Author: Yugal Joshi

Metaverse and ScienceTech: Will These Virtual and Real-World Markets Compete?

Metaverse is the buzz these days. While Metaverse provides an embodied virtual-reality experience, ScienceTech fuses technology and science to solve real problems of humanity. Who will win in the battle for relevance, investments, and talent? To learn more about these virtual and real-world market opportunities and what actions technology and service providers should take, read on.

While they once seemed far out, the Metaverse and ScienceTech are here now. As part of our continued Metaverse research, let’s explore these emerging technologies and whether they will collide or coexist.

ScienceTech brings together technology and science to improve the real world by enhancing living standards and improving equality. It combines technology with physical sciences, life sciences, earth sciences, anthropology, geography, history, mathematics, systems, logic, etc.

Meanwhile, the Metaverse is an emerging concept that uses next-generation advanced technologies such as Augmented Reality (AR)/Virtual Reality (VR), digital assets, spatial computing, and commerce to build an immersive, seamless experience.

Over the past few months, Metaverse has become a hot topic not only in technology circles but also among enterprises. As providers pump billions of dollars to create the landscape and value realization becomes clearer, Metaverse will grab increasing attention from enterprises, providers, and market influencers.

Its serious market potential can be seen by the collaboration of industry participants to define standards to interoperate Metaverse platforms and ecosystems. Everest Group is witnessing great interest in our Metaverse research and our recent webinar Web 3.0 and the Metaverse: Implications for Sourcing and Technology Leaders generated unprecedented client inquiries.

ScienceTech has been around for many years but has been mostly experimental with limited revenue and growth. Technology and service providers have been reluctant to meaningfully scale this business because of its complexity, significant investment requirements, and high risk of failure.

However, the pandemic has changed priorities for enterprises and individuals, making ScienceTech more critical to solving real-life problems. The cloud, an abundance of data, better manufacturing processes, and a plethora of affordable technologies have lowered the cost of enabling and building these offerings.

Competition between Metaverse and ScienceTech

Below are some of the areas where these two emerging fields could conflict:

  • Relevance

Many cynics have decried Metaverse as one more fantasy of BigTech trying to take people further away from reality. This cynicism has gained pace in light of the disruptive global pandemic. The make-believe happy world driven by a heavy dose of virtual reality takes the focus of humanity away from the pressing needs of our time.

While not well defined, ScienceTech is generally perceived as being different from pure play. Some of its ideas have been around for many years such as device miniaturization, autonomous systems, regenerative medicine, and biosimulation. The core defining principle of ScienceTech is that science researched, validated, and hypothesized themes are built through technology. The relevance of ScienceTech may appear far more pressing to many than the make-believe virtual world of Metaverse.

  • Investment

The interesting competition will be for investments. Last year, venture capitalists invested over US$30 billion in crypto-related start-ups. As the Web 3.0 and Metaverse tech landscape becomes more fragmented and crowded, investors may not want to put their money into sub-scaled businesses. This can help the ScienceTech space, which is not well understood by investors, but offers a compelling value proposition.

  • Talent

Technology talent is scarce and ScienceTech talent is even scarcer. Although Metaverse vendors will continue to attract talent because they can pay top dollar, ScienceTech vendors can offer more purpose and exciting technologies to niche talent. In the internet heydays, people bemoaned that bright minds were busy clicking links instead of solving world problems. Metaverse may have that challenge and ScienceTech can benefit from this perception. GenZ job seekers want to work in areas where they can impact and change the world, and ScienceTech can provide that forum.

What should technology and service providers do?

Both Metaverse providers and ScienceTech companies will thrive and share quite a few building blocks for technologies, namely, edge, cloud, Artificial Intelligence (AI), and data. Multiple technology and trends will not battle. Moreover, these two markets serve different purposes and Metaverse and ScienceTech will coexist. Technology and service providers will need to invest in both segments, and capture and shape the market demand.

Providers need to prioritize where to focus efforts, investments, partnerships, and leadership commitment. A different people strategy will be needed because skilling technology resources on science and vice-versa will not work. They will need to select specific focus areas and hire people from multiple science domains. The R&D group will have to change its constituents and focus on science-aligned technology rather than just Information and Communications Technology.

To be successful, providers also will have to find anchor clients to underwrite some offerings, collaborate to gain real-life industry knowledge, and engage with broader ecosystems such as academia, government, and industry bodies to build market-enabling forums.

To learn more about our Metaverse research and discuss your experiences in these emerging areas, contact [email protected] or contact us.

Visit our upcoming webinars and blogs to learn more about upcoming technologies and trends.

The Next for Low-code Software Development: Voice-driven Development

Using voice to create applications is the next evolution of low-code software development, but it has many challenges to overcome. Voice-based development can make it easier for users with less experience to create code and help fill the talent void. Is voice-driven software development the next pioneer in low code, or is it all talk? Read on to find out.

As low-code development software continues to grow, one way to make it even easier is by using voice to create applications. Voice can become an important interface to engage with low-code platforms in addition to the standard way of users building applications through drag and drop functions.

While professional software development has been talking about voice-based development for at least a decade, it hasn’t taken hold at the rate expected and still has a long way to go. Attempts have been made to create voice-based enterprise workflows using devices such as Alexa. However, these are voice “triggered” and not voice “developed.”

Voice-based software development hasn’t worked in the mainstream. Why would it work in low code?

Low-code development is full of challenges around aligning requirements and outcomes, security, debugging, portability, building complex functionalities, etc. Therefore, adding a voice layer to engage will be an obstacle in low code.

Software development through voice is an exciting area, and firms like Talon, Nuance (Dragon), and Serenade have attempted to incorporate voice-based software development. OpenAI Codex-based CodeVox also has tried to build software using voice as input.

The challenges with voice-driven software development are well documented and include speech recognition, interpretation, Integrated Development Environment (IDE) support, programming language support, formats, and building the actual code.

Moreover, professional developers do not generally like the idea of coding through voice because they believe they think and type faster than they speak. Therefore, non-professional developers and business users – the key targets for low-code software – become good audiences for enhanced value.

Despite the difficulties, voice can add meaningful benefits if done well in low-code applications and can further increase the user pool who are comfortable in building business line or workflow apps to start with.

Few, if any, low-code vendors today are providing voice-based development support because the industry does not have a strong AI-led base platform to incorporate such complex functionality.

As the market matures and low-code demand scales, enterprises and vendors will soon realize they will need to further simplify low-code application development beyond the current drag and drop model. If they don’t, low code will meet the same fate as professional development, where costs are astronomical, timelines are longer, and talent is scarce.

The big issues around the need for more software, lack of talent, rising costs, and poor time to market are not going anywhere and, in fact, will worsen in the future. While low-code platforms are an attempt to address some of these hurdles, the current model is not sustainable. Voice must become an integral part of low-code development for it to succeed.

For more information on the low-code software development market, see Everest Group’s research on Next Normal for Application Development and our assessment of leading vendors offering low-code software development platforms.

What do you think about voice-based low-code software development? Please let me know at [email protected].

You can also learn about emerging technologies in our webinar, Web 3.0 and Metaverse: Implications for Sourcing and Technology Leaders.

 

Technology Service Providers’ Conundrum: Cloud Good for Growth, Not for Their Leadership | Blog

Leaders of cloud development at technology service providers are often seen as stars, leaving executives in charge of traditional segments feeling left out and unnoticed. The C-Suite needs to recognize the important contributions business units and their leaders play to the company’s overall growth and future success. Read on to learn the actions “non-cloud” business leaders should take to be sure they get the company investment, attention, and rewards they deserve. 

What describes the current cloud landscape for business at technology service providers

In our market observations, one aspect has become very common. Leaders at technology service providers who are driving cloud business development for their firms are witnessing much stronger professional growth in the organization than others.

Businesses always value and reward people who are part of fast-growing markets. Given that cloud business for technology service providers is growing two to five times more than overall company growth, it is the cynosure of discussions, investments, and leadership promotions. However, it is also creating challenges for C-level executives in terms of managing the morale of other “non-cloud” leaders.

As a result, we see some segments are now led by “lesser title” executives than in the past. Even if senior leaders run these businesses, they do not get the needed attention and investments from the C-suite. These units quickly become the cash cows that need to drive other high-growth business, such as cloud, which are subtle indications from top management around companies’ priorities.

What are non-cloud leaders doing?

Leaders driving traditional segments are partnering with cloud leaders to drive business. However, they also realize they need to play “second fiddle” in this partnership. Though the cloud business probably needs these segments more than vice versa, the cloud business becomes the fulcrum around which the partnership revolves.

This is forcing technology service providers to rethink the organizational structure of these segments. Some of them are or will embed these segments into different units instead of running them as standalone practices. Many leaders who were part of transformational offerings (e.g., modernization, platforms) have changed their roles now to align with cloud business units.

However, this is not enough, and the non-cloud leaders know it.

What should C-level leaders do?

Top management focuses on the overall growth of the firm. Cloud will continue to receive significant focus and investments from the C-suite because of the benefits of cloud technology to the business. However, the C-suite is failing to realize that the cloud business cannot be seen as an antagonist and other leaders should not feel excluded.

Although C-level executives have aligned non-cloud leaders’ incentives, growth, and influence areas based on capabilities, focus, and aspirations, they must design better models to engage them. They need to understand that cloud business development relies on the success of these other units that bring 50-80% of their top line.

While the cloud business at technology service providers acts as a “nodal agency,” it is unable to influence capability building across the organization. The key reason is because non-cloud leaders are unwilling to collaborate beyond the bare minimum because they see their personal growth being stifled even if they make the cloud business succeed.

We believe technology service providers who can solve this complex organizational structure problem will accelerate their overall business and cloud growth faster than their peers. As newer concepts of Metaverse, Digital Twins, Artificial Intelligence (AI), and composable businesses accelerate and large spend areas such as supply chain, networks, employee engagement, sustainability, and customer experience get disrupted by cloud, it will become even more important.

However, cloud will not be front and center before the strategy but an enabler for overall business outcome. Therefore, C-level leaders need to nurture their leadership outside of the immediate cloud business to prepare their organization for future success. Failing to do so may result in near-term growth for cloud business development but bring long-term challenges for the overall organization.

What should non-cloud leaders do?

  • Stake claim to the high table: Have the courage to speak up about the importance of your service line. Educate top management about how underinvestment in your business impacts the overall firm. Continue to collaborate with cloud leaders but build deep relationships where you are an equal partner instead of being in the back seat
  • Make your portfolio exciting: Leaders should make their management style and offering portfolio enticing. Unfortunately, most confuse their run the business innovation as exciting, which it is not. They should focus on revamping their offering portfolio, drive positive messages across team members about the impact they are creating, and create internal events for people to feel connected and motivated
  • Invest beyond run the business: Many leaders have almost given up on the hope of growth investing in their business. Some of it is a result of top management’s lack of interest, but in large part is due to the internalization the non-cloud leaders have of this apathy. These leaders need to build a stronger case for investments in their segments, link it to overall firm performance, and provide detailed insights into how their business is adding to cloud momentum
  • Quit: If the leaders continue to get short shrift in their organization, they should proactively look at opportunities outside their company. Smaller and niche companies are always seeking a growth-centric C-suite and will be happy to engage with them. In these companies, executives can create their charters and show the value add they can bring

What is your take on cloud business development at technology service providers? Please reach out to us at [email protected], [email protected], or contact us.

With the rapid pace of change and push toward digital adoption, enterprises need to identify the right vendors, determine the right price, and keep up with evolving operating models. Learn more in our webinar, Cybersecurity: What You Need to Know to Find the Right Partner and Price.

SaaS Marketplaces: Opportunities for Technology and Consulting Services Providers | Blog

Driven by the pandemic, SaaS Marketplaces are rising in popularity as a unified virtual storefront where various vendors can provide cloud-based product and service offerings. As their role continues to expand and evolve, technology and consulting service providers who can seize opportunities in this area are well-positioned to become valued partners and mentors for enterprise clients and SaaS vendors. Learn more about the growth areas for service providers and the promising future outlook for SaaS marketplace solutions in this blog.

As the SaaS market has ballooned beyond US$120 billion, the role of SaaS marketplaces is getting noticed. Last month Salesforce celebrated 10 million installs of its AppExchange marketplace, Microsoft AppSource reached over 100 million users globally, and AWS marketplace has over 2,000 software vendors. While these statistics are not new, they are getting noticed now due to increased pandemic-fueled digital selling.

What is happening in SaaS marketplaces?

SaaS marketplaces have significantly evolved from their primitive infant days. Not only do they offer access to hundreds and even thousands of SaaS offerings from their partners, but they also add value today by improving the contracting process, vetting applications, and providing transparent billing and similar value-added services. Though they still represent a small dent in the overall enterprise buying process, some marketplaces believe these may become the default.

Software and platform vendors such as SAP, Oracle, ServiceNow, Salesforce, AWS, and Microsoft are proactively investing in these strategic initiatives. While most marketplaces ease enterprises’ integration challenges, many of them generally focus solely on add-on products for their platforms, Application Programming Interfaces (APIs), integrations, or plug-ins and not applications outside their ecosystem.

What does this mean for technology and consulting services providers?

With multiple pre-built and tested integration and API on SaaS marketplaces, a logical assumption is that technology service providers will struggle because SaaS consumption will become easier. However, the reality is entirely the opposite. Most service providers have listed some offerings on leading marketplaces, but that is not enough. The following three broad opportunities exist for service providers:

  • Enterprise guide: Most B2B sales continue to be traditional. However, the pandemic has shifted the focus to a digital sales model, including SaaS marketplaces. Enterprises need considerable help in building their adoption strategy SaaS marketplaces, ensuring risk and governance, monitoring consumption, embedding security, and driving SaaS adoption. All of these needs add to the existing pie providers get from enterprises. In addition, service providers can tap into the committed cloud spend of enterprises to extract more value from cloud investments
  • Leveraging large SaaS partnerships: Large SaaS vendors plan to build sticky relationships with clients through the marketplace offering. The listed products generally enhance these underlying platforms, and therefore, service providers who are strategic partners for the SaaS vendor stand to benefit. This can lead to not only consulting, implementation, and support work but also to running business processes for the enterprises. In partnership with the large SaaS vendors, Business Process as a Service (BPaaS) can be offered, bringing together multiple listed offerings and delivering them as a full stack in an outcome model (e.g., reducing day sales outstanding, impacting trade dispute spend, faster invoice processing, etc.). The service provider can build an industry-aligned solution using the marketplace offerings of large SaaS vendors and its partners
  • Driving innovation with smaller SaaS vendors: As a result of prioritizing their channel arm, 90% of service providers’ pipelines are generally with the top five to eight partners despite working with several hundred software vendors. Small SaaS vendors do not get the needed attention because their deal sizes are small (often $100-200K Annual Recurring Revenue.) With marketplace, service providers can bring together offerings from different smaller SaaS suppliers (e.g., industry offerings or enhancing an existing large SaaS platform). Service providers can become the gateway for enterprises to consume multiple SaaS offerings in an integrated manner and provide the needed governance discipline across business functions. They also can build attractive service packages that tie to these solutions and bundle SaaS and professional services

Most SaaS marketplaces have a significant presence of Managed Service Providers (MSPs), resellers, and other channel alliance partners. Technology service providers need to proactively invest to partner with multiple SaaS vendors to become their preferred channel to engage with the marketplace. They can provide value-added services of implementation, customization, data integration, and run after the purchase process. In addition, technology service providers can integrate their offerings with SaaS vendor solutions and host them on the marketplace. They can also partner with other vendors to create unique solutions with SaaS providers delivered on the marketplace. Some service providers may also build their own marketplace targeting specific areas such as application modernization or cloud migration.

What will happen going forward?

As a sub-segment of Cloud marketplace, SaaS marketplaces are part of the broader digital selling trend witnessing rapid growth due to the pandemic. These marketplaces will keep evolving beyond adding more listings to enhance contracting, leverage Artificial Intelligence (AI) to search for bundled and efficient options, and provide other benefits. The market will aggregate around large marketplaces, much like cloud and social media.

Enterprises will continue to evaluate these platforms to reduce cost, friction, and integration challenges. B2B commerce has already made organizations comfortable in using the principles of marketplace buying. SaaS marketplaces are one more addition to this journey.

If vendors can provide a seamless experience, transparent pricing, resolve disputes, and offer hyper-personalization after sales, the industry will witness significant momentum. Therefore, technology and consulting providers need to work closely with sellers, buyers, and platform vendors to drive their businesses. They will have to rethink their contracting, pricing, cataloging, and go-to-market (GTM) models to align with SaaS marketplaces. As SaaS gets more industry-aligned, the role of technology and consulting service providers will morph into becoming mentor-plus partners for their enterprise clients and SaaS vendors.

What have you experienced with SaaS marketplaces? Please feel free to write to me at [email protected].

Watch our webinar, Is Your IT Sourcing Program Up to Speed? Here’s How to Get There, for more details around IT and technology services.

Discover more of our IT and digital transformation services insights.

Multi-cloud and Modern Applications: Doomed to Fail | Blog

Are multi-cloud and modern applications a panacea or problem? As the cloud journey scales and newer ways of building workloads get adopted, the industry is divided over the value of these initiatives. With increasing concerns about their viability, enterprises need to address some key questions before moving forward. Read on to learn more.   

In our previous blogs, we covered the dichotomy of multi-cloud and explored choice or strategy and interoperability. Let’s now dive into the debate over these approaches.

While enterprises understand the new digital business models require them to fundamentally change the way they consume cloud and build software, they aren’t necessarily aligned on the best models for the future. Not everyone is completely sold on multi-cloud and some doubts by large enterprises are emerging.

The top five questions enterprises ask are:

  1. Is there a better way to solve business challenges than assuming that multi-cloud and modern applications are the panacea?
  2. Is multi-cloud now a distraction to our technology teams?
  3. Is multi-cloud a “fear uncertainty and doubt” created by the nexus of cloud vendors and their partners?
  4. How can we succeed in multi-cloud when we barely have skills for one cloud to build, manage, and optimize workloads?
  5. Why should we build modern applications this way if they are so complex to build, operate, and sustain?

These questions are understandable – even if not always correct. However, unless enterprises become comfortable and address these challenging issues, they cannot proceed in their cloud or modern applications journey.

What should enterprises do?

Based on our research, we recommend the following three steps to succeed:

  • Acknowledge: First, acknowledge that multi-cloud and modern applications are not a cakewalk but very complex strategic initiatives. Moreover, they may not be relevant for all enterprises or use cases. Stress testing the current operating model, development practices, and existing investments are important before charting this journey. In addition, performing analysis to understand the operating cost of multi-cloud and modern applications is critical
  • Assess: Next, discovering existing technology and business estate, aligning with future priorities, and understanding in-house talent, program risks, and funding capabilities become important. Once these decisions are made, enterprises need to consider architectural choices and technology stacks. Wrong choices on these critical input areas can derail the multi-cloud and modern applications journey
  • Act: Finally, understand it is not a foregone conclusion that multi-cloud and modern applications will always benefit or harm your enterprise. In addition to the technology challenges, operating models must change. Therefore, rationalizing tools, realigning teams, prioritizing funnel funding, and transforming talent are critical. Simulating these workloads before they are built and holding cloud vendors and partners contractually accountable is important. Enterprises should also understand that some existing technology investments will be irrelevant, and they will need to buy newer tools across design, build, and run

What should vendors do?

In the complex landscape, cloud providers, service partners, and technology companies have their own incentives and businesses to run, and none have the client’s best interests as their core agenda. Vendors need to build data-driven models to show the value of multi-cloud and modern applications initiatives and help remove as much subjectivity and intuition from this process. Moreover, building platforms that can simulate these workloads across the lifecycle, as well as the talent, funding, and process transformation needed for this journey, are important. If the returns are underwhelming, enterprises should not bother going down the multi-cloud and modern applications route.

Suppliers should be proactive enough to let clients know of the operating model changes needed to adopt multi-cloud and modern applications. We believe system integrators have a more strategic role to play here because cloud or tech vendors do not understand the client landscape and have less incentive to drive such fundamental operating model transformation.

In the end, it boils down to the conviction enterprises have in multi-cloud and modern applications initiatives.  Using tools and platforms to stress test can move the decision from being a gut feeling to fact-based.

Please share your experiences with multi-cloud and modern applications with me at [email protected].

Discover more about our digital transformation research and insights.

Databricks vs Snowflake: A Rivalry to Last or Lunch for Cloud Vendors? | Blog

In the latest tech industry rivalry, the competition between Databricks and Snowflake in the cloud data and analytics space is getting a lot of attention. It joins the other famous marquee rivalries over the past 100 years, such as those between IBM and HP, SAP and Oracle, or AWS and Azure. To learn more about the similarities and differences between these two big data service providers and how to make better buying decisions when choosing between the two, read on. 

What do Databricks and Snowflake do?

For the uninitiated, Databricks focuses on analyzing data at scale regardless of its location. It can broadly be considered a data and analytics platform that helps enterprises extract value from their data. Snowflake is a cloud-based data warehousing platform that positions itself as being a simple replacement to other complex offerings from traditional vendors such as Oracle and even cloud vendors such as AWS, Microsoft, and Google.

Both the platforms apply AI to data issues for enterprises. Therefore, they are Enterprise AI companies that plan to transform the usage of data in enterprises. It could be using AI to integrate data lakes and warehouses, crunching massive scale data to make decisions, or just being an intelligent analytics platform.

Where are the firms today?

Snowflake went public in 2020, making it the largest software IPO in history at a valuation of US$33 billion. Databricks, on the other hand, continues to be private and recently reached US$38 billion in valuation. While money is less of a problem, mindshare, being first to market, and the threat from cloud hyperscalers are bigger challenges. Both vendors struggle from the significant talent demand-supply mismatch, as we covered in our research earlier.

The management of both companies has a strong respect for each other. Databricks, for example, understands that Snowflake had a head start. On the other hand, Snowflake realizes some features of Databricks need to be built for its platform as well.

What is happening?

The two vendors are well covered in the public arena, and many have written almost with a romantic spin about their roots, success, and management background. Both firms have different management styles, with Snowflake run by a professional and Databricks by the founder. However, clients are least bothered about the internal operating model of vendors. They are more concerned about whether to bet on these firms, given cloud vendors have been reshaping the industry. In addition, these two companies are dependent on cloud vendors for their own platforms.

Both the vendors have taken potshots at each other with competing offerings with similar-sounding names such as Data Ocean from Snowflake and Data Lakehouse from Databricks. They also collaborate and have connectors to each other’s platforms while they keep developing their versions of these offerings. The sales and technical teams of these vendors bring out challenges in each other’s platforms to clients, such as how Databricks focuses on Snowflake’s proprietary model versus their open-source platform. Snowflake emphasizes how its compute scaling is faster and data compression is better.

What will happen?

Developers, operators, and data professionals have strong views on which platform(s) they plan to leverage. Given Snowflake’s view on building platforms from a warehousing perspective, enterprises find it easier to migrate. Coming from a data lakes perspective, Databricks has to fight a tougher battle. Moreover, Snowflake is perceived as simpler to adopt compared to Databricks. The bigger issue for both of these vendors is the threat from cloud providers. Not only do these vendors offer their platforms on cloud hyperscalers, but these hyperscalers have built their own suite of data-related offerings.

Both Snowflake and Databricks are losing money and running losses. Innovation will be needed to compete with cloud vendors, and innovation is costly. In addition to cloud, one other big challenge these two vendors face is the growing trend of decentralization of data. As data fabric and mesh concepts gain traction, building a lake or warehouse may lose relevance. Therefore, both of these vendors will need to meet data where it is generated or consumed. They need to make connectors to as many platforms as possible. Moreover, as more open-source data platforms see traction, the earlier powerhouse of Oracle, SAP, Microsoft, and IBM may decline, which will impact these two vendors as well unless they scale their offerings to these open-source databases, messaging, and event platforms.

What should enterprises do?

It’s a known fact that a large number of Databricks clients are customers of Snowflake as well. We recommend the following to enterprises:

  • Segregate the applications: With multi-cloud gaining traction, enterprises are fine investing in multiple data platforms as well. Enterprises need to segregate their workloads from classical Oracle, SAP, Teradata, and similar platforms as well as newer workloads they plan to build or modernize, generally on open-source databases. As the data type supported by applications evolve, enterprises will need help from data vendors
  • Evaluate partner innovation: In addition to the issues around talent availability, enterprises should evaluate the ecosystem around these two vendors. Innovation that other technology and service companies are building for these data platforms should be important decision criteria
  • Bet on architecture: Both Snowflake and Databricks have a fundamentally different view of the data market. Though their offerings may converge, one brings a warehouse perspective and the other a lakehouse. However, enterprises should think about their architecture for the future. With architectural complexity on the rise, enterprises should ensure their current data management bets align with their business needs 5-10 years down the road

The market is still divided on cloud’s role in data transformation, given the challenges around cost and latency. However, as these platforms bring down the total cost of ownership by segregating compute and storage, cloud data platforms will witness growing adoption.

The general questions on best sourcing methods will always persist irrespective of technology. Enterprises will need to answer some of these such as lock-in, security, risk management, spend control, and exit strategy in making their purchasing decisions.

What has your experience been in using Snowflake and Databricks? Please reach out to me at [email protected].

Enterprise Metaverse: Myriad Possibilities or Problems for the Hybrid Workplace? | Blog

The future of work in the post-pandemic world will increasingly incorporate elements of the metaverse where virtual reality permeates physical workspaces, creating a truly immersive employee experience. This can create exciting opportunities for organizations that embrace this new work environment that goes “beyond universe.” Continuing our coverage of metaverse, let’s take a look at the challenges and four essential elements needed for metaverse to succeed in enterprise workplaces.   

As the world debates return to work, hybrid work, public workspace, private workspace, and a myriad of other employee engagement models, the virtual workplace deserves more attention. This emerging workplace goes beyond merely adopting next-gen collaboration platforms to help employees, but fundamentally rethinks building workplaces where real employees, virtual employee personas, and other people work together.

Technology vendors such as Sophya, Cluster, VirBELA, and Teeoh, who have been active in this space, got a shot in the arm when Big Tech players Microsoft introduced Mesh and Facebook launched Horizon Workrooms. Enterprise adoption of Augmented Reality (AR)/Virtual Reality (VR) into training, employee onboarding, remote diagnostics in industrial sectors, and virtual events are already seeing traction. However, enterprises have struggled with seamlessly blending the virtual world and building a truly immersive workplace. With the pandemic making remote and distributed work more acceptable and workable, enterprises will become more audacious in experimenting with leveraging the building blocks of metaverse.

Four elements needed to make metaverse take off in the workplace  

  • Technology maturity and cost of ownership: The fundamental building blocks of metaverse that create mixed or augmented reality experiences are primitive in nature and expensive. However, make no mistake, the development happening in this space is more rapid than we can fathom. As the consumer world evolves with better hardware, software, and experience, it will influence the enterprise world as well. Most hardware vendors such as LG and Nvidia are focusing on building more affordable AR/VR headsets. While at some point of time in the future customized hardware (e.g., glasses or headsets) may not be required to function in the enterprise workplace metaverse, that world is very far off. Until that time, vendors need to build affordable technology solutions

 

  • Bold enterprise thinking: Disruption does not bring clarity. Change is difficult, and that scares enterprises. Enterprises will need to think boldly if they have to transform the employee experience, especially in the post-pandemic world. If they keep rethinking their workplace only in terms of deploying different types of collaboration suites, making things like policy more accessible to employees, and giving employees the best technology to work with, they will be missing the point. This is the time to fundamentally rethink the workplace by layering in metaverse. Many enterprises built virtual lounges for leadership during the pandemic and plan to continue with that. However, this needs to be scaled for everyone in the organization. Build a workplace that provides a common platform for all employees regardless of where they are based

 

  • CEO-driven change: If left to IT or HR teams, metaverse will not see the day of light in the enterprise workplace largely because CIOs do not have the incentive or vision to be so bold when their average tenure is only three years. CIOs can push for better laptops, phones, collaboration suites, etc., but rarely rethink an employee experience that needs metaverse adoption. The HR team generally views employee engagement from a policy rather than a technology adoption perspective. If the CEO believes talent strategy, seamless collaboration, and brand value are all important, they need to lead the enterprise metaverse charge within the workplace

 

  • User education: In addition to the typical user education needed with any change, virtual offices will need specialized attention to avatar definitions. Given the focus is having the virtual and real-world fuse seamlessly, an effective avatar is a key requirement to succeed. Therefore, enterprises may need to hire avatar builders rather than burden users with creating them. Policy guidelines around acceptable avatars also may be needed. By partnering with retail vendors to sell offerings for these avatars, enterprises can improve the employee experience and also potentially gain share with the provider to improve the return on these investments

Next steps in enterprise metaverse for the workplace

Enterprises need to understand the vendor landscape in this area, which includes suppliers offering meetings, training, onboarding, virtual events, remote support, and avatar-based workplaces. Providers are approaching this space from different angles and philosophies. Some require headsets and customized hardware to enter the metaverse, while others do not.  As this space evolves, the vendor offerings will expand, and other new segments are rapidly emerging. Given the dynamic nature, enterprises will need dedicated teams to track this landscape and keep up with the developments.

To drive adoption, enterprises need to bet on simpler use cases such as attending virtual forums, meetings, and fun events. Once users are comfortable in engaging on these metaverse forums, the use cases can be expanded to day-to-day work with specific personas. Technically advanced users can be the first users, followed by other enterprise functions.

Eventually, enterprises will need to realize and appreciate that metaverses will not be a replacement of their real workplace environment but used to enhance employee engagement and experience. As the world moves towards a mix of on-premise and remote models, fancy collaboration platforms will not suffice. Enterprises will have to bite the metaverse bullet, if not now, in the coming years.

Has your organization adopted any metaverse concepts in the workplace? Please let me know your experience at [email protected].

Metaverse: Opportunities and Key Success Factors for Technology Services Providers | Blog

While the metaverse may seem way out there, the opportunities for technology service providers in this next evolution are very real. While sci-fi movies such as Ready Player One introduced this concept of an interactive virtual reality (VR) world, leading technology giants including Facebook, Nvidia, and Microsoft are investing in this future. What will it take for tech service companies to seize a stake in this alternative universe that could be coming very soon? To learn more about the five factors providers will need to succeed in the metaverse, read on.

With digital technologies such as the Internet of Things (IoT), Artificial Intelligence (AI), and the cloud, buildings and other physical locations have become “smart spaces,” as we recently wrote about in this Viewpoint. The metaverse – a confluence where people live a seamless life across the real and virtual universe – can be thought of as the “mega smart space.” Google trends analysis of the word “metaverse” below suggests a growing interest in it.

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As the underlying powerhouse running the metaverse, the internet is expected to evolve to this next-generation model. Driven by the growing acceptance of virtual models as a standard way of living during the pandemic, many evangelists believe the metaverse may become a reality sooner than expected.

News such as a Gucci virtual bag selling for more than its physical value is grabbing attention. Virtual avatars are already attending corporate meetings and large audience forums with real people. The physical motion of body parts is being replicated in the digital world and vice versa, as witnessed at the recent SIGGRAPH 2021 conference. Even if we discount the hyperbole of vendors, there is merit in evaluating what this means for the technology services industry.

Opportunities to build a new world

Interestingly, the metaverse has no standard building blocks. Since it’s a parallel universe, things that exist in the real world are imitated. Therefore, blockchain-driven non-fungible tokens (NFTs) and payments, computing power to run the universe, connectivity through 5G and edge, cyber security, interactive applications, Augmented Reality (AR) and VR, digital twins, and 3D/4D models of the real world all become important. Of course, integrating these seamlessly with enterprise technology will be a demand to cater to.

The entire metaverse is based on technology. And with more technology spend comes more technology services spend. Although some of these enabling technologies, such as AR/VR, are still in their infancy, but technology vendors are accelerating their development, which will only help technology service providers.

Five factors needed for tech service providers to succeed in the metaverse

  1. Innovative client engagement: Gaming companies may end up taking a lead in this area given their inherent capabilities to build engaging life-like content. Unfortunately, few technology services work meaningfully with gaming companies. Vendors who can build product development competence for this set of clients will benefit from the metaverse. Service providers also will need to scale their existing engagements with BigTech and other technology vendors. The current work focused on maintaining their products or providing end-of-life support must change. Service providers will need to engage technology vendors upstream in ideating and designing products and not only developing and supporting them. The traditional client base in segments such as Banking, Financial Services, and Insurance (BFSI), retail, manufacturing, and travel will continue to be important. These industries will build their version of the metaverse for consumers for specific business use cases or participate in/rent out others. Technology service providers will need access to business owner spend in these organizations. Other industries such as education, which do not currently provide large technology service opportunities, may also take the lead in the metaverse adoption. The takeaway is service providers will need to expand their client coverage and rely less on their traditional client base
  2. Capabilities to work with “unknown” partners: Most service providers have a very long list of 200-300 technology partners they work with. However, they usually prioritize five or six as strategic partners who influence 70-80% of their channel revenue. This will need to change for the metaverse. With its complexity, the metaverse will require service providers to not only work with other peers but also innumerable smaller companies. Niche partners could be manufacturing smart glasses, tracking technologies, or virtual interfaces, etc. Building viable Go-to-Market (GTM) and technical capabilities will be critical
  3. Product envisioning and user experience capabilities: While many service providers now have interactive businesses, their predominant revenue comes from building mobile apps, next-gen websites, or commerce platforms. Most have very limited true interactive or product envisioning capabilities. The metaverse will reduce the inherent need for “screens,” and the experience will be seamless. Most enterprises rely on specialist providers to brainstorm with and push their thinking to envision newer products. Other service providers are still catching up and are bucketed as “technical partners.”  Envisioning capabilities will become critical. Therefore, service providers who are yet to get to even product design opportunities have a big road to traverse. Although these technology service providers can continue to focus on the downstream work of core technology, they will soon be sidelined and become irrelevant
  4. Infinite platform competence: The metaverse will need service providers to closely work with cloud, edge, 5G, carriers, and other vendors. However, the boundless infrastructure and platform capabilities needed will change. Service providers have already tasted success in cloud. However, the metaverse infrastructure will stress their capabilities to envision, design, and operate limitless infrastructure platforms. Their tools, operating processes, partners, and talent model will completely transform
  5. Monetization model: Service providers will need to bring and build innovative commercial models for their clients to monetize the metaverse. Much like the internet, no one will own the metaverse. However, every company will try to be its guardian to maximize their business. Service providers will need to understand the deep working of the metaverse and advise clients on potential monetization. To do this, they will not only need traditional capabilities such as consulting and industry knowledge but also breakthrough thinking around potential revenue streams. For example, a bank or telecom company will want its metaverse to influence growth and not just become one more channel of customer experience

Who will take the lead?

Without adding to the ongoing debate on the metaverse and its social impact, it is safe to assume that it can create significant opportunities for technology service providers that will continue to grow as this nascent concept evolves further. These service providers already have many technical building blocks that will be needed to succeed.

However, given the metaverse conversations are not even at infancy in their client landscape, service providers are not proactively thinking along this dimension. Since the metaverse will initially be dominated by technology vendors, who outsource a lot less than their enterprise counterparts, service providers will struggle unless they proactively strategize, and their traditional client base will need a significant push to think along these lines to create opportunities.

Currently, this all may appear too farfetched or futuristic. Indeed, there are too many “unknown unknowns.” Unlike technology vendors, technology service providers do not proactively invest until they size up the market opportunity. However, as enterprise-class technology vendors such as Microsoft launch offerings like Mesh, it is quite apparent that the metaverse, in some shape or form, will become enterprise-ready sooner than we expect.

What has your experience been with metaverse-related opportunities? Please share your thoughts with me at [email protected].

Cloud Transformation: How Much Is Enough? | Blog

With today’s business transformation led by cloud, migration frenzy remains at a fever pitch. Even though most cloud vendors are now witnessing slower growth, it will still be years before this juggernaut halts. But can you have too much cloud? The question of how far enterprises should go in their cloud transformation journey is rarely thought of. Read on to learn when it may be time for your enterprise to stop and reexamine its cloud strategy.  

Enterprises believe cloud will continue to be critical but only one part of their landscape, according to our recently published Cloud State of the Market 2021. Once enterprises commit to the cloud, the next question is: How far should they go?  This runs deeper and far beyond asking how much of their workloads should run on cloud, when is the opportune time to repatriate workloads from cloud, and whether workloads should be moved between clouds.

Unfortunately, most enterprises are too busy with migration to consider it. Cloud vendors certainly aren’t bringing this question up because they are driving consumption to their platform. Service partners are not talking about this either, as they have plenty of revenue to make from cloud migration.

When should enterprises rethink the cloud transformation strategy?

The challenge in cloud transformation can manifest in multiple ways depending on the enterprise context. However, our work with enterprises indicates three major common obstacles. It’s time to relook at your cloud journey if your enterprise experiences any of the following:

  • Cloud costs can’t be explained: Cloud cost has become a major issue as enterprises realize they did not plan their journeys well enough or account for the many unknowns to start. However, after that ship has sailed, the focus changes to micromanaging cloud costs and justifying the business case. It is not uncommon for enterprises to see the total cost of ownership going up by 20% post cloud migration and the rising costs are difficult for technology teams to defend
  • Cloud value is not being met: Our research indicates 67% of enterprises do not get value out of their cloud journey. When this occurs, it is a good point to reexamine cloud. Many times, the issue is poor understanding of cloud at the offset and the workloads chosen. During migration frenzy, shortcuts are often taken and modern debt gets created, diluting the impact cloud transformation can have for enterprises
  • Cloud makes your operations more complex: With the fundamental cloud journey and architectural input at the beginning more focused on finding the best technology fits, downstream operational issues are almost always ignored. Our research suggests 40-50% of cloud spend is on operations and yet enterprises do not think through this upfront. With the inherent complexity in cloud landscape, accountability may become a challenge. As teams collapse their operating structure, this problem is exacerbated

What should enterprises do when they’ve gone too far in the cloud?

This question may appear strange given enterprises are still scaling their cloud initiatives. However, some mature enterprises are also struggling with deciding the next steps in their cloud journey. Each enterprise and business unit within them should evaluate the extent of their cloud journey. If any of the points mentioned above are becoming red flags, they must act immediately.

Operating models also should be examined. Cloud value depends on the way of working and the internal structure of an enterprise. Centralization, federation, autonomy, talent, and sourcing models can influence cloud value. However, changing operating models in pursuit of cloud value should not become putting the cart before the horse.

Enterprises always struggle with the question of where to stop. This challenge is only made worse by the rapid pace of change in cloud. As enterprises go deeper into cloud stacks of different vendors, it will become increasingly difficult to tweak the cloud transformation journey.

Despite these pressures, enterprises should periodically evaluate their cloud journeys. Cloud vendors, system integrators, and other partners will keep pushing more cloud at enterprises. Strong enterprise leadership that can ask and understand the larger question from a commercial, technical, and strategic viewpoint is needed to determine when enough cloud is enough. Therefore, from journey to the cloud, to journey in the cloud, enterprises should now also focus on the journey’s relevance and value.

If you would like to talk about your cloud journey, please reach out to Yugal Joshi at [email protected].

For more insights, visit our Market Insights™ exploring the cloud infrastructure model. Learn more

Multi-cloud: Strategic Choice or Confusion? | Blog

The multi-cloud environment is not going away, with most large enterprises favoring this approach. Multi-cloud allows enterprises to select different cloud services from multiple providers because some are better for certain tasks than others, along with other factors. While there are valid points to be made both for and against multi-cloud in this ongoing debate, the question remains: Are enterprises making this choice based on strategy or confusion? Let’s look at this issue closer.

The technology industry has never solved the question of best-of-breed versus bundled/all-in consumption. Many enterprises prefer to use technologies consumed from different vendors, while others prefer to have primary providers with additional supplier support. Our research suggests 90% of large enterprises have adopted a multi-cloud strategy.

The definition of multi-cloud has changed over the years. In the SaaS landscape, enterprise IT has always been multi-cloud as it needed Salesforce.com to run customer experience, Workday to run Human Resources, SAP to run finance, Oracle to run supply chain, and ServiceNow to run service delivery. The advent of infrastructure platform players such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP) has reinvigorated this best of breed versus all-in cloud debate that results in multi-cloud or single-cloud adoption.

In a true multi-cloud world, parts of workloads were expected to run on different clouds seamlessly. But increasingly, interoperability is becoming the core discussion in multi-cloud. Therefore, it is not about splitting workloads and working across the cloud, but ensuring one cloud workload can be ported to another cloud. While debating a pedantic definition of multi-cloud is moot, it is important to acknowledge it as the way forward.

Most cloud vendors now realize multi-cloud is here to stay. However, behind closed doors, the push to go all-in is very apparent across the three large vendors. Let’s examine the following pro and anti-multi-cloud arguments:

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Both the pro and anti-multi-cloud proponents have strong arguments, and in addition to the above points, there are many others on each side. But the truth is increasing numbers of enterprises are adopting multi-cloud. So, when an enterprise proactively adopts a multi-cloud strategy, does that mean it’s a strategic choice or strategic confusion about cloud and its role as well as the other factors outlined above?

This is a hard question to answer, and each enterprise will have to carve its cloud strategy. However, enterprises should realize this strategy will change in the future. No enterprise will be “forever single cloud,” but most will be “forever multi-cloud.” Therefore, once they embark on a multi-cloud strategy, it will be extremely rare for enterprises to go back, but they can change their single cloud strategy more easily.

In enterprises with significant regional or business autonomy, multi-cloud adoption will grow. Enterprises may adopt various cloud vendors for different regions due to their requirements for workloads, regulations, vendor relationships, etc. Instances will continue to exist where some senior leaders support certain cloud vendors, and, as a result, this preference may also lead to multi-cloud adoption.

On many occasions, enterprises may adopt multi-cloud for specific workloads rather than as part of their strategy. They may want data-centric workloads to run on a cloud but may not want to leverage the cloud for other capabilities. Many cloud vendors may play “loss leaders” to get strategic enterprise workloads (e.g., SAP, mainframe) onto their platform to create sticky relationships with clients.

Many software vendors are launching newer offerings proclaiming they work best with client’s multi-cloud environments. As an ecosystem is built around multi-cloud, it will be hard to change. In addition to AWS, GCP, and MS Azure, other cloud vendors are upping their offerings, as we covered earlier in Cloud Wars Chapter 5: Alibaba, IBM, and Oracle Versus Amazon, Google, and Microsoft. Is There Even a Fight?.

Given multi-cloud drives “commoditization” of underlying cloud platforms, large cloud vendors are skeptical of it. Integration layers that provide value accretion on abstract platforms rather than core cloud services is an additional vendor concern. However, eventually, a layer on top of these cloud vendor platforms will enable different cloud offerings to work together seamlessly. It will be interesting to see whether cloud platform providers or other vendors end up building such a layer.

We believe system integrators have a good opportunity of owning this “meta integration” of multi-cloud to create seamless platforms. However, most of these system integrators are afraid of upsetting the large cloud vendors by even proactively bringing this up with them, let alone creating such a service. This reluctance may harm the cloud industry in the long run.

What are your thoughts about multi-cloud as a strategy or a confusion? Please write to me at [email protected].

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