a mighty tech titan that can make new markets by sheer force of will. It’s also a practical, agile and focused company that can dream up innovative products and services that give customers exactly what they need.

Both of these IBMs were heard from at last week’s annual IBM Analyst Forum in Stamford, Connecticut. In the mighty vein, analysts heard all about how cognitive computing, meaning IBM Watson, will set the company apart. We also heard executives talk about a new Big Blue that is moving beyond CIO/IT-oriented selling and delivering more actionable solutions with more hands-on technical guidance for line-of-business buyers.

A key component of the new Big Blue story is the embrace of design thinking, which The New York Times last week boiled down to “building what customers want, rather than building something and then trying to convince people that they want it.” After hearing about IBM’s many plans and initiatives last week, I’d say some plans and initiatives seemed design-thinking inspired while others sounded like big, market-making bets. Here, then, is my take on the two IBMs.

IBM Analytics on Spark

Analytics has long been a cornerstone for IBM, but it’s an area that’s understandably in transition due to larger market forces moving to open source, distributed computing options. IBM is adapting to increasingly popular open-source platforms including Hadoop and, more recently, Apache Spark. IBM embraced Spark in a big way in June, and it’s now porting plenty of IBM software to run on that open source framework.

IBM said last week that it’s embracing Spark for the same reasons it embraced Linux in 1999. I take that to mean it’s hoping to leapfrog competitors (like SAS and integrators like Accenture) by leading a wave of open source technology adoption. IBM even described Spark as “the analytics operating system,” and executives predicted Spark will have the same level of market impact as did the IBM 360 computer and Linux.

Spark has seen plenty of vendor adoption and support, but IBM insists it’s now at the head of the pack, poised to become the top contributor and committer to Spark. The company also pledged it will train more than one million data professionals on Spark. That will happen through the IBM-sponsored Big Data University community as well as through 11 DataPalooza events the company will hold around the globe over the next year. The three-day DataPalooza events show students how to develop data products using the new IBM Analytics for Apache Spark on IBM Bluemix. The stated goal is to “start a movement to create a belief that IBM is a trusted partner for data science success.”

MyPOV on IBM’s Spark Bet: Considering that it formally embraced Spark less than six months ago, IBM has managed to grab lots of attention. In fact, the buzz far outstrips the number of IBM-led Spark-related deployments out there in the real world. Far more numerous are customers using the company’s more mature analytics offerings around the IBM BigInsights Hadoop distribution, which include BigSQL, BigSheets and Big R.

IBM’s analytics portfolio spans the technology platform, which is being widely adapted to run
on Apache Spark, as well as cloud services, industry solutions, an IoT suite, cognitive computing
and consulting services.

Spark is a long-term bet for IBM. For now it’s sounding like the mighty tech titan touting “the largest investment in Spark of any company in the world.” But for this Spark bet to pay off, we need the story line to evolve and start getting into the compelling services and capabilities the company will offer. IBM says it has at least 16 products and services that now run on Spark, including IBM IoT on Bluemix, IBM Dataworks on Bluemix, IBM Swift Object Storage, the IBM SPSS Analytic Server and the IBM SPSS Modeler.

IBM is clearly trying to wear a white hat and win new customers with its training options, but I’m more interested in hearing about how customers will use (and are using) these new, reborn and refactored products and services on Spark. In my mind, Spark is definitely a destination for data scientists workloads, but I’m not sure big data types see it as an analytics “operating system” on which they want to run commercial tools.

IBM Cloud Insight Services   

The new design-driven Big Blue came through in last week’s discussion of IBM Insight Cloud Services. When these services were discussed at last month’s IBM Insight event, I came away wondering how much custom app-development and consulting work would be required to put them into action. At the Analysts Forum I was pleased to learn that these are very purpose-built services designed to bring actionable insights into well-defined work environments.

A Social Merchandising Insight Cloud Service, for example, is aimed at common questions asked by retail merchandizers. These individuals have to gauge weather patterns, social comments, topical news, and internal supply chain forecasts. This cloud service analyzes data on all of the above to help merchandizers trigger targeted promotions, spot affinity opportunities, and optimize inventories in a timely way.

In another example IBM talked about a new Fan Insight Cloud Service developed for sports and entertainment organizations, and it described how the service is being used by the Ottawa Senators NHL hockey team, an early customer. The service helps marketers and ticketing teams make sense of fan attitudes and behavior trends so they can boost brand awareness and fan interaction and better target renewal, upsell and incentive offers.

IBM says it will deliver more than 20 of these cloud services. It’s using high-scale, high-speed infrastructure licensed from the soon-to-be-acquired Weather Channel to deliver the data, and it’s also weaving that company’s weather data into many of the cloud services.

MyPOV On Insight Cloud Services: These services are far more targeted than I expected, down to user roles and integrations with tools typically used. That’s good news and in line with a line-of-business-oriented selling approach discussed by several executives last week.

IBM has long excelled in selling to the CIO and IT. Here’s where the mighty IBM – trust us, we have one of everything – style of selling has worked for years. But tech buying is shifting to LOB decision makers. These buyers are far more focused on quickly implementing products and services that address their specific problems, so IBM says it’s bringing more technical depth and architectural understanding into selling situations. This is a positive sight that IBM’s field sales approach is evolving.

IBM Insight Cloud Services are focused on well-defined use cases and are designed to bring 
actionable insights  to known roles and supporting tools.

MyPOV On The Two Faces of IBM

For years we’ve heard IBM boast of investing billions of dollars here and billions of dollars there to go after new businesses. The company conjures up stats about how many zillions of zetabytes are being created or how many millions of documents are being published, suggesting that only IBM has the heft to solve such problems. But instead of emphasizing how tough the problems are and how enormous the investments have been by IBM, why not focus on the clever, practical and approachable solutions IBM has dreamed up for real-world, well-defined problems?

The scenario of being overwhelmed by information is solid selling point for cognitive computing. IBM is promoting Watson as an advisor to doctors who can’t possibly keep up with all the latest medical journals and clinical trials each year. It’s also developing Watson to serve as a financial advisor, assisting professionals who can’t possibly keep up with all the stocks, funds and dynamics in the market. Both of these problems are very real, but these advisor roles don’t exist today. IBM is trying to create new markets.

In other cases cognitive is being aimed at existing roles. Last week, for example, exec Mike Rhodin passingly mentioned cognitive as a tool for automating call centers to cut costs by as much as 40%. “That’s real money,” he said, almost apologizing for such a practical use of cognitive computing. IBM has announced pilot deployments in this call center role, and I’d love to know whether those early customers are ready to talk about proven cost savings? In this same vein, Wipro is training its Holmes cognitive computing technology to automate manual data-collection-and-analysis steps required in anti-money-laundering “Know Your Customer” compliance processes. Sounds like Wipro is less shy about focusing on more practical uses of cognitive computing.

Given IBM’s imperative to drive revenue growth, I would think the focus would be on low-hanging fruit where companies see near-term benefits. To my mind, the focused, agile IBM that’s applying design thinking to focused customer challenges is compelling. The mighty IBM that spends $1 billion here and $1 billion to go after grand challenges and forge all-new markets seems out of step. I’m hoping the new Big Blue is the one that’s more in evidence in the coming year.

The challenge of the ‘Final Mile’, Asset Digitisation and Data Flow Management - Making sure that your Graph Databases and Event Engines have all the data

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…...

Read more

It’s not enough to know the Air Conditioning unit has failed, you need to know where it is, what model it is, when it was installed, if it is under Service Contract, etc. even when manually deciding on the appropriate action. Automating the event process response makes it even more necessary to ensure the completeness of data about the Device itself in context with its situation. Gathering and successfully digitizing an Asset for use by Event Hubs and Engines is a critical success factor in scaling up and developing any IoT project.

Research report now available: The Foundational Elements for the Internet of Things (IoT)

The concept of the 'Final Mile’ has been widely used in the Telecoms industry to describe the challenge of connecting the massive number of end users at their multiple locations through disparate types of technologies and protocols. Today the term is back in use to describe the similar challenge of connecting the equally disparate environment of the Internet of Things, IoT, with its wide range of Devices, connection types, protocols and data flow management issues.

While it is logical to focus on the business value output of an IoT deployment it will come as a nasty surprise to many IoT project owners to discover the challenges of the IoT Final Mile. The time and cost of gathering and creating contextual data to describe an IoT Device, or Asset, as well as establishing when, and where, to stream data flows can be considerable.

A proceeding post on Event Engines and Complex Event Processing, CEP, used as an example different combinations of input values from three sensors on a car enabled different output conclusions. Two of the outcomes; a warning of a slow puncture and a dangerous tire blow out, in addition to the immediate warnings to the driver have added value if forwarded to external Event Data Hubs, and Event Processing Engines.

The emergency services, and the car service management center will need the additional data on the location of the event, the type of car, wheel and tire, and service management agreement. Adding this additional contextual data these into the car service management Enterprise’s Event Engine as an example makes it possible to tell the driver where to get a puncture mended, or a new tire, on their service plan.

It is the broader ability to make use of contextual data aligned to sensed events to deliver complex insights and optimized actions that illustrates why IoT heralds a new era of Business capabilities. IoT is much more than the addition of sensors to existing Enterprise IT applications. IoT can transform simple online Services into high value Business Services that offer highly disruptive competitive advantage to a market.

Asset Digitization refers to the building of a complete digital picture of connected Assets, Of any type, to provide the contextual background data necessary for complex insights and actionable outcomes to be processed. As this is the reason for the deployment of IOT sensors any project that scales beyond a handful of locally contained and connected sensors manually supervised will need to include an Asset Digitisation program. 

Asset Digitization usually requires the assembly of data from a variety of sources using multiple and sometimes unfamiliar formats. As an example, CAD drawings may have to be used to gain not just individual sensor location information, but also to prepare a GUI presentation format of a site, or building. The collation and management of Asset Digital data requires a specialized tool, (see footnotes for example), that both captures and stores the initial deployment details, but will be used to maintain ongoing updates in respect of changes, such as service history updates.

It should not be assumed that this is necessarily a centralized Cloud based service stored in the Event Hub/Event Engine combination. There are two major considerations for a local Data store; first is the latency imposed by network transit times, and the second is the need to share the data with multiple Event Hub/Event Engines, possible operated by different Enterprises.

In the case of the car example a quasi real time response is required to the tire blow out event, and this illustrates the principle of Fog Computing where a localized, or edge, cloud of linked interactive IoT devices with an small Event Processing capability is required. A car with its many different sensors, probably hard wired, in a self-contained environment is a perfect example of a IoT Fog Computing deployment. (more information on Fog Computing)

Continuing to use the example of the car provides an illustration of remote event reporting and sharing as two further IoT Final Mile architectural elements; namely connectivity service types and data flow, or switching, management. The tire puncture, or tire blow out, events should both be reported externally via wireless, or satellite, to support Service providers to complete the comprehensive and cohesive response to the event.

The big question is not just how to provide the right connection type, but how to manage the data flow across this connection to the reach the defined next layer of Event Hubs and Event Engines operated by Enterprises such as the Car Manufacturer, Emergency Services, Traffic Management, etc. Data Flow management defines the circumstances to switch and direct event data streams to reach the next level of IoT Service Providers via their own IoT Event Hubs and Event Engines.

A Data Flow Engine has to master multiple rule sets with its own form of Complex Event Processing to decide where the event data stream should be forwarded across the Internet. Frequently some, or all, of an event Data stream will be required to be simultaneously forwarded to multiple Event Hubs and Engines in different Enterprises. This requires decisions with reference to the source, the context and the event data itself, and is a specialized task currently usually requiring a specialized product, (see footnotes for example).

The challenge of Final Mile connectivity does not present itself in small-scale local pilots within a single enterprise using their own network infrastructure and manual interpretation of the events. These types of deployments might be better termed an INTRANET of Things, but as the pilot stage moves into full-scale production deployment the automation and use of complex event processing becomes a necessity.

Excellent results can be obtained by Intranet of Things deployments to connect to and extend an Enterprise Application with some Application vendors providing a package to introduce quasi real time updating. In this type of deployment the difficultly of sensor protocols and data formats has already been addressed and rendered suitable to empower the enterprise application. Equally many ‘shop floor’ manufacturing machine Operational Technology, or OT, systems have been successfully deployed for many years as closed Ethernet based deployments.

Increasingly industrial, and consumer, devices will come with built in sensors and the manufacturer will have made the choice as to type of sensor, protocol and data format that they support, just as with Smart Phones today. Some Industrial Manufacturers such as Siemens have produced their own Event Hubs and Event Engines on their own form of localized on premised Fog Cloud and/or centralized Cloud. An output Data Flow via ETL, Extract Transform Load, is then provided for onward integration to an Enterprise Application, or an IT vendor IOT Event Hub and Event Engine. Siemens and SAP provide a good example of how this can function with their mutual integration capabilities. 

IoT Protocols are the last layer of the Final Mile in the emerging common approach to multi layer scaled up IOT architecture, and are required to be more than just a suitable connection protocol. Industrial IoT developers are focused on what, and how, IoT protocols should be able to have specific data definitions for different sensing types, functions, even different industry sector requirements. 

It is instructive to recall the very expensive lost rocket caused by the NASA and European Space Agency mistake over failing to ascertain what measurement standard for crucial metrics was in use in their data integration. Similar challenges exist for scaled up use of IoT sensors and Devices when integrated into large-scale interactive networks that share the data streams.  The Digitized Asset with also need to be able to self describe the data provided to ensure successful integration occurs in Complex Event Processing at Event Hubs and Engines.

Resource

The Foundational Elements for the Internet of Things (IoT)

Footnotes

Asset Digitization Tool example; https://www.youtube.com/watch?v=w4O6wtCDO7I

Data Stream Management example; http://cityos.io/tutorial/1032/Setting-up-Flowthings.io-flows-and-tracks

It’s

Event Report KronosWorks

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…...

Read more

We had the opportunity to attend Kronos' yearly user conference KronosWorks at the beautiful Aria resort in Las Vegas.

 

The conference was well attended with over 2500 attendees, Kronos has passed the 1B US$ of revenue in the last 12 months, so the vendor is doing well and is investing. 

 

But take a look:

 

 

If you can't watch - here are my Top 3 takeaways:

 

• Workforce Central Version 8 - The new user interface is a key progression for Kronos and its customers. Definitively an improvement over the previous version, and being HTML5 based, means a certain end of the Java woes if the past. It is good to see Kronos has spent time with customers and key users to make the products more productive in the high usage tasks.
   
• Paragon to speed up time to go live - Kronos has gone back to its many implementations in order to make them more productive with pre-existing setup, sandboxes, system generated user documentation and test scripts. A very important move to get customer live faster, but like with all services related initiatives, the proof will come from customer stories.
   
• Mobile in focus - Mobile is - with no surprise - one of the fastest growing products for Kronos. The vendor has tackled the smartphone side well and is now off to support tablets better. Having moves to HTML5 and responsive design should support these efforts well.

Tidbits

• Analytics - Kronos has partnered with key customers to understand BigData and Analytics usage and benefits. The result is a new Auditor product, that finds non compliance and other anomalies in the data. Not surprisingly customers are eager to get the tools, but then more mixed in the actions that the findings support. Not a surprise, as 'doctoring' in the time management area is one of the long term issue of the industry.
   
• Partnership with Cornerstone - Kronos unveiled a partnership with Cornerstone, that should help both vendors, a question mark to me remains how the traditionally more blue collar oriented workforce management space will jell with the traditionally more white collar oriented Talent Management space. But certainly two very synergistic vendors have found each other.
   
• Globalization - To keep growing, Kronos needs to become more global from both a go to market and product perspective. The vendor is investing in both areas, with key steps like hiring local workforce regulation and compliance experts in progress. Not an easy endeavor, but vital for the future growth of Kronos and Kronos customers, who by themselves are becoming more global every year. 

 

MyPOV

A good KronosWorks event for the vendor and its customers. Kronos has reached a milestone in regards of more than 60% of its customers are now being cloud based. It now needs to look at further growth, and it is looking at selling payroll, talent management (homegrown and with new partner Cornerstone) and going global. Paragon is a bold project, but time to go live is critical in today's fast paced economy, it will be interesting to see what Kronos can report in terms of faster go lives in a few quarters. The new user interface of Workforce Central is a mayor step forward both from a usability and architecture perspective, but it doesn't propel Kronos in a leader position for usability (yet?). The vendor has hired a large team of usability experts, it will be interesting to see what will come out of this group. 

 

On the concern side I would like to see Kronos push the pedal a little more on the gas pedal in regards of development speed. Many new capabilities going live now and soon are from about 2 years ago - or two KronosWorks' ago. But then Kronos has an obligation to its customers to move at a agreeable and digestible speed. On the global expansion of both go to market and product Kronos is investing, it will be interesting to see what progress the vendor can report in a few quarters from key regions like Western Europe, Brazil, China and Australia. All these markets have entrenched vendors, replacing them will be a long battle. As we have seen in this summer Kronos will not shy away from acquiring local players (see Kaba Benzing in Switzerland here).

 

Overall exciting times for the vendor and its customers, who are generally genuinely excited about things to come. 


More on Kronos

• First Take - KronosWorks - Day 1 Keynote - R&D Investment, Customer Success and Analyticss - read here
• Kronos executes - 2014 will be key - read here
• Tweeting and feeling good about it - read here

My notes are on Twitter - so you can find a collection of the tweets from the video here - and below a collection of the tweets come to live during the keynote. 


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

Satya Nadella at the security poker table

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…...

Read more

This morning Microsoft's CEO Satya Nadella gave a global speech about enterprise security. He announced a new Cyber Defense Operations Center, a should-not-be-new Microsoft Enterprise Cybersecurity Group and a not-at-all-new-sounding Enterprise Mobility Suite (EMS). The webcast can be replayed here but don't expect to be blown away. It's all just tablestakes for a global cloud provider.

Security is being standardised all over the place now. Ordinary people are getting savier about security best practice; they know for example that biometrics templates need to be handled carefully in client devices, and that secure storage is critical for assets like identities and Bitcoin. "Secure Element" is almost a lay-person's term now (Apple tried to give the iPhone security chip the fancy name "Enclave" but seem to now regard it as so standard it doesn't need branding).

All this awareness is great, but it's fast becoming hygeine. Like airplane safety. It's a bit strange for corporations to seek to compete on security, or to have the CEO announce what are really textbook security services. At the end of the speech, I couldn't tell if anything sets Microsoft apart from its arch competitors Google or Amazon.

Most of today's CISOs operate at a higher, more strategic level than malware screening, anti-virus and encryption. Nadella's subject matter was really deep in the plumbing. Not that there's anything wrong with that. But it just didn't seem to me like the subject matter for a CEO's global webcast.

The Microsoft "operational security posture" is very orthodox, resting on "Platform, Intelligence and Partners". I didn't see anything new here, just a big strong cloud provider doing exactly what they should: leveraging the hell out of a massive operation, with massive resources, and massive influence.

Reflecting On Five Years Of Disrupting The Industry Analyst Business

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…...

Read more

Thanks To Great Customers And Great Team Members

Internal Memo Sent November 3rd, 2015

As many of you know, we were founded almost five years ago on November 9th, 2010.  In the midst of a recession, and after working at another startup that was moving from analyst firm to boutique consulting, the goal was to build something different in the market.  Elaine and David were the first two team members to join.   The challenge – we had no funding.  We covered salary on 500,000 in personal savings.   We boot strapped the organization with a loose federation of independent analysts .  Today we have evolved into a full employment model with full benefits, stock options, and retirement plans.  Though we are five years older, the goal hasn’t changed – unite star people under one roof, bring star clients together, and engender a community and ecosystem around stars – hence the name Constellation Research.

Many of our customers have asked why we chose purple as our color.  Well, Gartner was blue. Forrester was green. IDC was yellow and blue.  Ovum was red.  Purple was the only real stand out color and a personal favorite.  A logo was sent out to 99 designs in a contest and we came back with a few logos but eventually ended up with the 3 rings for the reasons above.  The entire logo cost us $99.  A trademark application, incorporation papers, and all that fun legal stuff was set up and were in business.  Well, it wasn’t that simple… more on that another time.

Lessons Learned From The Early Years

Our first client to sign was Pervasive (now Actian).  Alison Raffalovich, Angela Schmidt, Kim Daugherty, and Lacey La Borde were the first to sign with David and we will never forget them and all of our first year customers.  We’re ultimately as good as the type of customers we attract.  The first years were tough. The goal build the brand as big as you can.  The second year, bring on as many people as you can.  The third year, you realize that was a bad idea as you need to build the right team and you have to be organized around common goals.  The fourth year was about  rebuilding and we now are at a point where we can say we have critical mass at our fifth year.

More importantly, we’ve had a number of folks who’ve been big supporters and our advisors from:

• Paul Greenberg – who’s helped us in countless behind the scenes and direct interactions
• Erin Kinikin – who’s critical thinking and approach is a great resource for smart advice
• Esteban Kolsky – who’s really trying to make you all smarter analysts despite the tough love
• Dr Janice Presser – who’s kept us all together by making sure we bring on the right people

Moreover, I can’t thank Dennis, our COO,  enough for keeping us all in line and making sure the trains run on time but more importantly in making sure the right things happen at the right time.   We were in utter chaos prior to Dennis.  Well, you all know that.

Moving To Our Next Five Years

So here’s where we are now five years old entering our sixth year.  We have awesome buy side clients.  These are folks that believe in innovation.  They are in charge of disruption.  They understand how we are different from the market. Many of them have been part of our research board.  They’ve been paid clients and many have also changed many jobs in the past five years but they keep coming back.  Within our network we have 1000 market leaders and fast followers we can reach out to and connect with on a consistent basis.

The conference we host every year is for these clients, our fans, our advocates, and prospects.  It’s once a year and it’s in-person.  This past Constellation Connected Enterprise, we had not only our best attendance to date, but some of the most insightful conversations at any conference we’ve been to.  We’re hoping we can translate that hospitality we exude in person and the insights and analysis we bring to them on a daily and digital format.  Watch for our new Constellation Executive Network program with CR Insights.  This will be our main focus for our next 5 years.

If you are reading this, we’re excited you can be part of our constellation.  There are so many opportunities ahead and we look forward to engaging with you.

The Battle For The Digital Corner Office, #CDO

Article written in partnership with Roger Beynon.

Whether they are spooked by the specter of “digital disruption” or just afraid that the bandwagon will leave before they can jump on, organizations are desperately looking for C-level talent with digital credentials. 

“Digital credentials,” however, can cover an array of competencies, and organizations have produced their own array of titles for the potential occupant of the newly allocated “digital corner office.”

A quick search on LinkedIn illustrates the title diversity among the digital leader cohort.

Which title will win the battle for the digital corner office?

The answer, we suggest, is to be found not so much in the title as in the role.

Interviews conducted with 100 C-level executives over the last 12 months reveal that the “digital leader’s” mission can differ widely from company to company.   At retail clothing chain, for example, digital leadership means weaving technology seamlessly into the purchase process. At a hi-tech manufacturer, the job of the VP, Digital is to bring discipline and message coherence to the company’s marketing and social strategy. At a century-old furniture manufacturer, digital leadership means process reengineering from the shop floor to the top floor.

Variations notwithstanding, the business imperatives behind any digital transformation strategy dictate a set of responsibilities that begin to define the role of a “generic” digital leader. Those same executive interviews point to a set of priorities common to the adoption of transformational digital leadership:

1. Developing the next generation P&L and driving, if necessary, corporate-wide self-cannibalization. (Digital transformation must manifest itself in the P&L or it’s not worth the effort.)
2. Facilitating horizontal transformation and digital literacy within a company. (The effective digital leader should work him/ herself out of a job, once the organization is digitally positioned.)
3. Hacking the product/service requirements loop to understand what customers will need and what they will pay for. (Before these requirements become known to the competition.) 

Given these priorities, how do the top-level digital titles and their accompanying responsibilities match up? 

• The Head of Digital Innovation/ Chief Innovation Officer focuses on exactly that – innovation. It is typically a job for an out-of-the-box thinker, but not necessarily someone with P&L experience.  
• The VP, Digital tends to occupy a marketing communications role. “Digital” is often synonymous with using technology to build ever higher levels of social engagement with an emotional attachment by the customer. That said, a VP is often someone who has General Management experience that qualifies him/ her for the P&L requirements that underpin the digital transformation imperative.
• The Chief Data Officer owns Big Data in whatever form that takes for any given organization. Big data can certainly help shape digital transformation but the Chief Data Officer is unlikely be the driver of change.
• The Chief Technology Officer tends to be an inward-focused role, essentially a facilitator and coordinator of the technology next generation infrastructure needed to meet the rapidly changing needs of the CTO’s internal customers such as the CIO.
• The Chief Information Officer may, in isolated cases, don the mantle of transformation agent, but the CIO role is rooted in maintaining service stability and continuity. Disruption is anathema to the CIO and asking them to embrace change as a way of life would, in most cases, would be asking for trouble.

The executive interviews point to the CDO as the title most aligned with the digital transformation mission. Here’s why.

To point #1 (inventing a new P&L/cannibalizing the old):

The digital leader is often brought in with the single focus of preventing her/his organization from being the victim of digital disruption – to the point of going out of business. Richie refers to this as “preventing companies from having their Kodak moments” – more currently, their ‘Zune Moments’”. This can involve radical self-cannibalization in the way that you see right now with GE, which is divesting itself of financial companies and transforming its commercial and industrial portfolio into a model for the Internet of Things. GE has become a software company in the vanguard of the IoT.

Point #2 (working horizontally across the organization):

Any digital leader missioned with company-wide transformation must be able to bring a horizontal purview to the organization and operate across functional silos. To identify, develop, and roll out new digital products or services, the digital leader might need to work with (but have no direct authority over): customers, designers, product developers, finance, marketing, sales, legal, compliance, operations, and customer support. Consider the logistics that confront a 2,500-store grocer like Kroger when it wants to roll out a click-and-collect capability -- adding drive-thru lanes, creating a picking process from an inventory system organized in huge, wrapped pallets, integrating store return credits to customer accounts and inventory systems, etc. The digital leader must bring all the vertically-minded disciplines together and move them toward a digital paradigm. (Richie believes that a digital leader in this sort of role should not have a job in about three years, because they would have worked with the rest of the organization to pivot towards the digital opportunities and make their role obsolete.)

For point #3 (figuring out future opportunities in the marketplace):

The digital leader is tasked with identifying market opportunities that can be best exploited through digital execution. To be able to see opportunity before it becomes visible to others, the digital leader must be able to work with and win the trust of customers. The digital soothsayer must divine how customers are internalizing technology-driven paradigm shifts, since those shifts will generate future requirements. IMS Health’s customers include the major Pharma companies small, large, regional and global. Richie works with Pharma companies to figure out their own paths toward transformation and in doing so is able to capture their aspirations for the future. He then interprets those aspirations and delivers them to the IMS Health’s digital product team to be able to build the company’s next gen P&L.

The digital leader must therefore operate (and be welcome) on the customer side as well as the product side. This, as describe by Richie, differs significantly from product development practices of the past, in which “our product guys build whatever the hell they think the future is going to be and it’s left to the marketing team to describe it in a way that makes sense to customers who don’t really want the product but need to be convinced they do.” 

What are the characteristics/competencies to look for in a Chief Digital Officer?

Companies can hire and allocate digital responsibilities to any and all the titles listed above, but if the transformation imperative covers the entire company and is seen as essential to survival and success, then they will more than likely want to hire a Chief Digital Officer. For what, therefore, should they be looking?

The research identified these primary attributes:

1. A technologist who is fluent in business:

The CDO will typically have computer science or engineering as a first degree, often bolstered with an advanced degree in business and a macro-economic world view. At core, they are technologists, but fluent in language and lore of C-suite business because they will have accumulated P&L responsibility along the way. This is important because the P&L perspective guides prioritization. Digital expertise along the whole of the value-creation chain, moreover, allows the CDO to distinguish digital value from “digital noise” and to be able to evaluate opportunities consistently spawned by technology change.

2. An Internet veteran:

This is not a mandatory qualification, but the experience accumulated while riding the Internet wave cannot be overstated. Many CDO’s have been involved in the Internet world for 20+ years. The majority of these have climbed the corporate ladder on the back of their technological prowess and then used that prowess to jump from IT to e-commerce to digital innovation and now to digital transformation. Having lived through the most explosive years of digital’s relatively short history, they better understand its evolution and have the best chance of anticipating its direction.

 3. A skilled, agile communicator:

The CDO must be articulate and persuasive. It helps if they exhibit what one CEO called “contagious confidence.” The CDO’s motto could be: “It’s not hubris if you can back it up.” They tend to be acutely conscious of their own brand, and they know its value to their corporate employer. They make digital “cool” for everyone within the organization, not just the geeks and the marketers. The CDO makes digital a corporate an idiom as well as an emblem. As a result, both the brand and the culture carry a different vibe.

4. A digital anthropologist:

The CDO is an observer and analyzer of customer behavior. Their job is to interpret that behavior for the digitally impaired by “parsing” customer needs and aspirations into digital (or digitally supported) products and services. CDO’s who have multi-industry backgrounds bring added value to this capability. The more a CDO understands the nuances of parsing customer needs for B2B as well as B2C, or international and domestic, or CPG and electronics, for example, the greater the anthropological asset s/he brings to the hiring company.  

5. A risk-taker:

Even though the dominant career path has been along the corporate Internet highway, CDO’s often exhibit strong entrepreneurial characteristics and it is not uncommon for them to have started (and sold) their own companies. This background gives the CDO a high tolerance for ambiguity. Change is their constant. They are hyper-inquisitive -- seekers and synthesizers of ideas, preferably in an “alpha state.” That said, every effective CDO carries scars. The learning that took place in the earning of those scars dictates that, having embraced and accepted risk, the CDO will constantly look to reduce risk levels within their digital initiatives. Consistent, disciplined, risk minimization is not antithetical to hubris.

6. A thought-leader:

New ideas fuel the CDO’s intellectual and professional engines. CDO’s seek out the type of high-fliers who speak at TED events because they identify with them. They follow and respect people like Ray Wang (at Constellation Research) andScott Galloway (at L2inc).  They network naturally and copiously with their peers and they are plugged into the start-up and investor communities. Many are mentors to incubators or innovation labs because digital is driven by disruption and the CDO’s radar must continuously scan 360. Richie describes this as: “There’s a lot of value to be found on the fringes, out where it can get a bit weird.”  

7. A time-jumper:

CDO’s create the future out of the past. They must be able to move readily and rapidly between the past (constraints of culture and legacy systems) and the future (the limitless world of digital possibility). To succeed, a CDO must be under no illusions about the legacy constraints under which the company operates. The most common constraints are out-dated platforms, but might also be ossified practices, processes, or people. Legacy constraints restrict the boldness of the vision the CDO can present. Pizza Hut, for example, had 9 POS systems at one point in time, so creating an app needing to link to all nine rendered the cost of digital innovation moot. Legacy burdens also impact the CDO’s budget and thereby restrict the speed with which the CDO can move. And speed is critical. CDO’s seek permission to fail, so long as they do it quickly. They operate on the belief that rapid failure leads to quicker success. Richie describes this as “de-legacy” activity, suggesting that it is more important to “stop or reverse un-innovation anchored on the wrong side of history” than to only look forward.

8. A trust-builder:

The most effective CDO works hard to be seen as an asset to his/her peers. Because a CDO’s appointment often indicates that a company feels threatened by digital forces outside its control, a CDO’s digital initiatives carry an implicit threat. The CDO must demonstrate by actions and results, as well as by words, that they can be trusted to make their colleagues as well as their customers successful. To that end they must be skilled in the creation of emotional capital, and even more adept at its allocation and cultivation.

The digital corner office: most CDOs we spoke with, do not have a physical office, the digital corner office is completely virtual, or constantly hoteling!

Roger Beynon

Software AG – Betting Big on Digital Platform

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…...

Read more

A few weeks ago I spent the majority of my time in Las Vegas with Software AG at their Innovation World summit. Unlike Vegas, what happened at Innovation World isn’t going to stay at Innovation World…okay poor attempt at humor. Software AG should be touting what they spoke about during the 3 days at the Aria Hotel and Casino. The main theme of the event is around the digital platform Software AG is doubling down on. Smart move? Time will tell…but a positive move in light of the digital disruption we are in the midst of and what we all believe will only become greater changes moving forward.

Software AG aggressively pushed their digital platform agenda from day one on main stage as their executives took turns highlighting Software AG’s efforts with creating a digital platform to allow their customers to innovate. Karl-Heinz Streibich, Software AG’s CEO, focused on 7 drivers that is the catalyst for digital disruptions:

• The shared economy, driven in large part by the Internet.
• Standardization, think of the smart phones we all carry.
• Asset lite companies, as digital becomes the main asset companies are shedding traditional assets.
• Transparency brought by greater connectivity, this will only accelerate with the rise of the IoT (Internet of Things).
• Fast sprints of innovation, digital platforms allows for rapid innovation.
• Lower costs, with digitization the costs are reduced.
• Unbridled creativity, once digitization has touched “everything” creativity will only continue to explode.

Such drivers continue to change the way companies and service providers address the market. Of course the undertone from main stage was that the customers know better what their business needs are, while Software AG knows best how to translate this into bites and bytes. This is the nature of the business world we are currently living in – digital has created an acceleration that is unprecedented. Vendors and solution providers cannot predetermine what problems and business use cases their customers will have next quarter let alone in 6-12 months. The idea of providing the platform – truly a Lego set for customers to then go out and create their own solutions. Karl-Heinz was right in saying – you know your business better than anyone, but we know the digital aspects better than you…let us work together.

There is a caveat to this notion – that while digital has greatly disrupted business, there are some truisms that will remain. The majority of business use cases have some basic aspects and needs that are consistent across industry and company. Under this light it is important that companies such as Software AG lean on their industry teams to accelerate focused business processes that are vertically aligned. Verticals such as retail, finance or manufacturing are already looking at how they can bring their industry insights to accelerate the time to productivity with their solution sets. Can Software AG leverages their vertical teams to start creating some standard building blocks that their N+1 customer in that specific vertical take advantage of?

The challenge for the German software vendor lies in their ability to pivot into verticals, compete with other service providers that have longer histories and track records servicing these verticals. The advantage Software AG brings is they are also not wed to their legacy offerings, which many other vendors are still fighting.