While talking about a new year’s next cool thing or development is a thoroughly enjoyable ritual, discussing what will not change provides valuable lessons for technology adoption strategy and investment planning, and highlights potential future disruptions.

So what are the five things that will remain more or less the same in 2014 for big data analytics?

  1. Hadoop will NOT REPLACE ETL: The nine-year old platform has achieved great traction, and its mindshare has significantly increased. Well-known analytics providers such as Cloudera, Hortonworks, and MapR have supported it for a couple of years, and even the big boys such as IBM and Pivotal have embraced it. However, Hadoop’s proponents are positioning it as a panacea for all the ills of big data. The antagonists are equally up to the task, denouncing it as one of the important, yet small, pieces of the puzzle. Most Hadoop proponents confuse ETL as an “activity,” rather than a “process.” The way in which ETL is performed in a Hadoop framework set-up may differ, but it does not make ETL redundant or replaceable.

  2. Analytics will still be UNDEMOCRATIC: Innovative data analysis and visualization technology players such as Tableau, QlikView, Alteryx, and Tibco (Spotfire) have gained traction as “end user” friendly products. And mega providers such as SAP have increased their efforts in this direction (e.g., rebranding SAP Visual Intelligence as SAP Lumira). However, despite significant efforts to “consumerize” big data analysis and move the power out of the ivory towers of data scientists, 2014 will witness only incremental changes in this regard. 

  3. Big Data will still be a PROJECT: Organizations always pilot a new technology before they put it into mainstream production. However, this attitude defeats the purpose of big data analytics. To gain real advantage from the deluge of data, companies must engrain a big data mindset into their DNA, rather than treating it as a silo “project.” Will 2014 see organizations jettisoning their age-old habits to wholeheartedly adopt big data analytics? Not according to my market conversations.

  4. Real talent will be TOUGH to find: Every technology transformation comes with “talent imposters,” and organizations desperate for talent will hire some of these and then repent later. Unfortunately, most of the existing data warehousing and business intelligence analysts masquerade themselves as “big data talent.” And the mushrooming of big data certifications and aggressive resume fabrication will not make organizations’ hiring task any easier in 2014.

  5. Integration will be a CHALLENGE: Technology providers such as Attunity, Dell Boomi, Talend, and Informatica have created multiple solutions to integrate disparate data sources for a consistent analysis framework. Most of these solutions work with data sources such as Amazon Redshift, IBM PureData System for Analytics (Netezza), HP Vertica, SAP HANA, and Teradata. However, organizations continue to face challenges in seamlessly integrating these, and are thus unable to extract meaningful value from their big data analytics engagements. While we’ll see major improvement in this area in 2014, a world in which different data sources are seamlessly integrated and analyzed will still be a mirage.

With cloud-based data management, modeling, and analytics disrupting the landscape, coupled with the rise of in-memory computing, the big data market will continue to surprise: we’ll see technology providers entering “unknown” domains, competing with their partners, and even cannibalizing existing offerings.

What are your takes on big data analytics in 2014 and beyond?

The lack of innovation from service providers is a constant and mournful refrain echoing around the industry. This plaintive and mournful dirge reminds me of Sisyphus, who was cursed to endlessly roll a boulder up a hill, only to watch it tumble back down, never achieving satisfaction. Likewise, the unending efforts of service providers to provide innovation to their customers seem similarly futile, resulting in the same frustrating lack of satisfaction for either provider or customer.

Why are these efforts doomed?

Service providers and their customers have different goals. Providers invest in initiatives that drive growth or improve profitability for the provider. Customers want lower cost, increased productivity and more functionality. These goals seldom align and the parties often work at cross purposes.

What do we do about it? 

The answer is that the customer must take the responsibility for defining the innovation agenda. The customer must outline what will be impactful and make a difference in its business and then share that agenda with the service provider. Whatever the issue is — reducing receivables, stock-outs in retail, more productivity, faster time to market — the customer must illuminate and define the target for the provider.

What if the provider is reluctant to pursue the innovation agenda?

Our experience is that providers often are willing to fund innovation and work across the customer’s agenda when it’s clear that it will make a difference to the customer. In these situations, the exercises in innovation lead to higher customer satisfaction and also lead to an extended contract or changing the relationship in mutually beneficial ways for both parties.

But a provider may be reluctant to pursue some aspects on an innovation agenda. An example is driving increased productivity in the provider’s organization. In a world of (P) Price x (Q) Quantity = Revenue, the provider wants to keep Q as high as possible, and productivity issues bring quality down.

From the provider’s perspective, there are two categories of innovation:

  1. Those that the provider wants to pursue and naturally aligns with (the opportunities that give new revenue opportunities or better industry insight)
  2. Those that the provider likely won’t want to pursue (things that negatively affect its commercial environment, especially its productivity).

To avoid continuously pushing your innovation boulder uphill, keep the provider’s perspective in mind. If your innovation agenda focuses on category #1, you can expect a rewarding discussion around the areas where you and the provider are aligned. But you will need to take a much more active role in driving the category #2 initiatives that are not aligned with the provider’s interests.


Photo credit: Kristina Alexanderson

The cloud revolution is breaking down walls surrounding existing outsourcing arrangements. In fact, the business case for some outsourced workloads crumbles in light of opportunities in the cloud. In a traditional data center or IT outsourced infrastructure model, you pay for the capacity 24/7; but in a cloud environment, you pay only for what you use.

By moving workloads to a cloud environment, we estimate that an organization would end up paying approximately 25-50 percent of the cost for the current 24/7 model.

Those economics are stunning.

Our analysis suggests that about 50 percent of current outsourced workloads have the capability to move to the cloud easily. That doesn’t mean that they will be moved. But they are intermittent workloads, so they can be turned off and on and thus easily moved to a variable pricing model such as the cloud. They also don’t have the same security and compliance cloud constraints as production workloads.

That doesn’t mean they will be moved. It just means they have the capability to be moved without significant disruption or a large investment to replatform them.

The diagram below shows the workloads that we think will migrate to the cloud.

Enterprise cloud migration is coming in waves

We believe the first to head for the cloud environment will be the application development and testing environments as this work is intermittent and ideal for the pay-per-use model. Considering that application development and testing comprise 20-25 percent of most outsourced IT infrastructure workloads, we believe the compelling underlying economics of the cloud model will drive these workloads out of their current environments quite quickly.

An enterprise with an IT infrastructure outsourcing contract very likely will want to migrate some workloads out of that environment into a next-generation model such as the cloud. It just makes sense to capture the savings. And in most outsourcing contracts, the customer has the freedom to reduce the outsourced workload by 30 percent before incurring penalties.

We see this as a big opportunity.

It’s also a potential threat.

On January 15, rival IT service providers CSC and HCL made an announcement that they were joining hands to deliver application modernization services. The partnership entails modernizing legacy applications (the HCL angle) and hosting them on cloud platforms (the CSC slant). CSC and HCL will open delivery centers in Bangalore and Chennai as part of this alliance, with a CoE for banking, and will share equally all revenues and costs of these operations.

The announcement sounds a lot like the one from Accenture and Dell a month ago where the two companies teamed up along similar lines. Read the release here. So what makes the CSC and HCL announcement more interesting? For starters, the simple fact that it is not the announcement we were anticipating (or were made to believe). The anticipation was for a broader alliance for infrastructure services, which would have had far significant implications on the supply landscape.

In reality, the announcement is not that big of a deal.

In our opinion this is more of a sales and marketing alliance versus a strategic re-alignment. But since it did catch our attention, here’s a brief analysis:

So why is this important?

Our research on cloud services shows that buyers place a high value on application modernization. While clients acknowledge the value of cloud adoption in order to transform their operating models and save costs, cloud-incompatible legacy applications limit the ability to harness this value. But oftentimes they are reluctant to make significant monetary investments for this pursuit and are looking for self-funding mechanisms. CSC and HCL, exploring mutual synergies, will theoretically be able to lower the risks and costs for clients transitioning to the cloud.

How does it benefit CSC and HCL?

CSC will get an additional channel for its cloud platform (BizCloud, a private cloud offering for the enterprise) and gain access to HCL’s offshore delivery capabilities in applications services. Also, this alliance will enable CSC to offer Proof of Concept (PoC) for its cloud platform to its clients at a lower price, something not feasible earlier with its U.S.-centric workforce.

For HCL, the alliance promises to:

  • Strengthen its presence in the financial services sector to match up with peers (HCL currently gets only 26% of revenues from BFSI, which is lower than that of its larger peers)
  • Boost its applications services business, which has been struggling for a while (infra business is driving growth) and position it well for potential downstream maintenance work
  • Allow it to offer a complete modernization solution across the application and infrastructure stack

Interestingly, CSC and HCL have been rivals traditionally with HCL being highly vocal about being a “replacement” for the likes of CSC. Like shrewd warring factions, CSC may have just married its enemy, turning it into an ally. The alliance likely enables CSC to not only protect its market share but also offer a compelling alternate proposition, to existing and new clients. 

Key questions that this alliance raises

  • CSC has been aggressively investing in augmenting its cloud and big data capabilities. The company, already a leading provider of cloud services will now be able to offer these services at a much reduced cost. Is there a possibility of market disruption?
  • Will HCL Technologies continue to be platform-agnostic with respect to its cloud offerings? Can there be a clause for an exclusive CSC-HCL partnership? We think there is little likelihood of this scenario, but it will be interesting to see how HCL manages demand for competing cloud platforms including IBM, Force.com, Rackspace
  • Will HCL be demanding a premium price from some of its traditional buyers as it gains access to CSC’s strong technological competency and knowledge of transformational solutions?
  • The alliance will enable HCL to augment its capabilities for application-related services, bringing it in head-on competition with the likes of TCS and Cognizant. So far HCL’s USP was its infrastructure management capabilities. Will the combination create a formidable competitor among the offshore majors?
  • Will the two rivals be successful in scaling up this alliance? How will the enterprise buyers react to this changed dynamic?

It is still too early to answer any of these questions. But one thing is clear – cloud and next-gen IT certainly create some strange bedfellows.

Bestselling author Nassim Taleb talks in one of his books about the anti-fragile, things that enjoy extreme conditions and thrive in disorder. Enterprise mobility appears to be a creature that loves disruptions in the technology market. With Microsoft’s recent reorganization, Amazon’s enhanced focus on Kindle, the never-ending rivalry between Apple, Google, and Samsung, and the queue of other players vying for this market, (Canonical, Dell, HP, and Lenovo), this disruption phenomenon is not going to fade anytime soon. In fact, when combined with the aspirations of organizations to allow enterprise application mobile avatars, and technology companies developing mobile enterprise application platforms, we have a perfect storm in the making.

However, many organizations still believe that allowing “toys in the workplace” is a good enough IT response to the CEO’s clarion call for employee appeasement and productivity. They are under a strange assumption that Bring Your Own Device (BYOD) = Enterprise Mobility. Fortunately, it is NOT; rather, it’s time to move BYonD it.

Mobile Application Platform

While mobile device/application management providers such as AirWatch, BoxTone, Citrix, Kony, SAP, and Sophos are witnessing good traction, they have not even touched the tip of the proverbial iceberg due to the limited availability of enterprise applications on mobile devices. However, despite business users’ clamouring for more enterprise applications on mobile, it is not surprising that organizations are slow to adopt.

Smartphones (e.g., from Apple, Blackberry, Google, HTC, Nokia, and Samsung), tablets (e.g., from Amazon, Apple, Dell, Microsoft, and Samsung), and their brethren indeed improve user productivity, but are largely focused on consuming information, rather than enabling performance of complex tasks beyond emailing and web surfing. Combined with the rapid pace of evolving technologies, form factors, and software, buyer organizations are unwilling to invest upfront and, therefore, continue to be fence sitters. In response, device makers show little interest in offering broader capabilities that can help enterprises move beyond BYOD (e.g., partnering with enterprise application platform providers).

However, the inflexion point has arrived. We will witness device makers, enterprise application providers, and mobile app developers coming together to offer factory-fitted popular enterprise mobile apps much like instant messengers (e.g., HR management, inventory management, CRM, social commerce). Moreover, this trinity will make various enterprise applications available on mobile devices, which we cannot even imagine today. Enterprise application providers will also enable easy access to their/partner’s application marketplace via collaboration with the device and network providers. This will enable end-users to seamlessly use their personal devices to access enterprise-class mobile applications.

Enterprises may also experiment with private app stores, as they increasingly require custom-built applications and are not entirely satisfied with a public distribution model. The challenge for them will be creating a platform-agnostic, “no lock-down,” mobility store. They can also develop innovative funding models in which users are incentivized to deploy mobile enterprise applications in return for funding for their personal device. Yet, these efforts will require significant investment and management commitment. Moreover, unlike other technology initiatives, these should be led by both IT and the business users.

Without a meaningful mobile enterprise application strategy, mobility will indeed become an undesirable “anti-fragile” that thrives in disorder.

If you are planning to or already deploying enterprise mobility and want to share your story, please reach out to me at yugal.joshi@everestgrp.com.

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