Skip to content

Posts from the ‘Enterprise Cloud Computing’ Category

May 3

FinancialForce’s Spring 2022 Release Defines the Future of FP&A In Services

Economic uncertainty sends shock waves throughout businesses, with service organizations seeing its brunt. The recent drastic drop-off in Netflix subscribers is a case in point. Services CFOs say there is an urgent need to track how well their overarching planning strategies linking finance and operations perform. However, getting the data to analyze has been challenging for even the largest services businesses.

As a result, CFOs need Financial Planning & Analysis (FP&A) integrated with operational planning applications to make it easier to track plan performance across all P&Ls and financials. FinancialForce’s decision to launch a fully-featured FP&A on their ERP Cloud platform shows they read the services market clearly and listen to their customers’ CFOs on what matters most.

CFOs Want To Know The Financial Impact Of Every Planning Decision

Even during economic stability, finance teams struggle to get operations planning teams the data they need to predict the financial outcomes of decisions. Line-of-business leaders look to finance to provide accurate, detailed information on the financial implications of every planning decision. By having FP&A use the same data accounting, reporting and planning have, CFOs, COOs, and their teams get greater visibility and control over every aspect of budgeting and forecasting.

One of FP&A’s greatest shortcomings in the past was relying only on siloed financial data alone with little visibility into operational planning. Financial teams need access to all available data across finance and operations to do their jobs well and create accurate forecasts. Getting FP&A right with any ERP platform needs to start with the goal of delivering integrated business planning. Sales management and their teams also need visibility into FP&A reporting and analysis to manage revenue. FinancialForce’s decades of experience on the Salesforce platform combined with the integration expertise Salesforces’ MuleSoft acquisition brought to the company four years ago will increase the probability of their FP&A solution gaining adoption.

Services companies’ CFOs are grappling with new economic uncertainties every week. As a result, they’re most interested in getting greater visibility and control over the planning process, including version control, more automated multi-planning options, and more real-time enterprise-wide collaboration, all on a single platform. FinancialForce’s DevOps and product management teams deserve credit for identifying these challenges and including them in their FP&A application delivered in the Spring 2022 release.

FinancialForce

FinancialForce’s long-awaited FP&A solution enables analysts to create multiple what-if scenarios using calculation rules and mass functions, create dynamic plans and stress-test assumptions, and better anticipate their return by area and investment.

The future of FP&A Is An Integrated Cloud

Service organizations are quicker to migrate to the cloud versus their product-based counterparts. That’s because procurement, order-to-cash, and supply chain management workflows tend to be less complex than product-based businesses. Services organizations also need financial management, procure-to-pay, and Professional Services Automation (PSA), all on the same platform to support operational planning with FP&A.

FinancialForce’s Multi-X functionality is expanded in the Spring 2022 release to simplify the consolidation of financial statements and meet the needs of multi-entity organizations. In the latest release, it’s possible to record taxes due from intercompany tax transactions, accelerating the intercompany process for taxation and reporting. The Spring 2022 release also streamlines the creation of multi-company sales invoices and simplifies consolidated financial statement preparation with consolidation group structure capabilities.

FinancialForce

Multi-X enables the recording and sharing across a multi-tier or multi-entity business.

New localization features that are essential to running a global business were added, including support for Switzerland, Denmark, Finland, and Austria, as well as enhanced business operations in Germany and Australia. In addition, multi-X supports multi-company invoicing support and advanced invoice consolidations for multi-revenue billing. Calculating and recording tax on intercompany transactions and enabling cash matching process across companies are also supported.

FP&A’s future is an integrated cloud, further validated by FinancialForce’s’ launch of ERP Cloud, Professional Services Cloud, and enhancements to its Customer Success solutions. “In today’s business environment, organizations must be able to respond to disruptions quickly while continuing to innovate and deliver tangible outcomes to their customers,” said Dan Brown, Chief Product and Strategy Officer at FinancialForce. “Our Spring 2022 release gives our customers a richer toolset to help pursue their primary goal, delivering exceptional customer outcomes while improving the customer experience across the opportunity-to-renewal journey.”

New Professional Services (PS) Cloud additions in the Spring 2022 release include customer-requested improvements to skills and resource management, services estimating, and project management capabilities. FinancialForce’s customers have also requested improved resource management to scale their efforts to train and retain their workforce. As a result, the Spring 2022 Release adds intelligent automation to the staffing process by enabling auto-assignment of resource requests that meet specific criteria and an expanded capability to model ideal staffing scenarios across a project, opportunity, or region. These enhancements improve PS Cloud’s resource optimization capabilities and enable resource managers to deploy ever larger and more complex teams efficiently and cost-effectively.

Conclusion

Services organizations are looking for cloud-based professional services ERP systems that deliver greater forecast accuracy, faster forecasting and budgeting, and improved accountability, visibility, and control. Integrated clouds are the future of FP&A for all these factors and the need all services organizations have to improve revenue and operations performance. In addition, given the growing economic uncertainty today, CFOs also want to increase better predictability and better risk management strategies while also supporting more collaboration. All these factors combined are defining the future of FP&A in an integrated cloud, which is what FinancialForce has been doing for decades on the Salesforce platform.

May 3

Which ERP Systems Are Most Popular With Their Users In 2021?

Which ERP Systems Are Most Popular With Their Users In 2021?
  • Sage Intacct, Oracle ERP Cloud, and Microsoft Dynamics 365 ERP are the three highest-rated ERP systems by their users.
  • 86% of Unit4 ERP users say their CRM system is the best of all vendors in the study. The survey-wide satisfaction rating for CRM is 73%, accentuating Unit4 ERP’s leadership in this area.
  • 85% of Ramco ERP Suite users say their ERP systems’ analytics and reporting is the best of all 22 vendors evaluated.

These and many other insights are from SoftwareReview’s latest customer rankings published recently in their Enterprise Data Quadrant Report, Enterprise Resource Planning, April 2021. The report is based entirely on attitudinal data captured from verified owners of each ERP system reviewed. 1,179 customer reviews were completed, evaluating 22 vendors. SoftwareReviews is a division of the world-class IT research and consulting firm Info-Tech Research Group. Their business model is based on providing research to enterprise buyers on subscription, alleviating the need to be dependent on vendor revenue, which helps them stay impartial in their many customer satisfaction studies. Key insights from the study include the following:

  • Sage Intacct, Oracle ERP Cloud, Microsoft Dynamics 365 ERP, Acumatica Cloud ERP, Unit4 ERP and FinancialForce ERP are most popular with their users.  SoftwareReview found that these six ERP systems have the highest Net Emotional Footprint scores across all ERP vendors included in the study. The Net Emotional Footprint measures high-level user sentiment. It aggregates emotional response ratings across 25 questions, creating an indicator of overall user feeling toward the vendor and product. The following quadrant charts the results of the survey:
  • 80% of Acumatica Cloud ERP users say their system helps create more business value, leading all vendors on this attribute. How effective an ERP system is at adapting to support new business and revenue models while providing greater cost visibility is the essence of how they deliver business value. The category average for this attribute is 75%. Of the 22 vendors profiled, 12 have scores at the average level or above, indicating many ERP vendors are focusing on these areas to improve the business case of adopting their systems.
Which ERP Systems Are Most Popular With Their Users In 2021?
  • 86% of Sage Intacct ERP users say their system excels at ease of implementation, leading all vendors in the comparison by a wide margin. Implementing a new ERP system can be a costly and time-consuming process as it involves extensive training, change management, and integration. Ease of Implementation received a category score of 75% across the 22 vendors, indicating ERP vendors are doubling down investments to improve this area. Just 11 of the 22 ERP vendors scored above the category average.
Which ERP Systems Are Most Popular With Their Users In 2021?

Mar 8

How FinancialForce Is Using AI To Fight Revenue Leakage

How FinancialForce Is Using AI To Fight Revenue Leakage

Bottom Line: Using AI to measure and predict revenue, costs, and margin across all Professional Services (PS) channels leads to greater accuracy in predicting payment risks, project overruns, and service forecasts, reducing revenue leakage in the process.

Professional Services’ Revenue Challenges Are Complex

Turning time into revenue and profits is one of the greatest challenges of running a Professional Services (PS) business. What makes it such a challenge is incomplete time tracking data and how quickly revenue leaks spring up, drain margins, and continue unnoticed for months. Examples of revenue leaks across a customers’ life cycles include the following:

  • Billing errors are caused by the booking and contract process not being in sync with each other leading to valuable time being wasted.
  • When products are bundled with services, there’s often confusion over recognizing each revenue source, when, and by which PS metric.
  • Inconsistent, inaccurate project cost estimates and actual activity lead to inaccurate forecasting, delaying the project close and the potential for bad debt write-offs and high Days Sales Outstanding (DSO).
  • Revenue leakage gains momentum and drains margins when the following happens:
    • Un-forecasted delays and timescale creep
    • Reduced utilization rates across each key resource required for the project to be completed
    • Invoice and billing errors that result in invoice disputes that turn into high DSOs & write-offs
    • Incorrect pricing versus the costs of sales & service often leads to customer churn.
    • Revenue leakage gains momentum as each of these factors further drains margin

Adding up all these examples and many more can easily add up to 20-30% of actual lost solution and services margin. In many ways, it’s like death by a thousand small cuts. The following graphic provides examples across the customer lifecycle:

How FinancialForce Is Using AI To Fight Revenue Leakage

Why Professional Services Are Especially Vulnerable To Revenue Leakage 

Selling projects and the promise of their outcomes in the future create a unique series of challenges for PS organizations when it comes to controlling revenue leakage. It often starts with inaccurately scoping a project too aggressively to win the deal, only to determine the complexity of tasks originally budgeted for will take 10 – 30% longer or more. Disconnects on project scope are unfortunately too common, turning small revenue leaks into major ones and the potential of long Days Sales Outstanding (DSO) on invoices. When revenue leaks get ingrained in a project’s structure, they continue to cascade into each subsequent phase, growing and costing more than expected.

The SPI 2021 Professional Services Maturity™ Benchmark Service published by Services Performance Insight, LLC in February of this year provides insights into the hidden costs and prevalence of revenue leakage. The following table illustrates how organizations with high levels of revenue leakage also perform badly against other key metrics, including client referencability. The more revenue leakage an organization experiences, the more billable utilization drops, on-time project deliveries become worse, and executive real-time visibility becomes poorer.

How FinancialForce Is Using AI To Fight Revenue Leakage

How FinancialForce Is Using AI To Fight Revenue Leakage

It’s noteworthy that FinancialForce is now on its 12th consecutive product release that includes Salesforce Einstein, and many customers, including Five9, are using AI to manage revenue leakage across their PS business. Throughout the pandemic, the FinancialForce DevOps, product management, and software quality teams have been a machine, creating rich new releases on schedule and with improved AI functionality based on Einstein. The 12th release includes prebuilt data models, lenses, dashboards, and reports.

Andy Campbell, Solution Evangelist at FinancialForce, says that “FinancialForce customers have access to best practices to minimize revenue leakage by scoping and selling the right product and services mix to allocating the optimal range and amount of services personnel and finally billing, collecting and recognizing the right amount of revenue for services provided.” Andy continued, saying that recent dashboards have been built for resource managers to automate demand and capacity planning and service revenue forecasting and assist financial analysts in managing deferred revenue and revenue leakage.

By successfully integrating Einstein into their ERP system for PS organizations, FinancialForce helps clients find new ways to reduce revenue leakage and preserve margin. Relying on AI-based insights for each phase of a PS engagement delivered a 20% increase in Customer Lifetime Value according to a FinancialForce customer. And by combining FinancialForce and Salesforce, customers see an increased bid:win ratio of 10% or more. The following graphic illustrates how combining the capabilities of Einstein’s AI platform with FinancialForce delivers results.

How FinancialForce Is Using AI To Fight Revenue Leakage

Conclusion

FinancialForce’s model building in Einstein is based on ten years of structured and unstructured data, aggregated and anonymized, then used for in-tuning AI models. FinancialForce says these models are used as starting points or templates for AI-based products and workflows, including predict to pay.  Salesforce has also done the same for its Sales Cloud Analytics and Service Cloud Analytics. In both cases, Salesforce and FinancialForce customers benefit from best practices and recommendations based on decades of data, which should be particularly interesting considering the “black swan” nature of 2020 data for most of their customers.

Jul 3

6 Ways Cloud ERP Is Revolutionizing How Services Deliver Results

  • Cloud ERP is the fastest growing sector of the global ERP market with services-based businesses driving the majority of new revenue growth.
  • Legacy Services ERP providers excel at meeting professional & consulting services information needs yet often lack the flexibility and speed to support entirely new services business models.
  • Configure-Price-Quote (CPQ) is quickly emerging as a must-have feature in Services-based Cloud ERP suites.

From globally-based telecommunications providers to small & medium businesses (SMBs) launching new subscription-based services, the intensity to innovate has never been stronger. Legacy Services ERP and Cloud ERP vendors are responding differently to the urgent needs their prospects and customers have with new apps and suites that can help launch new business models and ventures.

Services-based Cloud ERP providers are reacting by accelerating improvements to Professional Services Automation (PSA), Financials, and questioning if their existing Human Capital Management (HCM) suite can scale now and in the future. Vertical industry specialization is a must-have in many services businesses as well.  Factoring all these customer expectations and requirements along with real-time responsiveness into a roadmap deliverable in 12 months or less is daunting.  Making good on the promises of ambitious roadmaps that includes biannual release cycles is how born-in-the-Cloud ERP providers will gain new customers including winning many away from legacy ERP providers who can’t react as fast.

The following key takeaways are based on ongoing discussions with global telecommunications providers, hosters and business & professional services providers actively evaluating Cloud ERP suites:

  • Roadmaps that reflect a biyearly release cadence complete with user experience upgrades are the new normal for Cloud ERP providers. Capitalizing on the strengths of the Salesforce platform makes this much easier to accomplish than attempting to create entirely new releases every six months based on unique code lines. FinancialForce, Kenandy and Sage have built their Cloud ERP suites on the Salesforce platform specifically for this reason. Of the three, only FinancialForce has provided detailed product roadmaps that specifically call out support for evolving services business models, multiple user interface (UI) refreshes and new features based on customer needs. FinancialForce is also one of the only Cloud ERP providers to publish their Application Programming Interfaces (APIs) already to support their current and next generation user interfaces.
  • Cloud ERP leaders are collaborators in the creation of new APIs with their cloud platform provider with a focus on analytics, integration and real-time application response. Overcoming the challenges of continually improving platform-based applications and suites need to start with strong collaboration around API development. FinancialForce’s decision to hire Tod Nielsen, former Executive Vice President, Platform at Salesforce as their CEO in January of this year reflects how important platform integration and an API-first integration strategy is to compete in the Cloud ERP marketplace today. Look for FinancialForce to have a break-out year in the areas of platform and partner integration.
  • Analytics designed into the platform so customers can create real-time dashboards and support the services opportunity-to-revenue lifecycle. Real-time data is the fuel that gets new service business models off the ground. When a new release of a Cloud ERP app is designed, it has to include real-time Application Programming Interface (API) links to its cloud platform so customers can scale their analytics and reporting to succeed. What’s most important about this from a product standpoint is designing in the scale to flex and support an entire opportunity-to-revenue lifecycle.
  • Having customer & partner councils involved in key phases of development including roadmap reviews, User Acceptance Testing (UAT) and API beta testing are becoming common.  There’s a noticeable difference in Cloud ERP apps and suites that have gone through UAT and API beta testing outside of engineering.  Customers find areas where speed and responsiveness can be improved and steps saved in getting workflows done. Beta testing APIs with partners and customers forces them to mature faster and scale further than if they had been tested in isolation, away from the market. FinancialForce in services and IQMS in manufacturing are two ERP providers who are excelling in this area today and their apps and suites show it.
  • New features added to the roadmap are prioritized by revenue potential for customers first with billing, subscriptions, and pricing being the most urgent. Building Cloud ERP apps and suites on a platform free up development time to solve challenging, complex customer problems. Billing, subscriptions, and pricing are the frameworks many services businesses are relying on to start new business models and fine-tune existing ones. Cloud ERP vendors who prioritize these have a clear view of what matters most to prospects and customers.
  • Live and build apps by the mantra “own the process, own the market”. Configure-Price-Quote (CPQ) and Quote-to-Cash (QTC) are two selling processes services and manufacturing companies rely on for revenue daily and struggle with. Born-in-the-cloud CPQ and QTC competitors on the Salesforce platform have the fastest moving roadmaps and release cadences of any across the platform’s broad ecosystem. The most innovative Services-focused Cloud ERP providers look to own opportunity-to-revenue with the same depth and expertise as the CPQ and QTC competitors do.

Sep 18

Seven Ways Microsoft Redefined Azure For The Enterprise And Emerged A Leader

  • cloud startupsAs of Q2, 2016 Microsoft Azure has achieved 100% year-over-year revenue growth and now has the 2nd largest market share of the Cloud Infrastructure Services market according to Synergy Research.
  • Microsoft’s FY16 Q4 earnings show that Azure attained 102% revenue growth in the latest fiscal year and computing usage more than doubling year-over-year.
  • 451 Research predicts critical enterprise workload categories including data, analytics, and business applications will more than double from 7% to 16% for data workloads and 4% to 9% for business applications.
  • Cloud-first workload deployments in enterprises are becoming more common with 38% of respondents to a recent 451Research survey stating their enterprises are prioritizing cloud over on-premise.

451 Research’s latest study of cloud computing adoption in the enterprise, The Voice of the Enterprise: Cloud Transformation – Workloads and Key Projects provides insights into how enterprises are changing their adoption of public, private and hybrid cloud for specific workloads and applications. The research was conducted in May and June 2016 with more than 1,200 IT professionals worldwide. The study illustrates how quickly enterprises are adopting cloud-first deployment strategies to accelerate time-to-market of new apps while reducing IT costs and launch new business models that are by nature cloud-intensive. Add to this the need all enterprises have to forecast and track cloud usage, costs and virtual machine (VM) usage and value, and it becomes clear why Amazon Web Services (AWS) and Microsoft Azure are now leaders in the enterprise. The following graphic from Synergy Research Group’s latest study of the Cloud Infrastructure Services provides a comparison of AWS, Microsoft Azure, IBM, Google, and others.

Cloud Infrastructure Services

Seven Ways Microsoft Is Redefining Azure For The Enterprise

Being able to innovate faster by building, deploying and managing applications globally on a single cloud platform is what many enterprises are after today. And with over 100 potential apps on their cloud roadmaps, development teams are evaluating cloud platforms based on their potential contributions to new app development and business models first.

AWS and Microsoft Azure haven proven their ability to support new app development and deployment and are the two most-evaluated cloud platforms with dev teams I’ve talked with today. Of the two, Microsoft Azure is gaining momentum in the enterprise.

Here are the seven ways Microsoft is making this happen:

  • Re-orienting Microsoft Azure Cloud Services strategies so enterprise accounts can be collaborators in new app creation. Only Microsoft is coming at selling Cloud Services in the enterprise from the standpoint of how they can help do what senior management teams at their customers want most, which is make their app roadmap a reality. AWS is excellent at ISV and developer support, setting a standard in this area.
  • Giving enterprises the option of using existing relational SQL databases, noSQL data stores, and analytics services when building new cloud apps. All four dominant cloud platforms (AWS, Azure, Google, and IBM) support architectures, frameworks, tools and programming languages that enable varying levels of compatibility with databases, data stores, and analytics. Enterprises that have a significant amount of their legacy app inventory in .NET are choosing Azure for cloud app development. Microsoft’s support for Node.js, PHP, Python and other development languages is at parity with other cloud platforms. Why Microsoft Azure is winning in this area is the designed-in support for legacy Microsoft architectures that enterprises standardized their IT infrastructure on years before. Microsoft is selling a migration strategy here and is providing the APIs, web services, and programming tools to enable enterprises to deliver cloud app roadmaps faster as a result. Like AWS, Microsoft also has created a global development community that is developing and launching apps specifically aimed at enterprise cloud migration.  Due to all of these factors, both AWS and Microsoft are often considered more open cloud platforms by enterprises than others. In contrast, Salesforce platforms are becoming viewed as proprietary, charging premium prices at renewal time. An example of this strategy is the extra 20% Salesforce charges for Lightning experience at renewal time according to Gartner in their recent report, Salesforce Lightning Sales Cloud and Service Cloud Unilaterally Replaced Older Editions; Negotiate Now to Avoid Price Increases and Shelfware Published 31 May 2016, written by analysts Jo Liversidge, Adnan Zijadic.
  • Simplifying cloud usage monitoring, consolidated views of cloud fees and costs including cost predictions and working with enterprises to create greater cloud standardization and automation. AWS’ extensive partner community has solutions that address each of these areas, and AWS’ roadmap reflects this is a core focus of current and future development. The AWS platform has standardization and automation as design objectives for the platform. Enterprises evaluating Azure are running pilots to test the Azure Usage API, which allows subscribing services to pull usage data. This API supports reporting to the hourly level, resource metadata information, and supports Showback and Chargeback models. Azure deployments in production and pilots I’ve seen are using the API to build web services and dashboards to measure and predict usage and costs.
  • Openly addressing Total Cost of Ownership (TCO) concerns and providing APIs and Web services to avoid vendor lock-in. The question of data independence and TCO dominates sustainability and expansion of all cloud decisions. From the CIOs, CFOs and design teams I’ve spoken with, Microsoft and Amazon are providing enterprises assistance in defining long-term cost models and are willing to pass along the savings from economies of scale achieved on their platforms. Microsoft Azure is also accelerating in the enterprise due to the pervasive adoption of the many cloud-based subscriptions of Office365, which enables enterprises to begin moving their workloads to the cloud.
  • Having customer, channel, and services all on a single, unified global platform to gain greater insights into customers and deliver new apps faster. Without exception, every enterprise I’ve spoken with regarding their cloud platform strategy has multichannel and omnichannel apps on their roadmap. Streamlining and simplifying the customer experience and providing them with real-time responsiveness drive the use cases of the new apps under development today. Salesforce has been successful using their platform to replace legacy CRM systems and build the largest community of CRM and sell-side partners globally today.
  • Enabling enterprise cloud platforms and apps to globally scale. Nearly every enterprise looking at cloud initiatives today needs a global strategy and scale. From a leading telecom provider based in Russia looking to scale throughout Asia to financial services firms in London looking to address Brexit issues, each of these firms’ cloud apps roadmaps is based on global scalability and regional requirements. Microsoft has 108 data centers globally, and AWS operates 35 Availability Zones within 13 geographic Regions around the world, with 9 more Availability Zones and 4 more Regions coming online throughout the next year. To expand globally, Salesforce chose AWS as their preferred cloud infrastructure provider. Salesforce is not putting their IOT and earlier Heroku apps on Amazon. Salesforces’ decision to standardize on AWS for global expansion and Microsoft’s globally distributed data centers show that these two platforms have achieved global scale.
  • Enterprises are demanding more control over their security infrastructure, network, data protection, identity and access control strategies, and are looking for cloud platforms that provide that flexibility. Designing, deploying and maintaining enterprise cloud security models is one of the most challenging aspects of standardizing on a cloud platform. AWS, Azure, Google and IBM all are prioritizing research and development (R&D) spending in this area. Of the enterprises I’ve spoken with, there is an urgent need for being able to securely connect virtual machines (VMs) within a cloud instance to on-premise data centers. AWS, Azure, Google, and IBM can all protect VMs and their network traffic from on-premise to cloud locations. AWS and Azure are competitive to the other two cloud platforms in this area and have enterprises running millions of VMs concurrently in this configuration and often use that as a proof point to new customers evaluating their platforms.

Bottom line: Amazon AWS and Microsoft Azure are the first cloud platforms proving they can scale globally to support enterprises’ vision of world-class cloud app portfolio development.

Sources:

451 Research: The Voice of the Enterprise: Cloud Transformation – Workloads and Key Projects

Gartner Magic Quadrant for Cloud Infrastructure as a Service, Worldwide 2016 Reprint

Microsoft Earnings Release FY16 Q4 – Azure revenue grows 102% year-over-year

Synergy Research Group’s latest study of the Cloud Infrastructure Services

 

Jul 30

5 Ways Brexit Is Accelerating AWS And Public Cloud Adoption

  • London sykline duskDeutsche Bank estimates AWS derives about 15% of its total revenue mix or has attained a $1.5B revenue run rate in Europe.
  • AWS is now approximately 6x the size of Microsoft Azure globally according to Deutsche Bank.

These and other insights are from the research note published earlier this month by Deutsche Bank Markets Research titled AWS/Cloud Adoption in Europe and the Brexit Impact written by Karl Keirstead, Alex Tout, Ross Sandler, Taylor McGinnis and Jobin Mathew.  The research note is based on discussions the research team had with 20 Amazon Web Services (AWS) customers and partners at the recent AWS user conference held in London earlier this month, combined with their accumulated research on public cloud adoption globally.

These are the five ways Brexit will accelerate AWS and public cloud adoption:

  • The proliferation of European-based data centers is bringing public cloud stability to regions experiencing political instability. AWS currently has active regions in Dublin and Frankfurt, with the former often being used by AWS’ European customers due to the broader base of services offered there. An AWS Region is a physical geographic location where there is a cluster of data centers. Each region is made up of isolated locations known as availability zones. AWS is adding a third European Union (EU) region in the UK with a go-live date of late 2016 or early 2017. Microsoft has 2 of its 26 global regions in Europe, with two more planned in the UK.  Google’s Cloud Platform (GCP) has just one region active in Europe. The following Data Center Map provides an overview of data centers AWS, Microsoft Azure and GCP have in Europe today and planned for the future.

Data Center Map

  • Brexit is making data sovereignty king. European-based enterprises have long been cautious about using cloud platforms to store their many forms of data. Brexit is accelerating the needs European enterprises have for greater control over their data, especially those based in the UK.  Amazon’s planned third EU region based in London scheduled to go live in late 2016 or early 2017 is well-timed to capitalize on this trend.
  • Up-front costs of utilizing AWS are much lower and increasingly trusted relative to more expensive on-premise  IT platforms. Brexit is having the immediate effect of slowing down sales cycles for managed hosting, enterprise-wide hardware and software maintenance agreements. The research team found that the uncertainty of just how significant the economic impact Brexit will have on the European economies is making companies tighten capital expense (CAPEX) budgets and trim expensive maintenance agreements.  UK enterprises are reverting to OPEX spending that is already budgeted.
  • CEOs are pushing CIOs to get out of high-cost hardware and on-premise software agreements to better predict operating costs faster thanks to Brexit. The continual pressure on CIOs to reduce the high hardware and software maintenance costs is accelerating thanks to Brexit. Because no one can quantify with precision just how Brexit will impact European economies, CEOs, and senior management teams want to minimize downside risk now. Because of this, the cloud is becoming a more viable option according to Deutsche Bank. One reseller said that public cloud computing platforms are a great answer to a recession, and their clients see Brexit as a catalyst to move more workloads to the cloud.
  • Brexit will impact AWS Enterprise Discount Program (EDP) revenues, forcing a greater focus on incentives for low-end and mid-tier services. Deutsche Bank Markets Research team reports that AWS has this special program in place for its very largest customers. Under an EDP, AWS will give price discounts to large customers that commit to a full year (or more) and pay upfront, in many cases with minimum volume increases. One AWS partner told Deutsche Bank that they’re aware of one EDP payment of $25 million. In the event of a recession in Europe, it’s possible that such payments could be at risk. These market dynamics will drive AWS to promote further low- and mid-tier services to attract new business to balance out these larger deals.

Jun 27

55% of Enterprises Predict Cloud Computing Will Enable New Business Models In Three Years

  • NYC Skyline Louis Columbus69% of enterprises expect to make moderate-to-heavy cloud investments over the next three years as they migrate core business functions to the cloud.
  • 44% of enterprises are relying on cloud computing to launch new business models today, predicting this will increase to 55% in three years.
  • 32% are using cloud computing to streamline their supply chains today. Senior executives predict this figure will increase to 56% in three years, a 24% increase.
  • 59% say they use cloud-based applications and platforms to better manage and analyze data today, reflecting the increasing importance of analytics and big data enterprise-wide.

These and other insights are from a recent Oxford Economics and SAP study of cloud computing adoption, The Cloud Grows Up. You can find the study here (no opt-in). In late 2014, Oxford Economics and SAP collaborated on a survey of 200 senior business and IT executives globally regarding the adoption and use of cloud technology. Oxford Economics’ analysts compared the latest survey with one completed in 2012 looking for leading indicators of cloud adoption in enterprises. They found many C- and VP-level executives are taking a more pragmatic, realistic view of what cloud technologies can contribute. Enterprises are moving beyond the hype of cloud computing, putting in the hard work of launching new business models while driving top-line revenue growth.

Oxford Economics has made two interactive infographics available from the study here. The first details cloud adoption, and the second, on how enterprises see cloud computing changing their business models over the next three years.  As cloud platforms and applications become a scalable, secure and for the most part reliable, once-elusive enterprise goals and new business models become attainable.

Key take-aways from the study include the following:

  • Top–line growth (58%), collaboration among employees (58%), and supply chain (56%) are the three areas enterprises expect cloud computing to impact most in three years. The greatest gains will be in the areas of supply chain (a 24% jump), collaboration among employees (20%) and increased agility and responsiveness to customers (17%). The following graphic compares where enterprises are seeing cloud computing’s impact today and a prediction of each areas’ impact in three years.

Figure 2

  • Developing new products & services (61%), new lines of business (51%) and entering new markets (40%) are three key areas cloud computing is transforming enterprises.  With a 35% increase, developing new products and services is the most dominant strategy enterprises are relying on to grow their businesses. See the comparison below for further details.       

developed new services using cloud computing 2

  • 58% of enterprises predict their use of cloud computing will increase top-line revenue growth in three years. 67% see the cloud changing skill sets and transforming the role of HR. The following graphic illustrates the first of two interactive infographics Oxford Economics and SAP are providing with the report. You can access the infographic here.

clouds enduring promise

  • 74% of enterprises say innovation and R&D is somewhat or mostly cloud-based. 61% say they will have developed new products and services in three years as a result of adopting cloud technologies.  The following graphic illustrates the second of two interactive infographics Oxford Economics and SAP are providing with the report. You can access the infographic here.

infographic the cloud grows up

  • Enterprise cloud security strategies are maturing rapidly. From 2012 to 2014, strategies for ensuring the security of API and interfaces increased 24%, from 20% to 44%. Additional concerns that increased include virus attacks (up 19%), and identity theft (up 16%).  The following figure compares the top concerns enterprises have in the area of cloud security.

cloud security

  • 31% of respondents say the cloud computing has had a transformative impact on their business.  48%, nearly half, state that cloud computing has had a moderate impact on business performance. The majority believe cloud computing will have a significant impact on top-line revenue growth in three years.

Figure 31

  • 67% of enterprises say that marketing, purchasing, and supply chain are somewhat and mostly cloud-based as of today. Cloud-based adoption has reached an inflection point in enterprises, with functional areas having the largest percentage of workloads running on cloud-based apps. Enterprise senior executives see the potential to improve innovation, R&D, and time-to-market via greater collaboration using cloud technologies.