I’m currently in the process of wrapping up a report on midmarket IT budgets and spending trends in India for the 2013-2014 fiscal year (April 1, 2013 to March 31, 2014). For this report, we collected extensive data from 430 midmarket businesses (those with 400 to 2,500 employees) in the country to examine IT and business priorities among IT decision-makers. In addition to analyzing spending plans across standard IT categories (software, hardware, and services), we also analyze the likely impact on IT spending of key initiatives, including computing, mobility, and big data.
Despite increasing economic and political uncertainties in India, our survey found that midmarket companies are continuing to invest in IT to drive competitive differentiation. Our survey also signaled a changing attitude among Indian midmarket companies who are increasingly viewing IT as a means to better engage digitally enabled constituents. This is fueling a fundamental shift in the way Indian midmarket firms interact with customers. Here are some key highlights from the report:
The majority of Indian midmarket firms will increase IT spending in 2013-2014. Among all the companies surveyed, 61% of firms surveyed expect to increase their spending on IT by 5% to 10% in the current fiscal year. New IT initiatives and expansion of capacity will contribute to an increase in IT capital budgets as the current fiscal year’s budget is evenly split between new IT initiatives and expansion of existing capacity to better support growth initiatives. The need to modernize infrastructure and improve business applications to grow business will drive hardware and software spending from Indian midmarket firms.
We recently met with Huawei executives during the launch of its latest product in China, the S12700 switch. The product, which ships in limited quantity in Q1 2014 is designed for managing campus networks, and acts as a core and aggregation switch in the heart of campus networks. While wired/wireless convergence, policy control and management come as standard features, the draw is the Ethernet Network Processor (ENP). The ENP competes against merchant silicon in competitive switch products, and Huawei claims to be able to deliver new programmable services in six months, compared to one to three years for competitive application-specific integrated circuit (ASIC) chips. This helps IT managers respond quicker to the needs of campus network users, especially in the age of BYOD, Big Data, and cloud computing.
While it is a commendable product in its own right, Huawei will need to position its value more strategically against IT managers that have technology inertia, especially in ‘Cisco-heavy’ networks:
Tying the value of the switch to existing and future enterprise campus needs. In the age of cloud computing, big data, mobility, and social networking, IT managers need to solve network challenges like insufficient service processing capability and slow service responses. Huawei says the new switch is able to provide agile services and respond flexibly to changes in service requirements, on demand. For example, the switch has access control built in for wired/wireless access management. This is a good start. Enterprises will need to understand how the switch plays a central role in a campus network, and Huawei should continue to reinforce its agile network architecture’s storyline.
Tata Communications has emerged from its role as an incumbent Indian service provider to become a globally recognized provider of network connectivity services such as MPLS, Ethernet and IP transit as well as managed hosting in data centers, voice, data, and video.
Tata Communications is starting to measure up to global carriers. I’ve received a number of inquiries on Tata Communications’ regional and global carrier wholesale strategy, as well as its market focus. This increased interest among Forrester clients is a sign that Tata Communications is getting some things right in its carrier business, as the aforementioned global MPLS report makes clear. Its continual network and cable investments are paying off for the service provider.
with Brownlee Thomas, Ph.D., Henning Dransfeld, Ph.D., Bryan Wang, Clement Teo, Fred Giron, Michele Pelino, Ed Ferrara, Chris Sherman, Jennifer Belissent, Ph.D.
Orange Business Services (Orange) recently hosted its annual analyst event in Paris. Our main observations are:
Orange accelerates programmes to get through tough market conditions. Orange’s’ vision in 2013 is essentially the same as the one communicated last year. However, new CEO Thierry Bonhomme is accelerating cost saving and cloud initiatives in light of tough global market conditions. The core portfolio was presented as connectivity, cloud services, communication-enable applications, as well as new workspace (i.e., mobile management and communication apps).
Orange proves its capability in network-based services and business continuity. Key assets are its global IP network and its network-based communications services capabilities. In this space, Orange remains a global leader. These assets form the basis for Orange taking on the role of orchestrator for network and comms services, capabilities that have (literally) weathered the storm, proving its strength in business continuity.
Today's re-org at Microsoft comes amidst mixed success as they straddle the gap between capricious individual consumers and the cash-strapped, risk-averse needs of enterprise IT buyers who find themselves years behind the demands of their own capricious workers, who are also consumers when they go home. Windows 8 shows us that Microsoft has more learning to do about where to place those bets, but we also think their work on server, cloud and hybrid cloud is excellent, and that their longer-term strategy is viable. We see this organizational re-alignment as very positive.
The Server and Tools Business becomes Cloud and Enterprise Engineering Group
Satya Nadella and Scott Guthrie both have done a great job of driving Agile development and continuous delivery into every team in STB and that is resulting in faster moving and more compelling products and services. They deserve a lot of credit for this and so putting even more under them seems a good thing. The key is whether it is the right things.
For perspective: one of Microsoft's greatest strengths is that they give smart people development tools that are extremely easy to use and deceptively powerful. So much so that generations of developers will commit themselves and careers to mastery of Visual Studio, for example. Microsoft democratizes software development by lowering the barriers to entry like no other company. The shift to cloud gives them the chance to do it again, and the improvements in Visual Studio 2013 shown at BUILD in San Francisco are superb and stretch smoothly from the datacenter to the cloud.
Sourcing professionals already understand the importance of monitoring financial performance to assess risk in their key suppliers’ ability to deliver commitments. Sometimes sourcing professionals can also find valuable negotiation leverage in the financial results of their key suppliers, as is the case with Oracle’s Q4 2013 numbers . In my opinion, the revealing aspects that you can use to increase your bargaining power over the next couple of quarters, include:
I attended Google’s annual atmosphere road show recently, an event aimed at presenting solutions for business customers. The main points I took away were:
Google’s “mosaic” approach to portfolio development offers tremendous potential. Google has comprehensive offerings covering communications and collaboration solutions (Gmail, Google Plus), contextualized services (Maps, Compute Engine), application development (App Engine), discovery and archiving (Search, Vault), and access tools to information and entertainment (Nexus range, Chromebook/Chromebox).
Google’s approach to innovation sets an industry benchmark. Google is going for 10x innovation, rather than the typical industry approach of pursuing 10% incremental improvements. Compared with its peers, this “moonshot” approach is unorthodox. However, moonshot innovation constitutes a cornerstone of Google’s competitive advantage. It requires Google’s team to think outside established norms. One part of its innovation drive encourages staff to spend 20% of their work time outside their day-to-day tasks. Google is a rare species of company in that it does not see failure if experiments don’t work out. Google cuts the losses, looks at the lessons learned — and employees move on to new projects.
As businesses work to differentiate their products or services, grow the bottom line, and expand globally, they need to think seriously about the important role that their employees play in helping the business achieve successful outcomes. Businesses must invest in processes and technology to recruit and onboard the best people, address performance gaps with key learning activities, provide career development plans, and align pay with performance. Activities like human resource management (HRM) deployment in the cloud and the use of mobile and social technologies for HRM processes catapult HR to the cutting edge of innovation.
I recently analyzed 60 companies in India to understand the CIO reporting structure and the key projects that these organizations are focused on. Some interesting findings from this exercise:
Currently, 40% of Indian CIOs or top IT executives report to CEOs or the senior-most person (president, managing director, etc.) in their organization. Among the other 60%, most report to CFOs (35%), followed by COOs, group CIOs, and chief sales officers.
CIOs who report to CEOs tend to have a 30% higher IT budget than CIOs who report to CFOs, COOs, or group CIOs.
Projects led by CIOs not reporting directly to the CEO focus primarily on reducing IT costs and aligning IT to the business; these projects are typically measured in terms of cost savings.
Projects led by CIOs reporting directly to the CEO are more likely to focus on customer acquisition and retention and measured more in terms of business outcomes for the organization.