Musings: Dealing With The Startup Who Went Public And Is Now Arrogant As Hell

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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Best of Breed Startups Often Initially Differentiate And Delight Customers With Extreme Customer Centricity

The journey to an initial public offering (IPO) often brings an intense customer-centric culture and focus that separates the startup vendors from their legacy competitors.  These startup vendors woo their prospects with not only their emerging technologies and solutions, but also a commitment to enable their customer’s to deliver on disruptive business models.  These vendors earn their market share and mind share by delivering on this brand promise.  When customers partner with these vendors, they:

1. Gain direct access to the company’s decision makers.  The founders and key executives spend time with the prospects and clients.  All parties establish strong relationships and even friendships.
2. Yield significant influence on product road map.  Vendors care about customer’s requirements.  Each side works to identify what is a platform, a core feature, configurable option, and a customization.  Platform and core feature requests often center around industry, geography, and business models.  Each side is vested with symbiotic success.
3. Receive extreme customer service and success. Issues with bugs, broken functionality, and implementation issues receive instant response by vendors.  Their goal is to ensure the customer’s go-live and success.
4. Secure pricing discounts for early adoption.   Early adopters receive a risk discount for betting early and partnering with new startups.  These discounts often reflect the amount of joint effort required to take a solution live.
5. Evangelize success in sharing their stories. Vendors shower customers with opportunities to tell their story.  Client success leads to media exposure, customer events, and career promotion.  In many cases, the vendor may offer the client an opportunity to work for them as well.

This vendor-customer partnership leads to an amazing growth for the vendor and great success for the customer.  The reward for freeing themselves from the shackles of legacy technology providers delivers massive gains.   The emergence of a successful new market category encourages other startups to follow suit and forces legacy vendors to respond to this new customer centricity.  As a result, the industry advances forward while clients and prospects take steps to accelerate their business and technology strategy based on these experiences.

Post-IPO Or Acquisition, Most Startups Act More Like The Legacy Vendors They Replaced

Once public or acquired, these organizations struggle to retain their culture of innovation, customer centricity, and growth rates.  The push to IPO often drives the company into 80 to 120% CAGR.  Post IPO, they must deliver more consistent growth.  So long they deliver more than 40% organic and inorganic growth year-over-year, investors leave the newly minted publicly traded company alone.   However, in many cases, the push to IPO stretches their ability to continue growth at breakneck speeds.  How the startup achieves IPO often dictates their ability to succeed post-IPO.  A bad business model will fall apart post-IPO (see Figure 1)

Figure 1. The Life Cycle Of Startups

As the shiny new object faces the pressure of public markets, the focus on growth or focus on profit margin often shifts the company culture.  Announcements of experienced industry veterans joining the ranks often lead to standardization and a push to scale the business.  Now public, the post-IPO business types take over to scale the business.  They attract MBAs to join the ranks.  This new wave of employees bring their case study approach and cast aside the core ideals.  They often take credit for other people’s work.  Teams start focusing on politics instead of delivering on sales or product.  Pre-IPO folks battle the post-IPO folks.  The new managers force an overhead and level of process required to scale.

The result – the startup types and company heroes who took the company to IPO begin a slow ebb of departures.  In some cases, the founders leave within a year.  Now keep in mind, these individuals were hired in the startup phase because they knew when to do the right thing for the customer.  They didn’t have playbooks, process maps, approval requirements.  They often changed jobs on a monthly basis, reached across functional fiefdoms to deliver for the customer.  They didn’t care what metrics were good for one department versus another.   They delivered on the brand promise and were empowered.  They could talk to management without having to go through a gopher.  There was a meritocracy.  In many cases, they were inefficient, they were not consistent, and they didn’t take orders well from management.   However, they did what was good for the company and could see the impact of their contributions.  Unfortunately, over time the corporate types drive a culture clash that leads to an exodus of innovation and talent.

Customers do notice a change in the company’s behavior and culture.  Decisions that used to take days now take weeks.  A favorite service agent or sales rep leaves.  Calls for new requirements go unanswered.  As these post-IPO companies exhibit more and more legacy incumbent like bad behavior, customers begin to complain.  Partners and system integrators notice a fractious relationship.  The great hot-flying startup slowly takes on the characteristics of the legacy incumbents they replaced.  New startups challenge their position.

Early Adopter Customers Face This Arrogance Right Now From Successful Startup To Newly Minted Public Companies

Market leaders and fast followers now face challenges when dealing with west-coast VC backed startups who finally become newly minted public companies and extremely arrogant.  This also happens in acquisition.

Right now a growing number of customers face this arrogance from their favorite startup in social business, mobile enablement, cloud, big data, and unified communications.   Without naming the vendors acting on their worst behavior, here are some true customer quotes from conversations with hundreds of clients:

• “Upon renewal, my favorite HR Tech startup jacked up my rates 25% on renewal”
• “I was told by our CRM/CX vendor that we were no longer important to the company now that we have bigger clients”
• “My cloud HRTech vendor told me that our rates were significantly discounted in our initial deal and despite our divestiture, you now have to pay up, so we won’t be reducing your costs”
• “We used to receive excellent response times to our feature requests from our collaboration vendor, now they push out products we don’t care for and expect us to pay for them”
• “We’ve been complaining about the mobile UI for the past three years.  In the past, we would at least have some influence on the product direction.  Since we have no new additional sales, our new sales guy ignores us”
• “Our relationship with our HRTech sales person has gone down hill. Despite helping him out early and a repeat customer in many deals, they are only focused on new sales and no longer spend time building out our relationship”
• “We’re moving back to the legacy vendors who have figured out the the best of breed is now a feature in their stack/platform”
• “The company is now PR driven, not product driven. They are more worried about appearances than hearing the truth”

Analysts Often Recognize Five Factors Of A Failing Vendor

Constellation often can tell when a vendor has made the shift into arrogance from five factors:

1. Vendors begin selling vapor ware with product announcements six months out.  Releases are late and products are shipped with questionable customer value.
2. Corporate communication teams (influencer relations, analyst relations, public relations) clamp down on access to key executives.  They play gate keeper to the analysts and want to be in control of all communications and budget.  Instead of enabling change and input, they shut down dialogue and add friction to the relationship.
3. Executives no longer have thick skin in taking private criticism.  They’d rather hear happy thoughts than face reality when presented with the facts.  They shun direct feedback and focus on keeping to the message.
4. Founders and key employees exit the company and are replaced by post-IPO margin types.  The replacements bring bad habits from the legacy companies they came from and drag down the company culture.
5. Partners complain about the difficulty in working with the vendor.  Vendors begin to compete with partners for their revenue streams.  Partners no longer trust a handshake deal.

The Bottom Line: Business And Technology Strategy Must Account For The Post-IPO Jekyll And Hyde

To avoid the Post-IPO Jekyll and Hyde, Constellation suggests three concrete steps to minimize the damage.  For existing customers, successful application of these three principles in contract renewals will help refocus the relationship to a win-win paradigm:

1. Use the Customer Bill of Rights in all contract negotiations.  Make sure you protect yourself from the life cycle of technology engagement.
2. Leverage industry analysts to keep the vendors in line.  By serving as a third party confidant, analysts can bridge the gap between the vendor and the customer.  More importantly, the poor treatment of a client by a vendor impacts the analyst’s perception of a vendor.
3. Line up alternatives.  Begin the process of finding alternatives.  Good candidates include organizations who have put the startup features into their suite or platform.

For more customized approaches, feel free to reach out to any member of the Constellation team.

Your POV.

Are you tired of the arrogant public-IPO startup who’s broken your relationship?  Want to move back to a win-win?

Add your comments to the blog or reach me via email: R (at) ConstellationR (dot) com or R (at) SoftwareInsider (dot) org.

The post Monday’s Musings: Dealing With The Startup Who Went Public And Is Now Arrogant As Hell appeared first on A Software Insider's Point of View.

CSCMP – three lessons for digital supply chain leaders

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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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Last week  spent the majority it of it in San Diego, enjoying the warm southern California weather and sun. Why was I there? Attending the annual CSCMP conference. The conference was, as usual, well attended by an array of supply chain professionals. As in previous years, the event offered a wide array of break out sessions and interactions with fellow professionals. Three take aways from the event:

1. The importance of labor – it’s the people stupid. To borrow a line from James Carville, well at least part of the line. What was interesting and I was glad to hear, was the importance being placed on labor in the supply chain. We have seen this rise in labor importance in the retail world. We are all keenly aware of the growing change in the store front. Retailers, with brick and mortar, are looking to these assets under a different light. They are looking to transform these assets into destinations, think Restoration Hardware or Williams Sonoma. Others, such as Finish Line and Macy’s are looking to fulfill eCommerce orders directly from stores. While these changes to how their supply chain fulfills orders has a direct impact on inventory strategies they also have a secondary effect on labor. Employees both within the store but also in warehouses and logistics will have to add skills and new responsibilities to their daily routines. CxOs will have to ensure they empower this labor with the proper training, incentives and technology to ensure success. Bottom line is labor in the supply chain often is the touch point between the supply chain and the customer. CxOs cannot afford to ignore this crucial link. As Howard Shultz CEO of Starbucks stated from main stage – the most important asset for Starbucks are the ones wearing the green aprons.
   

   The coffee giant’s greatest assets – the ones in green.

2. Mission impossible for logistics – okay that might be an overstatement, but the reality is that our logistics networks, both warehousing and transportation, are being asked to do more. Logistics professionals should not expect this to abate any time soon. Delivery to the home, to lockers, even to the trunk of your car are all pushing last mile delivery capabilities to their limit. What will happen when the FAA loosens up drone regulations? This is driven entirely by the empowered consumer. As role and influence of the consumer continues to force supply chains to react to their demands, logistics will have to shoulder a greater amount of the burden. Supply chains will have to be ever nimble with their logistics to meet these demands. For example, Hostess had to ensure they have the necessary distribution centers (DCs), strategically located to meet exploding demand when they reintroduced their delicious Twinkies and Cupcakes to the market. The challenge became being able to readjust their strategy on the fly as the demand patterns became apparent. The success for Hostess rested in large part to their ability to have the proper levels of inventory in the right DCs. CxOs will need to be constantly evaluating all their logistics components of their supply chains to ensure they are in the best position to satisfy their customers’ expectations. They must also be willing to change strategies and tactics as needs evolve. Look for new business services such as the ones offered by Flexe who is using crowd-sourcing to fill excess warehousing space. As well as Amazon who announced the launching of Amazon Flex. Bring the same business model as Lyft, Uber and Airbnb to package delivery. Amazon Flex will open up package delivery to anyone who has a vehicle to become last mile delivery assets.
   

   Can your warehouse and logistics keep up?

3. Eat your own lunch otherwise someone else will – digital continues to accelerate disruption all across the supply chain.  Disruptive technologies such as IoT, robotics and augmented reality were all on display at CSCMP. Smart labels by Johnny Walker were discussed and how they can provide the consumer with additional insight about what they are consuming but also the distributor with regards to the location of inventory and the pace of consumption. Computing giant HP is leveraging connected printers to proactively order ink when the machine detects the level drops below a certain range. Companies such as Lids.com are using robotics from Swisslog to manage their DCs. Distribution companies such as DHL replacing traditional handhelds with augmented reality for their packing professionals, reducing errors and increasing velocity. Manufacturers such as GE are adding connectivity capabilities to their high end refrigerators…not because they have a use case for a connected ice box but to lay down the ground work for possible use cases. More than ever, CxOs must be watching for digital disruptions that are are currently impacting their businesses or those that are just over the horizon. These are also going to impact different parts of their supply chain – just complicating the matter.

After leaving San Diego my believe that we are on the verge of seeing some major changes through out our supply chains was reinforced. While it may sound cliche, the digital supply chain is going to change how we approach this space in ways we have not even imagined. CxOs are in the midst of exciting times. Those that embrace this will flourish, those that cling to their old thinking will be left behind. Quickly.

Looking forward to CSCMP next year back on the East Coast in Orland Florida.

The General Mills Cheerios Recall and Your Supply Chain

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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Chris Kanaracus

Managing Editor, Constellation Insights
Constellation

Chris Kanaracus is managing editor of Constellation Insights.  Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members.  Prior to joining Constellation, Kanaracus spent seven years covering the enterprise software industry for IDG News Service, where he frequently broke exclusive stories with a focus on end-customer issues. Kanaracus has also held various managerial and reporting roles at newspapers in New England since 1998. Twitter: @chriskanaracus , Title: Big IdeasConstellation Insights Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members. ...

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Supply chain professionals everywhere are no doubt wincing about the recent recall of nearly two million boxes of Cheerios by General Mills—turns out they weren’t gluten-free after all. From the Washington Post:

Jim Murphy, senior vice president of the company's cereal division, said he was "embarrassed and truly sorry" by an incident that allowed wheat flour to get introduced into the gluten-free oat flour system at a production facility in Lodi, Calif.

The "undeclared allergen" could cause adverse health effects for those with wheat allergies, celiac disease or gluten intolerance.

The Lodi facility lost rail access for a time, forcing General Mills to load the flour onto trucks for delivery. As a result of “purely human error,” wheat flour ended up getting intermingled with the oat flour, according to the Post.

Could It Have Been Avoided?

"One of the big things in supply chain that vendors and service providers are trying to figure out is how to do better track and trace," says Constellation Research VP and principal analyst Guy Courtin.

"That might not necessarily have avoided what happened at General Mills, but what it would have done is warned them sooner and help them rectify the problem sooner," he adds. "All it takes is a missed order on one truck and all of a sudden you've ruined everything you thought you had set up."

The Bottom Line

General Mills' Cheerios mishap provides a call to action for supply-chain pros. Examine your track-and-trace systems for weaknesses and look for ways to improve them, whether through IoT initiatives or better inspections checking processes, Courtin says. 

Incidents like it "just go to show that our supply chains are getting increasingly complex, increasingly strained by time constraints—people want things faster—you just need better checks and balances along the way to make sure these things don't happen," Courtin says.

Another tip for supply-chain pros: "Make sure your mindset is to be more cognizant of this stuff. Make it more of a priority."

The stakes vary according to different industries, Courtin notes. "If you're a food supplier and you screw something up, you might go out of business." But in pharmaceuticals, "if you screw up some of the supply chain there, you go to jail." 

Customer Experience Leadership: 5 Pitfalls to Avoid

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 importance of leading the customer experience cannot be understated. However, if the CMO steps into this role, there are risks that come along with the rewards. It may mean, in some organizations, that you’ll have to start by wearing a flak jacket to repel those who want to do you in. While that sounds harsh, those who have tried to lead new initiatives and were some of the first people who ventured out and did it, like social media, have been seen in the organization as early adopters. Most people in corporate America, though, are members of the early majority and late majority in terms of adoption of new ideas.

As a result, if you are an innovator or early adopter, be prepared that others may not see what you see. They may require a business case and more details on why you want to change the organization. If you know this in advance, it will save you a lot of heartache and make you much more successful.

The five “gotchas” our research uncovered for CMO’s (or whomever is leading customer experience) to watch out for include:

7 Ways for CMOs to Thrive When Leading Customer Experience

Vice President and Principal Analyst, Constellation Research
Constellation Research

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

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As brands realize Customer Experience Management is key to their overall strategy and long-term growth, our research at Constellation found CMOs should consider the following 7 principles when leading customer experience initiatives:

1. Bring passion about the brand you work for and drive cross-functional collaboration and lead organizational change
2. Focus on both communications and brand guardianship as well as innovation, product and business responsibilities
3. Balance the brand view and the business view so the CEO takes you seriously
4. Gain mastery of technical and non-technical skills: it’s critical
5. Use data and predictive insights to deliver real-time, optimized customer experiences
6. Evolve into a strong, well-balanced leader of cross-functional teams and groom successors and
7. Gain design-thinking experience.

Leaders of Customer Experience Management must have an emotional tie to the brand, identify with it and want to share the value it brings to customers. The CMO must be passionate about championing the customer experience and leading the development of the strategies, activities and tactics to create and sustain demand. Marketing must become the cross-functional voice of the customer. Having some organizational change management skills is very helpful to be able to lead the change, and is an inherent part of the changing role of the CMO, especially if they take on an end-to-end customer experience position.

AWS re-Invent Report - AWS lobbies for the enterprise - DB and IoT are the cheese

Holger Mueller

Vice President and Principal Analyst
Constellation Research

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

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We had the opportunity to attend Amazon's AWS unit user conference in Las Vegas, the event is seeing record attendance with over 19k attendees.

 

So take a peek for the Day 2 keynote and overall event takeaways:

 

 

If you don't have a chance to watch - here are my top three takeaways from the event:

 

• AWS wants a piece of IoT - One of the area seeing the most interest with our clients as a next generation apps scenario is IoT. And AWS has been already shortlisted for most IoT platform selections due to the breadth of capabilities and capacity (namely S3). So now with a more packaged offering we expect AWS to be even better positioned. What stands out on the architecture side is the creation of a 'shadow' object to the thing, which allow 'doing stuff to the thing' indirectly. And then pricing is purely based on messaging, so scaling the platform from a gateway, rules engine, registry and shadow perspectives is driven through the message pricing, interesting as a truly elastic architecture.
• AWS pushes for the enterprise - AWS understands what enterprises care about and announced a number of interesting services around DB data migration and product conversion (more here). On the  more disruptive side the new BI offering, Amazon QuickSight is the first AWS product that caters to a business user and is very competitive V1 version of a product, with substantial partner uptake. With partnership agreements like with e.g. Accenture, AWS know how will be more available with traditional trusted sources used by enterprise decision makers.
• AWS time is now - It cannot get much better for any cloud vendor than things got for AWS during this conference: There is very few enterprises that can top a commitment to move to AWS as an 'all in' move, like GE. And that's what the CIO of GE pretty much said...  apart from IP relevant apps (details are missing) over 9000 corporate IT functions are moving to AWS. And then a banking (!) CIO - the one of CapitalOne - is on stage and says that AWS data centers are more secure than his. Can't get much better either. So AWS can't make a much better case and can't have much better showcases, if the light bulbs in regards of public cloud adoption in the enterprise don't go on now, one can only be sceptical when the go on.

 

MyPOV

A very good event for AWS, with record attendance, interest and  announcements. For enterprises looking at public cloud use cases, it reconfirms AWS as a prime contender to be on the shortlist, as the vendor has become even more attractive for the enterprise buyer. 

 

On the concern side we see that AWS needs to find new ways to distribute knowledge, partnership with SIs are only one path, It's tough for anyone to stay on top of the innovation and the Venetian / Sands is bursting at the seams. And AWS needs to reach more of a enterprise audience - beyond the traditional developer audience of  re-Invent conferences. But then AWS CTO Vogels talked for over 15 minutes about IoT use cases, which was kind of odd, as traditionally he delivers a technology talk. It maybe a sign of AWS starting to cater more to the enterprise executive, but we would have to see more of that to call it a trend and with a different audience in attendance. AWS does this usually with AWS Summits, but once a vendor has a certain size, audiences can no longer be segregated and messaging needs to be consistent along the entire year. And lastly AWS needs to tune its platform message and move away from the a collection of technologies that get pieced together. Developer love that, executives dread that. The AWS IoT is an approach in that direction, AWS will need to do more and be firmer on the messaging. 

 

But overall a very good event for AWS and its customers. There can't be better references for the move to public cloud than AWS had on stage this week. Now it is for enterprises to chart their course.

 

 

AWS re:Invent: Five Takeaways On New Services

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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Amazon challenges ‘old-guard’ IBM, Microsoft and Oracle with QuickSight, Kinesis Firehose, Snowball, and new database services. Here’s a quick rundown with cautions for would-be adopters.

Make no mistake: Amazon Web Services (AWS) is doing everything it can to make it easy for enterprises large and small to bring all, or at least part, of their data into its cloud.

At the AWS re:Invent event in Las Vegas on Wednesday, AWS announced a battery of new services designed to lower the cost and simplify the tasks of analyzing data, streaming data, moving data, migrating databases and switching to different database management systems in the cloud. Here’s a quick rundown on five new services with my take on implications for would-be customers.

QuickInsight is a data-analysis, visualization and dashboarding suite introduced at AWS Reinvent. It promises ease of use and costs start at $9 per user, per month.

QuickSight Offers BI in the Cloud

Fast to deploy, easy to use, low cost: these are the three promises of QuickSight, which Amazon says will start at $9 per user, per month, “one tenth the cost of traditional BI options,” according to Amazon.

Currently in preview, QuickSight is described by Amazon as follows:

• QuickSight automatically discovers all customer data available in AWS data stores – S3, RDS, Redshift, EMR, DynamoDB, etc. – and then “infers data types and relationships, issues optimal queries to extract relevant data [and] aggregates the results,” according to Amazon.
• This data is then automatically formatted, “without complicated ETL,” and made accessible for analysis through a parallel, columnar, in-memory calculation engine called “Spice.”
• Spice serves up analyses “within seconds… without writing code or using SQL.” Data can also be consumed through a “SQL-like” API by partner tools running on Amazon including Domo, Qlik, Tableau and Tibco-Jaspersoft.
• A tool called “Autograph” automatically suggests best-fit visualizations, with options including pie charts, histograms, scatter plots, bar graphs, line charts and storyboards. You can also build live dashboards that will change in real-time along with the data. QuickInsight will also be supported with iOS and Android mobile apps.
• Sharing options will include “single-click” capture and bundling data and visualizations (not just screen shots) so collaborators can interact with, drill down on, and change visualizations. These can be shared on intranets, embedded in applications or embedded on public-facing Web sites.

MyPOV on QuickSight: Amazon is clearly taking on what it called “old-guard” BI solutions such as IBM Cognos, Oracle OBIEE and SAP BusinessObjects. We’ve already seen more modern, cloud-based alternatives from these vendors, including IBM Watson Analytics, Oracle BI Cloud Service and SAP Lumira Cloud. I expect to see yet more cloud BI and analytics options announced by these three vendors within the next few weeks. Amazon is smart to be moving into BI, analysis and visualization now as incumbents are starting to put all their chips on cloud-based BI and analysis offerings.

If the no-coding, automated visualization capabilities live up to their billing, QuickSight just may compete a bit with the likes of Qlik and Tableau as well as Cognos and BusinessObjects. We’ll also have to see just what you’ll get for $9 per user, per month and just how easy and broad the collaboration options will be. The pricing is in the freemium range where IBM Watson Analytics, Microsoft PowerBI and SAP Lumira Cloud have been establishing cloud beachheads.

If QuickSight has a weakness it’s that it appears to be entirely geared to consuming data that’s in Amazon’s cloud. Amazon said nothing about connecting to on-premises data sources. In fact, the keynote went on to describe many new services (described below) designed to bring yet more data into Amazon’s cloud. In short, QuickSight is not about hybrid scenarios, it’s about analyzing data that lives in the cloud, which will be fine for many, but not all companies.

Kinesis Firehose Handles Streaming Scenarios

Amazon already offered Kinesis Streams, a real-time streaming data option, but that service is aimed at technical users. Kinesis Firehose, available immediately, is intended to make it easier to support streaming scenarios such as mobile apps, Web apps or the collection of telemetry or sensor data (read, IoT).

Instead of writing code, “builders” create an Amazon Kinesis Firehose Delivery Stream in the AWS Management Console.” These streams can then be targeted at S3 buckets or Amazon Redshift tables (with more Amazon storage options to come). Users can specify refresh intervals, chunk sizes and compression and encryption settings.

MyPOV on Kinesis Firehose: This is a welcome refresh and addition to the Kinesis family. Kinesis Firehose seems to add some of the same visual, point-and-click/drag-and-drop, API-based approaches seen in recently introduced IoT suites, such as Microsoft’s Azure IoT suite. Ease-of-use and self-service seem to be the guiding principles for all data and analysis services these days, and Kinesis Firehose brings streaming capabilities closer to business users.

AWS Snowball: Chuck Bulk Data At AWS

Even if you have fat, dedicated pipes (at great cost), it takes a long time to move big data. Amazon has an existing Import/Export service that lets you ship data overnight to AWS on one-terabyte disks, but even that’s a time-consuming can error-prone approach when moving tens of terabytes or more.

AWS Snowball is a shippable appliance designed to move 50 TB at a time.

Amazon Snowball, available immediately, is a PC-Tower-sized appliance in a shipping box that stores up to 50 terabytes at a time. A digital-ink (Kindle-based) shipping label displays your address on the outbound trip and then automatically resets to Amazon’s address once you load data and are ready to send it back via FedEx or UPS.

Data is encrypted as it’s stored in a Snowball, and you can run several Snowballs in parallel if you need to move hundreds of terabytes or more. The service also validates that all data that’s stored on the device is uploaded and readable on AWS storage. The cost per shipment is $200, and Amazon says it’s the fastest and most cost-effective option available for bulk data loading to the cloud.

MyPOV on Snowball: Not much to quibble with here. Amazon has thought through a tough problem and has come up with an easier way to ship bulk data with provisions for security, damage- and tamper-resistant shipping, and fool-proof labeling.

AWS Database Migration Service: The Last Mile

Amazon launched two new services promising “freedom from bad database relationships.” The “old guard has treated you poorly,” said Amazon executive Andy Jassy, who cited lock-in, software audits and fines. So it’s “only natural” that companies are “fleeing expensive, proprietary databases,” he said.

The challenge, admitted Jassy, is that migrations are fraught with risks. Do you try to keep services running and hope you can pull off a seamless transition? Or do you shut down one service and then start another, hoping that you can minimize downtime? Another challenge is migrating from a commercial database, like IBM DB2 or Oracle, and switching to lower-cost, cloud alternative, like Amazon Aurora, PostgreSQL or (just added to AWS as a MySQL-replacement) MariaDB.

The Amazon Database Migration Service will “easily migrate production databases with minimal downtime,” according to Amazon. It’s said ensure continuous replication from target to source for any size database, with tracking and real-time monitoring. The tool takes 10 to 15 minutes to set up, says Amazon, and the cost of the service is about $3 per terabyte.

MyPOV on Database Migration: This is another well-intended service where any improvement offered will be welcome, but Amazon anticipated the major concerns (mine and yours) by also introducing the Amazon Schema Conversion Tool described below. Amazon threw the term “open” around quite a bit, but keep in mind that Amazon RDS, Aurora and RedShift are no less proprietary than DB2 or Oracle. Lower cost, certainly, but lock-in is a factor to consider here, too.

AWS Schema Conversion Tool: The First Mile

Migrating an on-premises database to the cloud (say, MySQL on-premises to MySQL running in the cloud) is hard enough. Migrating from on database management system on-premises (say, Microsoft SQL Server or Oracle) to an alternative DBMS running in the cloud (say, MariaDB replacing SQL Server or Aurora replacing Oracle) is harder still. Amazon acknowledged as much by introducing AWS Schema Conversion Tool.

New AWS Database Migration and Schema Conversion services are both intended to ease database moves, but schema conversion is the tougher task.

Migrating data from one database to another is really the easy last mile. The trickier part is all the preparation work you have to do before the big move. The Schema Conversion Tool is said to “reliably and easily” transform the data from one database type to another, swapping like-for-like tables, partitions, store procedures and more, according to Amazon. “We think we’ll be able to address 80% of changes automatically,” said Jassy. “This will radically change the cost structure and speed of moving from the old world to the cloud world.”

MyPOV on Schema Conversion Tool. Good for Amazon for taking its assistance a level deeper than the Database Migration Service. But practitioners should keep in mind that there will still be plenty of testing and quality-assurance work to do even if the Schema Conversion Tool manages to handle 80% of changes automatically.

Here again we’re talking about a well-intended service wherein any improvement over the status quo will be welcome. Just don’t expect this optimistically named tool to automagically move or swap your DBMS without breaking things in the process. That will certainly be the case when switching from one DBMS to another. Apply the rule of thumb often used in home-improvement projects: Count on it taking twice as long and costing twice as much as your initial estimates.

MyPOV on the Big Picture From re:Ieinvent

Amazon offered an impressive collection of announcements at re:Invent. It also didn’t hurt to have executives from the likes of CapitalOne and GE talking about how they’re consolidating data centers and moving huge chunks of their workloads to AWS – 60% in GE’s case. Keeping things real, it was refreshing to see Amazon acknowledge that many large enterprises (I believe most) will ultimately stick with hybrid cloud approaches. GE, for example, said it’s moving all non-differentiating workloads to AWS while anything related to “company crown jewels” will remain in company-owned data centers.

Where all these new data services are concerned, I think it’s also important for companies to think hybrid rather than putting everything in the cloud. QuickInsight might satisfy many self-service data-analysis scenarios, but that won’t eliminate the need for carefully curated data and analyses, high-value decision-support scenarios and mission-critical business-monitoring tasks. As for putting 100% of your data in the cloud, apply the standard advice to investors and diversify. So maybe you go cloud, but you mix public and private cloud.

The point is to not put all of your eggs in one basket. The Weather Company, for one, has split its B2C and B2B clouds between the AWS and IBM clouds, respectively. Keep competition and the threat of lock-in in mind when crafting a new data-management strategy and making long-term plans for how and where you support BI and advanced analytics for routine versus “company crown jewel” needs.

Should the Chief Marketing Officer (CMO) Oversee the Whole Customer Experience?

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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Customers, Value Chain and The Customer Experience Imperative Should the CMO oversee the whole customer experience? Today, the value chain in business has gone from products that became commodities to services that fuel anticipation of superb customer experiences that go beyond anything customers have expected previously. These new customer expectations have put pressure on companies to deliver on these experiences, which affect the revenue, margin and profits of a company. Brands are under a new type of pressure to keep the right customers and ensure that each of those customer’s experiences live up to their customer’s expectations. In order to make that happen, especially in large organizations, someone has to have customer experience as their primary responsibility and also have the clout to improve it. This is not your grandpa’s CRM. It’s starts with strategy and difficult leadership questions.

The big question? Who should lead the entire customer experience? With the shift to digital marketing, electronic commerce, social media and mobile interactions, brings a massive transformation to how brands and organizations engage prospects and customers. Customer Experience Management is a major pillar in many B2C and B2B organizations’ efforts to engage and retain customers. As it gets more complicated to engage and retain customers, organizations are realizing there is more to the job of customer experience than many first realized. This is in part because providing superb customer experiences often means getting many different departments or functional areas to collaborate, especially when they had not been in the habit of doing so before. Many times the reason for the lack of collaboration and why it has not happened before is because it’s not easy. Again, it’s not your grandpa’s CRM – it’s not about technology really. It’s really starts with a cultural mindset.

Falling Through The Cracks? There are many points along the customer experience journey where an organization can miss the mark and not even come close to meeting customer expectations. However, market leaders realize the future requires proactive, digital online engagement, integrated with in-person and/or in-store experiences to support the strategy. In this research we spoke to many leaders to find out how they are tackling the issues around customer experience and leadership and how best to lead this key strategic initiative in their organization.

The Research Found: The Role of Chief Marketing Officer Is Undergoing Fundamental Transformation, Yet Few Are Ready  As we explored the readiness, rewards, risks and gotcha’s for a CMO to step into an all-encompassing role to deliver the end-to-end customer experience, Constellation identified what CMOs are going through as they are being asked to add more to their “already” full plate. As they lead their organizations to become more customer-centric by creating and maintaining top-notch customer experiences, they helped us identify issues that can inhibit a CMO’s success –if how the business is run and the role of the CMO itself –doesn’t change. Here is a condensed version of the challenges we learned CMOs are facing:

1. Confusion abounds on who should lead (own) the customer experience.

2. Agile, design-thinking is required to lead changes needed for successful customer experience.

3. Marketing is often focused on communications rather than innovation, product development and business innovation. 

4. Marketing only recently became more accustomed to being highly measured, so building the business case for the additional responsibilities of the “new” CMO role may be difficult.

5. The Consumerization of IT has created often unfulfilled customer experiences.

6. The abundance of data requires immediate analysis and action to provide meaningful mass personalization at scale.

7. The plethora of data requires a data management and utilization strategy

8. Marketing can be isolated from other departments that affect customer experience and that isolation hurts the ability to lead change.

9. Marketing can be isolated from other departments that affect customer experience and that isolation hurts the ability to lead change.

10. Customer experience requires a highly collaborative individual to lead cross- functional collaboration.

The truth is there is not any “right” way to lead and deliver customer experience. Every single company has to think about their brand, the type of customer experience they want to deliver and their ability to do that consistently. As products and services have become commoditized, the last frontier to compete on is differentiation of the customer experience, so it is something that is more important than ever. What’s your take on who should lead the customer experience in your organization and why?

Resource

Read my latest research report, Should the CMO Lead the Customer Experience?  Download the table of contents and an excerpt of the report here: http://info.constellationr.com/report-download-cmo-oversee-customer-experience

@DrNatalie, VP and Principal Analyst, Constellation Research

Covering IOT of Customer Facing Initiatives in Marketing, Sales and Customer Service that Create Great Customer Experiences

AWS #reInvent Wednesday Keynote - AWS aims for the enterprise

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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I'm analyzing live from Amazon's AWS reInvent conference in Las Vegas. The conference is seeing record attendance, with over 19k attendees, more than doubling compared to the 2014 edition. 
 

Here's my analysis of the announcements made in the keynote:

 

If you don't have a chance to watch - here are my key takeaways:

 

• Database remains core - Not only is Aurora doing well, but AWS announced MariaDB as their 6th database offering. Continuous migration services were announced, as well as  a schema conversion tool across all 6 supported AWS relational databases. Jassy shared that 80% could be migrated automatically.
   
• Amazon QuickSight - Probably the most powerful product announcement, with a strong appeal for business users. Making sense of data automatically, then visualize it for further analysis and put it into storytelling capabilities is very attractive to business users. It needs better visualization, but impressive scope for a V1.
   
• Enterprise Focus - AWS is addressing again the security concerns enterprises have with cloud. With Inspector and Config Rules there are now software based offerings to make sure information and processes in AWS Cloud are safe and compliant. So when enterprises move they need to get their data their, and AWS announced Snowball, a secure way to ship a 50 TB box (or more of them) from on premisses to AWS. But with all software support, human skills are still in demand, and along these lines it is good to see Accenture announcing on stage to form a dedicated AWS consulting unit. 

MyPOV

A very good start for AWS reInvent, with a lot of announcements and new capabilities. Good to see AWS getting better at taking away the main inhibitors and concerns for enterprises starting with security, data migration and trusted advisors / people skills. 

 

On the concern side AWS is announcing a lot of things and innovating at rapid pace, to stay on top of that is a challenge for professionals and enterprises. Amazon will have to think about more innovative ways on know how distribution and certification at some point.

 

Stay tuned for more updates.

 

More on AWS

• Event Preview - AWS reInvent 2015 - watch / read here
• Event Report - AWS Summit Berlin - AWS spricht Deutsch - but when will the Germans speak cloud? Read here
• News Analysis - AWS learns Hindi - Amazon Web Services announces 2016 India Expansion - read here
• Event Report - AWS Summit San Francisco - AWS pushes the platform with Analytics and Storage [From the Fences] read here
• Event Report - AWS re:invent - AWS becomes more about PaaS on inhouse IP - read here
• AWS gives infrastructure insights - and it is very passionate about it - read here
• News Analysis - AWS spricht Deutsch - the cloud wars reach Germany - read here
• Market Move - Infor runs CloudSuite on AWS - Inflection Point or hot air balloon? Read here
• Event Report - AWS Summit in SFO - AWS keeps doing what has been working in the last 8 years - read here
• AWS  moves the yardstick - Day 2 reinvent takeaways - read here.
• AWS powers on, into new markets - Day 1 reinvent takeaways - read here.
• The Cloud is growing up - three signs in the News - read here.
• Amazon AWS powers on - read here.

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

2012, 2013, 2014 & 2015 (C) Holger Mueller - All Rights Reserved

GE, Capital One Give AWS the Rub at re:Invent

Chris Kanaracus

Managing Editor, Constellation Insights
Constellation

Chris Kanaracus is managing editor of Constellation Insights.  Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members.  Prior to joining Constellation, Kanaracus spent seven years covering the enterprise software industry for IDG News Service, where he frequently broke exclusive stories with a focus on end-customer issues. Kanaracus has also held various managerial and reporting roles at newspapers in New England since 1998. Twitter: @chriskanaracus , Title: Big IdeasConstellation Insights Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members. ...

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Amazon Web Services' opening keynote at re:Invent 2015 started in a familiar fashion, with SVP Andy Jassy providing an overview of AWS's rapidly expanding slew of services along with arguments why companies are moving, and should move, to its cloud. 

While Jassy's remarks were persuasive, the voice of the customer remains king—and AWS managed to convince no less than the CIOs of Capital One and General Electric to share their stories onstage.  

General Electric is using AWS as part of its transformation into a digital enterprise, said CIO Jim Fowler. By 2020, GE plans to generate $15 billion in revenue in software, according to Fowler.

All-In on AWS

In the meantime, GE is aggressively moving its IT environments to the cloud with AWS.

The journey began with a whopping 9,000 applications, 300 ERP systems "and too many physical data centers to talk about," Fowler said.

In recent times GE has hired more than 2,000 technical employees and invested $1 billion in a software center of excellence. 

"We're taking a build-versus-buy mentality for things that matter," he said. "The things we're going to choose to buy is where we don't differentiate. "I'm not going to sell another aircraft engine because I run a global data center operation really well. That's AWS's differentiator in the environment." 

All of those 9,000 workloads will move to AWS over the next three years, and GE's data center footprint will shrink from 34 locations to just four. Those will "only hold what we value most secretly," Fowler said. 

"AWS is our trusted partner who's going to run our company for the next 140 years," he added. "For us this is no longer an experiment, this is no longer a test. … It's inevitable." 

Betting the Bank on AWS

Meanwhile, many people know Capital One as a major credit card provider and top 10 bank, but "few of us know we're also a founder-led, 20-year old tech company," CIO Rob Alexander said. "Digital is truly the new bank branch. We really need to be great at building amazing digital experiences for our customers if we're going to win where banking is going." 

Customers prefer mobile apps twice as much as websites, and the trend to mobile "is moving away fast," he added. 

Capital One is investing massively in hiring new engineering talent, and takes an open-source first approach to technology, according to Alexander. 

AWS has become an increasingly more important part of its overall IT strategy. Capital One started with dev and test operations on AWS but today, "we can deploy some of our most critical workloads on Amazon." It has thousands of developers working with AWS, and is using or testing nearly every new service.

Leveraging AWS, Capital One is shrinking its data center footprint. It will be down to three by the end of 2018, compared to eight in 2014. 

Alexander closed with a couple other key rationales for choosing AWS. For one, it "enables us to operate even more securely in the public cloud than our own data centers," he said. 

AWS is also a great draw for the technical talent Capital One needs to attract: "The principal reason I'm standing here today is we have thousands of roles we need to fill." 

The Bottom Line

Alexander and Fowler's appearances and endorsements of AWS are telling indicators of its penetration with and trust among enterprise customers. 

"What better, bigger industrial company can you ask for to go onstage than GE?," says Constellation Research VP and principal analyst Holger Mueller. "Two years ago they had to get a CIO from Australia. Nothing against Australia but this year they've got GE. It's really impressive to have them onstage doing this."

Overall, companies considering the cloud for IaaS and PaaS should place Amazon on their short list, although public-sector organizations may require an alternative, such as IBM, due to security requirements.