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Executive Profiles: Disruptive Tech Leaders In Cloud Computing – Adam Rogers, Ultimate Software

Executive Profiles: Disruptive Tech Leaders In Cloud Computing – Adam Rogers, Ultimate Software

Welcome to an on-going series of interviews with the people behind the technologies in Cloud Computing.  The interviews  provide insightful points of view from a customer, industry, and vendor perspective.  A full list of interviewees can be found here.

Adam Rogers – Senior Vice President and Chief Technology Officer, Ultimate Software

1. Tell me in 2 minutes or less why Cloud Computing is changing the world for your customers

Adam Rogers (AR): Ray, let’s call it like it is. Cloud isn’t really disruptive – it’s already  disrupted – and we’ve made that transition over the past 10 years.  The new frontier for enterprise software is building systems that conform and cater to the user and how they want to work.  Let’s use Amazon as an analogy. A core difference between Amazon and the dozens of other e-commerce sites that competed for mind share in the 2000?s is that they realized early on that doing great work on behalf of the PERSON was more important than the URL or the consumer product segment.

Our customers benefit from cloud computing by taking advantage of business solutions for managing their people, instead of dealing with the cost and expense of IT. Second, because we handle all upgrades, they gain access to the latest functionality and don’t get trapped in a legacy on-premise solution that is outdated. There’s no barrier to upgrading. However, you’ve heard this all before. Honestly, these are really table stakes in business software today.

What Cloud is transforming for our customers is their ability to tailor the solution to their specific needs. For example, Google wanted us to handle the administration of payroll and the system-of-record, but they wanted to maintain the user experience of their internally developed GHR system. By connecting Ultimate to GHR through the Cloud, they can deliver a familiar user experience for their people while taking advantage of our backbone.

Importantly, small businesses gain access to enterprise systems at an affordable price point because:

1. If done right, it allows smaller businesses access (via affordability) to what used to be very expensive enterprise applications.

? up front through the economies of scale well-architected systems create, enterprise class software can be sold at much less expensive price points than previously.

? ongoing costs are contained.. and running in world-class data centers that only fortune 1000 companies could previously afford.

2. It brings the benefits of consumer software (constantly improved, modern user interfaces and simple) to enterprise customers who demand secure, stable and reliable applications.

We moved to cloud computing and SaaS 10 years ago because we felt it was good for our customers but in the end it also opened up the market to smaller customers with much smaller IT budgets. This is obviously great for our business model but very rewarding to know we can offer a world-class solution to what used to be out of reach to many companies.

2. What makes cloud computing disruptive?

(AR): Disruption typically has two major components. The first is cost and the second is making products available to a new class of customers.

Cloud computing has not only reduced the cost of business software, it has also made sophisticated systems available to organizations that previously wouldn’t have been able to afford to purchase and maintain those products. I think that’s a fairly obvious outcome at this point as discussed already.

What is less obvious, but more important in the long term, is that Cloud computing means we can — for the first time, really — combine applications that are tailored to the person and the device (an iPad, for example) with a robust administrative system on the back end. Those applications can be really small, and highly tailored, while still connecting to the core. That means users don’t have to deal with a lot of complexity, they can just focus on the work at hand — while still participating in the company’s core system.

This is disruptive because as the end of the day, this is great for consumers and customers but to execute, it really flips all accepted thinking on it’s side.

- Now we have to update our software early and often – the consumers demand this kind of cadence to realize the value. Consumers are using consumer applications and consumer devices and demanding that same elegant experience from their Ent Apps. GenX/Y’s are taking over the executive offices and making decisions on business software.

- Think about what it takes to do that… it’s an agile/iterative development process with continuous integration and deployment. That’s a simple sentence that is a multi million dollar investment for development teams. It took us years to make this turn.

- Finally it’s disruptive because you have to be comfortable in the state of “blowing in the wind”. Typical enterprise companies built loyalty through ridiculously expensive upgrades and data that was so locked down you had to syphon your data out discretely if you were thinking about switching vendors. Now you MUST, absolutely MUST deliver a steady flow of functionality and make your data available and accessible via standard web protocols. That’s a scary situation for many established vendors. It’s disruptive because that’s what our customers want. That’s what we are giving them. But many won’t.

3. What is the next big thing in Cloud Computing?

(AR): The intersection of consumer applications (more than just social) into Enterprise data. SaaS and cloud moved your data to the [potentially] accessible cloud. Soon it will be about making sense of all that data in the cloud. So Enterprise SaaS vendors will be forced to make their data accessible. That’s uncomfortable position for many traditional enterprise software companies who always felt the “hoarding” of their data is what kept customers paying their maintenance bills. So now the data must be “freed” and accessible through standard formats. And not only that, just like Gen X/Yers started bringing iPhones and Skype into the Enterprise without “permission”, we will need to be able to mash our Enterprise data up with consumer applications (especially social). Why not allow identity management via Facebook?

For example, take Apple with iOS5 is delivering their notification center — one place for the person to direct all their important action items. It is our job to plug into that if the user wants us too. Same with social streams. People don’t want 10 different streams, they might want a couple… so how do we publish and subscribe into those places where a user already works. Instead of taking an application-centered view, it is time to take a person-centered view. Cloud lets us do that.

4. What are you doing that’s disruptive for Cloud Computing?

(AR): Ultimate has grown to 2200 customers because of the inherent disruptive power of Cloud computing and SaaS. And we’re just at the start of this transition as an industry. But we have to keep looking forward. I’m not ready to share details yet, but let’s just say that business applications–even Cloud applications–have really been all about interrogating the user in order to capture data that matters for administering the company. We believe that era is over.

5. Where do you see technology convergence with Cloud?

(AR): Connections between applications and information is happening at the device and person level. The iOS5/iPad example is a great one. I want to create my own work environment, bringing together the information I need in the context that makes sense to me. With powerful devices and hyper-connective cloud-based applications, we can really make that happen which is exciting. And when you get the itch to start talking about technology, you really have to be careful.

In Silicon Valley, there is a never-ending focus on architecture, technology and administration. So much in industry is in discussion about why Cloud, SaaS, Mobile is great.

- These are means to an end. That end is great solutions for people. Apple gets this. They invent experiences instead of marketing processor speeds and USB ports.

6. if you weren’t focused on Cloud Computing what other disruptive technology would you have pursued?

(AR): - Definetely something in the field of medicine. I was studying biomedical engineering before switching to electrical and going down the computer/software path. As much as modern medicine has progressed there seems to be so much more room for massive technology advances.. Both in administering how we traverse through the hospitals/doctor’s offices and when we are in surgery.

7. What’s your favorite science fiction gadget of all time?

(AR): Dr. Who’s Tardis. What could be better than seeing how awesome the technology will be 1000 years from now?

Source: BBC

Your POV

What do you think? Got a question for Aaron?  Add your comments to the blog or reach me via email: R (at) ConstellationRG (dot) com or R (at) SoftwareInsider (dot) com.

The Tech Vendor series is closed.  To be considered for the Business and Tech Innovators series, please reach out to Elaine (at) ConstellationRG (dot) com.

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact sales (at) ConstellationRG (dot) com.

Disclosure

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

Copyright © 2011 R Wang and Insider Associates, LLC All rights reserved.

 

Future of Work Tech Optimization Innovation & Product-led Growth Leadership Chief Experience Officer

News Analysis: Lithium Technologies Adds $53M in Financing

News Analysis: Lithium Technologies Adds $53M in Financing

New Funding Shows Strength In Social Business Market And Lithium’s Business Model

Emeryville, California based Lithum Technologies announced today that it raised $53.4M in financing.  The lead round is from New Enterprise Associates (NEA). Other investors include SAP Ventures.

  • NEA leads the round with Peter Sonsini joining the board. Peter‘s been active with ecommerce play BeachMint, community platform BuzzMedia, ruby development player Engine Yard, and cloud player Eucalyptus.  Of note all “existing Lithium investors, including Benchmark Capital, DAG Ventures, Emergence Capital, Greenspring Associates, Shasta Ventures and Tenaya Capital” participated in this D round.

    Point of View (POV): NEA’s traditionally gone in early and invested with visionary entrepreneurs.  However, this play fits along its second investment thesis for venture growth equity opportunities.  NEA’s track record bodes well for Lithium should they decide to go the IPO route.  More importantly, NEA provides Lithium with a vast network of resources for both sales, business development, and expansion.
  • Lithium’s executed well amidst an increasingly competitive landscape. Lithium has shown growth into key verticals including auto, consumer products, financial services, retail, technology, telecommunications, and travel and leisure.  Key wins and expansions include BskyB, McDonalds, Nestle, Nissan, SuccessFactors and Telstra.

    Point of View (POV): Expansion into key verticals, improvement in SaaS upgrade technology, and the addition of enterprise class executives such as Rob Tarkoff, Ed Van Siclen, and Jim Drill show a seriousness to take the company to the next level.  The social business sale is starting to expand beyond the CMO role and across other line of business executives.  As the sale touches across the enterprise, the new management team is better positioned  to address the needs of CIOs, CFO’s, and other line of business execs as well as agency and system integrator partners.  More importantly, Lithium can expect consolidation in the market and increased competition from Jive, Salesforce.com, IBM, and others to heat up.

The Bottom Line For Customers: New Financing Validates Your Investment With Lithium Technologies

The strength and size of the additional financing validates Lithium’s position in the market place and bodes well for both existing customers and prospects.  Lithium intends to expand its role in defining the social customer experience.  This round of additional financing enables Lithium to:

  • Support new social business use cases
  • Expand into new markets such as digital agency ecosystem and growing geographies
  • Invest in more research and development
  • Fund future acquisitions
  • Improve service delivery for existing customers

The market place is about to consolidate and the additional funding ensures stability at Lithium as well as reaffirms its position among the leaders in social customer experience and the broader category of social business.

The Bottom Line For Technology Vendors: Expect Consolidation Across The Vendor Landscape In 2012

Activity around social business deals have accelerated in the last three months. Jive’s IPO has provided this market category with a catalyst for continued investment.  More importantly, key fundamentals such as increasing customer adoption, continued market share gains by start-ups and pure-play vendors, and interest by established software vendors indicate the beginning of a mergers and acquisition cycle in 2012.  Technology vendors can expect deals and partnerships as each of the Social Business software categories: Customer engagement, SCRM/ External Communities, Enterprise 2.0/Internal Collaboration, and Social Middleware combine to address the 43 use cases of social business.  The market can expect the following combinations:

  • Established CRM vendors to add social offerings
  • Social middleware vendors to move up the stack
  • Consolidation of SCRM players with Enterprise 2.0 communities
  • Expansion of SCRM vendors into other CRM areas

 

Figure 1. Expect Consolidation Across The Vendor Landscape In Social Business For 2012

 

Your POV.

Are you ready for Social Business? If you are a Lithium customer, what do you think?  Got a question?  Add your comments to the blog or reach me via email: R (at) ConstellationRG (dot) com or R (at) SoftwareInsider (dot) com.

Please let us know if you need help with your Social CRM/ Social Business efforts.  Here’s how we can assist:

  • Assessing social business/social CRM readiness
  • Developing your social business/ social CRM  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

Related Research:

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact sales (at) ConstellationRG (dot) com.

Disclosure

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

Copyright © 2012 R Wang and Insider Associates, LLC All rights reserved.

 

New C-Suite Innovation & Product-led Growth Leadership Chief Experience Officer

Unified Communications Trends for 2012

Unified Communications Trends for 2012

Unified Communications (UC) has reached mainstream adoption with approximately two thirds of businesses engaged or actively planning UC upgrades.  However, most organizations prioritize UC applications, such as integrated messaging, conferencing, video, presence and IP telephony but do not necessarily connect all UC applications into a UC framework at the same time.  During the coming year we will see the continued advancement in UC acceptance and adoption, as UC is a key factor in enabling real time connectivity and supporting multi-modal applications for anytime, anywhere  communications.   Key trends I see dominating the UC space during the coming year include:

  • Continued Investment at a moderate pace.  Based on Constellation Research 2011 UC survey there is a decline in the rate of future investment after 2011.  This is most likely due to tighter budgets for IT spending and an indeterminate economic recovery.  However, in areas that offer direct short-term payback, companies will continue to invest in UC upgrades.   According to this same survey 64 percent of respondents report a positive ROI investing in UC and another 30 percent broke even on their investment within two years.  This positive response to UC upgrades should promote the continued adoption of UC during 2012 based on the need for increased business productivity and agility.
  •  Increased use of tablet across the enterprise.   Tablets support a wide range of application and serve many functions that previously required a PC.   In many areas, such as retail and healthcare that require mobile employees have immediate access to data, tablets are a cost-effective means to help workers become more accessible and  productive.  Not all IT managers favor the additional data and application management needed to support tablets but the demand for them will counter their reluctance for additional device upkeep.   Although less fully featured than a PC, I expect tablets to become a replacement for many occupations currently requiring mobile access to data.
  • Smart devices continue on parallel path.  Most UC vendors offer dedicated UC features for integrating cell phones and smart devices into a common UC framework.   However, there does not appear to be a strong uptake with business on mobile UC integration.  One drawback is that mobile UC integration often requires the installation of client software for the management of its features.  With smartphones and tablets offering many features that connect the employees to their company, such as email access, Internet access, directories, and texting many do not see the need for UC integration. However, UC features such as presence, access to corporate directories, security controls and seamless routing of business calls to mobile devices offers an incentive for others to make this investment.  Mobile policy will be split between companies that want better control over their employee mobile devices and companies who support employees’ personal devices with partial reimbursement plans.
  • Virtualization to the desktop.  Unlike the widespread adoption for data, virtualization for voice and video has come to market more slowly due to concerns regarding high reliability and availability for voice and video.  It was not until last year that vendors announced virtualization for several UC applications.   Progress in this area continues and Mitel moved one step ahead recently announced a virtual UC suite for its softphone. Most likely other vendors will follow this initiative.  A softphone on a virtual desktop infrastructure (VDI) will reduce the number of landline phones in the office as many workers will use virtual softphones and smart phones as primary voice communication devices.  
  • Social software UC integration.  Companies are adopting social software for communicating with employees and many view it as a better alternative to email and other forms of internal communications.  Enterprise social software promotes collaboration and supports faster decision making by promoting the sharing of information on an immediate basis.  Due to its ease of implementation and customization, enterprise social software will become a major application for business communications.   Integration of social software into a UC framework supports additional features to facilitate knowledge exchange, such as access to experts, presence and directory integration.
  • Mobile applications increase in range and usage.  Mobile applications provide easy access to many features that business users commonly seek, such as audio and Web conferencing, video conferencing, file sharing, and information posts and business communities.  Business applications on mobile devices enable a collaborative experience and facilitate connections due to ease of use to launch the application and ability to share information on an immediate basis across communities of interest.  Additionally, the growth in mobile applications will also create the need for more support for customers using a company’s mobile application.
  • Cloud services for UC.   As additional UC applications are moving to the cloud, companies have more choices in their adoption of UC applications.  Cloud services today offer a full range of UC applications on a subscription basis and offer scalable and affordable solutions.  Many companies will adopt  a hybrid approach to cloud services and deploy both cloud and premise based UC.  Examples of hybrid deployments are using cloud services for conferencing, video, messaging and premise based services for telephony.
  • Name change for Unified Communications- I predict that unified communications will be renamed by vendors to indicate its new expansiveness and unification of media types. New enhancements and services that improve business connectivity and agility put more emphasis on the business advances made possible with UC application than on the software and servers that deliver this solution.  As vendors increase support for openness and interoperability new terminology may better indicate the full possibilities for UC.
Future of Work Next-Generation Customer Experience Tech Optimization

Tuesday's Tip: Apply Maslow's Hierarchy Of Needs To C-Level Business Strategy

Tuesday's Tip: Apply Maslow's Hierarchy Of Needs To C-Level Business Strategy

Maslow’s Hierarchy Of Needs Provides Prioritization Of An Individual’s Needs

In 1943, Abraham Maslow put forward his paper A Theory of Human Motivation. Eleven years later in 1954, Maslow went into detail on his hierarchy of needs in his book titled Motivation and Personality. The framework outlined five needs from the most fundamental or “deficiency needs” at the bottom and ended in Meta motivational needs towards the top (see Figure 1.).  At the highest level – self-actualization, the individual would focus on the needs to better society.

Figure 1. Maslow’s Hierarchy Of Needs

Source: Wikipedia

A Business Hierarchy Of Needs Provides A Model To Prioritize Business Strategy

While Maslow’s research explained what would drive and motivate individuals, applying the model to organizations yields a powerful framework for business prioritization. Why? Today’s next gen C-level executives face an onslaught of business priorities that must address the organization’s basic needs from regulatory compliance to higher level needs that include the management of the brand.  The business hierarchy of needs uses an analogous framework to Maslow’s.  Using the framework, business priorities and related projects can be aligned with the five levels that include (see Figure 2):

  1. Brand. The brand describes a promise to stakeholders. The brand is more than the collection of products or services offered by the company.  The brand encompasses an emotional value, an aspiration, and the public face of a business strategy.  The brand can be viewed as a person, product, organization, and symbol for the company.
  2. Strategic differentiation. Organizations seek strategic differentiation to achieve a desired reputation, create a defensible competitive advantage, and influence preferential behaviors in the value chain.  Tools include positioning strategy, design thinking, and innovation programs.
  3. Revenue growth. Revenue growth reflects the initiatives used to drive new customers, revenues, and market share for the organization.  Revenue growth is also known as top line priorities.
  4. Operational efficiency Operational efficiency priorities focus on reducing costs, improving existing performance, and optimizing existing landscapes.  Operational efficiency is also know as bottom line priorities.
  5. Regulatory compliance.  Regulatory compliance is a base need.  Organizations must comply with legal requirements.  In addition, organizations may want to avoid legal suits, causing injury, or failing to meet a commitment.

Figure 2. Constellation’s Business Hierarchy Of Needs

The Bottom Line: Use The Business Hierarchy Of Needs For Business Prioritization

As with Maslow’s framework for motivation, the business adaptation delivers a framework for all c-level execs to:

  • Align projects and priorities using the five categories in the framework
  • Budget resources, funding, and investments in a portfolio management model by type of business need.
  • Craft a strategy and portfolio mix based on business models and business need
  • Develop a methodology to include in overall corporate strategy
  • Evaluate with regular frequency for opportunities to improve

Your POV.

Are you ready to reassess your strategy efforts by business hierarchy of need?  How do you plan to allocate your resources and time for each need?

Take the survey and find out what your peers are doing today and in 2012.  As a survey respondent, you’ll get a copy of the results.

or do it here:

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

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact sales (at) ConstellationRG (dot) com.

Resources and Related Posts

20110303 Harvard Business Review – R “Ray” Wang “The Four Personas Of The Next Gen CIO”

20110713 Harvard Business Review – R “Ray” Wang “Coming to Terms With The Consumerization Of IT”

20111020 Harvard Business Review – R “Ray” Wang “Moving From Transactions To Engagement”

Disclosure

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

Copyright © 2011 R Wang and Insider Associates, LLC All rights reserved.

 

Future of Work Marketing Transformation Matrix Commerce New C-Suite Next-Generation Customer Experience Innovation & Product-led Growth Leadership Chief Experience Officer

Monday's Musings: 10 Mega Business Trends To Watch For In 2012

Monday's Musings: 10 Mega Business Trends To Watch For In 2012

The Shift From Transaction To Engagement Ushers A New Era For Businesses.

As organizations enter the evolution from transactional systems to engagement systems, a shift is happening in business (see Figure 1).  Engagement requires a different design point and business model for success.  Engagement must account for sense and response, massive social scale, conversation, new user experiences, real-time, multichannel networks, and other factors.

Next generation C-suite leaders not only build for engagement, but also design for the next era of experiential systems which apply context to deliver agility and flexibility.  These shifts have massive impacts on the societal, technological, economical, environmental, and political landscapes.  In fact, these shifts to experiential systems drive the 10 mega business trends to watch for in 2012 and beyond (see Figure 2).  Of note, they can also be aligned with Constellation’s Business Hierarchy Of Needs prioritization framework (see Figure 3).

Figure 1. Move from Transaction To Personal Fulfillment Systems

  1. Regulation gets worse and more expensive. Public outrage at a slew of government policy failures, the public sector debt crises, and a global sentiment against big business around the world will drive an increase in regulations.  Despite promises by politicians around the world for less regulation, a barrage of hidden taxes continue to be imposed by government bodies around the world.  In fact, Americans pay up to $1 trillion every year in stealth regulatory taxes.  Regardless of political point of view, global adoption of International Financial Reporting Standards (IFRS) and carbon trading proposals will also drive up costs.  Organizations must prepare for this continued regulatory assault as elected officials hope the passage of more regulations will result in their reelection.
    (Level 1: Regulatory Compliance – Business Hierarchy of Needs)
  2. Consumerization of IT must be enterprise class or businesses will fail. The recent Harvard Business Review post titled, “Coming to Terms with the Consumerization of IT” (CoIT), identifies six factors for the basis of balancing enterprise class requirements.  Businesses want IT to be simple, scalable, and sexy.  While the pendulum is definitively shifting towards business, Consumerization of IT requires enterprise class IT to ensure technologies to be safe, secure and sustainable. Success requires a natural equilibrium between business needs and IT requirements for key areas such as social, mobile, cloud, big data, and unified communications.  If IT is too strict, business fails. If business fails to have a level of discipline in technology adoption, IT can not keep up with the lack of standards and scale.
    (Level 2: Operational Efficiency – Business Hierarchy of Needs)
  3. Organizations who master data visualization gain the advantage of speed. New data visualization tools will improve internal and external communications.  The convergence of big data, unstructured social and mobile information, and machine to machine data will provide a treasure drove of data for business analytics.  However, the flood of data will result in poor signal to noise ratios.  Unfortunately, more data does not mean more information.  Consequently, data visualization will provide a key tool to efficiently communicate complex information to stakeholders such as employees, customers, partners and suppliers.  The systems change the future of work by allowing users to create, share, collaborate, and broadcast new visualizations models.  In this case, an image is worth an exabyte of data.
    (Level 2: Operational Efficiency – Business Hierarchy of Needs)
  4. New growth comes from monetizing the complete ownership life cycle. The low margins and limited barriers of entry for many products and services force organizations to rethink their business models.  In fact, many organizations have painfully discovered that products remain excuses to sell value added services and business model disruption is now a way of life.  Consequently, new business models include value added services such as installations, after market warranties, inclusion in communities, and exclusive experiences.  New business models also take advantage of new disruptive technologies and the shift to cross channel commerce.  For example, profitability at a company such as Best Buy mostly comes from these new value added services, not the product.  Thus, the goal shifts from selling products to winning market share in the overall ownership lifecycle.
    (Level 3: Growth – Business Hierarchy of Needs)
  5. Social shifts from B2B/B2C to people to people (P2P) networks. Emergence of extremely viral people to people (P2P) networks forever changes the notion of the customer. Adoption of social media, social networks, and mobility drives the death of B2B and B2C as we know it.  Why? How we interact increasingly depends on context.  For instance, a bad experience at work with a certain brand of laptop bleeds over to the consumer side.  A great experience with consumer products has driven the rise of bring your own device (BYOD) to work and Apple’s success in the enterprise.  As a result, context in the form of roles, relationships, location, business process, time, and other factors determine how we engage.  These factors drive the new rules of business based on the rise of people to people (P2P) networks.  Growth will come from how organizations manage these new P2P networks to their advantage. 
    (Level 3: Growth – Business Hierarchy of Needs)
  6. Battle for growth must include new global customer bases. Market place competition requires organizations to find the largest base of growing, profitable customers.  Competition for top growth status in stagnant developed markets could result in a strategic mistake.  For example, in the burger wars, Wendy’s has gained market share on Burger King in the United States.  At first glance, Burger King may seem to be failing.  However, Burger King’s recent efforts focus on rapidly growing markets in Latin America and Asia Pacific. Why? They plan to grow in the 18 to 34 age segment.  More importantly, the US market is a shrinking market while the emerging markets provide a green field alternative for fast food and high level growth.
    (Level 3: Growth – Business Hierarchy of Needs)
  7. Strategic differentiation begins with great design. Strategic differentiation provides a desired reputation, creates a defensible competitive advantage, and influences preferential behaviors in the value chain.  In a market of rapid commoditization of products, shrinking product cycle times, and global delivery of services, organizations can barely create and sustain market differentiation.  However, experiential design provides a tool for greater strategic differentiation. Organizations who invest in differentiation and integrated systems thinking can improve their brand value.  Differentiation tools include positioning strategy, design thinking, and innovation program that drive next generation customer experience.
    (Level 4: Strategic Differentiation – Business Hierarchy of Needs)
  8. The corporate digital divide only grows larger. The gap in profits, innovation, and market share will continue to widen between the companies who adopt disruptive and emergent technologies and those who choose to stay the course.  In some sense, average is over and organizations who strive for average will fail to survive.  Unlike the Occupy movement, organizations should strive to be in the 1%.  Why? There’s only room for the top 3 to 5 in any market segment.  Those in the 99% will crumble under market forces and cease to exist.
    (Level 4: Strategic Differentiation – Business Hierarchy of Needs)
  9. Market leaders know how to manage their innovation agenda. Market hype over disruptive technologies such as social, mobile, cloud, big data, and analytics will continue.  However, a good number of early adopters have achieved success.  Therefore, organizations must not only understand when and which technologies to adopt, but also when and which technologies to pass on.  Successful organizations will manage their innovation agenda as a partnership between business, IT, and legal.  Those who establish a governance model for innovation will succeed.  One approach is to adopt the DEEPR disruptive technology adoption framework.  The DEEPR methodology establishes a disruptive technology governance council in the “R” or realization stage.
    (Level 4: Strategic Differentiation – Business Hierarchy of Needs)
  10. The brand remains king (or queen). Organizations with strong brands will continue to command greater margins, larger market shares, survive economic downturns, and higher market caps.   Consequently, organizations must redefine, defend, and continue to position their brands. The brand describes a promise to stakeholders. The brand is more than the collection of products or services offered by the company.  The brand encompasses an emotional value, an aspiration, and the public face of a business strategy.  The brand can be viewed as a person, product, organization, and symbol for the company. 
    (Level 5: Brand – Business Hierarchy of Needs)

Figure 2. 10 Mega Business Trends For 2012

Figure 3. Constellation’s Business Hierarchy Of Needs

The Bottom Line: Pace Of Change Continues To Accelerate In 2012

In business, the only constant is change.  Unfortunately, the pace of change continues to increase.  Organizations who fail to manage this change will cease to exist in the next 24 to 36 months.  The 10 mega trends reflect the seismic shift happening in society, technology, environment, economy, and politics.  Business leaders should quickly factor these mega business trends into planning for 2012.  Importantly, organizations should weigh and factor trends based on their business hierarchy of needs.

Your POV.

Are you ready for 2012? Which mega business trend appeals to you the most?  Got one we missed?  Add your comments to the blog or reach me via email: R (at) ConstellationRG (dot) com or R (at) SoftwareInsider (dot) com.

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact sales (at) ConstellationRG (dot) com.

Required Reading

Note: For more on these mega trends and the move to customer engagement, read the latest from Paul Greenberg. A must read for 2012!

CRM 2012 Forecast: The Era Of Customer Engagement, Part 1.

Resources and Related Posts

20110303 Harvard Business Review – R “Ray” Wang “The Four Personas Of The Next Gen CIO”

20110713 Harvard Business Review – R “Ray” Wang “Coming to Terms With The Consumerization Of IT”

20111020 Harvard Business Review – R “Ray” Wang “Moving From Transactions To Engagement”

20110822 A Software Insider’s Point of View – R “Ray’ Wang “Monday’s Musings: Balancing The Six S’s In Consumerization Of IT”

20101004 A Software Insider’s Point of View – R “Ray” Wang “Research Report: How The Five Pillars Of Consumer Tech Influence Enterprise Innovation”

Disclosure

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

Copyright © 2011 R Wang and Insider Associates, LLC All rights reserved.

 

 

 

Matrix Commerce Next-Generation Customer Experience Innovation & Product-led Growth Leadership Chief Experience Officer

Press Release: Constellation Research Appoints Sachin Gosavi As VP of India

Press Release: Constellation Research Appoints Sachin Gosavi As VP of India

Constellation Research Inc, an award winning, specialty research and advisory firm that serves business leaders who seek to unleash the power of emerging and disruptive technologies, today announced the appointment of Sachin Gosavi as Vice President (India). Sachin brings over 12 years of experience in marketing and strategy in India, and will focus on serving the growing demand for technology research services of large Indian firms and technology vendors.

Releasing the announcement, R “Ray” Wang, Principal Analyst and CEO, Constellation Research, Inc., said, “It’s great to have someone like Sachin on board in India. His proven track record in technology research business along with strong ‘C’ suite networking abilities will be valuable to our growth. In addition, his deep understanding of the independent technology research space will be help drive business value for our clients in India.”

Commenting on his appointment, Sachin Gosavi said, “Constellation Research has established itself as the true model of disruptive technology research, so am quite excited to join them. Most Constellation analysts bring over 2 decades of hands-on experience in working with senior leaders in enterprise organizations, and am looking forward to working with such stalwarts.”

In his previous role for a brief timeframe, Sachin was an independent marketing consultant advising technology start-ups. Prior to that, Sachin spent about six years with Forrester Research spearheading it’s marketing function in India. Through innovative methods, he not only helped establish the brand Forrester in India, but also significantly raised the marketing bar for it’s competitors in local markets.

Gosavi earned his Master’s in Economics from the University of Pune, and PGDMM from IMDR, Pune.

At Constellation, Sachin will engage with both (technology) buy side and sell side clients in India. His responsibilities include:

  • Business development in India
  • Establishing partnerships between Indian firms- industry bodies and Constellation’s expert knowledge base
  • Assisting buy side business leaders with insight into the future of work, next gen customer experience, cross channel commerce, big data and analytics, and technology adoption
  • Helping Indian firms accomplish their specific business objectives around enterprise software, ERP, Mobile, BI, SCM, PBS, CRM, Collaboration, Analytics, UC, Gov 2.0 and Social

COORDINATES

Twitter@sachingo
Linked Inhttp://www.linkedin.com/in/sachinvgosavi
Geographical Location: Pune, India
Email: sachin (at) ConstellationR (dot) com.
Mobile: +91.9822.555.012

Office:
A2/405, Mont-Vert Pristine, Off Aundh Road,
Pune 411020 (India)

Website: http://www.constellationrg.com

ABOUT CONSTELLATION RESEARCH, INC.*
Constellation Research is an award winning, specialty research and advisory firm that serves business leaders who seek to unleash the power of emerging and disruptive technologies.  Our analysts start by understanding the business objective, applying real world experience and insights, and then incorporating disruptive technologies and business models as appropriate.  We cater to board of directors and c-suite executives looking for an edge in business model and technology innovation.  Research outputs always provide an insightful buy-side point of view.

Why Your Mission Is Our Mission

In today’s business environment, the rate of change is not only constant, but also rapidly escalating.  New business models by upstarts disrupt competitors with increasing frequency in all industries and markets.  In just 10 years, even 5 years, or dare say 24 months, many established companies have been left vulnerable, beaten down, and toppled by new upstarts.  Why? Business leaders have been too slow to react to their customers and the changes happening in the societal, technological, environmental, economic, and political fronts.

In business models, products are now excuses to sell services.  Product innovation cycles have shortened from years to months to weeks.  On the work front, five generations in the workforce disagree on where to work, how to work, when to work, and why to work.  Add the current trend of consumerization of IT  to the pace of change and business leaders must strategically determine which new technologies should be considered.

Unfortunately, the legacy research analyst firms and advisory firms continue to fail their clients when faced with these new challenges. Why? Their myopic focus on an IT centric point of view ignores the realities of the market.  In fact, Constellation estimates that the average IT budget is down 5% year over year and at best up 2% among the most innovative companies.  However, tech spending is up on average 18 to 22% at the most innovative firms.  What’s happened? The buying power has shifted and business leaders increasingly take control of how they are applying technologies to their business while whittling down the corporate IT budget for operational efficiencies.

Why Your Success Is Our Objective

We’re business leader and business value focused. Constellation differentiates itself in the market in two ways by:

  1. Focusing on the board room and C-suite point of view. Constellation’s research addresses the needs of boards, CEOs, CFOs, CIOs, CMOs, CHROs, CPOs, CSCOs, and COOs.
  2. Addressing the business problem first.  Research starts by addressing business value and then applying where disruptive and emerging technologies may play a role.

The result – Constellation serves as a coach and advisor to senior business leaders working on tough business problems including:

  • The future of work
  • Next generation customer experience
  • Cross channel commerce across the supply and demand chain
  • Digital marketing transformation
  • New organizational models including People-to People Networks
  • The new C-suite
  • Big data, decision systems, and information management
  • Business value frameworks and metrics for success
  • Energy management and green tech
  • Legacy technology optimization

We look forward to serving you with Insight, Inspiration, and Impact.

*Constellation Research, Constellation SuperNova Awards and the Constellation Research logo are trademarks of Constellation Research, Inc. All other products and services listed herein are trademarks of their respective companies.

 

 

Data to Decisions Future of Work Marketing Transformation Matrix Commerce New C-Suite Next-Generation Customer Experience Tech Optimization Innovation & Product-led Growth Leadership Chief Experience Officer

How to Engage Customers in Real Time Without Breaking the Bank

How to Engage Customers in Real Time Without Breaking the Bank

Most companies realize that their success depends on building effective customer experiences across multiple touch points.  Typically, it’s the customer support organization that is responsible for delivering support to maintain high-levels of customer satisfaction after a purchase.  The question facing many companies is how to deliver exceptional support during lean times, when organizations face headcount and budget limitations.  Now may be the time to take a look at recent innovations in customer response that automate service while also creating a positive customer experience.  Unlike earlier automated services that helped a company, often at the customer’s expense, new real time solutions enable a company to proactively and cost effectively deliver an extraordinary customer experience.

 Companies need to deliver services that reach customers where they are and across all modalities that customers prefer to use.  It is also important to become more proactive and reach out to customers in a timely manner, when they need the information.  Automated real time customer support includes:

  • Contextual voice portals. Unlike menu driven voice response systems, adding contextual information regarding a customer’s status, account information, recent activities will personalize the interaction and engage customers in using the automated service. 
  • Proactive notification. No one likes spam or robo call but proactive notifications on matters of interest across the device of the customer’s choice alerts the customer to matters of interest without requiring a customer to make a call or look up information on the Web.  Customers appreciate notifications when they offer relevant and opportune information.
  • Social outreach. Social sites represent unprecedented activity and user adoption and provide a valuable way for a company to deliver its messages to large populations quickly.  Unlike the one-to-one engagement of proactive notification, social outreach goes to the masses and information spreads quickly.  It requires constant monitoring and attention to communities of interest to be effective and relevant.
  • Text and video replies. With the use of smart devices, many customers prefer to see a text response or receive a short video clip compared to having to listen to the information from an agent or automatic voice response message.  Text and video messages encourage customers to use automated services, as they receive information in a more convenient and practical manner and have a better experience.
  • Mobile response management. Mobile applications need to provide a means to support customer requests on the application itself without requiring the mobile device user to make a call.  Intuitive user interfaces attached to customer data or knowledge bases can provide customers with relevant guidance based on their profile and account information while on the mobile application.

Investments in automated services usually pay for themselves very quickly.  Although there are situations when a live agent is the most appropriate response to a customer’s inquiry, reaching customers before they need to make a call or anticipating future inquiries creates an image of a company that goes the extra step to support customers wherever they are across multiple modalities.

Next-Generation Customer Experience

When does moving your contact center to the cloud make sense?

When does moving your contact center to the cloud make sense?

With costs soaring many companies are trying to decide if on-demand cloud services for their contact center are right for them. New vendor entrants with multiple-channel support options have spurred interest in cloud solutions for customer support. Early adopters for cloud services were smaller companies who found cloud solutions an affordable alternative compared to premise-based solutions. However, larger companies with the need to effectively engage customers across multiple channels, including social and mobile applications have become more interested in cloud services.  The increased complexity for managing customers who no longer view the telephone as their prime channel and want consistent services across all channels is driving this change.  With an aging infrastructure and the need to support a more complex contact center environment companies find that cloud based services offer immediate benefits, such as faster time to deploy, increased flexibility and scalability and access to more advanced applications.

Companies must also factor in how changes in the management of their contact center infrastructure will affect service and support. Some companies move cautiously into cloud services for customer support by selecting a few applications, such as voice portals or e-services, while retaining other applications on premise.  But new bundled cloud service offering offer a compelling alternative and deliver a broad portfolio of services including multiple channel routing, workforce optimization applications security and network optimization that deliver comprehensive contact center solutions.

Moving to the cloud will not always be less costly, as there are many considerations based on the services offered and a company’s internal support infrastructure. When considering a cloud provider, it is important that a company realizes the importance of setting expectations on the service delivery and understand all costs.  Choosing a service partner for contact centers means fully evaluating their offering and ability to deliver high reliable services. Key areas to include in your service provider selection criteria include:

  • Service level agreements (SLA). These spell out requirements and penalties for non-performance in areas such as response times for major and minor service issues.  SLAs indicate expectations for reporting and monitoring, problem escalation process, and quality assurance measures.
  • Reliability.  The reliability of the network is essential for managing customer support expectations and system availability needs to be at 5 9’s. Also, assess the provider’s policy in providing system updates and determine all charges for making changes to current configuration. Include disaster recovery and back up plans in this discussion.
  • Security. High security and ability to comply with external regulations are essential. Security measures include encryption, access control and identity management.

Consider your service provider as a business partner and focus on their ability to work with your organization for a more successful outcome.

 

New C-Suite Next-Generation Customer Experience Tech Optimization

Research Summary: Demystifying Enterprise Gamification For Business

Research Summary: Demystifying Enterprise Gamification For Business

Purpose and Intent

Much hype surrounds the topic of gamification. Often seen as a technique to add engagement to existing tasks, projects, marketing campaigns, and initiatives, the term gamification unfortunately lacks the seriousness it deserves. This report seeks to change the point of view and demonstrate where gamification plays a role in the enterprise. More importantly, executives will discover how gamification can drive behavior and outcomes through both monetary and non-monetary incentives in enterprise class settings.

Executive Summary

Gamification describes a series of design principles, processes and systems used to influence, engage and motivate individuals, groups and communities to drive behaviors and effect desired outcomes. Originating from the video game industry, many of these pioneering concepts now play a key role in driving incentive and behavior management for both brands in the consumer world and internal scenarios in the workplace. Enterprise gamification is a user experience (UX) and consumerization of IT (CoIT) trend that will take the market by storm in 2012. Constellation believes that by 2013, more than 50 percent of all social business initiatives will include an enterprise gamification component.

In interviews with 55 early adopters of enterprise gamification, Constellation identifies the three core pillars that include measurable action, reputation and incentives. By creating triggers through both monetary and non-monetary incentives among customers, employees, partners, suppliers and other interested parties, organizations can secure sustainable engagement and drive business outcomes such as improved marketing response from external communities, sustained long-term customer loyalty, increased collaboration among internal teams, or enriched onboarding, delivering success with new hires, partners, and customers.

Enterprise gamification requires an application of psychology and behavioral economics to incentivize outcomes. Because enterprise gamification maps closely to human behavior, organizations will want to follow Constellation’s best practices in appealing to the “Seven Deadly Sins” for gamification design.

Research report surfaces leading practices from 55 early adopters

Some highlights of the report include:

  • Details on who’s using gamification across the enterprise
  • The three pillars of enterprise gamification
  • The six elements of sustainable engagement
  • Sustainable behaviors to drive desired business outcomes
  • The Seven Deadly Sins to Optimize Gamification Design
  • The top gamified business processes for the enterprise (see Figure 1)

Figure 1. Marketing, Customer Service and HR Processes Lead in Gamified Processes

 

Your POV.

Designing your gamification models?  What enterprise business processes will you gamify first? next?   Ready to turbo charge your next generation customer experience?  Have you tested out iActionable, CrowdTwist or the 3B’s (i.e. Badgeville, Bigdoor, and Bunchball?  Ready to here how you can apply the white arts of the 7 Virtues to work?  Add your comments to the blog or reach me via email: R (at) ConstellationRG (dot) com or R (at) SoftwareInsider (dot) com.

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact sales (at) ConstellationRG (dot) com.

Get the report and other great research on the Constellation site

Resources and Related Posts

20110824 News Analysis: Bunchball Gamifies Salesforce.com And Delivers Simplified Applets

20110223 Best Practices: Applying The Seven Deadly Sins To Successful Gamification

20110120 Trends: 5 Engagement Factors For Gamification And The Enterprise

Community Input

Thanks to the following individuals for their review, input and contributions as part of the broader enterprise gamification community.

David Buckholtz (@dbuckho) – VP, Divisional CIO, Corporate IT, Sony Pictures Entertainment

Yvette Cameron (@yvettecameron) – VP & Principal Analyst, Constellation Research, Inc.

Andrea Chin – Senior VP, Transformation Office, Citigroup

Kris Duggan (@kduggan) – CEO and Co-Founder, Badgeville

Richie Etwaru (@richieetwaru) – Director, Chief Technology Officer’s Office, UBS

Irvin Fain (@ifain) – CEO and Co-Founder, CrowdTwist

Frank Falcone (@frankcrm) – Co-Founder and Executive Program Director, Rotman Centre for CRM Excellence

Maggie Fox (@maggiefox) – Founder and CEO, Social Media Group

Paul Greenberg (@pgreenbe) – Founder and President, The 56 Group

Ben Haines (@benlhaines) – CIO, Pabst Brewing Co.

Peter Kim (@peterkim) – Managing Partner, Dachis Group

Esteban Kolsky (@ekolsky) – President, ThinkJar, LLC

Marshall Lager (@lager) – Founder and Managing Principal, Third Idea Consulting

Alan Lepofsky (@alanlepo) – VP & Principal Analyst, Constellation Research, Inc.

Rajat Paharia (@rajatrocks), Founder and Chief Product Officer, Bunchball

Emanuele Quintarelli (@absolutezubzero) – Partner and Social Business Strategist, Open Knowledge

Alistair Rennie (@alistair_rennie) – General Manager Social Business, IBM

Ted Sapountzis (@sapountzis) – VP Social Media Audience Marketing, SAP

Adam Sold (@kafuchale) – Senior Director of Strategy, Dolby Labs

Dilip Soman (@dilipsoman) – Professor of Strategy, University of Toronto Rotman School of Management

Keith Smith (@chiefdoorman) – Chief Doorman and CEO, Big Door

Josh Weinberger (@kitson) – Independent Analyst

Michael Wu, PhD (@mich8elwu) – Principal Scientist, Lithium Technologies

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.

Copyright © 2011 R Wang and Insider Associates, LLC All rights reserved.

 

Future of Work Marketing Transformation New C-Suite Next-Generation Customer Experience Innovation & Product-led Growth Leadership Chief Experience Officer

News Analysis: SAP Buys SuccessFactors for $3.4B Signals SAP’s Commitment To Cloud, HCM, and Social

News Analysis: SAP Buys SuccessFactors for $3.4B Signals SAP’s Commitment To Cloud, HCM, and Social

SuccessFactors Acquisition Puts SAP In Direct Competition With Workday And Taleo

SAP (NYSE:SAP) announced its $3.4B acquisition of SuccessFactors (NYSE: SFSF) as it seeks to bolster its position in the Cloud and more importantly in the rapidly growing strategic HCM market.  Based in San Mateo, CA, USA, SuccessFactors brings over 15 million subscription users from 3,500 customers in 168 countries.  The company has 1450 employees and has been one of the SaaS/Cloud darlings of the industry.  When completed, SuccessFactors will remain an independent entity renamed, SuccessFactors, an SAP company.  Lars Dalgaard, Founder and CEO, SuccessFactors will lead the cloud business for SAP.  A quick analysis of the news reveals:

  • SAP seeking a comprehensive and complementary HCM solution. SAP believes the combination of SuccessFactors and SAP will create a comprehensive HCM solution, marrying strength in enterprise applications with people-focused cloud applications. Today, SAP serves the market with a comprehensive and international Core HR and payroll.  Other on-premise offerings include talent management, workforce analytics, and shared services delivery. Key offerings from SuccessFactors include areas such as talent management, recruiting management, goal management, performance reviews, and business execution.  Further, SAP believes the core SFSF offerings will be an attractive to more than 500 million employees of SAP customers .  SAP has 15,000 HCM deployments (not customers) that could benefit from one-stop shopping.

    Point of View (POV): While the core offerings provided a solid approach, these applications remained in the systems of transaction world and lacked many of the newer requirements for systems of engagement.  In fact, many customers left SAP to go to SuccessFactors to accelerate innovation in the talent space. The rise of Taleo, Workday, and Ultimate Software comes from the lack of general innovation in the HCM space by legacy vendors such as Oracle, PeopleSoft, and SAP.  Cloud computing provided the opportunity to deliver rapid innovation to customers.  Consequently, existing customers will welcome the move while best of breed purists will have to overcome the surprise and determine how innovative they expect SAP to become in HCM.
  • SuccessFactors’ provides SAP with massive cross-sell opportunities. SAP believes the core SFSF offerings will be an attractive to more than 500 million employees of SAP customers .  SAP has 15,000 HCM deployments (not customers) that could potentially go for one-stop shopping from SAP.

    Point of View (POV): SAP sees the acquisition as a great cross-sell opportunity for other cloud apps and analytics.  Other opportunities include CRM, Collaboration, Travel, and Procurement in the cloud.  In the past two years, Success Factors has made the shift to focus on business performance execution and provides a real time decision making platform.  While customers can acquire a solution from one vendor, the integration of the various cloud platforms may prove to be a challenge.  However, from a financial play, Co-CEO, Bill McDermott sees this as an easy way to meet his 2015 target of €20billion and move towards the 35% margin he seeks to bring shareholders.
  • SuccessFactors’ brings enhanced social, and cloud expertise while SAP provides mobile assets. Lars and company do bring cloud expertise and know how.  They have shown how to manage and innovate in large scale cloud deployments.  In addition, the CubeTree acquisition provides some basic social features and a solid set of pre-built integrations to many consumer and enterprise products including Twitter, Google Docs and Google Reader, Salesforce.com, WebEx and Basecamp.  Meanwhile, SAP hopes to add the Sybase platform to add business to employee mobility capabiltiies.

    POV: SAP’s many efforts headed up by Peter Lorenz may have to be rationalized quite quickly.  Why? SAP’s complete portfolio comprises five different software architectures from ByD, Career OnDemand, Plateau, and Business Suite 7.  Without harmonizing the architectures, SAP will inherit a technical deficit.  Lars first task must be how to integrate such a cacophony of technologies including how to fit Sybase Mobile onto the SuccessFactors architecture.  The Streamworks team will also face challenges with integrating the social business assets of CubeTree which include wikis, blogs, polls, file sharing, link sharing, search, and other consumer tech features.

 

The Bottom Line For Customers And Prospects (Buy-Side): Proceed With Caution

On the call with SAP and SuccessFactors executives, they reconfirmed that SuccessFactors will remain an independent entity and operate as “SuccessFactors, an SAP company”.  Lars Dalgaard is recommended for addition to the executive board of SAP AG.  However, customers and prospects should:

  • Shore up existing concessions and agreements with SuccessFactors. Use this opportunity to add additional licenses as needed, make contract revisions, and secure commitments on product enhancements.  Sales folks will be clamoring to complete end of year deals.  Now is the best time to negotiate a deal.
  • Seek clarity on the future cloud road map. Questions about the future road map abound.  With so many different offerings from SAP, which platform remains.  How will SAP handle cloud based integration at the process, data, and meta data level?
  • Explore other SAP offerings. Now with a broader portfolio, existing SuccessFactors customers who are not SAP customers may want to explore some of the other Line of Business Cloud offerings.

The Bottom Line For Vendors (Sell-Side): SAP Must Continue To Make Selective Acquisitions In Three Out Of The Five Pillars of Consumer Tech To Grow

This acquisition and many others show why large enterprise software companies such as SAP must acquire for innovation in order to grow top line revenue.  In the mobile, cloud, and social space, we are seeing a war for footprint and users.  The market can expect more consolidation and more chaos as these acquisitions change the overall market landscape.  For enterprise software, Oracle, Salesforce.com, IBM, and SAP must place bets on the five pillars of consumer tech entering the enterprise in order to remain relevant and grow.  SAP currently has built a solid foundation in analytics/big data with Business Objects and has made forays into Cloud with Business By Design and Mobile with Sybase (see Figure 1).  This acquisition moves it further along in Cloud.  However, SAP will have to do more in Social (CubeTree perhaps) and mobile to move forward.  Unified communications may come from a partnership with Cisco and Microsoft instead of an outright acquisition or organic development.

Figure 1. SAP Covers Three Out Of Five Pillars In The Consumerization of IT

 

The cloud does change many dynamics for all technology vendors.  Here’s why:

  • Hardware vendors emerge as cloud providers.  Dell’s entrance into providing bundled Cloud services shows how the model can also provide bundled services from a trusted hardware provider.
  • System integrators move to the cloud to provide differentiated IP. Capgemini’s Immediate offering shows how a system integrator can provide Cloud BPO with bundled services under a single SLA and contract.
  • Full stack providers move to create value to both the IT buyers and the line of business executive. For example,  IBM has led the way with its Social Business and Cross Channel Commerce acquisitions.  Oracle has finally acknowledging that the cloud exists with the RightNow acquisition and accelerated the cloud wars.

The next 12 to 18 months will show how innovation created by startups will find a natural path to existing legacy vendors.  The model is no different than in hardware 15 years ago.  However, with software, new innovators and entrants will continue to emerge due to the low barrier of entry for innovation and the compelling returns in exit strategies.

Your POV.

SuccessFactors customers, what’s your reaction to the SAP purchase?  SAP customers, will you move to SAP?  Add your comments to the blog or reach me via email: R (at) ConstellationRG (dot) com or R (at) SoftwareInsider (dot) com.

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

  • Mapping out the roadmap in the Future of Work
  • Providing contract negotiations and software licensing support for SaaS, Cloud, and On-Premises software.
  • Evaluating SaaS/Cloud options
  • Assessing apps strategies (e.g. single instance, two-tier ERP, upgrade, custom dev, packaged deployments”
  • Designing end to end processes and systems
  • Comparing SaaS/Cloud integration strategies
  • Assisting with legacy ERP migration
  • Engaging in an SCRM, HR tech and strategy
  • Planning upgrades and migration
  • Performing vendor selection

Resources

SAP Conference Call Replay With Bill McDermott and Lars Dalgaard

News Analysis: Oracle Buys RightNow For $1.43B

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

Media Coverage

20111203 ZDNet: Between The Lines – Larry Dignan “SAP acquires SuccessFactors for $3.4 billion: Cloud consolidation accelerates”

20111203 ZDNet: Irregular Enterprise – Dennis Howlett “SAP acquires SuccessFactors: a first take”

20111203 IDG News Service – Elizabeth Heichler “Update: SAP buys SuccessFactors for $3.4 bn to boost cloud offering”

20111203 SAP On The Cloud – Sven Denecken “SAP to Accelerate Cloud Strategy with Acquisition of SuccessFactors – will talk more #SAPSummit”

20111203 Bloomberg BusinessWeek -Ragnhild Kjetland SAP to Buy SuccessFactors for $3.4 Billion to Match Oracle”

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact sales (at) ConstellationRG (dot) com.

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.

Copyright © 2011 R Wang and Insider Associates, LLC All rights reserved.

 

Future of Work Tech Optimization Innovation & Product-led Growth Leadership Chief Experience Officer