Friday, December 26, 2008
2009 Prediction: Business Intelligence goes SaaS
#7 in our series of 2009 predictions
2008 recap
Business intelligence is an unsolved problem. At every company we’ve ever worked with, managers lack the information they need to make intelligent decisions. Why is this, after the rise (and eventual fall) of an entire industry around business intelligence technology? Will Cloud Computing change the sorry state of business intelligence for customers?
2008 saw a number of next-generation BI providers move their offerings from niche to mainstream. Companies like PivotLink, LucidEra, Good Data, and Panorama announced a maturation in their offerings and important customer wins. Even Business Objects and Cognos were able to advance their on-demand offerings from within their on-premise parents.
But most business still lack basic access to critical information. For most people in most companies, it takes a request to IT (and perhaps a call to your implementation parter) to do something as simple as add a field to a report. In our eyes, this is a market ripe for disruption from cloud computing in 2009.
2009 Prediction
Despite the fact that on-demand business intelligence has been slow to take off, there are fundamental problems in business intelligence that, in our view, can only be solved through cloud computing. We believe that the increased availability of cloud computing platforms in 2009 will make BI the next application category to reach the tipping point of on-demand adoption, fueled by data from SaaS applications.
Why BI?
BI is a classic “bursty” application. BI requires infrequent access to massive computing power-- a perfect application for cloud computing.
Thanks to Google, users have been trained to expect nearly instantaneous access to any piece of information. Instead of spending hours formulating a carefully crafted query to run once, users expect to be able to navigate iteratively through their business information. They expect to run an initial search, see what comes back, and explore from there.
This is simply not possible with any legacy BI system: vendors brag about achieving sub-minute response time… a far cry from the sub-second response time that an interactive application requires.
As a result, BI's impact in the enterprise has been limited... only a few power users are able to use it effectively. The impact and value of BI would be exponentially greater if business users could search and navigate their company's data in the same way they search and navigate the information on the internet.
Why can't in-house IT departments deliver this level of performance and usability using legacy BI systems? In part, the issue is infrastructure. BI infrastructure is overpriced and tremendously under-utilized. Many BI systems sit completely idle 90% of the time, only to be hammered on well beyond capacity in the days (or hours) leading up to a management meeting or end-of-quarter analysis.
These are perfect conditions for the shared infrastructure of cloud computing. Shared computing power is the only way that companies can deliver the responsiveness their users demand without a prohibitive investment in hardware. On-demand BI vendors, with their roots in modern web-based technologies and user interfaces are well positioned to create usable BI applications that will finally unlock the value from companies' transactional data.
Why BI from SaaS data?
We also predict that the winner in on-demand BI will emerge from an initial strength in analyzing data from SaaS business applications. Why? Analyzing data from SaaS applications overcomes 3 of the key barriers to adoption for on-demand BI: Security, transformation, and integration.
Security: Your business data are your crown jewels, and nobody wants to be the first to put that into a shared infrastructure. That’s why we think that data generated by on-demand business applications is the likely starting point for on-demand BI…. After all, this data already lives in shared environment.
Transformation: Query, reporting, and analysis is not the hardest part of BI—getting data into a format suitable for analysis is a far harder challenge, especially for an on-demand solution that’s trying to bring together information from behind the firewall. This is less of an issue for BI running off SaaS applications where the data is already in the cloud.
Integration: Most analytical applications require bringing together business data from multiple sources. Most modern SaaS applications offer more open APIs than on-premise software.... on-demand BI has the potential to be better integrated, and therefore more valuable, when paired with a SaaS application.
Implications for customers
Of course, it will be difficult for customers to justify investing in an entirely new BI infrastructure, especially since most are still trying to justify the investment they made in their last round of on-premise BI infrastructure and 2009 looks to be a year of frozen or slashed IT budgets.
That’s why we expect to see on-demand BI enter the enterprise from the line of business, not the IT department. Business users will be fed up by the inability of their IT department to support their basic demands for information. If they’re already using a SaaS solution, they’ll be tempted to try an on-demand BI solution that they can get running without IT support, out of their operating budget (exactly how on-demand CRM initially penetrated the market).
This is what we expect to see in 2009: Low ticket, low risk, on-demand BI solutions, built on cloud platforms, with adoption driven by business analysts hungry for information.
Our advice for enterprise IT? Let it happen. There isn’t yet a clear winner in on-demand BI, and you have much to gain and little to lose from these experiments. These are not requests you’ll be able to service in 2009 anyway, and early experimentation will leave you well positioned to jump on a winning solution.
What do you think?
Which of our predictions do you agree or disagree with? Please let us know by voting in our poll or commenting below.
Labels: 2009 Predictions, BI, Business Intelligence, Cloud Computing, PaaS, SaaS
Monday, December 22, 2008
2009 Predictions: Azure Disappoints
#2 in our series of 2009 predictions
2008 Recap
We’re not sure exactly what there is to recap about Microsoft Azure in 2008, other than the launch event, which certainly generated a lot of buzz.
A closer look by many generated more skepticism. Phil Wainewright said it best: “Whereas real cloud vendors release working services in beta on the same day they announce them, Microsoft simply announces what it’s going to do a year or two off in the future…. Ray Ozzie confessed that ‘the maturity of the things that we’ve got on them as this point in time is limited. It will be a different story a year from now. But I wouldn’t want to hold it for another year. So, we’re getting in the game.’”
2009 Prediction
So we’re keeping our expectations in check for Azure in 2009. CNET doesn’t expect web-based Office on Azure until 2010. There are only a handful of applications (nearly all Microsoft built) being demonstrated on Azure….the next generation of Live Meeting is supposedly up next.
Why the slow pace? Part of the explanation is certainly the scope and ambition of the Microsoft vision. Microsoft has a history of being late to markets that it eventually dominates, and we certainly don’t want to under-estimate the power of the resources Microsoft has at its disposal. Ray Ozzie is a visionary, and he’s charted out an ambitious course that will take decades to fully realize.
But we think there’s more to it than that. The last 2 years have shown us how challenging it is to play in both the cloud and client-based worlds. We’re written about the challenges SAP has faced building new business models without disrupting their core business. Microsoft will face the same challenges. This tension between wanting to play in the cloud without damaging its cash cows is the reason that it has taken Microsoft so long to even start talking about Azure.
Given this conflict, we don’t expect much from Azure in 2009. Microsoft will use it as a platform for some of its own services, but will face huge go-to-market conflict in rolling these out to customers. Microsoft’s developer community will face the same conflicts, and will be unsure how to focus their
investments. The hundreds of companies that make their living hosting Microsoft Exchange servers have the most to lose—Exchange and Sharepoint are likely to be the first applications ported to Azure (exhibit A of the types of conflict Microsoft will encounter as they roll out Azure).
What it means for customers
The big news for customers out of Microsoft Azure is validation of the cloud computing model. The entire IT industry is FINALLY unanimous in acknowledging that the future of enterprise computing lies in the cloud. Microsoft, IBM, SAP, Oracle—all have now told their customers that they need to be thinking about cloud computing.
So the real question for the enterprise is how to get started. That’s a question that we at Appirio love to help customers answer. Unfortunately, the answer is probably NOT with Microsoft Azure.
What do you think?
Which of our predictions do you agree or disagree with? Please let us know by voting in our poll or commenting below. And follow a rich dialog on these predictions hosted by Clint Boulton at eWeek.
Labels: 2009 Predictions, business by design, Microsoft Azure, Microsoft Exchange, Microsoft Sharepoint, PaaS, SAP
Sunday, December 21, 2008
2009 Prediction: Enterprises will figure out how to use social networks in the right way
Prediction #9 in our series of 2009 predictions...covered out of order due to New York Times Blog coverage.
2009 prediction:
In 2009, we predict that companies will finally figure out how to use social networks in the right way: by building up (NOT undercutting) the trust between employees and their friends. Your employees already use social networks to connect and exchange information with others in their personal life... there's no reason that this trend would stop at the office door. In 2009, you'll see HR, marketing, and sales organizations at leading companies capture real business benefits from effective, trust-based use of the social networks of their employees:
- Find and attract great talent for your company by encouraging viral employee referrals
- Create a "virtual account team" of friends inside and outside your company as you approach strategic accounts
- Virally promote activities your employees, customers, and partners are excited about
The underlying reason that social networks are valuable in the enterprise is simple: people trust their friends. Messages that come through personal connections will always have a higher impact than corporate messages conveyed through traditional advertising. This is what gives social networks such potential for viral sales, marketing, and recruiting.... and why maintaining the integrity and trust of the social network is so important. Companies who want to use the social graph effectively need to understand 3 core principles of social networking in the enterprise:
- The world doesn't need "yet another" social network: Social networks benefit from increasing returns to scale. The larger the network, the richer and more valuable the connections between its members. That's why efforts to create "behind the firewall" social networks have failed. Even the largest companies are too small to sustain the diversity of social connections required to rival the level of interactivity of a public service like Facebook. Companies need to acknowledge that the most valuable social networks live outside their firewall, and that making the most of the social graph requires reaching out, not
replicating within. - Lines are blurring between work and play: Many of us would like a clear line between our work life and our personal life....including a separation in these two social networks. But this separation isn't sustainable, and is already starting to break down. One example: our grad school classmates initially connected on Facebook--- even though we are all now doing business together, we still use Facebook to stay in touch. Functionality wise, there's no reason not to (Facebook's interaction is just as effective with work friends). And in any case, services like FriendFeed and Ping.fm make the notion of a separate, disconnected personal social network quaint. What does this mean? Companies need to get used to doing business on Facebook, and seeing personal information on LinkedIn. Employees need to get better using the capabilities these services offer to show different things to different friends. But at the end of the day, people are people, whether at work or at play-- there's no such thing as a purely social network.
- Employees own their social network, not their employers: Every marketing organization salivates over the prospect of privileged access to Facebook's 120 M users. But effective use of social networks requires an understanding that employees own their social networks, and will only allow their employer access if there's a clear value proposition to them AND their friends. The New York Times wrote up Appirio's Jobs4myFriends Facebook application, calling out the risks of inappropriately using an employee's social network. We couldn't agree more: that's why recruiting is such a great use case for an enterprise Facebook app--- our application puts control in the hands of employees, allowing them to refer friends they’d love to work with. YOU choose whether or not to refer a friend for a job, and your company will never see anything about your friends that isn’t public. Establishing this trust is critical to bringing social networks into the enterprise.
Which of our predictions do you agree or disagree with? Please let us know by voting in our poll or commenting below.
Labels: 2009 Predictions, enterprise 2.0, facebook, social networking
Thursday, December 18, 2008
"Cloud of Clouds" - the first in a series on our 2009 predictions.
2008 Recap
In 2008, we saw the early seeds of a "cloud of clouds" emerging. It started in April with Salesforce and Google announcing integration between Google Apps and Salesforce to bridge the gap between Google's productivity applications and Salesforce. Later in the year, at Dreamforce, Salesforce expanded the idea of a "cloud of clouds" by announcing integrations with Facebook (for social graph information) and with Amazon (for raw computing infrastructure). Salesforce ended the year with a bang, by announcing Force.com for Google App Engine. In a period of 12 months, Salesforce laid the seeds of a "cloud of clouds" bringing together the strengths of multiple, complementary, on-demand platforms to create a "virtual platform" for the industry.
2009 prediction
The "cloud of clouds" expands around connected platforms. We'll see increasing investment from Microsoft, IBM, and other traditional software players in new but siloed cloud platforms. At the same time, proponents of a more open approach like Amazon, Facebook, Google, Salesforce will push more and deeper “cloud connections” like they did this year - creating a more heated debate between the value of siloed versus federated platforms.
What this means for customers
Customers will face a choice in 2009 about where to focus their investment in cloud computing. Companies like Microsoft and IBM are building cloud offerings that recreate the old software paradigm using new infrastructure (both offerings warrant a prediction of their own, coming soon). This will offer customers some incremental cost-savings and slightly more flexibility, but does not enable anything fundamentally new.
What is unique about the "cloud of clouds" is the ability to connect realms of software that have never been connected in the past, e.g., business applications, collaboration applications and social applications. This enables increases in both efficiency (through improved productivity) and effectiveness (through insight and new connections between information). A few examples:
- Allow communication and collaboration in the context of business information: On-demand solutions offer the potential to finally bridge the gap between the tools that businesses need to run and the tools that people use to get things done. Imagine an account team communicating and collaborating in the context of their live customer data. That's the power of bringing together Salesforce and Google.
- Bring social graph information into sales and recruiting: Imagine a sales person seeing how they are connected to a prospect before they send out a critical email. This would result in a far superior interaction and most likely a higher close rate. Imagine an employee using Facebook to identify the best candidates for their company's open job positions. These employee referrals are likely to be of a significantly higher quality than typical applicants. That's the power of bringing together Salesforce and Facebook.
What do you think?
Which of our predictions do you agree or disagree with? Please let us know by voting in our poll or commenting below.
Labels: 2009 Predictions, cloud, Cloud Computing, cloud of clouds, Salesforce for Google Apps, Software as a Service
