Cloud computing, on-demand solutions, subscription fees… software licensing is undergoing significant changes. Enforced by the current economic crises with tight IT budgets, companies don’t have the money to pay upfront licenses and are reluctant to take financial risks over many years when purchasing software. A key factor of the current growth of cloud computing is its financial benefits: no capital expenditures, no upfront financial risk, no depreciation and nothing on the balance sheet! But pay-by-use licensing models are not necessarily limited to cloud deployment models and can be applied to more traditional implementations as well.
Traditional software licensing with upfront payments has served vendors well over the last 40 years. However, over time vendors had to face significant disadvantages as well. The pressure to successfully close quarter by quarter and the fiscal year has led to a common practice by customers to push decisions until year end for a special deal. Discounts up to 80% became not uncommon in the software business. Another problem is the revenue volatility in difficult economic times. In 2009 many software companies had to face a decline in new license revenues of 10 to 25%. Without the constant stream of maintenance revenues many software companies would be facing severe financial problems today.
When HP acquired EDS in May 2008 it was clear that in the short term the company would have to manage significant integration challenges before the medium and long term benefits of the acquisition would come to bear. Now, 18 months later, HP claims that the acquisition has been completed and so it is time to take a closer look at what has been achieved so far.
This caught my eye recently in a CIO-focused publication. Titled “Ten Ways To Re-energize Your IT Workforce”, it is advice from a workforce motivation expert: “Jon Gordon, a consultant for the NFL and numerous Fortune 500 enterprises, and the author of ‘The Shark and the Goldfish: Positive Ways to Thrive During Waves of Change.’ He offers ten recommendations for reenergizing and engaging employees in the face of economic turmoil.”
Even with year 2009's challenging economic environment, learning has not taken the drastic hit some pundits feared. In fact, in the past year I have heard more executives talk about the importance of keeping employees well-skilled and knowledgeable than ever before. Knowledgeable employees equate to greater business success. I've also seen CLOs and VPs for HR and Learning focus on making sure that learning experiences are in line with company's short and long term goals.
That call may surprise you. You might have put storage or Gigabit ethernet or the Internet itself at the top of the list. But when I think about what's different in the life of your average information worker as the decade comes to a close, it's the instant-on access to just about everything that the adoption of consumer broadband has fueled.
From our Consumer Technographics(r) survey of over 50,000 consumers every year for the last 12 years, between 2000 and 2009, consumer broadband soared from 2% to 63% of US households. For context, home PC adoption grew from 51% to 77%.
But why is consumer broadband the workforce technology of the decade? Three main reasons:
1. Telecommuting has become a way of life for xx million information workers. We have been watching -- and forecasting -- the growth of telecommuting. The impact is immediate and obvious: more hours to work; more location flexibility in hiring and retaining; and more work-life control. Telecommuting in the US is dependent on cheap broadband to the home. Telecommuters will rise to include 43% of the US information workforce by 2016.
2. Broadband-enabled markets have triggered massive IT innovation. Google; Facebook, Twitter, Wikipedia, and LinkedIn; WebEx, ZoHo, and Smartsheets.com; Amazon EC2, Google App Engine; and Windows Azure; open source and Web 2.0. All of these and thousands of other technologies and companies are built on the back of broadband to the home. The network innovation over the last 10 years makes the Internet 1.0 era look like a pre-season warmup game.
In hindsight, 2009 marked a turning point for the market research industry, when technology and innovation became part of the ongoing discussion on how to move the industry forward while balancing the realities of a business world in a recession.
2010 is going to be an interesting year with economic concerns impacting the security business. I suspect that businesses will need to regroup and think about their security spend again next year. Companies will probably remain gun-shy and hold budgets close to their vests. This could set up a shootout between increasing security threats and the desire to continue to control costs. Who will win? Your thoughts?
Happy Holidays y'all and here's wishing you a Secure New Year!
Canadians with online access are active users of social technologies like blogs, forums, social networks, and user-generated content: According to our North American Technographics® Q3 2009 survey, 79% of online Canadians engage with social media at least once each month.
A recent post on BusinessWeek explored an “emerging” concept in Western-style innovation management -- one that has deep roots in India - called Jugaad. The article mentions a meeting led by my former colleague (and still friend) Navi Radjou, and notes that jugaad is “an improvisational style of innovation that’s driven by scarce resources and attention to a customer’s immediate needs.”
Explore the term “jugaad” and you will find a range of enthusiasts and detractors. Many - particularly those more intimately familiar with the terminology -- argue that jugaad is not, by its very definition, a robust innovation solution to complex business problems. Rather, its just another way of saying “get it done whatever it takes” – meaning that innovation is done in an inexpensive manner, “on the fly”. In this context, it seems like a tough way for a multi-billion dollar company to build an innovation practice.
I'll stick to my comments and continue to believe that regulation had a stronger impact on the mobile sector than the economic crisis. The recent announcement that the French telecom regulation authority eventually (after years after back and forth discussions and lobbying) granted the 4th 3G license to Free/Iliad (one of the largest ISPs) is a good example of that. The new entrant will not launch before early 2012 but aims at captuting 10% market share by introducing cheaper tariffs (a competitive 3 hour package for less than 20€), bundling Internet access and offering interesting conditions to MVNOs. Evolution of termination rates or roaming tariffs as well as other regulations on spectrum have a much greater impact on operators' bottom line than reduced spending from consumers.