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CIO’s Guide To Stopping Privileged Access Abuse – Part I

By on April 21, 2019

CIOs face the paradox of having to protect their businesses while at the same time streamlining access to the information and systems their companies need to grow. The threatscape they’re facing requires an approach to security that is adaptive to the risk context of each access attempt across any threat surface, anytime. Using risk scores to differentiate between privileged users attempting to access secured systems in a riskier context than normal versus privileged credential abuse by attackers has proven to be an effective approach for thwarting credential-based breaches.

Privileged credential abuse is one of the most popular breach strategies organized crime and state-sponsored cybercrime organizations use. They’d rather walk in the front door of enterprise systems than hack in. 74% of IT decision makers surveyed whose organizations have been breached in the past say it involved privileged access credential abuse, yet just 48% have a password vault. Just 21% have multi-factor authentication (MFA) implemented for privileged administrative access. These and many other insights are from Centrify’s recent survey, Privileged Access Management in the Modern Threatscape.

How CIOs Are Solving the Paradox of Privileged Credential Abuse

The challenge to every CIO’s security strategy is to adapt to risk contexts in real-time, accurately assessing every access attempt across every threat surface, risk-scoring each in milliseconds. By taking a “never trust, always verify, enforce least privilege” approach to security, CIOs can provide an adaptive, contextually accurate Zero Trust-based approach to verifying privileged credentials. Zero Trust Privilege is emerging as a proven framework for thwarting privileged credential abuse by verifying who is requesting access, the context of the request, and the risk of the access environment.

By taking a least privilege access approach, organizations can minimize attack surfaces, improve audit and compliance visibility, and reduce risk, complexity, and the costs of operating a modern, hybrid enterprise. CIOs are solving the paradox of privileged credential abuse by knowing that even if a privileged user has entered the right credentials but the request comes in with risky context, then stronger verification is needed to permit access.

Strategies For Stopping Privileged Credential Abuse

The following are five strategies CIOs need to concentrate on to stop privileged credential abuse. Starting with an inventory of privileged accounts and progressing through finding the gaps in IT infrastructure that create opportunities for privileged credential abuse, CIOs and their teams need to take preemptive action now to avert potential breaches in the future.

In Part 1 of a CIO’s Guide to Stopping Privileged Access Abuse, below are the steps they can take to get started:

  1. Discover and inventory all privileged accounts and their credentials to define who is accountable for managing their security and use. According to a survey by Gartner, more than 65% of enterprises are allowing shared use of privileged accounts with no accountability for their use. CIOs realize that a lack of consistent governance policies creates many opportunities for privileged credential abuse. They’re also finding orphaned accounts, multiple owners for privileged credentials and the majority of system administrators having super user or root user access rights for the majority of enterprise systems.
  2. Vault your cloud platforms’ Root Accounts and federate access to AWS, Google Cloud Platform, Microsoft Azure and other public cloud consoles. Root passwords on each of the cloud platforms your business relies on are the “keys to the kingdom” and provide bad actors from inside and outside the company to exfiltrate data with ease. The recent news of how a fired employee deleted his former employer’s 23 AWS servers is a cautionary tale of what happens when a Zero Trust approach to privileged credentials isn’t adopted. Centrify’s survey found that 63% or organizations take more than a day to shut off privilege access for an employee after leaving the company. Given how AWS root user accounts have the privilege to delete all instances immediately, it’s imperative for organizations to have a password vault where AWS root account credentials are stored. Instead of local AWS IAM accounts and access keys, use centralized identities (e.g., Active Directory) and enable federated login. By doing so, you obviate the need for long-lived access keys.
  3. Audit privileged sessions and analyze patterns to find potentially privileged credential sharing or abuse not immediately obvious from audits. Audit and log authorized and unauthorized user sessions across all enterprise systems, especially focusing on root password use across all platforms. Taking this step is essential for assigning accountability for each privileged credential in use. It will also tell you if privileged credentials are being shared widely across the organization. Taking a Zero Trust approach to securing privileged credentials will quickly find areas where there could be potential lapses or gaps that invite breaches. For AWS accounts, be sure to use AWS CloudTrail and Amazon CloudWatch to monitor all API activity across all AWS instances and your AWS account.
  4. Enforce least privilege access now within your existing infrastructure as much as possible, defining a security roadmap based on the foundations of Zero Trust as your future direction. Using the inventory of all privileged accounts as the baseline, update least privilege access on each credential now and implement a process for privilege elevation that will lower the overall risk and ability for attackers to move laterally and extract data. The days of “trust but verify” are over. CIOs from insurance and financial services companies recently spoken with point out that their new business models, all of them heavily reliant on secured Internet connectivity, are making Zero Trust the cornerstone of their future services strategies. They’re all moving beyond “trust but verify” to adopt a more adaptive approach to knowing the risk context by threat surface in real-time.
  5. Adopt multi-factor authentication (MFA) across all threat surfaces that can adapt and flex to the risk context of every request for resources. The CIOs running a series of insurance and financial services firms, a few of them former MBA students of mine, say multi-factor authentication is a must-have today for preventing privileged credential abuse. Their take on it is that adding in an authentication layer that queries users with something they know (user name, password, PIN or security question) with something they have (smartphone, one-time password token or smart card), something they are (biometric identification like fingerprint) and something they’ve done (contextual pattern matching of what they normally do where) has helped thwart privileged credential abuse exponentially since they adopted it. This is low-hanging fruit: adaptive MFA has made the productivity impact of this additional validation practically moot.

Conclusion

Every CIO I know is now expected to be a business strategist first, and a technologist second. At the top of many of their list of priorities is securing the business so it can achieve uninterrupted growth. The CIOs I regularly speak with running insurance and financial services companies often speak of how security is as much a part of their new business strategies as the financial products their product design teams are developing. The bottom line is that the more adaptive and able to assess the context of risks for each privilege access attempt a company’s access management posture can become, the more responsive they can be to employees and customers alike, fueling future growth.

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RPA is dead. Long live Integrated Automation Platforms

By on April 16, 2019

The biggest problem with enterprise operations today is the simple fact that most firms still run most of their processes exactly the same way as they did 20/30/40 years ago, with the only “innovation” being models like offshore outsourcing and shared service centers, cloud and digital technologies enabling those same processes to be conducted steadily faster and cheaper.  However, fundamental changes have not been made to intrinsic business processes – most companies still operate with their major functions such as customer service, marketing, finance, HR and supply chain operating in individual silos, with IT operating as a non-strategic vehicle to maintain the status quo and keep the lights on.

Enter the concept of Robotic Process Automation (RPA), introduced to market in 2012 via a case study written by HFS and supported by Blue Prism, which promised to remove manual workarounds and headcount overload from inefficient business processes and BPO services.  However, despite offering clear technical capability and the real advantage of breathing life into legacy systems and processes, RPA hasn’t inspired enterprises to rewire their business processes – it’s really just helped them move data around the company faster and require less manual intervention.  In addition, most “RPA” engagements that have been signed are not for unattended processes, instead, most are attended robotic desktop automation (RDA) deployments. Attended RDA requires a loop of human and bot interplay to complete tasks.  These engagements are not the pure form of RPA that we invented – they are a motley crew of scripts and macros applying add band-aids to messy desktop applications and processes to maintain the same old way of doing things. Sure, there is usually a reduction in labor needs – but in fractional increments – which is rarely enough to justify entire headcount elimination. Crucially, the current plethora of “RPA” engagements have not resulted in any actual “transformation”.

The major issue with RPA today is that it is automating piecemeal tasks.  It needs to be part of an integrated strategy

Real research data of close to 600 major global enterprise shows just how not-ready we are to declare any sort of robo-victory. In our recent survey of 590 G2000 leaders, only 13% of RPA adopters are currently scaled up and industrialized. Forget about leveraging RPA to curate end-to-end processes, most RPA adopters are still tinkering with small-scale projects and piecemeal tasks that comprise elements of broken processes.  Most firms are not even close to finding any sort enterprise-scale automation adoption.

RPA provides a terrific band-aid to fix current solutions; it helps to extend the life of legacy. But does not provide long-term answers. The handful of enterprises that have successfully scaled RPA across their organizations have three things in common:

  1. A unifying purpose for adopting automation,
  2. A broad and ongoing change management program to enable the shift to a hybrid workforce, and
  3. A Triple-A Trifecta toolkit that leverages RPA, various permutations of AI, and smart analytics in an integrated fashion.

So HFS is calling it as we see it. RPA is dead! Long live Integrated Automation. And by integrated we mean integrated technology, but also, and all importantly, we mean integration across people, process and technology supported by focused objectives and change management. Integrated Automation is how you transform your business and achieve an end-to-end Digital OneOffice.

Integrated Automation is not about RPA or AI or Analytics. It is RPA and AI and Analytics.

Business problems are not entirely solved by one stand-alone technology but by a combination of technologies. While only 11% of the enterprises are currently integrating solutions across the Triple-A Trifecta, there is emerging alignment. The supplier landscape is also starting to realize that clients will buy integrated solutions (see Exhibit 1) and examples below:

  • RPA products are seeking to underpin AI and data management capabilities. WorkFusion was arguably the first to combine RPA and AI with its “smart process automation” capability. Other subsequent examples include Automation Anywhere with its ML-infused IQBot, Blue Prism announced its AI Lab to develop proprietary RPA-ready AI elements, and AntWorks embeds computer vision and fractal science in its stack to enable the use of unstructured data. What these products having in common is their use of robotics to transform tasks, desktop apps and pieces of processes.  Hence, we need to refer to these “RPA” products as Robotic Transformation Software products which is a far more appropriate description.
  • AI and analytics focused products are starting to embrace Robotic Transformation Software, instead of undermining it. IPsoft launched 1RPA with a cognitive user interface. Xceptor’s data-led business rules and AI-based approach to automation leverage RPA to help extend its functionality. Arago is starting to go to the market where it can help orchestrate RPA capabilities within its platform.
  • Enterprise software products are integrating the triple-A trifecta capabilities in their products. SAP Leonardo aspires to harness the emerging technologies across ML, analytics, Big Data, IoT, and blockchain in combination. It also acquired RPA software company Contextor (late 2018) similar to Pega when it acquired OpenSpan in 2016 adding RPA functionality to its customer engagement capabilities.
  • System Integrators are orchestrating the Triple-A Trifecta across multiple curated products. This typically combines some of their IP and service capabilities. Accenture launched SynOps in early 2019, offering a “human-machine operating engine.” Genpact’s Cora, a modular platform of digital technologies, similar to HFS’ Triple-A Trifecta, is designed to help enterprises scale digital transformation. IBM’s Automation Platform includes composable automation capabilities that orchestrate responses and alerts between Watson and Robotic Transformation Software solutions. KPMG’s IGNITE brings RPA, AI and analytics tools together with KPMG IP and services.

 

Integrated Automation is not just about Technology. It is Technology + People + Process.

The real point of Integrated Automation is actually to move beyond the tools. Yes, the Triple-A Trifecta offers more functionality, but it still does not work unless you change your business, your people, your processes.  Integrated automation is the effective melding of technology, talent, organizational change, and leadership to get to the promise land. It requires the integration of the Triple-A Trifecta change agents in your toolbox and their application across the original trifecta of people, process, and technology. If you keep throwing technology at a business problem, you will have more technology rather than a solution.

Technology has overpowered the discussion today without adequate focus on people and process:

Source: HFS Research 2019

Integrated Automation is not a Product or a Service. It is a Product and a Service.

Just like we realized that throwing bodies at a problem does not solve the problem, we need to recognize that merely hurling software at business process will not drive transformation. The real genius lies in understanding what to use when and how. The software also needs to come with support and services. Otherwise, we’re just selling more snake oil and magic. Strategic and collaborative relationships of the future will be formed by providers that can consult as a trustworthy advisor and execute as an “extension” of clients’ operations. Enterprises need partners to drive innovation, contribute investment, apply automation and new ideas, and focus on delivering business outcomes – and that requires a combination of services and software. An ecosystem approach with symbiotic relationships between service and product companies is a must-have ingredient for automation to succeed and truly be transformative. It is imminently clear that no one can be everything to everyone.

Adoption is not the measure of success for Integrated Automation. It is about Change Management.

Fifty-one percent of the highest performing enterprises see their cultures as holding them back in the digital transformation journey, while only 36% of the lowest performing enterprises identify culture as a problem to progress. Providers need to offer change management approaches that are agile, measurable, and iterative to be impactful. Scaling up digital initiatives and enabling the right governance models are also critical points. The ability to codify “business outcomes” in contractual agreements, pricing structures, and performance measures is also a vital element to drive change. While there is no nirvana around pricing, it needs to be implemented based on every client’s unique requirements and context. The flexibility to put skin in the game with innovative and non-linear commercial models is essential to drive real change.

Integrated Automation will not be effective with a functional approach. It requires an end-to-end “OneOffice” strategy.

Less than 12% of the enterprises we surveyed have an enterprise-wide approach to automation. This strong focus on task-level and process-level automation remind us that automation often takes place in functional silos, with parallel but unconnected initiatives. The ability to balance task-specific and process-specific pilots and production instances with broader enterprise mission and vision is certainly daunting, but it is precisely what needs to occur to enable scaled and successful automation programs.

The collaboration between business and IT is another crucial issue. While automation initiatives require IT involvement, the programs are generally impacting and enhancing business processes—which requires participation from business constituents who understand the functions in question. The ideal leadership mix, then, is a combination of IT and business. However, our data shows that just one-fifth of respondents have created integrated IT and business leadership teams to grapple with automation strategy and deployment.

Bottom Line: Integrated Automation utilizes the power of AND, not OR! 

We are lucky to live at a time where we have a multitude of established and emerging change agents at our disposal: global sourcing, design thinking, Robotic Transformation Software, AI, Analytics, IoT, blockchain among others. But, unfortunately, most of the discussions in the market end up becoming a comparative discussion versus integrative discussion – man versus machine, offshore versus automation, RPA versus AI, consulting versus execution, and so on. These change agents must work together rather than operate in silos to solve real business problems. The power of AND is much greater than OR and Integrated Automation is all about the power of AND. Thus, RPA is dead. Long live integrated automation!

(Cross-posted @ Horses for Sources)

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Modern selling

By on April 16, 2019

Looking at the current assortment of CRM functionality including AI, machine learning, voice recognition and chatbots, you might conclude that the tools are evolving to remove salespeople and others from direct customer contact and you wouldn’t be wrong. What’s surprising to me though is the amount of sales angst in senior people about the division of sales people’s time into two traditional buckets selling and not selling. One is good and valuable and the other is suspect. But why?

Research has shown that customers like finding their own answers without the assistance of someone whose job is to sell. Selling comes later, once a customer has a good idea of their basic needs and the available solutions. Before this point assistance can seem heavy handed. So, it makes sense to let customers do what they do. Organizations implicitly agree because they put so much information out on the Internet to support the self-service effort.

The result is that sales people engage with customers further along in the process or down the funnel. This puts added responsibilities on sales people. For instance, when sellers met customers earlier it was easier to have more customer meetings to simply deliver basic information. Managers didn’t like this so much because the probability of closing a deal was relatively low given that customers still had to go through a mental process to make a decision.

So, what did we do? We positioned all that information on the Internet to enable customers to make their own determinations. That’s great, right? No, no, no! Now the complaint is that salespeople are not spending enough time in front of customers.

Last year’s Salesforce report, “The State of Sales,” showed graphically that during an average week a sales person spent about one third of his or her time selling and the rest doing what many deem wasting time and that can get you scratching your head.

The report included as selling activities things like Meeting customers in person, Connecting with customers virtually, Prospecting, Administrative tasks, and Preparation and planning. This all seems abundantly reasonable.

But then look at what non-selling activities included. Generating quotes, proposals, and gaining approvals, Researching prospects, Internal meetings and training, Manually entering customer/sales info, Prioritizing leads/opportunities, Downtime.

A few years ago, I recall another report from either Forrester or IDC and I apologize for not knowing which but my point is simple. It surveyed CIOs and one finding was that sales reps were not adding enough value. They weren’t following up appropriately, didn’t come to meetings prepared to advance a discussion from the last meeting, etc. My takeaway when I read that report was that reps had too many accounts and not enough time to do the spade work necessary to drive a meeting and push a sales process along.

When I was selling, it was a rough rule of thumb that for every one-hour meeting you might need three or four (or more) hours of preparation. That was largely before CRM began giving reps back some of their time. In this context, the current selling and non-selling time appropriation looks pretty reasonable to me for a couple of reasons.

First, modern CRM has reduced the amount of preparation time significantly (but not to zero). Analytics might be able to tell you the next logical step but so can an experienced sales person and the real challenge is in doing the work for that step. But there’s good news there too. For instance, modern CPQ can produce errorless proposals and get the necessary approvals as quickly as a sales rep can get a manager to check email. You can say the same about presentation tools and slide libraries and almost every phase of selling that has some amount of automation for it.

But somebody has to actually use the systems and do the preparation which sounds like non-selling, but I’d advise that we reconsider our definitions. The fact that customers encounter sales people for the first time further down the funnel means there’s more at stake in that meeting than back when a sales person could fire off generalities. Having more at stake requires better preparation. If we want our sales people to be consultative and not glad-handers they have to come locked and loaded.

My two bits

I’m not saying there’s no room for improvement, just that we need to be smart about what we value and how we see the modern sales process. So, I guess I don’t get it when I see or hear sales pros lamenting the 2:1 relationship between preparation and face time. To me that seems pretty good. It could be better and maybe in ten years it will be. But it’s worth noting that as products commoditize customers need less attention from sales people and that at some point many products go from employing a direct sales model to more of a retail model. That’s especially what we’re seeing all over the tech sector today and it will proceed differently from business to business based on things like product complexity, customer receptivity and of course competition.

(Cross-posted @ Beagle Research Group)

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Reframing the Digital Transformation conversation in 5 steps

By on April 16, 2019

I’ve spent 2 days at Cloud Expo Europe, the premier London based event covering cloud platforms, hybrid and multicloud approaches, cybersecurity, AI, blockchain and more, as well as well as all of the ingredients of the data centres that support those technologies.  A wide set of tech topics, but within them everyone’s talking digital transformation and it’s dangerous.  Dangerous because, like talking cloud 10 years ago, it means different things to different people, becoming a catch all with too much emphasis on the technology itself, rather than the business outcomes it supports.  It’s the classic mistake we technology marketers have been making with our “widgets” for decades.  We need to reframe the digital transformation conversation!

First, how do we define it?  On the first day I was chairing the Techerati Keynote theatre.  During the stand out session of the morning an audience member asked the speaker that very question.  The speaker was Ian Johns, Chief Architect at Kings College London, who was talking about how you should ride the wave of digital disruption, rather than being swamped by it.  A message close to the heart of us Agile Elephants!  His session properly explained the disruption we are all experiencing, and he did a great job of defining digital transformation too.  I’m delighted that various blogs have referenced, and the latest Cloud Industry Forum research has adopted, our own definition which is:

“Digital transformation is the process of shifting your organisation from a legacy approach to new ways of working and thinking using digital, social, mobile and emerging technologies.  It involves a change in leadership, different thinking, the encouragement of innovation and new business models, incorporating digitisation of assets and an increased use of technology to improve the experience of your organisation’s employees, customers, suppliers, partners and stakeholders.”

The crucial point is that emerging technologies and innovation are driving it, but the true transformation is all about business, mindset and leadership change.

Allan and Will interviewing me on the
Disruptive.Live studio/stand

I spent a lot of my time at the Expo with my good friends at Disruptive.Live co-hosting some of their live #Techerati interview shows, but then switching sides and coming on as a guest to be interviewed by Will Spalding and Allan Behrens (see later).  “Where are we at with digital transformation?” was the first question they asked me.  So if we put the technology aside for a moment, how do you go about integrating these new approaches while running your existing business?  How do you reduce risk and increase your chances of success?  I believe we need to reframe the conversation.  Here are my five suggestions on how to do that:

1. Encourage good behavior

Digitally savvy companies have leaders who encourage teamwork, explain their purpose with clarity, and promote an environment of openness and sharing. The particular organizational structure you have in place is less important than getting employees and leaders to embrace these behaviors. In her book The Management Shift, Vlatka Hlupic shows that many successful companies share a management style characterized by an open mindset, an unbounded culture, strong team cohesion, inspirational leaders, a strong sense of purpose, and passion for the work the company does.  Check out the absolutely excellent Team of Teams by General Stanley McChrystal, Chris Fussell et al translating their experiences in Iraq War 2 to today’s complex supply chains where teamwork across organisational boundaries is crucial.  These are the characteristics that 21st century leaders and managers need to be able to handle today’s rapidly changing business landscapes.

2. Think holistically

Adding mobile apps and new digital business components on top of existing systems can provide some help, and even give short-term benefits in key areas. To really transform your business, however, you need a holistic approach.  According to recent Forrester research, most digitally mature businesses recognize that they must break down business silos in order to realize their digital visions. One helpful tool is the McKinsey 7-S framework, which has been tried and tested over decades.  The 7-S framework emphasizes the role of coordination, rather than structure, in organizational effectiveness.  First you assess the business in terms of strategy, structure, and systems. Then you examine your staff, skills, and style, as well as the shared values of the company.  This approach helps to integrate all the factors needed to add value, find efficiencies, and make a real difference in your organization. You don’t have to use this particular framework, of course—there are many other useful tools out there.  The point is that digital transformation becomes much easier when you think about it holistically.

3. Be agile

You need a plan to integrate your digital transformation project so that it works with your legacy systems. Your plan should draw on agile thinking while still satisfying the financial demands of the C-suite. Think in terms of short time scales and multiple iterations. Don’t fear experimentation or failure.  The Forrester research already mentioned highlights agility as one of the top five metrics to measure the success of digital programmes.  True agility requires you to think like a startup. First, identify the problem that needs to be solved with a new digital approach. Next, develop a minimum viable product that you can implement. Use the resulting feedback to improve and iterate your product.  Pursue multiple, parallel streams of change with a six-to-eight-week cycle or shorter. Focus on achievable outcomes rather than individual tasks and steps, and be sure to foster regular communication at all levels across the process (back to Team of Teams).

4. Build a social network

True digital transformation touches all of a company’s teams and processes. You need sound cross-functional governance to get everyone on board with the disruption that’s to come. Our research shows that organizations that have implemented some form of enterprise social network or social collaboration platform, such as Workplace by Facebook, Jive, Microsoft Teams, Kahootz, GitHub or Slack, are more successful with their transformation than those that don’t. This kind of communication harnesses the collective intelligence of teams in ways that aren’t possible with old communications technologies such as e-mail.

5. Create your transformation story

Unless you are a digital native startup, your digital transformation will most likely be a complex series of incremental and strategic initiatives that fundamentally change the company over time. To get employees, customers, and investors on board, leadership needs to communicate the big idea—the “why” of what you are trying to achieve by reinventing your business.  Start thinking about the principles of story telling.  Start thinking in terms of the visual tools and communication processes you are going to use get the whole company as well as your partner and supplier ecosystem on board.

Here is the interview, with the answer that triggered this post. Allan and Will also ask me about Blockchain technology, and what I think of the show too:

Please check out the hashtags #techerati and #disruptivelive for more CEE19 content from this year’s show.

In summing up how to go about integrating digital transformation:

  • Digital transformation requires an open mindset, an unbounded culture, strong team cohesion, inspirational leaders, a strong sense of purpose, and passion for the work the company does.
  • You need agile thinking, a mix of incremental and strategic initiatives, and short development cycles.
  • Leaders must communicate why they are reinventing the company so that everyone is on board with the overall goal.
  • If you need help defining, adapting or communicating your particular digital transformation story, please contact us – we’d love to help.

Note – this post is an evolution of an article I wrote for enterprise.nxt the HPE Insights blog.  

(Cross-posted @ Agile Elephant)

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The State Of Cloud Business Intelligence, 2019

By on April 15, 2019

  • An all-time high 48% of organizations say cloud BI is either “critical” or “very important” to their operations in 2019.
  • Marketing & Sales place the greatest importance on cloud BI in 2019.
  • Small organizations of 100 employees or less are the most enthusiastic, perennial adopters and supporters of cloud BI.
  • The most preferred cloud BI providers are Amazon Web Services and Microsoft Azure.

These and other insights are from Dresner Advisory Services’ 2019 Cloud Computing and Business Intelligence Market Study. The 8th annual report focuses on end-user deployment trends and attitudes toward cloud computing and business intelligence (BI), defined as the technologies, tools, and solutions that rely on one or more cloud deployment models. What makes the study noteworthy is the depth of focus around the perceived benefits and barriers for cloud BI, the importance of cloud BI, and current and planned usage.

“We began tracking and analyzing the cloud BI market dynamic in 2012 when adoption was nascent. Since that time, deployments of public cloud BI applications are increasing, with organizations citing substantial benefits versus traditional on-premises implementations,” said Howard Dresner, founder, and chief research officer at Dresner Advisory Services. Please see page 10 of the study for specifics on the methodology.

Key insights gained from the report include the following:

  • An all-time high 48% of organizations say cloud BI is either “critical” or “very important” to their operations in 2019. Organizations have more confidence in cloud BI than ever before, according to the study’s results. 2019 is seeing a sharp upturn in cloud BI’s importance, driven by the trust and credibility organizations have for accessing, analyzing and storing sensitive company data on cloud platforms running BI applications.

  • Marketing & Sales place the greatest importance on cloud BI in 2019. Business Intelligence Competency Centers (BICC) and IT departments have an above-average interest in cloud BI as well, with their combined critical and very important scores being over 50%. Dresner’s research team found that Operations had the greatest duality of scores, with critical and not important being reported at comparable levels for this functional area. Dresner’s analysis indicates Operations departments often rely on cloud BI to benchmark and improve existing processes while re-engineering legacy process areas.

  • Small organizations of 100 employees or less are the most enthusiastic, perennial adopters and supporters of cloud BI. As has been the case in previous years’ studies, small organizations are leading all others in adopting cloud BI systems and platforms.  Perceived importance declines only slightly in mid-sized organizations (101-1,000 employees) and some large organizations (1,001-5,000 employees), where minimum scores of important offset declines in critical

  • The retail/wholesale industry considers cloud BI the most important, followed by technology and advertising industries. Organizations competing in the retail/wholesale industry see the greatest value in adopting cloud BI to gain insights into improving their customer experiences and streamlining supply chains. Technology and advertising industries are industries that also see cloud BI as very important to their operations. Just over 30% of respondents in the education industry see cloud BI as very important.

  • R&D departments are the most prolific users of cloud BI systems today, followed by Marketing & Sales. The study highlights that R&D leading all other departments in existing cloud BI use reflects broader potential use cases being evaluated in 2019. Marketing & Sales is the next most prolific department using cloud BI systems.

  • Finance leads all others in their adoption of private cloud BI platforms, rivaling IT in their lack of adoption for public clouds. R&D departments are the next most likely to be relying on private clouds currently. Marketing and Sales are the most likely to take a balanced approach to private and public cloud adoption, equally adopting private and public cloud BI.

  • Advanced visualization, support for ad-hoc queries, personalized dashboards, and data integration/data quality tools/ETL tools are the four most popular cloud BI requirements in 2019. Dresner’s research team found the lowest-ranked cloud BI feature priorities in 2019 are social media analysis, complex event processing, big data, text analytics, and natural language analytics. This years’ analysis of most and least popular cloud BI requirements closely mirror traditional BI feature requirements.

  • Marketing and Sales have the greatest interest in several of the most-required features including personalized dashboards, data discovery, data catalog, collaborative support, and natural language analytics. Marketing & Sales also have the highest level of interest in the ability to write to transactional applications. R&D leads interest in ad-hoc query, big data, text analytics, and social media analytics.

  • The Retail/Wholesale industry leads interest in several features including ad-hoc query, dashboards, data integration, data discovery, production reporting, search interface, data catalog, and ability to write to transactional systems. Technology organizations give the highest score to advanced visualization and end-user self-service. Healthcare respondents prioritize data mining, end-user data blending, and location analytics, the latter likely for asset tracking purposes. In-memory support scores highest with Financial Services respondent organizations.

  • Marketing & Sales rely on a broader base of third party data connectors to get greater value from their cloud BI systems than their peers. The greater the scale, scope and depth of third-party connectors and integrations, the more valuable marketing and sales data becomes. Relying on connectors for greater insights into sales productivity & performance, social media, online marketing, online data storage, and simple productivity improvements are common in Marketing & Sales. Finance requiring integration to Salesforce reflects the CRM applications’ success transcending customer relationships into advanced accounting and financial reporting.

  • Subscription models are now the most preferred licensing strategy for cloud BI and has progressed over the last several years due to lower risk, lower entry costs, and lower carrying costs. Dresner’s research team found that subscription license and free trial (including trial and buy, which may also lead to subscription) are the two most preferred licensing strategies by cloud BI customers in 2019. Dresner Advisory Services predicts new engagements will be earned using subscription models, which is now seen as, at a minimum, important to approximately 90% of the base of respondents.

  • 60% of organizations adopting cloud BI rank Amazon Web Services first, and 85% rank AWS first or second. 43% choose Microsoft Azure first and 69% pick Azure first or second. Google Cloud closely trails Azure as the first choice among users but trails more widely after that. IBM Bluemix is the first choice of 12% of organizations responding in 2019.

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Millennial CRM

By on April 15, 2019

Trying to do business without also having a modern CRM system is like walking around naked. You can do it, at least for a little while, but people will begin to think you’re weird and the trouble is that those people are all potential customers. CRM is essential today because, despite our reverence for the free market, it’s really more like free markets–plural–and we need to be relevant, to treat people the way they expect to be, in each venue we decide to play in.

Before he died, Steve Jobs observed that the marketplace had bifurcated and the traditional Bell curve we use to represent it had actually become two humps, sort of like a Dromedary camel becoming a Bactrian.

Jobs saw one market for good enough products and the other for luxury items. His insight was that, with modern technology goods and customer facing systems, the merchandises in each group was essentially the same. In other words, much of the difference today comes from how products are sold and serviced. Good enough products had to be easy to use and intuitive in Jobs’ scheme and luxury goods had to come with hands on service throughout the purchase and ownership process.

That wasn’t so long ago and, wittingly or not, the observation drove CRM’s evolution to the point that today the suite is dripping with artificial intelligence and machine learning for insights into what to do for a customer next. CRM is now also over the top with journey maps as well as chatbots that do a pretty good job of interfacing with customers. They will only get better too.

But nobody who gets the good enough product, it turns out, likes being reminded that they didn’t spend big on the luxury item and all that service. We all like getting more than our fair share of service, especially if it’s free. So modern CRM splits the difference and provides affordable service and support without quibbling, through technology. Now, I would love to say that our work is done here but we both know better.

Here comes the rub. The other day I was reading an articlefrom last March in Inc. magazine that brought home how disparate our markets are and by implication how much vendors need high quality CRM today.

What once looked like a Bell curve and then looked like a camel has in a few short years come to resemble high tide at Huntington Beach. It’s clearer now than ever that people of different stripes, including different generations come to marketplaces with very different needs. We knew that already but maybe not its full extent.

Millennials

So, in the article, “73 Percent of Millennials are Willing to Spend More Money on This 1 Type of Product,” writer Melanie Curtin quotes a Neilsen report saying, “While 66 percent of global consumers are willing to pay more for sustainable goods, a full 73 percent of Millennials are.” Neilsen’s definition of Millennials is people born between 1977 and 1995 while others skew the timeline toward the present.

For instance, Pew Research brackets the group at those born between 1981 and 1997. Regardless, Pew and others rank Millennials and Baby Boomers neck and neck in cohort size: 75.4 million millennials according to a 2015 US Census study vs. 74.9 million Boomers.

But let’s get back to sustainability. As the author of a book with sustainability in the title, it warms my heart to think some of those people could actually find my book but the CRM side of me also says whoa horsey! A CRM system better be able to distinguish between a younger customer and someone older who might have different priorities.

Sustainability is not a well-defined category though you know it when you see it. It can mean everything and nothing but generally it refers to things with long lifecycles, things that can be easily recycled, products and services that aren’t generally one and done. So paper napkins not sustainable, recyclable paper plates, yes. And of course renewable power generation yes, yes!

Any market where 66 percent of customers want to pay more for something, let alone a market with 73 percent thinking that way, ought to raise more than eyebrows. But this all speaks to the need for data that tells vendors concretely who customers are.

We might still rely heavily on the next best algorithm to help determine what’s next but now we see that age cohort might reasonably be part of the calculations. I expect that simple discoveries like this will keep CRM developers busy for a long time as they continue to iterate toward CRM nirvana. At its heart, this means continuous improvement of process as the CRM suite seems to be fairly well broadened at this point.

Show season is starting in CRM. It’s the time of year when almost every CRM vendor holds a conference in San Francisco, Las Vegas, Chicago, Dallas, or Austin. Next week Oracle kicks it off with Modern Customer Experience (MCX) in Las Vegas. It will be a great chance to see the company’s CRM apps put through their paces without the dilution caused by all the database and middleware discussions of OpenWorld. Not that I mind, but as a CRM person discussions of benchmarks can leave me cold.

At any rate, Oracle has been coming on strong in the last 5 years making serious moves to the cloud and into CRM. They got serious, in my opinion when Larry Ellison pointed to the cloud and the company has spent billions to reach its rather complex goals in apps, platform and infrastructure.

It has only been in the last couple of years though that the company has achieved something like critical mass, which is why this edition of MCX will be so interesting. Rather than bringing so many products to market, the company has begun turning to process and it’s process that I think drives the discussion about things like sustainability.

(Cross-posted @ Beagle Research Group)

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The Two Dimensions of Startup Performance

By on April 15, 2019

When it comes to evaluating a startup’s performance, I think there are two key, orthogonal questions that need to be examined:

  1. Is the company delivering growth?
  2. Is management in control of your business?

Growth is the primary driver of value creation in a software startup.  I’m not going to quantify what is good vs. bad growth here – it’s a function of too many other variables (e.g., state of market, stage of startup).  For a seed stage company 100% growth (e.g., from $200K to $400K in ARR) is not particularly good, whereas 40% growth off $150M is quite strong.  So, the first question is — given the company’s size and situation — is it delivering good growth?

The second question is whether management is in control of the business.  I evaluate that in two ways:  how often does the company miss its quarterly operating plan targets and how often does the company miss its early-quarter (e.g., week 3) forecast for sales, expenses, and cash burn?

You can combine these two dimensions into a quadrant.

 

 

Let’s take a look at companies in each of these quadrants, describe the situation they’re in, and offer some thoughts on what to do.

Moribund Startups
Companies that are moribund are literally on “on death’s door” because they are not creating value through growth and, worse yet, not even in control of their business.  They make annual plans that are too aggressive and continually miss the targets set within them.  Worse yet, they also miss quarterly forecasts, forecasting sales of 100 units in week 3, 80 units in week 12, and delivering sales of only 50 units when the quarter is done.  This erodes the board’s faith in management’s execution and makes it impossible for the company to manage expenses and cash.  Remember Sequoia founder Don Valentine’s famous quote:

“All companies go out of business for the same reason.  They run out of money.” — Don Valentine, Sequoia Capital

While there may be many reasons why a moribund company is not growing, the first priority needs to getting back in control of the business:  setting realistic annual operating plans, achieving them, and having reliable early-quarter (e.g., week 3) forecasts for sales, expense, and cash burn.  I think in their desperation to grow too many moribund startups fail to realize that getting back in control should be done before trying to rejuvenate growth and thus die doing neither.

Put differently, if you’re going to end up delivering sub-par growth, at least forecast it realistically so you will still be in control of your business and thus in a far better position to either turnaround operations or pivot to a better strategic place.  Without control you have nothing, which is what your business will soon be worth if you don’t regain it.

Stuck Startups
Stuck companies face a different set of problems.  The good news is that they are in control of the business:  they make and hit their plans, they come in at or above their forecasts.  Thus, they can manage their business without the risk of suddenly running out of cash.  The bad news is that they’re not delivering sufficient growth and ergo not creating value for the shareholders (e.g., investors, founders, and employees).  Stuck companies need to figure out, quickly, why they’re not growing and how to re-ignite growth.

Possible reasons for stalled growth include:

  • Lack of product-market fit. The company has never established that it solves a problem in the market that people are willing to pay (an amount compatible with your business model) to solve. You may have built something that nobody wants at all, or something that people are not simply willing to pay for.  This situation might call for a “pivot” to an adjacent market.
  • Poor sales & marketing (S&M) execution. While plenty of startups have weak S&M organizations, a lot of deeper problems get blamed by startup boards on S&M.  Why?  Because most boards/investors want to believe that S&M is to blame for company performance problems because S&M issues are easier to fix than the alternatives:  just fire the VP of Sales and/or Marketing and try again.  After all, which would you rather be told by doctor?  That your low-grade fever and weakness is due to the flu or leukemia?  The risk is that through willful misdiagnosis you keep churning S&M executives without fixing (or even focusing on) a deeper underlying problem. [1]
  • Weak competitive positioning. Through some combination of your product and product marketing, customers routinely short-list you as a contender, but buy from someone else.  Think: “we seem to be everyone’s favorite second choice.”  This can be driven by anything from poor product marketing to genuine product shortcomings to purely corporate factors (e.g., such as believing you have a fine product, but that your company will not be a winner in the market).

Stuck companies need to figure out, with as much honesty as possible with themselves, their customers, and their prospects, why they are stuck and then take appropriate steps to fix the underlying causes.  In my opinion, the hard part isn’t the fixes – they’re pretty obvious once you admit the problems.  The hard part is getting to the unpleasant truth of why the company is stuck in the first place. [2]

Unbridled Startups
Like Phaeton driving his father’s chariot [3], the unbridled startup is growing fast, but out of control, and thus risks getting too close to the Sun and burning up or simply smashing into the ground.  Unbridled startups typically are delivering big growth numbers – but often those big numbers are below the even bigger numbers in their aggressive annual operating plan.  The execs dismiss the plan as irrelevant and tell the board to look at growth and market share.  The board looks at the cash burn, noting that the management team — despite delivering amazing growth — is often still under plan on sales and over plan on expenses, generating cash burn that’s much larger than planned.

If the growth stops, these companies burn up, because they are addicted to high cash burn and can suddenly find themselves in the position of not being able to raise money.  So to keep the perpetual motion machine going, they’ll do almost anything to keep growing.  That might include:

  • Raising money on an unattainable plan
  • Raising money on undesirable terms [4] that hurt earlier investors and potentially really hurt the common stock
  • Spending heavily on customer acquisition and potentially hiding that in other areas (e.g., big professional services losses)

Remember that once the Halo is lost, it’s virtually impossible to get back so companies and executives will do almost anything to keep it going.  In some cases, they end up crossing lines that get the business in potentially serious trouble.  [5]

Unbridled companies need to bring in “adult supervision,” but fear doing so because they worry that the professional managers they’ll bring in from larger companies may kill the growth, driven by the company’s aggressive, entrepreneurial founders.  Thus, the board ends up in something of a waiting game:  how long do we bet on the founding/early team to keep driving crazy growth – even if it’s unbridled – before we bring in more seasoned and professional managers?  The smart part about this is realizing the odds of replacing the early team without hurting growth are low, so sometimes waiting really is the best strategy.  In this case, the board is thinking, “OK let’s give this [crazy] CEO one more year” but poised to terminate him/her if growth slows.

The transition can be successfully pulled off – it’s just hard and risky.  I’d argue MongoDB did this well in 2014.  But I’d argue that Anaplan did it not-so-well in 2016, with a fairly painful transition after parting ways with a very growth-oriented CEO, leaving the top job open for nearly 9 months [6].

So, the real question for unbridled companies is when to bridle them and how to do so without killing the golden goose of growth.

Star Startups
There’s not much to say about star startups other than if you’re working at one, don’t quit.  They’re hard to find.  They’re great places to learn.  And it’s sometimes easy to forget you’re working at a star.  I remember when I joined Business Objects.  The company had just gone public the prior year [7], so I had the chance to really dig into their situation by reading the S-1.  “This place is perfect,” I thought, “20-something consecutive quarters of profitable growth, something like only $4M in VC raised, market share leadership, a fundamental patented technology, and a great team — I’m critical as heck and I can’t find a single thing wrong with this place.  This is going to be my first job at a perfect company.”

That’s when I learned that while Business Objects was indeed a star, it was far from a perfect company.  It’s where I learned that there are no perfect companies.  There are always problems.  The difference between great and average companies is not that great companies have fewer problems:  it’s that great companies get what matters right.  Which then begs the question:  what matters?

(Which is an excellent topic for any startup strategy offsite.)

# # #

Notes
[1] One trick I use is to assume that, by default, we’re average in all regards.  If we’re hiring the same profiles, using the same comp plans, setting the same quotas, doing the same onboarding, providing the same kit, then we really should be average:  it’s the most likely outcome.  Then, I look for evidence to find areas where we might be above or below.  This is quite different from a vigilante board deciding “we have a bad sales organization” because of a few misses (or a personal style mismatch) and wanting to immediately replace the VP of sales.  I try to slow the mob by pointing out all the ways in which we are normal and then ask for evidence of areas where we are not.  This helps reduce the chance of firing a perfectly good VP of sales when the underlying problem is product, pricing, or competition.

[2] And that’s why they make high-priced consultants – a shameless plug for my new Dave Kellogg Consulting business.

[3] See Ovid’s version, the one I was raised on.

[4] For example, multiple liquidation preferences.

[5] I seem to have a knack to end up competing with companies who do – e.g., Oracle back in the late 1980s did some pretty dubious stuff but survived its comeuppance with $200M in financing from Nippon Steel (which was a lot of money, back in the day), MicroStrategy in 2000 got itself into trouble with reports of inflated earnings and had to pay nearly $100M in settlements (along with other constraints), Fast Search and Transfer managed to get acquired by Microsoft for $1.2B in the middle of an accounting scandal (and were even referred to by some as the “Enron of Norway”) and after its $11B acquisition by HP, Autonomy was charged with allegations of fraud, some of which are still being litigated.

[6] Yes, you can argue it’s been a successful IPO since then, so the transition didn’t hurt things and perhaps eventually had to happen.  But I’m also pretty sure if you asked the insiders, they would have preferred that the transition went down differently and more smoothly.

[7] I was employee number 266 and the company was already public.  My, how times were different back then.

(Cross-posted @ Kellblog)

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Drama in enterprise computing

By on April 15, 2019

Ray Lane, a top-notch tech executive and investor over decades, said this about my new book

“Don’t be fooled by the title—the book is not just about SAP. It’s about drama in enterprise computing.”

I then used “drama” in the title of my recent ZDNet guest column.

Drama? That’s what you get in Augusta in April. Isn’t enterprise tech boring and glacially slow?

You be the judge.

My book catalogs the product launch machine SAP has become and the fact that its customer base has grown 50% in the last five years. It was on the ropes, the competition could have delivered a knockout punch but it has bounced back impressively.

Of course,  SAP is also generating a lot of interest and emotion with its recent layoffs and executive moves. From an investor point of view, CEO Bill McDermott has created excitement by promising to double its market cap in four years

Marc Benioff of Salesforce told Jim Cramer of CNBC a few weeks ago ” I see $30 billion right around the corner. In fact, we initiated a 4-year guidance today, Jim, of $26 [billion] to $28 billion.”

How can that not make your heart beat faster?

Last week, in his coming-out party since he joined Google several months ago, Thomas Kurian made quite an impression.

Also last week, at a SAP Analytics event, mostly under NDA, I expected to hear plenty about coopetition with Google, Oracle and IBM. Instead I kept hearing about Microsoft with its Power BI, Surface, Azure ML, Office 365 and other products.

Oracle and IBM were similarly snubbed by the DoD as it shortlisted vendors for its $ 10 billion JEDI cloud contract. One contract should not mean that much but the twists and protests in that one certainly count as drama.

When a case ends up at the Supreme Court of the US, it usually makes for some some oohs and aahs. When all 9 justices vote unanimously on something, it certainly perks you up. That’s what recently happened to Oracle in its long running litigation with Rimini Street.

One of the nice things about the Amazon Kindle is a feature called “Popular Highlights”. Amazon combines the highlights marked by all Kindle customers and identifies the passages with the most highlights. For my book, this statement by Mark Hurd has already qualified for that honor. “In October 2018, Oracle co-CEO Hurd predicted that 80% of business applications would be in the cloud by 2025.”

That para goes on to say “Today, even after two decades of cloud computing, industry and geographic coverage is spotty — by my estimate, less than 20%. For Hurd’s prediction to prove accurate, it will take massive new investments in upgrading industry functionality.” Will Hurd’s own products grow rapidly and get a lion share of his projected 80%? In January 2006, Oracle had confidently declared they were “Halfway to Fusion”. 13 years later, Oracle still mostly talks finance, HCM and CRM. NetSuite, even after 20 years, has limited global coverage as Phil Wainewright points out here or industry coverage as I point out here.

In the meantime, in China, Kai-Fu Lee, who has been called the “Oracle of AI” has funded nearly 150 AI start-ups. At Davos earlier this year, the theme was Globalization 4.0 which shows that Industrie 4.0/IoT concepts are spreading worldwide. Holger Mueller of Constellation opines about platforms “Why Open Source has won and will keep … winning.”

Augusta generates drama for 4 days. Enterprise tech takes a bit longer. But it has its share of comebacks and black horses. I will have a front row seat as I start planning for SAP Nation 4.0.

Or may be it will be titled Oracle Nation 1.0 or Workday Nation 1.0. That right there is plenty of drama.

(Cross-posted @ Deal Architect)

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Why does G Suite keep kicking into Microsoft’s goal post? #googlenext19

By on April 15, 2019

Watching the G Suite news coming out of Google Cloud Next 2019, I had my Michael Corleone moment that took me back to my old stomping ground: employee engagement and workplace performance.

I was hoping that we wouldn’t see Google trying to out Microsoft at Microsoft’s own game but that’s what we got. “More collaboration insights in the Activity dashboard, New security assessment program for apps on G Suite Marketplace, Gmail making email more secure with MTA-STS standard, Get more done in less time with G Suite Add-ons beta, Google Voice for G Suite: Cloud telephony with the intelligence and security of Google Cloud”

Not shockingly, the incremental updates to G Suite were awesome engineering feats. But Google had the chance to entirely shift the goal post by re-imagining a better “what” this time. Instead, what we got another attempt at a better “how” by pitting product features against Office 365.

Ditto for the go to market messaging gleaned from session titles:

“Learn about G Suite’s newest app: Currents! Large organizations are increasingly dispersed, and as they grow communication and knowledge sharing often become more difficult to navigate. Adapting existing productivity tools to maintain a sense of community can be challenging—employees struggle to connect with each other, leaders are unable to get feedback and drive alignment, and content and knowledge remain trapped in silos.“

Knowledge sharing, connecting employees, breaking silos.

2001 called. She wants her value prop back.

So, what does more “what” look like? 

  • Frontline Work: Upskill America estimates that over 24 million workers just in the US are front line workers. Many of these workers have one job in huge industries such as retail, logistics and healthcare. Sitting at the very last mile of the customer experience, they are the face of a company’s brand. Yet these workers today do backflips to make desktop worker optimized HRIS and employee engagement systems work for them. The mobile-only front-line worker needs a very different design paradigm to be the best that she can be.
  • Shift Work: Approximately two in five workers in the US work during nonstandard times. Shift workers work in jobs that go 12-24 hours. Each job requires 2 to 3 people to cycle in. And shift workers often have multiple employers. There is a significant gap and inefficiency in how they get found, how they get scheduled, how they perform and in turn, how their performance is measured, and how they get marketed to potential employers. The Population Reference Bureau estimated that the occupations of these workers will have the largest projected growth rate over the next decade. That’s a hunk of TAM.
  • Unstructured work modalities are hugely underserved. The design metaphor for tools such as GSuite, Office 365, Asana and others serve a structured work modality: task management, spreadsheet creation, workflow, etc. The reality is that these tools are great after the collaboration to generate and firm up ideas has already taken place. They work great when its time to break up tasks and get them done, to model out costs, or document decisions, or present plans made. What’s missing is the ability to support the integral steps that form the basis of the task – whiteboarding, ideation, planning, organizing thoughts. Massive industries such as Professional Services, Industrial and other Design, CAD/CAM all rely on these crucial precursor phases before “work” is remotely ready to go into a spreadsheet for costing, or a presentation for funding.

G-Suite-600x337The tragedy in all of this is that Google does have the best capabilities, the best real-time interplay and the absolute best NLP in the market. All sitting atop GCP which remains the best-kept secret on Planet Enterprise. Thanks in part to GCP and in part to the genius of Kahuna co-founder and CTO Jacob Taylor and his team, at Kahuna we on-boarded 80 million consumers in a single day, with zero dev ops support.

And yet, Google misses the forest for the trees by deploying these maddingly sophisticated resources only towards improving the “how”, vs re-imagining the “what”.

This playbook of shifting the goalpost works. At SuccessFactors / SAP, we shifted the goal post by offering functionalized collaboration to solve very discrete problems in Sales, Marketing, IT and HR. And as a result, we drove revenues up well over 20-fold and subscription 5-fold in just 12 quarters. And we changed the narrative for collaboration which added significant sales and marketing velocity.

So, question the prevailing premise.

Look, this doesn’t need to be an either / or game. Given the astonishingly good numbers we’ve seen from Google’s historical focus on education, the horizontal long game can work. But Google has all the pieces to re-cast the narrative and see returns now. And with Thomas Kurian at the helm, they have the street cred to build real enterprise SaaS software that solves real business problems, for huge markets.

I’m rooting for you, Goog.

 

 

=============

As I was doing some research for this post, these were some of my favorite posts on the event.

  • Mike Melanson of The New Stack brings a very compelling developer angle
  • Holger Mueller of Constellation Research covers the infrastructure and security elements but ventures into apps and SaaS.
  • Ron Miller at TechCrunch and Kurt Marko at Diginomica go for the jugular and take on the AWS vs GCP analysis, head on.
  • Finally, Frederic LardInois at TechCrunch has an in-depth interview with David Thacker, VP of Product for G Suite on Currents – Google’s newest shot at horizontal enterprise collaboration.

(Cross-posted @ Pretzel Logic)

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Public Cloud Soaring To $331B By 2022 According To Gartner

By on April 14, 2019

Public Cloud Soaring To $331B By 2022 According To GartnerGartner predicts the worldwide public cloud service market will grow from $182.4B in 2018 to $331.2B in 2022, attaining a compound annual growth rate (CAGR) of 12.6%.

  • Spending on Infrastructure-as-a-Service (IaaS) is predicted to increase from $30.5B in 2018 to $38.9B in 2019, growing 27.5% in a year.
  • Platform-as-a-Service (PaaS) spending is predicted to grow from $15.6B in 2018 to $19B in 2019, growing 21.8% in a year.
  • Business Intelligence, Supply Chain Management, Project and Portfolio Management and Enterprise Resource Planning (ERP) will see the fastest growth in end-user spending on SaaS applications through 2022.

Gartner’s annual forecast of worldwide public cloud service revenue was published last week, and it includes many interesting insights into how the research firm sees the current and future landscape of public cloud computing. Gartner is predicting the worldwide public cloud services market will grow from $182.4B in 2018 to $214.3B in 2019, a 17.5% jump in just a year. By the end of 2019, more than 30% of technology providers’ new software investments will shift from cloud-first to cloud-only, further reducing license-based software spending and increasing subscription-based cloud revenue.

The following graphic compares worldwide public cloud service revenue by segment from 2018 to 2022. Please click on the graphic to expand for easier reading.

Comparing Compound Annual Growth Rates (CAGRs) of worldwide public cloud service revenue segments from 2018 to 2022 reflects IaaS’ anticipated rapid growth. Please click on the graphic to expand for easier reading.

Gartner provided the following data table this week as part of their announcement:

  • Business Intelligence, Supply Chain Management, Project and Portfolio Management and Enterprise Resource Planning (ERP) will see the fastest growth in end-user spending on SaaS applications through 2022.  Gartner is predicting end-user spending on Business Intelligence SaaS applications will grow by 23.3% between 2017 and 2022.  Spending on SaaS-based Supply Chain Management applications will grow by 21.2% between 2017 and 2022. Project and Portfolio Management SaaS-based applications will grow by 20.9% between 2017 and 2022. End-user spending on SaaS ERP systems will grow by 19.2% between 2017 and 2022.

Sources: Gartner Forecasts Worldwide Public Cloud Revenue to Grow 17.5 Percent in 2019 and Forecast: Public Cloud Services, Worldwide, 2016-2022, 4Q18 Update (Gartner client access)

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