Every year around this time IDC publishes a series of predictions that start with a set of firm level predictions in November and then following shortly many other sets from a variety of programs. This year my group has at least three sets coming out, enterprise applications, social business and channels and alliances. The enterprise applications predictions are pretty much done and I'll talk about them tomorrow (1/22/13) in a breakfast briefing in Burlingame, CA (link here). Overall there are a few trends that are having a big impact on enterprise software. Cloud consolidation is continuing from last year and is redefining the vendor landscape quite a bit. Applications continue to be redefined as services and mobile continues to gain momentum as well as offer challenges to enterprise IT and IT vendors. Traditional IT roles are blurring as line of business executives have more influence and even direct control over IT budgets. The expectations of employees, customers, partners, etc. continue to shift and be influence by consumer tech. Social business is still an important force on employee collaboration, customer experience, performance and talent management, supplier and partner networks and innovation management. We'll save most of the social discussion for another post where I'll go though our social business predictions for 2013.
First though, let's look back at the 2012 predictions and see how we did:
Demand for Digital Commerce Will Outpace Other Enterprise Software Markets as Traditional Retailers Search for an Equilibrium Between Brick-and-Mortar, Online, Mobile, and Social Commerce Channels, with Digital Commerce Growing Beyond Retail. Grade: B+
Cloud Monetization Will Become More Sophisticated (Beyond Per User Per Month) as Cloud Applications Mature Grade: B+ (look for more this year)
This Year, Businesses Will Move a Portion of Enterprise Application Seats to Public Cloud Infrastructure, Accelerating the Wholesale Model and Growing the Percentage of Applications Seats Deployed on Public Cloud IaaS to About 2.4% Grade: A
2012 Will Be the Year of "Putting the Pieces Together" for Effective Customer Engagement Grade: A- (lots of activity last year, which is spilling over into this year as well)
Context Awareness for Personalization (Not Customization) Will Be the "New Black": The Ability to Customize Is Still Critical, But That Signals Time and Effort Grade: C- (context awareness is very important, but as of yet, much technology is lagging, particularly in traditional enterprise apps)
Innovation Management Will Become a Focus for Business as a Key Element of Competitive Advantage in a Tough Economy Grade: A- (and gaining momentum into this year)
Cloud Apps M&A Will Be Led by Big Names: 2012 Will See Significant Buying as Major ISVs, Late to the Cloud Game, Fill Out Their Functional Portfolios Grade: A+
As Social Business Gains Momentum, Panic Will Set in Across the Applications Market as Vendors Fear Losing Their Legacy Footprint to Vendors Offering New Models of Interaction with "Just Enough Support" for Core Enterprise Functionality Grade: B+ (the fear call was right, but of course all the major vendors bought or built into the social various social solutions categories)
As More and More Components of the ERP Suite Prove Out Their Viability in the Cloud, the Gravitational Pull of Vendors Around Platforms Will Accelerate Grade: A
As Heterogeneous Deployments Become the Norm, Cloud Infrastructure Hardware and Management Software Sales Will Grow by More than 100% in 2012 as Private Cloud Moves into the Mainstream and Service Providers Look to Accelerate Deployments Grade: A
So that was last year and now on to the predictions for this year:
- Applications are becoming services. Traditional enterprise applications are being redefined as cloud services, offering a more modular and granular way to deploy and configure business processes. Companies increasingly look to software vendors to provide a catalog of services, with >50% of new license growth in 2013 coming from these new cloud services.
- Cloud Consolidation. The cloud wars, which heated up in late 2011, continues to gain momentum as major tech vendors like Oracle, IBM and SAP scramble to build out complete cloud “stacks”, and every one of the 50+ SaaS pureplays that made at least $25m in 2012 is in somebody's sights.
- SAP leapfrogs the competition. Acquisitions and market consolidation means that SAP moves from 23rd place in the SaaS race to #3 by the end of 2013.
- The Best 20% of Enterprise Software Vendor Partners Will Have Moved to the Cloud.
- Enterprise mobile device management software adoption accelerates leading to acquisition frenzy with the major software vendors getting into the game following Citrix’s acquisition of Zenprise. >50% of the Fortune 1000 will deploy a MDM solution by the end of 2013, but will find MDM lacking as the need for a more application centric (less device centric) approach leads MDM vendors to move to mobile apps management (MAM).
- Enterprise Cloud Content Collaboration (eC3) Hits Prime Time. As IT Steps In With Support. These solutions have seen viral adoption over the past two years as individual business units and ad hoc teams have self-provisioned and invited their collaborators, but 2013 is the year IT takes ownership (typically out of shared services or desktop support teams).
- IT Solutions Providers Will Play Referee Between LOB and IT
- War for LOB Budget / Mindshare Begins With Battle for CMO Dollars
- Deeply verticalized ERP suites doubles the growth of the standard Enterprise Applications market
- Consumerization of software and the rise of the "corporate consumer" mean UX development focuses on PEOPLE (not consumer, not enterprise)
There you have it, that's what we believe will happen this year. Besides me, here's the team that worked on these predictions: Robert Mahowald, Mary Wardley, Amy Konary, Melissa Webster, Darren Bibby, Vanessa Thompson, Connor Sullivan, Steve White, Paul Edwards and Christine Dover.