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Techaisle Blog

Insightful research, flexible data, and deep analysis by a global SMB IT Market Research and Industry Analyst organization dedicated to tracking the Future of SMBs and Channels.

SMB Channels Mobility Solutions Snapshot

Having the right information in the right context in the right format at the right time is critical to making business decisions these days, and increasingly that means access through mobile devices – whether it is the roughly 30% of consumers who own tablets or those tens of millions who get information from a Smartphone. A recent Techaisle survey of over 600 channel partners uncovered several important similarities and differences between how SMB channels are approaching three of the most important trends in the market: Cloud-Computing, Mobility Solutions and Remote Managed Services. In this post we will offer a snapshot of some characteristics of Mobility in the SMB Channel.

SMBs Requesting Mobility Solutions from the ChannelFrom a demand perspective, 60% of partners reported having SMB customers request Mobility Services, with almost 80% of ISV customers topping the list. Not surprisingly, email – the killer app, is the most used and offered service with about 50%, followed by Payment Processing with over a quarter. As we have found in other surveys, the front-office, revenue-related applications of CRM, especially among ISVs, and SFA, especially among SPs and Social Media Marketing, especially among SPs, were all being adopted by almost a quarter of respondents. We expect a rapid uptake in 2013 in the area of Mobile Analytics, which is being embedded into many front office SaaS applications in the form of dashboards and self-configured KPI management with proactive communications, or from the several cloud-based pure-play BI vendors in the market. As mentioned following the recent Citrix announcements, we also believe the market is ripe for adoption of Cloud-based Productivity Suites, which will also drive adoption of mobility among SMBs.

In many areas of Cloud Computing and especially Remote Managed Services, the big inflection point in both adoption and average spending does not happen until the 100-249 employee segment, but not so with Mobility; approximately 60% of the demand comes from the 1-9 and 10-49 employee segments, with the increase in email (across the board) and Social Media Marketing and Mobile Advertising (ISVs, SPs) driving the trend.

SMB Partner Mobility ChallengesThere are differences in the approaches, needs and challenges between SMB channel types when offering Mobility Solutions to customers, typically falling into Cost and Complexity, Management and Employee, Network and Device and Security categories. In this example, we see some key differences between the VAR/SI and SP partners related to the provision of Mobility solutions. Poor Network Service is the biggest challenge for VAR/SI partners, followed by Insufficient Network Speeds, Lack of Integration/Compatibility, and Immature Platform Choices. Both were challenged equally by Slow Performance of Mobile Apps and Device Management issues. SPs biggest challenges relative to VAR/Sis included Lack of Applications Availability, followed by Poor Mobile Web browsers, and Network and Device Issues.

As the market matures, these challenges should dissipate with increased mobile responsiveness built into websites and applications, more affordable device and data plan pricing and wider adoption of smart mobile devices. For now, the perennial SMB issue of cost and complexity of new technology balanced against perceived and demonstrated return on investment remains the most important barrier for channels to overcome.

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Don’t Blame IBM - Blame Adam Smith

In this WSJ article, the Congress is investigating the meteoric rise of Huawei, China’s major telecommunications equipment provider and accusing it of using technology theft and government handouts as the path to its’ incredible growth. The article insinuates that IBM is a major cause of this situation because they have shared advanced technology and management best practice approaches as a shortcut, and summing it up with:

“U.S. government concerns culminated this week in a report by the House intelligence committee that labeled the company a security threat and warned U.S. telecom companies against doing business with it.”

Huawei counters that they have spent over $400M with US consulting firms like IBM, Accenture, BCG, PWC and others since 1997, and at one point after signing a strategic agreement, they had 200 IBM consultants onsite to optimize core systems and train management in the most efficient approach expand internationally. If there is real evidence of technology theft (none in the article), that would be basis for retaliation, but it did not seem like IBM and others were complaining during the bonanza: Gerstner’s IBM made the transition from antiquated mainframe manufacturer, about to be broken up, into the world’s largest professional services provider on the back of international deals like this, and probably got a couple of large US government contracts in the process. McDonalds, Wal-Mart, Oracle and Boeing have done pretty well also, and American consumers have been blessed with an abundance of all the “stuff” they can buy for the absolute lowest price (not cost). According to the venerable Adam Smith:

“Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer.”
-Adam Smith, The Wealth Of Nations, Book IV Chapter VIII, v. ii, p. 660, para. 49.


This is a technology blog and we try to steer clear of politics, but sometimes you have to scratch your head when you read articles like this. We have written on the effects of optimization on society, including the leading role of IBM with its’ Smarter Cities initiative to build global intelligent and optimized networks.

Married to China - Economist CartoonThe telecom services and equipment segment is a cornerstone of a country’s infrastructure and economic development, which is why virtually every country controlled it through government monopolies and trade barriers until global trade pressure forced them to open it – through direct pressure or infrastructure loan programs that directed spending. There was certainly value to opening the markets, as it is impossible to function in the global economy without a robust telecommunications infrastructure; the point is that there is a balance between internal development of capabilities and purchase of imported materials. We discussed this last week in our post comparing the evolution of the Internet in China and Korea. The article also hinted that trade friction was caused by onerous conditions that went into the negotiations between GM, GE and Google: “Companies such as General Snatching the Pebble?Electric Co. and General Motors Co. have had to contribute valuable assets and technology to participate in markets such as aviation and automobiles that China considers critical to its economy. Google Inc. lost market share after moving its Web- search and other services to Hong Kong to avoid complying with China's censorship policies.”

Some might find it difficult to find sympathy for those three - didn’t GM get a public bailout to prevent it from disappearing? And doesn’t Google own the market in virtually every country in the world except China? And how many times does GE fail to negotiate profitable terms in international infrastructure projects? By making them such a large trading partner and buyer of our national debt, we have become inextricably linked to China economically. Decisions have long term consequences.  They are flexing their muscles and  it is not the first time, nor will it be the last, especially as their economy continues to slow.

Again, from the Father of Capitalist thought:
“It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our necessities but of their advantages.”
-Adam Smith, The Wealth Of Nations, Book I, Chapter II, pp. 26-7, para 12.


In other words, China is going to do what is good for China and America is going to do what is good for America. Don’t be surprised when the pupil tries to snatch the pebble from the master’s hand.

 

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Meet the New Boss: Big Data (WSJ) – Techaisle Take

Wall Street Journal Article

This is an interesting article from the WSJ concerning how we are slowly allowing decision-making processes to move away from people and be handled by algorithms instead. It caught our attention at a time when we are completing survey work for Business Intelligence report. As discussed in an earlier post, one of the key trends in BI is how deeply it is being embedded into all kinds of applications , and this article is a good example. Please let us know what you think: comment, like, tweet or forward.

Laying the Foundation


Analytic software has evolved through several generations over the last 70 years from around WWII, when a series of unprecedented number-crunching challenges gave rise to Decision Support Systems (DSS) designed to solve problems such as best equipment production mix given material constraints, how to logistically support the Allied invasion of Europe, split the atom, or break the Japanese code. These kinds of problems tended to be monolithic, using stochastic models to find the best answer – and were a major catalyst to development of the mainframe computer.

Business Intelligence (BI) followed this linear and iterative approach with one that supported solving business problems, mostly operational, within divisions and departments of large commercial organizations, using more distributed equipment within a wider audience, i.e., Finance, Operations and Distribution. In the late 1990s there was an explosion of data resulting from widespread adoption of CRM, the killer app of the Client/Server era, adding mountains of Sales and Marketing Data to the volumes of operational information. There was a growing need to get a top down view of how performance in one area of the organization was impacting the others, to begin taking a more structured approach at understanding cause and effect, setting objectives and consistently measuring performance to improve results. BI was evolving into Enterprise Performance Management (EPM) - which is where market leaders are today.

EPM is characterized by using Business Intelligence software to understand the best performance scenarios, measure actual performance indicators (KPIs) and determine how to close the gaps, using exception reporting for most front office functions (CRM/SFA) and rules-based processing for the back office (Process Manufacturing/Real Time Bidding, SCM/Advanced Web Analytics).

Optimization Nation


Equally important as the individual BI technology advances are some of the underlying rules that have accompanied the evolution: Moore’s Law, Metcalfe’s Law, the Law of Accelerating Returns all drove exponential growth in production, adoption and utility. Over a 20 year period, these have resulted in a slow-motion Black Swan event based on the cumulative effect of technology investments, and having huge impacts on our society, including but not limited to the following optimization activities:

Law of DisruptionEconomy – development of consumer mortgage products designed to optimize sales volume regardless of risk, bundling them into bonds to optimize profit on the debt, creation of derivatives to optimize transactions and create demand for increasingly suspect debt, development of new financial instruments that have no underlying value such as  synthetic derivatives that truly have nothing but conceptual paper profits behind them, etc. By 2008 these financial instruments had optimized leverage to create risk greater than the combined GDP of industrialized world.

Employment – The WSJ article goes into depth about how algorithms have already replaced a hiring manager's decisions based on probabilities of how the employee might behave under certain circumstances. Employer choices have also been optimized by a flattening of the market caused by oceans of virtually unlimited supply from sites like Monster.com, 100K Jobs, Dice, etc. Middle management has been optimized out of the organizational chart and replaced with productivity tools, more efficient communications and a lower ratio of managers to workers. And the actual number of staff required to hit the bottom line has been optimized while CEO salaries have been optimized. If we look a little further down the line, Andrew McAfee's POV is deep on this subject, and more technical than mine.

Industry – We all know that manufacturing was moved offshore en masse over the past three decades to optimize production costs, but several other industry segments have been optimized as well, including Retail which has optimized through consolidation and healthcare which has optimized revenue per patient. Retail has been optimized at a structural level, to provide one-stop shopping for almost everything you need in a single location while volume has been optimized to produce the absolute lowest price and any cost, including optimizing the number of worker hours to keep an optimal ratio of full time to part time employees and save the resulting benefit costs. And it has also optimized the number and variety of retail outlets and small businesses required to service an optimized population in square miles. Healthcare prices have been optimized to take advantage of tax structure, potential law suits, healthcare insurance gaps, maximizing federal matching funds, Board and C-Suite compensation, pharma industry profits, and many more.

Government – Automation has also enabled a profitable business model that optimizes the use of Federal Government funds and ensures that every available dollar is spent, whether it is to make sure everybody gets a state-of-the-art mobile wheelchair, their 120 monthly catheters, a speaking glucose meter, maximum disability benefits, etc.  “Don’t worry - we’ll handle all the paperwork.”

Set it and Forget it


Complex SystemsThe imminent next generation of analytics involves truly “optimized” complex systems with human intervention largely removed from the process. Not to single out Wall Street, but they offer one of the best examples of unbridled application of technology in the singular pursuit of optimization, in their case, profit for themselves and their shareholders. The Financial Services industry has invested billions into technology and employed thousands of physicists and Ph.D.-level mathematicians to achieve a couple-millisecond transaction advantage, and programmed algorithms to use the advantage and change the rules (i.e., share price represents perfect information is no longer true). This has not proved to always produce predictable results, and the ghost in the machine has put us back on the precipice more than once, as seen in this TED video by Kevin Slavin. As we move into a brave new world that combines optimization software with networks that operate too fast for human intervention, more of our lives will be controlled by how rules are programmed into the system than what we do as individuals to impact the results. One of the best examples of where this is heading is the IBM’s Smarter Cities Initiative, which combines intelligent networks that manage Traffic, Water and Electric Utilities, Transportation, Healthcare, Public Safety, Education and others into an overall “Intelligent City”. Everyone hates traffic, so the video example from the IBM innovation site does more to explain this than I can by writing more on the subject.

Whether you agree with it or not, we are on a direct course to this future that is almost impossible to divert. This is a philosophical question and everyone will have their own opinion about the cost/benefit of chasing optimization. Comments and Opinions are welcome, please let us know what you think.

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Pick of the Week - Exxova

"As a general rule, the most successful man in life is the man who has the best information."
- Benjamin Disraeli (1804 - 1881), British Prime Minister

We are in a transformational time for Mobility and Mobile Business Intelligence, with lots of innovation happening in both hardware and software. Factors such as declining data plan prices, improved broadband availability, software investment, and widespread access to Smart Phone applications will continue to drive market acceptance as barriers to adoption fall away.

Mobility Requests to SMB ChannelsTaking a channel partner  view of the market, this chart shows what SMB Channel Partners (50%+ Revenue from SMBs) are hearing from their customers: overall 60% report that customers are asking for Mobile Solutions, including ~80% of ISVs, 54% of VAR/Sis and 47% of Service Providers.

One of the trends in BI overall is a large  increase in embedded BI functionality into software applications. This arose through the enterprise-level dashboards and  reporting capabilities that SMBs saw with Salesforce.com functionality and quickly become must-have features for serious software applications, especially those delivered as a Service (SaaS). On premise and SaaS versions have been updated through development of new internal code or OEM arrangements and open source code from players like Pentaho and Jaspersoft.

Enabling BI mobility is accomplished by moving  existing functionality to a mobile environment, using the new technologies on top of the old, which is more complicated than starting from scratch in many cases.  The larger companies such as Oracle, IBM and SAP are approaching  this through acquisition of smaller companies and integrating them into existing products. But in a classic build vs. buy fashion, smaller companies offering SaaS BI services have been building new offers from the ground up, directly employing the newest technologies like HTML5, iOS and Android for delivery to Apple devices, smartphones and the burgeoning number of tablets in the market. Smaller providers in many cases have gained a timing advantage; using native technology brings existing mobile functionality to bear on the problem; instead of simple links to server data, the presentation of the information can immediately be rich and interactive using screen manipulation, i.e., pinch and squeeze or geo-location awareness, as part of the data exploration and visualization experience.

Other features of “true” mobility integrated with “true” BI include the ability to interact with data objects on the screen, such as search, filters, check-boxes, drill-down and drill-through to the record level and other interactive functionality. Of course, then being able to use the built-in device communications capabilities is also important once the information has been isolated – SMS, email and  forms should be available for manipulation and dissemination of the information.

Many use case scenarios present themselves from the low end retail – such as immediate revenue and profit reporting from the new generation of card swipers into QuickBooks or MS Dynamics and received on a smartphone, to a mid-market electronic component manufacturer checking inventory turns in the Singapore distribution center using SAP Business Objects or IBM Cognos 10 through a Samsung Galaxy Note Tablet.

Among the pure-play SaaS Mobile BI firms to have emerged in the last few years is Exxova, based out of Atlanta, which we chose as our Cloud Vendor Pick of the Week. We chose Exxova because they have a unique value proposition: although they use some of the most powerful  back end analytics technology – SAP, Business Objects, Oracle, etc., they have managed to simplify this technology and allow administration of database structure and reporting by literally dragging and dropping fields in a web-based interface, creating new groups and calculations, and having the results delivered immediately through mobile devices running iOS and Android as described earlier. Having separated the reporting layer from the analytical engine allows them to provide deep BI capabilities to end users without the additional cost of licenses for all the back end tools, while at the same time allowing Flash and Flex to be delivered in original format to the Apple environment.

We interviewed their President Mark Hillam, a BI industry veteran and former Business Objects executive for this post. In response to how Exxova reduces complexity for the users and administrators of Mobile BI, Mr. Hillam replied:

“Every report, dashboard, and analytic is rendered with perfect fidelity to the original source.  All of this is accomplished without any modification or changes to the Enterprise BI platform or the existing content.  Even full report editing is capable from the mobile platforms.”

Exxova offers a strong example of true Mobile BI functionality which is relatively easy to administer and use at a good price point. There are others in the market such as SAP, Microstrategy, Oracle and IBM, who also have strong mobile solutions. For the SMB marketplace there will always be a balance between cost, complexity and functionality to be taken into account before long term commitments are made, Exxova seems to fit this space well. For more information, see it in action below.



 

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