US Q2 2011 GDP Report Is Bad News For The US Tech Sector, But With Some Silver Linings

The US Department of Commerce released preliminary Q2 2011 GDP data this morning (National Income and Product Accounts -- Gross Domestic Product: Second Quarter 2011 (Advance Estimate); Revised Estimates: 2003 through First Quarter 2011), and there was not much good news in the numbers.  First, US real GDP growth came in at a weaker than expected 1.3% (see Table 1).  Equally bad, prior quarters' growth was revised downward -- Q1 2011 down to 0.4% from 1.9% earlier, and Q4 2010 down to 2.3% from 3.1% earlier.  Given the negative impact of the deadlock on raising the US Federal debt ceiling -- even if a default is avoided at the last minute -- it is hard to see US real GDP growing faster than 2% in Q3 and Q4 2011, and very possibly not much more than 1.5%.

Table 1, US Real GDP Growth Rates, Before and After July 29, 2011 revisions

 

Real GDP, annualized growth rate from prior quarter

Q1 2009

Q2 2009

Q3 2009

Q4 2009

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

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BI Vendors Have To Eat Their Own Dog Food

Would you trust a car salesman who’s not driving the type of car he’s trying to sell you? Would you trust a nutritionist or a dietitian who’s not in a good shape? Probably not. There are two things that I suggest we all ask of BI vendors. Ask if they:

  • Use their own BI tools to run their company. Next time you interview a BI vendor, ask for a proof that their own CxOs and all other strategic and tactical decision-makers are using their own tools. I know of some cases where they don’t. How can a vendor convince you to buy its solutions if it hasn’t convinced its own people?
  • Adhere to the same best practices they suggest you implement using their tools/solutions. Transparency is one of them. One of the top use cases for enterprise BI is transparency: full visibility into companies processes, people, policies, rules, and transactions.
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Standalone Knowledge Management Is Dead With Oracle's Announcement To Acquire InQuira

Its exciting news to see Oracle announce its intention to acquire InQuira. We have been waiting for this news for a long time. The reasons are multifold:

  • Today’s contact center ecosystem is complex, and comprised of multiple vendors who provide the critical software components. Read my blog post on what these critical software components are. Customers are looking for a simpler technology ecosystem to manage from both a systems perspective and a contractual perspective.
  • Suite solutions, available from unified communications (UC), CRM, and workforce optimization (WFO) vendors, are evolving and include comprehensive feature sets. These vendors have either built these capabilities out or acquired them via M&A activity. And we expect more M&A to happen.
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Winning!?

 Are you winning? No, this is not about Charlie Sheen! I mean, are you one of the “fortunate” ones leading application delivery in a firm that is winning?

Today’s economy is a mix of winners and losers, with winners weighted strongly toward firms, industries, and regions experiencing rapid growth in customer demand for experiences that integrate their lives across multiple digital (mobile, web, …) and physical (retail, auto, …) touchpoints. App delivery leaders experiencing this rapid growth would say it is “the best of times,” except for how hard it is to keep up — the business demands more and more, faster and faster! So “winning” can be a mixed blessing in software, too:
 

Relevant Advice For “Winning” App Delivery Leaders

Lately I’ve been working with the speakers for our upcoming Application Development & Delivery Forum 2011, Sep 22-23, 2011, in Boston*, helping them to prepare their keynote and track sessions, and I’ve been struck by how relevant their advice will be for these “winning” app delivery leaders. This is all by design – we are aiming this event squarely at solving the problems you winners face.

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Forrester Will Lower Its Tech Market Forecast By One-To-Two Percentage Points, Depending On Federal Debt Ceiling Outcome

On Tuesday, we were ready to publish our mid-2011 global IT market forecast.  It projected 7.4% growth in the US IT market in 2011, and 10.4% in 2012.  Global growth in US dollars was forecast at 10.6% in 2011 and 7.6% in 2012, with the dollar rebounding in 2012 from its weakness in 2011;  measured in local currencies to eliminate currency fluctuations, growth was projected to be 7.8% in 2011 and 9.1% in 2012.  Our definition of the IT market included business and government purchases of computer and communications equipment, software, and IT consulting and outsourcing services -- it did not include their purchases of telecommunications services, which are declining in the US and growing slowly globally.

Our forecast did recognize three threats to economic growth, and thus three risks to our forecast: 1) a failure to reach a sensible resolution to raise the US debt ceiling and start on a path to lower budget deficits; 2) a failure of European governments to reach a sensible resolution to the Greek debt crisis that lowered the Greek debt burden and reduced the risk of a broader debt crisis that included Italy and Spain; and 3) overreaction by China and India to rising inflation that reduced their growth. 

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What Next For ITIL?

With the updated version of ITIL imminent (the 29 July 2011), I participated in a BrightTalk webinar on “what next for ITIL.”

My views on this are very clear, that we need to “look back before we look forward.” I touched on some of this in a previous blog, 2011: An ITIL Versioning Odyssey, but think it worthwhile to continue to articulate my views in this area.

Let's start with what I consider to be the biggest issue: the gulf between theory and practice with ITIL.

There is no doubt that ITIL can benefit I&O organizations. There are certainly many I&O organizations encouraging, or even forcing, their people to take ITIL training and qualifications: There are at least 1.5 million people with the certification and there is no sign of this slowing down. Not only are trainers busy, so are ITSM consultants and, of course, industry analysts. But, from an industry analyst perspective, there is a lot wrong with ITIL. This is not just how it ballooned in size from ITIL v2 to ITIL v3, but also how it is adopted in the real world.

So what's going wrong?

  1. If you look at existing ITIL v2 adoption, there is a focus on the reactive elements such as incident management, problem management, change management, and maybe even configuration management and service-level management. How many organizations have moved on to the more proactive elements such as availability management, capacity management, IT financial management, and continual service improvement?
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Dev Teams Juggle Compliance, Agility Without Major Injuries

Now that Agile has moved into the mainstream, it is encountering a whole new raft of challenges, including compliance. The word on the street for at least the past couple of years is that trying to be Agile and satisfy regulatory requirements is a lot like juggling chainsaws and machetes: theoretically possible but certainly not advised.

Fortunately, the word on the street is nearly always wrong. When I started interviewing people who had made Agile succeed in highly regulated environments, I expected to hear a lot of handy best practices that I could synthesize into a research document — essentially, a tactical guide to compliance. If you're a medical device company and you need to document six ways from Sunday how you validated and verified the software embedded in a new device, here's what you might do. If you need to deal with the auditors, here's where an investment in an application life-cycle management (ALM) tool might help. 

Although this type of research depends on interviews, it's worth taking a peek at the available survey data to see if it has any additional insights. And boy howdy, am I glad I did. Sifting through the data collected in the survey that Forrester did in conjunction with Dr. Dobb's Journal, I found the first of two big surprises about Agile and compliance:

Agile adoption in the most regulated industries is not significantly different from the adoption rate everywhere else.

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Is Marketing The Biggest Opportunity For IT Since The Internet?

In today’s fast-paced global economy, examples of how empowered customers and citizens use social technology to influence everything from brands to governments are all around us. The Arab Spring clearly shows the ability of technology to empower people. In this new digital age, marketing teams must react at the speed of the market: Product development life cycles that used to last many years are compressed into months or weeks; customer service expectations have moved from same-day response to instant response; public relations snafus must be handled in minutes rather than days; marketing campaigns are adjusted in real time based on instant feedback from social media. In this new era, mastering customer data becomes the key to success and, in my opinion, represents the biggest opportunity for IT to impact business results since the dawn of the Internet.

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How Are You Reacting When New, Disruptive Products Come Out?

We talk to product strategists in a wide variety of industries. Regardless of the vertical industry of their companies, they tell us that the release of new, disruptive products -- like Apple's iPad -- changes their relationships with their customers. Oftentimes, nearly overnight.

Whether their product comes in the form of “bits” (content, like media, software, or games) or “atoms” (physical products, like shoes, consumer packaged goods, or hardware), consumer product strategists must navigate a world filled with a dizzying array of new devices (like mobile phones, tablet computers, connected TVs, game consoles, eBook readers, and of course PCs). We call this proliferation of devices the Splinternet, a world in which consumers access the digital world across a diverse and growing number of hardware and platforms. And product strategists have to react by developing new apps, by crafting digital product experiences, and by rethinking their product marketing.

Delivering digital products across the Splinternet isn’t easy: It requires understanding -- and acting upon -- an ever-changing landscape of consumer preferences and behaviors. It also requires reapportioning scarce resources -- for example, from web development to iPad or Android development. Yet product strategists who fail to contend with newly disruptive devices (like the iPad or Xbox Kinect) will find themselves in danger of being left behind -- no matter what industry they’re in.

We'd like to invite product strategists to take our super-quick, two-minute survey to help us better understand how you are reacting to disruptions caused by the Splinternet: 

UPDATED: THE SURVEY IS NOW CLOSED

Thank you!

Agile Business Intelligence Solution Centers Are More Than Just Competency Centers

By Boris Evelson and Rob Karel

Our latest BI solution center (BISC, which in our definition is more than a BICC/BI COE) report is now live on the Forrester website. Here’s a brief summary.

Forrester firmly believes that tried and true best practices for enterprise software development and support just don’t work for business intelligence (BI). Earlier-generation BI support centers — organized along the same lines as support centers for all other enterprise software — fall short when it comes to taking BI’s peculiarities into account. These unique BI requirements include less reliance on the traditional software development life cycle (SDLC) and project planning and more emphasis on reacting to the constant change of business requirements. Forrester recommends structuring your BISC along somewhat different lines than traditional technical support organizations.

Earlier-generation BI support organizations are less than effective because they often

  • Put IT in charge
  • Remain IT-centric
  • Continue to be mostly project-based
  • Focus too much on functional reporting capabilities but ignore the data
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