$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?
Co-authored by Henning Dransfeld and Jennifer Belissent
Telefónica recently invited us to its European Analyst Day at the headquarters of Telefonica UK (O2) in Slough. Jose Luis Gamo Global Solutions CEO Multinationals started off the day with an ambitious outlook on strategy and revenue growth. He highlighted Telefónica plans to deepen customer engagements by addressing their needs for global contract consolidation, as well as demands for M2M solutions, big data and analytics and cloud services. Telefónica certainly has a lot to offer. But is Telefónica doing enough to position itself well in the evolution to markets driven by customer experience? We believe that there is potential because:
Telefónica is increasingly competitive in winning global enterprise network contracts.After the global landmark deal with DPDHL, Telefónica has added companies including Ferrovial and NSN to its customer base. Telefónica, the largest European operator by capitalization, is increasing contract values with existing customers through cross selling activities. Their ability to do so is enabled by a demonstrable focus on the following initiatives: Strengthening professional account management, increased commitment by Telefónica group to the enterprise market, as well as initiatives to improve service management, the technical architecture, customer services and the terms and conditions.
We are about to kickoff a Forrester Wave on Application Security Testing. The focus of this Wave is on both static application security testing (SAST) as well as dynamic application security testing (DAST) offerings. This Wave will cover both tools and SaaS based delivery methods. What does this mean for you?
Vendors: If you feel that your solution applies to this Wave, please contact us and let us know that you'd like to be sent the prequalification survey. We will be limiting the number of vendors participating in this evaluation.
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.
Many organizations will have been relieved to find that the implementation of the update to existing European data privacy laws, the EU Data Protection Regulation, has been postponed. Adoption of the Regulation is now scheduled for 2015, which means it’ll be 2017 (possibly end of) before it’s actually applicable.
At least, that’s what it looks like. In typical fashion, the official document released after the European Council meeting in Brussels on Oct 25th is the result of much political horse-trading, and avoids specificity on any matters where agreement is lacking. As a result, one has to rely on a variety of third party sources in order to piece the story together. In a nutshell, a number of countries felt that the process for finalizing the EU Data Protection Regulation should be slowed down. The UK and Germany in particular argued that further consideration was required, albeit not for the same reasons: on the British side, concerns were more on the potential adverse impact on business of very stringent rules, whereas Germany wants to ensure that all required safeguards are in place.
Those who are rejoicing over the postponement shouldn’t pop the champagne corks yet, though. While the extra time is no doubt welcome, headlines such as “Victory for tech giants on EU data laws” are premature: nothing is finalized, and there is still the chance that the final version is rather more restrictive than many would hope.
Occasionally I like to yield my "bully pulpit" to folks on our team that I collaborate with on joint research projects - and today is just such an occasion. Over the past few months I've been working on research with Vivian Brown on the in's and out's of public and private hackathons. It was interesting when we started this research - we got more than a few puzzled looks and questions like "why would developers want to spend their own personal time writing code?" and "hackathons might be great for start-ups and Valley companies, but will they play in Peoria?". My own personal response to these questions was to refer folks back to a stream of research I wrote in 2010 on building high-performance development teams. In my opinion a well-run hackathon is the developer equivalent of a musicians' jam session. At their core the best developers are makers - creatives who are intrinsically motivated to create and get a charge out of learning something new or building out someone else's inspiration. It's one expression of a building wave of "Social Development" that is changing the way development works, and how firms relate to developers and vice versa.
But enough rambling. I'll turn things over to Viv. Right before Thanksgiving, Salesforce hosted a well publicized "Million Dollar Hackathon" - and the results were a bit mixed. Viv's thoughts on it below:
I recently had a meeting with executives from Tech Mahindra, an Indian-based IT services company, which was refreshing for the both the candor with which they discussed the overall mechanics of a support and integration model with significant components located half a world away, as well as their insights on the realities and limitations of automation, one of the hottest topics in IT operations today.
On the subject of the mechanics and process behind their global integration process, the eye opener for me was the depth of internal process behind the engagements. The common (possibly only common in my mind since I have had less exposure to these companies than some of my peers) mindset of “develop the specs, send them off and receive code back” is no longer even remotely possible. To perform a successful complex integration project takes a reliable set of processes that can link the efforts of the approximately 20 – 40% of the staff on-site with the client with the supporting teams back in India. Plus a massive investment in project management, development frameworks, and collaboration tools, a hallmark of all of the successful Indian service providers.
From a the client I&O group perspective, the relationship between the outsourcer and internal groups becomes much more than an arms-length process, but rather a tightly integrated team in which the main visible differentiator is who pays their salary rather than any strict team, task or function boundary. For the integrator, this is a strong positive, since it makes it difficult for the client to disengage, and gives the teams early knowledge of changes and new project opportunities. From the client side there are drawbacks and benefits – disengagement is difficult, but knowledge transfer is tightly integrated and efficient.
In 2013 enterprises got real about cloud computing. In 2014 we will integrate it into our existing IT portfolios - whether IT likes it or not. The moves by DevOps and line of business aren't going to stop and can't be ignored. So 2014 will be the year IT Ops relents, stops fighting and gets with the program formally by developing real strategies for embracing the cloud, managing cloud-based application deployments and empowering the business to keep being agile. As the Age of the Customer arrives, all the focus shifts to the Systems of Engagement and the agility in refining these critical customer tools. Cloud technologies and services represent the fastest way for the business to reach new buyers and breathe new life into aging applications. In 2014 cloud leverage will be both traditional and disruptive as the business and IT put cloud to work.
Below are the top ten cloud actions we predict will happen in enterprise IT environments in 2014. Recommendations for what Forrester clients should do about these changes can be found here. Our predictions are:
Since 2012, China has become the second-largest economy and third-largest IT market in the world, but IT spending per capita in China is still less than 5% of US. The potential for IT spending growth is obvious in the coming years. For CIOs in China to succeed, they need to go beyond retaining “control” of technologies to focusing on retaining and winning customers.
Forrester recently published its technology predictions for Asia Pacific in 2014, highlighting to technology professionals that the ability to embrace the age of the customer will determine success or failure of an organization. We believe that we have entered “a 20-year business cycle in which the most successful enterprises will reinvent themselves to systematically understand and serve increasingly powerful customers.”
In particular, CIOs in China should take note of the following five key 2014 predictions:
Technology spending is slowing down in China and local vendors will gain share. According to my latest China Tech Market Outlook: 2014 report, Forrester estimates that China’s enterprise IT purchases will grow by 6% in 2013, to RMB 698 billion, and a further 8% in 2014, to RMB 752 billion. This is slower than then 11% growth in 2011 and 9% growth in 2012. The new government is focusing on economic reforms to overcome both internal and external challenges. In the meantime, local vendors like Huawei, Inspur, and Lenovo will likely benefit from the NSA/Snowden issue; they will gain share mostly in the hardware space, including server, storage, and networking, in 2014.
Smell that? That’s the smell of digital customer experience delivery technologies converging. Just kidding . . . but closer to the truth, you might be going deaf from the sheer volume of M&A and branding announcements over the past few years. Along with normal versioning announcements, 2013 held two key branding changes. Q1 witnessed Adobe’s shedding of the CQ moniker to adopt “Adobe Experience Manager” and cement its place among the expanding Adobe Marketing Cloud, and Q4 just witnessed salesforce.com’s debut of its “Salesforce1” customer platform.
If you somehow tuned out all of the marketing/sensory overload, I’ll prove this to you another way. No peeking yet . . . OK, open your eyes! (see graphic).
Represented visually, it’s clear that M&A activity in the marketing automation space never even paused after Oracle purchased eloqua last holiday season: Salesforce bought ExactTarget in June, Adobe bought Neolane in July, and Oracle came back for seconds with its Compendium Software grab in October. Commerce continues its three-year hot streak: SAP grabbed hybris in June and Sitecore bought Commerce Server in November. Mobile and social haven’t completely lost their mojo either, as SDL picked up bemoko to further it’s mobile/omnichannel street cred and IBM hoovered up Xtify, a mobile messaging platform, in October.