Category: Cloud & Infrastructure

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.

Cloud ERP Market War: Oracle Continues to Win Over SAP and Microsoft

Oracle still ranks number one in the cloud ERP market with high enterprise satisfaction for its licensing, functionality, integration and customization, talent and community, and user adoption. But SAP and Microsoft have made notable improvements over the past two years and are moving closer to the leader in the ERP cloud war. Read on to learn the latest insights and five things that companies today demand from large enterprise resource planning (ERP) platforms.

In our blog in 2019, Oracle Wins Over Microsoft and SAP in the Cloud ERP BigTech Battle, we discussed how Oracle ERP Cloud is winning against SAP S/4HANA and Microsoft Dynamics 365.

Since then, we have interviewed more than 200 enterprise clients to collect feedback on major platforms as part of various PEAK Matrix® assessments, including Microsoft Dynamics 365 Services PEAK Matrix® Assessment 2021, SAP S/4HANA Services PEAK Matrix® Assessment 2021, and Oracle Cloud Applications (OCA) Services PEAK Matrix® Assessment 2022.

In our latest research, we share an updated analysis on the cloud ERP market and how this space has evolved. Key insights from these interviews are also summarized in our enterprise pulse study.

The below figure summarizes current enterprise satisfaction for ERP platforms across various dimensions.

exhibit 1

Cloud ERP market updates

Oracle continues to win the cloud ERP market competition, but SAP and Microsoft are inching closer. Let’s look at what has changed since 2019:

  • Oracle has improved its commercial flexibility, which was a major contention among enterprises. Its licensing model is now flexible enough to accommodate both cloud and on-premise workloads. This has eased Oracle customers to transition their core workloads to the cloud
  • For Microsoft Dynamics 365, multiple enterprises have vouched that talent availability and overall customer experience have improved, especially among SMB clientele. Adoption has increased due to mature sales and service capabilities along with affordable commercials. In general, Microsoft Dynamics has struggled with large enterprises in the past and is now making inroads into large clientele
  • For SAP S/4HANA, enterprises have observed that innovation from SAP into Business Technology Platform, together with mature partner solutions, have contributed to improved functionality and cloud capabilities. But SAP is not able to deliver a consistent experience across its on-premise, and cloud versions and its clients continue to suffer from integration challenges

What do enterprises expect from large ERP platforms?

  • Improve cloud functionality: Oracle cloud applications are a more mature offering than S/4 HANA and Dynamics. However, for all the vendors, the cloud versions will still take at least five years to reach the maturity of the on-premise version. For example, in Microsoft Dynamics, the maturity of products beyond sales and service is a concern, especially for marketing and commerce. Meanwhile, in Oracle, enterprises have expressed worries over the maturity of CX cloud; for SAP, HR, sales, and service modules continue to be concern areas
  • Enhance integration capabilities: Enterprises we interviewed said cloud ERP integration challenges continue to persist in the SAP landscape. End users often complain about broken experiences across cloud and on-premise systems. SAP needs to knit together all its business applications that are either developed in-house or acquired to work cohesively to deliver a superior end-user experience and enhance adoption
  • Strengthen partner ecosystem: Enterprises believe ERP platforms should further strengthen the partner program and solve challenges in the network ecosystem. They opine that System Integrators (SIs) fail to understand clients’ non-standard approaches and business-specific use cases. Present industry-specific applications across all three vendor ecosystems require high customization. Technology vendors should build scalable industry solutions in close collaboration with the enterprises and the SI ecosystem
  • Buttress talent availability: Another challenge enterprises continue to face is talent availability, especially for complex cloud modernization initiatives. The demand-supply gap is relatively higher for SAP skills compared to Microsoft and Oracle. Technology vendors should ramp up their investments in collaboration with service partners to scale up the talent base, especially for newer product areas
  • Offer hyperscalers flexibility: Enterprises believe that switching costs increase exponentially by tightly coupling applications with infrastructure. Customers want multiple vendors in their landscape to maintain price competitiveness. They expect Oracle and Microsoft to provide the flexibility to run cloud applications in an equally efficient manner on hyperscalers of their choice

Although current analysis shows Oracle continues to lead the cloud ERP market, it needs to continuously evaluate changing enterprise expectations and make targeted investments to consistently drive higher value for its clients.

How has your experience been with SAP, Oracle, and Microsoft? Please share your thoughts about the cloud ERP market with us at [email protected] and [email protected]. Or contact us.

Strategic Role of Technical Support in Driving SaaS Adoption

To meet the complexities of the software as a service (SaaS) world, leading providers are revamping their outdated support models to help enterprises achieve success in Industry 4.0. Technical support teams now have expanded roles in customer success, relationship management, and delivering other value-added services for clients. Read on to learn how the next evolution in technical support is turbocharging SaaS adoption.

For more on our continuing coverage of how digitalization is changing technical support functions, also read The Evolution of the Technical Support Engineer Job Role.

Customer support has been the “issue to resolution” function for many decades. When a customer calls with a problem, the support team works to resolve it as quickly as possible. In traditional perpetual licensing models, technical support is focused on operational metrics such as “the time to close a ticket” instead of offering an enhanced customer experience to improve customer retention and lifetime value. Legacy customers are accustomed to opening tickets when they notice an incident and expect companies to react quickly.

However, with the emergence of Industry 4.0 – characterized by technology-intensive transformation and the convergence of cyber and physical systems – enterprises have significantly shifted how they leverage technology-based solutions. In the experience-driven outcome economy, customers expect companies to monitor their solutions proactively to ensure outcomes are delivered as promised. This means companies should automate their monitoring, alerting, and self-healing capabilities to resolve most issues before customers notice them.

SaaS adoption is one of the key driving forces behind the emergence and success of Industry 4.0. Leading technology/SaaS vendors realize that traditional “break-fix” technical support models are outdated in the new environment and failing to evolve their existing technical support models is a major cause of dissatisfaction among SaaS customers. Hence, they are investing in revamping their technical support models. Let’s learn more about this interplay between SaaS adoption and technical support.

SaaS adoption and its impact on enterprise buying behavior

SaaS adoption is increasing exponentially across the globe. The global SaaS market is expected to grow at more than 100% CAGR through 2026, reaching a market size of US$300-400 billion. This increased adoption is driven by factors such as zero upfront/CapEx cost, reduced IT-related operating and maintenance costs, the ability to easily ramp up/down operations, adherence to best practices, and built-in functionalities providing users with ease of operations.

However, the increasing adoption of SaaS-based operating models has significantly influenced enterprises’ buying behavior, ultimately propelling SaaS providers to rethink their technical support strategies. Below are two key changes in buyer behavior and how they are impacting providers:

  • Shift from product to service mindset – No longer can you sell a technical solution with a perpetual license and consider your job finished. In a SaaS-based solution, revenue depends on the customer’s subscription and consumption of services. This is a dramatic shift in the treatment of SaaS-based solutions from a product to a service-based model with the quality of technical support determining the working relationship with the customer, affecting retention and lifetime value
  • Low client stickiness – With increased adoption of interoperability standards and heightened competition, the cost of changing from one SaaS provider to another has been drastically reduced versus on-premises solutions where switching costs previously locked clients into continuing with a specific service provider. This negligible switching cost has reduced client stickiness, making it essential for providers to help customers quickly realize value and deliver a differentiated experience to drive renewals and sales growth in a SaaS model

Evolving expectations from technical support

With negligible switching costs and a plethora of options available, technical support is becoming paramount to the SaaS solution’s success. A well-designed and well-implemented technical support model can help customers achieve desired objectives and increase revenue through differentiated technical support or even indirect lead generation by uncovering opportunities to cross-sell or upsell. Accordingly, the scope of technical support services has broadened beyond the break-fix solutions to involve the following dimensions:

  1. Value-added services

Additional value-add opportunities include:

  • Proactive and omnichannel support – Proactive customer service and omnichannel customer experiences are the new standards for supporting customers and can differentiate your product from the competition. Customers today demand self-service for addressing low-complexity queries, which reduces the number of inbound issues and support tickets. Addressing customers’ needs, challenges, and concerns before they occur shows customers you are invested in their success, promoting customer loyalty and retention. With the growth of digital channels, omnichannel support is necessary to offer customers a consistent, seamless, and integrated experience regardless of the channel to create a unified brand experience
  • Product usage and feedback analysis: While the support function has always had access to detailed customer data, the ability to correctly capture, read, and apply the insights learned from this data — both directly and from support automation tools — can transform a support organization into a marketplace pacesetter. Customers expect technical support providers to continuously analyze their usage patterns and then use that knowledge to augment products and services to fit their needs
  1. Act as customer success ambassadors

Technical support’s role has broadened beyond addressing customers’ queries and concerns to building customer loyalty and fostering long-term customer relationships. Now, technical support specialists also act as customer success ambassadors (also called Customer Success Managers (CSMs)), ensuring customers receive the needed tools and support to achieve their goals. CSMs strive to have an in-depth understanding of the customer’s needs and are responsible for communicating customer behavior/feedback to sales, marketing, and product teams. They help the organizations by:

  • Ramping up utilization: The technical support team acts as the SaaS provider’s brand face, ensuring customers quickly realize value and have a differentiated experience, which is vital to driving renewals and sales growth in a SaaS model. Keeping clients engaged is difficult if they don’t see the value in your products. They guide clients on product capabilities and use cases in which those capabilities can be leveraged
  • Cross-sell and upsell products/services: CSMs understand their customer requirements and can identify the best fit opportunities to upsell or cross-sell to their customers, as well as decide which features, functionality, or additional products would best suit each customer. When customers are ideal for an upgrade, CSMs can meet with them to explain why the additional purchase will be helpful

The shift in operating model for technical support

While the enhanced role of technical support is integral to the overall product experience and many factors are driving it, not all enterprises can deliver superlative technical support on their own. This can be due to multiple factors such as cost and geographic constraints, shortage of relevant in-house skills, inability to scale with product growth, failure to implement a true omnichannel experience, lack of accelerators to drive efficiency, etc.

Thus, enterprises are increasingly relying on both in-house and outsourced teams to offer technical support. A strategic third-party partner can bring technical domain skills, innovation, and customer success expertise to deliver an outstanding end-user experience and improved value realization for clients to supplement the capabilities of in-house employees.

As SaaS vendors explore the best fit from among the potential third-party technical support service providers, assessing providers’ potential strengths and shortcomings is important. For example, it may make sense for a SaaS vendor to partner with traditional contact center providers for high-volume low-complexity scenarios such as in a B2C environment. On the other hand, if the technical support required is characterized as low volume and high complexity such as in a B2B environment, then SaaS vendors may prefer to go for specialist technical support providers with strong domain experience and a highly-skilled talent pool.

Conclusion

As SaaS offerings become more ubiquitous, it will be critical for SaaS vendors to ensure  technical support teams progressively evolve. In a SaaS set-up, enterprise technical support includes a range of activities, such as complex platform support activities and analytics support for product enhancement, proactively addressing customer needs through self-service, as well as understanding customer needs and behavior for enhanced value realization of products.

Enterprises need to continuously invest in skill development of their in-house teams, which includes domain-specific learning, and experience with specific tools, as well as seek partnerships with third-party technical support providers to address customers’ heightened expectations for technical support. The technical support team – in-house or outsourced – should act as the brand face when engaging with the end client and reflect the technology solution providers’ values and brand promise.

If you have questions or would like to discuss the strategic role of technical support in driving SaaS adoption and how it is evolving, please reach out to David Rickard, [email protected], Rananjay Kumar, [email protected], or Divya Baweja, [email protected].

Watch our LinkedIn Live event, How Can Your Data Analytics Improve Your Customer Experience? for insights into how data and analytics can help businesses understand their customers at higher levels than ever before.

Building a Resilient Supplier Cyber Risk Management Strategy | Blog

Sharing sensitive data with outsourcing providers in today’s interconnected digital world has increased organizations’ vulnerability to cyberattacks, making it more important than ever to have an effective supplier cyber risk management strategy. To protect against threats, read on to learn the best practices for supplier cyber risk management.  

In today’s risky and interconnected environment, it has become essential for organizations to have a supplier cyber risk management strategy to identify, protect, detect, respond, and recover from supply chain cyberattacks.

The critical importance of relationships with outsourcing service providers has been amplified by the pandemic and recent geopolitical turmoil due to the Ukraine-Russia crisis. Outsourcing suppliers now play a vital role in running business operations, and these partnerships have grown more sophisticated.

With data sharing between the two parties increasing multifold, organizations have greater exposure to ransomware attacks, phishing, denial-of-service, and other cyberattacks.

Depending on the sensitivity of data shared with suppliers, the potential risk of data loss can impact an organization’s business operations – making it essential to develop a supply chain cyber risk management plan to protect from significant financial and operational impacts.

Not having a formal supplier cyber risk management strategy can cause compliance issues. With scrutiny on global supply chains intensifying, a lack of supplier insights can lead to government regulation violations, resulting in financial losses and tarnishing an organization’s brand.

As suppliers have access to sensitive and business-critical information, managing permissions and protecting data from unauthorized access, misuse, and data loss become crucial.

Further, many other risks exist from a supplier’s operational perspective, including issues related to geopolitics, bankruptcy, and macro risks. Organizations should have complete supply chain visibility to rapidly respond to susceptibilities and disruptions at the supplier’s end.

All of these factors can have a long-lasting impact on an organization’s image and reputation, potentially deteriorating customer loyalty and trust. Hence, having a resilient supplier cyber risk management strategy that includes visibility, transparency, clear communication, and collaboration has become non-negotiable for organizations.

The Everest Group risk management matrix

Let’s take a look at the different risk scenarios and their remedial measures below:

Picture2 1

Exhibit 1: Everest Group Supplier Management Toolkit: Risk Management in Outsourcing

Best practices for developing a supplier cyber risk management strategy

Developing a Supply Chain Risk Management (SCRM) program is indispensable for organizations as they become increasingly vulnerable to supply chain attacks.

Currently, the risk management focus in outsourcing is limited to compliance requirements such as the Sarbanes-Oxley Act (SOX), Service Organization Control (SOC) certifications, industry-specific compliances such as Health Insurance Portability and Accountability Act (HIPAA) and Health Information Trust Alliance (HITRUST), and criminal background verifications.

Other vital factors such as geopolitical and offshoring risks have not yet become key executive priorities. Further, as more companies lean on service providers to drive digitalization and corresponding transformation in their outsourced processes, organizations rarely try to identify potential risks and establish associated mitigation/contingency plans.

Some industry best practices such as ISO/IEC 27036:2013 and the NIST Cybersecurity Framework have been updated to include information security for supplier relationships, highlighting the importance of SCRM in corporate security. In terms of cyber security, this involves:

  • Defining cyber security requirements and measures that apply to suppliers based on their risk category
  • Enforcing these requirements via formal agreements (e.g., contracts) to ensure suppliers enter a binding commitment
  • Verifying and validating communication and access from and to suppliers
  • Ensuring effective implementation of cyber security requirements
  • Managing and supervising the above activities periodically

To optimally engage with and manage suppliers, the entire supplier life cycle should be organized into these three phases:

  1. Before and during the contracting phase – Screening suppliers before onboarding is essential for organizations to assess financial, operational, and reputational aspects. Procurement heads need to carry out background checks to ensure suppliers’ compliance status and performance viability. An exhaustive contract with legally binding responsibilities related to cyber security for both the organization and its suppliers should be created. This contract should define fundamental and high-level security requirements and privacy-based controls for supplier relationships at every point in the life cycle
  2. During the ongoing relationship – Once suppliers are onboarded, organizations must track all assets suppliers can gain entry to in a central repository. Customers should categorize suppliers into different risk classes based on how critical the information is to further define appropriate cybersecurity controls. These controls should be continuously evaluated to ensure adherence
  3. After the termination of the relationship – Offboarding a supplier requires disabling its logical and physical access, removing access to any data, and destructing it to ensure the supplier doesn’t hold any sensitive data. This phase also requires ensuring no severity incidents are pending and facilitating proper handoff between suppliers

Prevalence of risk management processes in the supplier life cycle

How common is it for organizations to have established risk management processes in each of the third-party life cycle steps? Our polling results show while most organizations have these safeguards in the first stage, fewer use them in later phases, as illustrated below:

Picture1 2

Exhibit 2: Everest Group’s Webinar Quick Poll (Could Your Business Partners Be Offering More Risk than Support?)

The supply chain for almost any organizational procurement activity can be the target of cyberattacks, either by going after the supply chain or the supplier’s/organization’s systems, once they are integrated.

More complex and sophisticated attacks are often left undiagnosed or unreported, making them potentially more disastrous for enterprises. At different points in the supplier management life cycle, stakeholders across organizations will have the primary responsibility for establishing and maintaining effective supplier cyber security controls.

Vigorous governance is required to ensure relevant stakeholders are responsible at the right time to guarantee optimal and best efforts are made to combat any cyber threats. To complement this governance, a strong collaborative culture across different departments is needed to drive continuous improvement.

Learn how to create an effective program for your organization in our executive brief on Cybersecurity Risk Management in the Supplier Life Cycle, part of our supplier management toolkit.

Please reach out to [email protected] to gain further insights on supplier cyber risk management or Contact Us.

Discover even more about cybersecurity in our current environment in our webinar, Cybersecurity: What You Need to Know to Find the Right Partner and Price.

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.

Metaverse eCommerce: The Next Logical Step in the Evolution of Immersive eCommerce

Metaverse is here to stay, and it’s going to play a significant future role in how we experience brands virtually. Industry giants are investing big in this space, and it is creating new opportunities for service providers to build feature-packed solutions for their customers entering the Meta world. Read on to learn about the potential and pitfalls of Metaverse eCommerce and why gaining a first-mover advantage is critical.

Digital commerce owes its maturity to the ever-evolving technology ecosystem – starting with the first online dial-up transaction on a modified television to a plethora of innovations over the past decade like mobile commerce, voice search, and social commerce. Emerging concepts such as gaming commerce and recommerce or reverse commerce are further defining the ecosystem.

Digital commerce is also witnessing an era of hyper-personalization powered by Artificial Intelligence (AI). According to Everest Group research on the Top 15 Start-ups Redefining Shoppable Experiences, 70% of the start-ups in the ecosystem are leveraging AI to offer enhanced solutions.

Enterprises are offering immersive buying experiences through Augmented Reality and Virtual Reality (AR/VR). To continue progressing on this trajectory, technological alignment is inevitable for a futuristic eCommerce strategy, and the next logical step for attaining this is Metaverse.

Defining metaverse and its significance in eCommerce

metaverse

Exhibit 1: Definition of Metaverse

In simple terms, Metaverse is an extension of technologies such as AR, VR, blockchain, cryptocurrency, and social commerce coming together to form a virtual world, where customers can shop, play games, and socialize with friends.

Popularized by video games and fiction novels, the idea of Meta has been around since the early 90s, but recently, the industry has become extremely bullish on Metaverse primarily due to two major contributors. Firstly, technologies backing the concept of Meta (blockchain, crypto, and affordable VR) have attained significant headway in the past decade. Secondly, the idea has gained mainstream momentum because industry giants such as Facebook (Meta), Google, and Microsoft are pouring huge investments into Meta-platforms. Experience management leader, Adobe, has also put its best foot forward towards the Meta world by offering tools specific to 3D content creation, experience delivery, asset management, and commerce.

The Meta wave began in the early 2000s with games like Second Life and World of Warcraft, which were based on centralized economies where the value of owned assets was limited to those games. Aiming to overcome this deficiency, Decentraland came into existence in 2020. This platform offered a decentralized economy, where along with building virtual worlds, trading assets, and hosting events, users could transfer purchases to other Meta platforms like The Sandbox. Although the latest version of Meta provides numerous opportunities for users, we are still far away from creating an Omniverse like the movie “Ready Player One.”

Despite the technology being in its infancy, Metaverse holds significant potential in the digital commerce space. In the current 2D eCommerce model, information is consumed rather than experienced, restricting brands from creating physical connections with users.

Metaverse can solve this problem to a very large extent. In Meta-commerce, shoppers can truly experience a company’s culture, design, and branding elements. This will create huge brand differentiation beyond what is currently limited to logos and banners.

Although the technology backing Metaverse is still at a nascent stage, it holds immense potential to build an immersive commerce platform where products will come alive and personalized customer engagement will create brand loyalists.

Brands advocating metaverse are already pioneering virtual commerce

Envisioning the macro future implications of a single worldwide Metaverse, forward-looking brands have already started creating virtual commerce experiences at the company level. Here are some examples:

  • DRESSX – Designers and fashion enthusiasts can enter their Metaverse and create clothes from scratch. Users can try clothes on through their avatars and convert their fashion non-fungible tokens (NFTs) into actual garments
  • Gucci Garden Metaverse and Louis The Game – Gucci and Louis Vuitton have each launched their own NFTs where everyone has the freedom to create and modify their apparel
  • Charlotte Tilbury Virtual Beauty Gifting Wonderland Users can connect with make-up artists in virtual rooms to discuss their skincare concerns and also invite friends to help them find the right product through an integrated video feature in the same session

Potential challenges in realizing metaverse

Metaversechart

Exhibit 2: Challenges pertaining to Metaverse implementation

To make Metaverse a reality, several challenges need to be overcome. These include:

  • Consistent user experience and interoperability – A singular global decentralized Metaverse with shared data, computation, and bandwidth can only be achieved with collaboration between several global parties. Unless features are aligned and intellectual property is shared, we’ll never get a true Metaverse
  • Dearth of skilled talent – Talent for developing design tools and headless systems for businesses to prepare their stores for different media and virtual formats is in high demand and short supply
  • Cybersecurity and privacy – Metaverse users could experience incidents related to fake NFTs and malicious smart contracts that access personal data and crypto-wallets. Since personalized virtual experiences will create an endless need for countless customer data points, industry giants will likely prioritize competitive advantage over user data privacy

 Along with these obstacles, challenges related to hardware, use-case identification, slow adoption, lack of capital, a fragmented tech landscape, unpredictable Return on Investment (ROI), and legal implications will surely make it difficult to turn the virtual world into a reality.

But on the brighter side, the foundational infrastructure is already in place in the form of a sophisticated global blockchain network, ergonomic VR design, scalable AI, and last-mile internet connectivity in most parts of the world. Therefore, Meta is no longer a far-fetched dream. And with most industry giants strategically investing in the concept, the challenges associated with it will get mitigated very soon.

Opportunities for eCommerce service providers in this meta wave

This new world is pushing IT service providers, consulting firms, and design agencies towards attaining Metaverse eCommerce capabilities. These industry players will be able to add several new digital service offerings through Metaverse. A few of these services include:

  • Metaverse consulting – With Pwc buying land in The Sandbox, it is evident that consulting firms will play a pivotal role in the world of Meta. Enterprises entering Metaverse will need significant hand-holding and a relevant knowledge base about the concept to formulate their Meta-business strategy. Consulting firms can leverage their expertise to advise and direct clients who wish to embrace Meta with its full range of challenges
  • Metaverse applications – Exclusive applications will be required for users to interact with the Meta world for virtual shopping. IT providers will need to build development expertise in the AR/VR technology stack to deliver these capabilities
  • Design and NFT – Design agencies will be essential for creating 3D models of virtual artifacts in the Meta world. Along with that, designers also create NFTs that play an extremely vital role in the Meta economy. Therefore, Metaverse will bring a plethora of lucrative business opportunities for design agencies around the world
  • NFT marketplaces – With the increasing popularity of cryptocurrencies, from digital paintings to Twitter hashtags, NFTs are being bought and sold everywhere. Since sellers will have the power to tokenize everything in Metaverse, a marketplace that supports NFT transactions through blockchain will be needed. Because of this, demand for IT service providers specializing in the NFT marketplace and blockchain development technology will rapidly increase

An exciting future

Brands are already implementing core technologies essential for Meta in silos. Soon, we will witness their integration to create an alternate world full of endless possibilities.

Metaverse is here to stay, and it will bring a multitude of opportunities for service providers to build feature-packed solutions for their customers entering the Meta world. Enterprises need to seize the first-mover advantage now by swiftly evaluating the future impact of Metaverse on their businesses.

Discover more about how organizations are increasingly finding ways to incorporate elements of the metaverse in our blogs: Enterprise Metaverse: Myriad Possibilities or Problems for the Hybrid Workplace? and Metaverse: Opportunities and Key Success Factors for Technology Services Providers.

To further discuss Metaverse eCommerce opportunities, contact us.

Demystifying Cloud Advisory | Blog

Before embarking on a cloud journey, every enterprise should conduct an assessment of their IT landscape by an external advisor or an internal team. But how deep should the evaluation go and what’s covered? Let’s clear up the confusion about cloud advisory and discover how to start your migration and modernization programs off right.

Starting out

To create a successful migration roadmap, due diligence or cloud discovery and assessment is critical because this first phase will directly impact the migration execution and management. Any action plan to migrate and/or modernize workloads to the cloud must consider the source environment and the business requirements.

Most enterprises typically seek help from cloud consulting service providers who bring in technical expertise as well as proprietary tools, accelerators, and frameworks required to deliver the project.

Determining the assessment extent

Choosing between the following two assessment types prevalent in the market will depend on the stage of the cloud transformation journey the organization is in and the cloud consulting support needed:

  • Low-touch assessment: Often, clients want a quick, high-level assessment before deciding to move to cloud. The scope is restricted to business and IT strategy alignment. The objective is to arrive at a top-line business case looking at Total Cost of Ownership (TCO) and Return on Investment (ROI) using the information gathered from stakeholder interviews without deploying any discovery tools. These projects typically take one to two months
  • High-touch assessment: This detailed exercise will recommend a roadmap that will help clients later migrate workloads to cloud. Discovery of workloads is largely tool-driven. The migration execution team will reference the analysis and recommendations. Occasionally service providers also conduct Proofs of Concepts (POCs) and migrate a few apps on cloud during this phase, mostly to determine the larger execution program feasibility. Projects at this higher level can take up to five months

Cloud advisory objective and depth

Organizations carry out high-touch assessments to gain an in-depth workload evaluation, resulting in nearly 60 to 70% of clients proceeding with a cloud migration transformation journey. In more than 90% of the cases, we observed clients immediately implementing the decommission/archiving-related recommendations.

The following key activities are conducted in these deep appraisals:

  • Assessing application health: Reviewing application-specific attributes such as availability, criticality, stability (issues per month), etc. is important to identify the apt migration strategy
  • Categorizing using 7Rs analysis: Tagging each workload with the appropriate migration strategy is the major goal. Depending on their characteristics, the workloads are segregated using the 7Rs: Rehost, Replatform, Refactor, Rearchitect, Replace, Retain, or Retire. For each application, a target state for each of the components (Database, Web server, app server, etc.) might also be identified at this stage
  • Planning migration waves: The group of applications that must be migrated together will determine how they are moved. The migration plan serves as a reference for the execution team
  • Determining TCO: The cloud advisory service provider also can be tasked with analyzing the costs of migrating and hosting

Choosing an advisor

Most all service providers have developed cloud advisory capabilities with the market growth. The majority also leverage proprietary tools and accelerators along with the popular third-party cloud migration tools such as Cloudamize, Device42, Movere, etc.

Everest Group believes that the cloud migration and modernization space will continue to evolve in the coming years. Until the dust settles, we see the market reeling with incoherent definitions and interpretations, resulting in dissimilar pricing for advisory services. Understanding what’s involved in the starting assessment will help you select a partner that will set your journey off in the right direction.

To access more information about the future of cloud and cloud management, watch our recent webinar on demand, Hybrid Cloud: The Future of an Ideal Enterprise Architecture. To share your experiences with cloud advisory programs, please reach out to [email protected].

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].

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