Despite Economic Problems, Tech Market Will Continue To Grow In 2011 And 2012

Andrew Bartels

As readers of my blog will remember, we were all ready to publish our mid-2011 update to our global economy report (see July 28, 2011, "Forrester Will Lower Its Tech Market Forecast By One-to-Two Percentage Points, Depending On Federal Debt Ceiling Outcome") when the US deficit ceiling crisis, renewal of the European debt crisis, and other developments raised questions about the strength of the economic recovery. Given the deterioration in the economic outlook, we stopped publication to rework our forecast to reflect those changes. The delay did have a some side benefits, including getting Q2 tech market data for Canada, adjusting our US data on computer equipment, communications, and equipment for Bureau of Economic Affairs revisions, incorporating new data sources for our US projections for IT consulting and outsourcing services, and taking advantage of the better data on Australia, China, India, and Japan from Forrester's acquisition of Springboard.

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Netflix: Can A Company Really Be This Inept And Succeed?

Nigel Fenwick

NetflixIf you thought Netflix handled its earlier price increase badly, just wait till you hear the complaints about its latest move. In a letter to subscribers sent today, Reed Hastings, Netflix Co-Founder and CEO, opens with:

“It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming and the price changes.” – Hmm, perhaps a little bit of an understatement! (Read the full text at the end of this post.)

So members like me might be lulled into the false impression that this letter was going to be an apology in an attempt to smooth things over. Boy, was I wrong. Instead Hastings goes on to say the following (my paraphrasing, not his):

  • Because you are such a good customer, renting both DVDs and streaming, we’re going to degrade your service.
  • We know you like the fact that you can easily move movies between your online queue and your instant queue, which is why we’re going to stop you from doing that.
  • We know you liked the fact that a movie in your DVD queue is added to your instant queue automatically when it becomes available for instant viewing – so we’re going to stop allowing that.
  • We recognize that our website, with its easy-to-use features is one of the reasons you use our service, so we decided to give you twice the benefit by breaking it into two websites and asking you to use the two sites instead of one.
  • We won’t be increasing our prices as a result of reducing your service levels – we already did that.
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RIM's Tablet Night Terrors

Ted Schadler

Picture this. There's a hot new market adjacent to one you've dominated for years. You have the design team, engineering staff, retail distribution, and corporate buyer relations to build and sell that adjacent product. (Okay, so you don't have all the software skills or platforms you need, but you can buy those, right?)

Wouldn't you go for it? I mean, bet the business on it? Sure you would.

Now picture this. You ship a v0.7 tablet and call it done. You ship 500,000 units to corporate resellers and consumer retailers. And you talk about the tablet ecosystem that you have and are building. Then, just one quarter later, you ship 200,000 units to your channel. (Remember that Apple sold, not shipped, sold, 9.25 million iPads in the same period.)

Wouldn't that give you night terrors?

Here's what RIM needs to do to wake up and face reality:

  1. Scale back expectations and promises and revert to its natural market: highly secure, regulated, and locked down industries. Defense comes to mind. This will reset expectations and get the media bull's-eye off your back.
  2. Pull out all the stops to get QNX secured, BES-controlled, and deployed on a new generation of touchscreen phones. This will plug your product holes.
  3. Get the Android compatibility down cold. Don't replicate that ecosystem of content and apps. Embrace it. This will let you appeal to the consumer inside every employee.
  4. Make BES the center of your commercial universe. Deliver more connectors to SAP, Oracle, Salesforce, the cloud, and beyond that Apple or Google. This will attract corporate developers and buyers.

With those steps in motion, the night terrors will subside and a more rational, though smaller, company will emerge into the light of 2012.

Making Change Management Work: Three Practitioners Offer Some Guidance

Claire Schooley

Change management from the people perspective is too often a forgotten component of business process transformation. Organizations focus on getting the new processes right and putting technology components in place — but helping people who will implement the new processes accept and even embrace change is usually an afterthought. Some organizations — small and medium-size businesses as well as global enterprise organizations — have realized how critical the people piece is to success and have addressed the people issue early on in the change process.

At Forrester’s Business Process Forum, we will bring together some of these practitioners that have made change management work in their organizations. We recently caught up with three of them: Tom Coleman, Chief Information and Process Officer, Sloan Valve Company; Wade Wallinger, GM Value Chain Optimization COE , Chevron; and Ronald Sharpe, Change Management Lead, Business Excellence Team, Cabela’s.

Q: How did you get your change management program started?

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“Street Smart” Versus “Book Smart”

Jennifer Belissent, Ph.D.

Leonardo da Vinci BridgeSmart cities come in all shapes and sizes. There is not one definition of smart. Think about the terms “street smart” and “book smart.” When I think about the initiatives or reforms that we’re seeing across cities, I’ve started categorizing them along these lines. New initiatives like sensor-based parking and traffic optimization fall into street smart, while streamlining of back office processes and applications tend to be more book smart. And as we know, it takes all kinds.

The hype of smart cities, however, has focused on the sexy new kid on the block. Everything sensor-based and “intelligent” has gotten top billing from vendors. However, many cities need to start cracking the books first. 

Here are a few ways to start:

  • Rationalization of back office applications. Sprawling or at least siloed IT infrastructure and business apps can be upgraded and consolidated. Several CIOs I’ve spoken with have mentioned that this is a big challenge. Department heads don’t want to give up control over their domain, as they see it. Big cities find themselves with multiple enterprise resource planning (ERP) systems running across different departments in a city: Parks and Recreation licenses ERP from one vendor; Public Works subscribes to ERP services from another; Transportation manages their fleet with yet another.
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CMOs And CIOs Tackle Technology: Q&A With Robert Mead, CMO And Michael Mathias, CIO At Aetna

Sharyn Leaver

Recently my colleague David Cooperstein and I had the opportunity to meet with Robert Mead and Michael Mathias, the CMO and CIO respectively at Aetna. They will be speaking at our upcoming CIO-CMO Forum on September 22 in Boston, so this serves as a bit of a preview to what should be an eye opening presentation. Enjoy!

David Cooperstein: What external changes drove you to build a deeper partnership with your technology peers?

Robert Mead, Senior Vice President, Aetna Marketing, Product & Communications: The U.S. health care system is fragmented and well behind the curve in terms of price transparency and consumer-friendly products and services.  The deep partnership between technology and marketing at Aetna lets us put leading-edge technologies and powerful tools and applications directly into the hands of people so that they can be confident consumers and informed patients. Our close collaboration with our colleagues in technology is driven by a few external factors:

  • the increasing cost of care and the corresponding changes in employer-based insurance – consumers are being asked to take more ownership of their health and wellness and their health care spending;
  • the introduction and rapid adoption of technology that empowers consumers (and patients) to engage in the health care system where they are in life and in the way they want to be connected; and
  • health care reform, which aims to bring millions of previously uninsured Americans into the marketplace as consumers.
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HP Expands In Africa: Don't Forget That GTM Is Not CSR

Jennifer Belissent, Ph.D.

There seems to be a renewed interest in Africa. Is it that those who follow emerging markets have tired of China and India?  Is it the recent events in North Africa that have sparked interest and hope for the region? Or could it be that, as McKinsey Global Institute put it, at least some African countries “have turned a corner and are now on the path to sustainable growth and poverty alleviation?”

From a technology perspective, it is also likely that finally with recent developments in both undersea cable and satellite links, the Internet has arrived in a way that makes Africa a viable market for ICT. And by that I mean not just for low-cost, bottom-of-the-pyramid solutions and not just South Africa, both of which have long been on the radar of some technology vendors for some time. 

I’ve been studying Africa on-and-off for over 20 years now. In 1989 I took a one-way ticket to Bujumbura, Burundi (yes, I did have to look it up on a map first), traveled to Bukavu, Zaire (now Democratic Republic of the Congo), where I spent the summer, and eventually settled in Bossangoa, Central African Republic, where I was a high school math teacher for two years. At that time there were no telephones in my city although it was the largest in the region, and only limited lines into and out of Bangui, the capital. I spoke to my parents three times in two years, which is very hard to imagine in these days of Skype and Facebook. Needless to say much has changed in Africa as well.

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Define Your Social Ecosystem

Nigel Fenwick

One of the many interesting topics of discussion we get into in our Social Business Strategy workshops is around the social ecosystem. This is the name I have given the collection of business capabilities potentially enhanced by one or more social technologies.

First let me define social technologies. Note I’m using the word “technology” quite deliberately in place of the more common term “social media” because social media is too often associated with consumer-facing technology as deployed in support of marketing. In defining the entire social ecosystem I prefer the more generic “technology”. I define social technology as “any technology that enables one-to-many communications in a public forum (or semi-public if behind a security firewall)”.

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Dreamforce 2011 Notes: Salesforce Wants To Be The Collaborative Interface Between Your Business And The Market

TJ Keitt

While the Metallica concert and guest appearances by MC Hammer and Neil Young during Marc Benioff's opening keynote made's Dreamforce 2011 entertaining, my principle reason for venturing out to San Francisco was to hear Salesforce's vision for how it was going to turn Chatter into an enterprise-wide collaboration platform. What they showed was an elegant, natural extension of their core value proposition as a CRM and platform-as-a-service (PaaS) provider. In a nutshell, Salesforce wants you to use Chatter to connect internal business processes to the external social web in which your partners and customers live. This is not a new vision, of course. We've argued the importance of external collaboration for purposes of product management and marketing and even profiled a company that has rolled out technology and changed its corporate culture to embrace intercompany collaboration. What makes Salesforce's story compelling is how it intertwines Chatter with its database, social listening, CRM and PaaS capabilities. Mr. Benioff presented this as a three part story:

  1. Create a social profile of the customer. The Radian6 acquisition is brought to bear here. Salesforce proposes using this technology not only to understand customer sentiment, but to take a snapshot of indivdual customers by using their interactions with social media to learn who they are. This information is used to build a "social database" which can round out a customer record in the CRM system.
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3 (New) Predictions For The Future Of Carbon And Energy Management Software

Chris Mines
Eighteen months ago, I wrote a market overview report, "The Advent of Enterprise Carbon and Energy Management Systems." Returning from vacation last week, I was sifting through the recent news from suppliers in this nascent market, and thought it would be an opportune time to revisit the principal predictions I made in that report. It's actually something that we in the industry analyst world do not do often enough -- take a look back at our predictions and see how events have or have not conformed with our forecast.

So here goes:

  • Prediction No. 1: IT is the buyer of ECEM systems. "During the next few years [I wrote in December 2009] we believe that enterprise IT organization will emerge with the clear ownership role [for] ECEM systems. IT will bring its expertise in data analysis, data integrity, network connectivity, and overall systems architecture to bear on the corporate sustainability challenge. The faster that data sources for ECEM become more instrumented, more granular, [and] more real-time … the faster IT will move to the center of ECEM system evaluation, implementation, and operation."
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