The Recent Ruling In Oracle vs Rimini Street Has Significant Implications For The Wider Outsourcing Industry

Duncan Jones

I've just published a Quick Take report that explains why the Nevada District Court’s recent decision on some of the issues in the four-year-old Oracle versus Rimini Street case has significant implications for sourcing professionals — and, indeed, the entire technology services industry — beyond its impact on the growing third-party support (3SP) market.

http://www.forrester.com/Quick+Take+The+Rimini+Street+Ruling+Has+Serious+Implications+For+Oracle+Customers/fulltext/-/E-RES115572

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Lenovo Has Started To Benefit From The Mobile Mind Shift

Gene Cao

Lenovo recently announced record results for the third quarter of the 2013/14 fiscal year: the first time that the firm has exceeded US$10 billion in revenue in a single quarter. Lenovo has continued to prioritize maintaining or increasing its share of the PC market — the majority of its business. This strategy has paid off: Lenovo’s PC business (laptops plus desktops) grew by 8% year on year — in stark contrast to its slumping rivals. Lenovo can attribute its success to a strategy that sacrifices profit to keep prices competitive, maintains a direct local sales team, and retains channel partners after acquisitions.

Forrester believes that the mobile mind shift is one of four key market imperatives that enterprises can use to win in the age of customer. Lenovo has gotten a good start on this journey with its effort to enhance its mobile-related capabilities. Although the coming Motorola deal may have a negative impact on Lenovo’s performance over the next three to five quarters, the firm believes that mobile can change its business — and not just its digital business. In the next two to three years, Lenovo’s key strategy will be to provide customers with mobile devices and related infrastructure that will address their mobile mind shift. In particular:

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How Good Is That BMC Or CA End-Of-Year Deal?

Mark Bartrick

Many of you will be in the midst of a contract negotiation or maintenance renewal with BMC and/or CA at the moment, because both software vendors do a large proportion of their license deals in the January to March quarter as it’s their financial year ends on March 31. It’s a sourcing cliché that software companies give their best discounts at their financial year end, but just because you are making a purchase in month 12 doesn’t mean that you are getting a good deal. Through client interactions, I see a lot of software deals and I am often surprised by the gulf between the latest deal on the table and what I would consider to be a market best deal – one that sets the relationship up for mutual success, balancing price, flexibility and risk.

Buying software from powerful providers such as BMC and CA is very different from buying hardware, services and non-IT categories. Unfortunately, many sourcing professionals seem to think that they’ll look weak if they engage external expert help to coach them during a negotiation, but it isn’t a question of just buying additional haggling advice (although that can sometimes help), it’s really a question of buying deep, current market knowledge. Unless you have that, you risk:

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Look Outside Of Indonesia To Fill Skill Gaps

Fred Giron

Our global clients are increasingly inquiring about the capabilities of their preferred service providers in ASEAN and Indonesia in particular. I recently spent some time in Indonesia and met leading local and global service providers there. The key takeaways from these meetings? Not surprisingly, the strengths and weaknesses of IT service providers in Indonesia differ by industry, domain, and service line. As a result, clients need to be careful and orient their vendor selection process toward the right set of service providers. Depending on the requirements, the right provider might be based in Indonesia — and it might not. More specifically, sourcing professionals should realize that:

  • MNCs looking for traditional infrastructure services can rely on a good availability of skills. Most MNCs setting up shop in Indonesia are looking to replicate the enterprise architecture defined at their headquarters in the US, Europe, or Japan. The presence of local and foreign SIs in Indonesia with solid infrastructure skill sets across major technologies means that they won't face too many challenges finding the right partner at the right price point.
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Organizations Will Rapidly Ramp Up Data Services Spend In 2014

Charles Green
Improving the use of data and analytics is a top strategic priority for many companies. But organizations face major challenges ramping up their information management capabilities — in particular due to the combination of a brutal proliferation of new or enhanced technologies, emerging data sources, and difficulty in finding skilled people with the appropriate experience. As a result, companies are increasingly looking to service providers for help.
 
My colleague Gene Leganza and I have therefore published two reports to help technology professionals navigate the data services market, with a particular focus on data management services (Data Management Services: Spending Trends For 2014 and Best Practices For Engaging Data Service Providers). These reports highlight both the rapid growth we expect to see in the market as well as best practices for engaging with service providers.
 
Please note that we use the term “data services” to refer to broader engagements (including data delivery, analysis, management, or governance-related services), while “data management services” form a smaller subset of services relating to finding, collecting, migrating, and integrating data.
 
Here are three of the key findings from our research:
 
  • More than two-thirds of organizations expect their spending on data management services to increase; 41% stated they expect spending to increase 5% to 10% in the next 12 months.
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Get Expert Guidance During Your Microsoft, Oracle And SAP Negotiations

Mark Bartrick

In the Age of the Customer, it’s vital that your hard-pressed IT budget is spent wisely and is refocused into areas of the business that can help improve client acquisition, retention and profitability. Negotiating better deals with your legacy incumbent software vendors is a great way to free up cash to spend on innovation.

If you have an upcoming contract negotiation with Microsoft, Oracle or SAP then let’s schedule a call to discuss how you can gain greater pricing and contract concessions by working with Forrester’s dedicated Software Contract Negotiation experts. With the costs of software licenses and annual maintenance going up each year and vendors providing limited transparency into licensing options, it’s critical you know which discounts to target and what negotiation tactics have worked well for other businesses.

Having worked with thousands of clients, Forrester has built up significant market intelligence on what’s achievable and how to get it. As a result, we are often able to show our clients how to negotiate additional savings on their license and on-going maintenance/support costs. And our success-based fee model means you only pay us if our advice helps you save you money.   

We can help you and your negotiating team:

●       Review the competitiveness of your software vendor’s proposals and renewal contracts.

●       Refine your negotiation strategy and tactics so that you target the most valuable concessions, improve contractual terms and maximize savings.

●       Optimize your time at the negotiating table by helping you prepare for, and react to, your software vendor’s sales tactics and objections.

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Securing The Asia Pacific Airwaves

Clement Teo

by Clement Teo and John Brand

VMware recently announced that it has signed a definitive agreement to acquire AirWatch, a leading provider of enterprise mobile management and security solutions. The acquisition is expected to provide customers with the most complete solution to manage users, devices, and applications across server, desktop, and mobile environments.

My colleagues Tyler Shields and Christian Kane have already shared their views and published two reports on the acquisition. Tyler has also raised some questions about AirWatch’s burn rate.

But what does it mean in Asia Pacific?

VMware obviously has had to expand its penetration beyond the server-centric virtualization market. So far, it has had mixed success with selling virtualization as a platform in the region, even though it has successfully entrenched itself as a leading hypervisor provider (unfortunately, VDI has proved a difficult sell for VMware in AP). In order to gain much deeper penetration and traction, VMware needed to add an end user computing offering to its portfolio. The pairing should result in:

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The UK Government’s Drive To Improve Public Sector Technology Procurement Is Fundamentally Flawed

Duncan Jones

Transformation Should Focus On Improving Outcomes, Not Merely On Increasing Competition

I’ve spoken with many IT Procurement leaders in public sector organizations ranging from US county schools districts to national governments. Most are prevented from applying best practices such as Strategic Software Sourcing by their politicians’ ill-conceived edicts and directives, such as those included in this announcement by the UK’s Cabinet Office that optimistically claims “Government draws the line on bloated and wasteful IT contracts”. In related press interviews the relevant minister Francis Maude complained that “a tiny oligopoly dominates the marketplace” and talked about his intention to encourage use of open source alternatives to products such as Microsoft Office, to increase competition and to divert more spend to small and medium-sized IT companies. The new edicts include bans of contracts over £100 million or 2 years’ duration and of automatic renewals. Mr. Maude claims these rules “will ensure the government gets the best technology at the best price”.

Mr. Maude and his team have a laudable and important goal but their approach is misguided, in my opinion. Short term contracts, indiscriminate competition and avoiding sole source category strategies will deliver neither the best technology nor the best price, because:

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Government-Certified Public Cloud Providers Can Ease Cloud Concerns In China

Gene Cao

Although Forrester expects China’s public cloud market to show solid growth through 2020, we have observed that organizations face barriers to adopting public cloud. Survey results indicate that data privacy, residency, loss of control, and security remain the top barriers for organizations adopting public cloud in China. This shows that Chinese customers are getting more knowledgeable about cloud and would like to understand cloud players’ offerings in more detail.

 

To ease concerns about public cloud usage, in mid-2013 the Chinese government and some leading cloud and data center service providers in China initiated an industry standard to evaluate cloud service offerings. After six months of discussion, they agreed upon version 1.0 of the industry standard, which includes three categories and 16 detailed SLAs:

Source: CNII

The first 10 qualified cloud service providers were announced on January 17, 2014:

Source: C114

What does this mean for end user organizations?

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Always-On Service Availability In The Age Of The Customer

Clement Teo

When I interviewed clients for a recent telecom sourcing best practices report, I heard a recurring refrain: “We need to drive down costs.” Both CIOs and sourcing and vendor management (SVM) professionals measure the health of their department with the amount of annual cost savings they can achieve. While this is a laudable metric, over time it can skew SVM pros’ perspectives and cause them to miss an opportunity to provide value to the business in the form of a vital “always-on” service.

SVM pros should:

  • Accept that cost savings are limited and short-term. Telecommunications is highly regulated in Asia Pacific; local competition is limited and governments own significant stakes in incumbent telcos. While cost savings can be had, they will diminish over the lifespan of a contract. SVM pros must understand how to work with lines of business and suppliers to create more value for the organization.
  • Focus instead on always-on service availability. Firms must focus on the fundamentals: ensuring that their communications services push toward always-on service availability. Getting the right price for services is important, but SVM pros in Asia Pacific must align business needs to service sourcing and ensure that the service delivers the expected value in terms of availability and quality.
  • Engender trust with providers with long-term commitments. View service providers as long-term partners; this will take the uncertainty out of the relationship and engender trust. One company was happy to lock in a five-year rental with an equipment supplier, eliminating a source of business risk in a volatile Asian economy. Focusing on long-term contracts gives providers the impetus to serve you well.
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