According to IBM’s CEO Sam Palmisano, “vision without execution is delusion.” That saying stuck in the minds of attendees at IBM’s SmarterCities event in Shanghai last week making it the de facto theme of the event. According to Palmisano, it’s time to move beyond ideas and put those ideas into practice.
I would argue, however, that when it comes to making “cities” smarter it’s not a question of “vision without execution.” IBM and others are executing, particularly in China and other emerging markets. IBM’s growth markets revenue was up 19% in 2009, up from 18% growth in 2008. China alone grew 14.7 % in 2010. In many markets, stimulus funding has spurred spending on “smart” initiatives.
Rather, it is still more a question of vision. The mantra of smarter cities resonates with many — it’s like motherhood and apple pie, or the equivalents across the globe (rice pudding? crème brûlée?). You can’t argue against it. But, can you show me a smarter city? “Smarter cities” is a catch-all phrase for any initiative undertaken by a government or even nongovernmental entity — the transport ministry or tax agency, the postal service, a hospital or university, or even an association of exporters. Don’t get me wrong; I love the idea. I’ve just been wrestling with a definition for some time now. Everything can be a “city” and within IBM’s sights.
Unfortunately, this week’s IT Forum is at the same time as the World Innovation Forum, which many of my professional colleagues are attending. But Forrester’s IT Forums still give me a much great opportunity to interact with people who are working on innovation initiatives, so I'm not complaining. I’m looking forward to reporting on my experience in Lisbon next week.
Here are a few of my observations from the Vegas event:
I know many of you already know my position on this, but I thought I'd get it out in the open and challenge all of you with a controversial discussion. In my definition – and believe it, I am fighting and defending it every day – analytics has always been, and will always be, part of BI. What many of the vendors and analysts describe as "the new age of analytics" I built at Citibank in the early '80s and then built in about 50+ enterprises in the '90s at PwC. I think the effort of trying to differentiate analytics from BI is a vendor-invented hype, since many BI vendors are running out of ways to differentiate themselves (and incorrectly so: see the next paragraph, and many other next-gen BI trends). I also disagree with the “old BI = bad”, “new analytics = good” premise that I see in many analysts' papers. You and I know that you can’t build analytics (OLAP, advanced analytics, etc.) without basic ETL, DW, MDM, etc. So nothing’s really changed as far as I am concerned: we are still fighting the same battles – silos, data quality, etc.
At the beginning of this year, we stated that application stores would continue to flourish, but none would replicate Apple's success in 2010. So far, it has been quite easy not to be proven wrong on this one. Android Market and, to a lesser extent, RIM's BlackBerry App World are growing fast in the US, while Nokia's OVI is performing quite well in some regions. Windows Marketplace is likely to benefit from end-of-year Windows 7 sales, while Samsung Apps are not yet really marketed, not to mention LG's efforts. The Wholesale Applications Community (the operators' alliance) has not yet launched. Global operators have yet to significantly launch their own multiplatform stores. Both approaches (the vertically integrated from handset manufacturers/OS players and the horizontal layer added by operators) are likely to continue to expand this year, making it even more complex for brands and companies launching their own applications. Many of them are starting to realize that there is a world outside of Apple's iPhone and that their app will be lost in a back catalog of more than 200,000 apps if they don't market it. They are starting to wonder how to break the Apple App Store ranking algorithm, how much to invest in the life cycle of their application, and which stores they should target to distribute their products and services. I see a couple of key issues that need to be tackled to seriously address this market opportunity:
On Monday, June 7th, AT&T will introduce two new smartphone data plans, which will replace the current $30/month unlimited data plan offer and will make smartphone data packages affordable to more customers. The DataPlus package does, indeed, lower the entry-level price for smartphone users. The DataPlus package costs $15 per month for 200 megabytes of data, with the option of purchasing an additional 200 megabytes of data for $15. Customers who are heavy data users can purchase the DataPro plan, which is a 2-gigabyte package for $25 per month. If customers go over this limit, an additional gigabyte of data costs $10. DataPro customers can also use their mobile devices as wireless modems to connect other devices (e.g., laptops) to the network for an additional $20 per month.
The net-net of these new packages is that customers using the DataPlus plan get a voice and data plan for $55 per month and customers on the DataPro plan pay $65 per month, compared with the current price of $70 per month. These price cuts will benefit the increasing number of employees who are responsible for paying for their own voice and data plans. Results from Forrester’s 2010 Enterprise And SMB Networks And Telecommunications Survey show that approximately 30% of over 1,000 surveyed enterprises have already cut the number of employees who qualify for corporate-liable mobile data and voice services, and 17% plan to cut the number of employees on corporate-liable voice and data services this year.
Consider the following scenario. You have realized that your firm can benefit from having a documented business architecture – perhaps based on business capabilities – not for any one issue or need but rather as a general framework for planning, strategic execution and coordination by different parts of business and IT. You are in a meeting with your CIO, making the case, when the CIO says, “In a couple of minutes our CEO is dropping by. You can make your case to him. If he’s interested, we’ll go ahead.”
OK – that scenario may seem like kind of a stretch – after all, how often does the CEO drop in on the CIO and want to listen to a pitch on business architecture? Well, something like this happened to me recently, and I’d like your thoughts on how to make the case. I was visiting a client – the head of EA at this client (a medium-size financial services firm) – when he said, “I’ve started to lobby with our business management that we need a business capability map. The CEO is dropping by and would like to hear the reasons from you. I think you’ll have about 15 minutes.”
Talk about a challenge! When CEO arrived, after initial introductions, this is the case I made:
Last week I recorded a podcast on what has recently become a very hot IT research topic at Forrester right now — Microsoft licensing. June 2010 signifies an extremely active and very hectic month for a large number of businesses because it's not only the last month of Microsoft’s fiscal year but also the last month for a large portion of Microsoft's three-year contracts.
The reason for this pileup of Microsoft licensing activity partially stems back to 2000: Microsoft refreshed their volume licensing program and introduced Software Assurance. Microsoft Enterprise Agreements are typically for three years. Facing the initial June deadline in 2001, many businesses switched over to this offering and since then, every three years their licensing agreements need to be reassessed and renegotiated. Now fast forward nine years to June 2010 and factor in several significant new products releases — and here we are again witnessing what is truly the perfect storm of activity, discussion, and negotiation for businesses and their Microsoft licensing, decision-making personnel.
As you might expect, we receive an ever-increasing number of inquiries related to this subject as we continue to get closer to the aforementioned June 30th deadline. Clients bring a range of questions like whether or not they should renew their enterprise agreement (EA), if Software Assurance holds enough value to justify the commitment, or what IT upgrades and migrations impact their decisions. My first response to these questions is. . . there is no easy answer. Each company has their own set of requirements, cost limitations, and future strategic plans that affect which decision is right for them.
What matters to financial buyers depends on who they are and what they are buying. Our Technographics data shows that European customers with different profiles — for example, different sociodemographic or attitudinal profiles — care about different things when selecting financial services firms.
The report 'Why Europeans Choose Financial Firms' also shows that the influence of word of mouth on a customer's decision to select a financial services firm declines sharply with age. A striking 37% of customers ages 16 to 24 and 18% of customers ages 25 to 34 were influenced by their friends' or family's recommendations. On the other hand, nearly half of European financial buyers ages 65 or older chose a company for their most recent financial purchase partly because they already had a product or account there.
The choice between different formats of cloud computing (IaaS, SaaS mostly) and their comparison to internal IT business service deployment must be based on objective criteria. But this is mostly uncharted territory in IT. Many organizations have difficulties implementing a realistic chargeback solution, and the real cost of business services is often an elusive target. We all agree that IT needs a better form of financial management, even though 80% of organizations will consider it primarily as a means for understanding where to cut costs rather than a strategy to drive a better IT organization.
Financial management will help IT understand better its cost structure in all dimensions, but this is not enough to make an informed choice between a business service internal or external deployment. I think that the problem of which deployment model to choose from requires a new methodology that will get data from financial management. As I often do, I turned to manufacturing to see how they deal with this type of analysis and cost optimization. The starting point is of course an architectural model of the “product”, and this effectively shows how valuable these models are in IT. The two types of analysis, FAST (Function Analysis System Technique) and QFD (Quality Function Deployment), combine into a “Value Analysis Matrix” that lists the customer requirements against the way these requirements are answered by the “product” (or business service) components. Each of these components has a weight (derived from its correlation with the customer requirements) and a cost associated to it. Analyzing several models (for example a SaaS model against an internal deployment) would lead to not only an informed decision but also would open the door to an optimization of the service cost.
I think that such a methodology would complement a financial management product and help IT become more efficient.