The Emergence Of The German Digital Autobahn Ecosystem

A few days ago, at an event hosted by Continental, Deutsche Telekom AG, Fraunhofer ESK, and Nokia Networks, I came across an interesting example of an emerging mobile Internet-of-Things (IoT) solution: the initiative to “connect the Autobahn” in Germany. The goal of the Digitales Testfeld Autobahn initiative is to develop a platform that allows a wide range of players to access a common platform for digital services in the context of Germany’s road infrastructure. The event also included a test drive to highlight how driving “assistants” in connected cars could communicate with a latency of about 15 milliseconds. Discussions at the event underlined several insights that CIOs should consider when devising mobile IoT solutions:

  • Ecosystem partnerships create more value for IoT solutions than standalone approaches. At the event, Deutsche Telekom’s CEO, Continental’s Head of Interior Electronic Solutions, Nokia’s VP of Strategy, Fraunhofer-Institute’s Head of Embedded Systems, and Germany’s Minister for Transport all pointed to the necessity for close cooperation to make the “digital Autobahn” platform work. Proprietary OEM technologies will not boost the connected road infrastructure. Continental told us that open IoT systems create more value than closed systems for the company and its customers. To uncover its true potential, the “digital Autobahn” platform will also need to be open to third parties like weather forecasters, retailers, and entertainment companies. This means that CIOs need to support open APIs.
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Atos’ Acquisition Of Unify Offers The Potential For A New Enterprise Collaboration Platform

French IT service provider Atos has reached an agreement to acquire Unify, a provider of integrated communication solutions, from The Gores Group and Siemens for an enterprise value of €590 million, of which €340 million is cash. Unify’s 5,600 employees generated an estimated €1.2 billion in revenue in 2014. Atos, 12% of which is owned by Siemens, hopes to finalize the deal in the first quarter of 2016.

Over the past few years, Unify has managed to transform its portfolio from traditional PBX products to robust, scalable, and carrier-grade solutions for IP voice, web collaboration, video conferencing, mobility, and advanced messaging; clients can add these to existing communication infrastructure to enhance business processes and productivity. However, this transformation wasn’t always easy for Unify’s customers, as it brought disruption and often meant integration and transition assistance. What can Unify’s customers expect should the Atos deal materialize? We believe that the deal will:

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AT&T Delivers Its Network On Demand

I believe that network-as-a-service-type offerings — where customers can control the provisioning and characteristics of their network transport services — will have a long-term impact on those enterprises undertaking digital transformation. Businesses that fail to recognize the significance of quality network infrastructure will undermine their digital business strategy. Secure, stable network connectivity is a prerequisite for using cloud, mobile, big data, and Internet-of-Things (IoT) solutions. As the business technology (BT) agenda gains momentum, CIOs are looking to technologies like virtualization and cloud that create agility by dynamically responding to business conditions. Network infrastructure has been a laggard on this score — until now.

AT&T has unveiled its solution, Network on Demand. It’s the basis for a new category of services aligned with customer requirements, including self-service access, control, and configuration of network bandwidth and features like security, routing, and load balancing. Network on Demand:

  • Gives customers control of network services. Network on Demand offers a completely different customer experience regarding network provisioning. Near-real-time provisioning via a self-service portal makes the customer’s network responsive to business needs.
  • Is a real game changer in the realm of connectivity solutions. As on-demand networks take off, products have the potential to become features on an access pipe that customers can turn on and off rather than remaining standalone "silo production".
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Mobile Solutions For The Internet Of Things Raise The Prospects For Edge Computing

Source: Forrester

I recently attended IBM BusinessConnect 2015 in Germany. I had great discussions regarding industrial Internet of Things (IoT) and Industrie 4.0 solutions as well as digital transformation in the B2B segment. One issue that particularly caught my attention: edge computing in the context of the mobile IoT.

Mobility in the IoT context raises the question when to use a central computing approach versus when to use edge computing. The CIO must decide whether solution intelligence should primarily reside in a central location or at the edge of the network and therefore closer to (or even inside) mobile IoT devices like cars, smart watches, or smart meters. At least three factors should guide this decision:

  • Data transmission costs. The costs of data transmission can quickly undermine any mobile IoT business case. For instance, aircraft engine sensors collect massive amounts of data during a flight but send only a small fraction of that data in real time via satellite connectivity to a central data monitoring center while the plane is in the air. All other data is sent via Wi-Fi or traditional mobile broadband connectivity like UMTS or LTE once the plane is on the ground.
  • Mobile bandwidth, latency, and speed. The available bandwidth limits the amount of data that can be transmitted at any given time, limiting the use cases for mobile IoT. For instance, sharing large volumes of data about the turbines of a large container ship and detailed inventory measurements of each container on board is completely impractical unless the ship is close to a coastal area with high mobile broadband connectivity.
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Cisco Is In The Midst Of Some Major Repositioning

As the digital economy gains momentum, CIOs will have to reassess and evolve their technology vendor portfolio. CIOs need to evaluate if their main technology vendors support the required new business practices and focus on crucial technologies.

Cisco has made massive investments in its portfolio and go-to-market strategies that help to sustain its role as a preferred vendor to most of its clients. We believe, however, that Cisco still has some distance to travel to transform its skillsets and business culture to become a truly strategic technology provider. The recent leadership transition offers Cisco the opportunity to redouble its efforts to strengthen its digital and customer experience skills, flatten its corporate hierarchies, and build a strong digital ecosystem of software and services partners. Our main observations when scrutinizing Cisco as a vendor in the emerging digital ecosystem are that:

  • Cisco is on the path to becoming a partner of the CIO's technology agenda.Cisco has launched programs to change its operational setup, its business culture, its compensation incentives, and its skillsets. Its willingness to disrupt itself positions Cisco well to eventually transform from a network business into a global BT provider.
  • A gap remains between top management's vision and Cisco's go-to-market pitch.Cisco's vision to transform from selling networking boxes to selling architectures, solutions, and business outcomes is spot-on. However, we still perceive a go-to-market approach focused on engineering and products. This disconnect remains a challenge to becoming a strategic technology provider.
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Exploit The Top Mobile Mind Shift Technologies

Picture: Leonardo da Vinci

As change agents, CIOs, CTOs, and technology and strategy managers need to help design great mobile moments that drive revenue growth, improve the customer experience, and eventually help transform their organization’s business model. Technology will play a major role in this endeavor. To succeed, it is important to remember that:

  • There will not be one single new revolutionary mobile technology. Many mobile technologies are coming of age; their true potential will unfold through the intelligent combination of mobile technologies to support mobile moments. The goal for the CIO should not be to chase the latest mobile technology, but rather to combine emerging mobile technologies in the most effective manner.
  • Mobile has moved well beyond smartphones and tablets. Mobility is now embedded in nearly every business process in both the consumer and business markets. Wearables and all sorts of devices and machines are becoming part of the mobile universe. The Internet of Things will also have a strong mobile dimension.
  • CIOs must focus on the mobile technologies with the greatest user impact. As CIOs create their business technology (BT) agendas, they need to take a more proactive approach to understanding and investing in emerging technologies for competitive differentiation. CIOs need to identify and catalog the customer impact of the main emerging mobile technologies that will help their organizations thrive in the age of the customer.
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The Future Of Telcos Remains Precarious

The old telco business model is breaking up. Telcos are at a crossroads, with one path leading to becoming pure utilities, another to transforming into important members of digital ecosystems, and a third to their complete demise.

Telcos have had years to prepare for this situation, but few have used their time effectively. At this stage, I see few reasons to be optimistic about the prospects for most telcos to recover the ground they’ve lost to other players in the emerging digital ecosystems because:

  • Consumers care more about apps and devices than connectivity than ever.One main impact of the onslaught on telcos by over-the-top providers like Facebook and handset manufacturers like Apple has been to push telco brands to the back of the consumer’s mind. Consumers care more about which handset and apps they use than which connectivity provider they have. Telco brands just don’t rock as they used to years ago.
  • Business leaders do not see telcos as the first choice to provide ICT services.Data from Forrester’s Global Business Technographics® Networks And Telecommunications Survey 2015 shows that business and IT users trust systems integrators and independent solution specialists more than telcos with a wide spectrum of voice, data, and managed services. One of the reasons is that business and IT users feel that telcos don’t understand their specific business requirements sufficiently.
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Orange Must Intensify Its Transformation

Orange hosted its analyst event in Paris in July 2015, detailing its Essentials 2020 strategy for business customers. Central to Orange’s Essentials 2020 strategy is:

  • Pushing its customer experience capabilities. Orange shared its ambition to make its entire organization listen to its customers more effectively. In our opinion, Orange is one of the more CIO-focused telcos. One of Orange’s key goals is to support the CIO in regaining control over technology projects that have been lost to line-of-business (LOB) managers, who launch technology projects outside the CIO’s remit. Importantly, Orange also told us that it is working increasingly with LOB managers.
  • Driving the cultural transformation of Orange itself. Orange must become braver to disrupt itself. This includes bringing in new perspectives and experiences from outside, including other sectors. There are some encouraging signs that this is beginning to happen. For instance, Orange Business Services recruited its deputy CEO, Laurent Paillassot, from the financial services sector and put the American Diana Einterz in charge of its French Major Accounts.
  • Enhancing its digital solutions. Orange recognizes the greater role of software and data in its customers’ and its own business models. At the event, Orange demonstrated a number of interesting digital solutions in the Internet-of-Things (IoT), mobile, and healthcare spaces, which equal those of its leading telco peers.
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Huawei Defends Its Pole Position In The Race Of Network Solutions Providers In Europe

Several Forrester analysts attended Huawei’s 12th global analyst summit in Shenzhen recently. This post will focus on the perspective of European CIOs; in our view, they should take note of Huawei due to the firm’s growing strength in the European enterprise segment. For Forrester’s global perspective on the event, please refer to our upcoming report. For European CIOs, the main takeaways of the analyst summit are that Huawei is:

  • Strengthening its financial performance. Huawei’s enterprise divisions — which the firm just announced in 2011 — impresses with its strong growth rates. Huawei grew its enterprise activities by 27% to $3.1 billion in 2014; two-thirds of that growth came from outside China, with Europe accounting for the largest share of that. Huawei’s goal is to grow its enterprise business to $10 billion by 2019. Outside of China — which still accounts for 38% of Huawei’s revenues — EMEA will continue to play a critical role for Huawei, as it accounts for 35% of revenues. In EMEA, Huawei reported revenue growth of 20%.
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Digital Ecosystems Alter Value Creation And Process Landscapes

CIOs will be orchestrators of digital ecosystems to boost innovation, production, and go-to-market capabilities. In the age of the customer, every business needs to put the customer at the center of marketing, sales, service, and delivery in order to support the brand promise.

Business ecosystems comprise many market players, including suppliers, distributors, customers, competitors, and government agencies. People, processes, and technology are the fundamental building blocks of business ecosystems. They evolve as a form of collaboration between these market players as part of the process of developing and delivering products or services. Now business ecosystems are going digital.

The digital transformation is a huge challenge and opportunity for each individual business. Business processes are changing significantly as a result of real-time information exchange, the mobile mind shift, always connected and mobile devices, and the opportunity to collect and monitor structured and unstructured data. As a business enabler, no CIO can ignore the digital transformation. Digital ecosystem management is much more than a sourcing project: According to Capgemini, businesses with the digital maturity to build digital innovations and to drive enterprise-wide transformation are 26% more profitable than their average industry competitors on a range of measures including EBIT margin and net profit margin. The CIO must actively help the organization to deliver value in the emerging digital ecosystems.

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