Old ROI Methods Are Holding Back The Adoption Of New Technology

Andrew Bartels

My colleagues at Forrester and I have been puzzling over the discrepancy between the wealth of attractive new mobile, cloud, and smart computing technologies in the market, and the relatively weak record of actual growth in tech spending that our tech market forecasting numbers show.  Certainly, the recessions in Europe and weak economies in the US, Japan, China, India, Brazil and other emerging markets explain part of the weakness in tech buying.  In addition, cloud computing’s impact on the timing of tech spending (reducing initial upfront capital purchases of owned hardware and software while increasing future subscription payments for use of these resources) means that  spending that in the past would have occurred in current years has now been pushed into the future.  Lastly, as a recent Economist article pointed out, business investment in general has been low compared to GDP and to cash distributed to shareholders this decade, as CEOs with stock option compensation have focused on meeting quarterly earnings-per-share targets instead of investing for the longer term (see Buttonwood, “The Profits Prophet,” The Economist, October 5, 2013). Still, even taking these factors into account, tech investment has been growing more slowly relative to economic activity than in past cycles of tech innovation and growth.

Read more

Smart City Santander: Proven Technology, Uncertain Business Models

Jennifer Belissent, Ph.D.

The city of Santander boasts 20,000 fixed and mobile sensors throughout the city – on buses, in parks, waste bins and in buildings.  These sensors capture bus locations, humidity in the air and soil, pollution etc. They tell bus riders when their bus will arrive; they tell city park workers when to water the gardens. They also dim lights when there is no one on the street at night, and turn them on when cars or pedestrians pass. They create a complex internet of things and a rich source of data. Together with the platform enabling the aggregation, analysis and visualization of these data, they (will) provide a valuable tool at the disposal of city leaders, enterprises, developers and citizens. Today Smart Santander is a living lab (with an application pending to be part of the European Network of Living Labs). 

Having launched in September 2010 with €6 million budget (primarily from the EU) and 15 partners, the project is now in its 3rd and final phase.  With its sensor network, the city demonstrates the benefits of the Internet of Things across several initiatives:

  • Urban mobility: Sensors on buses and in taxis make it easier for citizens and tourists to find transportation; parking sensors help drivers find available places more quickly.
  • Water management: Sensors embedded in urban gardens detect soil humidity and enable more efficient watering; the broader water initiative envisions smart water meters in homes and buildings, and use of the sensors by Aqualia, the city’s water company.
Read more

The Canadian Tech Market Continues To Underperform In 2013, But Will Pick Up The Pace In 2014

Andrew Bartels

Relative to both Canada's economic growth and the US tech market, Canadian business and government purchases of information and communication technologies (ICT) has lagged since 2011. Spooked by European debt problems, uncertain growth prospects in its US and Asian export markets, and the strong Canadian dollar, business executives have been holding back on making tech investments.  That pattern has continued in 2013, with our latest Canadian tech market report projecting growth of just 2.2% in Canadian ICT purchases in 2013 when measured in Canadian dollars (see October 25, 2013, “The Canadian Tech Market 2013 To 2014 – Sluggish Canadian Tech Market Will Accelerate In 2014”).  Business and government purchases of computer equipment will be down 0.2% in 2013, purchases of communications equipment will rise by just 0.9%, and spending on IT outsourcing and telecommunications services will increase by 2.6% and 0.7%, respectively.  The best tech sectors in a generally weak Canadian tech market will be software (with 5.8% growth) and IT consulting and systems integration services (with 3.6% growth).  

Read more

US Tech Spending Growth Slows To Under 4% in 2013 Due Federal Budget Cuts And Shutdowns

Andrew Bartels

The Congressional juveniles with their calls for big Federal budgets cuts, tolerance of Federal government shutdowns and flirting with Federal debt defaults have been put back into their corner, so it is time to assess how much damage they have done to the US tech market.  In Forrester’s semi-annual US tech market update, we conclude that the Federal budget sequestration, the two-week Federal government shutdown, and the fallout from threats to not raise the Federal debt ceiling have shaved about two percentage points of growth from business and government spending on technology goods and services in 2013 (October 25, 2013, “Government Spending Brinksmanship Drags Down The 2013 US Tech Market Outlook – We Cut Our 2013 Spending Growth Estimate To 3.9% From 5.7%”).

Not surprisingly, government tech spending has borne the brunt of the slowdown, with Federal government buying down while state and local government tech purchases rose modestly.  But since the effects of reduced Federal spending have flowed into the private sector, purchases of computer equipment have also slumped, as cautious CIOs dial back their spending on these easily deferred categories of the tech budget.  Servers and PCs have been especially hard hit as alternatives like infrastructure-as-a-service (instead of buying servers) and tablets (as replacements for laptops) accentuated CIO caution.  However, there is evidence that even corporate purchases of tablets have slowed in 2013 as the initial rush to put these new devices into the hands of employees has been way to a more measured adoption curve.

Read more

Healthcare.gov's Failure Starts With Leadership, Not Technology

Ted Schadler

There has been lots of fingerpointing about the digital technology problems behind Healthcare.gov. If I had to net it out, I'd say that government leaders blamed it on technology contractors and the technology contractors blamed it on each other. And everybody acted surprised that this could happen.

But seriously people, Healthcare.gov was doomed to fail at launch:

  • No Web site ever worked perfectly on the first day! There are always glitches. It's always true with complex technology. Nasa didn't shoot a rocket to the moon first. It tested a monkey in space and went through a decade of learning before Neil Armstrong set foot on the moon.
  • It's impossible to test a Web site with 250,000 users before launching. The only practical way to have launched Healthcare.gov would have been to do it a little bit a time, perhaps starting with a few counties in 5 or 6 states. This is what Amazon and Facebook and Google and Twitter do.
Read more

AirWatch Connect 2013 Highlights The Emergence Of A Key Enterprise Mobility Provider

Dan Bieler

AirWatch held its EMEA AirWatch Connect customer event in London recently. The event underlined that AirWatch, at the tender age of 10, has become one of the leading global providers of enterprise mobility services. My key takeaways from the event are that:

  • Secure collaboration forms the center of the connected business. Business productivity and innovation benefit significantly from a workforce that is empowered by mobility. AirWatch has one of the most comprehensive enterprise mobility portfolios in the market to support this drive. AirWatch can play a central role for any organization that is transforming into a connected business.
  • An integrated platform approach to enterprise mobility has a clear advantage. AirWatch pursues a Lego-block approach, bringing together solutions for email, browser, containerization, content locker, and, of course, device and app management. By building its solution as one platform, customers gain the flexibility of a Lego-style deployment — they can pick only those blocks that they require while ensuring the integration and flexibility of the overall solution.
  • Building a business case for enterprise mobility must include soft factors. Managers who build ROIs for enterprise mobility solutions usually focus on hard KPIs that support existing ways of doing business. However, this “hard ROI” approach really only compares the present with the past. In reality, it is often the soft KPIs, like new ways of doing business, that matter more. Ultimately, mobility is crucial for greater operational flexibility and business transformation. Both are at the heart of long-term business success.
Read more

Mind The Tech Expectations Gap:Many Employees Are Not Satisfied With Work Technologies, Especially In Europe

Jennifer Belissent, Ph.D.

“Happy employees make happy customers” or so the saying goes. Employee satisfaction and engagement are correlated to business outcomes.  Finding the right employees, providing them the tools they need to do their jobs, keeping the good ones happy, and keeping them around is the job of the whole organization – even the CIO.  Yet employees report significant dissatisfaction with the technology provided to them at work:  the technology expectations gap.  And that gap is more pronounced in Europe than elsewhere. 

Read more

Office Productivity Software Is No Closer To Becoming A Commodity

Philipp Karcher
We just published a report on the state of adoption of Office 2013 And Productivity Suite Alternatives based on a survey of 155 Forrester clients with responsibility for those investments. The sample does not fully represent the market, but lets us draw comparisons to the results of our previous survey in 2011. Some key takeaways from the data:
 
  • One in five firms uses email in the cloud. Another quarter plans to move at some point. More are using Office 365 (14%) than Google Apps (9%). 
  • Just 22% of respondents are on Office 2013. Another 36% have plans to be on it. Office 2013's uptake will be slower than Office 2010 because fewer firms plan to combine the rollout of Office 2013 with Windows 8 as they combined Office 2010 with Windows 7.
  • Alternatives to Microsoft Office show little traction. In 2011, 13% of respondents supported open source alternatives to Office. This year the number is just 5%. Google Docs has slightly higher adoption and is in use at 13% of companies. 
Read more

What Would Happen To Tech Buyers And Tech Sellers If The Federal Government Does In Fact Default

Andrew Bartels

Two weeks after the Federal government shutdown and two days before the Federal government runs out of means to pay all its bills without additional Federal borrowing, the unthinkable development of a Federal debt default needs to be thought about.  The responsibility for this situation lies squarely with the House Republicans, who have refused to bring to a vote a resolution to raise the debt ceiling without conditions.  Moderate Senate Republicans and Senate Democrats have been working on a resolution that would raise the debt ceiling until January and re-open the Federal government at current, sequestration-reduced spending levels, in return for initiating negotiations between the White House, Democrats, and Republicans on longer-term deficit reduction plan  and some minor adjustments to the Affordable Care Act.  While this could well form the basis for a way out of this deadlock before midnight on Thursday, October 17, some House Republicans have already labeled it "a surrender" and vowed to oppose it.  So, I think the risk of a Federal debt default is at 10% and rising.

Read more

IBM's Global CxO Study Shows That You Irrefutably Live In The Age Of The Customer

Ted Schadler

Yesterday, Forrester released two important reports: one on the business masteries you need in The Age Of The Customer and one on the Business Technology you need to succeed in it.

Serendipitously, IBM this week released its global study of 4,183 CxOs from around the world. The title? The Customer-activated Enterprise. The study carries irrefutable evidence that we already live in the age of the customer, which we define as "a 20-year business cycle in which the most successful enterprises will reinvent themselves to systematically understand and serve increasingly powerful customers." Here's my analysis of IBM's data:

  • First, CxOs see customers are a critical influence on their company's strategic vision and business strategy. Over half of global CxOs place customers ahead of all other influencers except the C-Suite itself as a strategic influence on the firm. And they don't mean the company's perception of what customers need. They mean customers themselves: eighty-two percent of CEOs believe they include customers in defining new products and services today. That's a ubiquitous desire, folks: CEOs want customers themselves to define the firm's new products and services.
Read more