As I discuss with clients the developing notions of Forrester's Business Capability Architecture (see blog post #1 and blog post #2), I have found it important to distinguish between different levels of scope for technology strategy. The primary distinctions have to do with (a) the degree to which a strategy (and the architecture it promulgates) aims to account for future change and (b) the breadth of business and technology scenarios addressed by the strategy.
Thus, I define a four-part technology strategy taxonomy along a two-dimensional continuum with (a) and (b) as axes (IOW, the four parts are archetypes that will occur in varying degrees of purity), to wit:
Type 1: project strategy for successful solution delivery. With Type 1 strategy, the goal is simply to achieve successful project delivery. It is beyond the strategy’s scope to consider anything not necessary to deliver a solution that operates according to immediate business requirements. Future changes to the business and future changes in technology are not considered by the strategy (unless explicitly documented in the requirements). The classic case for a Type 1 strategy is when an organization definitively knows that the business scenario addressed by the solution is short-lived and will not encounter significant business or technology change during the solution’s lifetime (history argues that this is a risky assumption, yet sometimes it is valid).
With Microsoft's fiscal year end coming to a close today, I wanted to spend some time focusing on future licensing direction. Windows Intune is a significant offering from Microsoft that blends cloud-based management, on-premises tools from the Microsoft Desktop Optimization Pack (MDOP), and Windows – as a subscription service. Let’s put Intune aside for a moment.
Like all software vendors, Microsoft is keen on pulling customers into an annuity relationship for their offerings – a dependable revenue stream that isn’t as vulnerable to things like economic downturns or anything that might delay a purchase. When Microsoft first introduced the Software Assurance (SA) program, it was primarily just upgrade rights – while a license was covered under SA, you had rights to deploy any new versions that came out during that time. Over the years Microsoft has refined the program, adding different benefits to incent customers into the program – but the primary focus of value has remained upgrade rights. Unlike other vendors, Microsoft included security patches and updates as part of a license, so their “software maintenance” program has always been something a little different.
I recently finished the draft of my report on the ecosystem of innovation services providers. This report, to be published in July, explores the landscape of companies that are unified by a single purpose: they are dedicated to helping their clients unleash their own innovation potential. These are not companies who simply use "innovation" as a marketing buzzword. Rather, they are dedicated to the discipline of innovation – and bring unique innovation expertise to clients in wide variety of corporate roles. This report builds on much of Forrester’s previous work related to Innovation Networks and Innovation Management, but expands the "ecosystem" to consider all of the companies I interact with that have a distinct innnovation focus. In the report, I explore the offerings of:
Strategy consulting organizations
Technology service providers
Product management firms
Outsourced product development firms
Idea management/solution generation companies
Other niche service providers (including training program, design firms, and others)
I argue that this ecosystem of providers will be an increasingly important part of a comprehensive innovation strategy. However, it will be up to very knowledgeable and “connected” individuals within companies to help manage the diverse players, and connect suppliers to the right role, at the right point in the innovation process. I also argue that this is an opportunity for SVM professionals who want to play a more strategic role in their organizations.
Lately I have been getting quite a few inquiries on database migrations asking me about migration approaches, best practices, and tooling. Some of the reasons why companies are looking at migrations are because of staffing issues, scalability and security concerns, and cost-saving strategies. Migrations have always been complex, time consuming, and expensive, because each DBMS has proprietary data structures, data types, and SQL extensions. Once you choose a DBMS, you get locked into its platform, often creating a challenge when looking to migrate. Some companies told me that it took them more than a year to migrate some large and complex applications, which is not surprising. Although, tools and services have helped with migrations in the past, they have not been comprehensive and automated, which would make the process simple. Like an IT manager in the retail sector recently told me, “We did not want to spend a million dollars on tools and services just to save a million dollars on our database platform; it just didn’t make sense.”
To quote Forrester’s CEO and Founder, George Colony, during his keynote at Forrester’s IT Forum EMEA event: “CEOs only care about two things: revenue growth and profitability.” How should we interpret this? CEOs do care about green if it is able to drive revenues, reduce costs and mitigate risks — all of which are essential ingredients in delivering long-term profits and shareholder value.
Evidence is mounting around CEOs' rising interest in corporate sustainability initiatives. For example, the United Nations Global Compact-Accenture CEO Survey 2010 published in June finds that 54% of CEOs globally view sustainability as “very important” to the future success of their businesses. And the Economist Intelligence Unit backs this up by finding that companies that rated their green efforts most highly over the past three years "saw annual average profit increases of 16% and share price growth of 45%, whereas those that ranked themselves worst reported growth of 7% and 12% respectively."
So does your CEO care about green IT?
Not without some convincing. And here’s why: While your CEO might care about green, they may not necessarily care about IT. As an indicator of this, Forrester found that only 16% of the world’s largest companies mention green IT in their annual reports. And as a result, CEOs are most likely unaware of IT’s role in enabling their company's green ambitions. The good news, however, is that IT is playing an increasingly central role in planning and executing companywide green strategies which will lead to C-level visibility.
Recently on a cross-country flight, I was just waking up when the flight attendant asked me what I wanted for lunch. She was a little annoyed because I kept her waiting while I looked through the magazine for food choices, and gummed up the whole works. And who could blame her for being annoyed? She had a whole bunch of people to get serve. I made a hasty selection and mistakenly picked the healthy snack box (organic pumpkinflas granola and apple slices instead of pepperoni and a chocolate chip cookie).
About an hour later, I had some serious hunger pains and would have killed for one of those old-school gummy chicken casserole airline dinners.
What would have solved this? A proper online engagement architecture, naturally. I usually print my boarding passes out ahead of time. So why doesn’t an airline print out the food choices under the boarding pass, or distribute via mobile devices as people increasingly use them for check-in? The airlines could provide other information, too, like how full the flight is, and whether NBC in the Sky will show something good like “The Office” or something not-so-good like “The Marriage Ref”.
So, what’s the problem? Content management and delivery systems aren’t unified. There are all kinds of opportunities to present rich, consistent, engaging multichannel experiences by integrating technologies such as content management, customer relationship management, document output management, email campaign management, and others. But these are still siloed, due to legacy issues as well as market dynamics (there is no unified solution on the market).
My colleagues Ted Schadler and Josh Bernoff are preparing the launch of their coauthored new book, Empowered, after the success of Josh Bernoff’s Groundswell. Basically, Empowered’s message is: "If you want to succeed with empowered customers, you must empower your employees to solve their problems . . . . From working with many, many companies on social technology projects, we've found that the hard part is not just the strategy. The really hard part is running your organization in such a way that empowered employees can actually use technology to solve customer problems.” (Josh Bernoff, Groundswell blog post).
Coupled with Smart Computing — a new cycle of tech innovation and growth within the technology industry that Andrew Bartels described — this movement toward empowered employees represents what I consider to be Web 3.0: the next generation of Internet/intranet/extranet usage that will benefit the enterprise and employees. By adopting “Web 3.0,” enterprises can expect productivity improvements of 5% to 15% as well as improved customer satisfaction.
Enterprises should prepare themselves to benefit from Web 3.0 by:
I'm on vacation this week, traveling with a small group of my extended family out on the Dingle peninsula of Ireland. I'm mostly focused on vacation, but have done a little checking in on work things. Trying to stay connected - and figuring out how to adjust my Internet habits while on vacation with a Dad and brother that are decidedly less interested in computing is interesting. Here are some random thoughts from the experience.
I'm using a temporary Forrester computer, so none of my files are on this computer. I'm putting new files in the Dropbox folder, so they'll automatically be synced out for access when I get back. And I'm using a SugarSync account to retrieve needed files from my main PC, when I can find a connection. Our B&B doesn't have Wi-Fi, and it is rare in Dingle, so I'm using an ice cream shop that hands you a code if you want to use their Wi-Fi. Which means I connect about every 2 days, because it is several hundred meters away - thankfully it still works when they're closed and they don't change the code!
The biggest pain is mobile phone roaming! I turned off mobile access on the iPad. I signed up for AT&T's roaming data plan, which is the only east option for data but expensive. Even with the international roaming, mobile voice is $1 a minute. And there's no plan for roaming texting, so it's something like 25 or 50 cents a shot. So I bought an Irish SIM at the Post Office - which offers voice and text. But for some reason the old BlackBerry I put the SIM in can't send text, only receive them. And even though it is supposedly only for in-country calls, my brother was able to call my mobile with the Irish SIM when his Guinness factory stop in Dublin didn't work out.
Applications development people can't stand the Luddites in the operations group, and ops people hate those prima donas in apps dev - at least that's what we are led to believe. To explore the issue, two of my colleagues who write to the infrastructure and operations (I&O) role - Glenn O'Donnell and Evelyn (Hubbert) Oehrlich - invited me to participate in an experiment of sorts. They arranged a joint session for the I&O Forrester Leadership Board (FLB) meeting, and I was the sole applications guy in the room - a conduit for I&O FLB members to vent their frustration at their apps dev peers. For those who aren't aware, FLBs are communities of like-minded folks in the same role who meet several times a year to network, share their experiences, guide research, and address the issues that affect their role.
We infused the session with equal parts education, calls for joint strategic planning across all IT work, and a bit of stand-up comedy - Glenn noted that as representatives of our respective roles, he and I were actually twin sons of different mothers. I noted that in that context that our parents must have been really ugly. Once we opened the session for discussion, the good folks in the room wasted no time in launching verbal stones my way. Now, I'm no IT neophyte: I've been in the industry since 1982, and I'm no stranger to conflict - I grew up with 3 older brothers, and we all exchanged our fair share of abuse as siblings will. Still, I wasn't quite prepared for the venting that followed. To summarize a few of the main points, I&O sees apps folks as:
TECH DYNAMICS: Last Friday, June 25th, the US House and Senate reached agreement on a financial reform bill, which is likely to pass and be signed into law.* At first glance, this legislation has nothing to do with the IT industry directly. But buried in this bill is a provision regarding debit card fees, which could serve as a model for how end users of software could bring about a change in something that is very important to the economics of the software industry — software maintenance fees.
Now, software maintenance fees have been one of the givens in the software industry in perpetual license deals. Typically set at 18% to 22% of initial license fees, they are fixed in stone. An enterprise software buyer can try to negotiate a discount on a license fee; a really smart one can negotiate a deal where the maintenance fee rate is applied against the discounted license fee, not against the list license fee. But software vendors rarely discount maintenance fees.
Why? Established software vendors depend heavily on maintenance fees for the bulk of their revenue. Almost half (49%) of SAP’s revenues and Oracle’s applications revenues in 2009 came from maintenance fees. Oracle’s middleware business earned 55% of its calendar 2009 revenues from maintenance fees.
And yet maintenance fees are one of the biggest sources of complaint from enterprise software buyers. Every so often this dissatisfaction breaks into the open. SAP faced massive client unrest when it raised maintenance fees for most customers during 2009. SAP tapped the biggest vein of resentment about maintenance fees: fees on old software. Old software is the crux of the problem with maintenance fees: It tends to be stable and therefore requires little support.