Cisco watchers have been wondering whether the company’s realignment is to take advantage of much-talked about market transitions or to hunker down for battle with the current generation of formidable competitors (like HP, Huawei, Juniper). Some might see this week’s appointment of Gary Moore as COO as an indication that the business has lacked operational excellence, but that’s easy to reject. I remember sitting down with Randy Pond nearly 10 years ago (he was EVP operations -- the de facto COO for Cisco at the time) and talking about operational priorities required to profitably take advantage of market transformations and build world class capabilities across Cisco’s complex environment. At the time, Cisco was a complex combination of acquisitions (like Crescendo where Randy had been VP Operations) and contract manufacturing around the globe. Operational excellence has always a hallmark at Cisco; that’s not the central issue facing the company. Instead, it is facing a fundamental transition to “incumbent” status. Cisco is now the object of every competitor’s attention, and high-growth markets that are large enough to make a substantive impact are increasingly hard to find.
Yesterday we received the very sad news that our great friend and wonderful colleague Julie Giera passed away earlier this week. Although we were well aware of the fact that Julie had been battling breast cancer for several years, I still find it difficult to comprehend the news – in particular since we had lost another great analyst colleague – Andrew Parker – only a few months earlier.
Julie was one of the great stars and a leading voice of Giga Information Group – the analyst firm later to be acquired by Forrester in 2003. She was instrumental in establishing and extending the Giga brand and influence across a wide community of different stakeholders, including many CIOs as well as the senior executives of many tech vendors. She later continued that fame with Forrester where she quickly became a thought leader around the broader IT services market change issues. Julie was one of the founding members of the vendor strategy research team and many of the key reports that she authored over the last years are still relevant today and represent key highlights of our team’s research portfolio. A lot of her great research can still be viewed and downloaded online, so check out the following:
You may have noticed that I was, along with the other 1,100+ professionals at Forrester, out of the office this past week. We were all together in Boston talking about our success in 2010 (I can’t talk about that — you’ll have to wait for official results to be reported next week) and more importantly about Forrester’s Vision, Values, Strategies, and Tactics to help make our clients successful. We spent time both looking inward, thinking about how we think we can do better, and scanning the horizon by asking key clients who map themselves to each of our roles to talk about what they do every day and how they are recognized and rewarded within their own companies.
I left the meetings feeling jazzed that we were truly achieving success by putting our clients first and that we had a plan to extend and accelerate our ability to positively affect every leader and every decision. I also left the meetings with that tension all analysts get in their gut: What will this strategy look like in the future? How will our values change the market’s perception of Forrester? How will we be able to translate these intentions into actionable tactics to help each and every one of our clients? What better way to test the ideas than to ask you, dear readers, what you think; so, what do you think? Are we just drinking our own Kool-Aid? Or do we have the “five-hour energy” that every one of our clients hungers for to refine their strategies and accelerate their performance and success in the market? Please weigh in with your opinion of Forrester and our strategy — as well as your suggestions on how we can best help you to succeed — in the comments section.
Last week Verizon Wireless announced it will begin selling Apple’s iPhone 4 to customers in February 2011. The new relationship between Verizon Wireless and Apple terminates the exclusive relationship AT&T had with Apple since 2007 to distribute iPhones in the US. Verizon Wireless will be able to address pent-up demand for iPhones among existing customers, as well as from customers who switch from competitors such as Sprint and T-Mobile to gain access to these devices. The introduction of Verizon’s iPhone also impacts the competitive smartphone landscape, mobile application developers, network operators, and other participants in the mobility ecosystem. Details regarding the Verizon Wireless iPhone announcement are highlighted in the report “Verizon’s iPhone Sets The Battleground For iPhone 5,” written by my colleague Charles Golvin.
Verizon’s iPhone and AT&T’s iPhone will look and cost the same, however Verizon Wireless has not yet announced the cost of voice and data service for these devices. There are also key differences in Verizon’s iPhone, which have important implications on enterprise smartphone purchasing decisions. Verizon’s iPhone will not have a multimode chip, so these devices will only roam onto CDMA networks, which are used in Verizon’s network. CDMA network technology is not as common in other countries so firms with employees who travel internationally may find this to be a limitation. Also, the timeline for replacing corporate liable smartphone devices is often 18 months. Therefore, although Verizon Wireless will begin offering the iPhone 4 in February, enterprise smartphone contract renewal cycles may mean these devices do not make their way into the hands of employees for more than a year.
In his report, “The Top 15 Technology Trends EA Should Watch: 2011 To 2013” Gene Leganza names telepresence as a tech trend to watch. 42% of respondents to the August 2010 Tech Trends survey said telepresence would have a strong impact over the next two years. Why? Because telepresence deliver life like video across distances, making telepresence meetings as similar to live meetings as possible when participants can’t get together face to face – and in today’s economic situation companies continue to trim travel budgets and look for economies wherever they can. Many clients I have spoken with have paid for their telepresence deployments in under a year, and others have touted significant business gains from being able to meet more often and more effectively with a wider cross-section of experts, decision makers and other stakeholders. With this significant value statement, telepresence seems like an obvious choice so why has it not taken off? The answerer is simple and lies in Metcalf’s Law.
On December 5th, Verizon Wireless launched its Long Term Evolution (LTE) network in 38 cities and in over 60 airports. This deployment signals the beginning of the 4G/LTE wars. The fuss over 4G/LTE networks is based on significantly faster network speeds which enable a smoother, faster, less jittery video experience for customers. Verizon’s LTE network is expected to run nearly 10 times faster than the company’s 3G EVDO network with downstream speeds of 5 Mbps to 12 Mbps and upstream speeds of 2Mbps to 5Mbps.
Initially, Verizon Wireless is taking a land grab approach to marketing its LTE network service primarily to business customers who can connect to the Internet using their laptops. Data plans start at $50 per month for 5GB of data, or $80 per month for 10B of data. Additional data use above these data plan caps will cost $10 per GB. Lower price point plans which would appeal to cost conscious consumers were not identified. Verizon plans to offer LTE enabled smartphones in mid 2011.
The $50 per month baseline LTE data pricing plan is undercutting Verizon’s current 3G data access prices. Why undercut 3G data prices? Because the 4G/LTE competitive landscape is heating up. Clearwire is deploying a WiMax network in 68 markets, and T-Mobile is positioning its HSPA+ network as 4G in more than 80 markets. In addition, Verizon is hoping to capture a significant share of customers in the 4G market before AT&T jumps into the 4G arena in 2011, so expect more 4G/LTE announcements and increased competition for 4G customers in the coming year.
With its latest public cloud offering, T-Systems not only comes close to Amazon’s EC2 pricing, it might even be cheaper than Amazon. The €4 billion, German headquartered IT services firm announced today a public beta running from November 2010 to February 2011.
Although Amazon recently made a time-bombed version of its EC2 available for free, a real, unlimited service still costs in the range of $0.095 per hour for a small server of one core with 1.7 GB RAM in Europe. Last week, Forrester had the chance to look at a beta version of T-Systems’ public cloud offering. Although no pricing has been announced officially, the beta showed the price for a virtual machine of a similar size to the aforementioned Amazon machine starting at €0.2/hour. T-Systems inidcated that they even like to go below the Amazon pricing! T-Systems has been working for more than a year with cloud provisioning tools from Zimory to manage the virtualization of larger-scale server and landscape compositions. Leveraging this experience, T-Systems manages to drive efficiency even further than the current economies of scale, which makes this aggressive move possible.
Is T-Systems planning to seriously compete with Amazon in the future and does it make sense for a traditional large enterprise IT services and hosting firm to compete with low-price public cloud offerings?
T-Systems’ public cloud beta shows a continuous memory sizing in a state-of-the-art self-service portal.
During the past year, many companies have revisited their corporate mobility initiatives, device support, and mobile application deployment strategies. In addition, a growing number of firms are prioritizing mobility initiatives as a key strategic focus, expanding the use of smartphone devices, and investing in a range of mobile applications to address the needs of employees in various roles.
As the population and diversity of smartphones making their way into firms increases, so do the challenges for IT organizations. Below are key drivers of increased corporate mobility complexity:
Most enterprises support multiple wireless networks.
Many firms also support a wide variety of mobile devices.
New segments of mobile workers are emerging.
Employees use a wide range of mobile applications.
Some employees choose non-approved devices.
Smartphone security concerns loom over mobile adoption.
Today, Microsoft begins life as a real competitor in the enterprise voice space. It has slain dragons (like enabling call access control and E911), faced mighty jousters (Miercom has called Lync a resilient, feature-rich, scalable UC system in their review), and emerged triumphant to compete for enterprise accounts looking for unified communications and collaboration (UC&C) solutions. Microsoft has amassed an impressive list of early adaptors — of both Office Communications Service Release 2 (OCS R2) and Lync — that includes large and small deployments with varied features/capabilities enabled.
Lync required Lighthouse accounts to use a wide array of services at significant scale, so I expect to see big accounts like Marquette University and the Dominican Republic Ministry of Education join current OCS enterprise voice users like Shell, Intel, AT Kearney, and Sprint on Microsoft’s “Customer Success Stories” page. In talking to many early adopters, I heard very few complaints about voice quality or reliability of the solutions, and:
Almost every firm using Lync is connecting employees together using Lync AND other Microsoft products.
Improved voice quality and reliability drives customer satisfaction and makes Microsoft’s story more credible in delivering UC&C solutions.
Last week, Microsoft unveiled its Windows Phone 7 software, which is dramatically different from this company’s previous software for mobile devices. This new mobile operating system software provides an improved user interface, animated icons, a colorful touchscreen, and personalization features which enable users to customize aspects of the phone’s appearance and performance. In addition, these smartphones work with Sharepoint servers, which are being deployed by enterprises.
Sixty mobile operators, including América Móvil, AT&T, Deutsche Telekom, O2, Orange, SFR, SingTel, Telstra, Telus, and Vodafone, will be supporting Windows Phone 7 in 30 countries. In the US, Windows phones will be available in November. AT&T will sell Windows phones from HTC, Samsung, and LG Electronics, and T-Mobile USA will offer phones from HTC and Dell Inc.
Even with these distribution channels, Microsoft faces tough competition in the smartphone arena. The US smartphone market is dominated by Research in Motion’s BlackBerry devices, Apple iPhones, and devices that run on Google’s Android operating system. Given this intense competition, Microsoft is going to be fighting for fourth place in the US. Microsoft has a better chance to capture a significant share of the smartphone market in developing regions, including China and Latin America, where customers are not tied to Android or Apple smartphone devices.