Constellation Orbits Constellation Research, Inc.

Elizabeth is a well-recognized industry-leading analyst. She was previously Vice President and Principal Analyst at Constellation Research.  Prior to Constellation, Elizabeth spent eleven years at Forrester Research as vice president and principal analyst.  She has managed large consulting projects for business and government organizations and provides technical insight and guidance to business and government organizations on their communication issues. Prior to her role as an industry analyst with Communication Initiatives and Forrester Research, Elizabeth held senior management positions with IBM, ROLM and Siemens ICN where she was a senior manager for strategic planning and alliances. Expertise Elizabeth’s expertise includes in-depth knowledge of unified communications,… Read more

The rapid growth in smartphones, social media and video has created new channels — many of which are handled separately than the traditional call center, causing inconsistent customer experiences. Today’s customers, especially the digital natives, seek immediate response to issues and are no longer satisfied with slow service or delayed response.  They expect immediate connectivity and response to their questions and want consistent service and recognition regardless of the channels they choose. 

This more complex support environment often leads to mistakes as CSRs toggle back and forth among several applications to deliver an answer to a customer. Additionally, customers are often put on hold while waiting for the CSR to process a transaction. An intelligent unified desktop software greater reduces processing time and improves accuracy of CSRs. Customers enjoy faster and more accurate answers resulting in a positive experience.

Most existing unified desktop software supports only telephone transactions and neglects the rapidly emerging channels of social and mobile application support. Unified desktop software vendors include CRM vendors such as Salesforce and Amdocs that link to the core ACD software and provide customer information directly to agent desktops when a call is received.  Additionally, dedicated software, vendors such Pegasystems offers business process management and supports unified desktop software for handling complex business processes by automating programming and workflow. Pegasystems Business Process Management offers premise based and cloud solutions and is excellent tool for high-end complex customer support operations. It is one of the few vendors supporting multiple channels on their unified agent desktop.

LiveOps a cloud based customer service organization recently announced a new integrated agent desktop that supports all channels including social called LiveOps Engage.  All channels are visible on a single screen, which improves agent productivity and delivers a seamless customer experience. Importantly, LiveOps has built in quality control that allows managers to review agent’s messages on social and other channels before messages are posted publically.  LiveOps demonstrates solid innovation in this area that will attract more customers and help sustain its strong year- over- year growth in cloud customer service.

There is little doubt that for customer support operations to improve performance in today’s complex environment that a unified agent desktop is an essential tool.  It improves the customer experience, increases accuracy, supports more personalized interactions and reduces processing time.  I expect to see significant growth in unified desktop software for a multiple channel customer experience in 2013.

Constellation Alumni

"I am fascinated by understanding technologies, then explaining how to apply these within enterprises -- while still retaining common sense." Charles Brett is VP and Principal Analyst at Constellation Research, Inc..  His primary focus is on all aspect of mobility and the use of mobile technology in the enterprise.  For 25+ years Charles Brett has focused on delivering common sense to the application of technologies, especially software ones, in organizations of all sizes around the world. While concentrating at Constellation Research on mobility and its management in the enterprise (sometimes known as MDM or Mobile Device Management) he also addresses: mobile app development and deployment mobile apps and associated data management BYOD (Bring or Buy Your Own… Read more

According to the FT in its piece about the latest iPad upgrade (January 30, 2013), Philip Schiller, Apple’s SVP of Worldwide Marketing, said 120m iPad owners were using these “rather than their old PCs” to fulfil both “business and personal needs”.  The implication, at least according to Mr Schiller, seems that to be that the PC must be dead or dying because it is being supplanted by iPads.  This seems a dubious (except to Apple) proposition.

What may be true is something slightly different, and rather more plausible.  This is that the ‘vanity PC’ (or laptop) is being added to (but not replaced) by iPads (and potentially other tablets), which may or may not in turn be ‘vanity tablets’.

So what is a ‘vanity device’?   It is a device purchased for (or by) an executive more for show rather than serious use.  You think these do not exist?  If so, you are sadly mistaken.

The first ‘vanity device’ I encountered was when consulting for a significant UK company whose deputy chairman insisted that he must have a (what was then the new-fangled) PC in his office.  The limitations on his usage were best illustrated by this company’s IT Centre, located some 30 miles away from Head Office.  On more than one occasion an support specialist had to incur the corporate cost to drive to and from central London to put back the PC’s plug back into the electricity socket — because no one had worked out (the courage) how to ask him to check that the PC was plugged into the wall and the switch turned on. (It transpired that the cleaner used that same power point to clean his office, but never reconnected what she had pulled out).  Worse still he could not even log on for himself but insisted that the PC be left logged-in when he was not there…

Most recently I encountered a partner in a financial services company who has an laptop but who never edited (nevermind originated) a document (or spreadsheet or presentation).  His PA confirmed that that laptop was for receiving and reading information — and fair enough.  Nevertheless the laptop (in this case) was a smart one, both fashionable and overpowered as well as more than is necessary for the modest tasks being performed.

In the latter case, a 2012/2013-style tablet actually can make more sense than a laptop PC.  An iPad or Android tablet IS a great mobile content consumption device, even if it is not so good for content creation.  A tablet is also a great data access device, though not so good for data manipulation, and potentially excellent for enhancing workflow-based decision taking (as Workday, SAP and others are demonstrating).

Herein lies the issue that Mr. Schiller raised.  Are the alleged 120M iPads:

• displacing working laptops/PCs?
• displacing vanity laptops/PCs?
• adding to the collection of ‘vanity devices’ that are minimally used by (especially) executives?
• adding to the collection of working devices that are in constant use by other executives, managers and users?

At the December’s Dell World (in Austin) John Swainson (Dell’s head of software and ex-CEO of CA and more) stated that at one conference he had attended he had almost felt he was confessing when he owned up to carrying 5 devices, saying also that he was not the person carrying the most devices.  Equally I have to confess that, when business traveling, I rarely have less than 4 devices (at least 3 smartphones covering 3 countries/networks, possibly two tablets  – of different sizes and capabilities — and normally a laptop.  If he and I are even only mildly representative, many others will be adding to their device collection rather than displacing existing ones.

The core issue continues, therefore, to be about content creation.  Microsoft’s Office retains its premier position, not least because interchanging editable documents (spreadsheet, presentation or written document) matters.

Could Office 2013 change this, by enabling all to exchange and edit through the cloud?  Yes, possibly.  It will be interesting to see how creating and editing Office business documents in the cloud on an iPad or Android tablet will feel — and for that we will have to wait until late February.

As I, and many others, have argued, Office remains a significant key to tablets and their future in and between enterprises.  Thus far Windows 8 RT has proved to be a mixed bag — because Office is more than the sum of Word, Excel, PowerPoint, Outlook and more: Office represents a healthy ecosystem with enormous flexibility, choice and function coming from the largest development community (still).  Gainsaying this be difficult and full Office on full Win8 tablet is still an emerging arena (the first Win8 tablets have not really convinced).

Apple has a tradition of claiming much, while also being happy to omit sustaining detail.  Apple seems also to be suffering; its own personal computer sales are falling (despite refreshes).  Indeed, the closer that OS X and iOS become the easier it is for the Mac-world (especially those not using Office) to migrate to iPads, for the function is so much more similar.

2013 is likely to be a turning point in the PC/tablet evolution.  Office will likely be a major determinant of what emerges.  Even so, the ‘vanity device’ phenomenon will continue — and will include (rather than displace) vanity tablets as well as vanity laptops (especially of the super-sexy, brushed aluminium, high price variety).  It is not strange that those same executives who insist on cost reduction/containment/management also insist on the latest and best of something that all too many of them do not really use?  Yet the car precedent has been there for all to see for decades — as Audi, BMW, Lexus, Mercedes and others have and continue to enjoy.

Alumni: Constellation Research Constellation Research

Dr. Brent Kelly is a Vice President and Principal Analyst at Constellation Research and President of KelCor, Inc. He focuses on the unique intersection of unified communications, social business, cloud services, video and mobility.&nbsp; Dr. Kelly provides strategy and counsel to key clients including Chief Information Officers, Chief Technology Officers, investment analysts, venture capitalists, technology policy executives, sell-side firms and technology buyers. <br> Prior to joining Constellation, Dr. Kelly served for 10 years as a partner at Wainhouse Research where he was the primary author of most of the firm’s unified communications reports and forecasts. Dr. Kelly is a regular presenter at Enterprise Connect (formerly VoiceCon), the communications industry trade show where his… Read more

At IBM Connect, Sametime has barely had any mention on the main stage. Furthermore, as one looks at the show program, there are only a couple of sessions on Sametime.

Yet, in some of the demos, the ability to see presence, send an instant message, or have an instant meeting was demoed or at least referenced as key parts of the solution functionality. It almost seems that in the minds of IBM's executives and managers, Sametime's capabilities have become part of the enterprise infrastructure fabric - almost a given that they are there.

Yet, in spite of the lack of executive mind share, the Sametime group still has revenue targets it must meet, which indeed must be challenging given the sales and marketing emphasis on other products, including IBM's social software solution, Connections, and its big data and analytics products. 

In one of the few sessions about Sametime, the Sametime roadmap was discussed within the context of Social Communications. In fact, the session title was "Social Collaboration Strategy and the IBM Sametime Roadmap". The presenter, who leads the Sametime group started the session with these words, "Communications is more powerful in a social business context."

Thus, it appears that collaboration and communications, while important building blocks, are becoming part of the fabric of the enterprise: always available, integrated with and within other solutions. This trend was predicted back in 2009 in an article on NoJitter.com in which I wrote, "It is clear that ... the table stakes now include some form of a UC client that includes integration with the PBX for click-to-call/click-to-conference, directory integration, presence/IM, and usually video. The more sophisticated UC solutions include integration with the email system, integration with standard office desktop software, and a much richer presence engine... UC concepts will ultimately become so commonplace in the market that people will cease to talk about it."

Another trend that may further hasten the inclusion of UC in general and Sametime in particular into the infrastructure fabric is WebRTC. WebRTC is a capability that introduces audio and video communications natively within HTML5 browsers. One can imagine in the very near future when every browser, whether it is running on a PC, smartphone, or tablet, is fully communications enabled. (I am co-chairing a full day conference-within-a-conference at Enterprise Connect 2013 on WebRTC.)

IBM has announced Sametime version 9.0 scheduled for release in mid-2013. Could this be the last "version" of Sametime as a separate product?
 

Alumni: Constellation Research Constellation Research

Yvette Cameron was VP and Principal Analyst at Constellation Research, Inc. focusing on next generation HCM processes and technologies, and is founder of NextGen Insights. Yvette is now a Constellation Research alumna. , Title:&nbsp;Big Ideas CRM concepts will transform HCM processes for new levels of Employee Engagement and Business Results Companies are investing heavily to understand and optimize their customer relationships, but less so with their employee relationships. We must apply the tenets of CRM to HCM processes to understand, engage and align the workforce, because customer success begins with employee success. From “Command and Control” to “Engage and Inspire” Traditional work practices and business structures are evolving at an unparalleled rate. New thinking and… Read more

The messages at this morning’s IBM Connect keynote event were clear: The future is “Social” and the new language of business is “Analytics”. Welcome to the future.

All morning these messages were evangelized and demonstrated, from IBM executives and their demo teams, to clients like Bosch, Caterpillar and Regeneron Pharmaceuticals, and even from a Hollywood star-slash-collaborative film development entrepreneur.  Each spoke on the transformational role that collaborative, social engagement is having in our business and personal lives, changing how we work, play, create, engage and in some cases even how we’re paid or rewarded for our efforts.

For me, one of the most intriguing aspects of the keynote came at the end, when Mike Rhodin, SVP IBM Software Solutions Group, spoke to the future and the intersection of social, analytics and people processes.  He spoke of cognitive systems like IBM’s Watson and its ability to filter through the terabytes of data created every day to see patterns, unlock the real truth about business, employees and customers, and to weave intelligence into every aspect of the fabric of a business.

For example, Rhodin asked that we image a central “employee center” for global organizations – one which becomes a trusted career advisor from pre-hire through advanced roles in the organization through the continuous analysis of formal, informal, social and other inputs (structured and unstructured) to present a highly personalized, dynamic and guided  path for each individual. Not the static, pre-defined career paths of the past, but truly intelligent, contextual and adaptive guidance to the individual all throughout their career with a company.

Long term future vision?  Not as far off as might be imagined.  Today, Watson is being used in select healthcare use cases such as analyzing patient records and myriad information sources to surface recommended treatment protocols.  Applying similarly deep and broad analysis across the ‘big data’ of the enterprise, with a lens on employee success and value creation for the organization, makes complete sense.  Only big data analytics will be able to effectively interpret all the signals an enterprise may receive around its employees and drive meaningful insights and decision support – for managers and the employees alike.  Embedded cognitive systems are the necessary next step as we evolve our talent technologies and processes from transactional systems to systems of engagement and, ultimately, transform them to the experiential systems necessary to thrive in the future of work.

Of course – the answer isn’t just pure analytical power.  Human engagement and analysis will still be needed.  Even in the Watson-recommended healthcare protocols referenced above, the physician and other caregivers use the results to inform and guide their actions; ultimately the healthcare provider makes the final decision.  Likewise, in the career management and other employeee-oriented engagement scenarios, the cognitive system-delivered paths will serve as guides to inform individuals; Watson won’t replace the person-to-person conversations and analysis that will ultimately drive the employee’s action.  What’s transformational, however, is the richness of information that will inform those individual actions, that can make recommendations based on previously hidden patterns and connections, all because of the capabilities of real-time analysis of vast quantities of seemingly disparate information.

Many announcements are underway here at IBM Connect and the opportunities for the  HCM market are numerous; more to follow in upcoming days.  Meanwhile, let me know what you think about the idea of Watson and related systems and the opportunities for HCM.

Filed under: Analytics, Big Data, business effectiveness, Future of Work, Global HCM, HCM, IBM, Kenexa, Mobile/Social, NextGen Workforce, Social Tagged: analytics, Artificial intelligence, Big Data, future of work, HR, HR Tech, IBM, IBM Connect, Next Generation apps, Social, Social Enterprise, Trends, Watson, workforce analytics, yvette cameron

Alan Lepofsky

Vice President & Principal Analyst Constellation Research

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

Today at IBM Connect (the conference formerly known as Lotusphere), IBM unveiled their vision for how businesses can find, attract and hire the best employees; empower those people to get their jobs done as effectively as possible; and motivate them to be happy, productive and successful employees with long and rewarding careers. These three areas combine to deliver what IBM refers to as the Smarter Workforce.

My Point of View

For the past decade or so, the core messages at Lotusphere have revolved around they ways Lotus software could help people collaborate. Each year as the Lotus product portfolio grew (Sametime, Quickr, Connections, Portal, etc.) the messages evolved to include new product features or platforms but the story remained fundamentally the same. This year IBM made a big shift, revealing a new, much grander vision.

With the conference renamed to reflect the overall IBM brand and the introduction of Smarter Workforce, IBM (and ideally their business partners) can now speak with customers and prospects about IBM solutions at a much more strategic level. Those conversations should no longer be based on things like Notes/Domino for email or Portal for intranets, but rather how social networking (people, communities), content (documents, files, etc.) and analytics (using data to make decisions) should be integrated with the business tools and processes employees use for getting work done.  

Based on the recent acquisition of Kenexa, the business processes IBM is currently talking about are related to Human Resources (HR), but Smarter Workforce is not just about "social business + HR". I predict it will be expanded into areas like Sales (IBM should acquire SugarCRM), Marketing (IBM should acquire Marketo), Engineering (leveraging assets from IBM Rational, or integration with GitHub) and Customer Service (IBM should acquire GetSatisfaction and/or ZenDesk).

IBM is not unique in this vision. Competitors such as SAP, Oracle, Salesforce and Microsoft have also shifted their stories away from social software being a category of its own, to now talking about how social must be a core feature of business applications. SAP acquired SuccessFactors. Oracle acquired Taleo. Salesforce acquired Rypple and created work.com. Bedford funding now owns both PeopleFluent and Socialtext. All of these vendors are combining social and HR into an integrated experience. This shift from "generic sharing" to "purposeful collaboration" is necessary, as despite the hype, stand-alone social software has not sold as well as vendors had hoped, and many companies who have purchased social software have struggled to get people to use it in business scenarios other than online communities. By providing a purpose for using social features, employees won't have to shift out of the context of the tools and processes they use as part of their daily workflow. I refer to this as "taking the training wheels off of social".

The challenge ahead for IBM is turning this new vision to reality. Strategy is the easy part, execution is more difficult. At this early stage the details are not clear about what (and how much) technology (software, hardware, deployment options, pricing) is required to create execute on the Smarter Workforce vision. Purchasing, installing and maintaining combinations of products such as Connections, Kenexa, Cognos, Tivoli, Coremetrics, Worklight, IBM Watson and others will not be a simple (nor inexpensive) proposition.

Customers should have detailed conversations with IBM about the integration of these various products at the UI level (what will users see), the API level (will there be a consistent development model?) and support (who should they call and will they get passed back and forth).

As these new offerings emerge, there should be good opportunity for Business Partners to fill in the gaps in areas like missing features, product integration and administration tools. First, IBM will need to prove to partners that this is not just "the next shinny thing" but truly an area that customers are looking for.


In conclusion, I'm very impressed with the story IBM is telling and the demos they are showing around Smarter Workforce. I think this is an important evolution for the company (and partners and customers), bringing together the people and products from all across IBM that used to work in very distinct brand-specific silos. Now we've heard similar stories before with e-Business, Knowledge Management, Social Business and more... so IBM certainly has their work cut out for them but I'm optimistic and support them in what they are doing. I'm interesting in hearing what customers and business partners think. I hope to hear some new success stories in 2013 that talk about more than just "we improved the way our community works."
 

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,&nbsp;Everybody Wants to Rule The World&nbsp;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

Mergers Continue In The Enterprise Software Space

On August 7th, 2012, CDC Software and Consona Corporation merged to form Aptean.  Over the past six months, Monte Ford, the president of Aptean has made key executive hires, committed to new product investments, and rationalized overhead.  Key points in the acquisition include:

• Merger creates economies of scale. The merger brings 1500 employees and over 9,000 customers together from CDC Software and Consona Corporation.  Both CDC and Consona have grown through acquisition over the years.  Headquarters will center in Atlanta, GA.

Point of View (POV): The acquisition provides greater scale required to compete with Epicor, Infor,  Microsoft Dynamics, and Syspro in product development, distribution reach, and overhead savings.  Greater scale provides Aptean the means to service both SMB and Global 2000 companies.  Aptean must also find means to move its intellectual property assets into the cloud in order to drive cost reduction and increase innovation delivery.

• Acquired products provide a large functionality footprint. The acquisition brings together 32 product lines in ERP, CRM, Supply Chain, eCommerce, supply chain, and public sector.  Key product lines include 4-Gov Fund Accounting, Catalyst WMS, Compiere, Ecompix, IMI Supply Chain, Intuitive ERP, Knova KM, Made2Manage, MarketFirst Market Automation,  Onyx CRM, Pivotal, Ross, Saratoga, and Trade Beam GTM.

(POV): Aptean’s broad product portfolio has a strong CRM/Front Office portfolio with Pivotal, Onyx, and MarketFirst.  ERP solutions go deep into micro verticals and broad into both discrete and process manufacturing.  Key solutions include Compiere, Intuitive ERP, Made2Manage, and Ross.

• Focus on micro-verticals will create a differentiator. Aptean targets key vertical markets such as  financial services, manufacturing, distribution, medical, high tech, and professional services.

(POV): The focus on micro-verticals is important as users seek last-mile, industry focused solutions.  Aptean services 24 verticals such as association & NFPs, automotive, chemicals, computers and electronics, consumer packaged goods, education, financial services, food and beverage, government, health payers, home building and real estate, life sciences, medical device manufacturing, metals, natural products, professional and business services, publishing, retail, senior living, telecommunications, transportation, travel/recreation, energy and utilities, and wholesale distribution.

The Bottom Line:  Battle for Micro Verticals Continue As Customer’s Seek Outcomes Not Technologies.

As with any merger, it comes down to leadership.  So far, we’ve seen the team take steps to focus on customer success and set in motion a strategy for much needed product and technology renewal.  Customers so far have been encouraged and pleasantly surprised.  However, success will require Aptean to move quickly to the five pillars of consumer tech that influence enterprise software: social, mobile, cloud, big data, and unified communications.  Customers will measure success based on how well Aptean meets their product and applications strategy needs.  Analyst will examine the ratio of new licenses to maintenance revenue as well as new customer adds.

Your POV

Are you an Aptean customer?  Will you stay with Aptean or upgrade to a different product?  Add your comments to the blog or send us a comment at R (at) SoftwareInsider (dot) org or R (at) ConstellationRG (dot) com

Please let us know if you need help with your enterprise apps strategy efforts.  Here’s how we can assist:

• Reviewing your Apps Strategy
• Vendor selection
• Implementation partner selection
• Connecting with other pioneers
• Sharing best practices
• Designing a next gen apps strategy
• Providing contract negotiations and software licensing support
• Demystifying software licensing

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales .

Disclosure

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy, stay tuned for the full client list on the Constellation Research website.

* Not responsible for any factual errors or omissions.  However, happy to correct any errors upon email receipt.

Copyright © 2001 – 2013 R Wang and Insider Associates, LLC All rights reserved.
Contact the Sales team to purchase this report on a a la carte basis or join the Constellation Customer Experience!

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,&nbsp;Everybody Wants to Rule The World&nbsp;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

The Latest Silicon Valley Disruption Is…A Car?

It’s all the rage in the valley.  No, it’s not the latest social, mobile, and big data app.  No, it’s not some cloud computing break through.  No, it’s not even bio tech.  It’s actually a car. 

Source: Tesla Motors, Inc.

Whether you are a tree-hugging environmentalist or gas guzzling performance driver, the Tesla Model S actually brings the best of both worlds together. The Tesla Model S is an all-electric, meaning not hybrid with a back up engine, vehicle that:

• Goes from 0 to 60 in 4.4 seconds (for the Performance models)
• Achieves a driving range of 300 miles (for the 85 kwh battery)
• Sports a 17″ haptic touch screen user experience
• Receives on-going software updates throughout the life of the car
• Has a 8 year, unlimited mileage battery warranty (for both the the Performance and Non-Performance 85KwH models)
• Seats up to 7 (including rear-facing child seats)

Pretty wild right?  It also comes with an upfront sticker shock of $100,000 USD for the top line versions.  This definitely puts the car out of reach for most folks, or not?

Source: Tesla Motors, Inc.

Behind The Numbers, The Model S Is Actually More Affordable Than You Think

Here’s the secret, the life time ownership costs are cheaper than owning an internal combustion engine (ICE) vehicle.  Are you in shock?  Let me show you why.   Using the same approach we take to calculating technology ownership costs, we considered a number of factors (See Figure 1):

• Planned ownership. How long will you own the car?
• Miles per year. How many miles to be driven per year?
• Total energy costs. What are the fuel/energy costs will be in a year?
• Yearly service fees. What are the total service and maintenance costs per year?
• Cost/mile/year. How much does it cost to operate a car per mile per year.
• % reimbursable mileage. If you have a business, what percentage of the mileage is business related.
• Reimbursement rate. How much does the tax agency allow you to deduct for mileage?
• Car priced with options. What’s the cost before taxes for the vehicle?
• Financing costs. What are you paying for a car loan?
• Tax incentives. What credits are being given to purchase an electric vehicle?

The comparison in Figure 1 assumes a comparison of an ICE (e.g. Audi A6, BMW 5-series, Lexus GS, Mercedes E-Class) vs an 85KwH Tesla Model S Performance Sedan with 19″ wheels.  Take a look at the results:

Figure 1. ICE vs Tesla Model S (right click to view full image)

Source: Insider Associates, LLC.

With incentives, the car’s lifetime ownership costs, not including insurance, but including a one-time replacement battery of 10,000 USD is almost equivalent to the lifetime cost of an ICE.  The cost savings come for a few reasons:

• Lower cost/mile of operation.  Assuming a $.15 per KwH, which is high as the national rates are $.11 per KwH, and $3.75 per gallon of gas, the Tesla is still operating at $.22/mile cheaper than an ICE vehicle.
• Minimal service costs per year. Service costs for premium vehicles average out at about $2000 per year, assuming about 15,000 miles driven.
• Federal mileage reimbursement rates remain high. At $.55 per mile, those with small businesses can deduct almost $.22 more per mile at $.45/mile.

The Bottom Line: Have Your Cake And Eat It Too.

You don’t have to trade performance for greenness.  The Tesla Model S is a game changer.  While the costs are front-loaded, low vehicle interest rates below 2% make ownership very affordable.  For more savings, put a solar panel on your roof. In the meantime, you can outrun a Porsche Panorama making faster, better, cheaper a reality.

Not convinced, go at it on your own.  Here’s the spreadsheet.  Have some fun.

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales .

Disclosure

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy, stay tuned for the full client list on the Constellation Research website.

* Not responsible for any factual errors or omissions.  However, happy to correct any errors upon email receipt.

Copyright © 2001 – 2013 R Wang and Insider Associates, LLC All rights reserved.
Contact the Sales team to purchase this report on a a la carte basis or join the Constellation Customer Experience.

Alan Lepofsky

Vice President & Principal Analyst Constellation Research

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

Next week IBM will be putting on IBM Connect, the conference formerly known as Lotusphere. The theme is "Get Social. Do Business." and the sessions are divided into two primary tracks: 1) Create a Smarter Workforce and 2) Create an Exceptional Customer Experience. Think of the first track as focused on employees (internal) while the second is focused on customers (external), although both topics do have some overlap.

Leading up to the event, I've been pointed to several websites, so I thought I'd share them all here to make things "easier" for people.

1) The main conference home page with marketing information and links to other resources
2) The Session Preview tool
3) The Social Business Online, the online community for conference attendees (powered by a combination of Domino X-Pages and IBM Connections)
4) The Social Aggregator, which brings together Tweets, blogs, videos and photos
5) IBM Software Channel Livestream, for watching the keynote and other videos live
6*) There is yet another site for industry analysts (powered by Tumblr, not an IBM platform), but that's private. I don't understand why this is not within the Social Business Online site listed in #3.

There are also non-official sites, such as IBM Connect Live, which is run by Carl Tyler and Chris Miller.

On Twitter, the official hashtag is #IBMConnect, but many people (myself included) will also be using #LS13.

Given that the event is geared towards teaching organizations how to properly use "social tools" to improve their business, I'm surprised that IBM is not setting the best example. Instead of multiple sites all with different domain names, IBM should be running a single site (ideally located at www.ibmconnect.com, a URL that IBM already owns) that includes the registration, agenda, session content and online community.  The best example of a conference that I've seen is Salesforce's Dreamforce event. It's easy to find (the URL is the event name!), register, login for community access, watch the videos, etc... all from one location.

I've been privy to many of the announcements and demos (under NDA, so don't ask!) and am impressed with the vision that IBM has around helping organizations collaborate both internally and externally. I'm looking forward to IBM Connect/Lotusphere... seeing old friends, making new ones, going to a slew of parties and hopefully enjoying a little Florida sunshine.