Billions For Snapchat – Have We Lost Our minds Again?

Craig Le Clair

 

$3 billion may not be enough for Snapchat, the latest social-media craze. Those of you as socially challenged as I am may not know that Snapchat allows teens (mostly) to send photos that get erased after a few seconds. Certain politicians would have paid dearly for this feature. And now there are so many bad photos zipping around the Internet (my wife alone is responsible for thousands) that the Snapchat message service may have great social value.

No question, it is a popular site for young users and is grabbing Facebook’s teenagers. But valuations like this strike me as well – ridiculous. Sure Facebook will try to keep this from Google and the latter will be reluctant to see Facebook grab the possible next big social media thing. I get that.

But value continues to be a funny thing in technology. 7,671 miles from Silicon Valley is India.  Looking over its shoulder at China, they finalized the deal to pick up a $2.3 billion aircraft carrier from Russia. A bit of a "fixer-upper" but it will now have two aircraft carriers. The Russian flag on the vessel was lowered, and the flag of the Indian Navy was raised. A coconut was then smashed against the ship’s side. 

I have a hard time reconciling these two values.  You can have a photo-sharing site with a clever algorithm and a fair number of eyeballs, for maybe 3 billion. Or you get a 45,000-ton vessel that can carry up to 30 aircraft and will have a crew of around 2,000 for a mere $2.3 billion, certainly an eye-popping conversation piece when tied up off the back dock. 

It’s hard for me to imagine that the vast R&D teams at Facebook or Google couldn’t whip something like Snapchat up in a few months. But even if taking a bit longer, if rumors are true, how do you turn down a $3 billion offer? And the bigger question: Is it really worth anywhere near that?

Business Agility And Obamacare

Craig Le Clair

 

What’s really wrong with healthcare.gov?

Everyone is focused on getting the health exchanges working well (or criticizing those who failed to get them working). But the greater risk and opportunity long term is the ability to manage change. With software you often get one chance to get it right – that initial design and architecture needs to be well conceived. Adding features, patches, and fixes, particularly under pressure, often creates hard problems down the road.  

So think of the vast number of changes that await. Modifications to various rating systems within hundreds of  benefit and risk levels; revised procedures and laws that allow brokers to enroll – not to mention the small business health options (SHOP) programs; and improvements to back-end functions to support online and offline processing. And these are changes to the Act itself. Changing demographics, ramping customer experience demands, and advancing mobile opportunities also will drive change. My biggest fear, as we pull the bus out of the ditch, is whether hastily applied extensions to deal with the initial crisis will make it difficult to adapt going forward. Hence, the real challenge is whether healthcare.gov has been built to handle the incredible number of inevitable changes with this transformational law.

We just completed our second report on Business Agility Performance and looked at what factors can make the government more agile. Of our 10 dimensions, the most important dimensions for the exchange going forward are Process Architecture and Software Innovation.

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Business Agility And The NSA

Craig Le Clair

 

Here’s a different take on the recent revelations of the NSA.

How does Edward Snowden, a low-level contractor to the government, recently fired from Booz Allen with a fabricated salary history, get access to a trove of documents about top-secret telephone and Internet surveillance programs? This to me is troubling. Too many years ago, I had top-secret clearances in places like BBN and MITRE Corporation that do lots of contract work for DoD and the three-letter agencies. But I never had anywhere near the broad or deep access to information that this contractor had.

Yet, we need to keep this lapse in governance in perspective. The only way we can beat terrorists is with superior information management. Big data with predictive analytics can make connections that no human can. These tools will form the ultimate weapon of this century and should remain a key investment area where we maintain leadership. How important is analytics? Forrester just completed its second report on business agility, and we looked at what factors can make the government more agile – better able to deal with unexpected outside events. We also studied which of our 10 dimensions drives the most economic performance. Of our 10 dimensions, the two that apply most in this case are analytics and knowledge dissemination.

Competence in analytics was shown conclusively to drive effectiveness in government and profit in the private sector based on our survey. See Agility Performance. A sophisticated government organization, particular where intelligence is the goal, needs great tools to control, manage quality, and govern the use of data throughout the organization.

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Business Agility And The Odds Of A Successful American Airlines and USAir Merger

Craig Le Clair

Another blockbuster airline merger is upon us. It is hard to imagine this will benefit the flying public - fewer direct flights,  higher prices, more crowded planes –if that is possible- are a likely outcome. But the stock market likes the move: more pricing power + economies of scale – how can you not like this?  The Airline industry in aggregate has lost over 50 billion dollars in the last decade. Life time it is in the red. Southwest is the only airline to consistently make money. Warren Buffet, before eliminating airlines from his portfolio, has been quoted as saying “If a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down.”

Cynicism and ugly facts aside, the success of this merger will depend on how prepared the combined airlines are in dealing with change in their markets and ecosystem.  Dominant companies with few competitors tend to think they are immune to change.  So they don’t try to increase their awareness of changes, and other than cost, don’t try to improve their execution of change strategies.  They become less agile as companies – when new competition starts to pick them off, they will be left with the least differentiating and least profitable parts of their business. 

Forrester is putting significant effort into Business Agility – what it is, how it relates to the success of companies within industries, and what foundations business agility is built on.  We’ve identified 10 dimensions that underlay business agility – and even developed a quick assessment methodology.

Looking at what agility foundations the combined AMR+USAir  should have, several of these dimensions jump out:

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The "Three Kingdoms" Of The Public Cloud Market In China

Charlie Dai

The classic work of Chinese historical fiction “Romance Of Three Kingdoms” describes the history of China after the Han dynasty. This work focuses on three power blocks that fought against each other in an attempt to be the dominant kingdom. After my discussions with many users and vendors at the OpenStack Summit 2013, I see an analogy between these three kingdoms and the evolution of the IaaS market in China as I described it in my report “PaaS Market Dynamics In China, 2012 To 2017” early this year.

Three categories of players are emerging in public cloud market in China, and similar to the Three Kingdoms, these players will fight against each other and collaborate at the same time, accelerating both the adoption and the maturing of cloud solutions in Chinese market.

  • State of Shu: Amazon Web Services. The king of Shu was the descendant of Han dynasty before the era of the Three Kingdoms; because of his “royal blood,” he had many supporters and followers to fight against the other two kingdoms.

Amazon.com is in a similar situation: It has very good reputation among architects and developers in China. However, Amazon’s promotion activities are lagging. Amazon is trying to expand its cloud territory into Chinese market by building a data center in Beijing and recruiting local personnel. However, its relationship with the government is not as good as Microsoft’s, and Amazon’s ambition to launch AWS in China has been slowed down due to local regulations.

  • State of Wu: Microsoft Windows Azure and its alliances. The state of Wu is competitive because it has the natural advantage of the Yangtze River, helping it defend against invasion and expand its territory.
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Engagement, Smart Systems, and Nimbleness Anchor The Top Tech Trends To Watch

Brian  Hopkins

Mobile, social, and cloud computing have created seismic shifts in the business technology landscape over the last seven years. Instead of simply evolving our 2011 top trends research, this year we’re taking a fresh look at how technology is fueling business change anchored by three broad themes:

  • Engagement: Engaged customers drive the pace of business change.
  • Smart: Firms rely on smart systems for competitive advantage.
  • Nimble: IT embraces change to help them be both nimble and secure.
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How Telstra drove global operations through business-led IT Transformation

Charlie Dai

IT complexity hurts business.  This is even more the case when a company has global markets and global operations.  Essential business needs such as a single integrated view of global customers, or consistent product or service portfolio become impossible to achieve. 

Managing IT complexity to support business strategy is a big challenge for enterprise architects at large companieswhen a company has global operations, as is the case for Telstra, an Asia-based telecommunications firm. However Telstra’s enterprise architecture (EA) team addressed its challenges by focusing on customer engagement, improved agility, and global business strategy enablement.  Because of their success, they were one of the six firms to win the InfoWorld/Forrester Enterprise Architecture Award  in 2012. 

In my recent report “Case Study: Telstra’s Business-Led IT Transformation Facilitates Global Operations”, I analyzed the key practices they made to support their business-driven transformation. These practices include
  • Build Capability Maps To Link Business Goals And Transformation Requirements. Business capability maps are a core tool that enterprise architects use to identify their organization’s strengths and gaps and support its business strategy. Architects should leverage industry standard frameworks like eTOM to build a custom map, overlay it with business goals, and use it to assess and prioritize needed changes.
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2013 Enterprise Architecture Award Winners – All About Business

Alex Cullen

The practice of enterprise architecture is about your business – guiding decisions and designing solutions for better, more sustainable business outcomes. 

Pretty much every EA leader would agree with this statement – but only a small percentage can say that this describes their program. Whether due to the situation they are in, or their own leanings, their impact is mostly on IT outcomes. It’s in this context that it’s such a pleasure for me to announce the winners of the 2013 InfoWorld/Forrester Enterprise Architecture Awards

Two words stand out in all these winning submissions:  “business” and “transformation.” These EA programs all share a singular focus on being central to how their business, not just their IT function, evolves.   

  • Many in our profession have said that EA should report into the business, not IT.  The EA program in the National Bank of Abu Dhabi; the second largest lending bank in the United Arab Emirates, does so. In their submission:  Building the Global Business Transformation Roadmap, they describe how the credibility and impact they had when they were part of IT lead to them being moved into the Transformation Management Office, reporting to the CEOThey are now responsible for the analysis and transformation road maps, transformation program design, and balanced scorecards for the overall bank as it seeks expand to 45 countries in five years.     
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Big Data For Telco Begins To Unleash Systems Of Engagement

Brian  Hopkins

In our recently completed Q3 2013 Global State Of Enterprise Architecture Online Survey, big data for real-time analytics moved from the No. 3 most revolutionary technology to the No. 2 position, according to the 116 enterprise architects who participated. This reflects the importance firms now place on turning vast amounts of data into immediate insight. And this trend is extremely important to telecommunication industry communication service providers (CSPs), who are sitting on a gold mine of data about what subscribers are doing on their mobile devices.

Let’s break this down a bit more -- according to the United Nations, there are about 2 billion mobile broadband subscriptions globally (that’s about 28% of the world’s 7.1 billion people). That’s a huge number of perpetually connected people, using bunches of apps for both work and personal. This is part of what we call the mobile mind shift, and it’s not about smartphones and tablets; rather, it’s about the changing expectations that pervasive mobile computing and broadband wireless have. According to a recent report, "The Mobile Mind Shift Index," we estimate 21% of the adult online US population now expects that any information is available on any appropriate device, in context, at their moment of need (see Josh Bernoff’s May 2013 blog Introducing The Mobile Mindshift Index). And this number is going to grow significantly over the next few years.

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NARA To Software Vendors: Help Government Rethink Records Management

Cheryl McKinnon

On September 10, the US National Archives and Records Administration (NARA) hosted an interactive panel discussion to educate solution providers, vendors, and the broader records management community on an opportunity to help shape the future of records management (RM) inside government. A follow-up activity to the August 2012 Presidential Directive on RM, this panel is a call to action to software vendors, consultants, and subject matter experts who care about moving the records profession in public sector out of the “mental model” of paper.

Important links include: the agenda (PDF) and the two-part event recording, hosted on the NARA UStream External Engagement channel, and the RFI (closes October 4, 2013).

My take? If you are a software vendor, consultant, records management practitioner, or a software developer looking for inspiration, listen to the videos. There is some important stuff there, with the US federal government demonstrating some true leadership in rethinking the oft-maligned records management software system. What does NARA want? Fresh systems, more automation, and a readiness to divorce from the construct of paper that has limited our progress in tackling e-records.

The discussion and sense of urgency here supports the trends and we’re seeing here at Forrester in this area. (See recommended reports and blog links at the bottom of this post.) Our research shows that RM programs today struggle to get consistent user adoption, align related initiatives (like RM, archiving, and eDiscovery), capture new content sources like social and mobile, and get over fear of the cloud.

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