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This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Analyst Relations
Regional Briefing
Egham, Surrey
July 30, 2014
Agenda • Welcome & “Optimizing Your Relationships With Gartner Analysts”
- Jeff Golterman, GVP and AR Community Lead
• Digital Business: Nightmare or Opportunity for High Tech Vendors
- Neil McMurchy, Managing Vice President, Gartner Research
• AR Panel Discussion: Putting Analyst Insights to Work
- Justin Anderson, CEO Flexeye; Julian Dobbins AR Cognizant; Natalie Harrington, AR Professional
• Magic Quadrant, Critical Capabilities & Other Methodological updates
- David Black, Vice President, Gartner Research
• Peer and Analyst Networking Lunch
- AR and Peers Network with Gartner Experts and Analysts
• MQ Research Process Optimization Workshop
- Claire Dessaux, Managing Vice President, Research Content Process, Gartner Research
• Advanced AR Strategies: AR program ROI Through business relevance
- Jeff Golterman; Sally Elliott, BT Consultant and Industry Analyst Relations; Tom Minarik, Director Analyst Relations Capgemini
• Wrap –up
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. This publication may not be reproduced or distributed in any form without Gartner's prior written permission. If you are authorized to access this publication, your use of it is subject to the Usage Guidelines for Gartner Services posted on gartner.com. The information contained in this publication has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information and shall have no liability for errors, omissions or inadequacies in such information. This publication consists of the opinions of Gartner's research organization and should not be construed as statements of fact. The opinions expressed herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner is a public company, and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartner's Board of Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research organization without input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner research, see "Guiding Principles on Independence and Objectivity."
Neil McMurchy
Managing Vice, President
Software Applications
July 29 2014
Digital Business: Nightmare or Opportunity For High-Tech Vendors?
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved. 4
50% Of the total increase in VC investment in technology
companies came from Corporates , not VCs (y/e
31/3/14 of all VC investments now comes from
Corporates
30%
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Key Issues
• The New “Make” – The Impact of Digital Business on a Technology Segment
• Ecosystems : The New Battleground
• Show Me the Money
• Critical Vendor Competencies for Digital Business
• Optimizing the Gartner relationship – an analyst view
•
5
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Digital Business Demands Will Drive a New “Make” Strategy for Applications
By 2020 80% of application purchases supporting digital business will be
“Make” not “Buy”
6
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
A New Kind of “Make”
• Assembly of application components to support innovative business designs and processes that are differentiated, innovative, not standard
• Increasingly sourced from startups, disruptors and specialized local software and services providers
Tomorrow's Application
Building Blocks to “Make”
Services Packages Custom
Business Process, Information, Collaboration
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Digital Business is a Strategic Imperative for all Organizations to:
Compete Globally A source of competitive differentiation
and advantage
Attain Operational Excellence
Improve the Efficiency and Effectiveness of Business
Operations
Implement Business Diversification
Allows to embrace new business opportunities, reach new targets
Gartner Digital Business Document Collections
The creation of new business designs by blurring the digital and
physical worlds
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
• Introduces new business opportunities
• Is moving faster than IT's (and providers') ability to respond
• Is a platform for engagement with external and internal parties
• Increasingly incorporates the Internet of Things
Nexus of Forces Is the platform for Digital Business and…
Gartner Nexus Document Collections
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Corporate Board, 15%
CEO, 44%
CFO, 5%
CIO, 30%
CMO, 1%
Business Units, 5%
Applications Must Be “Fit for Digital Business” – Business Driving the Need
Source Gartner: Survey Enterprise Backbone 2013/14 – Respondents 714 (Vice President and above only)
Corporate Board, 17%
CEO, 38% CFO, 19%
CIO, 22%
CMO, 2% Business Units,
3%
…over your organization's IT spending?
Which department or individual role has the most influence over your organization's IT
strategy?
54%
52%
53%
43%
43%
47%
45%
55%
The ability to adopt technology solutions that can be “turned on” quickly and that give immediate access and immediate value.
The ability to adopt new technology while limiting capital expenses
Ease and speed of deployment in support of targeted/specific business initiatives
Easy data integration
1-2 rating
3-5 rating
6-7 rating
When considering software purchases, how important are each of the following factors for your organization
when choosing the type of solution?
1. Not at all
important
7. Extremely
important
Applications Need Speed & Ease of Deployment,
Integration and Time to Benefit
Source Gartner: Survey Enterprise Backbone 2013/14 – Respondents 2016
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
13%
23%
35%
15%
14%
We develop custom standalone solutions in-house that meet all business requirements
We design an extension to our proprietary custom-built application infrastructure to
seamlessly integrate the specific business needs
We leverage our pre-existing applications to fulfill business needs while maintaining the end to end integrity of our IT environment
We look for the best-in-class out-of-the-box solutions that fulfill business needs
irrespective of whether it conforms to IT policies
We select solutions based upon the prevailing mood of the business, resource
availability and the preference of the project sponsor
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Source Gartner: Survey Enterprise Backbone 2013/14 – Respondents 2016
New technology implementation approach is diversified and subject to business needs
65% Trends to “New Make”
Already
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
…and CEOs are ready to invest on IT, Digital and R&D!
• 2014 Gartner CEO and Senior Executive Survey reveal:
- Top three investment areas to be:
IT up from 3rd place in 2012, 2013
Digital Capabilities (New Entry)
R&D ranks 3rd up from 7th
- Topmost Technology-Enabled Capability Investments Over the
Next Five Years:
Digital Marketing;
e-Commerce; Customer experience management;
Business Analytics
- CEOs See Digital as a Team Game, and the CIO Still Has the
Highest Visibility
16
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Disconnect Example: Current Application Spend & Business Perception of Incremental Value
18
Current Application Investment
Innovation
Differentiation
Record
Business’ Application Value Perception
Innovation
Differentiation
Record
Gartner’s PACE Layer for Applications
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Wish (IT dominant)
• One Suite
• One Instance
• One Vendor/Contract
• One Architecture
Vendor Promise
• Buy into my Vision
• Suite Centric
• Solves the Integration Issue
The MegaSuite Wish is Broken
Wish (Business Dominant)
• Business Agility Dominates
• Happy Users Consuming
• Speed to Use: SeeITBuyITUseIT
• Architectures is IT’s issue
Vendor Promise
• Buy into my Brand & Ecosystem
• Multi Product/Service Centric
• Provide Integration Tools
Yesterday Today/Tomorrow
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Enterprises Looking for Innovation Beyond The Usual Suspects
• “Other” - the most influential vendor in 10 years time for +30% of enterprises (more than Google, any other named vendor, more than Microsoft / SAP/ Oracle combined*)
• Global telecom equipment supplier crowdsourcing its new applications
• Airbus goes Open Source – vendor risk of mega-vendors
• Corporate VC investments grown 100%+ YOY to Q1 2014
• “Rethink and extend supplier, vendor, and partner and service provider relationships, including the use of smaller, faster, more innovative partners, and working with partners in new domains such as mobile, design, etc” *
20
*Gartner 2014 CIO Survey
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Apps Purchase Decision Changes, So Must Sales, Marketing & Value Proposition
21
CEO
CFO CIO Business
“CxO”
Digital Initiative
CDO
CEO
CFO
CIO
Business “CxO”
IT as an operational Cost Centre
CEO has reservations about the convenience and value of IT innovation. CFO is charged to
contain spending in this area. Decision-making and procurement of IT is centered on the CIO.
The CxO establishes the business requirements
Positioning, Selling and Account Planning changes radically based on how IT is viewed and the role it plays
in supporting Digital Business IT as a Business Value-Creating
Resource
Decision-making and procurement of IT is primarily centered on the CIO but with
higher degrees of decentralization. The CEO evaluates the importance of Digital
Initiatives. CFO influence is subordinated to the CEOs will. CxO and CIO delegates work
together in joint project teams
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
The Application Long-Tail Gets Longer …Ecosystems Become the Main Battleground
Application Functionality
Target Audience
Size
Long Tail Role- Specific
Employee-Specific
Enterprise Spanning
Industry-/ Enterprise-
Specific
Packaged Application
Domain
Ecosystem Domain: Middleware as a Platform
• As both Target Audience and Required Functionality expand , the Long Tail will become longer
• Mega-vendors have to date been unable to build or acquire sufficient functionality and the long tail gap will grow
• Ecosystems & participation become the key battleground for large & small vendors
Things-Specific
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Much lower costs of production and distribution mean lower barriers to entry
• Innovative technologies coupled with convenient mass consumption models favor cheaper, faster and easier web app development
- Examples of client-side development technologies: HTML 5; CSS ; JavaScript; Ajax (Asynchronous JavaScript and XML); jQuery ; MooTools ; Dojo Toolkit …
- Examples of Mass Consumption Models: Freemium, OSS, Subscription-Based, Free Redistribution, Developer Communities …
• Start-Ups Galore: example Oculus, went from duct-taping prototypes in a garage to a 78-employee firm acquired by Facebook for $2 billion in just 18 months. A little over a month earlier, Facebook purchased five-year-old startup, WhatsApp, for $19 billion
• Atlassian - $3b valuation , $200m+ revenue, enterprise software company ….. no sales force
25
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
YOUR CUSTOMER & PARTNER COULD TURN INTO YOUR WORST COMPETITOR FOR
TALENT
Competition will intensify for best software and engineering talent
26
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
The Business Model will have to change!
Packaged Applications
Application Platforms/Suites for
Intranets
Digital Composites
Cloud Space/Ecosystems for
Digital Business Participation & Service
By product
Business Dimension
Large Businesses
Geography
By service / Apps
By Receiver
By Natural Language
By analysis needs
Service Providers
VARs
Technology ISV
ecommerce /Direct
Share of Developers
Media
Direct Sales force selling Product
Indirect Partner Projects/Resellers
Online Registration to an Ecosystem or Business Service
Ads – Data Analysis – Other emerging
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved. 29
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
30
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved. 31
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved. 32
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved. 34
Corporate VC Investments Represents 50% of the Increase in Total VC Funding
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
YOUR CUSTOMERS & PARTNERS COULD TURN INTO YOUR WORST COMPETITOR
FOR INNOVATION…. AND FOR ACQUISITIONS
Competition will intensify for innovation
35
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Critical Capabilities & Questions for Digital Business
• Is your brand an opportunity or a problem?
• Can you buy or build new capability fast enough?
• Partnering beyond the press release
• Focus on customer segments, not products
• Recasting your business model to a consumption buyer
• Differentiation beyond product/service feature
• Selling without a sales force
• Focusing on serving the customer, not “owning” it
37
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Optimizing a Gartner relationship – A personal perspective
1. Move beyond “Happy Noise”
2. Don’t have sales execs do Vendor Briefings – see point 1
3. More harm comes from “not enough” information vs. “too much”
4. Criticality of relevant customer references
5. Be prepared for Vendor Briefings ,, and have a paper-based Plan B beyond Webex ...
And ……
39
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
6. Beyond the Numbers - Engage the Gartner TSP analysts
40
Derry Finkeldey
Building Vertical Industry Capability
Vassil Mladjov
Startups, Incubators &
Venture Capital
Hank Barnes
Differentiation &
Go to Market
Chris Pang
Future Of Sales
Ed Cordin
Go to Market
Mark Paine
Go to Market &
Future of Sales
Bianca Granetto
Digital Business Models
Bob Anderson
SMB Market Strategy
for Large Vendors
Dan Sommer
Big Data
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Questions?
41