I caught up with Duncan Jones at the Forrester IT Forum in Las Vegas this week. Jones recently published some research on trends in software licensing and maintenance.
In this video, he discusses why he sees some flexibility on the part of software vendors, what companies need to consider as they move applications to the cloud and mobile devices when it comes to their existing software contracts and his plans for a software “tea party.”
Forrester’s CEO took the stage at the IT Forum in Las Vegas today and outlined his bold predictions for the future of business technology — and who will win and who will lose.
Citing Moore’s Law, which states that processing power will double every two years, and what he called “Hitachi’s Law,” the principle that the physics of storage technology allows storage to double every 1.2 years, George Colony said computing power lies at the center of a company’s IT structure, but also at the periphery.
As proof, he held aloft an iPad 2, which has the equivalent processing power of the Cray Supercomputer, which would have made it one of the top 30 supercomputers in the world in 1983.
The network however, is not progressing at the same speed, he added.
“While the center is ever more powerful, it also says that the periphery of the network is also becoming very powerful,” Colony said. “That will change the architectures we all use in the future.”
And the cloud model, while powerful and dynamic in its own right, does not take full advantage.
“A standalone cloud or Web solution is dead,” Colony said. “The Web is a dead technology, it is not the future architecture of the Internet. The architecture that’s going to dominate is going to take advantage of high power at the center Internet but also the periphery where applications reside.”
That future architecture, Colony called the App Internet.
Eventually, every device will have an AppStore, Colony said. There’s going to be app stores on every single device whether it’s on a PC, and iPhone, or a car.” As an example of the emerging shift, he pointed to USAA, the Texas-based insurance company which is shifting development away from the Web and toward mobile applications.
Winners and Losers
Colony also presented a Forrester Wave for the App Internet, though he called it a “Wave Lite” with only two weeks of research devoted to it rather than the months that a Wave typically requires. And he didn’t spare barbs for many who are undoubtedly Forrester clients.
The poor performers in Colony’s Wave are those reliant on the Internet.
The leader, to no one’s surprise was Apple, though Colony did not exactly praise Apple for its long-term vision.
“I think this company is very lucky,” Colony said. “Why are they in the App Internet business? Steve Jobs initially said this is a closed device. It took months and months to let people [build applications for the iPhone]. They kind of fumbled in to this app internet architecture.”
The Risky Bets
Google – “Google would like it if the world would stop spinning. I have Google as a risky bet because they’re so Web centric. I thought that the [Chrome book, an entirely web-centric computer] was one of the greatest acts of corporate idiocy I’ve ever seen.”
HP and Dell – “They’re already in the powerful periphery device business but can they reform the PC to live in the App Internet world?”
SAP and Oracle – “I think these guys can get traction pretty quickly in the App Internet. The problem will be pricing.”
“Microsoft and their little buddy Nokia” – “Microsoft gets it to an extent with variable pricing, all cloud to all data center. Also Silverlight could be a fantastic development platform for the App Internet.”
The SaaS Horde – Lots of them are at risk. “Find a successful SaaS company, go out and build and App internet of that company you could make a lot of money.”
Renren (the Facebook of China), Baidu (the Google of China) and Yandex (the Google of Russia) — Wall Street is pricing these at very high numbers but they’re vendors of the past not the future.”
RIM – “RIM has a tablet; the problem is that doesn’t work unless you have a BlackBerry.”
IBM – “IBM is in the services business. If there’s a fantastic play for the App internet it’s the services business.”
The Strong performers:
Salesforce.com – “They quickly responded to the iOS and Android challenge. Now we have ability to access Salesforce through that App Internet experience.”
Software entrants – “Five years from now you’ll see two or three players we’ve never heard of who will come on very fast.”
“There’s a lot of dynamism on this chart,” Colony said in an attempt to cover himself in case any of the vendors he mentioned were in attendance. “The future is not written. Any and all of these vendors can change these business models and move toward the App Internet.”
For technology professionals, the App Internet will mean change, according to Colony.
Application developers — are going to need to develop new programming skills.
Business process professionals — should not let any new application in to their organization that does not offer an App Internet experience. “Your workforces are all coming with these devices which are running the App Internet already.”
CIOs — will need to prove they can drive customer centricity by driving app intent.
Enterprise Architects – should not over commit to the cloud. “The cloud can still do some things for you but it’s not the final solution, the hammer that can hit every dam,” Colony said.
Infrastructure and developer pros -”You’re job is not going away. If you look at number of gigaflops in your company, they may not be in the data center, it maybe in hands of everybody.
We’re going to have to manage all those devices.”
Security and risk pros – “Your about to become very overemployed. There is risk in the App Internet. There are security problems. We’re moving executables through the network to employees.”
Sourcing and vendor management pros – “You’re going to have to make sense of all the new pricing and packaging schemes.”]]>
Gabriel Byrne opening the first keynote; Michio Kaku calling the H1B visa the foundation of the American economy; SAP customers like Boesch, Colgate-Palmolive and Nestle singing the praises and power of in-memory computing; Sting — SAP’s annual Sapphire conference had plenty of razzle-dazzle and some serious production values.
What about the value customers are trying to get out of their existing investments?
SAP’s challenge in balancing its innovation vision with meeting the day-to-day needs of its longtime customers is no small task.
One needs only to talk to Tim Birnley, director of enterprise applications at Bentley Systems Inc., an Exton, Penn.-based CAD software maker.
Bentley is solidly an SAP shop and an up-to-date one at that.
It runs ECC 6.0, BI 7, Enterprise Portal 7, Process Integration 7, CRM 7, Business Planning and Consolidation installed on the Business Warehouse and NetWeaver.
“There’s a bias [toward SAP],” Birnley said of his company’s approach to new IT projects.”They’re not the only thing, but they’re involved in everything we do.”
Yet, when it comes to SAP’s biggest initiatives – HANA and mobility – Bentley is taking a slower approach. First with HANA and in-memory computing power:
“The price is concerning,” Birnley said. In fact, Bentley held off on adopting? the predecessor to HANA, SAP’s Business Warehouse Accelerator, for that reason as well.
“We elected not to go there for two reasons,” Birnely said. “One was price. The second, was do we really need the data that fast? We’re not making minute critical business decisions every minute. We’re a software company.”
Speeding up a report that takes five or 10 minutes doesn’t justify the cost for Birnely. However, once SAP has its applications running on top of HANA, that’s a different story and one of interest for Birnley given the potential performance gains it brings.
And mobile? Even before SAP rolled out its latest Afaria and Sybase Unwired Platform (SUP) releases, Bentley was exploring mobile.
“We did a lot of investigation on mobile with SkyTech and others,” Birnley said. “I’ve got a brilliant development team and we started looking at what are our critical points in business.”
With a global business, the proverbial “sweet spot” for mobile applications was travel approvals, so Birnley had his team build out a mobile app for BlackBerry to speed up the approvals process. Then he ran the metrics on it.
“We were only getting 3-4% usage of these tools which we only used internal resources for,” he said. “I was expecting 30%. When you hear all the noise [about mobile applications], in my opinion [usage] is low.”
While Birnley considers his company “bleeding edge” when it comes to new technologies, thanks largely to the founder’s focus on innovation, all projects still require a detailed business case.
“So I said we have a 3,000-person workforce globally. How much do I want to spend on mobile applications? Afaria and SUP are not cheap,” Birnley said. “I need an SVP [senior vice president] to come show me numbers that show me where going to generate this much additional revenue, this many more sales to generate a half million dollars in profit to cover this expenditure.”
Even Solution Manager, SAP’s highly-regarded but underused application lifecycle management tool, doesn’t get the usage one would expect from a software development company. Bentley uses Solution Manager to stay up to date on all the latest enhancement packs but priorities are elsewhere.
“You look at it and say. ‘am I going to take the resources and put them almost on an IT tool or am I going to put them on something to generate revenue or reduce costs?’,” Birnley asked.
It’s not just Birnley and it’s not just this year either. We heard similar feedback at the 2010 event.
Of course, for SAP to take the stage last week and not produce anything new or innovative would only earn it more condemnation from the press and customers alike. That led to co-CEOs Jim Hagemann Snabbe and Bill McDermott holding hands on stage and McDermott proclaiming, “last year we signaled the innovations that are coming and now they’re all here.”
I spoke with some customers who, while not necessarily ready to adopt in-memory, are encouraged by recent developments.
“Over the last two years the big change has been the pace they’ve been able to deliver at,” said Nigel de Voil, head of Business Systems, with U.K.-based Camelot, which operates the national lottery.
Really, it’s the Colgate-Palmolives and Nestles of the worlds that are going to be the early users of in-memory and likely only users for a while, given the costs and business needs that require that sort of speed. In fact, general availability of HANA doesn’t arrive until next month.
Rapid Deployment or On Demand?
That’s not to say there was nothing to help SAP customers get more out of existing releases. SAP seemed determined to push its Rapid Deployment Solutions in particular. It promises small, business process level implementations, flexible licensing scenarios, faster roll outs – none of which sounds like the SAP many people are familiar with. It represents an acknowledgement by the company that it needs to provide customers some help with launching its software. However, those are the same sort of benefits that SAP promises with on-demand apps. While SAP touts this as “choice” it’s not much of one for some.
Craig Pederson, director of IT, e-commerce and CRM with Hunter Douglas, a maker of custom window treatments, said he rolled out SAP CRM to a 200-person sales force with the Rapid Deployment Solution and Sales On Demand wasn’t a consideration.
“We’re an ECC back end,” he said. “Because of the integration requirements, we were far better off with SAP CRM.”
With Sapphire over and the SAP customer base “fired up” (in the words of co-CEO Bill McDermott “who wants to be a winner”), now let’s see what those customers are doing with what they already have.]]>