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.
Trying to avoid the obvious and the already underway, here are my predictions for 2010.
1. Cloud security standards emerge. By the end of 2010, we’ll see a framework emerge for establishing a well defined set of technology, practices, and processes, organized into different levels of trust. Ultimately, adherence to these specifications will need be certified by third parties. The effort won’t be complete, but it will be underway. Look to the government as key industry (other than the vendors) driving this effort.
COROLLARY: The use of cloud will take off as adopting organizations by and large overcome their security concerns – or at least, understand them at a specific enough level to seek out providers that satisfy these concerns.
2. Federation will start to take off by the end of 2010. Use of federation will be fueled by SaaS and cloud computing and the need for single sign-on to bridge identity from the enterprise to those external environments. Where standards reign over kludges, SAML will be the leading mechanism. OpenID will continue to be just a lab toy for the "Identerati".
3. Managed Security Services expands far beyond “Managed”. Organizations are not only turning to managed security services, they are seeking more from their providers than merely assuming operational functions. Increasingly, they seek partners to help them with security strategy, benchmarking, making the business case, and integration. MSSPs that are in fact multifaceted solution providers will start to establish market dominance. Big winners will be IBM, VZB, Wipro, among others.
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.
Take a look at Forrester’s recent Enterprise IT Services Survey and you will find a data point that highlights an interesting challenge in the IT services marketplace. When we asked North American and European IT services clients about their biggest challenges with existing IT services and outsourcing relationships, 52% said that “cost savings are lower than expected and 40% said “inconsistent or poor quality service”. No real surprises here: given the large number of companies that partner with service providers in an explicit effort to lower costs, many IT professionals simply underestimate the time and resources it takes to define and manage these relationships.
But look at the #3 and #4 responses, and the data gets more interesting. 33% of respondents said that their biggest challenges were “lack of innovation and or/continuous service-level improvements” and 35% cited “inability of vendor/contract to respond rapidly to changing business needs”. Don’t the first two responses, in some ways, conflict with the latter two?
These data point to a complaint Forrester hears all the time from professionals within the technology industry: they know that their clients want a proactive business partner – one who can help the client drive innovation and business results – but they don’t know how to charge for innovation in a way that clients will be willing to pay for it. Clients say they want greater level of business innovation from their IT service providers, but prioritize cost-reductions – which are more easily measured and which justify the investment in the IT services relationship.
We all know that end user organizations have security concerns about cloud computing. But let’s put some numbers to that: according to our latest Enterprise And SMB Hardware Survey, North America And Europe, Q3 2009, fully half of organizations (49% of enterprises and 51% of SMBs) cited security and privacy concerns as their top reason for not adopting cloud computing. This means security is far more than just a concern; it’s a major inhibitor to growth.
Many of you vendors have incorporated cloud computing into your strategy, or are preparing to. In order to gauge how security factors into such plans across the tech industry, we’ve set up a poll on the Vendor Strategy home page within Forrester.com for vendors to take.
This was the shareholder lawsuit, not the consumer/victim lawsuit, so different issues apply. But it's still interesting. Somewhere down the road, such a case will win…likely because of a smoking gun email by IT security staff. That calls for greater communication and accountability around security, which smells like GRC to me.
Ask any business professional whether, as they look to 2010, they care more about cutting internal costs or whether they care more about driving new business-focused innovations, and you’re likely to get the response “yes…to both”. In the wake of the 2009 recession, companies are struggling with these sometimes conflicting objectives – on one hand they know that cost cutting and operating efficiently is a mandate. On the other, they must develop new technology –enabled product, service, and business model innovations or they risk falling behind.
For vendors in the B2B technology marketplace, this means balancing the need to communicate the cost-effectiveness of your product or service with messages that stress the business value you provide. I believe that far too many vendors think that only the lowest-cost provider can succeed right now, when proving strategic business value is still a critical priority for all professionals - particularly IT professionals.
For a company that gets it, look to GlobalLogic, the offshore product development firm. Their Vice President Milind Patwardhan recently told me “cutting costs for clients is the ‘table stakes’ right now. The best technology companies focus on reducing costs, but also seek to partner with clients to enable business results.” While many vendors talk this talk, one of their client references confirmed the value: He told me that GlobalLogic worked with business executives on strategic planning, was willing to take on risks in order to strengthen the relationship, and proactively looked for ways to create innovation.
Yesterday MTN - the African mobile operator - completed the purchase of 20% of Belgacom International Carrier Services (BICS) for € 74 million. BICS is the telecoms wholesale joint venture (jv) owned by Belgacom and Swisscom the incumbent operators in Belgium and Switzerland respectively. BICS future revenues will be reported by Belgacom (the majority shareholder with 57.6%) unlike the past where the partners had allocated proportionately.
This is ground breaking on three fronts. Firstly,an African telco buying into European incumbents is unheard of. Investment is usually in the opposite direction - Europe to Africa (e.g. France Telecom, Vodafone). Secondly, a wholesale operator with a three-way ownership is unique - the BICS jv was novel.. This model could realize the true value of the the wholesale function in the future. Thirdly, this makes the new version of BICS entity the leading wholesale operator in Africa.
Last month we published a paper titled The Changing Face of Telecoms Wholesale where we said (amongst other things) that wholesale operators are changing from national to trans regional and global entities, from standalone to collaborative partnership models, and adopting new business models out of commercial necessity. This deal ticks all three of these boxes. In a blog in September we also referred to the new "Scramble for Africa", so BICS including MTN is well placed in this race too. In short, we told you so.
This deal is a sign of the changing times we live in, and quite possibly a signpost of things to come. I am happy to discuss as ever.
We announced today that Forrester is acquiring a business some of you already know called Strategic Oxygen. From where I sit, this deal is a great fit for both organizations. For those of you who don't know the Strategic Oxygen offering, it's a data-driven tool that gives marketers rich, detailed insights to inform their marketing mix and spending decisions across markets and media. Given the shift to social, the return to tech spending growth, and the explosion of channels available to marketers, this is the kind of data tech marketers can use to make more confident decisions about how to maximize the return on their marketing spending. I am interested in any comments or questions the Forrester and Strategic Oxygen deal bring to mind for you, so feel free to post a comment and I will respond.