Business Models Trump Technology As Enablers Of Gov2.0

Jennifer Belissent, Ph.D.

Local governments continue to evaluate their short- and long-term objectives and the tools they need to achieve them.  As they do, it is increasingly obvious that those tools include not only the technologies to transform their internal processes and external citizen programs and services.  The business model – how the cities partner and purchase – is the most important enabler to a technology-driven government transformation.  Governments no longer – if they ever really did – go out and purchase technology.  Rather as governments increasingly turn to technology-driven solutions, they are pushing vendors to adopt business models that have long been popular in larger infrastructure-based public works projects – public private partnerships (PPPs). 

The PPP model, however, has been a daunting proposition for many vendors.  I’ve heard many technology vendor strategists state categorically:

“PPPs are not in our DNA.”

“We do them if we have to.”

“Our competitors are driving us in that direction.”

But more recently, particularly in the context of the smart city opportunities, tech vendor strategists are embracing alternative business models.  They still, however, tend to avoid the term PPP – although the models chosen are all forms of “partnership” with the public entities they are serving.  Here are four examples:

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Three ICT Roadblocks In Realizing Smarter Buildings' Potential

Chris Mines
Three ICT Roadblocks in Realizing Smarter Buildings' Potential

The promise of smart buildings is cropping up across the ICT industry lately. Our calendar of vendor briefings and events is crowded with announcements of new products, acquisitions, and partnerships as ICT suppliers seek to connect their digital and analytic systems with the physical world of HVAC, security, lighting, and other in-building systems.

There are a number of goals that smart building projects hope to achieve, including:

  • Improving customers' bottom lines by reducing energy consumption and expense.
  • Improving employees' physical surroundings and therefore productivity and satisfaction.
  • Improving sustainability metrics and perceptions by baselining and then reducing corporate carbon footprint.
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6 Types Of Sustainability Software That Meet Any Company's Needs

Chris Mines
6 Types of Sustainability Software that Meet Any Company's Needs

It's been clear for some time that sustainability is moving from the periphery toward the center of many companies' strategic agendas, and that IT systems and software will play a crucial role in accelerating that movement.

But what's been missing -- until now -- is an overarching framework for understanding who the stakeholders (and buyers) of IT-for-sustainability (ITfS) systems are, what motivations and barriers they face, and which categories of products, services, and solutions can help them. With the research report that we will publish next month, Forrester takes a giant step towards providing that framework. Based on interviews with sustainability leaders at more than a dozen large global enterprises, we developed three company archetypes of sustainability adoption (see Figure 1):

 

Marketer: Improving branding and transparency with advanced reporting. Companies that fall into this category are either early in their sustainability maturity or just do what they have to do when it comes to regulatory compliance.

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Business Value, Not Regulation, Sells Sustainable IT

Chris Mines
Business Value, Not Regulation, Sells Sustainable IT

I meet with about three or four sustainability solution providers each week, getting an update on their customer and product progress and sharing our latest research plans and client inquiries in the IT-for-sustainability (ITfS) space. In the past few weeks, I heard again from vendors about their excitement for new regulatory mandates appearing on the horizon.

Whether it’s the UK government’s reaffirmation of its carbon-cutting targets or the U.S. Environmental Protection Agency’s renewed vigor on policing emissions, vendors seize on these activities as prospective catalysts for customer adoption of their ITfS solutions. Regulation, they say, will increase the urgency for companies to measure, manage, and report on sustainability metrics like resource consumption and resulting GHG emissions. And, as a result, put a knee in the curve of their revenue projections.

To which I invariably say, "Get real."

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Microsoft's Office 365 Allows Flexibility In Enterprise Collaboration Technology Strategies

TJ Keitt

Yesterday morning (June 28), I , along with a small group of Microsoft customers, partners, and members of the technology and business press, sat in a SoHo, NY, gallery to listen to Microsoft CEO Steve Ballmer announce the release of Office 365, the long-awaited successor to Business Productivity Online Standard Suite (BPOS). In his remarks, Ballmer positioned the product set as a way for businesses of any size to facilitate communication and collaboration. What he and all of the multimedia presentations in the gallery stressed was how Office 365 addressed the productivity and collaboration needs of IT-constrained small and medium-sized businesses. While smart business (it helps Microsoft tell a compelling story against Google, which is doing well in that part of the market), the natural question I heard from people in the room was, "What about the enterprise?"

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Taleo Makes Strategic Jobpartners Acquisition To Boost Its European Presence

Claire Schooley

Today Taleo announced the acquisition of privately-held, Europe-based Jobpartners for $38 million (€25 million) in cash. With this acquisition, Taleo strengthens its European presence in talent management, as Jobpartners has a presence in 50 countries and 28 languages and is also a talent management vendor. The deal is expected to close in early Q3. Jobpartners has only 68 customers, but these customers include Deutsche Post DHL, Nike EMEA, Rabobank, and 16 Global 500 companies. Jobpartners also has a R&D facility in Krakow, Poland and a support center in Scotland that no doubt figured prominently in Taleo’s acquisition decision. In terms of technology, the fit is a good one, because Jobpartners is SaaS-only. Taleo said that it is in the process of evaluating Jobpartners’ technology, but this acquisition is not about acquiring new technology — it’s about doubling Taleo’s customer base in Europe and becoming a known European player in the talent management field. Customer success teams made up of Taleo and Jobpartners staff are in place to meet with Jobparters customers to help them get familiar with Taleo. Taleo will continue to support the existing Jobpartners platform for a while as plans are put in place for the transition.

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How Consumerization Drives Innovation

Ted Schadler

Forrester has been analyzing the impact of consumerization of IT on business since this seminal 2008 report. And we've collected data to measure the phenomemon since 2009. Did you know that 35% of information workers use personal technology for work? And we published a Harvard Business Review Press book, Empowered, on why companies must empower their employees: it's so they can serve the needs of empowered customers.

And now we can directly link consumerization with business outcomes that IT and every other part of a business cares about: innovation, advocacy, and leadership. We've done this with a Q1 2011 survey of 5,102 information workers in North America and Europe, our Workforce Forrsights data.

The report, "How Consumerization Drives Innovation," is chock full of data available to Forrester customers. This post is an excerpt to introduce the outcomes and impact to everybody. We'll use three charts to make the point.

  • First is the consumerization data. Just how many information workers in North America and Europe do something with technology outside of IT control -- either bring their own smartphone or tablet for work, use unsanctioned Web sites for work, or download applications to a work computer? It's one in three!
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Watch Out For A Potential Glut Of “Dark Cloud” IaaS

Andrew Bartels

Back during the dot.com boom years, existing telcos and dozens of new network operators, especially in western Europe and North America, laid vast amounts of fiber optic networks in anticipation of rapidly rising Internet usage and traffic. When the expected volumes of Internet usage failed to materialize, they did not turn on or “light up” most (some estimate 80% and even 90% on many routes) of this fiber network capacity. This unused capacity was called “dark fiber,” and it has only been in recent years that this dark fiber has been put to use.

I am seeing early signs of something similar in the build-out of infrastructure-as-a-service (IaaS) cloud offerings. Of course, the data centers of servers, storage devices, and networks that IaaS vendors need can scale up in a more linear fashion (add another rack of blade servers as needed to support an new client) than the all-or-nothing build-out of fiber optic networks, so the magnitude of “dark cloud” will never reach the magnitude of “dark fiber.” Nonetheless, if current trends continue and accelerate, there is a real potential for IaaS wannabes creating a glut of “dark cloud” capacity that exceeds actual demand, with resulting downward pressure on prices and shakeouts of unsuccessful IaaS providers.

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Canadian ICT Market Will Be Similar To US In Growth Rates, But Differs In Product And Industry Mix

Andrew Bartels

On the same day that we published our latest forecast for the European ICT market, Forrester has also published our forecast for the Canadian tech market (see June 8, 2011,“The Canadian Tech Market 2011-2012 -- Different From US In Industry Mix of Purchases; Similar Growth Rates").   The following are my key takeaways from this report:

  • The Canadian market for purchases of information and communications technologies (ICT) by businesses and governments is about 10% the size of the US ICT market, and only about 3% of the global ICT market.  Still, it is an important market because of the sophisticated level of its tech adoption (i.e., its readiness to adopt advanced technologies) and its proximity to the US market.  
     
  • Canada's ICT market growth rates of 6.2% in 2011 and 2012 growth of 8.1% in Canadian dollars will be very similar to the US ICT market growth in US dollars in the same periods.  With the Canadian dollar having gained strength against the US dollar, that means that US vendors will see even stronger Canadian revenue growth when they convert their Canadian sales back into US dollars. 
     
  • Communications equipment and software will have the strongest growth in 2011, at 10.5% and 8.4%, respectively.  Computer equipment growth of 4.4% and telecommunications services growth of 2.2% will be the weakest product categories.
     
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IBM's Intelligent Operations Center for Smart Cities: Think Cities not just Departments.

Jennifer Belissent, Ph.D.

Government investment in ICT is growing. At Forrester we expect the overall government ICT budget to reach $346 billion in 2011, growing to $382 billion in 2012 or by about 10%.  That makes government one of the largest vertical industries – almost double the size of the retail industry, well above the telecom industry and actually behind only professional services and financial services.  As government soul searching intensifies in the wake of the financial crisis, and in light of global competition and economic recovery, we expect the dawn of a new government – not “big government” but a government that operates more effectively and certainly more efficiently.  What does that look like, and what does that entail?  We see three primary trends:

  • A move to greater performance management processes with an emphasis on KPIs for specific programs rather than just budget targets.
  • An increased dependence on technology but with an eye to rationalization and consolidation, and an increased role of a centralized CIO to coordinate technology adoption;
  • And, a growing adoption of enterprise management tools with visibility not only into department level programs but including executive dashboards to enable a holistic view of the government. 
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