How Complexity Spilled The Oil

The Gulf oil spill of April 2010 was an unprecedented disaster. The National Oil Spill Commission’s report summary shows that this could have been prevented with the use of better technology. For example, while the Commission agrees that the monitoring systems used on the platform provided the right data, it points out that the solution used relied on engineers to make sense of that data and correlate the right elements to detect anomalies. “More sophisticated, automated alarms and algorithms” could have been used to create meaningful alerts and maybe prevent the explosion. The Commission’s report shows that the reporting systems used have not kept pace with the increased complexity of drilling platforms. Another conclusion is even more disturbing, as it points out that these deficiencies are not uncommon and that other drilling platforms in the Gulf of Mexico face similar challenges.

If we substitute “drilling platform” with “data center,” this sound awfully familiar. How many IT organizations are relying on relatively simple data collection coming from point monitoring such as network, server, or application while trying to manage the performance and availability of increasingly complex applications? IT operations engineers sift through mountains of data from different sources trying to make sense of what is happening and usually fall short of finding meaningful alerts. The consequences may not be as dire as the Gulf oil spill, but they can still translate into lost productivity and revenue.

The fact that many IT operations have not (yet) faced a meltdown is not a valid counterargument: There is, for example, a good reason to purchase hurricane insurance when one lives in Florida, even though destructive storms are not that common. Like the weather, there are so many variables at play in today’s business services that mere humans can’t be expected to make sense of it.

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BPM Research Series

For most of the past year or so, I have been working on a set of research docs in parallel to my inquiry and consulting work at Forrester. And the results are finally becoming available on the Forrester RoleView platform. With seven docs out in the past few weeks, this set should provide a comprehensive guide to Forrester clients setting up and running BPM programs.

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The Combination Of iGate And Patni Will Be Synergistic -- How Will It Impact Their Clients?

"iGATE Corporation (NASDAQ: IGTE), the first Business Outcomes based integrated technology and operations company, today announced that its subsidiaries have executed definitive agreements to acquire a majority stake in Patni Computer Systems Ltd. (NSE: PATNI, NYSE: PTI), the Mumbai-based IT services and BPO company. The transaction is valued at approximately $1.22 billion, including the mandatory open offer to the public shareholders of Patni. The transaction is expected to be completed in the first half of 2011. iGATE expects the transaction to be accretive by 2012 on a cash earnings per share basis. "

-- Excerpt from iGate press release, January 10, 2011

Now that the acquisition has been announced, it is expected that current Patni customers will be cautious and concerned, but it would be unwise to assume that they are ready to switch vendors. The reality is, application development and maintenance (ADM) transitions are not easy, they have the potential to cause a lot of disruption, and are more likely to impact the client’s end customers. In addition, client current priorities are focused on new technologies and keeping pace with their industries.  If they are happy with their existing relationship they won’t divert the attention needed to switch out the vendor due to an acquisition.  Besides, acquisitions in the tech space are more common these days. Our research shows that Sourcing & Vendor Management Professionals are better prepared to articulate their concerns and expectations to the acquiring firms.  They are less likely to switch vendors today, due to an acquisition, than they were 5-7 years ago. 

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Understand The Customer Service Specialty Solutions Vendor Landscape To Plug Capabilities Gaps

In 2011, organizations will ramp up their multichannel customer service initiatives. This will be harder to do than in the past, as customers now expect more: They are increasingly online, want self-service options, and demand responses in real time, often through their mobile devices. Social media, such as Twitter and Facebook, has also grown to be an important new channel for interacting with customers and engaging in innovative ways.

 Navigating the complex customer service solution ecosystem is difficult, as there are many good solutions available. One category of solutions to consider is the customer service capabilities provided by leading CRM suite software solutions providers. These vendors provide core customer service transactional and data management capabilities. There are also many specialty solution providers that provide best-of-breed capabilities that are good options to fill specific gaps in your customer service technology infrastructure.

To help you sort though the choices, I recently investigated 24 specialty customer service solution providers that offer solutions for cross-channel interaction management, knowledge management for customer service, business process management for customer service, customer communities, and customer feedback management, both traditional and via social listening platforms. In summary, I found that:

  • eGain, Genesys, Moxie, Parature, and RightNow offer mature and comprehensive solutions for multichannel management. LivePerson and FrontRange also provide multichannel communications capabilities, if your needs match their offering.
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Tech Market Will See Similar Growth In 2011 As In 2010, But With Important Twists

At first glance, our forecast that the global IT market will expand by 7.1% in 2011 is right in line with the 7.2% growth we are estimating occurred in 2010 (see our January  11, 2011, "2010-2012 Global Tech Industry Outlook" report).  In fact, there are many points of similarity between the two years besides the overall growth rates, such as comparable growth rates in communications equipment purchases both years, or the US and Asia Pacific growing at similar rates of growth in 2010 and 2011.

However, there are three important points of difference that I think make our projected growth for 2011 more impressive than the almost identical rate of growth that occurred last year:

  1. Minimal rebound effects in 2011.  2010 was the year when IT capital investment bounced back from recession-depressed levels in 2009, especially in computer equipment and to a lesser degree in software.  Companies had been cutting back on purchases of servers, personal computers, storage devices, and peripherals like printers and monitors since 2007.  That meant a build-up of a lot of deferred demand for replacement equipment, which was unleashed in 2010, helping to drive 11% growth in this category last year.  Licensed software also felt some of these effects, with freezes on capital investment pushing purchases from 2009 into 2010.  Thus, in both cases, 2010 growth rates were measured off of low bases in 2009.  In contrast, the 2011 growth will reflect new demand for IT goods and services, not pent-up demand for prior years.  And the 2011 growth rates will be measured off a stronger base that reflects that fact.
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To BW Or Not To BW - 2011 Update

I get lots of questions from clients on whether they should consider (or continue to rely on) SAP BW for their data warehousing (DW) and business intelligence (BI) platform, tools, and applications. It’s a multidimensional (forgive the pun) decision. Jim Kobielus and I authored our original point of view on the subject soon after the SAP/BusinessObjects merger, so this is an updated view. In addition to what I’ll describe here, please also refer to all of the DW research by my colleague, Jim Kobielus.

First of all, split the evaluation and the decision into two parts: front end (BI) and back end (DW).

  • Back end – DW
    • Strengths:
      • Best for SAP-centric environments.
      • Agile tool that lets you control multiple layers (typically handled by different tools) such as ETL, DDL, metadata, SQL/MDX from a single administrative interface.
      • Unique BW accelerator appliance (via in-memory indexes).
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Which Vendors Have Gotten Smart (Computing, That Is)?

Thirteen months ago, I introduced the concept of “Smart Computing,” which I predicted would drive the next big wave of technology innovation and growth in the 2008 to 2016 period (see December 4, 2009, "Smart Computing Drives The New Era of IT Growth"). Smart Computing involves the addition of new awareness technologies like RFID, sensors, and image recognition and new real-time analysis technologies, along with adoption of foundation technologies like service-oriented architectures, unified communications, virtualization, and cloud computing. Since then, I have been tracking the tech market for evidence that this is in fact happening.  

One key indicator I am watching is how many vendors have started to incorporate “Smart Computing” terms and language into their marketing, sales, and brand material.  This matters, because tech vendors will be the ones that translate the concepts embedded in Smart Computing into actual sales of solutions and products to clients, thereby generating the revenue growth that will cause the tech market to grow twice as fast as the economy as we expect.  In fact, that kind of tech market growth has been occurring, at least in the US (December 14, 2010, “US Tech Industry Outlook For 2011 -- 2011 Likely To Replay 2010's 8% Overall Domestic Growth Rate”).  But we want to see whether that strong growth is due to adoption of Smart Computing solutions, or other factors.

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With The Acquisition Of Dimdim, Salesforce.com Shows They Want To Be Your Collaboration-Enabled Apps Provider

I've always liked the approach Dimdim took in offering web conferencing services. The pillars of the business model, which I profiled last year, were lean operations, smart viral marketing and technology partnerships with larger companies like Novell and Nortel CVAS. The technology they built emphasized ease of use, providing an audio/video/web conferencing experience through the browser, allowing information workers access to a web meeting regardless of the device or operating system they were using. So it was not surprising when software vendors looking for conferencing capabilities started sniffing around Dimdim as an acquisition target. It was even less surprising when Salesforce.com picked up the company for $31 million yesterday.

For Salesforce, this was a straight technology acquisition, as evidenced by the seemingly near total shutdown of Dimdim's website: Monthly accounts cease on March 15 and annual accounts will be allowed to complete their term but will not be able to renew. While the rapid sunsetting of the Dimdim brand probably won't make Salesforce any friends in the Dimdim user base -- reportedly north of 5 million -- it should provide some interesting new services for Salesforce CRM and Force.com customers. Why? Dimdim's real-time communications technology fleshes out the collaboration story Salesforce began with its social offering, Chatter, last year. This blending of tools will boost the collaborative power of some key Chatter features:

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Dell To Acquire SecureWorks

Dell announced Tuesday its intent to acquire managed security services provider (MSSP) SecureWorks for an undisclosed amount. SecureWorks, which acquired VeriSign's Managed Security Services in July 2009, has been growing their business significantly over recent years. Dell on the other hand, has been strengthening its services arm and moving towards a more solutions-centric approach. SecureWorks will continue to act as a separate business unit and will maintain its offerings, keeping its consulting and services intact. This deal was surprising but not shocking. As information security becomes an integral part of the infrastructure, large system vendors strive to build or buy security capabilities into their products and services. Here are our initial thoughts on the acquisition:

  • Dell builds a security foundation through SecureWorks capabilities. Dell doesn’t have a strong security presence - And similar to the RSA/EMC acquisition, SecureWorks will become the security division of Dell. This acquisition will enrich Dell’s portfolio with a well-respected managed security services company with expertise in threat intelligence, infrastructure security, and strong customer service.
  • SecureWorks and Dell find new revenue streams through security offerings. Infrastructure security is becoming ever more important as organizations embrace data center consolidation and the cloud. SecureWorks offerings will strengthen the business case for Dell while keeping customers secure. On the other hand, SecureWorks will find new industries and geographies beyond government, utilities, and retail services.
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Predictions And Plans For Business Analytics In 2011

I love reporters. As someone with an M.A. in journalism who then evolved into an analyst, I recognize that both professions occupy approximately the same tier in the industry food chain. In fact, many IT industry analysts were trade press reporters at one point in their careers, and it’s not uncommon for analysts to go back into media institutions later on.

When great longtime IT reporters, such as Computerworld’s Jaikumar Vijayan, call me up to get my thoughts, I’m just as interested in their take on what’s important. Jai recently published an excellent article with my predictions, plus those of another analyst, on the year ahead in analytics. To the jaded reader, these sorts of year-end look-ahead articles may feel like perfunctory rehashes of stuff we’ve been telling them for quite some time, perhaps with a trendy new buzzword thrown in to keep it remotely glance-worthy.

I try not to repeat myself too much. Rather than regurgitate the statements I made in the phone interview with Jai, I’ll highlight how I’m addressing the principal business-analytics trends that I discussed with him — self-service, pervasive, social, scalable, cloud, and real-time—in our 2011 Forrester research agenda:

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