R "Ray" Wang

Principal Analyst and Founder Constellation Research

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

Microsoft Provides The Passion And Products For Partners To Compete In A Post PC Era

Microsoft kicked off its Worldwide Partner Conference in Toronto, Canada amidst 16,000 partners (See Figure 1).  Attendees caught the latest news and product announcements while sharing new business models and products for a post PC era.  Key announcements for Day 1 and Day 2 include:

• Partners given back the relationship in Office 365. Partners gain a pre-paid payment option with Office 365. The service gives partners a mechanism to deliver “packaged services with a single invoice and manage the customer relationship”.
  
  Point of View (POV): Partners have been clamoring for the ability to manage the customer relationship in the cloud. Microsoft proves it’s allegiance to partners by providing Office365 Open and reasserts that Microsoft will not disintermediate the partner channel

• Windows 8 RTM/GA dates confirmed. Corporate VP of Windows Tami Reller announced that Windows 8 is on track for an early August release to manufacturers (RTM) and generally available (GA) at the end of October. Enterprise customers will receive Windows 8 as early as August. The product is available in 109 languages and 231 markets. Consumers can expect to receive Windows 8 by software upgrades and device purchases by end of October.
  
  Point of View (POV): Windows 8 is the most tested release in Microsoft history. Reller showed demos from Acer, ASUS, HP, and Lenovo of upcoming tablets, Ultrabooks, PC’s, and hybrid tablets, highlighting the broad and deep offerings available this fall. Microsoft may have cracked the code in better release coordination with Windows 8. Unfortunately, with Windows 7 momentum strong at 630M worldwide, the conversion to Windows 8 may take a bit longer as users have just gotten used to 7.

• Perceptive Pixel (PPI) acquisition highlights importance of touch. Kurt DelBene, President of the Office division announced the acquisition of PPI.  The company is best known for its 82″ collaborative multi-touch screen used by CNN during the 2008 elections.  While terms of the deal were not disclosed, the devices have dominated the high end at $80,000 a unit.  Perceptive’s founder Jeff Han was on stage with a trademark demo highlighting the collaborative and interactive features of the product.
  
  Point of View (POV): Should Microsoft succeed in driving down the cost of PPI’s flagship display technology, the Office division will have a focal point for discussion around the future of work.  PPI’s technologies have shown leadership in multi-touch user experiences and digital content display technologies.  Partners and customers can expect these innovations to quickly make their way into Windows Phone 8.

• New apps take storm on Windows Phone 8. Attendees saw the power of integration with Windows Phone 8 and Windows 8.  A lineup of new business apps include  Words with Friends, Draw Something, Audible, Chase and PayPal.  On the game front, new titles include Asphalt 7: Heat, N.O.V.A. 3: Near Orbit Vanguard Alliance, and Batman: The Dark Knight Rises ”
  
  Point of View (POV): While not as robust as the Apple iStore, new titles and a growing developer ecosystem on multiple device types gives Windows Phone 8 a compelling chance.  With RIM and Nokia on life support, Microsoft has a shot to earn its place as a platform of choice.  The challenge – emphasize the interoperability between devices and prove the write once deliver any device mantra.  If Microsoft executes, Android will emerge as their number one competitor and appear as a messy platform when compared to Windows Phone 8.

• ISV’s select Microsoft Dynamics as their core platform. Microsoft expands its presence as the core platform for several new independent software vendors.  Campus Management Corp., Cenium, Inc., Cincom Systems, Inc., PROS Pricing and Technosoft join the growing list of vendors building on the Dynamics platform.  Other notable members include Tyler Technologies and Ferranti Systems MECOM product.
  
  Point of View (POV): The move to open up the Dynamics platform is brilliant.  ISV’s with deep industry vertical capabilities can cut their development costs by up to 1/3.  Instead of focusing on building out the platform, the savings can go towards furthering the last-mile solution.  The catch – ISV’s become wedded to the success and failure of Microsoft Dynamics.

Figure 1. Scenes From WPC12

The Bottom Line: New Partner Types Will Emerge

The world of resellers, ISV’s, OEM’s, solution partners, and system integrators have converged.  Every partner type must face the new realities:

• Cloud disintermediates the customer relationship and delivery
• Products are excuses to sell services.  However, services are now an excuse to sell information
• Customers want turnkey solutions from one source to choke
• Deep vertical capabilities drive profitability
• Innovation is no longer a luxury
• Everyone is in everyone’s business

As a result, partners have made the value shift from provider to catalyst over the past 3 years (see Figure 2).  Leading partners have moved to a trusted advisor status.  Unfortunately, these activities are not enough.  Partners must start delivering intellectual property (IP) if they plan to thrive.  Why? Customers are willing to pay a premium for last-mile innovative solutions from a trusted partner.  With the overall commoditization occuring in the ecosystem, new revenues will come from IP. If a partner can deliver this in the cloud, that partner will have the ability to massively monetize across the entire ecosystem.

Figure 2. Partners Must Shift To The IP Creation Achetype To Thrive

Your POV

Microsoft Partners, ready to transform from Catalyst to Creator? What’s your view the outlook for Microsoft and your customers?  Ready to embrace Dynamics Platform, Windows 8, Office 365, and Azure?  Looking?  Add your comments to the discussion or send on to rwang0 at gmail dot com or r at softwaresinsider dot org and we’ll keep your anonymity.

Resources And Related Research:

• 20120508 Constellation Researh – R”Ray” Wang “The Link Between Certification and Partner Profitability”
• 20100711 A Software Insider’s POV – R “Ray” Wang – “Research Report: Microsoft Partners – Before Adopting Azure, Understand the 12 Benefits And Risks”
• 20100621 A Software Insider’s POV – R “Ray” Wang – “Research Report: How SaaS Adoption Trends Show New Shifts In Technology Purchasing Power”
• 20090714 Sandhill.com – R “Ray” Wang – “Opinion: Moving to a SaaS Offensive”
• 20100322 A Software Insider’s POV – R “Ray” Wang -”Understanding The Many Flavors Of Cloud Computing/SaaS”
• 20100125 A Software Insider’s POV – R “Ray” Wang – “Monday’s Musings: The Hidden Value In SaaS Deployments”
• 20091222 A Software Insider’s POV – R “Ray” Wang “Tuesday’s Tip: 10 Cloud And SaaS Apps Strategies For 2010″
• 20091208 A Software Insider’s POV – R “Ray” Wang – “Tuesday’s Tip: 2010 Apps Strategies Should Start With Business Value”
• 20091012 A Software Insider’s POV – R “Ray” Wang – “Research Report: Customer Bill of Rights – Software-as-a Service”
• 20090602 A Software Insider’s POV – R “Ray” Wang ” Tuesday’s Tip: Now’s The Time To Consider SaaS Software Escrows”
• 20081028 A Software Insider’s POV – R “Ray” Wang “Tuesday’s Tip: SaaS Integration Advice”

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 – 2012 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!

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

We are in a BYOD era with employees clearly indicating that they want to choose the devices they use for their work.  Increased mobility among workers has led to high adoptions of smart phones and tablets as preferred communication devices.   For routine contacts with co-workers and business partners, most workers choose email and instant messaging over traditional phone calls.  Telephones still dominate for conference calls but increased use of video conferencing suggests that phone conversations will diminish as video conference calls increase.  The question on the minds of many executives is what is the long term relevance of their corporate telephone system and if it is necessary to continue to make large investments in these systems.   With funds tight for IT investments, is it time to let go of the desktop telephone as basic equipment for all employees.

Additionally, some executives question the need for telephones to support customers when they have other channels, such as email, Web and social sites to go for help.   A recent New York Times article (July 7, 2012) cited technology companies, such as Twitter, LinkedIn and Facebook  are basically ignoring customer support phone calls and steering all inquiries to online options.   These examples are early indicators of the declining role of the traditional business telephone for managing external customer communications.  However, not all customers found this lack of telephone support acceptable.

Clearly we are at a time of transition for business communications.  However, I do not believe companies should immediately get rid of their telephone systems.  What they do need to do is more effectively manage voice communications and understand the needs of workers and to develop a plan that allocates the right mix of communication devices best suited for its user population. It does not make sense to automatically give all employees a desktop telephone.   Instead consider providing workers with the right devices and applications based on their job functions.

 Industries that serve the public cannot simply refuse to support voice communications and force its customers to rely on the Internet.  Industries that rely heavily on voice conversations include government, hospitality, education, healthcare and retail.  Other industries also require voice communication connections for safety reasons and compliance.   When developing your business plan for voice communications consider job classifications and categorize requirements based on job functions.  This will enable you to provide a diversified environment that optimizes your investments in communication applications.  For some workers, this may mean a desktop telephone is essential and for others communications will take place from their mobile devices, tablets or workstations.

When determining user requirements it is important to note that many workers must collaborate closely with teammates and need the appropriate software applications to perform their work.  To improve job performance these workers require the ability to connect quickly with co-workers, see their availability for real time collaboration and access experts for faster decision-making.  Ensure that those making an upgrade decision for voice communications have cross functional conversations that will identify needs and have the flexibility to deliver the right mix of communications for all employees.

R "Ray" Wang

Principal Analyst and Founder Constellation Research

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

Used Software Pioneers Gain A Small Victory In A Shrinking On-Premises Software World

The surprise July 3rd, 2012 judgment by the Court of Justice of the European Union for UsedSoft GmbH v Oracle International Corp rules that “An author of software cannot oppose the resale of his ‘used’ licenses allowing the use of his programs downloaded from the internet”.

“The Court of Justice interprets EU law to make sure it is applied in the same way in all EU countries. It also settles legal disputes between EU governments and EU institutions. Individuals, companies or organisations can also bring cases before the Court if they feel their rights have been infringed by an EU institution.”

The recent ruling on the rights of used software mirrors other rulings in cases such as SusenSoftware v SAP and UsedSoft v Microsoft.  Analysis of the ruling shows that:

• Exhaustion Rule is now the rule of the land. While the German Federal Court of Justice (BGH) on July 6th, 2000 upheld this legal foundation, many vendors have continued to challenge the case.  In this instance the BGH sent the case to the Court of Justice to interpret the UsedSoft v Oracle International Corp case.  The court deliberated and finally ruled that “The exclusive right of distribution of a copy of a computer program covered by such a license is exhausted on its first sale”.
  
  Point of View (POV): UsedSoft’s primary business model is to market licenses acquired from Oracle customers.  After acquiring rights to the license, UsedSoft’s customers who do not possess the software download the licenses directly from Oracle’s website.  Applied to the “Exhaustion Rule”, this means that the developer’s copyright exclusive right of distribution expires at the time of sale.  In summary, a developer can only make money on the initial sale and any attempt to restrict trade of used software through specific trade terms conflicts with the exhaustion rule.

• Exhaustion Rule applies to physical and downloaded software. This applies to any on-premises software purchase in person and on-line anywhere in the territory of a Member state of the EU.  The ruling states that “the principle of exhaustion of the distirbution right applies not only where the copyright holder markets copies of his software on a material medium (CD-ROM or DVD), but also where he distributes them by means of downloads from his website.”
  
  Point of View (POV): Oracle’s main argument in the case that the directive does not apply to licenses downloaded from the internet is struck down.  As the highest court in the EU, this ruling is the final ruling.  Downloaded or bought in physical form, exhaustion rule applies to all software including both enterprise, personal, and games.  New acquirer of the licenses can download it directly from the vendor’s site.

• Software publishers can no longer oppose the resale of the copy of software. The court clarified two points on resales of copies of software.  The first, “Where the copyright holder makes available to his customer a copy- tangible or intangible – and at the same time concludes, in return form payment of a fee, a license agreement granting the customer the right to use that copy for an unlimited period, that right holder sells the copy to the customer and thus exhausts his exclusive distribution right.” The second, “Such a transaction involves a transfer of the right of ownership of the copy. Therefore, even if the license agreement prohibits a further transfer, the right holder can no longer oppose the resale of that copy”
  
  Point of View (POV): The clarifications on the resale of the copy of software have huge ramifications.  Based on the ruling, “the distribution right extends to the copy of the computer program sold as corrected and updated by the copyright holder”.  Users basically have rights to all updates at the time of the sale and this latest version can be sold to the secondary market.  Users who fail to download updates have rights to resell those alterations to the next customer.  The subsequent customer would not have such rights.

• Software licenses can not be divided in the resale and be reused. The ruling clarifies ownership provisions upon reselling.  “If the license acquired by the first acquirer relates to a greater number of users than he needs, that acquires is not authorised by the effect of the exhaustion of the distribution right to divide the license and resell only part of it”.  “An original acquirer of a tangible or intangible copy of a computer program for which the copyright holder’s right of distribution is exhausted must make the copy downloaded onto his own computer at the time of resale”
  
  Point of View (POV): The court wisely upholds copyright law by requiring the seller to remove the property from their possession prior to resell.  However, the inability to divide licenses means that users will have to be careful about the number of licenses they purchase upfront or purchase with separate contracts to allow for the resell of licenses in the future.

The Bottom Line For Buyers: In the EU You Own Your Software Free And Clear of Vendor Encumbrances

Prior to this ruling, customers could resell hardware to a secondary market but not their software.  This inefficiency and inconsistency in the law has led to billions dollars of wasted expense by organizations around the world, perplexing buyers for decades.  Pioneering efforts by SusenSoft and UsedSoft should be applauded by customers for fighting the legal battles to reinforce their rights.

Other efforts by Rimini Street and now Spinnaker to free up the third party maintenance market should be supported by the software users around the world and the European Union.  As with reselling software, the anti-competitive practices of software vendors to limit access to third party maintenance is as heinous as limiting the ability to resell used software.  This practice is akin to only being able to service one’s Toyota at the Toyota dealer.

One major concern for users – the cloud presents the next big lock-in.  Why? Users do not own their licenses.  This ruling may lead to all software publishers to deliver software via access in the cloud.  In effect, no on-premises software would ever be sold again and users could only rent their software.  This unforeseen ramification could prove even more costly as vendor lock-in will increase unless cloud users are granted protections in the market.

Kudos go out to the Court of Justice of the European Union for continuing to protect both the consumer’s software rights and in general the individual’s privacy rights.  The only complaint, the inability to divide licenses in a resell.  Buyers should learn to buy in separate contracts and refuse bundling to preserve their resell options. Users around the world should push for similar provisions in the World Trade Organization as well as the US Department of Justice.

The Bottom Line For Software Publishers: The US Will Be The Next Battleground

Software publishers should take note that anti-competitive practices are no longer tolerated in the EU.  This ruling will require new strategies covering multiple areas of the software distribution process:

• Appstores must account for new license rules. Software publishers will need to track ownership before and after exhaustion with each download.  Companies such as Flexera and Avangate stand to benefit as their software can ensure that the necessarily updates and alterations will be delivered upon exhaustion.
• Wholesalers business models disintermediated. The business models of Arrow, Avnet, CDW, Ingram Micro must radically change.  While the cloud put large pressures on the business, each distributor will have to rethink what part of the reseller market they intend to participate in and what services will they have to focus on to make it into the next transition.
• Software publishers will move entirely into the cloud in the EU. Faced with the exhaustion rule, on-premises distribution will seek to be profitable for many vendors.  Expect most vendors to move purely to cloud delivery and the rental model in the next 18 to 24 months.  Most vendors will lobby for protections in the US Department of Justice and the FTC to avoid the EU debacle.

Expect users and other rights groups to free the US market from the same practices.  In the meantime, savvy users will purchase their software in the EU so that their organizations can benefit from these new consumer protections.

Your POV.

Let us know your experiences with UsedSoft or SusenSoft.  Add your comments to the blog or reach me via email: R (at) ConstellationRG (dot) com or R (at) SoftwareInsider (dot) com.

Let Us Help You.

Need help with your software contract or working out the rationale for used software or third party maintenance?  Put the power of experience with over 1200 software contract negotiations to work.  Contact us throughout the vendor selection or negotiation process.  We can help with a quick contract review or even the complete vendor selection.  We provide fix-fee and gain sharing arrangements.

Related Constellation Research

Scavo, Frank & Wang, R. “Big Idea: Constellation’s Business Value Framework.” Constellation Research, Inc.  January 31, 2012.

Wang, R. “Best Practices – Three Simple Software Maintenance Strategies That Can Save You Millions” Constellation Research, Inc. March 7, 2012

Wang, R. “Best Practices: Why Every CIO Should Consider Third-Party Maintenance.” Constellation Research, Inc. August 7, 2012.

Wang, R. “Market Overview: The Market For SAP Optimization Options.” Constellation Research, Inc. May 11, 2011.

Wang, R. “Best Practices: The Case for Two-Tier ERP Deployments.” Constellation Research, Inc. February 28, 2011.

Related Resources And Links

20090612, Channel Partner, “Used software – SAP suffers defeat”

20090612 Channel Partner, “UsedSoft obtains a provisional order against Microsoft”

20080602 Federal Judge Approves eBay Auction of Copyrighted Autodesk AutoCAD Design Software”

20120318 Research Summary: Best Practices – Three Simple Software Maintenance Strategies That Can Save You Millions

20100419 Tuesday’s Tip: Dealing With Pesky Software Licensing Audits

20090714 Research Summary: An Enterprise Software Licensee’s Bill of Rights, V2

20101214 Tuesday’s Tip: Dealing With Vendor Offers To Cancel Shelfware And Replace With New Licenses

20100308 Monday’s Musings: Decoupling Support From Maintenance – What Apps Vendors Can Learn From Microsoft Dynamics

20100222 Monday’s Musings: Why Users Should Preserve Their Third Party Maintenance Rights

20100104 News Analysis: SAP Revives Two-Tier Maintenance Options

20090210 Tuesday’s Tip: Software Licensing and Pricing – Do Not Give Away Your Third Party Maintenance And Access Rights

20090709 Tuesday’s Tip: Do Not Bundle Your Support and Maintenance Contracts!

20091222 Tuesday’s Tip: 10 Cloud And SaaS Apps Strategies For 2010

20091208 Tuesday’s Tip: 2010 Apps Strategies Should Start With Business Value

20091102 Best Practices: Lessons Learned In What SMB’s Want From Their ERP Provider

20091006 Tuesday’s Tip: Why Free Software Ain’t Really Free

20090504 News Analysis: Oracle Waives Fees On Extended Support Offerings

20080909 Trends: What Customers Want From Maintenance And Support

20080215 Software Licensing and Pricing: Stop the Anti-Competitive Maintenance Fee Madness

20090405 Monday’s Musings: Total Account Value, True Cost of Ownership, And Software Vendor Business Models

20090324 Tuesday’s Tips: Five Simple Steps To Reduce Your Software Maintenance Costs

20090223 Monday’s Musings: Five Programs Some Vendors Have Implemented To Help Clients In An Economic Recession

20091012 Research Report: Customer Bill of Rights – Software-as-a Service

20090910 Tuesday’s Tip: Note To Self – Start Renegotiating Your Q4 Software Maintenance Contracts Now!

20090721 Tuesday’s Tip: 3 Approaches To Return Shelfware

20090127 Tuesday’s Tip: Software Licensing and Pricing – Now’s The Time To Remove “Gag Rule” Clauses In Your Software Contracts

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 – 2012 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!

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

One of the challenges of an ever more mobile environment that is that the degree of dependency on mobile carriers to provide services also increases. This applies to both voice and data.  Yet, of these two, the implications about the inadequacy of data services is becoming more and more worrying, especially for enterprises or organizations which value their ability to operate in flexible (mobile) ways.  At the same time, most carriers still treat mobile data as if it is merely a similar sibling of traditional voice services, rather than as a distinct growth market with special characteristics, requirements and challenges.  This has major implications for enterprises.

To understand why it matters, start with a personal example — one that many will recognize. You are on the move with your smartphone or your tablet.  You depend on a 3G (or LTE or similar) mobile data service  to stay in contact — whether looking up information on the web, receiving your email, accessing your employer’s applications, finding where you are (and where you should go) on a map or whatever.  Without a decent mobile data connection you cannot perform the tasks you expect.  Yet, all too often, you discover that your carrier does not have the coverage that you expect where you expect.  As an individual you end up frustrated (and worse).

Now extend the scale — to multiple employees of enterprises.  The consequences, of not being able to obtain consistent reliable data connections, escalate.  100 or a 1000 employees affected even only occasionally produces a a substantial cumulative loss of productivity.

Extend this still further, into (say) emergency services.  You are waiting for an ambulance or a police car or a fire truck … and it does not appear.  One reason could be that, at a key point in the journey from origin point to you, there is a gap in mobile data coverage — and resulting delays.  Now the cost may be mortal.

Return to the carriers.  It pretty much does not matter where you are (USA, Canada, Europe, Latin America, etc.), there is a constant: only with the greatest of difficulty might you find out where there is good (or limited) coverage for any given network in sufficient detail.  Yes, third party tools like Open Signal Maps (www.opensignalmaps.com) do exist, but these are still rudimentary.  Indeed, most coverage maps are too high-level to be anything other than useless.

What is, perhaps, even more surprising is that decent high quality coverage maps are not provided online by carriers — until you realize, so stuck in conventional voice network operations are they, that knowing where reception for data services is good and bad has simply not occurred to them as a planning service that enterprises and individuals alike increasingly regard as a necessity.  As so often before, telephone carriers are locked inside their copper-voice pasts, and paying far too little attention to where their business can grow — namely via reliable and predictable data services.  Instead, most carriers whinge about the investment cost required to enable data — even though data services will likely save their businesses.  (O2 provides some interesting statistics about how smartphones are used — with making a voice call being #5, not #1 — q.v. http://bit.ly/LVKZYm)

For individuals this situation is frustrating, but personal.  For enterprises and organizations, with many employees who increasingly depend on reliable and predictable mobile data services, the bottom line significance is much more serious.

Think about it.  Let us say you are managing a logistics company with thousands of trucks delivering to tens of thousands of locations each day.  Your people need reliable mobile data services.  Not having these undermines your business model and profitability.  It does not matter where the data network disfunction arises — in a city or in the wider countryside: the failure to complete delivery services has a measurable cost.  Apply the same logic to governmental-type services (police, health, utilities, sanitation, etc) and while the actual cost may be expressed differently, it has costs.

This is where the approach of a small Colorado company called Mobile Pulse becomes interesting.  By installing a small client on any mobile device with mobile data connectivity it assembles  broadband performance data against which its customers can run analytics to find out how different devices/networks perform — and identify where coverage gaps occur (which, according to its CEO, Andrew MacFarlane, many carriers do not know in detail).  In effect its tools deliver, via a SaaS business model, to enterprises and other (larger) organizations the capability to understand the performance and geography of broadband wireless networks, carrier by carrier/location by location.  With such data enterpeises and organizations can identify problem issues to carriers (if they listen) and/or negotiate alternatives — depending on the data discovered.

The appeal of a service like this is enormous.  The great pity is that, probably for sensible economic reasons, the data gathering is currently not extended out to all users. Think about the implications of what could occur if smart device users possessed a small client on their device which reported on what data services worked for which carriers where.  Within months, possibly days, detailed analyses by area could become available for purchase before you visit a location or country.  Individuals as well as enterprises and other organizations could then celebrate knowing they had access to what would materially help productivity — something certainly not available today.

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

A broad and possibly confusing range of options face enterprises and organizations of all sizes as they consider immediate and future communications and collaboration needs. One of the challenges organizations face is obtaining reliable cost data for UC and IP-PBX solutions and in being able to make apples-to-apples comparisons between them. Add the complexity of trying to compare on-premises to cloud to overlay deployment options, and the task of evaluating the numerous possibilities quickly becomes overwhelming.

To help make this task easier, sixteen vendors offering a total of 24 solutions have stepped up to respond to an RFP covering cloud, overlay, and on-premises options.  The RFP was for 2,000 UC seats. The organization consisted of a headquarters location and two branch offices. There was a 75 person call center also included.

Based on the responses of the vendors themselves, and using only the public RFP data presented, the data has been compiled into a format that makes it easy to compare the TCO over a five-year period for all of these solutions. In addition to using the data as bid by each vendor, we have normalized the solutions so that a true apples-to-apples comparison can be made.

The following figure shows the average costs for the nine on-premises offerings, the seven hosted solutions, and the eight overlay systems. Actual costs ranged from $1.37 million for the lowest TCO offering up to $5.97 million for the most expensive solution over the five-year period covered in the RFP.

From this data, we see that there is a clear crossover point between on-premises and hosted solutions. Furthermore, the hosted offerings initially cost less, but almost universally turn out to cost more by the end of the five-year period. That being said, the hosted providers are also showing double-digit growth universally, so there is clearly more than just TCO at play when companies make these decisions. The overlay options almost always come out less expensive over the TCO period. We also note the concern as to whether an overlay solution will meet an organization’s long term needs, or if it will evolve into a complete IP PBX and UC solution with adjusted TCO at some future date.

It is interesting to look at the costs for vendors who bid multiple solution types. For example, Microsoft’s overlay option is more expensive that its on-premises offering while Avaya’s and Cisco’s on-premises solutions are less expensive from a TCO perspective than their hosted options but more expensive than their overlay solutions.  The Cisco cloud-based solution represents Cisco Hosted Collaboration Solution (HCS) offered by Verizon; the Microsoft cloud-based solution represents Microsoft Lync hosted by BT.

An overview of the report containing the executive summary and the table of contents is available by clicking here. Alternatively, any of the authors may be contacted. Because this information is so relevant for end user organizations investigating UC solutions, pricing for these organizations has been made very attractive. We know of no other document with such comprehensive TCO data available in our market.

The original RFP used for this study may be obtained by contacting the author.

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

All The Current Talk Of Big Data Technology Misses The Point

The hype around big data has crescendoed to the levels of SOA in the early 2000′s, cloud in the late 2000′s, and social in the past few years.   Unfortunately the hype is creating three main pitfalls:

1. A morass of confused definitions. In fact a quick survey of any educated audience, yields a multitude of definitions.  Some folks see big data as large data sets and data warehouses, others see big data as code for analytics and BI.  Many see the output of big data as infographics or the hardware behind the support of big data.  The V’s of big data continue to expand from volume, velocity, and variety to include veracity, viscosity, and virality.  Some folks even have 16 V’s in their definitions.
2. Solutions confusion among buyers. A technology vendor land grab for mind share with big data is happening now the same way everyone adopted cloud.  Hardware vendors now enable big data.  Storage providers now deliver big data solutions.  Integration vendors provide plumbing and intelligent connections for big data.  Analytical vendors now all support big data.  Some folks like to confuse Hadoop with big data.  Everyone has a solution, just not the solution a buyer thinks they need.  Confused capabilities continue to proliferate amidst a lack of good customer references.  Customers feel the chaos.
3. Discussion on technology options not business problems. The discussion about big data has evolved into a technology conversation not a business value or transformation conversation.  Clients immediately talk about products and technologies without defining the problem to be solved.  Technology investments take over the discussions on solution development.

Recommendations: Focus On the Questions To Ask, Not The Answers.

Despite this chaos, organizations can escape the pitfalls of big data confusion.  Business leaders should focus the discussion back to business value.  In the case of big data, the big question is what is the question?  Start each project by asking the following:

• What are the questions that need to be asked?
• What are the answers that help us move from data to decisions?
• Can we shift insight into action?
• How do we tie information to business process?
• Who needs what information at what right time?
• How often should this information be updated, delivered, and shared?

The Bottom Line: Big Data Is About Making Decisions In The Future Not Rehashing The Past

The history in moving from data to decisions is littered with failed technologies.  The failure of data warehouses to provide real-time data led to the creation of data marts.  Data marts failed to provide complete and updated and comprehensive views.  The world moved to business intelligence to access insight yet this still did not address the issues.  A movement to master data management attempted to address the lack of a central repository.  Information governance emerged as a key people and process issue.  Users over the past 20 years saw the complete cycle repeat itself.

After spending hundreds of millions in time and money, existing solutions still don’t solve the problem.  Why? The market and business environment have changed.  Data moves from structured to unstructured.  Sources exponentially proliferate.  Data quality is paramount.  Real-time creates too much information.  It’s not about real time being fast enough.  Real-time is irrelevant because speed does not trump fidelity.  Quantity does not trump quality.  Context is key as we need to shift from real-time to right time data based on roles, processes, location, time, and relationships.

Yet all this is still irrelevant.  Organizations must address the key issue – how can an organization or leader make the right decision?   Business questions remained unanswered despite the massive number of reports and views and charts.  Organizations must make the shift to asking the right questions instead of seeking the right answers.   The big shift is about moving from data to decisions.  This is transformational in thinking and not easy to achieve.  However,  this is the journey ahead and big data is one small part.

Your POV

What business problem will require you to start with Big Data?  What are the key outcomes?  Where do you expect to move the needle?   Add your comments to the blog or send us a comment at R (at) SoftwareInsider (dot) org or R (at) ConstellationRG (dot) com

Resources

• Monday’s Musings: Beyond The Three V’s of Big Data – Viscosity and Virality
• Monday’s Musings: The Three V’s of Big Data
• Research Report: Rethink Your Next Generation Business Intelligence Strategy
• Monday’s Musings: Balancing The Six S’s In Consumerization Of IT
• Monday’s Musings: A Working Vendor Landscape For Social Business
• Research Report: The Upcoming Battle For The Largest Share Of The Technology Budget Part 1
• Research Report: How The Five Pillars Of Consumer Tech Influence Enterprise Innovation
• Best Practices: Five Simple Rules For Social Business

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 -2012 R Wang and Insider Associates, LLC All rights reserved.
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Elizabeth is a well-recognized industry-leading analyst. She was previously Vice President and Principal Analyst at Constellation Research.&nbsp; Prior to Constellation, Elizabeth spent eleven years at Forrester Research as vice president and principal analyst.&nbsp; 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

Customer service providers have struggled for years to encourage customers to use their self-service channels including the Web, social sites or interactive voice response (IVR) applications.   Despite marketing efforts to promote higher usage, self-service often plateaus at a level somewhat lower than its potential.  Many service providers indicate that its usage will not go up as customers just don’t like using self-service.  The real question that needs to be asked is why customers don’t like it.  While some types of transactions require human assistance, there are many others that can be successfully automated but have barriers that make it difficult to use.  Looking more closely at why customers don’t like automated service I find that poor performance, such as too many responses on FAQs or navigating through long menus or speech commands are customer pain points.   Additionally, some customers are uncertain that the automated systems accurately recorded their information and lack confidence in using the service.  Making some basic changes can significantly improve the percentage of completed transactions on self-service channels.

The following lists two steps customer service professionals can take to improve self-service transaction rates and increase customer satisfaction on these channels.   

• Knowledge Management Tune Up.  Many customer support managers do not have a clear indication of the type of responses provided with the existing knowledge base or the average number of responses given.  The knowledge base may deliver too many responses or provide responses that are not accurate.  This causes customers to grow frustrated and place a call to an agent who will provide the needed information.   Knowledge bases require continuous management and monitoring to determine if a correct response was given and the issue closed.   Additionally, customers need to get the right answer quickly when interfacing with a knowledge management system or they will default to an agent.
• Personalize with contextual information.  Customers appreciate it when they do not need to constantly reenter information regarding their account in order to proceed.  Contextual personalization does more than just recognize a customer.  It uses historical and real time  information, such as customer status, recent account activity, purchases and GPS information from mobile devices to better discern the reason for the current interaction. It may also use business intelligence to predict a customer’s issue and make recommendations for proceeding.   This level of understanding and knowledge makes a routine call into a positive customer experience.  For example an airline service center can have current customer information available, so that it would know a flight had been cancelled and provide its customer with updated status on a new flight without the customer doing anything more than making the initial call.  Contextual personalization promotes confidence with the customer in using self-service, which promotes higher use of self-service channels

When making self-service improvements proactively alert customers to your new and improved services to regain those who grew discouraged with earlier experiences.  Customer service representatives (CSRs) should also suggest to callers that they can receive faster response on their next transaction by using the self-service solutions.  Higher use of self-service is a major cost reducer and a self-service transaction is approximately 90% lower than an assisted call.  Investments in upgrading knowledge bases and contextual personalization will rapidly provide a positive ROI.   It is important to focus upgrades on the 70% of interactions (percentage varies by industry) that lend themselves to self-service and allow CSRs time to tackle the more complex and difficult issues.