Way back in 2011 we published a maturity model for the adoption of social technologies and the resulting cultural and process changes that those technologies could enable. Quite a lot has happened since then of course but happily some of the fundamental business impacts from the use of social technologies hasn't. We do understand them more, and there have been a lot more business use cases to examine though, so revising the model at some point was something that we always knew we'd want to address. The idea, that adoption tends to follow a predictable pattern, is pretty well established and a concept that IDC is using across a bunch of technologies recently. Since our original model the process has undergone a standardization effort so that all the models we publish have a similar look and feel. This new maturity model is now called a Maturityscape, and uses a consistent process for the evaluation of the available data to establish the model.
To understand the way we view social technologies today, it's useful to refer to our overarching taxonomy, which focuses on three key experiences; customer experience, employee experience and partner experience. Bridging these 3 experiences are technologies like enterprise social networks, digital commerce and socialytics. The following diagram depicts that approach to social technologies:
I won't spend a lot of time on this concept, something that we developed and published a couple of years ago, but simply use it as a frame of reference for the maturity model.
The revised maturityscape was developed by 3 additional IDC analyst besides me, Vanessa Thompson, Lisa Rowan and Christine Dover. It is explained in detail in this doc (warning, subscription or purchase required to access). Here is the graphic that explains the steps:
As you can see, there are 5 stages of maturity ranging from Ad Hoc or grassroots social adoption efforts, all the way to Optimized, or a reality that has the use of social technologies as inherent in all business processes. More and more, we see this as the future state of social, the inherent incorporation of social into every business workflow and, thus inside all business applications. This idea is strongly represented in a relatively new topic area that we are exploring, the "future of work", which we started as a research thread last year. More on that topic in an upcoming post, and of course in a series of research reports over the next year.
As I was re-reading my post on application silos I realized I forgot to include one additional example of the current problem. Recently Microsoft released Office for iPad. Now going beyond whatever I think of Office in general, I am in a situation where I have to use Office so having it (finally!) available on iPad was a really good thing. The product itself is quite good, maybe in some ways better than using Office on other devices. Needless to say that at first I was quite pleased to have near full Office capabilities on my trusty iPad. Unfortunately that happiness was short lived.
You see Microsoft has always been one of the most closed vendors, and in that, one of the worst offenders to creating application silos. Most of us today use a variety of tools to keep work in sync and to share and collaborate with team members. There are a variety of tools to manage file sync and share in the cloud, and while I like several for different reasons I haven't settled on just one. I suppose that's mostly because I don't have to, I can use several and manage just fine. I use Sugarsync to keep all my files in sync across iPad, 2 Android phones, MacBook Air, iMac and Mac Mini, and it works great. I use Box as well, and could have used it for sync but at the time I started using Sugarsync Box did not yet have a Mac client, so now inertia keeps me using both I guess. Box I use for work and yes, I use Dropbox for some personal sharing, particularly sharing family pics (it's easy and has a great UI). I also use Google Drive (I mean face it, Google has by far the best deal on storage) and I have iCloud for my Apple products as another backup. In other words I use most popular file sync and share tools for one thing or another, mostly out of convenience but also to test and compare (I am an alalyst after all). All of these tools work pretty seamlessly across tools and devices. What you'll see absent from the list is OneDrive. Now recently I am using it for one work activity, the team that I colaborate with uses it, so add another tool, no problem really.
The Microsoft problem though, is that they apparently don't know any of these other tools exist. Office for iPad connects ONLY to OneDrive and local iPad storage, so to move files on and off (or is that in and out) for Office I must use OneDrive. Not a huge deal except my files are also often already in Sugarsync (I back up everything there) and/or Box, Dropbox or Google Drive. This adds another step to my work, moving files in and out of OneDrive on my iMac / MacBook / Mac Mini. Again that wouldn't be a terrible thing but I often now only travel with my iPad and Android phones. Having Office on the iPad really enabled that. Microsoft's arcane idea of supporting only one file sync and share service creates pain and suffering for it's customers, and instead of making me use OneDrive, it makes me HATE OneDrive because of the poor user experience it creates moving files around and trying to keep them in sync (something the software does for me in other circumstances). Now I know what you're thinking, just switch to OneDrive...well, I don't want to. It's about consumer choice remember. I'm the customer and I want to use all of these excellent services, not just the one that Microsoft wants me to use. Wake up Microsoft, the days of closed application systems is over, today it's about openness, open standards and connectivity!
I was working on some more research on business model innovation the other day and as I thought about the role of the Internet in business model disruptions over the past 15+ years, I couldn’t keep my mind from wondering back to something that has troubled me for the past couple of weeks, the proposed merger between Time Warner and Comcast. Actually more than just that announcement, there are many issues that keep coming up that threaten the independent nature of the Internet and those threats seem to be increasing in potential very rapidly. Now I should first say that I’m a technology analyst, not a political commentator or expert in government regulation / FCC policy. I am focused on innovation in technology and have spent a lot of time looking at the use of and disruptive nature of the Internet though, and that means that “net neutrality” is a subject that is of keen interest to me.
The problems, which are global, seem much more obvious and pronounced in the US, at least once you get outside of the obvious attempts by non-democratic governments to control access. This growing crisis in the US is a big problem from my perspective, and I guess many would argue that we’re already quite a ways from an open Internet, even putting aside the NSA privacy scandal, and just focusing on the other threats that are top of mind today. Before jumping feet first into these issues though, I want to put a basic concept in place; the Internet is to me at least, the latest addition to an obvious list of public utilities, added to electricity, water, sewage, natural gas, and phone service. This is very important from a legal and regulatory standpoint, and as such, value in an open market should be the key, we should have a system that insures reasonable availability / access to everyone. As a business tool it is essential and from an individual consumer perspective it is a key backbone for commerce, education, entertainment, communication and lot’s of other stuff that we haven’t even thought of yet. From a technology perspective we would not be talking about the cloud, big data/analytics, social technologies or even mobile devices in the same way without the Internet, disruptive businesses that range from Amazon and eBay to Uber and Airbnb, would not exist without it.
Why is Net Neutrality important? To get to that, first let’s make sure we know what “it" is. Net Neutrality is the concept that the Internet should be open and allow free communication. In other words Internet Service Providers (ISP) or governments (or any other organization) should not have the ability to discriminate against, block or interfere with any content, web site, application or user that travels across the network. ISP’s are tasked with providing open (dumb) networks that can be used equally by anyone. As a utility this is similar to a public phone line, the phone company provides the service for a fee but has no control over the content that is shared (i.e. the conversations) through the service. The phone company can’t for example, make the calls to your grandmother clear because she is on the some phone company service but provide substandard service to your office in Paris just because they’re on a different phone company service. They also couldn’t change the call quality based on what brand of phone you use, giving preferential treatment to phones of their manufacture while only providing substandard service on competing phone brands.
So for consumers net neutrality is essential to make sure they can get access to and interact with any content they choose in a consistent manner. It also means that there should be access available that provides reasonable value for the price paid and that it is not denied to a large part of the population for economic reasons. Everyone gets access to all available content and services. Think about it this way, the Internet is just another part of your everyday life, not a luxury place you visit sometimes. This might not have been the case 20 years ago, but today you are on the Internet as much as you’re not. It’s just a part of your everyday life.
For businesses it means that the landscape is a level playing field from a competitive standpoint (or should be). In other words ISP’s can’t favor their own content by slowing down or denying access to competing content. They also can’t use access as a bargaining chip to extort higher prices just to stay competitive. Not that ISP’s aren’t entitled to make profits from providing the network, they just can’t use access or quality of access to change the competitive landscape in their favor. This extends to start up as well, which could easily fall prey to this type of discrimination, with ISP’s using favor to help or thwart start ups based on relationships. The same would apply to governments, they couldn’t, for example, order higher quality service for businesses that contributed to campaign funds or had undue influence through lobbyists. Governments couldn’t restrict access to services except in some pretty dire situations, like the need to use critical infrastructure for communications in a short term emergency or natural disaster.
So what’s the problem, or why do I think we should be more than just a little concerned about net neutrality? Well, let’s look at a few things:
1. A few very large companies are making a very obvious assault on net neutrality in the US and attempting to gain unacceptable control (maybe they already have unacceptable control?). Competition is dying in the US, or actually is on life support. The proposed Time Warner / Comcast merger would create a near monopoly in 19 of 20 of the largest markets in the US. Both companies already have a reputation for heavy handed practices so imagine what it would be like in a market that they control; or in other words, they already have significant influence and control based on pricing, pay-to-play and just overall size, what happens when they become massively larger?
Comcast has a history of using it’s Internet access to favor it’s own cable services over competitors. Netflix again is at the heart of this issue, with Comcast using data speed caps as a tool to favor it’s own content over any other competitors. I guess this is not as much a problem for Netflix after they started paying off Comcast for equal access though, but if you want to know more read this.
2. Peering, or the voluntary connecting of two administratively different Internet networks for exchanging traffic has generally been accepted as a necessary part of maintaining net neutrality. Simply peering is necessary for keeping traffic between high traffic participants flowing freely. Over the past several months is appears that Comcast was somehow slowing Netflix traffic. Both parties disputed it, but the fact is that there is quite a bit of evidence that makes me believe that Comcast was in fact throttling Netflix. Now remember Netflix is a direct competitor to the movie services that cable operators offer and since cable operators are also ISPs you can see that there are conflicting issues, make money off the content while offering reasonable peering services as an ISP. This goes back to the idea that the Internet is a utility, therefore should ISPs provide paid information services? In this case Netflix seems to have caved and set a horrible precedent by paying for peering services that should have been a matter of normal peering agreements.
3. FCC is weak to ineffective and has repeatedly been cut off at the knees. The recent court ruling concerning the communication services rules that the FCC had applied to the Internet, the FCC made a serious blunder in the specifics of their approach (not using “common carrier” language) and, in a ruling that was no real surprise, lost. Instead of applying the obvious basic criteria to the Internet (treating it like any other utility) the FCC chose to call it “enhanced services” or now more commonly information services, something that all of the major ISP’s obviously supported. The mistake, besides the overarching classification came in the recent attempt to undo the mistake and apply common carrier rules anyway. In 2010 the FCC lost to Comcast in a case that started with Comcast throttling specific content. The FCC attempted to prevent the throttling and while Comcast agreed to the ruling, it challenged the FCC in court and won on the grounds that it was not subject to common carrier regulation as an information services provider. While the recent rumors were that the new FCC chairman Tom Wheeler was planning to revise the rules significantly in favor of net neutrality, unfortunately Verizon’s court case challenging the same rules as Comcast went the wrong way before anything significant could be done. Verizon, just like Comcast, won. The current situation then, leaves the ball in the FCC’s court, but would require them to do what they’ve failed to do over the past 34 years, that is, officially classify the Internet under the common carrier rules as a utility. The ISP’s are the pipes, the information services are something quite a bit different.
4. The US wireless / mobile broadband situation is a mess. Take what I’ve said about the ISP’s and make that 10, no maybe 100 times worse for mobile broadband with it’s outrageous proving and it’s tightly managed data caps. In Jan of this year, AT&T took this whole mess up a notch by offering developers and brands the opportunity to provide sponsored content. In other words you can pay for preferential treatment on AT&T’s pipes and get your content to mobile devices outside the data caps. While on the outside this might sound like a good thing, it’s in reality another threat to the open Internet. The only real hope for the US market comes in the moves by the “anti” carrier, T-Mobile, whose emergence from the failed AT&T merger has finally created a carrier that is aggressively taking on it’s competition and offering radically different services.
5. Paying more for less: That’s just how the current Internet provider market is set up in the US. In a market where market dynamics doesn’t drive competitive pricing and innovation that’s just what happens. The US has some of the slowest connection speeds and yet is among the most expensive markets for broadband in the world. I could show chart after chart to demonstrate that, but this BBC article will suffice to demonstrate the problem.
We have a serious problem in the US and that problem can extend to a global one, net neutrality is under attack. So what can we do? We all have to put as much pressure on the Federal Government, particularly the FCC to step in and provide the kind of regulation that is needed to keep (or make in some cases) the Internet open to all. The current attacks on neutrality, the Comcast / Time Warner merger, sponsored content, pay for play, caps and the paid circumvention of those caps, etc. are a real threat. We can only hope that the FTC’s current antitrust investigation will once again, just like the T-Mobile / AT&T deal, prevent something that will clearly not be good for consumers. We can also hope that the FCC finally steps in and defines the industry in a way that enables them to effectively protect the open Internet.
Here's another installment from my video recording session with the eCornell team, this time looking at customer experience and meeting customer expectations. I've written and talked about this for some time, so none of it should be particularly new. In fact, here's a post from earlier this year on building CX strategies that goes along with this video quite wekk I think.
I did a series of videos for eCornell during Dreamforce and one of them fits nicely into this series (now extended to 3 parts) so I thought I'd share it as the 2nd installment. I'll probably share a few others over the next week as well.
The following slides are from a presentation I did on 8/20/13 at CRM Evolution conference in NYC.
As we move into 2013 it's time to take a look back and see what major events shaped and changed enterprise software in 2012. It was an active year, particularly from the standpoint of continued consolidation in the enterprise software markets. Several hot trends continued to drive acquisition activity and product directions, including cloud, mobile, social, Internet of things and data analytics. Social business has started maturing somewhat and is at least much clearer in specific directions and the best areas of focus for businesses to see real benefits.
The cloud wars really started in late 2011 with SAP's acquisition of SuccessFactors but gained momentum throughout 2012. The major enterprise apps vendors are moving quickly to gain footprint and functionality in cloud apps, as well as define platforms and infrastructure. Early in 2012 Oracle fired the first return shot to the SAP / SuccessFactors deal with its bid for Taleo. Not to be left out, IBM joined the HCM race with its acquisition of Kenexa in August. HCM continues to be a hot area for investment, for more on the 2012 HCM market see this guest post from IDC analyst Lisa Rowan.
The next major cloud acquisition came, once again, from SAP with its acquisition of cloud collaborative commerce vendor Ariba. Ariba provided SAP with a full featured and mature cloud based procurement, sourcing and contract management tools and the largest and oldest supplier network. Maybe more valuable though is the cloud expertise and credibility that Ariba's executives added to the SAP management team.
Oracle filled out its cloud portfolio quite a bit by focusing on customer experience. The Oracle Cloud CX suite, which arguably started in late 2011 with the acquisition of RightNow, added social marketing platform Vitrue, socialytics platform Collective Intellect, social media management platform Involver and finally with the recently announced acquisition of marketing automation vendor Eloqua. Combined with other cloud assets in commerce, sales (Fusion CRM), content, etc., the suite has a broad footprint. I wrote about the Eloqua acquisition here. In addition to Oracle's strong move into CX Lithium acquired social support vendor Social Dynamx and IBM moved to redefine it's web experience products in the context of the overall customer experience.
Social business, particularly around enterprise social networks (ESN), applications to support CX strategies, innovation management and talent and performance management, matured quite a bit over the past year. Much like cloud almost all the major tech vendors get involved in social business technology through new acquisitions, new products and enhancements to existing social tools. Existing social vendors also moved to broaden offerings through acquisition.
ESNs are one of the hottest areas for growth as many companies have / are deploying the technology and working to consolidate existing networks. Consolidation in the ESN market started in 2011 and continued last year, as larger tech vendors moved into the space. Adding to VMware SocialCast, Salesforce Chatter, Cisco Webex Social, Tibco Tibbr and IBM Connections Microsoft purchased ESN leader Yammer for $1.2B in June, Oracle made its own Oracle Social Network generally available in the Oracle cloud, Citrix acquired Podio and SAP completely revamped its offering into SAP Jam.
More and more companies are looking for ways to drive adoption of social processes and increase productivity. Getting social embedded into the enterprise workflow is gaining support and more companies are looking for ways of providing an integrated social experience. The trend is gaining momentum as vendors move from social applications to apps that are social, or have social functionality embedded inside the workflow. At Dreamforce 2012 Concur and Salesforce announced a good example of this concept, Concurforce, an app built on the Force.com platform.
As more companies embrace social technologies internally and externally a few issues are growing that will need some answers as we move into 2013. In particular there is a growing skills gap in consulting expertise to help companies drive successful social projects and sort out ongoing operations. I wrote about it here. In addition to the skills gap there is also a growing issue for many companies that have deployed several ESN products, which often grow virally and at least initially without full executive support. This social network sprawl issue is creating the exact opposite of the desired outcome by perpetuating organizational silos. To solve this companies will have to consolidate in some cases and in other they will need to integrate the networks so that functionally a single ESN exists.
Mobile continues to be an enterprise priority as the need to support multiple devices with multiple OSs is expected by employees. Tablets continue to grow in popularity and smartphones are a standard. Many vendors have provided native mobile apps with some subset of enterprise features but are feeling pressured by customers to give compete access to enterprise features on multiple devices. Many vendors moved to provide a better mobile framework on which they can provide a richer mobile experience to cuatomers. Among those vendors that made good strides last year include Netsuite, Deltek, salesforce, SAP and Oracle, although they all have more work for this year.
Internet of things was discussed quite a lot as sensor technology gets better and more and more "things" are added to the network. In the area of automation the use of sensors with new software products is providing benefits as diverse as preventative maintenance to inventory control. From a consumer perspective the mobile device is becoming a "Swiss army knife" of sorts and integrating sensor data opens up many possibilities for health and fitness monitoring to commerce. Look for 2013 to see this trend explode across business and consumer.
There seems to be more pressure on IT over the past few years to redefine and change its roles to be more relevant to the business. What has become more of a governance and enforcer role for many IT organizations is getting pressured to find new ways of adding value as more IT buying decisions get pushed out to the line of business executives. In many companies CMOs now manage a larger IT budget than the CIO, particularly as companies deploy technology to drive CX strategies. The move to the cloud is also changing the staffing requirements for many IT shops. Many IT organizations are finding that they need more of a business process focus and less of a deep developer technical focus. Look for this trend to accelerate in 2013.
In general enterprise software has remained a growth area as companies continue to buy technology. Driving this growth are several trends, including the need to provide better mobile support, the need to get technology that helps facilitate critical CX strategies and the need to provide a more collaborative and networked work environment. As a result of the economic pressures that continue to plague businesses many companies find themselves doing more with considerably less resources. The only reasonable way to maintain and increase productivity is though automation and through better software tools. Hot markets in 2012, social, mobile, CX, etc. will continue to be hot in 2013.
So now its time for SAP to make its move and with this weeks announcement, SAP becomes a contender in the social software market. Now this didn't just happen though, there's a bit of a story to it, as one might expect. Earlier this year SAP signaled that it was getting serious about social by hiring well known social business expert Sameer Patel to head up its social business efforts as the Global VP and GM of social software solutions (DISCLAIMER: and also a friend). Sameer spent the better part of the last several years helping companies actually DO something with social business solutions, so he brings a wealth of real world experience to the position and the team. Since joining SAP he has gathered together a talented team and completely reworked SAP's strategy and offerings, and I have to admit so far, I like what I've seen.
There are quite a few ESN solutions on the market today, and frankly most have similar features. They can operate as a system of relationship across the entire organization and offer employees a modern, clean and simple way to collaborate and connect to each other, and to data, content and systems. This approach, forming a new social layer, works fine for some employees and some roles, that is, moving collaboration and a lot of day to day communication into a new system. Some employees, particularly in some specific roles, roles that spend much of their time doing work inside an enterprise system, like customer service agents or AP/AR clerks, find it undesirable or inconvenient to add an new system for communication and collaboration that is separate from the system that occupies most of their daily activities. That's why it's necessary to provide the capability to embed the ESN into other enterprise systems to get the broad adoption that delivers the greatest value from the network. While the current leading ESN's have this capability it has always seem to me that the major enterprise vendors were in a unique position here, and could leverage the ESN most effectively through inserting it into the work flows inside its other enterprise systems. That's exactly what SAP is doing with its new ESN product, SAP Jam.
SAP Jam, which is offered both on prem and in the cloud, is built to connect people (employees, partners, customers) to people, content and data in context to the enterprise work flow / process. Jam is enterprise ready, mobile (iPad app available now), secure, not silo'ed and in SAP terms "infused" across the rest of the SAP apps portfolio (phased in across the next few releases of course). The following diagram, provided by SAP, gives a good overview of the strategy:
The current roadmap, which is subject to change, provides social on-boarding and collaborative opportunity management in Q4 2012, along with several integrations including Sales OD, Finance OD, Social OD and CRM 7, as well as the Jam API. In the first half of 2013 SAP plans to add:
along with a number of additional integrations, including an OpenSocial API.
SAP has come a long way in a very short period of time, and has some very aggressive plans in the coming months. The real proof is in the execution, so I'm anxious to see how the plans progress and to talk to some live customers once there's a bit more experience with the new solutions. Based on what I've seen so far, SAP is definitely in the social business software game now, and has a good opportunity to provide significant value to its customers.
This week there was quite a bit of debate and discussion instigated by a letter from SEC Chairman Mary Schapiro to Rep. Darrell Issa, Chairman of the House Committee on Oversight and Government Reform that was a reply to a letter from Issa and talks about the possibility of reforming the regulations around capital formation. Lately high profile start ups like Facebook, Zynga and Groupon have been under a lot of scrutiny because of their sky rocketing valuations in the secondary markets and a SEC rule that private companies with more than 500 shareholders must report financials just like public companies. This rule is designed to protect investors and takes away one of the major reasons for staying private. As Schapiro points out there is a fine line between protecting investors and in supporting a start ups need to gain access to capital. In the letter the SEC Chairman steps out from under what is often seen as a very conservative regulatory stance and suggest that some of its rules may not be in line with the current needs of start ups and need to be reviewed on a regular basis to make sure that they keep pace with current thinking or as Schapiro says "to make sure that they are up-to-date and costs and benefits remain appropriately calibrated." She goes on to provide a long lists of regulations that are being reviewed. There are a few of these that have significant implications for start ups including the increase of the 500 shareholder cap and relaxing the prohibition of companies publicizing the issuing of shares, called the "general solicitation ban."
The changes to the rules around reporting are interesting of course, taken in context to the Facebook, Groupon, Zynga, etc. status in the secondary markets. The change in the general solicitation ban though, is probably the more important. The truth is that most if not all start ups break the ban every time they raise money today. By changing the ban not only does it remove the current violation but it paves the way to using crowdsourcing as a funding vehicle. Current crowdsourcing platforms like Kickstarter are limited to projects not companies and can't offer equity stakes in those projects (prohibited by the general solicitation ban). Instead they offer "rewards". Allowing equity as a vehicle to encourage crowdsourcing would allow start ups to use these platforms. The one thing not addressed in the letter though, is a review of the accredited investor criteria, something that many start ups have called for. I suspect that those criteria will not be lowered and maybe that's not such a bad thing.
Here's the full contents of the letter if you'd like to read it yourself: