IBM'S Business Analytics and Optimization Service Comes to Market

Recently, I was invited to attend an analyst briefing event at IBM's TJ Watson Research Center in Hawthorne, NY to hear about their new Business Analytics and Optimization service line.  The company is quite excited about this new service line, which they describe as one designed to use analytics to help companies “improve the speed and quality of business decisions.”  They cite some underlying drivers of demand – like the fact that many business leaders say they don’t have enough information to make business decisions, or that many business decisions are based on gut feel – as pointing to the fact that more customers will look to IBM for a quantitative, data-driven analysis of their business situation and options.

Overall, I was impressed.  I had a very nice lunch with Fred Balboni (the service line leader) in which, in addition to discussing his ambitious cycling regimen, he explained why the new service line is both important to the market, and consistent with IBMs existing capabilities.  The company claims that while the service line is new, they have been doing projects in this area for quite a while as part of their services work. 

I also think IBM is tapping into to some powerful trends around business decision making that relate closely to the “business technology” themes we write about here at Forrester.  As computing becomes ubiquitous, it makes it easier to monitor and measure efficiency and  effectiveness – and that data needs to be used…The problem for most organizations is that are already sitting on piles of interesting quantitative information, but don’t have the expertise or time to make sense of it all.  IBM is in a strong position to help customers with that -- its simply a good match to their capabilities and brand.  

Of course, I can be a skeptic too…Just because CEOs make decisions based on gut feel today, and say they want more information to make more decisions, it does not mean that they are willing to pay money to IBM to change the situation.  I’ve always found that the majority of CEOs, particularly at SMBs, like to trust their gut and intuition more than they trust consultants (I act as one here at Forrester, so maybe its just me). And quant-heavy approaches may be somewhat out of favor these days (what with the whole AIG fiasco)...But its reasonable that within IBM’s primary market (larger companies), business decisions based on gut feel are no longer a viable way to justify serious strategic moves.  For this reason, the dedicated service line makes a lot of sense. 

Please feel free to comment!
Chris Andrews

Impressions of the RSA Conference: Notable for what was missing

The RSA Conference is now over, though by no means have I decompressed: it was a whirlwind of activity (I held 38 meetings in 5 days!). As evidence of how significant the RSA Conference is as the place to show your wares and to be seen, by my count there were over 350 vendors exhibiting - which is a bit less than half of the entire security vendor community. Notably, though, many of the booths were smaller than in years past.
My colleague John Kindervag predicted in advance of the conference that cost-cutting and "cloud" were going to be the two big pitches coming from vendors. Credit John with a direct hit on that.
But here's what I saw missing from the event:

1. End users. By all reports, not a lot of customer business was done (I've heard from non-RSA sources that end user attendance was down 20%-30%). Foot traffic on the expo floor was way down, as was the overall energy level. One vendor joked to me that all the good prospective customers were on stage! To be fair, the end users who had and spent the discretionary funds to attend were serious about starting projects soon. We still see security spending rising in 2009, and even accounting for all the chest-thumping, my conversations with vendors seem to bear that out. But conferences everywhere are hit by the recession.

2. Another notable thing that was missing from the RSA Conference was a singular trend or theme. In the past we had events where "data security" or DLP, GRC before that, compliance, and identity management really stood out as hot areas. This year, nothing. If I were an optimistic fellow, I'd say this reflects a maturity of the market. But I'm an analyst, and get paid to be skeptical, so what do you think? :-) 
The remaining two items missing from the conference have to do with vendor strategy and positioning.

3. Messaging that really resonates. John Kindervag was spot on about the focus vendors have on positioning their solutions in light of cost savings. Yes, lower TCO is important, and cost justification even moreso (though I'll take business justification over cost justification any day). But what really matters in today's climate of both economic pressure and vast IT change is helping security groups to take the complexity out of their jobs, not just lowering the price or capex of a product, or even getting a quicker ROI (however that might be measured). Addressing complexity was sorely lacking in everything except - surprisingly - Art Coviello's keynote about the need for integration across vendors'  products.

4. The identification of a larger opportunity. It's the toxity of capex and the focus on TCO that is driving a lot of the hype around security in the cloud as well. But here, most vendors are simply looking at cloud - and SaaS - as a new delivery model. The only vendors who really benefit from in-the-cloud vs. on-premise security are the MSSPs focusing on network protection and the threat management vendors who are trying to solve the problem of pushing out too many signatures (McAfee, with Artemis) or recognizing the benefits of (like RSA/Cyota and Websense have been doing for a while) or both (as Panda just announced). Few vendors recognize the opportunity to secure the IT environment as it migrates to cloud-based or SaaS-based solutions (I've written about this in my recent report "VC Trends In IT Security"), which is the bigger opportunity.

I had no time to attend any of the sessions. I was hoping to sit in on a few (those that seemed decidely not vendor pitches), but missed them all. Anything stand out?

If you're a vendor who went to RSA - or one who decided to sit out this year - I would love to hear your thoughts about the conference.
Despite the gloomy post, I still think it's a must-do event for vendors.

Jonathan Penn

Oracle Shakes the Eco-System

By Holger Kisker

Since the announcement of Oracle to acquire Sun Microsystems you can find a lot of thoughts on the web about Oracle’s main motivation behind the deal, the portfolio mapping of the two giants and how Oracle would leverage pieces of the new assets or possibly sell-off some again.

Please read this Forrester Report for more insights.

 

Oracle continues to assure they are not planning to depart from any of their new assets. If we believe in this mantra the consequences to the whole IT eco-system are severe. It is the first time that a large application vendor expands into the hardware territory and forces us to redefine the traditional view of IT market segmentation – again.

 

·        Changing IT Markets Force Everyone to Rethink

Consolidation of market segments is not new to the IT world – no other industry faces similar dynamics with new markets and new players coming to the game and others that quickly disappear. When the increasing complexity of the application world opened a new market for middleware, new specialized vendors entered the floor and flourished for several years until large application companies grabbed that market and incorporated it into their own portfolio. The goal to provide end-to-end solutions and completely integrated stacks was the motivation on the banner of consolidation. Many middleware vendors quickly disappeared from the show and the battle of IT platforms emerged with dramatic consequences for the surrounding eco-system. Service providers, ISVs and end-users ponder about the right platform decision and often swallow increased cost not to get locked onto a specific vendor platform as long as the battle continues. The dust of the platform battlefield has not yet settled when Oracle opens a new fight and eco-system players again have to rethink their position.

 

·        Partners Need to Plan Their Moves

The Sun acquisition by Oracle is very similar in regard of market consolidation as compared to the middleware example, but of different quality in size and consequences. Following the new IT Partnership Taxonomy by Peter O’Neill here is what existing partners of Oracle should consider:

 

o       Technology partners have to prepare for battle

For now, Oracle will want to continue existing partnerships with other technology / hardware vendors. But for how long will the coopetition be fruitful for both sides? Dedicated hardware vendors will have to make good use of a transition period: (re)-negotiate partnering terms with Oracle, test the waters for alternatives and more important – avoid being locked and expand the portfolio towards services and applications in the longer run.

 

o       Solution partners will find partnering easier

With the additional Sun assets Oracle also expands the portfolio of supported standards in many directions. There will always be white spaces to partner with Oracle and adhering to a broadening spectrum of standards can significantly cut the cost for complementary solutions.

 

o       Implementation partners will find a friend and loose some business

Dealing with less partners in order to offer end-to-end services is always a good thing and service partners will look forward to even stronger engage with Oracle. However, with a higher degree of pre-build integration by Oracle between hardware and software some business opportunities will dilute over time.

 

·        And What Does it Mean for Oracle’s Competition?

Answering this question will go well beyond the focus of this blog, but stay tuned for more research from Forrester on this topic. It would not be the first time for other application vendors to follow into Oracle’s acquisition steps. Watch out who will do the next step!

 

How do you see the impact of the Oracle / Sun deal on the Partner Eco-System? Please leave a comment or contact me directly.

 

Kind regards,

Holger

 

IT Partnerships - Do You Understand The Terms Anymore?

Introducing a new partner-type Lingua Franca for the new era

By Peter O'Neill

We have been getting numerous inquiries from both vendor and user clients about the strange collection of terms used to describe partners in our industry.
What is a "Preferred Partner"? Who prefers them and why should that be important to me the buyer.     Or what does "Advanced Partner" mean?
So we looked at the partner-taxonomy for 16 different IT vendors and, lo and behold, it is truly a mess!

Of course, compared with other industries, the IT industry is still relatively young and we are still more influenced by technology than business trends - so most decisions of this type are still made by technology experts with only occasional business-savvy. The partnerships that IT vendors develop and communicate tend to reflect their bias.

And yes, our partnership monikers reflect inconsistent usage and even abuse of terminology, so it is no wonder that buyers find themselves confused by the morass of definitions.
As our industry evolves toward maturity, the ecosystem of supply chain and channel partners will become less dynamic and we should now begin to push for an industry-standard taxonomy when communicating partnerships and partner portfolios to buyers. Forrester has made a stab at a partnership taxonomy and proposes the following groupings are adopted when listing vendor partners to external audiences:

• Technology partners. Partners that provide platform technology, hardware, or software underlying the business solution proffered. This partnership is important to buyers wanting to know these details for architectural and vendor governance reasons.
• Solution partners. Partners leverage the vendor’s technology into a purchasable business technology solution by adding their own technology, which is productized.
• Implementation partners. Partners certified to implement the vendor’s technology through customization and project programming.
• Consulting partners. The consulting offering can include the phases of technology selection as well as business process and organization consulting. The partner CAN also be listed as an implementation partner.
• Hosting partners. Many business solutions are now offered in a managed services, an outsourcing, or even an SaaS scenario.
• Education/training partners. These companies offer classroom or computer-based education.

Please see the Forrester report just published here: Forrester's Partner-Type Taxonomy: Lingua Franca For A New Era

These partner types are not mutually exclusive: A partner will often be qualified as more than one type. But this is the partner-type information that most interests a buyer. After all, the primary audience for communicating partnerships is prospective buyers, with the secondary audience being potential partners themselves. So it is therefore important to provide clarity and transparency about which partners a vendor is working with. The above listing simplifies the partner classifications for this purpose.

Other findings: well, you should definitely avoid the “strategic” moniker. Buyers perceive no immediate value from an additional label on the partnership such as “strategic” because the only “strategic” they care about is the commitment to their installation.
Also, many vendors who have more complicated product portfolios of hardware and software, or even several different types of software often end up with a long list of labels alluding to product type or "solution competencies.” The larger the vendor is, the more complex and laborious this list becomes. If you must, introduce the product or competency specialization under the above generic terms list to make it easier for the audience.

That is our proposal but we’d also like your feedback. Do you agree with us? Do you propose a different or modified taxonomy? We are going to continue our thinking and work out a similar taxonomy for the new types of partnerships around SaaS.  So please leave a comment
 
Always keeping you informed!
Peter

SUN / Oracle: Is It The Consolidation-Blues Or A Game Changer?

By Stefan Ried

The blogsphere on the Oracle/Sun deal has been hot for the past two days and the Forrester team has just gotten off the phone with Ed Screven, Larry’s Chief Corporate Architect to learn more on the background. Actually Oracle’s commitment, the market reaction, and our analysis provides far too much content to cover in one report or even a quick blog. It will end up in various Forrester reports according to your role:

For infrastructure and operations professionals, James has already unveiled the impact on SUN’s installed base. Everybody operating a Sun hardware based data center is scared by the mere possibility that Oracle might sell the hardware part of Sun. See his blog here. 

For various end user roles, the projection of a merged portfolio is the most exciting question. See Ray’s blog post for an initial analysis.  Obviously the post-merger integration is the biggest challenge on Oracle's transition from a pure software company to a new software/hardware/appliance/cloud vendor.

A quick recap of the market options and some reactions in the bay over the past day has been posted by Tom Grant. Can other vendors’ product management and marketing professionals capitalize on the deal? Is it a threat or an opportunity for the other vendors? I am sure that Tom will follow up on his blog as always with a spicy kind of humor.

The vendor strategy view of the deal will definitely look at an even more abstract level: Is this deal just another consolidation peak? One small vendor acquired by a larger one – or is it embracing a new era of IT industry strategy?

Please see the Forrester report just published a minute ago here

Oracle's Sun Acquisition Is A Game Changer 

What the title already indicates is a significant eruption of today’s M&A paradigm and portfolio management in the tech industry. The IT industry can be thought of in four major pillars: Hardware, Middleware/Databases, Packaged Business Apps and IT Services including custom application development. Most 2nd tier vendors are in one corner of this map, while larger vendors like HP/EDS or Oracle drive their core business in two of these portfolio pillars. Only IBM already occupies three out of four. Oracle’s acquisition of SUN is not a tactical move. It’s not only preventing IBM from getting their hands on the Solaris installed base, it means a strategic move into the third portfolio pillar, hardware, now that their market share in middleware/database and in packaged applications is solid. It is still questionable how and if at all, Oracle will be able to digest SUN and merge into an integrated large portfolio vendor like IBM. Obviously IBM’s size and portfolio richness is still unmatched; but Oracle's strategy moves in this direction, while their execution will still have many obstacles to overcome.

Also stay tuned for a great report coming up form J.P. Garbani next week for the second round of strategy analysis in the context of 40 years tech industry history.

The changed Oracle strategy might bring major parts of the IT ecosystem out of balance. How should hardware vendors and the remaining pure play ERP vendor SAP position and re-shape their partnerships? Stay tuned for another post in this blog from Forrester’s latest analyst for vendor strategy in the application space: Holger Kisker in two days.

Let me know what the deal means for you as a vendor and leave a comment.

Cheers

Stefan

Yet Another Cloud – How Many Clouds Do We Need?

A proposed cloud taxonomy.

Everything as a service (XaaS) and Yet Another cloud! The cloud is the buzzword du jour.

Unfortunately vendors are increasingly confusing customers as too many different things are related to cloud computing. We’d like to start a public discussion around the number and structure of cloud computing categories. Discussions with Forrester clients and among Forrester analysts turned out that not only the technical capabilities or the network topology is the major dimension for a differentiator. It is also the role of the corresponding IT professional. A specific technical cloud infrastructure for example, cloud be called by a vendor strategist simply a “private cloud”, but might get two different names from the IT operations professional depending on an internal or external sourcing approach.

Forrester already explored various cloud trends, SaaS and PaaS technologies and business application.

There Are Two Types Of Compute Clouds  Forrester's SaaS Maturity Model Forrester's Platform-As-A-Service Reference Architecture  Which Cloud Computing Platform Is Right For You? Platform-As-A-Service Is Here; Can It Help You?  TechRadar™ For Sourcing & Vendor Management Professionals: Software-As-A-Service

However, vendor strategists still face the challenge to categorize their offering into the various understandings and communication of cloud computing. The discussion turned out, that we have to look for the right differentiator of the various cloud offerings before we can define names. A first trial of a possible cloud-taxonomy is categorizing cloud services by IT-Infrastructure vs. Business Value and by the level of privacy a certain concept embraces:

Most of today’s cloud services and SaaS applications could file into this cloud taxonomy.

However, before we write a report on this, we’d like to get your feedback. Are privacy and business value the right dimensions? Would a cloud-taxonomy like this help you as a vendor to make your marketing communication less confusing and clearer to your customers? Does is sound logical to end customers?

Please leave a comment.

Cheers

Stefan

The changing mobile world

It has been a busy week or so in the mobile world.

The perpetual pressure on revenues has been ratcheted up a notch or three. Deutsche Telekom is battling to block the Skype application on the iphone that it sells in Germany. The never-ending regulatory battle to reduce call termination rates saw UK regulator Ofcom impose a 21% reduction with immediate effect. And the specter of satellite based competition reared it's head again as the European Commission is about to allocate S-band radio spectrum to enable the owners to potentially offer pan European Mobile services. Clearly sometimes bad news really does come in threes.

But the mobile operators are fighting back with action on new business and costs. Using mobiles as a substitute for credit cards has been growing in popularity in the east for some while. This week credit card giant Visa and Maxis announced a deal to offer this in Malaysia using Near Field Communications (NFC) technology. Looking at costs, recent moves by Telefonica and Vodafone in Europe to share networks, and Zain and Essar in Kenya to do the same, is all about sharing to reduce costs.

What all this activity shows is that the established order is changing rapidly. We are probably seeing the first moves towards resetting the established business model. In this new era revenues will come from a broader base, and cost structure will be radically different from what has come before. 2009 will be remembered as a year of big change in the mobile world.

The cloud became even more attractive for ISVs this week.

As many ISVs and vendors of business applications have subscribed this vendor strategy blog of Forrester, I’d like to share two important announcement of this week with you. Both will make business applications in the cloud more attractive and enable ISVs to reach more people with their cloud deployment.

The first one is around Salesforce.com’s mobile client for the iPhone and Blackberry. Packaged as free Mobile Lite, the client app is a version of the company's existing mobile program. It gives mobile workers restricted read-only access to their salesforce.com account. Beyond this, the free version allows users to update tasks and calendars. Unfortunately third-party applications that might be deployed on force.com are not getting mobile capabilities through the mobile client automatically. ISVs have to create corresponding style sheets and have to enable their force.com objects for mobile access manually. Although there is no direct benefit for existing third party apps on this platform, the free option will drive significantly the mass adoption of mobile access to the CRM system. This will finally generate much more demand for mobile access to third-party apps. Be prepared for your customer request in this direction.

The second interesting announcement comes from Google. The vendor celebrated the first birthday of its App Engine this week at the developer event Campfire One.  The engine is based on Python and provides basic platform as a service capabilities. Much functionality is still missing to be a grown-up PaaS environment compared with Forrester's Platform-As-A-Service Reference Architecture. However, the app engine is quite attractive to deploy scaled out deployments of new web applications. Google is announcing now Java support of the App Engine! Acknowledging the dominant java IDE Eclipse, Google announced also a Eclipse plugin to support the link between the App Engine and this major IDE. The Google App Engine with Java support is available since April 7^th for 10,000 interested developers as a preview. Potentially this is the next evolutionary step in the history of Java Application Server.

I am curious to hear feedback from application vendors how the migration from existing Java application into Google’s App Engine works.

Telecoms, the G20 summit, and the recession: Three in one

Welcome to my inaugural blog on Telecoms. For readers I don’t know I have worked in the industry for over 20 years, and over the past few years have been interviewed by a wide range of media in connection with market developments in the sector. Here at Forrester I cover Telecoms Strategy and write for Vendor Strategists.

 

What a week this has been with the G20 meeting here in London. As we now know the G20 nations has committed to making $1.1 trillion available for to ease the credit problems of the financial sector; a rejection of protectionism for trade; and a commitment to do whatever is necessary to restore growth to the global economy. Much of the funding for this is to come from  China and Saudi Arabia– a sign that this is a genuinely global solution and not a cozy western club as its predecessor the G8. In this respect UK Prime Minister Gordon Brown is right to talk of a new world order.

 

 

And in the margins around the conference Presidents Obama and Medvedev agreed significant cuts in nuclear missiles for the US and Russia. Chancellor Merkel (Germany) and President Sarkozy(France) rightly pushed for greater regulatory oversight of financial markets. And Mrs. Obama gave a speech to UK schoolgirls every bit as powerful as any given by her husband during his election campaign last year. Some week - and it is still only Friday!

So what does all this mean to the telecoms sector? Much more than meets the eye is the short answer. It is fair to say that so fat the sector has not been hit badly by the recession - so far. Last week the EU reported growth of 1.5% points, a figure consistent with the most recent earnings results posted by the major telecoms operators. So whilst telecoms is not like the manufacturing, construction, or retail sectors it is not immune from the wider recession. In our view we haven’t yet seen the full effects flow through from the sharp downturn that happened in October last year.

 

Whilst the G20 conference was underway 25 of the leading mobile companies – a second new world order - delivered a letter pledging to invest $550 billion in mobile broadband with the potential to create 25 million jobs and so help lift the global economy out of recession.  In return they asked for a more stable regulatory environment and an allocation of new spectrum.  On the one hand you could say this was an attempt to demonstrate how telecoms can stimulate growth, flags up that the sector is still growing ,and has the appetite to continue to invest. There are not too many of these around today.

 

And yet on the other hand it can be said this act is grandstanding and a thinly disguised attempt to extract favorable treatment at a time when world leaders had other weightier things on their minds (how to revive the global financial sector, how to cut nuclear missile stocks). This would be a bit harsh, not least because as this week in London has shown, if the global economy is to pull out of recession then we all need to talk to each other.  This is the real achievement of the G20, and telecoms is, of course,  the means for us all to do so.

 

 

Mike Cansfield, Principal Analyst