The data economy — or the system that provides for the exchange of digitized information for the purpose of creating insights and value — grew in 2014, but in 2015 we’ll see it leap forward significantly. It will grow from a phenomenon that mainstream enterprises view at arm’s length as interesting to one that they embrace as a part of business as usual. The number of business and technology leaders telling us that external data is important to their business strategy has been growing rapidly -- from one-third in 2012 to almost half in 2014.
Why? It’s a supply-driven phenomenon made possible by widespread digitization, mobile technology, the Internet of Things (IoT), and Hadooponomics. With countless new data sources and powerful new tools to wrest insights from their depths, organizations will scramble to use them to know their customers better and to optimize their operations beyond anything they could have done before. And while the exploding data supply will spur demand, it will also spur additional supply. Firms will be taking a hard look at their “data exhaust” and wondering if there is a market for new products and services based on their unique set of data. But in many cases, the value in the data is not that people will be willing to pay money for bulk downloads or access to raw data, but in data products that complement a firm’s existing offerings.
On October 31, IBM and Tencent announced that they will work together to extend Tencent’s public cloud platform to the enterprise by building and marketing an industry-oriented public cloud.
Don’t be fooled into looking at this move in isolation. With this partnership, IBM is turning to a new page of its transformation in China, responding to the challenges of a stricter regulatory environment, an increasingly consumerized technology landscape, and newly empowered customers. The move is a crucial milestone in IBM’s strategy to localize its vision for cloud, analytics, mobile, and social (CAMS). IBM has had a strategic focus on CAMS solutions and is systematically building an ecosystem on four pillars:
Cloud and social. This is where IBM and Tencent are a perfect match. IBM’s cloud managed service, operated by its partner 21ViaNet, officially went live on September 23. It can support mission-critical applications like ERP and CRM solutions from SAP and Oracle from both the IaaS and SaaS perspective. This could help Tencent target large enterprise customers beyond its traditional base of small and medium-size businesses (SMBs) and startups by adding social value to ERP, CRM, and EAM applications.
We have even seen law enforcement documents on threat actors. In August, Mr. Su Bin, a Chinese national, was indicted for the theft of Boeing’s trade secrets. The criminal complaint regarding Su Bin’s activities became public in June and offers a fascinating perspective into espionage as a service.
Mobile developers change people's lives every single day -- they create innovative experiences, reshape how we spend our time, and give us continual access to Facebook and Twitter (the latter being especially important to the author!). The pace at which these new experiences are delivered continues to amaze, yet continues to speed up. As a recovering enterprise mobile developer myself, I'm always tracking the new tools and technologies that developers are using to maintain this pace and provide new innovation. With that in mind, we've published a report on the mobile development predictions for 2015; the changes that will allow developers to continue to produce amazing innovation at a continually faster rate. We've highlighted 8 in the report, but the ones that are especially exciting to me are:
I just spent a great weekend in Canberra, Australia’s capital, as a part of the Human Brochure activity — a campaign organized by Visit Canberra to get people discussing and promoting the city on social media. As one of the “VIP activities”, my family went to the Cockington Green Gardens miniature village, which was celebrating its 35th anniversary. The son of the owner (who is heavily involved in the business) was our host - it was a really interesting and educational evening, and we had the opportunity to ask all sorts of questions.
Currently, Cockington Green Gardens has no mobile app, and very little presence in the virtual world. I asked if they had thought about a mobile app (someone else asked about audio tours), but their small budget means that this is not possible at present. The value of such an app was brought home by the huge amount of information that the owner’s son passed on to us — such as the fact that the roof in the image below has 50,000 tiles, all of which were laid by hand at a rate of 500 to 1,000 per day — most of which is beyond the reach of most visitors.
We live in a subscription economy, thanks to the internet and cloud-based computing. Industries like media, entertainment, and telecommunications have fully embraced a subscription software model, while others, such as publishing, computer storage, financial services, healthcare services, transportation, and business-to-business (B2B) software, are moving in this direction.
What has also happened in parallel is the arrival of the "age of the customer." Customers have become more demanding, staying loyal to companies only when they deliver value. If you offer your products as services, you must manage customer relationships to make sure that your customers are satisfied and will stay loyal to your brand. You must do this to:
Preserve revenue. Managing customer churn becomes increasingly important as you move out of an early-stage, high-growth mode. This is because focus shifts to more steady growth, and customer retention becomes a significant metric for financial success.
Expand revenue. If a customer is obtaining value from their purchase, renewal and upsell conversations become easier. For example, you can collect data on how a customer is using a product to realize their business goals and use it to present the appropriate cross-sell and upsell to the customer.
I sat down with Steve Cowley, General Manager for IBM Watson, on Tuesday at IBM Insights to talk about Watson successes, challenges since the January launch, and what is in store. While the potential has always intrigued me, the initial use cases and message gave me more than a bit of pause: the daunting task to develop and train the corpus, the narrowness of the use cases, what would this actually cost? Jump ahead nine months and the IBM Watson world is in a very different place.
IBM is clearly in its market building phase. It is as much about what IBM Watson is and how IBM overall is repositioning itself as it is about changing the business model for selling technology. However, it is easy to get negative very fast on this strategy as seen with the tremors on Wall Street as IBM's stock has gone from a 52 week high of $199 to $164 at close on Friday 10/31, much of that happening in the past month since earnings release. Wall Street may not like company uncertainty during transitional periods, but enterprise architects care about what will make their organizations successful, make development and management of technology easier, and making sure costs don't sky rocket when new bright shiny objects come in. And, that is where IBM is headed with an eye toward changing the game.
IBM Watson delivers on information over technology.
Steve surprised me with this statement, "[With] traditional programmed systems, the system is at its best when it is deployed, because it is closest to the business need it was written for. Over time these systems get further and further away from the shifting business need and so either they fall in effectiveness, or require a great deal or maintenance." Steve pointed out that data is what is changing the game.*
Previously Microsoft tried to discourage customers from using virtual desktop infrastructure (VDI) on top of rival operating systems by applying complex licensing rules involving various TLAs such as RUR, VDA and CSL (which I’m not going to explain here, because they are, thankfully, no longer needed). The USL is far simpler - clear Windows licensing replacing translucent frosted glass, so to speak.
Technology has given your customers choices and digital predators the edge. Ask marketing, they will tell you about the decreasing effectiveness of traditional campaigns. Look at your business strategy and find plans to address new digital competitors that have become serious threats overnight. Across the board, Forrester finds high expectations that emerging technology will help firms stay competitive amidst these changes. But which ones should you pay attention to? Cloud, mobile, social, Read more