In discussions on cloud computing, I often talk to architects who have been told to create a "cloud strategy." This sounds appropriate enough, but there’s a devil in the details: When the task is "create a Technology X strategy," people often center strategy on the technology. With cloud, they aim to get a good definition of pure cloud and then find places where it makes sense to use it. The result is a technology strategy silo where cloud is placed at the center and usage scenarios are arranged around it. The problem with this is three-fold:
Considering the full business dynamics of any given usage scenario, there is a wide continuum of often strongly competing alternatives to pure cloud (including cloud-like and traditional options).
The rapid pace of market development means that business value equations along this continuum of options will keep changing.
Your business needs integrated strategy for many technologies, not simply a siloed cloud strategy.
It's time for IT to get out of the business of running everything itself and move into the role of delivering technology value to the business. This is a core theme that runs through a large majority of Forrester's research and our advice to clients. But exactly how do you make this transition? Well, a good example can be found in Amylin Pharmaceuticals.
Yesterday at its annual analyst meeting, Accenture unveiled its new software group. Yes, the company has formally set up a software organization to sell packages and SaaS offerings. The group was internally established back in September 2009, but publically launched this week. The group has 48 products, 36 of which are vertical packages that Accenture has done on its own; the remainder are enhancements to existing packages from vendors like Oracle and SAP. The vertical packages include freight and logistics, hotel property management, and a claims components solution. Sample “enhancements” cover P&C billing with SAP, banking with both SAP and Oracle, and a human capital management offering with SAP. The numbers on the group: the offerings cover 8 industry segments and it has 2,000 people and claims that it has signed 600 deals where there is an explicit software license. There are 12-15 software factories in support of 48 products. This is an extreme example of the standardized offerings that services vendors will bring out as the market evolves.
For those of you unable to attend, I will summarize some of the content that I presented on SAP’s overall growth and innovation strategy. SAP has a double-barreled product strategy focused on Growth and Innovation.
The Growth strategy rests heavily on the current Business Suite, which includes the core ERP product that is used by approximately 30,000 companies worldwide. SAP claims that it touches 60 percent of the world’s business transactions, which is hard to validate but not all that hard to believe. The main revenue source today is Support, which comprises 50% of the total revenues of the company at more than 5 billion Euros annually, and it grew by 15% in 2009. Other growth engines include:
Software-as-a-Service (SaaS) is rapidly becoming “Everything-as-a-Service” (or, as a client said to me last week, “All-as-a-Service”).I’ve been reporting the impact of SaaS on IT management software for nearly two years now and I keep saying that SaaS is really a phenomenon of new market entrants with compelling arguments against incumbent suppliers. Operators like ServiceNow.com, ManageEngine, Splunk, and SpiceWorks are leading a charge to replace HP, BMC Software, and CA installations. So it’s NOT really a trend impacting small and medium businesses only: many enterprises, even large ones, now also prefer a SaaS solution for their systems monitoring, IT asset management, service desk, or even discovery and CMDB management.
In the last weeks there has been a series of SaaS announcements by the megavendors. But the inquiries coming in from Forrester clients imply that things are not all that clear on these announcements. So here is a quick summary. As you will see, while riding the SaaS wave, they each interpret it differently.
CA now has a Service Desk On Demand offering based on their Service Desk r12 product. It’s run on dedicated installation in their data center or as a multi-tenant instance in one of CA’s partners installations also hosted there. CA clearly wants to limit the service to their target enterprise market. They will control this by requiring a minimum 1 year contract (with financial incentives for signing for 2 or even 3 years), a minimum of 50 service desk analysts (you pay per analyst per month) and, most importantly, you cannot just sign up for the service on the web, you have to be approved by CA first.