Apple's Developer Tour De Force And What It Means For CIOs

Ted Schadler

CEO Tim Cook opened Apple's worldwide developer conference 2012 this morning in San Francisco. The event sold out the Moscone West venue in 90 minutes, a clear indication that Apple's star is still rising rapidly. (Developers are the first to smell a slowdown in momentum and so are a good indicator of the future.)

Here are my quick impressions of what Apple's announcements mean for developers, hence for CIOs and the IT organization.

  • New versions of its operating systems, OS X Mountain Lion and iOS 6, just one year after the last upgrade. That pace of innovation coupled with the rapid adoption Apple has created with free or low-cost upgrades and App Store distribution means that most iPhones and iPads will be running the new software a few months after it ships in the fall and many existing Macs will also get it. Developers get a single market to code to (unlike the intense fragmentation and dusty versions of Android). CIOs get confidence that the latest security and features will be present.
  • A significantly upgraded notebook line with faster MacBook Airs and MacBook Pros and a new Flash-based MacBook Pro with a Retina, very high definition screen. (This announcement caused the first unprompted "oooooo" from the enthusiastic developer audience.) Developers will love the powerful machine. BYO computer aficionados will be happy to have even better ultrabooks and notebooks. CIOs will wonder even louder about where HP and Dell and Microsoft are with comparable computers.
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Google Buys QuickOffice And Embraces The App Internet

Ted Schadler

Google just bought QuickOffice. I think that means they now get the App Internet and are moving beyond pure Web.

The App Internet is the future of software architecture and the foundation of how people get stuff on their mobile devices (we call that mobile engagement). The App Internet means native (or hybrid HTML5) apps on mobile and desktop devices that use the Internet to get services. It's the native app that makes the user experience good. It's the Internet that makes the user experience relevant to life.

Google has been "pure Web," meaning that they don't want native apps on any device. Of course, they've been moving slowly away from that pure architecture for years now even as its marketing rhetoric has denied it. Remember that when iPhone shipped in 2007 it had a native Google app called Maps on it. And they have readers on their Android devices.

In the meantime, QuickOffice has been growing handily because it gets the App Internet -- any device, anywhere, anytime using a native app. If you want to read or edit Microsoft Office formats on your iPad or Android phone or whatever, you can do it with QuickOffice. That has led consumers and information workers and sometimes entire enterprises (in the case of one life sciences company with 15,000 iPads deployed, for example) to use QuickOffice to access and edit the critical documents they need on their tablets.

What does this mean?

  • For Google, it means they've woken up to embrace the App Internet as the way to deliver great user experiences on mobile devices.
  • For Microsoft, it means Google has done another "embrace and extend" play to take keystrokes away from Microsoft Office. And that ahead of Microsoft's purported but unannounced plans to port Office to iPad.
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Dark Clouds On The Tech Horizon Redux: Europe Drops, China And India Slow, US And Canada Limp Along

Andrew Bartels

Haven't we seen this show before?  Like last year?  Once again, Europe wrestles with and is again losing against its debt crisis.  Once again, after some promising growth in late 2011, the US economy is showing signs of losing steam.  Once again, China and India are flashing distress signals.  And once again, John Boehner and the Congressional Republicans are threatening to refuse to raise the US debt ceiling unless US Federal spending is cut sharply. 

Last year, the mid-year economic troubles did take their toll on tech purchases in the third and four quarters of 2011, but a last-minute resolution to the US debt ceiling issue, the European Central Bank's aggressive lending to banks so they could buy Italian and Spanish government debt, and some strength in US consumer spending, Germany's surprisingly strong growth, and continued growth in China revived global economic growth in Q4 2011 and into Q1 2012.  Much depends on whether this pattern of slump and revival will recur again in 2012.   My bet  is that we will in fact see the same pattern. 

So, let's look at the economic evidence, and then the tech market evidence. 

  • US economy slows but continues to grow.  In the US, the US Bureau of Economic Analysis on May 31 revised down Q1 2o12 real GDP growth to 1.9% from 2.1% in the preliminary report, and on June 1 the US Bureau of Labor Statistics reported that a disappointing 69,000 increase in payroll employment in May, the second month of sub-100,000 job growth.  On a more positive note, US retailers and auto makers reported good sales growth in May, while gas prices at the pump continued to fall from peaks earlier.   My take is that we will see real GDP growth in the 1.5% to 2% range in the remainder of 2012, down from my earlier assumption of 2% to 2.5% growth. 
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India's Public Sector Forecast: 2012 To 2017

Manish Bahl

The most critical factor driving the Indian public sector over the next five years will be India’s 12th national five-year plan, which covers the period from 2012 to 2017. I have just published a report on the plan that provides a comprehensive review of India’s new government spending framework and what it means for ICT vendors looking to successfully position for success.

Forrester estimates that India’s public sector IT purchases will grow at a CAGR of 14% between 2012 and 2017, reaching $108.5 billion in 2017. In 2014, we anticipate a decrease in government spending due to parliamentary elections — but spending will pick up after the election, as maintaining GDP growth will be on the agenda of any new government. We believe that massive infrastructure investments and increasing citizen expectations will fuel public sector IT in spite of the 2014 parliamentary elections. Citizens are pressuring federal, state, and local government to become more proactive and interactive and to provide services in a more organized and user-friendly manner. A recent Forrester survey of government IT buyers in India spotlighted this heightened focus on citizen services:

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Redefining Your Greenfield: Existing Cities Find Greenfield Opportunities

Jennifer Belissent, Ph.D.

Unfortunately, I will not able to deliver the keynote presentation at Forrester’s upcoming Infrastructure and Operations Forum in Paris as planned.  The theme of the conference is “Redefining your greenfield,” and I was looking forward to sharing my observations of “greenfield” in the context of smart cities.  So I thought I’d share some of my thoughts here.

A “greenfield” presents the opportunity to do things differently, to innovate.  We often think of a greenfield as the clean slate, the ability to start from scratch, to create without the baggage of history, without existing infrastructure, without meddling stakeholders.  We often hear of greenfields these days in the context of new cities – the massive infrastructure projects cropping up in the deserts of the Gulf region, or in Asia.  In the IT world, we think of the entrepreneurial start up building out their infrastructure from ground up.  Or even an emerging market with no technology legacy.  But greenfield opportunities aren’t just for startups or emerging markets, and moreover, their grass isn’t always greener.

That’s not to say the promise isn’t appealing.  The new, technology-enabled greenfield cities provide a clean slate, and the ability to test new technologies and practices.  Think about:

  • Networking across the city to facilitate home entertainment, telecommuting, remote diagnostics, eLearning, and eGovernment.
  • Smart grids to respond more quickly to vagaries in electricity supply and demand, and to enable self-repairing networks.
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SAP Buys Ariba – Huh?

Andrew Bartels

The big news in the ePurchasing software market yesterday was SAP’s acquisition of Ariba. This blockbuster deal will extend SAP’s position as the largest software vendor in the ePurchasing market. It also brings into the SAP fold one of the most innovative companies in this market – a company that has a fair claim to having begun the whole market in the late 1990s.

Still, as my title suggests, I’m not convinced that this acquisition makes strategic sense. I think there’s a real risk that this turns out to be a deal where one plus one equals 1.75, not two, let alone a multiple of two. Reason one: the tremendous duplication of products between the two firms, and thus the problems of product rationalization and internal competition. Reason two: the Ariba Network, which is the main rationale for the acquisition, is based on an idiosyncratic pricing model that in my view is unsustainable at current rates and thus will not generate the kinds of revenues that SAP is expecting.

Let me first state the case for why this could be a good deal:

  • SAP has a goal of significantly increasing the portion of its revenues that come from SaaS subscriptions, so adding a projected $342 million in subscriptions revenues in 2012 (on an annual basis – SAP’s share for the year will be about half that) helps SAP reach its target of $2 billion in SaaS revenues.
  • Ariba has correctly recognized the economic value in operating a supplier network that stands between corporate buyers and suppliers and facilitates their transactions. SAP’s acquisition of Ariba now gives it control of and revenues from the largest of these supplier networks.
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SingTel Lands Big Government Cloud Win In Singapore

Manish Bahl

On May 15, 2012, the Infocomm Development Authority (IDA) of Singapore announced that it would award its much-awaited externally hosted g-cloud infrastructure five-year tender to SingTel. My colleague Jennifer Belissent and I published a report on g-cloud opportunities in Asia Pacific late last year that highlighted Singapore as one of the governments leading the way toward g-cloud adoption in the region.

Some key highlights from the Singapore g-cloud contract:

  • SingTel will be responsible for all of the capex- and opex-related costs needed to build and manage the central infrastructure from its own data center in Singapore.
  • Singtel will provide a central “G-Cloud Service Portal” to all government organizations and departments to access central g-cloud services (computing, storage, database, archiving, networking, and other basic resources) and derive revenue based on a subscription model.
  • The Singapore government has not committed to any particular minimum g-cloud usage level.
  • SingTel will provide the required training to government departments on g-cloud functioning.
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SAP Gets Serious About The Large Enterprise Application Cloud

Stefan Ried

 

SAP Gets Serious About The Large Enterprise Application Cloud: 

Its Long-Term Strategy Should Involve A Triple Platform Play For The Cloud

Until now, it looked like SAP was still trying to balance its existing on-premises licensed business with the cloud alternative. But following its acquisition of Success Factors and the arrival of that company’s outstanding CEO, Lars Dalgaard, SAP has become really serious about applications in the cloud, placing Mr. Dalgaard at the head of a 5,000-person development team.

SAP’s new cloud strategy is all about business applications in large enterprises. SAP today announced its People, Money, Customers, Suppliers strategy — a significant move to offer business applications for large enterprises, rather than just SMBs and a few niche cases. It’s really targeting its core business users. Today’s announcements show SAP combining its core strength of large enterprise applications with a ready-to-use cloud strategy for the first time.

What is really mission-critical in this transformation of SAP and its global customer base?

1. Cloud-generation business applications.

Software-as-a-service (SaaS) applications are not just rehosted traditional applications. SAP is still on a learning curve, and the infusion of Success Factors will definitely help. The upcoming generations of enterprise users expect their applications to be simple, collaborative, mobile, and very different from what they (and their moms and dads) have used in the past. SAP key’s challenge is to keep their existing, conservative customer base happy while meeting the requirements of (and signing deals with) this new generation.

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2012 Huawei Global Analyst Summit: ramping up the game

Dan Bieler

Dan Bieler; Bryan Wang; Henry Dewing; Katyayan Gupta; Tirthankar Sen

Huawei hosted about 160 industry and financial analysts at its annual analyst summit in Shenzhen, China in April 2012. The main take-aways from the event are:

  1. Huawei continues its drive for more financial openness and transparency. Huawei provided detailed information about its financial and operational performance. In 2011 Huawei grew revenues by 12% to reach US$32.4bn and EBIT by 9% to US$3bn. The main regional growth was registered in Latin America, up 40%. Although due to higher capex cash from operating activities declined, the cash margin stood at 9%. Huawei is easily able to fund its expansion and innovation activities. In 2011, Huawei hired 30,000 new staff, bringing the total to 140,000 globally. For 2012 Huawei targets between 15-20% sales growth.
  2. Huawei places main growth emphasis on enterprise services and consumer devices. These market segments represent a potential target market with a combined value of about US$1.7 trillion, compared with the carrier equipment market value of about US$150 billion. Huawei repeatedly pointed out the early-stage nature of its activities in these areas. It even felt as if Huawei consciously played down its ambitions in order to downplay expectations.
  3. Huawei must strengthen its go-to-market strategy for its enterprise business. With more than 40% of Huawei’s current business coming from China, Huawei has to continue to fine tune its go-to-market model and penetrate markets other than China in a swift manner. Huawei also has to push for stronger relationship with their partners and increase their share in the total revenue.
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Deloitte Meets “Mad Men”

John McCarthy

Earlier this morning, the consulting firm launched “Deloitte Digital.” Part offering and part organizational change, the initiative brings together a mix of business, technology, and creative expertise to address a perfect storm of technology change. The firm will bring together five key capabilities — strategy, mobile, social, web content, and digital ERP. Deloitte Digital will focus on mobile and social, while the traditional technology services and consulting groups will handle the strategy, web content, and digital ERP elements. The tag line for Deloitte Digital is “business led, tech enabled and creative infused.” From an organizational view point, the firm has taken a page from its 2011 acquisition of Übermind and created 11 digital studios around the globe. Approximately 50% of the staff in the studios will come from a creative, graphic design, or user experience background. The rest will be a mix of engineers focused on emerging technologies and resources coming from the traditional consulting or technology services side of Deloitte. To showcase their newfound creative chops, the Deloitte Digital Team presented the pre-announcement to the analysts using paper “pitch books” straight out of the new reality advertising TV show “The Pitch.”

Forrester believes that the Deloitte announcement highlights the hybrid skill model that the new mobile apps and systems of engagement will require. Deloitte Digital is an innovative approach for multidisciplinary new skills required for success. However, it is still not apparent how the firm would tackle the other key side of the mobile equation, building the broad ecosystem of software and as-a-service partners in order to quickly roll out solutions for clients.

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