- Providing real-time responses 24/7 on any mobile device anywhere is the new normal in 2017.
- 54% of B2B companies selling online report that their customers are using smartphones to research purchases, and 52% say that their customers are using smartphones to buy online
- The majority of CEOs (86%) see mobility as essential to creating and sustaining a competitive advantage.
- Industrial manufacturing CEOs prioritize mobility (73%), cybersecurity (72%) and data mining and analysis (70%) as their top three priorities for attaining competitive advantage.
PriceWaterhouse Coopers (PWC) annually surveys global CEOs to learn about their current and future priorities, plans and technology adoption trends. PwC’s 18th Annual Global CEO Survey (free, no opt-in) is based on interviews with 1,322 CEOs located in 77 countries. The survey provides valuable insights into the strategic direction enterprises are taking with technology investments.
The following graphic from the report illustrates the strategic importance CEOs are placing on mobile technologies:
Competing On Accuracy, Speed And Responsiveness Is How You Win Today
CEOs at the world’s leading industrial manufacturing companies share a common focus on how to continually improve the accuracy, speed, and responsiveness of their companies using mobile technologies. A recent study by research firm Forrester shows that 54% of B2B companies selling online report that their customers are using smartphones to research purchases, and 52% say that their customers are using smartphones to buy online.
Being ready to respond with complete quotes, pricing, order status, delivery dates, updated service information on a 24/7 basis on any device anywhere is the new normal. Amazon’s ability to take orders, process, ship and deliver them in some cases all within 24 hours is driving up expectations in B2B selling too. And a key part of making sure you can compete in 2017 and beyond is by having an integrated mobile apps strategy that provides customers the information they need when they need it.
The following are five ways real-time mobile apps delight customers and streamline manufacturing:
- Enabling configure, price and quoting (CPQ) apps to provide real-time updates on any device, anywhere wins more deals and keeps customers sold on doing business with you. According to a recent Gartner study, the competitor in any deal who is the first to produce a quality quote will win the deal 70% of the time. Given the competitive intensity around delivering the first, highest quality quote possible, having mobile apps that are based on real-time Salesforce and SAP integration is a must-have. From the very first interaction with any new prospect to closing a sale, having mobile apps that deliver real-time information gained through CRM and ERP integration is key.
- Being able to answer “When will my order ship?” anytime, anywhere on any device, at any time is what it takes to win and keep customers today. It’s time to challenge the outdated assumption that customers only want to speak with you when your legacy systems are available. The best manufacturers are modeling Amazon today, providing real-time alerts on when orders are being prepared to ship, providing e-mail and text alerts and delivery times and shipping information. Mobile apps need to be used to extend past the boundaries of legacy systems that don’t meet the minimum expectations of customers today. The CEO of an electrical machine manufacturer told me that once he was able to launch mobile apps for his customers, there was a 76% reduction in order status calls to the enterprise sales teams and 13% increase in sales the first six months these apps were available.
- Getting in control of quality and being able to manage customer expectations and relationships to positive outcomes with accurate data. Quality, compliance, inbound inspection and quality assurance are applications that often are isolated from CRM, ERP and customer service systems. The lack of integration between these systems wastes valuable time in getting back to customers on how best to solve quality problems and address questions they may have. That’s why it’s so important to have compliance, product quality, and quality assurance data delivered on mobile apps in a context the customer can use. Having this data available over mobile apps, enabled for customers’ use via Salesforce integration, reduces problem escalations and provides greater accuracy. Enabling quality data on mobile apps also helps to unify operations and production, giving everyone on the shop floor visibility into quality levels of order and long-term, over product lines being produced. Making data and reporting available company-wide often requires integration to SAP ERP and legacy systems, with companies including enosiX emerging as market leaders.
- Reducing Field Service call cancellations and delays by accurately communicating parts and staffing requirements shows respect for your customers. There is nothing more frustrating from a customer’s perspective than waiting for a field service technician to show up, only to find they don’t have the necessary parts or are told the problem was completely different than the one that needs to be solved. By enabling Salesforce integration with field service apps and providing customers with real-time alerts to their mobile devices via an app, field service calls can lead to solved problems and higher customer satisfaction faster.
- Providing customers with real-time updates via mobile apps on delivery dates driven by supply chain conditions helps in managing expectations while giving production planners the information they need to meet demand. Manufacturers whose business models rely on rapid inventory turns, tight production schedules, and thin margins are the leading early adopters of mobile technologies for logistics and supply chain coordination. Enabling mobile apps to provide the latest updates on Available-To-Promise (ATP), Capable-To-Promise (CTP) requires SAP integration across the Salesforce platform. Being able to provide updates on how suppliers are potentially impacting their delivery dates on orders is invaluable in managing expectations over the long-term.
- U.S. retailer supply chain operations who have adopted data and analytics have seen up to a 19% increase in operating margin over the last five years.
- Design-to-value, supply chain management and after-sales support are three areas where analytics are making a financial contribution in manufacturing.
- 40% of all the potential value associated with the Internet of Things requires interoperability between IoT systems.
These and many other insights are from the McKinsey Global Institute’s study The Age of Analytics: Competing In A Data-Driven World published in collaboration with McKinsey Analytics this month. You can get a copy of the Executive Summary here (28 pp., free, no opt-in, PDF) and the full report (136 pp., free, no opt-in, PDF) here. Five years ago the McKinsey Global Institute (MGI) released Big Data: The Next Frontier For Innovation, Competition, and Productivity (156 pp., free no opt-in, PDF), and in the years since McKinsey sees data science adoption and value accelerate, specifically in the areas of machine learning and deep learning. The study underscores how critical integration is for gaining greater value from data and analytics.
Key takeaways from the study include the following:McKinsey Analytics
- Location-based services and U.S. retail are showing the greatest progress capturing value from data and analytics. Location-based services are capturing up to 60% of data and analytics value today predicted by McKinsey in their 2011 report. McKinsey predicts there are growing opportunities for businesses to use geospatial data to track assets, teams, and customers across dispersed locations to generate new insights and improve efficiency. U.S. Retail is capturing up to 40%, and Manufacturing, 30%. The following graphic compares the potential impact as predicted in McKinsey’s 2011 study with the value captured by segment today, including a definition of major barriers to adoption.
- Machine learning’s greatest potential across industries includes improving forecasting and predictive analytics. McKinsey analyzed the 120 use cases their research found as most significant in machine learning and then weighted them based on respondents’ mention of each. The result is a heat map of machine learning’s greatest potential impact across industries and use case types. Please see the report for detailed scorecards of each industry’s use case ranked by impact and data richness.
- Machine learning’s potential to deliver real-time optimization across industries is just starting to evolve and will quickly accelerate in the next three years. McKinsey analyzed the data richness associated with each of the 300 machine learning use cases, defining this attribute as a combination of data volume and variety. Please see page 105 of the study for a thorough explanation of McKinsey’s definition of data volume and variety used in the context of this study The result of evaluating machine learning’s data richness by industry is shown in the following heat map:
- Enabling autonomous vehicles and personalizing advertising are two of the highest opportunity use cases for machine learning today. Additional use cases with high potential include optimizing pricing, routing, and scheduling based on real-time data in travel and logistics; predicting personalized health outcomes, and optimizing merchandising strategy in retail. McKinsey identified 120 potential use cases of machine learning in 12 industries and surveyed more than 600 industry experts on their potential impact. They found an extraordinary breadth of potential applications for machine learning. Each of the use cases was identified as being one of the top three in an industry by at least one expert in that industry. McKinsey plotted the top 120 use cases below, with the y-axis shows the volume of available data (encompassing its breadth and frequency), while the x-axis shows the potential impact, based on surveys of more than 600 industry experts. The size of the bubble reflects the diversity of the available data sources.
- Designing an appropriate organizational structure to support data and analytics activities (45%), Ensuring senior management involvement (42%), and designing effective data architecture and technology infrastructure (36%) are the three most significant challenges to attaining data and analytics objectives. McKinsey found that the barriers break into the three categories: strategy, leadership, and talent; organizational structure and processes; and technology infrastructure. Approximately half of executives across geographies and industries reported greater difficulty recruiting analytical talent than any other kind of talent. 40% say retention is also an issue.
- U.S. retailer supply chain operations who have adopted data and analytics have seen up to a 19% increase in operating margin over the last five years. Using data and analytics to improve merchandising including pricing, assortment, and placement optimization is leading to an additional 16% in operating margin improvement. The following table illustrates data and analytics’ contribution to U.S. retail operations by area.
- Design-to-value, supply chain management and after-sales support are three areas where analytics are making a financial contribution in manufacturing. McKinsey estimates that analytics have increased manufacturer’s gross margins by as much as 40% when used in design-to-value workflows and projects. Up to 15% of after-sales costs have been reduced through the use of analytics that includes product sensor data analysis for after-sales service. There are several interesting companies to watch in this area, with two of the most innovative being Sight Machine and enosiX, with the latter enabling real-time integration between SAP and Salesforce systems. The following graphic illustrates the estimated impact of analytics on manufacturing financial performance by area.
Integrating ERP, CRM, and legacy systems lead to greater manufacturing innovation, setting the foundation to move beyond business models that don’t stay in step with customers’ fast-changing needs. Bringing contextual intelligence into manufacturing that centers on customers’ unique, fast-changing requirements is a must-have to keep growing sales profitably. By integrating ERP, CRM, SCM, pricing and legacy systems together, manufacturers can provide customers what they want most, and that’s accurate, fast responses to their questions and perfect orders delivered.
Integration Powers Manufacturing Innovation
Enabling a faster pace of innovation in manufacturing starts by using systems and process integration as a growth catalyst to profitably grow.There is a myriad of ways integration will transform manufacturing in 2017, and the top 10 ways are presented below:
- Real-time visibility across selling, pricing, product, manufacturing and service improves the speed of customer response and makes planning easier. By integrating legacy SAP ERP systems with CRM, pricing, product catalog, Manufacturing Execution Systems (MES) and service, telling customers in real-time the status of their orders is possible. Having real-time data on manufacturing operations provides planners with the visibility they need to optimize production schedules, including fine-tuning Material Requirements Planning (MRP). By orchestrating these areas of manufacturing more efficiently, customer satisfaction increases, the potential of upselling and cross-sell improves and less order fulfillment errors turn into higher profits.
- Making analytics the fuel manufacturing needs to move faster, attaining time-to-market goals and exceeding customer expectations. One of the quickest ways manufacturers are going to use integration to fuel greater growth in 2017 is by using analytics to measure operations from the customer’s perspective first. From quality management to order fulfillment and meeting delivery dates, every manufacturer has the baseline data they need to begin a customer-driven analytics strategy today. Integration is the catalyst that is making this happen. Making quality a company-wide focus begins with real-time integration of quality management and broader IT systems. enosiX has taken a unique approach to real-time integration, streamlining quality inspections and inventory control for beverage equipment manufacturer Bunn.
- Improving new product success rates by integrating CRM, pricing, product catalog, service, and Product Lifecycle Management (PLM) systems are enabling manufacturers to create new product lines that drive new business models. For consumer electronics and high-tech products manufacturers serving B2C (business to consumer) and Business to Business (B2B), speed and time-to-market are a core part of their business models. Capitalizing on the speed of customers’ changing requirements is more important to stay ins type with than competitors, however. To do this, manufacturers capturing feedback from service and PLM systems and then putting it into context using CRM systems can innovate faster than competitors who track each other instead of customers.
- Configure-Price-Quote (CPQ) will continue to be one of the most effective strategies manufacturers can use for accelerating sales in 2017, made possible by the real-time integration between ERP, CRM, pricing and manufacturing systems. Winning new customers and closing deals often comes down to being faster than competitors at delivering accurate, complete quotes and proposals. By integrating CRM, ERP, and pricing systems manufacturers can trim days and in some cases weeks and months off of how long it takes to produce a quote or proposal. CPQ will continue to accelerate in 2017, gaining momentum as more manufacturers move beyond their manually-based methods of quoting and opt for more integrated approaches to excelling at this vital selling activity.
- Industry 4.0’s many advantages including creating smart factories are dependent on the real-time integration of traditional IT and manufacturing systems increasing production speed and quality. Engraining greater contextual intelligence into every phase of manufacturing increases shop-floor visibility. It also makes planning more efficient and customer-driven. The key to revitalizing existing production centers and getting them started on the journey to becoming smart factories depends on the real-time integration of IT and manufacturing systems.
- Personalizing pricing strategies by customer persona and segment using real-time integration between CRM, pricing, accounting and finance systems to optimize profitability. Manufacturers doing this today also have propensity models that define which customers are most and least likely to accept up-sell and cross-sell offers. For many manufacturers, this level of pricing precision is possible today with greater systems integration. By having pricing strategies defined by persona and segment, measuring just how much speed and time-to-market matters to each is possible by measuring sales rates of new products and services.
- IT system security companywide improves with tighter real-time integration as long-standing legacy systems are updated to enable greater connectivity with newer systems. When manufacturers choose to pursue a more focused, urgent strategy fo systems integration to improve manufacturing performance, system security often improves companywide. It’s because longstanding legacy systems, often the most vulnerable to unauthorized use, get re-evaluated at the operating system and integration levels. The result is company-wide IT security improves when real-time integration is attained. For manufacturers where 70% or more of their materials and costs are from outside their owned production centers, this is more important in 2017 than ever before.
- Sensor data generated from the Internet of Things (IoT) combined with advanced analytics is transforming manufacturing today and will accelerate in 2017. Manufacturers with globally-based operations are piloting and using IoT strategies in daily operations today. A few are working with semiconductor manufacturers to design in their specific requirements at the chip level. Having real-time integration in place between ERP, CRM, pricing and services systems provides the scalable, secure foundation to build advanced analytics and IoT platforms that can scale over the long-term.
- Market leaders in manufacturing are designing in real-time integration to their connected products, enabling new sources of revenue. General Electric’s approach to monitoring jet engines in flight and providing real-time data to aircraft manufacturers including Boeing and airlines globally is an example of how integration is enabling entirely new business models. A global aerospace manufacturer who requested anonymity is working with integrated circuit developers Broadcom, Intel, and Qualcomm to create chipsets that can provide sensor-based data on an entire jet’s health in real-time anywhere in the world, anytime.
- Greater visibility and speed are coming to supply chains, enabling manufacturers the ability to take an accepted quote and turn it into build instructions in real-time. Automating the steps of taking a quote and turning it into a bill of materials, scheduling the best possible work teams, and orchestrating parts and materials all is becoming automated from quote approval. From a customer’s perspective, all they see is the approved quote and activity starting immediately to provide the products they ordered. By having this level fo real-time supply chain integration, speed becomes the new normal and customer expectations are met and often exceeded.
- Enabling real-time integration across on-premise and cloud platforms often involves integrating SAP, Salesforce, third-party and legacy systems. 2017 will be a break-out year for real-time integration between SAP, Salesforce, and third party systems in support of Internet of Things and Industrial Analytics.
- McKinsey Global Institute predicts that the Internet of Things (IoT) will generate up to $11T in value to the global economy by 2025.
- Predictive and prescriptive maintenance of machines (79%), customer/marketing related analytics (77%) and analysis of product usage in the field (76%) are the top three applications of Industrial Analytics in the next 1 to 3 years.
Real-Time Integration Is the Cornerstone Of Industrial Analytics
Industrial Analytics (IA) describes the collection, analysis and usage of data generated in industrial operations and throughout the entire product lifecycle, applicable to any company that is manufacturing and selling physical products. It involves traditional methods of data capture and statistical modeling. Enabling legacy, third-party and Salesforce, SAP integration is one of the most foundational technologies that Industrial Analytics relies on today and will in the future. Real-time integration is essential for enabling connectivity between Internet of Things (IoT) devices, in addition to enabling improved methods for analyzing and interpreting data. One of the most innovative companies in this area is enosiX, a leading global provider of Salesforce and SAP integration applications and solutions. They’re an interesting startup to watch and have successfully deployed their integration solutions at Bunn, Techtronic Industries, YETI Coolers and other leading companies globally.
A study has recently been published that highlights just how foundational integration will be to Industrial Analytics and IoT. You can download the Industrial Analytics Report 2016/17 report here (58 pp., PDF, free, opt-in). This study was initiated and governed by the Digital Analytics Association e.V. Germany (DAAG), which runs a professional working group on the topic of Industrial Analytics. Research firm IoT Analytics GmbH was selected to conduct the study. Interviews with 151 analytics professionals and decision-makers in industrial companies were completed as part of the study. Hewlett-Packard Enterprise, data science service companies Comma Soft and Kiana Systems sponsored the research. All research and analysis related steps required for the study including interviewing respondents, data gathering, data analysis and interpretation, were conducted by IoT Analytics GmbH. Please see page 52 of the study for the methodology.
- With real-time integration, organizations will be able to Increase revenue (33.1%), increase customer satisfaction (22.1%) and increase product quality (11%) using Industrial Analytics. The majority of industrial organizations see Industrial Analytics as a catalyst for future revenue growth, not primarily as a means of cost reduction. Upgrading existing products, changing the business model of existing products, and creating new business models are three typical approaches companies are taking to generate revenue from Industrial Analytics. Integration is the fuel that will drive Industrial Analytics in 2017 and beyond.
- For many manufacturers, the more pervasive their real-time SAP integration is, the more effective their IoT and Industrial Analytics strategies will be. Manufacturers adopting this approach to integration and enabling Industrial Analytics through their operations will be able to attain predictive and prescriptive maintenance of their product machines (79%). This area of preventative maintenance is the most important application of Industrial Analytics in the next 1 – 3 years. Customer/marketing-related analytics (77%) and analysis of product usage in the field (76%) are the second- and third-most important. The following graphic provides an overview of the 13 most important applications of Industrial Analytics.
- 68% of decision-makers have a company-wide data analytics strategy, 46% have a dedicated organizational unit and only 30% have completed actual projects, further underscoring the enabling role of integration in their analytics and IoT strategies. The study found that out of the remaining 70% of industrial organizations, the majority of firms have ongoing projects in the prototyping phase.
- Business Intelligence (BI) tools, Predictive Analytics tools and Advanced Analytics Platforms will be pivotal to enabling industrial data analysis in the next five years. Business Intelligence Tools such as SAP Business Objects will increase in importance to industrial manufacturing leaders from 39% to 77% in the next five years. Predictive Analytics tools such as HPE Haven Predictive Analytics will increase from 32% to 69%. The role of spreadsheets used for industrial data analytics is expected to decline (i.e., 27% think it is important in 5 years vs. 54% today).
- The Industrial Analytics technology stack is designed to scale based on the integration of legacy systems, industrial automation apps and systems, MES and SCADA systems integration combined with sensor-based data. IoT Analytics GmbH defines the technology stack based on four components inclouding data sources, necessary infrastructure, analytics tools, and applications. The following graphic illustrates the technology stack and underscores how essential integration is to the vision of Industrial Analytics being realized.
- Industrial Internet of Things (IIoT) and Industry 4.0 will rely on real-time integration to enable an era of shop-floor smart sensors that can make autonomous decisions and trade-offs regarding manufacturing execution. IoT Analytics GmbH predicts this will lead to smart processes and smart products that communicate within production environments and learn from their decisions, improving performance over time. The study suggests that Manufacturing Execution System (MES) agents will be vertically integrated into higher level enterprise planning and product change management processes so that these organizations can synchronously orchestrate the flow of data, rather than go through each layer individually.
- Gartner predicts CPQ will continue to be one of the hottest enterprise apps for the foreseeable future, predicting a 20% annual growth rate through 2020 with the majority being from cloud-based solutions. Legacy on-premise vendors including SAP’s Variant Configurator (VC) are going to face increasingly strong headwinds in the market as a result.
- The CPQ market continues to grow as companies replace legacy on-premise CPQ apps and outdated ERP quoting and ordering apps with cloud-based CPQ solutions.
These and many other insights are from the recently published Gartner Market Guide for Configure, Price and Quote Application Suites (PDF, client access required) by Mark David Lewis and Guneet Bharaj on October 27th of this year. CPQ selling strategies are part of the broader Quote-To-Cash (QTC) business process that encompasses, quotes, contracts, order management and billing. CPQ market leaders also are offering solutions that support the creation of quotes and capturing of orders across multiple channels of customer interaction (such as direct sales, contact center, resellers and self-service). Cloud- and SaaS-based CPQ systems scale faster across multiple channels and often have higher adoption rates than their legacy on-premise counterparts due to more intuitive app designs and better integration with Cloud-based Customer Relationship Management (CRM), Sales Force Automation (SFA) and incentives systems.
What makes the Market Guide so noteworthy is that it is the first research piece on CPQ published by a major analyst firm in several years.
Key takeaways from the study include the following:
- Microsoft Azure and the Salesforce platform are benefiting the most from the intense competition in the CPQ market today. Microsoft Azure is emerging as the enterprise leader from a platform perspective, evidenced by the points made in my previous post, Seven Ways Microsoft Redefined Azure For The Enterprise And Emerged A Leader. Being able to scale globally and provide greater control over security and openly address Total Cost of Ownership (TCO) concerns of enterprises are a few of the many factors driving Azure’s adoption. Salesforce has gone in a different direction in the CPQ market, choosing to acquire SteelBrick earlier this year. Salesforce in effect became a competitor with its partners in the CPQ market by doing this. According to Gartner, SteelBrick is a good solution for high-tech assemble to order (ATO) and software companies. Last month Salesforce founder and CEO Marc Benioff was interviewed at the Intel Capital Global Summit, and the video is available here. At 11 min., 20 seconds, he says that “Steelbrick is not for all customers, so Apttus still has a tremendous opportunity.” Earlier this year Apttus announced their entire QTC suite is now available on Microsoft Dynamics, showing just how critical it is for CPQ engineering teams to move fast from a platform strategy perspective to keep their companies growing.
- Omnichannel and digital commerce is a high-growth area of CPQ as companies seek to improve buying experiences across all customer-facing channels. For many companies, their omnichannel selling strategies and initiatives are proliferating, driven by how quickly customers are changing the channels they buy through. Leading CPQ and QTC suites are now offering digital commerce and omnichannel apps integrated into their main app platforms. They are having initial success in B2B selling scenarios where self-service configuration is needed. Gartner mentions Apttus, Oracle CPQ Cloud, and SAP as having the most robust digital commerce offerings today.
- CPQ vendors are attempting to reinvent themselves by innovating faster and more broadly than before. Relying on machine learning to recommend the optimal incentives, pricing, and terms to close more deals and increase up-sell and cross-sell revenues through guided selling apps is a fascinating area of innovation today. Apttus’ Intelligent Quote-to-Cash Agent Max, Salesforce’s Einstein and others exemplify this area of development. Rapid advances and improvements in visualization, 3D modeling and Configuration Lifecycle Management (CLM) from Configit also illustrate how quickly innovation is changing the landscape. Gartner also mentions intelligent negotiation guidance, mobile configuration support, estimated compensation, verticalization, and deeper integration with back-end fulfillment systems as being additional areas where innovation is redefining the competitive landscape.
- Improving promotion, incentive and rebate performance across a multitier selling network based on machine learning algorithms is redefining the QTC competitive landscape. Eighteen CPQ vendors are profiled in the market guide, many of them selling into industries that rely on complex multitier distribution, selling and support networks for the majority of their revenue. It’s clear many are moving in the direction of using machine learning to improve the effectiveness of promotions, incentives, and rebates across all selling channels. Being able to provide the best possible incentive to a distributor, dealer or 3rd party sales person defines which manufacturer wins the deal. Look to see more emphasis in this area in 2017 as CPQ vendors work to provide companies with the chance to steer more deals their way in channels they don’t directly control.
- The CPQ landscape will continue to consolidate as the race for new customers accelerates, driven by the need companies have for improving QTC performance. Gartner mentions how there have been major acquisitions over the last four years including Big Machines being acquired by Oracle, Salesforce acquiring SteelBrick, Configure One acquired by AutoDesk, and Cameleon Software was acquired by Pros. There are many other CPQ vendors privately for sale right now, with all of them looking to find an acquirer or company to merge with who can best complement their core technologies. Look to see the pace of acquisitions accelerate in the next year.
- I’m looking to see which CPQ vendors further distance themselves from competitors with modern and intuitive user experience design (UX). CPQ, while a necessary foundation piece for B2B use cases is evolving into the broader Quote-to-Cash umbrella. To attain its full market potential, I believe that CPQ vendors must excel at UX across all products and app experiences. I am looking forward to seeing which vendors will invest in modern and intuitive UX to drive this change in the market and deliver great experiences to customers as a result.
- From the enosiX blog, Key Takeaways From Gartner’s Market Guide For Configure, Price and Quote (CPQ) Application Suites, 2016
- Organizations are using multiple cloud models to meet their business’s needs, including private (62%), public (60%), and hybrid (26%).
- By 2018 the typical IT department will have the minority of their apps and platforms (40%) residing in on-premise systems.
These and many other insights are from IDG’s Enterprise Cloud Computing Survey, 2016. You can find the 2016 Cloud Computing Executive Summary here and a presentation of the results here. The study’s methodology is based on interviews with respondents who are reporting they are involved with cloud planning and management across their organizations. The sampling frame includes audiences across six IDG Enterprise brands (CIO, Computerworld, CSO, InfoWorld, ITworld and Network World) representing IT and security decision-makers across eight industries. The survey was fielded online with the objective of understanding organizational adoption, use-cases, and solution needs for cloud computing. A total of 925 respondents were interviewed to complete the study.
Key takeaways include the following:
- The cloud is the new normal for enterprise apps, with 70% of all organizations having at least one app in the cloud today. 75% of enterprises with greater than 1,000 employees have at least one app or platform running in the cloud today, leading all categories of adoption measured in the survey. 90% of all organizations today either have apps running in the cloud are planning to use cloud apps in the next 12 months, or within 1 to 3 years. The cloud has won the enterprise and will continue to see the variety and breadth of apps adopted accelerating in 2017 and beyond.
- Business/data analytics and data storage/data management (both 43%) are projected to lead cloud adoption in 2017 and beyond. 22% of organizations surveyed are predicting that business/data analytics will be the leading cloud application area they will migrate to in the next twelve months. 21% are predicting data storage/data management apps are a high priority area for their organizations’ cloud migration plans in 2017. Three of the market leaders in analytics are Tableau, QlikView and Microsoft Power BI. They are analyzed in this recent post from SelectHub, accessible here.
- 28% of organizations’ total IT budgets is dedicated to cloud computing next year. Of that, 45% is allocated to SaaS, 30% to IaaS and 19% to PaaS. The average investment organizations will make in cloud computing next year is $1.62M, with enterprises over 1,000 employees projected to spend $3.03M. The average investment in cloud computing remains constant in organizations with $1.62M invested in 2014, $1.56M in 2015 and $1.62M in 2016. 10% of enterprises with over 1,000 employees are projecting they will spend $10M or more on cloud computing apps and platforms throughout this year.
- CIOs, IT architects and IT networking/management control cloud spending in the enterprise. In contrast, CEOs, CIOs, and CFOs are driving small and medium business (SMB) cloud spending this year. The following graphic compares how influential the following groups and individuals are in the cloud computing purchase process.
- Just 46% of organizations are using Application Programmer Interfaces (APIs) to integrate with databases, messaging systems, portals or storage components. 40% are using them for creating connections to the application layer of their cloud and the underlying IT infrastructures. The following graphic provides insights into how APIs are being used and which teams see the most value in them.
- In 18 months the majority of organizations’ IT infrastructures will be entirely cloud-based. IDG found that in 18 months nearly one-third (28%) of all organizations interviewed will be relying on private clouds as part of their IT infrastructure. Just over a fifth (22%) will have public cloud as part of their IT infrastructure, and 10% will be using hybrid By 2018 the typical IT department will have the minority of their apps and platforms (40%) residing in on-premise systems.
- Concerns about where data is stored (43%), cloud security (41%) and vendor lock-in (21%) are the top three challenges organizations face when adopting public cloud technologies. Private and hybrid cloud adoption in organizations is also facing the challenges of cloud security and vendor lock-in. Private and hybrid cloud adoption are being slowed by a lack of the right skill sets to manage and gain the maximum value from cloud investments.
Bottom line: Defining salesforce integration strategies from the customers’ perspective that streamline every aspect of their relationship with your company drives greater revenue, earns trust and creates upsell and cross-sell opportunities in the future.
In the most competitive selling situations the company that has exceptional insights into what matters most to prospects and customers win the most deals. It’s not enough to just have a CRM system that is hard-wired into the core customer-facing processes of a business. To win more sales cycles companies are getting the most from every system they have available. From SAP Enterprise Resource Planning (ERP) systems to legacy pricing, operations, services, pricing, and CRM systems, companies winning more deals today can use Salesforce integration as a catalyst for driving more revenue.
Five Strategies For Improving Customer Relationships Using Salesforce Integration
- Making the Configure-Price-Quote (CPQ) process more efficient for customers and prospects by integrating ERP data into every quote. Today speed is a feature every system must have to stay competitive. Being able to create quotes that include the date the proposed configuration will ship and coordinate with services and programs delivery while providing order status from ERP systems is winning deals today. The tighter the ERP system integration, the better the quote accuracy in a CPQ system and the higher the chance of winning a sale. The following table shows the many benefits of having a well-integrated CPQ process.
- Creating an omni-channel experience for customers needs to start with ERP, legacy, 3rd party and Salesforce integration that sets the foundation to exceed customer experiences daily. Providing a unified experience across every channel is challenging yet attainable, with market leaders using a series of integration strategies to provide this level of insight so customers’ expectations are exceeded in every single interaction. Only by integrating CRM systems including Salesforce with SAP ERP systems can any company hope to deliver a consistent, excellent series of experiences across all channels, all the time.
- Set up sales teams for exceptional performance with tightly integrated mobile apps that accelerate sales cycles. By using mobile apps that integrate SAP ERP systems, Salesforce CRM, and legacy systems into simplified, highly efficient workflows, sales teams can close more deals without having to come back to their offices. Senior management teams can get more done using mobile apps that are an extension of their SAP ERP systems as well. Mobile apps are revolutionizing productivity thanks to SAP and Salesforce integration.
- Attaining high product quality levels that exceed customer expectations by providing every manufacturing department real-time visibility into quality inspections and inventory control. By integrating inbound inspection, inventory control, and quality management data across manufacturing, Bunn can deliver products that exceed customer expectations. Bunn’s product quality inspectors can perform and record results right at the machines being tested. The warehouse management system can scan and record inventory counts in real time to SAP. Maintaining high levels of product quality are what make Bunn’s beverage equipment machines a market standard globally today.
- Making new product launches more successful by having a tightly integrated approach to selling, producing and servicing new products that are in step with customers’ changing needs. From apparel to high-tech and financial services, customers are rapidly redefining which channels they choose to purchase through, how they choose to customize products, and which services they prefer to bundle in. Integrating Salesforce, e-commerce and ERP systems into a single, unified workflow that is designed to provide customers exactly what they need is essential for enabling new product launches to succeed. With an integrated system across Salesforce, ERP, distribution and pricing systems, new product launches can scale globally quicker and still allow for personalization to customers’ unique preferences. Salesforce integration is essential for successful new product introductions as the entire launch process gains speed, scale, and simplicity as a result.
Originally published on the enosiX blog, Five Strategies For Improving Customer Relationships Using Salesforce Integration.
- During the 2Q16 call, Google called out Cloud as the primary driver of the re-accelerating growth for Licensing and Other revenue, the first time the business has been called out in pole position.
- Recent Orbitera and Apigee acquisitions underscore Google’s new focus and aggressiveness to grow GCP. Google has spent $1B+ on Cloud M&A over the past 12 months.
- Deutsche Bank predicts GCP is preparing a series of new product announcements in September to strengthen their customer-facing roadmap further.
These and other insights are from Deutsche Bank Markets Research study, Google Getting More Aggressive In The Cloud, (client access) published 8 September 2016 by Ross Sandler Karl Keirstead, Deepak Mathivanan, Aki Aggarwal and Taylor McGinnis. Deutsche Bank found that Google is investing heavier in the cloud, making a financial commitment with over $1B in acquisitions in the past year including the recent Apigee deal. The study is based on interviews Deutsche Bank contacted with channel partners, prospects, partners, and customers. Despite the renewed focus on growth, Deutsche Bank predicts that GCP would continue to trail AWS and Microsoft Azure for the foreseeable future.
Key takeaways of the Deutsche Bank Markets Research survey include the following:
- Deutsche Bank defines the Total Available Market (TAM) enterprise IT spend in nine categories that together account for over a $1T TAM. Deutsche Bank defines the Enterprise IT spending market by combining storage, network equipment, infrastructure software, IT outsourcing and support, data management software, BI/analytics, application software and consulting Deutsche Bank sees AWS make significant progress across a wide spectrum of their taxonomy categories.
- GCP new product launches are concentrating on machine learning, data analytics and security, including data encryption and identity and access management. Google’s aggressiveness regarding the cloud is most visible from their new service announcements shown in the table below. Recent announcements include SQL Server Images, where customers can now natively spin up Microsoft database instances on GCP, akin to AWS RDS for SQL Server. GCP also announced a second generation version of Cloud SQL, its cloud-hosted alternative to MySQL and AWS Aurora. While all of these announcements provide GCP with greater potential to compete against AWS and Microsoft Azure, Google’s two larger competitors have formidable momentum in enterprises.
- Aggressive build-out of global infrastructure locations continues. Google announced during their 4Q15 earnings call they would build 12 new regions in 2016 and 2017. Of the 12 new planned GCP regions, the US Western region in Oregon opened in July 2016, and Google has said that the new Tokyo region will be available later this year, leaving ten more regions to be added in 2017.
- Google continues to believe in the importance of machine learning and artificial intelligence. Deutsche Bank interviews with GCP customers confirmed interest in using machine learning and artificial intelligence on the Cloud. Customers also perceive GCP is well ahead of AWS and Azure in this regard.
- Google is quickly hiring enterprise sales reps in an attempt to close the sales gap between themselves and AWS & Microsoft Azure. Deutsche Bank found that Google has been “hiring very aggressively” to scale its enterprise sales rep capacity and also retrofitting existing sales reps from elsewhere in Google into GCP.
- GCP is gaining share rapidly within the startup community. Deutsche Bank spoke with customers who estimated that 25% startups are using GCP today (with 75% on AWS), while another estimated the ratio to be 20%/80%. While both agreed that a couple of years ago only 10% of startups were using GCP (with 90% using AWS). During the GCP NEXT Asia-Pacific keynote earlier this month Google disclosed that Snapchat “is one of our largest customers,” making up to 2 million queries per second and consuming more Google bandwidth than any other organization except for YouTube.
- Recent Orbitera and Apigee acquisitions underscore Google’s new focus and aggressiveness to grow GCP. Last month Google acquired Orbitera, a small cloud commerce platform. Orbitera simplifies the buying and selling of cloud-based software by providing vendors with packaging and provisioning, billing, and marketplace solutions on AWS and Azure. Earlier this month Google acquired Apigee for $625M, which is 5.2x Apigee’s FY17e revenues of $120M. Apigee is expected to grow by 30%-35% in The company focuses on larger enterprises (Walgreens, Nike, Target, AT&T) and despite an ongoing mix shift to the cloud or SaaS model, it still has a legacy on-premise license/maintenance business.
- Google is very focused on building relationships with all systems integration (SI) firms but that building out a GCP channel is proving to be challenging. Deutsche Bank believes that Microsoft is also finding it tough to build out it’s Azure channel, in part because many traditional partners and resellers struggle with how they can monetize Azure, given its different price points and the lower services attach rate
- 2M developers are working on IoT applications, increasing 34% since the last year.
- Over 50% of the developers working on IoT applications are writing software that utilizes sensors in some capacity.
- 4M enterprise developers play decision-making roles when it comes to selecting organizational IT development resources. Another 5.2 million hold decision-making authority for selecting IT deployment resources.
- The APAC region leads the world with approximately 7.4M developers today, followed by EMEA with 7.2M, North America with 4.4M and Latin American with 1.9M.
These and many other fascinating insights are from the Evans Data Corporation Global Developer Population and Demographic Study 2016 (PDF, client access) published earlier this week. The methodology Evans Data has created to produce this report is the most comprehensive developed for aggregating, analyzing and predicting developer populations globally. The study combines Evans Data’s proprietary global developer population modeling with the current results of their semi-annual global developer survey.
Key takeaways from the study include the following:
- 6M developers (29% of all developers globally) are involved in a Big Data and Advanced Analytics project today. An additional 25% of developers, or 5.3M, are going to begin Big Data and Advanced Analytics projects within the next six 13% or 2.6M of all developers globally are going to start Big Data and Advanced Analytics projects within the next 7 to 12 months. The following graphic provides an overview of the involvement of 21M developers in Big Data and Advanced Analytics projects today. Please click on the image to expand for easier viewing.
- 4M developers (26% of all developers globally) are using the cloud as a development environment today. Developers creating new apps in the cloud had increased 375% since Evans began measuring developer participation in mobile development in 2009 when just slightly more than 1.2M developers were using the cloud as their development platform. 4.5M developers (21% of all global developers) plan on beginning app development on cloud platforms in the next six months, and 3.9M (18% of all global developers) plan on starting development on the cloud in 7 – 12 months. Please click on the image to expand for easier viewing.
- 8M developers in APAC (24% of all developers in the region) are currently developing on cloud platforms. 29% of APAC developers are planning to start cloud-based development in six months, and 20% in 7 – 12 months. The following graphic compares the number of developers currently using the cloud as a development environment today and the number who plan to in the future. Please click on the image to expand for easier viewing.
- 34% of all Commercial Independent Software Vendors (ISVs) globally today (1.8M developers) are using the cloud as a development environment. An additional 1.4M are planning to begin cloud development in the next six months. 28% of developers globally creating apps in the cloud are from custom system integrators (SI) and value-added resellers (VARs). 23% or approximately 1.2M are from enterprises. The following graphic compares the percent of developers by developer segment who are currently creating new apps in cloud environments. Please click on the image to expand for easier viewing.
- 30% of developers (6.2M developers globally) are currently developing software for connected devices or the Internet of Things today, with an additional 26% planning to begin projects in 6 months. Evans Data found that this increased 34% over the last year. Also, 2.1M developers plan to begin development in this area within the next 7 to 12 months. The following graphic compares the number of developers globally by stage of development for creating software for connected devices or the Internet of Things. Please click on the image to expand for easier viewing.
- 41% of global developers creating connected device and IoT software today are from 27% are from North America, 24% are from EMEA and 7% from Latin America. There are 6,072,048 developers currently working on connected device and IoT software today globally. The following graphic provides an overview of the distribution of developers creating connected device and IoT software by region today. Please click on the image to expand for easier viewing.
- 34% of developers actively creating software for connected devices or the Internet of Things work for custom System Integrators (SI) and VARs today. ISVs are the next largest segment of developers working on IoT projects (30%) followed by enterprises (21%). The following graphic provides an overview of the global base of developers creating software for connected devices and IoT. Evans Data found there are 6.1M developers currently creating apps and solutions in this area alone. Please click on the image to expand for easier viewing.
- 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.
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.
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