SaaS, We Will Miss You – Well Not Really!

This blog first appeared on Everest Group blog portal. See here

Do you ever think about the lamp in your living room? Probably not today, as it serves its purpose well. But its newness, beauty, and usefulness gave you great satisfaction when you first bought it.

SaaS adoption is much the same. In the last decade, clients bought SaaS applications because they were “SaaS,” outside their premises, and offered interactive interfaces, better access, quicker new features, and cost savings. Adopting SaaS used to be a priority…SaaS was the means and the goal. But in and of itself, SaaS is now a table stake that is being relegated to the background by four key trends.

  1. Mobile has taken the center stage: All SaaS providers worth their salt, (e.g., Salesforce.com, NetSuite, and Workday.com), and traditional vendors that have embraced SaaS, (e.g., Oracle, SAP, and Microsoft), are now focusing on offering mobile services leveraging their SaaS solutions. Therefore, enabling mobility is taking a priority over being a “SaaS company.” Salesforce.com, the global SaaS leader, acknowledged this market trend and launched “Lightning,” its mobile platform, to enable developers to quickly develop and deploy mobile apps. I expect other providers to make mobile their chosen computing platform and architect their SaaS offerings accordingly. Making end-user mobile leveraging SaaS concepts will take precedence over offering “SaaS” applications.
  2. Platform service has become crucial: All the major SaaS providers cited have developed their platform offerings to enable developers to create application extensions and integration. SaaS may lose its sheen when not accompanied by a meaningful platform service. To scale, every SaaS provider will require a platform service to integrate with the legacy and broader enterprise IT landscape. Think about Salesforce.com, which integrated its disparate platform services (Force.com, Heroku, etc.) within the Salesforce1.com umbrella to create an integrated platform offering that assists developers and IT operation teams. Private platform providers such as Apprenda, Cloud Foundry, and Engine Yard, as well as traditional integration vendors such as Dell Boomi, Informatica, and IBM, are also eyeing this opportunity for application integration, and are exploiting the gaps left by SaaS offerings running in standalone environments. Technology providers that continue to offer point solutions will experience a natural ceiling to growth once they generate a critical mass. These providers may be acquired by other larger players that can offer more comprehensive, end-to-end services integrating different cloud components.
  3. Analytics has become integral: In the last six months, both Salesforce.com and Workday committed to their vision of analytics services by launching multiple applications and platforms such as Salesforce Wave and Workday Insights. This is market leader acknowledgment that clients need value from their SaaS offerings that goes beyond day-to-day operations. SaaS companies are sitting on a treasure trove of client data, and mining it could provide significant benefits to their customers. While these applications are generally delivered in a SaaS model, companies will not buy them for delivery ease or cost savings, but for functionality and value. I expect most other serious SaaS providers will offer analytics services, especially in domains that require data crunching by vast numbers of humans or machines (e.g., Social, CRM, HR, Finance, IT spend, and M2M.) 
  4. SaaS’ novelty has faded away: SaaS has become one of buyers’ preferred mechanism for deploying applications. Even if they are hesitant to leverage a public cloud service, they end up in a private SaaS model and make their developers create “SaaS-like” applications. As most applications are now available in the SaaS delivery model, SaaS’ newness and cachet as a point solution are gone. Most buyers now incorporate “SaaS architecture” in their applications, regardless of whether they are delivered as a SaaS or not. SaaS is now so entrenched as a concept that it is no longer a novelty or a David competing with the Goliath’s of the traditional application world. 

Today’s buyers expect SaaS to be better than on-premise systems. They no longer adopt SaaS just because it’s delivered in an “as-a-service” model. They want SaaS because it can solve business problems that on-premise systems may not (or may be exorbitantly costly and time consuming). Buyers no longer buy delivery models; rather, they buy solutions and outcomes.

SaaS as we knew it is gone. However, now it will drive the broader ecosystem of IT consumption, aid clients in running and transforming their businesses, and help end-users perform meaningful tasks. It is the backbone of the entire application landscape. SaaS needs to perform this work in the background and let the new-age concepts and value drivers take the front seat. SaaS needs to become the lamp in the enterprise living room.

– See more at: http://www.everestgrp.com/2015-02-saas-we-will-miss-you-well-not-really-sherpas-in-blue-shirts-16615.html#sthash.D6wo2gAY.dpuf

Social Analytics and an iPad to Chop Veggies

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This post appeared on Everest Group’s blog. See here

I recently watched a WhatsApp video in which a woman was visibly pleased when her advanced-age father said her gift of an iPad was “great,” then became baffled and shocked when she saw him using it as a vegetable cutting board!

While this is certainly an extreme example of something being used for a different purpose than its intent, we’re seeing the same type of disconnect with social media platforms and the associated analytics. Lots of organizations have deployed social analytics tool to assess the typical engagement metrics (e.g., number of users reached, time spent per user), beauty metrics (e.g., hashtagged or liked), or perspective metrics (e.g., positive or negative sentiments). Much like the iPad veggie chopper man, these enterprises believe the solution is doing its job well. However, like the daughter knew, this is not what social analytics platforms are made for.

Social analytics platforms should be deployed to generate value beyond tracking customer portal trawls. They are meant to listen to, engage, and amaze customers and prospects. However, very few organizations use them for those purposes. Hardly any of them have integrated social data with the main customer data bank. Moreover, there is little collaboration or coordination across social media, analytics, and sales teams, each instead working in its silo. Why is that? Although enterprises may give different excuses, I see four main reasons per my market interactions:

  1. Organizational challenges in terms of structure and complexity that no business manager wants to disrupt
  2. Lack of forceful evangelization
  3. Limited understanding of how to leverage social media and analytics
  4. Deployment of social media and analytics for “buzz purposes,” rather than as something meaningful

In various organizations, the entrenched old school senior management fundamentally does not believe in “new age toys” of social media. Many of them admit that social media is good to impress the CEO and tick mark their key performance indicators, but not good enough to drive meaningful business. This reluctance results in half-hearted strategies with little focus or commitment.

These reluctant organizations, however, have a very potent argument. They believe there are limited, if any, successful adoptions of analytics solutions that have resulted in revenue enhancement. While they think that analytics may help in running operations more efficiently, reducing costs, and enhancing their brand, they consider its direct impact on revenue to be weak.

Responsibility for this misperception falls both on technology providers and the buyers of analytics solutions, more with the providers. They publicize client adoption focusing on cost savings than revenue enablement. This diminishes the real value a business can derive from analytics adoption. And there are indeed organizations actively deploying social analytics to generate insights, serve the customer, and build the next product, many of which now have a Chief Data Officer overseeing the adoption of analytics solution.

How can an enterprise become truly social? Can it align the wide range of business units – including procurement, HR, finance, sales and marketing, product development, customer support, and quality management – to become social? Can it embed the philosophy behind social initiatives into its business processes? While the challenges are significant, this is where the value from social media initiatives lies. Silo-driven deployments will only add to the fragmentation, instead of helping the business.

Is your company using an iPad to chop its vegetables? Our readers would enjoy hearing your social media experiences.

Google feels the heat – The new chapter of “frenemy” saga

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The recently held Google I/O managed to supress some of the anxiety (if not fear) the internet giant must have developed in the recent past. Its “ally” Samsung, launched a smartphone, not on Google’s Android, but on its own operating system Tizen. Samsung has deployed Tizen earlier for wearable devices, however, smartphone is the first. On the other hand Apple picked Bing as the default search engine for iOS 8.

This development in the consumer space is well matched by the trends in enterprise technology:

a)      When Dell formally announced its partnership with integrated infrastructure provider Nutanix, VMware had things to say

b)      VMware too “soft introduced” its MARVIN integrated system, which positions it directly against the partners (though of course VMware does not see it that way)

c)       The growing influence of Cisco in the server market was much appreciated by its long time partners EMC, VMware, and NetApp. However, post the Whiptail acquisition, despite vehement denials and statement of “no conflict”, VCE and the FlexPod world is feeling the shivers

d)      HP’s CEO has gone on record saying the long term partners Intel and Microsoft are now “outright competitors”

What is common across these partnerships? It is the fundamental conflict of interest (and vision) these technology players have. Each one of them, of any might, aspire to be the sole owner of the technology space it operates in (and perhaps beyond).

For example, Google, wants to own our house (acquiring Nest), our driving (launching Android Auto), and our digital interactions with the real world (Google Glass), an Apple wants to do the same for our home (via Homekit), our driving (via CarPlay), and our digital entertainment (all the iDevices). Even the enterprise technology providers are not far behind:

a)      VMware – launched its own cloud services

b)      Oracle – buying everything in the market

c)       Microsoft – making Azure proliferate across platforms, infrastructure, and applications

d)      IBM – buying everything from Fibrelink for mobility to Cloudant for big data

e)      Amazon – single minded obsession to disrupt the entire technology back-end

Given the convergence in technology space each of these “frenemy” partners will enter other’s turf and fire will fly. The battles, showdowns, and realignments, are an undesired yet unavoidable outcome of frenemy partnerships, and they won’t stop anytime soon. The challenge will be to manage the inherent conflict of interest and yet serve and shape customer demand.

In the midst of all these, buyers of these frenemy alliances need to be very cautious and keep a close track of the market. The earlier touted benefits of a system may suddenly be positioned as “useless” once the partnership change. The product roadmap, support, service levels, and vendor commitment may completely change and buyers may feel short changed.

Buyers have everything to lose as well as gain depending on how they engage with these frenemy alliances. Therefore, they need to periodically revisit technology strategy, provider portfolio, and must have a sense of the market. Technology disruptions are revamping the competitive and offerings landscape rapidly. Providers will continue to partner each other and break these partnerships as well. Buyers need to understand these dynamics more than what they did historically. Technology disruptions can destroy (or make) a business. Buyers must be alert enough to sense these changes.

To quote Andrew Grove – “Only the paranoid survive”.

Enterprise Technology Disruption: It’s not the Cloud, Stupid…

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This post was first published on Everest Group’s blog. See here.

Today’s conversations and research around technology disruption and the causes invariably focus on cloud services, and rightly so. Be it infrastructure, software, or any other facet of technology consumption or development, cloud services have had, and will continue to have, the most disruptive impact. The disruption discussion also includes the impact of mobility, next-generation analytics, and the growing importance of software to control the enterprise.

This is leaving enterprise technology providers in a state of amazement and numbness. They are investing all their energy in responding to these disruptive trends. However, there are equally important dimensions they need to understand. Some of these include:

  1. Where is the talent? How many conventional enterprise technology providers are the first choice of employees these days? They themselves believe, very few. The mindboggling (and questionable) valuation of companies such as Pinterest, Uber, and WhatsApp, and the flood of consumer technology start-ups/niche firms (reminders of 2000?), are pushing the technology talent toward these smaller companies. Job seekers now believe that all the action and fun are in consumer technology. Even within the enterprise technology segment, new candidates and existing talent are focusing on new and innovative firms (e.g., Alteryx, Coupa, Dropbox, Palantir, Tableau, Workday) or their own start-up more than on traditional vendors. Given that technology is as good as the people who innovate it, this is a serious threat for most enterprise technology providers.
  2. Where is the plan? Enterprise technology providers take pride in their exhaustive business case modelling and time to market planning. These cases normally create a multiyear plan and staggered investments across the timeline. However, given that technology disruption is reducing the cycle of innovation and time to market, these time and tested strategies are increasingly becoming irrelevant. Do these technology providers have sufficient internal strength, processes, and willingness to jettison the age-old model of investment planning and be in sync with the shortening technology cycle?
  3. Why so many competitors? The huge entry barriers incumbent technology providers created for newer players are crumbling in the face of technology disruption. Enterprise buyers, driven by internal and external factors, have become more receptive of nimbler and more innovative technology companies than in the past. Moreover, new-age technology providers now better understand the requirements of an “enterprise grade product.” More so, the enterprises’ requirements are themselves undergoing significant changes that suit these new-age technology firms, such as agility over control, and first to market rather than best to the market.
  4. Who is the competition? IBM is fighting retailer Amazon for dominance in cloud services, Oracle is fighting smaller MongoDB and Postgres for the database market, Teradata is fighting Cloudera for next generation analytics, and so on. While the technology world has been replete with similar David versus Goliath stories seemingly since time immemorial, their occurrence and impact have become more severe in the past couple of years.

The enterprise technology providers are responding by leveraging their tried and true methods of acquisition, (e.g., IBM/SoftLayer, VMware/AirWatch, Tibco/Jaspersoft,) and partnering with nimbler firms (e.g., SAP, Microsoft, and IBM partnering with Hortonworks and Cloudera for Hadoop, HP partnering with OpenStack for cloud services, and Oracle partnering with NetSuite for SaaS.)

The big challenge these enterprise technology providers now have is to strategize based on the type of competition. In earlier times, they knew their competitors and how they would react, and they were comfortable in their planning meetings. However, now the environment has changed. No one knows who and where the next competition is coming from (airline industry versus video conferencing, anyone?)

While there are likely numerous other dimensions shaping the technology market today, they are tough to foresee. This makes enterprises’ and technology providers’ task of planning for their technology roadmap almost impossible.

What is the best way to move ahead? Should enterprises and providers stop their technology planning cycles and become real time planners? Should they wait it out for the disruption smoke to clear? Should they continue with their existing strategies?

Enterprise Mobile Apps – Are We Done?

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This post was first published on Everest Group’s blog. Read it here.

The state of today’s enterprise mobile apps industry is akin to the dark side of a jungle: a dense forest and tangled vegetation, inhabited by hundreds of largely unfamiliar animals and plants that rely on its delicate ecosystem to survive, perhaps to thrive. This is creating frustration among stakeholders including the CIO, CFO, CMO, and CEO, who believe they might have over-invested in mobility initiatives.

However, this is far from the truth. Mobile apps have a long way to go in enterprise. Yet, to avoid the earlier pitfalls, enterprises and technology providers need to be fully aware of the following dangers in the mobile apps jungle:

  1. Business process transformation: Few enterprises or technology providers even consider that enforcing mobile access to an existing business process may be a poor idea. Making the end-user consume the same business process albeit through a different, perhaps “cooler,” app is not true mobility. User interest will not last if the business process is itself unsuitable for mobile. At the same time, not all business processes require this change. Enterprises must be selective in changing business processes while undertaking the mobility journey. Consultants, vendors, and others with vested interests will always extol the virtue of business process transformation for mobility, but enterprises should be very wary of this aggressive spiel.
  2. Line of business collaboration: In their desire to be the first movers, many line of business managers are creating all kinds of mobile apps with little collaboration with other business units. Given the increasing influence of non-CIO budget centers to approve technology funding, the tried and tested processes of application development are being compromised under a convenient, self-pleasing argument that mobile apps do not require a structured or “traditional” approach.Will this ad-hoc development blow up in our faces? I think it will. Can we prevent this? Unfortunately not. Business users are happy getting the needed application functionality on mobile devices, yet no one is thinking about the mobile application lifecycle. A long-term technology adoption framework is an unthinkable thought for these budget owners. They do not believe collaboration is their mandate or their responsibility. Their KPIs are linked to business outcomes, not to channelizing or seamlessly introducing mobile technology, and thus they will rarely ever have an incentive to create the needed structure.
  3. Cost of mobility: Enterprises and technology providers need to understand that while business agility, flexibility, and access is all good, the cost of these should not outweigh the rewards. Therefore, enterprise mobility should be viewed in its entirety to understand whether the incremental business has come at a greater cost of management and complexity. Yet the existing mechanisms across enterprises, where different unconnected lines of businesses are creating their noodly soups of mobile apps, does not engender great confidence that they will take a view of the broader picture any time soon.
  4. Mobility governance: It is fashionable these days to ignore any advice from someone who wants to instill structure or a governance model on enterprise mobility. Governance is perceived as “anti-growth” and “uncool.” Given this perception, few technology managers, despite their strong opinions, express any sentiments against the ad-hoc enterprise mobile strategy. This is a recipe for disaster.

So what can enterprises do to quash the mobile apps jungle’s beastly flora and fauna?

  1. Be selective about changing/transforming the underlying business process while mapping to mobile apps
  2. Create an environment that incentivizes lines of businesses to collaborate rather than compete in creating the next “cool” mobile app
  3. Adopt a lifecycle management approach to mobile apps
  4. Balance the growth objectives with the cost implications of enterprise mobility
  5. Incorporate an “eagle eye” to govern mobility projects

– See more at: http://www.everestgrp.com/2014-03-enterprise-mobile-apps-are-we-done-sherpas-in-blue-shirts-13442.html#sthash.Ph6GF4FC.dpuf

Cloud Foundry Foundation – The game changer?

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When a couple of year old open source technology with reasonable support from the major players, create a governance foundation to inculcate a disciplined culture andindex commit to its evolution, there is something serious happening. The recent announcement by the likes of SAP and Rackspace to become the platinum sponsor for Cloud Foundry (an open source PaaS offering from Pivotal, child of VMware) governance alliance Cloud Foundry Foundation, is really interesting. These players along with the other biggies such as VMware, EMC, IBM, and HP have been associated with the platform for some time, however, with a formal governance model (much like OpenStack) Cloud Foundry seems to be gaining traction.

Most of these technology providers spent the last year to incorporate Cloud Foundry and its support in their broader cloud service solutions (e.g., IBM BlueMix running on SoftLayer, VMware vCloud Hybrid, SAP HANA broker, Canonical, and even CenturyLink who bought Tier3). The key in this announcement is the support from SAP which brings the much needed enterprise credibility not to mention it’s perhaps the only “true software” company with limited interest in infrastructure.

PaaS is supposed to abstract the finer details of IaaS and offer developers/architects simpler mechanism of developing applications than worrying about underlying design and complexity of infrastructure. These platforms expose the needed programming interfaces, databases, operating systems, and middleware for developers to focus on their core task (better applications) than worrying about scalability, recovery, performance, etc. Therefore, a consistent open source platform will allow application interoperability which has been a “much talked mirage”. However, we have heard this spin before whenever an AWS, Microsoft, or Google has come up with their version of PaaS (none of them talk to each other). Will Cloud Foundry be any different?

The challenge with these offerings is that they will allow interoperability as long as the application is developed/deployed on their platform (which then can support different cloud-based infrastructure). Therefore, the assumption or the hope is that the platform will become so popular that everyone uses it and the network effect will ensure that applications can interoperate. It is much like Microsoft Windows “interoperability” that as long as your desktop was Windows most of your applications worked. Good thing was Windows was all pervasive. Can Cloud Foundry become that pervasive? I am sceptical. It will help those deployments that run on Cloud Foundry, however, what about other PaaS? Still the announcement gives Cloud Foundry the mojo to become a leading PaaS solution for developers and architects.

Also noteworthy is Rackspace joining in. This effectively draw curtains to Project Solum (Racksapce PaaS attempt) whereas Red Hat absence is obvious (given its focus on OpenShift). However, will this new alliance make Solum and OpenShift irrelevant? Most of the technology players joining the Cloud Foundry Foundation are involved, to varying extent, with Solum and OpenShift as well. Will this initiative bring them firmly in Cloud Foundry’s stable? Will they continue to hedge their risks and have multiple offerings to suit client needs? Will they invest in other PaaS as well?

These are the questions the open source community need to ask. There has been a considerable confusion regarding PaaS stance of the industry. However, Cloud Foundry seems to have become a favourite child, if not the only child.

Big Data Big Data Analytics in 2014: 5 Things That Won’t Happen

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This post first appeared at Everest Group’s blog post.

While talking about a new year’s next cool thing or development is a thoroughly enjoyable ritual, discussing what will not change provides valuable lessons for technology adoption strategy and investment planning, and highlights potential future disruptions.

So what are the five things that will remain more or less the same in 2014 for big data analytics?

  1. Hadoop will NOT REPLACE ETL: The nine-year old platform has achieved great traction, and its mindshare has significantly increased. Well-known analytics providers such as Cloudera, Hortonworks, and MapR have supported it for a couple of years, and even the big boys such as IBM and Pivotal have embraced it. However, Hadoop’s proponents are positioning it as a panacea for all the ills of big data. The antagonists are equally up to the task, denouncing it as one of the important, yet small, pieces of the puzzle. Most Hadoop proponents confuse ETL as an “activity,” rather than a “process.” The way in which ETL is performed in a Hadoop framework set-up may differ, but it does not make ETL redundant or replaceable.
  2. Analytics will still be UNDEMOCRATIC: Innovative data analysis and visualization technology players such as Tableau, QlikView, Alteryx, and Tibco (Spotfire) have gained traction as “end user” friendly products. And mega providers such as SAP have increased their efforts in this direction (e.g., rebranding SAP Visual Intelligence as SAP Lumira). However, despite significant efforts to “consumerize” big data analysis and move the power out of the ivory towers of data scientists, 2014 will witness only incremental changes in this regard. 
  3. Big Data will still be a PROJECT: Organizations always pilot a new technology before they put it into mainstream production. However, this attitude defeats the purpose of big data analytics. To gain real advantage from the deluge of data, companies must engrain a big data mindset into their DNA, rather than treating it as a silo “project.” Will 2014 see organizations jettisoning their age-old habits to wholeheartedly adopt big data analytics? Not according to my market conversations.
  4. Real talent will be TOUGH to find: Every technology transformation comes with “talent imposters,” and organizations desperate for talent will hire some of these and then repent later. Unfortunately, most of the existing data warehousing and business intelligence analysts masquerade themselves as “big data talent.” And the mushrooming of big data certifications and aggressive resume fabrication will not make organizations’ hiring task any easier in 2014.
  5. Integration will be a CHALLENGE: Technology providers such as Attunity, Dell Boomi, Talend, and Informatica have created multiple solutions to integrate disparate data sources for a consistent analysis framework. Most of these solutions work with data sources such as Amazon Redshift, IBM PureData System for Analytics (Netezza), HP Vertica, SAP HANA, and Teradata. However, organizations continue to face challenges in seamlessly integrating these, and are thus unable to extract meaningful value from their big data analytics engagements. While we’ll see major improvement in this area in 2014, a world in which different data sources are seamlessly integrated and analyzed will still be a mirage.

With cloud-based data management, modeling, and analytics disrupting the landscape, coupled with the rise of in-memory computing, the big data market will continue to surprise: we’ll see technology providers entering “unknown” domains, competing with their partners, and even cannibalizing existing offerings.

What are your takes on big data analytics in 2014 and beyond?

– See more at: http://www.everestgrp.com/2014-02-big-data-analytics-in-2014-5-things-that-wont-happen-gaining-altitude-in-the-cloud-13135.html#sthash.hvlA7gpu.dpuf

SaaS in 2014 – The 5 things that should happen

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If 2013 is any indication for the world of SaaS, 2014 should witness the following five developments

1) Blurring SaaS and on-premise: With the quintessential poster boy of cloud computing and SaaS, Salesforce.com announcing a partnership with HP where customers can now choose to have their “dedicated infrastructure” within Salesforce.com datacentre, the true “SaaS” premise is dead. However, rather than quibbling and mindless debate on further defining true “SaaS”, the SaaS vendors will realize potential of this market which requires a SaaS solution that is “dedicated”. Though Salesforce.com has always shied away from creating a true on-premise version of its SaaS offering, other vendors do offer on-premise and SaaS version. This blurring of boundaries will further continue in 2014

2) Battle of architectures: Oracle, a company that always denounced cloud computing, has suddenly found love for it and has acquired (and will continue to acquire) a lot of SaaS vendors (nothing different from its “on-premise” strategy, remember JD Edwards, PeopleSoft?). However, Oracle for long has criticized Salesforce.com’s approach of creating application-based multi-tenancy. With the introduction of Oracle 12c (c denoting cloud), Oracle’s marketing machinery is going to town explaining how their database-driven multi-tenancy is better than typical application-based architecture. 2014 should see the lines being further drawn

3) Indirect sales: Most SaaS vendors are running in losses and understand that their sales and marketing expenses (~30-40% of revenue) are exorbitant. These vendors will realize the importance of indirect sales channels such as system integrators and partners to further drive adoption of their offerings. Given the strategic partnership of Salesforce.com, Workday, and NetSuite with large system integrators such as Accenture, Wipro, Deloitte, and niche providers such as Bluewolf, 2014 should see increase in depth of these partnerships

4) Churn management: Not many industry observers and not many SaaS vendors discuss their high churn rates. Theoretically moving workloads from one SaaS provider to another is easy, but in reality this is far from the truth. Despite this “soft lock-in”, SaaS providers are witnessing high churn rate. To be fair to them some of the churn can be attributed to client’s unwillingness in adopting SaaS models once the pilot run is over. 2014 will see SaaS providers investing more time and energy in maintaining their existing customer relationships

5) Enhanced functionality: This is a multi-year multi-decade evolution for the SaaS ecosystem. In the past decade SaaS providers have included a lot of functionalities that were earlier considered to be unsuitable for this model. These vendors will continue to evolve their offerings, introduce an industry specific vertical flavour wherever possible. However, given the opportunity in the horizontal SaaS space (CRM, salesforce automation, marketing, HCM, etc.), most SaaS vendors will have lion share of these even in 2014

Intel OnCue: What’s the Cue?

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It seems Intel’s attempt to sell off its OnCue services, may finally bear some fruits. For the uninitiated, simply put, OnCue is a “content streaming” service over the internet. However, given Intel’s size, OnCue was a not really a path breaking initiative (compared to say its mobile strategy), as can be seen from the asking price of ~US$500 million. One can very well argue that when highly consumer focused companies such as Apple, Google, and Sony could not make much headway in this market, what made a company that had limited meaningful connect with the end-consumers (except the sticker Intel Inside), join the bandwagon? But that is a separate discussion altogether.

What can the technology industry and the social media giants learn from this?

a) A new CEO can disrupt product strategy: An age old adage, however, somehow Intel missed it. The world knows what Brian Krzanich the CEO appointed in May 2013, thought about OnCue (“we are not a content company”). That was perhaps the beginning of the end

b) Enterprise to end-user is not an easy transition: Technology disruptions are diluting the impact conventional business strategy, especially seen from a historical perspective, normally had. Therefore, a retailer like Amazon is battling out with a technology giant like an IBM. However, enterprise technology providers continue to struggle penetrating the end-user market, and vice versa (e.g., Apple, Sony are still “non enterprise” whereas Microsoft (except may be Xbox) is still not “end-user” centric)

c) When the core is suffering, nothing can prosper: Intel have had challenges in business growth. Its mainstay chip business has stagnated and there is limited success on the mobile front. Therefore, investing time and money in something perceived as dramatically different is tough. Though large corporations succeed by killing their own brands, they must have an operationally tuned cash cow to invest the money in newer initiatives

d) An ecosystem is crucial, however, don’t threat the major players: It’s not always that one can take on the established players and get away with it. The cable operators are always scarred of “streaming services”. Intel could not get content creators to back its idea, as these guys did not want to impact their relationships with these operators. Can’t really blame the content creators who perhaps believed that Intel is not strategically committed to “content streaming” compared to someone like a Netflix that knows nothing else or Vodafone that sees it as the next growth platform and possess the required competencies

e) Don’t underestimate privacy: Though it’s tough to put this reason as one of the major factors in OnCue debacle, Intel’s aspiration and technology of “micro managing” end-consumer drawing room moves, were not taken well. The technology was not fully developed till recently, however, the impact it could create was quite scary. Overzealous social media companies and marketers should take a note

That does not mean technology companies should not branch out. For sure they should, otherwise they can’t grow. The challenge is to keep an efficient engine running while investing in newer ideas. Moreover, a real commitment and strategic clarity is required that can put the entire organization machinery behind an idea. Half-hearted attempts that are adopted to exploit an ongoing fad, with limited strategic convergence, will die an unnatural death.

Is this “times up” for Forbes?

The news of Forbes being finally sold to “prospective buyers” has become stronger. The company always had suitors who chased it, however, it maintained its independence to a large extent.

The company for long has witnessed a declining performance. Forbes tried to put its house under order since at least 2004 when it turned down the buy offer from Conde Nast Inc. More so in 2006, the founders sold a stake for US$240 million, and brought a “non family” CEO in 2010. However, nothing seems to be working in terms of revising the company’s fortune. It can be argued that when the company didn’t sell earlier, why it should do now?

Surprisingly, Forbes is a media house that had adopted digitization as a centerpiece of its strategy unlike other peers and had a first mover advantage. It seems after the sell off of Washington post to Jeff Bezos and Boston Globe to John Henry, Forbes after all, may not come as a surprise.

The company reaped benefits during the dot com era but witnessed challenges when the bubble burst. Still, it invested in its digitization program and somehow survived. The challenges around unwillingness of readers to pay for online content or getting distracted by online advertisements, has been age old and plagues all the internet businesses.

So what has changed now? It seems the rapid pace of technology change in digital media coupled with increasing competition from social networks as the place to share news, have become overwhelming for Forbes. It is realizing that the constant innovation required in the digital world is very different than even five years ago where a successful online advertisement platform sailed the company through.

So, will Forbes go the same way as some of its peers such as Newsweek and Businessweek? Only the time will tell.