Gartner published the report What’s Hot in CRM Applications in 2013, by Ed Thompson on June 20, 2013. The report covers areas of interest by clients in the four areas of marketing, sales, customer service and e-commerce.
The report states that “the 2013 What’s Hot list was compiled after examining Gartner inquiry volumes by topic. It was then supplemented by asking all Gartner CRM analysts to offer their opinions on what has been generating the most interest during all the client inquiries they have taken since the end of 2012 and in the beginning of 2013.”
Big data, cloud, social, mobile and the Internet of Things are the five catalysts that are driving inquiries in the hottest areas of interest. Gartner’s Ed Thompson, author of the report, states that “this is where our clients’ interests lie, although not their current CRM spending.” Technologies highlighted in red are the hottest in terms of interest, shown in the following table Highest CRM Application Priorities for 2013.
What This Says About the Future of CRM
Mobility is just one part of delivering an excellent customer experience.
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- It is surprising that Gartner clients aren’t looking to create a more unified strategy to customer experience across all channels at all times. As the report states, “The refreshing of an aging agent desktop with a new, more intelligent and unifying user interface has shot to the top of the heat charts once more.” The findings of this Gartner analysis make the highly promoted claims of usability by many CRM vendors look overly hyped. I think usability is the fastest path to greater system adoption of any CRM system, and that has to include mobile. It is surprising that a related technology in this area didn’t rise farther in the rankings.
- Second, mobile sales on smartphones and tablets dominate, followed immediately by Social – Internal Collaboration and Social – Integration with Social Data. What is fascinating about this group of four top items in Sales is the indication that the behavior of how sales teams work individually and together is changing fast. Collaboration is a strong catalyst for Return on Investment (ROI) from social technologies and the sequence of these priorities in Sales underscores that.
- Third, the vision of the mobile-enabled support representative able to be autonomous yet fully supported to solve customer problems is rapidly approaching. Of all patterns emerging from this data, this is one shows the greatest profit potential. Service Lifecycle Management (SLM) and the many forms of service management all have very significant profitability associated with them for manufacturers. The quicker this area of mobility moves, the faster SLM and Maintenance, Repair and Overhaul (MRO) strategies will grow – giving manufacturers and service providers the ability to mine their installed bases for more profits.
- Fourth, predictive analytics and big data are reordering how marketing strategies are designed, implemented and managed. Given the increasing complexity of marketing automation systems and the strategies they support, predictive analytics and big data are starting to dominate the conversations I’ve personally had with Chief Marketing Officers (CMOs) and many demand generation professionals. I expect the predictive analytics aspects of marketing, combined with big data, to accelerate quickly over the next year.
- Fifth, the rapid adoption of mobile-based platforms including the Apple iPad in the Configure, Price, Quote (CPQ) continues throughout the professional services, discrete and process manufacturing companies I often visit. One manufacturer I often work with on their CPQ strategies has the ability today to present a completed 3D model of the proposed product, embed it in a quote and e-mail it to the prospect all from an iPad. The future of CPQ is going to be dominated by mobility and enterprise support for key order management, pricing and product configuration options.
Cutting through the hype of cloud vendors starts by evaluating how ready their Cloud Services, enabling technologies and Professional Services are to serve customers today.
That’s one of the key take-aways from a recent webinar I attended titled How Cloud Computing Changes the Vendor Landscape by David Mitchell Smith, VP and Gartner Fellow last week. The slides are available for download here (Free for download after Gartner registration if you are not a Gartner client).
What made this webinar unique and worth mentioning is the framework that was presented for evaluating vendors. Beginning with the well-known Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS) structure, Gartner added in a Business and Information Systems layer that includes brokerages, management and security. This is the layer where Gartner says they are seeing enterprise clients most concentrate on emerging technologies.
The cloud vendor landscape is defined by Cloud Services, Professional Services for Consumption, Enabling Technologies and Professional Services for building and running applications. Green designates a vendor area of emphasis, yellow are those areas serviced by partners and white areas are not addressed by the vendor’s strategy at all.
Using this framework, nine different companies were analyzed including Amazon, Google, HP, IBM, Microsoft, Oracle, Salesforce.com, SAP and VMWare.
- Microsoft has the most ambitious cloud strategy of the nine companies profiled, and their cloud-first design initiative shows they have faith in Azure performing in the enterprise. Microsoft Dynamics AX 2012 will first be released on Azure, then on-premise is a case in point. Microsoft is impatient to move into a subscription model with its evolving cloud platform. Gartner’s analysis of Microsoft’s cloud strategy is shown in the following graphic.
- Oracle is one of the most persistent cloud washers according to Gartner, often bending the definition of cloud computing to align with their strengths. Their continual efforts to redefine the cloud are also designed to get their formidable customer base to upgrade to the latest generation of their applications. Of the vendors compared they also have the greatest strength in enabling technologies, evidenced by their Exalogic and Exadata systems, Oracle Linux and Solaris operating systems.
- SAP’s cloud strategy looks to make the most of the large, highly profitable R/3 installed base while partnering with IaaS vendors to build out their cloud platform according to Gartner. The point was made that of the vendors in the comparison, SAP prioritizes enabling technologies over owning the entire cloud stack as Oracle aspires to.
Bottom line: If you want to know the truth about a given cloud vendor evaluate their Cloud Services, Professional Services track record and how well they transform enabling technologies into successful products. The following graphic provides a summary of the vendors included in the webinar:
As public cloud computing gains greater adoption across enterprises, there’s an increased level of spending occurring on infrastructure-related services including Infrastructure-as-a-Service(IaaS). Enterprises are prioritizing how to get cloud platforms integrated with legacy systems to make use of the years of data they have accumulated. From legacy Enterprise Resource Planning (ERP) to Customer Relationship Management (CRM) systems, integrating legacy systems of record to cloud-based platforms will accelerate through 2016. I’ve seen this in conversations with resellers and enterprise customers, and this trend is also reflected in Gartner’s latest report on public cloud computing adoption, Forecast Overview: Public Cloud Services, Worldwide, 2011-2016, 4Q12 Update Published: 8 February 2013. Below are the key take-aways from the report:
- Global spending on public cloud services is expected to grow 18.6% in 2012 to $110.3B, achieving a CAGR of 17.7% from 2011 through 2016. The total market is expected to grow from $76.9B in 2010 to $210B in 2016. The following is an analysis of the public cloud services market size and annual growth rates:
- Gartner predicts that Infrastructure-as-a-Service (IaaS) will achieve a compound annual growth rate (CAGR) of 41.3% through 2016, the fastest growing area of public cloud computing the research firm tracks. The following graphic provides insights into relative market size by each public cloud services market segment:
- Platform-as-a-Service (PaaS) will achieve a 27.7% CAGR through 2016, with Cloud Management and Security Services attaining 26.7% in the same forecast period. Software-as-a-Service’s CAGR through 2016 is projected to be 19.5%. The following graphic illustrates the differences in CAGR in the forecast period of 2011 – 2016:
- Gartner is projecting the SaaS market will grow at a steady CAGR of 19.5% through 2016, having increased the forecast slightly (.4%) since its latest published report. Global SaaS spending is projected to grow from $13.5B in 2011 to $32.8B in 2016.
- CRM will continue to be the largest global market within SaaS, forecast to grow beyond $5B in 2012 to $9B in 2016, achieving a 16.3% CAGR through 2016. The highest growth segments of the SaaS market continue to be office suites (49.1%), followed by digital content creation (34.0%). The following graphic rank orders CAGRs across all public cloud services segments from the forecast period:
- 59% of all new spending on cloud computing services originates from North American enterprises, a trend projected to accelerate through 2016. Western Europe is projected to be 24% of all spending. A graphic comparing total spending by geography and corresponding growth rates is provided below:
- The following tables provide insights into each category of public cloud computing spending throughout the forecast period. Please click on the tables to expand them for easier reading.
Source: Forecast Overview: Public Cloud Services, Worldwide, 2011-2016, 4Q12 Update Published: 8 February 2013.
The latest round of cloud computing forecasts released by Cisco, Deloitte, IDC, Forrester, Gartner, The 451 Group and others show how rapidly cloud computing’s adoption in enterprises is happening. The better forecasts quantify just how and where adoption is and isn’t occurring and why.
Overall, this year’s forecasts have taken into account enterprise constraints more realistically than prior years, yielding a more reasonable set of market estimates. There still is much hype surrounding cloud computing forecasts as can be seen from some of the huge growth rates and market size estimates. With the direction of forecasting by vertical market and process area however, constraints are making the market estimates more realistic.
I’ve summarized the links below for your reference:
- According to IDC, by 2015, about 24% of all new business software purchases will be of service-enabled software with SaaS delivery being 13.1% of worldwide software spending. IDC further predicts that 14.4% of applications spending will be SaaS-based in the same time period. Source: http://www.idc.com/getdoc.jsp?containerId=232239
- The cloud computing marketplace will reach $16.7B in revenue by 2013, according to a new report from the 451 Market Monitor, a market-sizing and forecasting service from The 451 Group. Including the large and well-established software-as-a-service (SaaS) category, cloud computing will grow from revenue of $8.7B 2010 to $16.7B in 2013, a compound annual growth rate (CAGR) of 24%. https://451research.com/
- Forrester forecasts that the global market for cloud computing will grow from $40.7 billion in 2011 to more than $241 billion in 2020. The total size of the public cloud market will grow from $25.5 billion in 2011 to $159.3 billion in 2020. Link to report excerpt is here.
- Deloitte is predicting cloud-based applications will replace 2.34% of enterprise IT spending in 2014 rising 14.49% in 2020. The slide below is from an excellent presentation by Deloitte titled Cloud Computing Forecast Change downloadable from this link.
- Gartner predicts Small & Medium Business (SMB) in the insurance industry will have a higher rate of cloud adoption (34%) compared to their enterprise counterparts (27%). Gartner cites that insurance industry’s opportunity to significant improve core process areas through the use of technology. The following figure from the report, 2011 SMB Versus Enterprise Software Budget Allocation to Annual Subscriptions indicates the differences in software budget allocation for annual subscriptions by vertical market from the report:
2011 SMB Versus Enterprise Software Budget Allocation to Annual Subscriptions
- Gartner is predicting that the cloud system infrastructure (cloud IaaS) market to grow by 47.8% through 2015. The research firm advises outsourcers not moving in that direction that consolidation and cannibalization will occur in the 2013 – 2014 timeframe The providers named most often by respondents were Amazon (34%), SunGard (30%) and Verizon Business (30%). Of the global top 10 IT outsourcing market leaders, only CSC appears on the list. Source: User Survey Analysis: Infrastructure as a Service, the 2011 Uptake Claudio Da Rold, Allie Young.
External Service Providers Being Considered for IaaS (or Cloud IaaS)
It is ironic that a framework meant to define the relative level of hype associated with new technologies adds in seven new ones, an increase of 20% within just a year.
Are all those technologies really significant enough to be included in a framework whose purpose is to cut through hype? With less than 1% adoption throughout enterprises for over 50% of these technologies, it may be time for a more rigorous screening process.
After reading this Hype Cycle several dominant themes emerge. They include modernization of IT infrastructure to support greater scalability and security, consolidation of IT hardware investments, recognition of hybrid clouds being a central part of networking strategies, and location-based technologies having the potential to re-define logistics, supply chain and customer service strategies. That’s a lot of ground to cover in a single Hype Cycle, and to be fair, Gartner says this is an aggregated view of the market. Yet there is still the issue of technologies being included that have not shown any real value to enterprises yet.
Presented below is the Hype Cycle for Networking and Communications, 2011 and key take-aways.
Source: 2011 Gartner, Inc. Hype Cycle for Networking and Communications, 2011 David A. Willis, Publication Date: 24 August 2011 ID Number: G00216400
- Gartner is predicting the technologies that will experience the fastest growth include Virtual I/O, Gigabit Ethernet, Long-Distance Live Virtual Machine Migration, Energy Efficient Ethernet, Context Delivery Architecture, and Video Telepresence.
- Hosted Virtual Desktops, OpenFlow (technology also known of as software-defined networking (SDN), Transcoderless and Software-Based Videoconferencing Infrastructures, Mobile Enterprise Applications via SaaS, 802.11ad (Wi-Fi at multi-Gigabit speeds) , 802.16-2009 (consolidates dated WiMAX standards) and Mobile Satellite Services are the latest technologies Gartner has added to this Hype Cycle. Of these, Mobile Enterprise Applications with SaaS have the most significant potential effect on Total Cost of Ownership (TCO) on CRM and customer-facing enterprise applications. None of these have greater than 1% adoption in the enterprise today however.
- Gartner is projecting over 1B smartphones and media tablets will be sold globally by 2015. This explosive growth is forcing enterprises to react much faster than they initially expected to mobile security, mobile device management, and application support is an essential services. A recent survey completed by Gartner indicates that CIOs fully expect to support up to three mobile operating systems by 2012 and that 20% of devices will be employee-owned by that year. Presented below is their forecast for smartphones and media tablets through 2015. The following forecast is from their report, Emerging Technology Analysis: Mobile Business Intelligence, 13 July 2011, ID:G00214124 by Bhavish Sood, Andreas Bitterer, James Richardson.
Worldwide Smartphone and Media Tablet Shipments, 2010-2015
- Mobile Enterprise Applications via SaaS will see the greatest growth in vertical or specialized and Small & Medium Business (SMB) segments. It is evident from their analysis that TCO estimates may confuse enterprise buyers into thinking initial set-up costs for SaaS will lead to a lower price than licensed, premise-based applications. This will not always be the case despite the hype around SaaS economics today. This Hype Cycle could have been stronger and more prescriptive for enterprise IT buyers by discussing SaaS economics in greater detail.
- Gartner goes into great depth on location-aware technology yet doesn’t make that convincing of a connection to enterprise-level strategies, initiatives and programs. There is much technological discussion on GPS, assisted GPS (A-GPS), Wi-Fi, Enhanced Observed Time Difference (E-OTD) and Enhanced GPS (E-GPS) yet hardly any analysis of how this fits into the enterprise.
- Gartner sees the majority of enterprise cloud-based systems being hybrid. The Hype Cycle provides a glimpse into private and public clouds being integrated together for workload sharing. There needs to be more focus on how this will work for a business process standpoint to be of value however.
- Mobile consumer application platforms (MCAPs) will increasingly become multi-platform based. Gartner is predicting that Messaging-Based, Browser-Based, Thick Clients/Rich Clients and Streaming Audio/Video will dominate consumer application platforms within the next two years. They also see this area as the most transformational of all technologies analyzed in the Hype Cycle.
Bottom line: The best way to deflate hype in any industry is to insist on real, measurable results. From choosing communications and networking solutions to including nascent technologies in a research framework, results attained by real customers are all that really matter.