Enterprise IT


“This Cloud thing’s fecking brilliant, Ted! It’s like all white and fluffy and everything…”

The headline is based on the recent news that Sir ‘Bob’ as he’s known locally, or Sir Bob Geldof of BandAid and LiveAid fame among other things, is a follower of Cloud Computing. Well what he apparently said at the BETT tradeshow is that it is “Fooking brilliant.”

Obviously Sir Bob had an agenda, otherwise the non-email or smart phone using celeb would have looked even more out of place, but I’m starting to feel the Cloud debate is all becoming a little ‘Father Ted.’ (And I would like to confirm that I am in no way comparing Sir Bob or the Irish in general to the characters of ‘Father Ted’ – the author is Irish – so no need to send the indignant outrage emails…please!)

The more sensible reason for this thinking was provoked by Jason Stamper’s predictions for the year ahead and its mention of last year’s Gartner’s Hype Cycle for Emerging Technologies 2010.

I agree with Jason that there is every danger Cloud Computing, the catch-all for anything-over-the-Internet, is going to crash into the trough of disillusionment unless vendors are careful.

Gartner would, I’m sure, be happy to consult concerned parties for a small fee – particularly as they believe Cloud is the number one priority this year – but here’s some much cheaper thoughts from the communications perspective! Cloud is here to stay, without any question, but the pseudo religious fervour that some applying to this debate has allowed the mud slingers to continue re-using tired arguments around security, reliability and scalability…as borne out by the Economist article in December, which I’d personally like to thank for its guidance on the pronunciation of SaaS, PaaS and IaaS. (apparently, it’s ‘letter’ + ‘arse’…what bright spark came up with that branding idea!?)

While Cloud continues to be perceived in this way it is easy to see why enthusiasm is wavering.

Like any chasm crossing moment there are important business steps to follow and the communications strategies should be an integral of the process. The key focus areas should be:

1) Listening: demonstrate through your communications that you are listening to your customers and show you understand their challenges. While it is obvious to you that Cloud is the way forward, quite a large majority of the world don’t think that.

In fact they’re quite happy where they are and have grown up with a clear understanding of how to review, deploy and refresh their IT systems. Fundamentally you need to re-educate prospects on the ‘A to Z’ of IT strategy and implementation and that can’t be done while you’re thumping the pulpit.

2) Differentiation: be clear about what you do differently. For the cynics out there among the enterprise IT community (apparently there are one or two) all of the different acronyms and platforms just encourage individuals to roll their eyes. Case in point might be Infrastructure-as-a-Service (IaaS). Looking closely at the recent Gartner IaaS magic quadrant the term ‘hosting’ is used as often as any other, so what makes these folks different compared to traditional hosting services? Pardon me for this sweeping generalisation, but clarity when communicating a proposition is critical.

3) Avoid Cloud Fatigue: while I haven’t come up with the right equation yet I’m sure there is an extension to the Gartner Hype Cycle, which includes the role that celebrities play in the technology lifecycle – situations where they can provide a positive impactand others where they undermine the value of the latest new, new thing (eg: Paris Hilton on the iPhone4). Clearly, vendors looking to encourage further adoption of their technologies need to be careful of preaching. Customers are taking greater control of their IT strategies, refusing to be tied into long-term contracts, so there is even more need to engage with them in dialogue on their terms, listen to their perspectives and be seen to respond. If Cloud Computing is as agile as it says on the tin, then vendors have to be prepared to engage on these terms.

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following Monday’s insight from the analyst community on the trends and expectations for the year ahead (check out the full post here), we thought we’d have a bash ourselves at predicting the future. so here are our suggestions for the year ahead – let us know whether you agree with us, or think we’re miles off the mark…

(also – to anyone reading this in December, you have *not* got an eye condition; those floating white dots across the screen are snow. it’s festive.)

…and we’re putting together a mobile special in case you think it’s a bit thin on mobility right now – watch this space in Jan for the 2011 mobile outlook according to Edelman Tech…

Predictions for 2011:

Larry picks a fight…with God

Larry Ellison will never be accused of being the shy retiring type. In fact one of the well known legends is that he bases a lot of his modus operandi around ‘The Art of War’ and over the years he has picked a fight with pretty much everyone in the industry. Bill Gates, Ray Lane, Craig Conway, Tom Siebel and more recently SAP and HP. Frankly there isn’t anyone really left to fight so the speculation surely must be that the only person worthy of a challenge is God. Given the old joke – "What’s the difference between God and Larry Ellison?…God doesn’t think he’s Larry" – this may not be the case.

Facebook emerges as a powerful content player

Just a stab in the dark, but I’d hazard that before 2011 is out we’ll see Facebook commissioning its own content – or co-creating content at least. The ‘Like’ function is powerful – whether for selling products or amplifying conversation around content. We know that young audiences are watching more online. I wouldn’t be surprised if Facebook will start working closely with production companies to push something like KateModern into stratospheric proportions – the first social entertainment blockbuster.

‘Do no evil’ Google becomes ‘Bad Google’

In some respects it seems almost stereotypical that a company that was once the darling of the industry is now beginning to look over its shoulder, as the mutterings begin to increase. Like Intel and Microsoft before then they have incurred the wrath of the regulators and how the company reacts next year will be interesting to watch.

Hopefully it will have learnt from the mistakes of others, but there’s the danger its senior leadership team has drunk a little too much of the ‘Kool Aid’.’There is no doubt that the ‘noughties’ belonged to Google and today it remains one of the key drivers of the IT industry, but it needs to sustain that growth to justify its market cap. As a result its moved into a number of different areas with mixed results…Google Wave (#fail), Android (#successtodate), GoogleTV (#waitandsee). Similarly it has had the high profile embarrassment around China, which has severely dented its reputation and competitors like Facebook, Youtube and even Microsoft are beginning to make in-roads on its heartland. 2011 may be a sticky year for Google.

We will all be buying coffee via our mobiles by the end of next year

Whether paying for stuff with your mobile, buying online credits, or using Square we’ll be seeing a lot more money changing hands, without touching hands. Much of the rest of the world already is – Africa and Asia are well ahead of Europe and US in this field, (indeed Gartner predict that 60% of this market in 2011 will be in Asia). But there is some key technology coming that will make phones that much smarter and make it that much easier for us all to get involved. Google has confirmed the next version of Android will support NFC (near field communication) chips, and it’s rumoured that iPhone 5 will have this functionality in-built. Nokia and RIM are both also expected to follow-suit.

Creative Agency "ownership" of social media

This year the classic PR v marketing battle was augmented by the arrival of "customer services" onto the scene. The range of customer and support services using social media to support their communications and contacts has led to them claiming ownership (and budget). A valid claim (like all the rest).

Next year customer relationship management (CRM) will join the fray under the moniker "social" CRM, linking customer databases with social media to define whether, when, how often, on what medium companies communicate with their customers.

I see loads of privacy and "ownership" issues but for any company who gets this right it could be huge.

There are however always pitfalls, and twitter is flooded with examples of companies ‘doing’ social media very well and responding to customers and issues, but the actual customer service department in the clients’ back office not following up. To avoid this becoming a fad or people losing faith in social media platforms as a channel, companies need to place the same focus on the back office customer services departments as they do in keeping pace with an external zeitgeist.

Gamification of Life

There’s a lot of chat about the ‘gaming of everyday life’. Truth is ‘social games’ like Farmville  actually aren’t very social (people tell their friends there are playing, but are they playing with friends and telling others? I think not). FourSquare is often touted as the best example of the gamification of life but personally, I don’t think it is a very good game.

To its credit I think it’s a very promising form of direct marketing and I’m sure we’ll see more coupons next year. More interesting – if more niche – social games are playthings like Chromoroma. These sorts of initiatives will continue to garner interest from the press and trend watchers. Whether or not they will engage enough people to become ‘mainstream’ is perhaps unlikely.  But in a game of influencing the influencers – this sort of creative approach will be a top scorer.

Murdoch will just give up with his paywall.

Personally I think it’s all a little too little too late – the industry has sat back and watched itself be destroyed – news on the internet will be, and will always be, free. If you can’t get what you want from The Times you’ll go somewhere else to find it. The quality argument, for me personally, doesn’t stack up, people generally will accept a lower quality if it costs them nothing.

Mobile and application based news might be a short-term saviour, and there will be winners and losers in this area next year. It’s perhaps true that people are prepared to pay for innovation and the novel – but even then, the future of the mobile experience looks set to be a browser/cloud based model. Mobile applications will go the same way as desktop applications at some point in the not too distant future (let’s say 2013 for arguments sake).

News will become hyper-local & hyper-social. A location based service will join forces with a news site for location centric news – what’s happening where you are right now….. bringing you nearer to……

……‘Where’s that ambulance going?’

I don’t think 2010 has quite been the year of location, as many though it might be. Less than 4% of mobile users are using this feature. It’s growing though and expect next year – with the rise in popularity of Foursquare and Facebook places (sorry Gowalla you missed the boat) – for the term “where am I now” to be more popular than ever.

Combine this with the fact that media is looking to innovate, to tap into the power of social, than I can see a very logical next step to be a combination of owned and user generated news to be pushed to users based on location.

What is happening in the world you’re in right now. Whether this is in combination with one of the aforementioned services or a plug-in to a site like the BBC, Digg or the Guardian, I think we’ll start to see this as a powerful service. Indirectly, this may then only serve to fuel citizen journalism, as people are alerted more easily to incidents / events happening close to them.

Someone will figure out how to give everything, no matter how small, an IP address

Long shot this one, and is based on boozy conversations with colleagues on the outerweb and the internet of things, that this could be the next big breakthrough – giving everything a link to the internet.

This could be as simple as me seeing a sofa or salt shaker and “liking” it in real time or adding instantly to an Amazon wish list via a connection to my smartphone. It will happen, perhaps not next year, but it’s always good to have an outlandish prediction – and hell most food products do now have a link to the web via barcodes.

Videogames will shift from products to entertainment services

By the end of 2011, most blockbusters games will turn into an subscription-based service instead of releasing a new iteration each year (i.e.: the Call of Duty franchise). We’ve already seen this happening with the Steam platform offering games as uploads, and annoying retail outlets in the process, but the next year could see this become even more prominent. Gamers are currently predominantly ‘owned’ by their console (although multi-console owners are increasingly more common), but game manufacturers could see a niche in the market for tying them into series through exclusive uploads, game advances and new episodes. Given the dedication the most successful games generate, this would seem a seamless next step.

Cloudy outlook;  another year of unfulfilled promise, the return of hardware storage, and Everything-As-A-Service?

Seriously, can someone just make the cloud revolution finally happen? It’s been on everyone’s lips for years – YEARS – but is 2011 the year the cloud actually becomes the tech saviour it’s lined up as? Granted, there are already plenty of services claiming ‘cloud’ services, but on closer inspection many of these are simply network servers – can we finally envisage a true cloud? If we are to do so, the main obstacle is going to be keeping such services reliable and absolutely, unrelentingly secure – it’s the security issue which has held adoption up in many instances.

And if the security issue does remain unconquerable, we could perhaps see the return of hardware storage with servers and SSDs, as the perceived risks around cloud computing create too many anxieties to warrant full adoption.

If the cloud DOES finally break loose, expect ‘EaaS’ – Everything-as-a-Service – a growing offers with more collaborative tools and more complete applications to be proposed; everything becomes “on demand” with the cloud.

Social media will finally arrive in the enterprise

We’ve already witnessed the growing adoption of social media in the enterprise – for both internal and external usage – and we can expect to see more of the same as IT decision makers start to impact the business strategy discussions.

Once the C Suite understand the role social media plays in business, and how it can (positively) impact business efficiency, we’ll see this boom. Social media is currently viewed as a distraction to staff, but once this misapprehension is dealt with, and its proper adoption, integration and monitoring is understood, enterprises will rush to get involved.

The key issue which needs tackling in 2011 is to dispel the perception of social media adoption being simply an ‘allow or deny’ decision. It is simply not that black and white, and different employees require differing access and controls. The workforce coming into industry now is that which has grown up with the likes of Facebook, and they’ll expect the same in business – and if they don’t get it, they’ll find a way around security to use it none the less. “Allow or deny” is no longer a valid debate.

and the consumerisation of IT won’t be restricted to social media…

…Bring-your-own

We can’t get enough of having a familiar device in our pocket, even in the workplace – we’re moving into the age of ‘bring your own’- your own technology, that is – into work. With more Millennials/Generation Y/the L’Oréal generation, whatever you want to call them, coming into the workplace, we’ll see a shift in the technology we use and how we use it altogether. Businesses will support the idea – in theory. Employees using a familiar device has the obvious efficiency advantages. However, whether organisations, and infrastructure, will be able to support alien devices is another thing. After all, there’s the usual security, technical, data protection and legal issues that cloud computing has been dealing with for years. It will certainly be a step in the right direction, but we may very well get there at a snail’s pace.

with thanks for the following for contributions:

@RogerDara

@cairbreUK

@LukeMackay

@JustinWestcott

@LucyDesaDavies

@wonky_donky

“Why Cloud will only see widespread adoption if the IT industry has a Stock Market-style crash”

Given that my job is providing PR consultancy to the IT industry I appreciate the absurdity of recommending some kind of Stock market crash as the way forward for the IT industry. I went through the dot com bubble – it wasn’t pleasant. However, I am not making this suggestion because I enjoy scaremongering or want to see anyone out of a job, but because I am at a loss to understand how else we can correct and move beyond this ‘Age of Institutionalised Complexity.’

Enterprise IT departments, ever since the early days of mainframes, have built up stockpiles of hardware and software, which I would contend they rarely fully use. Sure, technology has pushed greater integration and commoditisation, but major organisations are left with bulky IT infrastructures creaking under the weight of their inefficiency.

Yet models exist which could enable CIOs to become more agile and responsive, but adoption – although on the increase – is not widespread.

It would appear to the cynical eye that enterprise IT environments have become so institutionalised by this complexity that wholesale change isn’t possible without some kind of dramatic event, such as a crash.

“Why isn’t every IT department moving wholesale to the Cloud?”

Ok, perhaps I’m being a little too impatient for change – and probably only have a superficial understanding of the technical requirements – but enterprise customers, in particular, are not grabbing the opportunity of Cloud Computing to move wholesale away from hereto expensive and restrictive relationships with their existing IT providers (as Ray Wang highlighted last year at the SAP UK User Group).

If we believe the analysts Cloud is heading in only one direction with revenues soaring and yet we’re still having a debate about the theory of Cloud – how it should be applied, etc (single tenant, multi-tenant, private cloud, public cloud).

Surely the long-term benefits far outweigh the challenges? Yes, cost is stripped out of IT structures, but more importantly it should create IT environments with the flexibility to respond to ever changing business conditions.

Call it resistance to change, fear of the unknown, or plain stubbornness – there is a need to overcome such blockers as the IT industry will collapse under its own complexity unless it adopts new models such as Cloud.

“Stupid is as stupid does…”

Despite the traditional IT vendors taking flak from every angle for their poor innovation (you only have to read Vinnie Mirchandani’s book, which suggests a lot of the innovative application of technology is being done by non-IT companies) we’re still moving quite slowly given that ‘Cloud’ has existed in some form for quite some time. (Simon Wardley suggests the concept first appeared in 1968).

In moments of greater frustration it seems the only conclusion is that humans really are as stupid as some believe. Thankfully, though, further investigation leads me to a different conclusion, one prompted by a term referenced by Dennis Howlett on Cloud – ‘Institutional Memory’.

Like Dennis I reviewed the excellent keynotes by Mark Masterson and Simon Wardley at OSCON and started to build a clearer picture of this notion of ‘Institutionalised Complexity.’

Both speakers underlined the fundamental in the clash between innovation and the desire to achieve predictable success in business. Masterson applies this view to the previous decade, describing an era he calls the ‘Age of Productivity’ which was focused on reducing the likelihood of failure and cost of failure in return for predictable business success.

The outcome has been that companies focused on initiatives – both in business and IT – driven by this need for predictability and as a consequence pushed IT products/service development towards commoditisation. As Wardley explains this creates a fundamental issue for innovation, because it requires a risk-taking, uncertain environment to prosper.

Wardley’s solution for IT vendors and their customers wanting to reinvigorate innovation is to recommend they analyse where products and services have already been commoditised. He highlights functions, such as HR, CRM, and Finance – all mainstays of ERP – as prime areas for exploitation. Areas where value has been eroded so much that they are ripe for the Creative Destruction process. Masterson sees breaking free of the constraints of the ‘Age of Productivity’ as the opportunity for open source software and argues that companies should be focused on the ‘Age of Growth.’

“Trapped in an Institutionalised Mindset”

Logically that should mean the time is right for mass adoption of Cloud Computing. Yet I have a concern that most enterprise IT departments simply aren’t prepared or willing to enter this ‘Age of Growth’ because they’ve become so institutionalised in their adoption of IT. Cloud Computing challenges this mindset at every level, in terms of how IT is acquired, supported and how its success is measured. JP Rangaswami even suggests that attempting to apply traditional measures such as Service Level Agreements (SLAs) is wrong, that IT departments need to be designing their IT infrastructure for a ‘loss of control.’ Applying the linear models of the ‘Age of Productivity’ is wrong, companies need to be thinking in terms of language such as ‘self healing,’ ‘self aware’ and ‘heuristic.’

Having grown up being driven by the need for risk aversion and predictability it will be difficult for any IT department to cope with such significant change, particularly at a time when there is even greater pressure on IT leaders to demonstrate value to their business peers. Therefore I contend that the easiest way for such technologies to gain much wider adoption is that the IT industry has some kind of implosion with both vendors and IT customers being forced to start again.

I appreciate this is slightly insane, well possibly very insane, but let me cite two reasons why:

1. All good things come to an end because they become too complicated: Clay Shirky has written about a book by Joseph Tainter, “The Collapse of Complex Societies.” In it Tainter analyses why supposedly sophisticated societies such as the Romans and the Mayan Indians eventually implode. In his view complexity has stifled each of these societies and it leads Shirky to suggest:

Complex societies collapse because, when some stress comes, those societies have become too inflexible to respond…When the value of complexity turns negative, a society plagued by an inability to react remains as complex as ever, right up to the moment where it becomes suddenly and dramatically simpler…Collapse is simply the last remaining method of simplification.

2. History is repeating itself: a quick look at any number of examples demonstrates why this logic is applicable to business and therefore IT. The automotive industry went from innovative to commodity driven by Henry Ford and hung on for dear life, until its recent collapse due to the stress of the global economic crisis and changing attitudes to the environmental impact of car travel. While some of the incumbents fight on (eg: Honda, who’s tagline has been ‘dream the impossible’) a range of new manufacturers are emerging. For many the well-publicised collapse of the Financial Services industry has been due, largely, to the complexity of its products and the inability of regulation to cope with this complexity. The Media and Entertainment industry is in the throes of a similar challenge, with various sectors in different stages.

“An alternative solution would be to simply embrace the chaos”

The simplest conclusion for the IT industry is to embrace collapse and its accompanying chaos, but perhaps we don’t have to see Rome burning. Rather enterprise IT users should prepare for a period when IT structures and their accompanying ‘rules’ have to be reset. Cloud Computing is the vehicle for that change and there is a significant opportunity for Cloud vendors to help their customers move towards this ‘post-proprietary’ era of adoption.

To encourage change Cloud vendors need to follow a number of steps, mainly to appeal to the current institutionalised mindset, but also to lead their customers to place where they believe that risk-taking isn’t dangerous.

Step one – build trust: recognise that technology> won’t lead to change alone – accept Simon Wardley’s point that it is only one of four triggers that drive uptake. Unless the concept for a new technology is clearly defined, unless the customer recognises its suitability for its environment and the customer has been convinced to change their attitude, the technology will always sit on the shelf, no matter how good it is.

Step two – change the benefit discussion around Cloud: both Nicholas Carr and Paul Strassmann have said – in one form or other – that there is little value in IT spend and in fact Jevons Paradox showed that technology adoption increases consumption, rather than saves money. There is a need to appeal to the predictability mindset, because cloud will never achieve widespread, commoditised consumption – similar to other utilities – unless vendors show how Cloud can bridge the default position regarding risk aversion and the desire for repeatable solutions. But making  a conversation solely about cost reduction will never move IT users out their comfort zone to experiment fully with the Cloud.

Step three – embolden customers to take risks: for me this is encapsulated by provoking customers to respond to Shirky’s question: “Would this be an interesting thing to try?”

It goes to the heart of the point about moving the discussion beyond cost. If Cloud vendors can show the benefits of piloting their technologies can be done at minimal risk, they can begin to break down linear approaches to IT adoption. However, to do this they must bring customers on a journey that explains what their roles will be in the future, because a guaranteed blocker to change is an IT Director, who sees his or her role being replaced by a new technology. (Classic example – which I’ve witnessed – try selling database automation technology to a room full of Database Administrators)

Cloud Computing suppliers are beginning to reassure more and more enterprises that they have a role in their IT infrastructure, but they are yet to build significant trust among the broader ‘Church’ of the enterprise IT industry. The danger is that the traditional vendors are not only feeding that hesitation, they are using this period to catch up, so the Cloud specialists don’t have long to drive their advantage home.

For this ‘Age of Growth’ perhaps the new motto should be: “Go on failing. Go on. Only next time, try to fail better.” (Samuel Beckett)

Or as Mrs Doyle said it more succinctly, “Ah go on, go on, go on…”

@cairbreUK

The US is the traditional home of the internet but it doesn’t crack the top 20 in terms of internet speeds.

According to Akamai’s quarterly State of the Internet report China and the US account for almost 40% of all IP addresses in the world but both rank well behind South Korea’s 11.7 Mbps average.

Average internet speeds are down around the world due to wider spread adoption of mobile broadband but the US is lagging behind both developed and emerging economies.

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While the $7.2 billion US broadband stimulus package has focused on connecting all of its citizens, the next phase must be to ensure that connectivity speeds can cope with e-healthcare, e-government and other bandwidth intensive applications. Lagging bandwidth speeds might be a question of geography but there are ICT-orient governments, like South Korea, that are already seeing the benefits. As the $7.2 billion gets spent, it is also no guarantee that the US will move up the rankings as emerging economies ramp up development. The US is behind now, and might be well in to the future.

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Akamai gathers data from its global network to track internet trends across geographies. http://www.akamai.com/stateoftheinternet/

In the swanky central London offices of a leading law firm recently, at an event held by BABi, Stephen Leonard chief executive UK, Ireland IBM UK Ltd., reviewed the outcome of an IBM survey investigating whether technological complexity was an opportunity or a threat.

Perhaps not unexpectedly IBM and the views of its existing and prospective customers, comprising 1500 chief executives across 60 countries, supported the notion that existing complexity might be better harnessed with the introduction of additional layers of technology that ‘abstracted the complexity’ from the system.

Without wishing to reiterate the whole presentation – which was compelling – simply put, Stephen postulated that there are now more transistors on the planet than grains of rice. That the disparate systems that use these transistors – everything from CCTV, through traffic, transport, motor vehicle, GPS or smart mobile devices – are complex but disjointed and that by abstracting and integrating the useful information from these systems and combining them together mankind will enjoy a period of sustainable social, environmental and economic well being.

In the UK we’ve suffered a litany of high profile government IT projects either being delayed or going belly up or both placing the onus for overspent and waste on the tax payer.

Surely the answer is fewer systems that are better written, better connected and infinitely simpler rather than more? Whilst this might not be in the most immediate interest of generating short term revenue for Big Blue failure to grasp this will, I fear, find us playing second fiddle to third world countries that are already leap-frogging our old legacy systems – for example going straight to mobile versus fix line phones – challenging our technology thought and industry leadership and positioning the UK, Europe and the US as net importers of technology savvy.

Given the choice of a bowl of transistors or a bowl of rice which would you choose?

@mattwarder

Two weeks ago I crowd sourced the question about the changing nature of influence within the technology sector and how this was impacting on analyst firms specifically. There was tremendous response from which three key themes emerged that are illustrated below with some of the most relevant comments.

1. A New World of Influence

Clearly from your comments there is a new dynamic of influence within the IT sector. James Boike highlighted the fratured nature of influence away from the traditional sources specifically analysts.  He said, “Just based my experience in enterprise tech, influence on IT adoption has become highly polarized. If you think of Chris Anderson’s “long tail” concept, the most effective analysts and influencers have scattered to the far left and far right of the axis – influence is being polarized.

“That means top influencers increasingly work at extremities: either at “A Big Firm” or as vocal, prolific specialists in their trades.” The vast middle is no longer a fruitful position for analyst shops in enterprise tech. Tier-2 firms and independent freelancers who are not in the top decile of self-promotion are glossed over – they are more easily disregarded. More specifically, on the left pole I see Gartner, influential venture capitalists like Tim Draper/DFJ and Fred Wilson/Union Square Ventures, and key executives like Werner Vogels, CTO at Amazon (and until recently, Jonathan Schwartz at Sun). On the right pole I see folks like Anil Dash, Ray Wang, Dan Gillmor and Dave Winer, who seem to speak less for their organizations, instead voicing their own perspectives which are heard by thousands of IT decision-makers globally. Big caveat: much of the above influence does not fall into traditional industry analyst role, but that’s the point – the role of tech influence has scattered from the space formerly occupied by industry analysts.”

2. New Influence is Driven by Engagement

The nature of influence in this new world is driven by engagement Fred Broullard explained. “So, to our influencers. There are 2 things to be considered here :

A : Exemplarity: the opinion is driven by the status or relevance of the influencer. For instance, a designer will clearly influence for a technology product on style, design, good taste, but not really on technology. His influence varies by the topic and level of his engagement with the product.

B: Usage, or proven track of record: increasingly, as we have less time and far too much information, the picture says it all, so to speak. If the demo or the usage of a product / a solution has been successful, it will clearly influence. It might therefore be a shift from documentation to demonstration or engagement

Who they are ? … hard to tell, and increasingly so. I think that in each industry / organization / association, often the geekiest and most engaged person will definitely be the one who will be known and given credit.”

3. Engagement and Influence Originates In Micro-Communities

A major trend has been the growth and development of micros communities. These communities by their nature are formed from those engaged and it seems this is the source of great credibility and the source of influence.

Andrew Howard highlighted this fact: “I engage with global privacy stakeholders very closely—everyone from advocates to academics to policymakers. I’ve managed engagement with this community on behalf of a number of Edelman clients. These individuals are playing an increasingly prominent role in technology adoption as they influence consumers via the media and policymakers via lobbying efforts. Privacy is complex, highly subjective and poorly understood; as a result, privacy stakeholders can seed fear, uncertainty and doubt in the market. I believe there’s a new privacy engagement imperative for tech companies introducing products and services that push data boundaries (think location-based services, social networking, health IT, etc.).”

These micro-communities are important because the key idea starters on specific conversations and topics as Andrew highlights for privacy issues. It also highlights another question I was asked on a global training session this week what is the difference between and engagement strategy and a traditional communications approach. I came across a quote from Andrea Di Maio Gartner’s leading analyst on e-Government issues earlier this week that explains it well. “Using social media to communicate means to expand a multichannel communication strategy to encompass new channels. It used to be the counter, the telephone and the web site: now you have the Twitter hashtag or the Facebook page, but these are just channels. Of course people can engage, retweet your information, post on your Facebook page, and so forth. So it would appear that simply setting some ground rules about what people can and cannot do and how the moderation policy works would go a long way toward moving from simple communication to engagement. But “real” engagement is something else. It is about figuring out where people are already having conversations that your organisation needs to be aware of. It is about bringing information and dialogue to places where people want that dialogue to happen: their blogs, their Facebook groups, their Twitter streams. In essence, an effective communication strategy is likely to be almost the exact opposite of an effective engagement strategy. The former chooses and controls channels, while the latter joins somebody else’s channels. The former determines rules of engagement, the latter follows somebody else’s rules. The former assumes that people reach out to your organisation, the latter is based on your organisation reaching out to communities and groups.”

As James Boike pointed out Gartner analysts still dominate at one end of the axis but I would love to hear thoughts from all points of influence.

Either side of Christmas there has been a fair amount of debate about the future of the enterprise software market, particularly whether the big players such as Oracle and SAP are going to start feeling the heat from the software-as-a-service (SaaS)/cloud computing folks. Given the economic conditions and the hefty maintenance fees that many customers have been asked to pay it quite rightly led some commentators to suggest customers have a right to demand more.

SAP has been ‘victim’ of some sabre rattling in Europe as it has just announced that it is backing down on changes to its support license structure – a result of pressure being exerted by many commentators. Frankly, though, I’d rather see that as a good example of an enterprise IT vendor getting the need for dialogue with customers. In fact Dennis Howlett suggests that SAP wants to be the ‘voice of the customer.’ So rather than criticise SAP I say well done!

Rip and Replace Frenzy?

Elsewhere there has been debate about the financial performance of SAP and Oracle with some analysis suggesting the Oracle’s numbers before Christmas told a disturbing story about its reliance on support revenues for its profitability. As I’ve said before Oracle does say its higher maintenance fees are critical to future investment in product/services R&D, but given the financial belt tightening of the last year many customers don’t have the luxury of sustaining such expenditure. (A fact borne out by the growth of the likes of Rimini Street and other third party support vendors, who are seeing more and more customers turning away to them for maintenance contracts)

So does that mean we are about to see dramatic changes in the IT industry? On its home turf Computerwoche dared to raise the question whether SAP could remain independent, while the hotly debated Sapience conference saw the SaaS vendors making very bold statements about their competitiveness against the ‘traditional’ enterprise IT companies. In this more balanced piece Jon Reed did say there are merits to the SaaS model and that SAP needs to be careful, particularly with some of its older customer base refusing to upgrade, but that we are not going to see a dramatic ‘rip and replace’ frenzy.

Integration Rather Than Software to Decide SaaS Success

I tend to agree both from a practical and technical perspective. Practicalities – for instance – IBM AS/400 was around long before I started and is still around today. Ultimately it will always be up to customers to decide which products they use and they would be crazy to throw away long-standing investments. In December Ray Wang also offered advice to companies considering a shift to SaaS, listing 10 recommendations, the most important of which – for me – was a technical one about integration. We have already learnt the lesson the hard way with existing enterprise IT platforms, that unless applications are integrated companies fail to extract their full value.

Certainly, in some areas such as customer relationship management (CRM) and salesforce automation it has been possible to establish a beachhead quite quickly, because these systems can be quite distinct from core IT infrastructures. However, to convince major organisations to switch their critical applications such as financial administration to the SaaS or Cloud model, vendors must demonstrate they can integrate disparate systems to ensure a transparent picture for the customer. That means combining business intelligence with performance management with accounts payable and other core finance applications. That is no easy task and requires a depth of expertise that I don’t think I’ve seen from the SaaS gang.

Who do you Trust?

I guess they would suggest implementation partners ensure the business processes run smoothly together, but if I were a major bank who would I see as having the expertise to implement properly? If the CIO had to guarantee the trading floor had real-time data that linked seamlessly with the back-office finance applications so would the CIO trust a SaaS vendor?

For me that’s the big question. Security is an easy FUD argument against SaaS/Cloud, but integrating business processes is the major area where SaaS vendors will need to convince.

So does that mean the ‘traditional’ big guns can breathe easy? No.

Impact of Conway’s Law and Enterprise IT as a Utility

The reality is that we’re moving to the Cloud/service driven IT model. It will fulfil Nicholas Carr’s view of IT as a utility. At the moment it is driven by economic necessity, but while the SaaS vendors have their chance I am confident they are going to be working hard to get further and further inside the corporate firewall, stripping out the older proprietary systems.

Where does that leave Oracle and SAP? I once had it described to me as moving a world of ‘provices’ and ‘serducts’ rather than products and services. In this excellent overview of the challenges for the enterprise vendors Pete Swabey references Conway’s Law, which reads: “Organisations which design systems…are constrained to produce designs which are copies of the communication structures of these organisations.”

If we follow the model that software will become a commodity and accept the impact of Conway’s law there are going to be a few clear priorities for vendors:

1)      Customer service reputation: historically never a strong suit for enterprise IT vendors, but surely they are going to have to engage more aggressively with customers and be prepared for frank, sometimes awkward dialogue. How far that dialogue should go is the key challenge. If you follow the engagement model to its furthest reaches then surely vendors will involve customers more in agreeing product roadmaps, but that could be a massive, complex headache, which sees profits disappear, much to the consternation of shareholders.

2)      Brand: if you agree that service rather than product will become the priority, that means that the focus on brand identity will have to increase and change. The US technology companies are all fairly sophisticated in protecting their brands, but I’m not sure many of them recognise it as critical to their customer/employee engagement. For example, I don’t really remember either Oracle or SAP trumpeting the capabilities of the Consulting and Support teams much beyond the odd press release. Surely, highlighting the services and expertise of these teams should become even more important than product. And that is not just about tangibles, it is also about the intangibles that customers associate with a brand. For example, would an enterprise IT vendor have the courage to publicise a software implementation that went wrong (and the turn around process), as a positive example of commitment to customers? Today no, but in the future (in the right context) a brave vendor should surely be willing to demonstrate how willing it is to through the kitchen sink at a problem? Creating that kind of mythology enhances loyalty.

3)      People: And if the tangibles and intangibles become ever more important in this service driven model, then obviously people are of paramount importance. A cliché, sure, but again enterprise IT vendors have not always covered themselves in glory when it comes to interaction with their staff. Having worked for an enterprise software vendor (Oracle) and loved it, I know how exciting it can be to work in this sector. However, across the industry the approach to employee communications – more importantly engagement – is frankly patchy. And if you treat staff like mushrooms, then the obvious happens…

So neither a bloody or a velvet revolution, but it would be interesting to be in the boardrooms of SAP and Oracle to hear what they’re saying about the future.

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