As of late 2011, more than half the organizations we surveyed in Asia Pacific excluding Japan (APEJ) are either currently using or actively planning cloud initiatives — 52% in fact. This number has nearly tripled since 2009.
But adoption rates alone don’t tell the whole story. Vendor strategists should also be closely tracking how organizations evolve from ad hoc, disjointed cloud projects to well-defined, effectively managed cloud procurement. Our recent survey results indicate a surprising degree of maturity across the region — along with some clear areas for growth.
Centralized IT procurement of cloud services varies widely across the region. Australia (82%) and India (83%) currently lead in driving centralized procurement and management of cloud services through IT. Both markets are well above the regional average of 74%. This is no surprise for Australia, which is the most mature market for cloud computing in the region. But the strong results for India are surprising, and indicate the strong potential for a sharp increase in demand for cloud services over the next six to 12 months as early projects begin delivering positive returns. Only 66% of respondents in China are currently centralizing cloud procurement and management — not unexpected given the relative lag in cloud adoption in China relative to other APEJ markets.
Organizations in China are least likely to have a formal cloud strategy in place. Fifty-six percent of respondents in China currently see unsanctioned buying by the business outside of IT. This is the highest rate in APEJ by far, where the average is 35% and there are lows of 23% in Australia and 25% in Singapore.
When I very briefly joined TCS (Tata Consultancy Services) as an IT service management (ITSM) consultant a year ago today, I met a fellow new recruit Sandy Winschief – a vendor/supplier management specialist armed with a pair of Six Sigma black belts. Sandy was/is a key piece in TCS’ Service Integration offering jigsaw and someone who made me think more about the relationships between IT infrastructure and operations (I&O) organizations and their suppliers.
Sorry, you said, “Service Integration”?
For those new to Service Integration I offer the following “definition” from a Forrester colleague’s “thinking”:
“To make multisourcing arrangements effective, customers must get suppliers to work together, both from the commercial and operational standpoint. The services integration layer, comprising elements of process, tools, service-level agreements (SLAs), and related structures, is absolutely critical to the success of these arrangements.”
I've been testing the MacBook Air for five months now. I use it for work and for home. At work, I run our corporate image Windows XP with the attendant applications and security software in a Parallels virtual machine. At home, I run the Mac side. After a few hiccups with the security software going haywire in our corporate image (thanks to the Parallels support team and to our own IT client and network security team for help), it's been a great experience.
But I do need to describe my experience with this travel-friendly, totally modern, and practical combination of hardware and software. I'll then also point out some things that are still challenging in using the MacBook Air in a Windows-centric business world. First, the experience in four bullets:
I work with a lot of CIOs and heads of strategy in Australia and the Asia Pacific area – particularly concerning the development and updating of their IT strategies. As a part of our strategy document review service, I have seen plenty of approaches to IT strategies – from “on a single page” position statements through to hugely detailed documents that outline every project that will take place over the next 5-10 years.
While it can be argued that an IT strategy can’t really be strategic at all if it is just responding to business needs and requests (isn’t that just an IT plan?), the broader question of “what, exactly is a strategy?” is rarely touched upon.
In late 2010 I noted that startup SeaMicro had introduced an ultra-dense server using Intel Atom chips in an innovative fabric-based architecture that allowed them to factor out much of the power overhead from a large multi-CPU server ( http://blogs.forrester.com/richard_fichera/10-09-21-little_servers_big_applications_intel_developer_forum). Along with many observers, I noted that the original SeaMicro server was well-suited to many light-weight edge processing tasks, but that the system would not support more traditional compute-intensive tasks due to the performance of the Atom core. I was, however, quite taken with the basic architecture, which uses a proprietary high-speed (1.28 Tb/s) 3D mesh interconnect to allow the CPU cores to share network, BIOS and disk resources that are normally replicated on a per-server in conventional designs, with commensurate reductions in power and an increase in density.
Customer service managers don’t often realize that data quality projects move the needle on customer satisfaction. In a recent Forrester survey of members of the Association of Business Process Management Professionals (ABPMP), of the 45% who reported that they are working on improving CRM processes, only 38% have evaluated the impact that poor-quality data has on the effectiveness of these processes. And of the 37% of respondents working on customer experience for external-facing processes, only 30% proactively monitor data quality impacts. That’s no good; lack of attention to data quality leads to a set of problems:
Garbage in/garbage out erodes customer satisfaction. Agents need the right data about their customers, purchases, and prior service history at the right point in the service cycle to deliver the right answers. But when their tool sets pull data from low-quality data sources, agents don’t have the right information to answer their customers. An international bank, for example, could not meet its customer satisfaction goals because agents in its 23 contact centers all followed different operational processes, using up to 18 different apps — many of which contained duplicate data — to serve a single customer.
Lack of trust in data negatively affects agent productivity. Agents start to question the validity of the underlying data when data inconsistencies are left unchecked. This means that agents often ask a customer to validate product, service, and customer data during an interaction — increasing handle times and eroding trust.
As my regular readers know, I try to provide something thought-provoking for most of my blog posts. But every so often something comes along that makes me go “wow, I really need to share this.” This is one of those times.
Like many analysts here at Forrester, I have an iPad (my own, not the company’s) which I often use for work — especially when travelling (which we do a lot). And like many people, I’ve grown used to the tactile feel of a real keyboard — so every now and then I’d yearn for a real keyboard to use with my iPad.
Being an Apple fan, I first bought the Apple Bluetooth keyboard. While this is a good keyboard, it has a couple of major flaws for my use. Firstly, it doesn’t actually hold the iPad, so you have to position your iPad somewhere you can see it while typing. For this reason you can’t easily use it anywhere there isn’t a good flat surface near you on which to stand your iPad. And secondly, it’s not very convenient to travel with as it’s so long — who wants to walk around with a sleek iPad and a huge keyboard? I needed something more compact.
I just saw something that makes a point I covered in a technology trends briefing for a client yesterday. After getting my Sun-dried Ethiopia Harrar (a $3.45 “clover-brewed,” ridiculously priced guilty pleasure – nice marketing job, Starbucks!), I noticed a young woman sitting behind me with her 5x7 notebook out, busily scribbling while bent over a large smartphone. Hmmm, I thought, let’s see what she’s doing. So I made pest of myself by asking a few questions. Here is some of the Q&A (her replies are abbreviated; she was actually quite helpful and not as curt):
Q: Are you a student or is what you are doing for work? A: No, I’m actually working.
Q: So do you have a PC? A: I do, but it’s a bulky 17” laptop that I got when I was a student, and I can do what I need on this.
Q: Is that company-issued phone, or is it yours? A: It’s mine.
Q: Does your company help by paying for any of the service? A: No, I pay it all myself.
Q: Are you doing an official assignment? A: No, nobody told me to do this. I am ...
Q: Do you even have your PC with you? A: No, I didn’t bring it.
I attended two really great presentations at MSPWorld yesterday. This is a very interesting conference, sponsored by the MSPAlliance[i] and co-hosted with IT-Expo but focused on managed service providers. Both dealt with the issue of MSP (MSSP) valuation. Many of the attendees are SMB (MSP/MSSP) business owners and this was a hot topic.
So what is an MSSP worth and if someone wanted to buy a business like this how much should they pay? This is an important question for Forrester’s IT clients because the rules of valuation can help IT clients evaluate potential partners. Financial stability and the intermediate and long-term plans of the MSSP should factor into the decision of selecting an MSSP. In any negotiation it’s also always good to know what the other side is thinking. Here’s the list:
1. Recurring Revenue – What is the firm’s recurring revenue profile? What are the sources of revenue and how much of this revenue comes from long-term (multi-year) contracts?
2. Service Agreements – What is the nature of the service-level agreements the firm has in place with other clients? Do they address risk management and risk sharing? How much liability is the MSSP willing to accept for regulatory compliance and information breaches?
3. Service Revenues – What percentage of the MSSP’s revenue comes from what types of business?
I attended Trend Forum 2012 last week in Bonn, effectively an analyst day where Deutsche Telekom presented its innovation strategy. There was no focus on overall group strategy. Still, innovation matters greatly as part of the repositioning efforts of telcos. As the role of telcos in the value chain is weakening, largely due to increasing competition by over-the-top providers (OTTPs), telcos need to differentiate themselves increasingly via service provision and their ability to innovate quickly and prolifically. Failure to do so will cement their status as transport utilities for OTTPs.
Deutsche Telekom’s Core Beliefs focus on: a) building its platform business by partnering with software firms; b) leveraging the cloud by providing high QoS and secure connectivity; and c) leverage differentiating terminals through device management and customer experience provision. These Core Beliefs form the basis for pursuing its focus growth segments in digital media distribution, cloud storage, cross-device digital advertising, classified marketplaces, and mobile payment in addition to the core telco business. These targets match up well against our evaluation of best cloud markets for telcos.
A defining characteristic of next-generation network (NGN) infrastructure and the move towards cloud-based business models is openness. As a consequence, OTTPs increasingly deal directly with end customers across the network. Relationships between telcos and other members of value chain become more complex. Emerging cloud services by telcos need to become network agnostic to deliver cross-network solutions and ensure cloud interoperability. Deutsche Telekom has made significant progress in the recent past to adapt its strategy to these new telco realities.