Blockchain Or Distributed Ledger? What’s In A Name – And Does It Matter?

Martha Bennett

“Blockchain” and “distributed ledger” continue to generate plenty of headlines in both the specialist and mainstream press. If these — and vendor publicity materials — were anything to go by, we’re on the cusp of mainstream adoption. But that’s far from the case. And judging by the questions Forrester receives about the topic, there’s still quite a bit of confusion around what the technology can actually do, how mature it really is, and how to assess the many initiatives and software offerings that are out there. Here's what to bear in mind:

  • There’s no such thing as “the blockchain”. Blockchain technology is best described as a concept that involves a number of key components, including (but not limited to) validation, consensus, replication, and storage. Which components are implemented, and which ‘flavor’ of each, differs between deployments and is determined by the exact use case and requirements; there'll also be differences between public (trustless) and private (trusted) blockchain deployments. Like “cloud” and “big data”, the term “blockchain” should be regarded as useful shorthand, but no more – any discussion should start with the participants clarifying what they mean by the term. 
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Open Source Escapes The Bedroom, Enters Your Boardroom

Paul Miller

The myth that open source software is exclusively written by and for lonely — rather odd — individual geeks remains remarkably prevalent. And yet it’s a myth that is almost entirely wrong.

A bottle of Free Beer, photographed by Edward BettsMany of the world’s best-known technology firms make sizeable investments of time and money in open source projects: guiding their strategy, contributing code and expertise, and baking the results deeply into their commercial offerings. Some, like Facebook or Google or IBM, might be names you’d not be too surprised by. Others, like Microsoft or Oracle, are still unfairly associated with an earlier age, in which Linux was branded “a cancer,” and proprietary power ruled.

Many of the world’s biggest brands depend upon open source projects: using them directly, and buying commercial solutions that are themselves dependent upon open source underpinnings.

Red Hat built a $2 billion company on the back of open source software, and the likes of Hortonworks are keen to repeat that feat.

Again and again, we encounter executives who do not grasp how much their organisation already depends on open source. More importantly, they do not see the key role that open source technologies and thinking will play in enabling their efforts to transform into a customer-obsessed business that really can win, serve, and retain customers.

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Reflections On Huawei’s Analyst Summit 2016 – And Beyond

Dan Bieler

As always each year, Huawei hosted its analyst event in April, with hordes of analysts descending on Shenzhen. Here are a few observations from the event:

In 2015, Huawei’s revenues grew by 37% to €61 billion and its EBIT grew by 34% to €7 billion, keeping the operating margin stable at just under 12%. Huawei’s strategy paid off across all of its divisions in 2015. Huawei’s Carrier Business pushed deeper into carrier transformation support and grew by 21% in 2015. Its Consumer Business operations entered the mainstream: The division grew by 73% in 2015, with Huawei gaining the No. 3 spot in the global smartphone league table. Huawei’s Enterprise Business is gaining traction and grew by 44% in 2015.

There are four distinctive aspects that go some way to explaining why Huawei keeps on outgrowing its peer group. First, Huawei’s heart beats in its R&D division, and most of Huawei’s top managers have come through the ranks of the R&D team. Second, Huawei benefits from strong internal collaboration and flexibility. Compared with other vendors, Huawei seems a lot less process-driven. Instead, Huawei seems to tolerate, even encourage, self-organization among employees — despite strict management hierarchies. Third, Huawei has a flexible and unconventional approach to customer experience. Huawei completes projects that overrun without overanalyzing whose fault it is. Fourth, Huawei is not listed and therefore not answerable to external shareholders. This gives it the freedom to experiment and take a long-term view.

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Data Management Platforms Go Mainstream

Jennifer Adams

The holy grail of digital advertising is accurately determining who to target, when to target them, and what products to highlight. Data management platforms (DMPs) facilitate smarter media buying by unifying data from multiple sources to allow more accurate and detailed audience segmentation. In our recently published Ad Technology (Data Management Platforms) Forecast, 2016 To 2021 (US), we take a more in-depth look at the market. We examine demand for DMPs that support the programmatic advertising ecosystem, including platforms from vendors such as Adobe, Google, IgnitionOne, Krux, Lotame, Neustar, Oracle, and Wunderman (KBM Group). We conclude that:

DMPs have hit a tipping point, driving continued robust growth. While the US DMP market is relatively small at $500 million, we expect to see robust 43% annual growth over  the 2015 to 2021 period. We believe DMPs reached a tipping point in the past year or two as both marketers and publishers became increasingly aware of their benefits. CMOs are focusing on improving their marketing and advertising ROI, and DMPs demonstrate tangible value by clearly organizing data into taxonomies, identifying intent to purchase, and yielding higher conversion rates.

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Innovation Management Solutions Push Innovation That Creates Both Change And Value

Dan Bieler

Source: The Forrester Wave™: Innovation Management Solutions, Q2 2016

Innovation that only creates change is just that — change. When we asked firms about their major business objectives, 37% claim that product and service innovation is central to their business transformation.

But old-style innovation will be very tough to maintain. To exploit business value from digital technologies, innovation managers need to increasingly think in open ecosystems, open standards, open platforms, and open source software. Digital innovation equals service innovation, which in turn requires a willingness to experiment and engage in minimal-viable-product thinking, because:

  • As customers’ demand changes more quickly, innovation cycles must get shorter. Fast software innovation will “eat” slow hardware innovation given the ever greater role that software plays for today’s business value creation. An innovation management solution supports decision sessions and real-time voting and collaboration to quickly validate or gauge the interest of organizational priorities in short sessions. Organizations need to be willing to fail fast, be able to work iteratively on product and service improvements, run idea experiments based on soft-launches, and get feedback on innovation efforts via external feedback loops quickly.
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CIOs must operate at the speed of the customer

Fred Giron

Digital transformation is about reinventing the business model of your company. It’s an end-to-end transformation that moves at only one speed: the speed of the customer. Back-end systems are not immune from these pressures, somehow shielded from change as customer-facing systems and processes innovate quickly to keep up with fast-changing customer behaviors.

Forrester believes that the pursuit of two-speed IT (aka bimodal IT) is a trap for CIOs. My colleague John McCarthy recently published a report that explains why CIOs need a single, bolder business technology (BT) strategy to accelerate innovation and simplification, not a two-class system that adds more silos of complexity (Forrester clients can have access to the report here).

At a recent CIO event organized in Singapore with our partner Odgers Berndtson, we shared the results of this research and related case studies. The audience was in agreement with this call, best illustrated by two examples that were shared during the discussion:

  • Two-speed operations break the best unified customer experience intent. The head of digital for a life insurance provider mentioned how his team did a great job creating a digital only policy purchasing capability enabling customers to purchase a life policy within 15 minutes online. Unfortunately, it then takes about 2 months for the operational teams to come back to the customer with the actual policy due to slow back-end systems moving at yesteryear speeds. Once the complete engagement has been executed, most clients are lost.
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Envision 2016: Microsoft Pushes Beyond IT

Nigel Fenwick
Where was HololensThis week in New Orleans, Microsoft launched it's first conference aimed squarely at business leaders as the company looks to move beyond the department of the CIO. Envision 2016 replaces Microsoft's previous Convergence conference and comes on the heels of "Build2016" the previous week.
 
As a guest of Microsoft, I had two reasons to attend Envision: First, to hear from CEO Satya Nadella and other Microsoft executives; I wanted to better understand their business strategy going forward, specifically as it relates to enterprise customers. Secondly, I had the opportunity to provide feedback to Microsoft leaders on its enterprise marketing strategy.
 
It was no doubt clear to attendees that Microsoft wants a relationship with enterprise customers beyond the office of the CIO. Based on Satya's opening keynote, there is a recognition that Microsoft must become a more strategic business partner, helping today's CIO clients work alongside their line-of-business peers to deliver on the promise of digital business. 
 
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Businesses Need To Prepare For New Digital Realities

Dan Bieler

Photo: Bergmann

At Mobile World Congress 2016, GE outlined some fundamental insights about the digital transformation efforts of industrial businesses. William Ruh, CEO for GE Digital, a US$6 billion business of General Electric, shared valuable insights about the digital transformation process that industrial businesses need to tackle.

Businesses must focus on those activities that they can transform into digital business models. Not every industrial activity can become a digital business, but it will be impossible to succeed in digital transformation by developing a digital business and an industrial business and then operating them side by side indefinitely. GE sold 40% of its business activities because it felt that it could not transform them into digital businesses. For those industrial activities that can become digital businesses, executives need to be aware that:

  • Every industrial worker has to develop digital DNA. Industrial workers and mechanical engineers have to be comfortable interacting with digital systems. At GE, mechanical engineers have to design a locomotive in such a way that they can place a local data center inside it. Every industrial worker will have to have analytics skills, whether that’s the ability to create sensible and reliable data sets or to analyze and interpret these data sets.
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Digitizing The Car: Why Auto-Makers Are On The Wrong Track

Nigel Fenwick

Autocross

I’m a bit of a car nut. I love driving cars. So does my wife. We both autocross one of our cars most weekends in the New England summers (FYI AutoX is a great way to hone your driving skills and be a safer driver). We love our cars and I’m pretty passionate about the whole driving experience.

As a car junkie, I love the fact that automakers are bringing digital experiences to their cars, but I can’t help thinking they are going about it all backwards – or as we say at Forrester, from the inside out.

In my post from CES this year, I noted that every single automaker seems hell-bent on making the car the center of their customer’s digital world. No doubt manufacturers hear the siren call of customer data; imagining all that they could do with such rich information. But it’s inside-out because, even for car-lovers like me, the car is not the center of my digital universe and I doubt it ever will be. Why? Because my car doesn’t go with me wherever I go. But you know what does? My phone.

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Accelerating Digital Business And Innovation In Financial Services

Fred Giron

From discussions with our clients in the financial services industry (FSI) in Asia Pacific, we’ve noticed that their digital agenda has changed dramatically over the past 18 months, shifting from a consideration of acquisitions and distribution channels to a broader business transformation imperative.

In fact, leaders at banks and insurance firms are increasingly realizing that:

  • Customer experience is fast becoming the only competitive differentiator.
  • Banks and insurance have to accelerate their ability to innovate and deliver new sources of value to customers faster. 
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