Telcos Badly Need Shock Therapy -- But Politicians And Regulators Are Unlikely To Support This Treatment

Dan Bieler

The other day, I met with the strategy director of a European telco. Let’s call him Art. We shared an informal discussion about the future of telcos. Personally, I am fairly skeptical about the prospects of telcos to recover ground – in particular in Europe.

Consumers are more concerned about the apps they use and the devices that they have than what connectivity they use, as I outline in the report The Future Of Over-The-Top Services. Forrester’s Customer Experience Index, which measures consumer perceptions of telco services, shows telcos near the bottom of all sector readings.

On the business side, data from Forrester’s Business Technographics® Global Networks And Telecommunications Survey, 2014 shows that business users trust systems integrators and independent solution specialists more than telcos with almost all voice and data service, because they feel that telcos don’t understand their specific business requirements as well.

Add an unfavorable regulatory environment — which, under the umbrella of the net neutrality debate, is about to close the door on commercial relationships regarding quality connectivity between content and network providers — and it becomes difficult to be wildly optimistic about the future of telcos. Yet, this is not where our discussion ended. Art pointed to three major issues where telcos will need shock therapy:

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European Tech Market Showing Signs Of Life, But Not Yet A Boom

Andrew Bartels
Forrester has just published its annual European Tech Market Outlook (see "At Last, A Tech Market Recovery In Europe"), and we are projecting modest growth of 2.3% in euros in 2014 for European business and government purchases of technology goods and services, with an acceleration to 4.9% in 2015.  There are some bright spots in the European tech market:

  • Spending on technology that supports customer facing processes (e.g,, customer relationship management, marketing automation, mobile applications, eCommerce solutions, Web content management, etc.) will rise by over 10% as firms put priorities on technologies that help them directly win, serve, and retain more empowered customers;
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The Data Digest: Introducing Forrester’s Consumer Healthcare Segmentation

Gina Fleming

The age of the customer coupled with the onset of the Patient Protection and Affordable Care Act (a.k.a. "Obamacare") means that many new customers will enter the US health insurance market. One outcome of the legislation is an opportunity for health insurance marketers to acquire new customers and engage existing customers — and Forrester wants to help them seize this moment. As such, we have created a consumer healthcare segmentation to identify unique groups of US consumers as well as their healthcare needs and attitudes to help health insurance marketers target new customers, engage existing customers, and innovate exciting healthcare tools and programs.

Our report, “Introducing Forrester’s Consumer Healthcare Segmentation,” explains each segment and how to attract or engage them. The segmentation includes both insured and uninsured consumers, representing the entire US online adult population. The graphic below shows each of the segments and their relative size.

Some highlights from the report, which is based on a survey of more than 4,500 US online consumers:

  • Fitness Trackers are young and love to use wearable devices; in fact, everyone in this segment uses one. The majority agree that that their health and wellness are priorities for them and they try to eat a healthy diet, but close to half believe that they are so healthy that they don’t need health insurance.
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India’s 2014-2015 Budget: A Gold Rush For Tech Vendors

Manish Bahl

The new Indian government announced its maiden 2014-2015 budget yesterday. Forrester views the latest budget as progressive, pragmatic, and a step toward building a “new” India. We expect the aggressive push on infrastructure and manufacturing as well as the focus on reforms to help lift India out of its economic doldrums. Here, in no particular order, are Forrester’s top five takeaways from the budget from an ICT spending perspective:

  • A thrust toward clean energy will drive technology investments. The Indian government realizes that it will be difficult for the energy sector to meet rising demand without new power generation capacity. We expect the increased focus on clean energy to drive demand for smart grid technologies and industry specific solutions. Clean generation companies are also likely to look for innovative business models from their service providers.
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How To Develop Effective Mobile Marketing Strategies In China

Xiaofeng Wang

Our Chinese Mobile Consumers Are An Attractive But Unique Audience report showed how marketers in China are facing the most promising — yet most complex — mobile market in the world. To help marketers overcome mobile challenges in China, we’ve recently published a follow-up report, Drive Effective Mobile Marketing In China.

Mobile is changing the daily life of Chinese consumers; the phone-addicted population (ditouzu) is growing fast. With high adoption and usage of mobile devices, consumers in China are experiencing the mobile mind shift: the expectation that they can get what they want in their immediate context and moments of need. However, marketers in China are not keeping up with consumers. Why? They aren’t thinking about mobile strategically:

  • They hold false assumptions on how to reach Chinese mobile consumers. Most marketers in China still think in a traditional way: They assume that consumers in tier one cities are the most active mobile Internet users; that Chinese mobile users can actually use the mobile Internet on the go; and that a city-tiered approach in mobile marketing will be successful.
  • Their mobile marketing strategies are still experimental. Although many marketers in China have tested mobile, only few have incorporated it as a consistent marketing channel. Marketers only spend a very small portion of their ad budgets on mobile.
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Upcoming Research -- Brief: US Department Of Homeland Security (DHS) Provides Funding For Cybersecurity Innovation

Edward Ferrara

The United States Department of Homeland Security (DHS) plans to sponsor important research in cybersecurity over the next three to five years through the Broad Agency Announcement (BAA) process.  The US Federal government’s participation in cybersecurity is one of false starts. Members of each of the branches of government have made statements on the need for improved cybersecurity but very little has been done, at least in any public sense, to help the private sector deal with an onslaught of cyberattacks. At the same time, the National Security Agency (NSA) has been actively spying on private sector companies and their customers. This has sent mixed messages.

Encouragingly, the DHS is now making money available to fund research in cybersecurity with the goal of solving some of the toughest cybersecurity issues. The amount of money is small compared to the enormity of the cybersecurity problem, but it is a step in the right direction. This report will focus on what the money funds and what it means to commercial enterprises and their customers. Look for this report to publish in early August.

Gateways Will Accelerate Data Migration To The Cloud

Henry Baltazar
The last few days have been eventful in the cloud gateway space and should provide I&O organizations more incentive to start evaluating gateways.  Yesterday, EMC announced its acquisition of cloud gateway startup TwinStrata which will allow EMC customers to move on-premise data from EMC arrays to public cloud storage providers.  Today, Panzura launched a free cloud gateway and their partner Google is adding 2TB of free cloud storage for a year to entice companies to kick the tires on a gateway.  Innovation and investment in this area does not appear to be slowing down.  CTERA locked in an additional $25 million in VC funding last week to accelerate the sales and marketing efforts to support its cloud gateway and file sync & share products.
 
Though the cloud gateway market has grown slowly so far, this technology category is about to become mainstream.  Cloud Gateways are disruptive since they can facilitate data migration from on-premises to a public cloud storage service to create a true hybrid cloud storage environment.  Basically, a cloud gateway is a virtual or physical storage appliance which looks like a NAS or block storage device to users and applications on-premises, but can write data back to a public cloud storage service using the native APIs of that cloud.  
 
A number of use cases have emerged for cloud gateways including:
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Business and network strategies will become more integrated as the network becomes the nervous system of the digital business

Dan Bieler

The enterprise network is the ugly duckling of enterprise technology landscape, looked at disparagingly by CIOs and often ignored by the business. The enterprise network is much less exciting than all the fancy projects like cloud, mobility, and big data.

Yet the enterprise network represents the vital underpinning for all these projects and increasingly evolves into a business-critical asset for companies looking to succeed in the age of the customer. It becomes the nervous system of the digital business. It facilitates deeper customer engagement by connecting manufacturers, sellers, and buyers of products in new ways, and it helps drive more operational efficiencies as it supports closer collaboration and connects previously disjointed assets. For most business leaders, the network infrastructure isn't much more than a utility, such as electricity or plumbing, while most CIOs don't know how to monetize it. This is a business challenge for the connected business as:

  • The enterprise network enables business success in the age of the customer. Customer engagement, internal collaboration, and the emergence of digital products and services all rely on a quality network infrastructure. Moreover, network data and business intelligence turn the network into an asset for monetization. As a result, the enterprise network no longer functions as a commodity but becomes a key function for success in the age of the customer.
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Empower Your Digital Business with Forrester’s Summits for Asia Pacific CIOs!

Dane Anderson

It’s hard to believe almost a year has passed since our last Summits for CIOs in Asia Pacific. Our team is ramping up preparations to this year’s CIO Summit series and I’m looking forward to meet you at the events which will kick off in Sydney on August 14, Singapore on August 19 and Mumbai on August 21. Themed “Beyond IT: Empower Digital Business in the Age of the Customer”, Forrester’s 2014 Summits will focus on the significant shift we’ve seen in CIO’s traditional focus from the design and deployment of internal systems focused on process control to digital products and services for their customers.

Of particular importance on the digital journey are three domains: customer experience, the mobile mind shift and the transformation of big data into actionable business insights. Each of these topics will feature prominently at the Summits with select analysts flown in to delve deeper into how CIOs can overcome some of these challenges through Forrester guidance.

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Case Study: Improving Social Media Measurement In China

Xiaofeng Wang

Ever since we published the Social Media Measurement In China report (and accompanying blog post) last year, marketers in China have been constantly asking us if we have any case studies. This year, we interviewed Nestlé China, one of the few marketers in China that has started to measure the link between social media metrics and business outcomes rather than basic volume and engagement metrics. The result: our new Case Study: Nestlé China Raises The Social Media Measurement Bar For Its Ice Cream Brands report.

Nestlé China's ice cream business unit has two major brands: BenNaNa and Five Rams. BenNaNa is an unusual ice cream stick with a peelable jelly shell that shapes the ice cream, which is eaten just like a real banana. Because of its playfulness, BenNaNa is the No. 1 kids’ brand in China and is also popular among young consumers. Five Rams, a local brand that has been based in Guangzhou for more than 50 years, was licensed by Nestlé in the 1990s. As a regional brand, Five Rams is the category leader in Guangdong province.

Nestlé started using social media in 2012. For the first two years, the company confined its social marketing efforts mostly to Sina Weibo, as it had tested other platforms but did not find any that generated good performance. Starting this year, the Nestlé marketing team added WeChat to its social spectrum and gradually shifted its efforts to this rapidly growing mobile social platform.

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