Brand Loyalty Is Declining. Total Product Experience Chains Can Help.

JP Gownder

Product strategists in many industries (from CPG to consumer electronics to financial services) share a challenge with their marketing colleagues: how to leverage the power of brand. Product strategists have a number of strategic tools in their toolboxes for differentiating their products from competitors’ offerings: features (a different taste, a new technical capability, or a higher interest rate, for instance); channel, price, or brand (or based on some combination of these factors). For the moment, let’s think about brand, because some product strategists design and build their products based largely on the promise implied by their brand name.

Forrester’s new research report – leveraging a multi-year analysis of Consumer Technographics® data – shows that while brand is important, brand loyalty (defined as the propensity to repurchase a brand) has been waning. The new report, entitled “Brand Loyalty Isn’t Enough For Products Anymore,” reveals that:

·         Brand loyalty is on the decline. Brand loyalty dropped in the U.S. from 2006 to 2010, our data shows. One reason? The Great Recession. Another? The strength of brands themselves: competing brands in the marketplace entice consumers to try new brands.

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Oracle Open World Part 1 – The Circus Comes To Town And The Acts Are Great!

Richard Fichera

In the good old days, computer industry trade shows were bigger than life events – booths with barkers and actors, ice cream and espresso bars and games in the booth, magic acts and surging crowds gawking at technology. In recent years, they have for the most part become sad shadows of their former selves. The great SHOWS are gone, replaced with button-down vertical and regional events where you are lucky to get a pen or a miniature candy bar for your troubles.

Enter Oracle OpenWorld. Mix 45,000 people, hundreds of exhibitors, one of the world’s largest software and systems company looking to make an impression, and you have the new generation of technology extravaganza. The scale is extravagant, taking up the entire Moscone Center complex (N, S and W) along with a couple of hotel venues, closing off a block of a major San Francisco street for a week, and throwing a little evening party for 20 or 30 thousand people.

But mixed with the hoopla, which included wheel of fortune giveaways that had hundreds of people snaking around the already crowded exhibition floor in serpentine lines, mini golf and whack-a-mole-games in the exhibit booths along with the aforementioned espresso and ice cream stands, there was genuine content and the public face of some significant trends. So far, after 24 hours, some major messages come through loud and clear:

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OpenStack: Time To Capitalize On The Momentum

James Staten

In the IaaS market the open source torch has officially been passed from Eucalyptus to OpenStack, a community effort that is showing strong momentum in both vendor participation and end user interest. But now it needs to start showing staying power, and that's just what I expect to see at this week's OpenStack Design Summit in Boston. What started as an effort to leverage the open community to help advance the technologies started by Rackspace and NASA has now turned into a vibrant community advancing IaaS technologies at a rapid pace. What it was lacking up until this summer was solid go-to-market momentum. But now:

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ITSM: People are the Problem, but People are the Solution

Glenn O'Donnell

I just spent most of this week at the annual itSMF conference called Fusion, held this year at the sprawling Gaylord National Resort below Washington DC. As always, it was a wonderful gathering of some of the finest people I know. When you’ve been involved in the IT service management field as long as I have, you get to know a LOT of these people very well. In fact, when I delivered the closing keynote of Fusion in 2009, I opened by saying, “This feels like a family reunion … except I like you more!” I was only half joking because many of these people ARE like family and I do indeed like them.

 As Forrester’s “automation guy” I often make statements about the flaws of the people in IT. I always try to inject some comedy into these statements because we have to be able to laugh at ourselves. There is a serious side to this position, however. There are now just under 7 billion idiots on this planet and none of us is exempt from that characterization. People do dumb things. We all do. Hopefully, we do more start things than dumb things. Since we do dumb things, we need to protect ourselves from ourselves.

ITSM is one of many mechanisms that offers such protection. We need ITSM because IT has rightfully earned an awful reputation for chaotic execution. It seems that IT is one of the most egregious demographic groups exemplifying human error and sloppiness. It is full of smart people doing dumb things. We in IT have a very serious problem.

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DCIM And The New Reality Of Infrastructure & Operations

Richard Fichera

I recently published an update on power and cooling in the data center (http://www.forrester.com/go?docid=60817), and as I review it online, I am struck by the combination of old and new. The old – the evolution of semiconductor technology, the increasingly elegant attempts to design systems and components that can be incrementally throttled, and the increasingly sophisticated construction of the actual data centers themselves, with increasing modularity and physical efficiency of power and cooling.

The new is the incredible momentum I see behind Data Center Infrastructure Management software. In a few short years, DCIM solutions have gone from simple aggregated viewing dashboards to complex software that understands tens of thousands of components, collects, filters and analyzes data from thousands of sensors in a data center (a single CRAC may have in excess of 20 sensors, a server over a dozen, etc.) and understands the relationships between components well enough to proactively raise alarms, model potential workload placement and make recommendations about prospective changes.

Of all the technologies reviewed in the document, DCIM offers one of the highest potentials for improving overall efficiency without sacrificing reliability or scalability of the enterprise data center. While the various DCIM suppliers are still experimenting with business models, I think that it is almost essential for any data center operations group that expects significant change, be it growth, shrinkage, migration or a major consolidation or cloud project, to invest in DCIM software. DCIM consumers can expect to see major competitive action among the current suppliers, and there is a strong potential for additional consolidation.

Is IT Infrastructure & Operations Still Relevant In “The Age Of The Customer”?

Doug Washburn

Yes, but you must adapt by demonstrating your ability to drive business growth and differentiation, not just cost savings and uptime. Here’s a personal example of a much broader trend as to why this is so important to your business and your role as an I&O professional:

It’s a cool Autumn day, which reminds me I need a new jacket. I walk into Patagonia. I evaluate several models and then buy one – but not from Patagonia. It turns out a competitor located two miles away is offering the jacket at a discount. How did I know this? I scanned the product's bar code using the RedLaser app on my iPhone, which displayed several local retailers with lower prices. If I had been willing to wait three days for shipping, I could have purchased that same jacket while standing in Patagonia from an online retailer with an even better deal. [Truth be told: I actually bought the jacket from Patagonia's store after validating no better deals existed… but The Home Depot wasn’t so lucky this summer when I bought the same, but cheaper air conditioner from Amazon while standing in aisle 4.] 

This is a prime example of what Forrester calls the “The Age Of The Customer” where empowered buyers have information at their fingertips to check a price, read a product review, or ask for advice from a friend right from the screen of their smartphone. This type of technology-led disruption is eroding traditional competitive barriers across all industries; manufacturing strength, distribution power, and information mastery can't save you.

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Pulling Off A Razor-Razorblade Product Strategy, Like Amazon's Product Strategists

JP Gownder

Amazon’s product strategists shocked some constituencies with their $199 price point for the Amazon Kindle Fire tablet announced today.  But there’s a fundamental product strategy lesson to this pricing, and it’s an old product strategy model:  The so-called Razor-Razorblade Pricing model.

We all know this model well, as consumers: your initial purchase of razor is relatively cheap, but the cost of replacement razorblades really adds up over time. If you don’t buy razors, perhaps you’re familiar with this scenario from your inkjet printer.  Remember how cheap that scanner/printer was -- but have you ever seen the price of refill inkjet cartridges?

The Razor-Razorblade model works when “dependent goods” – the refills, the stuff you need to keep buying to use the product – are closely related to the anchor product.  In the case of the Amazon Fire Tablet, the dependent goods are content and services – MP3s, streaming videos, and of course books, magazines, newspapers, etc. and cloud services that allow you to store and synchronize your content across devices. Amazon’s product strategists can afford to charge a low entry price to raise adoption of the device, and then (they hope) deliver an experience that’s attractive enough for Kindle Fire owners to pay for as a service.

Hence Amazon CEO Jeff Bezos’ portrayal of the Kindle Fire product strategy:  “What we are doing is offering premium products at non- premium prices,” Bezos says. Other tablet contenders “have not been competitive on price” and “have just sold a piece of hardware. We don’t think of the Kindle Fire as a tablet. We think of it as a service.”

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Now This Is How To Do The App Internet Right — Autodesk Cloud Shows The Way

James Staten

Much of the discussion around integrating applications with the Internet has centered on mobile applications connected to web backends that deliver greater customer experiences than mobile apps or web sites could by themselves. But the real power of this concept comes when a full ecosystem can be delivered that leverages the true power and appropriateness of mobile, desktop and cloud-based compute power. And if you want to see this in action, just look to Autodesk. The company, we highlighted in this blog last year for its early experimentation with cloud-based rendering, has moved that work substantially forward and aims to change the way architects, engineers and designers get their jobs done and dramatically improve how they interact with clients.

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Oracle Delivers On SPARC Promises With New T4 Processors And Systems

Richard Fichera

Background – Promises And Potential

Last year I wrote about Oracle’s new plans for SPARC, anchored by a new line of SPARC CPUs engineered in conjunction with Fujitsu (Does SPARC have a Future?), and commented that the first deliveries of this new technology would probably be in early 2012, and until we saw this tangible evidence of Oracle’s actual execution of this road map we could not predict with any confidence the future viability of SPARC.

The T4 CPU

Fast forward a year and Oracle has delivered the first of the new CPUs, ahead of schedule and with impressive gains in performance that make it look like SPARC will remain a viable platform for years. Specifically, Oracle has introduced the T4 CPU and systems based on them. The T4, an evolution of Oracle’s highly threaded T-Series architecture, is implemented with an entirely new core that will form the basis, with variations in number of threads versus cores and cache designs, of the future M and T series systems. The M series will have fewer threads and more performance per thread, while the T CPUs will, like their predecessors, emphasize throughput for highly threaded workloads. The new T4 will have 8 cores, and each core will have 8 threads. While the T4 emphasizes highly threaded workload performance, it is important to note that Oracles has radically improved single-thread performance over its predecessors, with Oracle claiming performance per thread improvements of 5X over its predecessors, greatly improving its utility as a CPU to power less thread-intensive workloads as well.

The SPARC SuperCluster

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New Study Yields Eye-Opening IT Service Management Benefits

Glenn O'Donnell

In April and May of this year, Forrester and the IT Service Management Forum’s US chapter (itSMF-USA) conducted a joint study to assess the state of ITSM. We collected data from 491 qualified subjects that are heavily involved in ITSM efforts (69% have two or more years of ITSM experience and 95% hold some level of ITIL certification; 50% at an advanced level). Since it was in conjunction with the US chapter, the responses were heavily US-centric.

The results offer empirical evidence of something ITSM professionals already know: ITSM offers significant benefits to the organization and to the professionals themselves. The full report is now in the final editing stages and will be available soon to all Forrester clients, all itSMF-USA members, and all participants who do not already fall into one of those groups. Forrester clients and itSMF USA members will receive email notifications when it is ready. Others will be contacted directly by itSMF.

This morning (Monday, September 26, 2011), I presented the results at the itSMF-USA’s national conference known as Fusion 11. Here are a few key insights from the study:

  • 51% of ITSM efforts are driven primarily by IT or business executives
  • ITIL has had an overwhelming positive impact on:
    • Organizational productivity: 85% positive and 2% negative
    • Service quality: 83% positive and 1% negative
    • IT’s reputation with the business: 65% positive and 3% negative
    • Operational costs: 41% positive and 4% negative
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