Do you ever think about the lamp in your living room? Probably not today, as it serves its purpose well. But its newness, beauty, and usefulness gave you great satisfaction when you first bought it.
SaaS adoption is much the same. In the last decade, clients bought SaaS applications because they were “SaaS,” outside their premises, and offered interactive interfaces, better access, quicker new features, and cost savings. Adopting SaaS used to be a priority…SaaS was the means and the goal. But in and of itself, SaaS is now a table stake that is being relegated to the background by four key trends.
Mobile has taken the center stage: All SaaS providers worth their salt, (e.g., Salesforce.com, NetSuite, and Workday.com), and traditional vendors that have embraced SaaS, (e.g., Oracle, SAP, and Microsoft), are now focusing on offering mobile services leveraging their SaaS solutions. Therefore, enabling mobility is taking a priority over being a “SaaS company.” Salesforce.com, the global SaaS leader, acknowledged this market trend and launched “Lightning,” its mobile platform, to enable developers to quickly develop and deploy mobile apps. I expect other providers to make mobile their chosen computing platform and architect their SaaS offerings accordingly. Making end-user mobile leveraging SaaS concepts will take precedence over offering “SaaS” applications.
Platform service has become crucial: All the major SaaS providers cited have developed their platform offerings to enable developers to create application extensions and integration. SaaS may lose its sheen when not accompanied by a meaningful platform service. To scale, every SaaS provider will require a platform service to integrate with the legacy and broader enterprise IT landscape. Think about Salesforce.com, which integrated its disparate platform services (Force.com, Heroku, etc.) within the Salesforce1.com umbrella to create an integrated platform offering that assists developers and IT operation teams. Private platform providers such as Apprenda, Cloud Foundry, and Engine Yard, as well as traditional integration vendors such as Dell Boomi, Informatica, and IBM, are also eyeing this opportunity for application integration, and are exploiting the gaps left by SaaS offerings running in standalone environments. Technology providers that continue to offer point solutions will experience a natural ceiling to growth once they generate a critical mass. These providers may be acquired by other larger players that can offer more comprehensive, end-to-end services integrating different cloud components.
Analytics has become integral: In the last six months, both Salesforce.com and Workday committed to their vision of analytics services by launching multiple applications and platforms such as Salesforce Wave and Workday Insights. This is market leader acknowledgment that clients need value from their SaaS offerings that goes beyond day-to-day operations. SaaS companies are sitting on a treasure trove of client data, and mining it could provide significant benefits to their customers. While these applications are generally delivered in a SaaS model, companies will not buy them for delivery ease or cost savings, but for functionality and value. I expect most other serious SaaS providers will offer analytics services, especially in domains that require data crunching by vast numbers of humans or machines (e.g., Social, CRM, HR, Finance, IT spend, and M2M.)
SaaS’ novelty has faded away: SaaS has become one of buyers’ preferred mechanism for deploying applications. Even if they are hesitant to leverage a public cloud service, they end up in a private SaaS model and make their developers create “SaaS-like” applications. As most applications are now available in the SaaS delivery model, SaaS’ newness and cachet as a point solution are gone. Most buyers now incorporate “SaaS architecture” in their applications, regardless of whether they are delivered as a SaaS or not. SaaS is now so entrenched as a concept that it is no longer a novelty or a David competing with the Goliath’s of the traditional application world.
Today’s buyers expect SaaS to be better than on-premise systems. They no longer adopt SaaS just because it’s delivered in an “as-a-service” model. They want SaaS because it can solve business problems that on-premise systems may not (or may be exorbitantly costly and time consuming). Buyers no longer buy delivery models; rather, they buy solutions and outcomes.
SaaS as we knew it is gone. However, now it will drive the broader ecosystem of IT consumption, aid clients in running and transforming their businesses, and help end-users perform meaningful tasks. It is the backbone of the entire application landscape. SaaS needs to perform this work in the background and let the new-age concepts and value drivers take the front seat. SaaS needs to become the lamp in the enterprise living room.
As enterprises freshen their technology mandate for 2015, they stand at the cusp of a multi-dimensional interplay of agility, flexibility, and rising security considerations. Beyond the usual SMAC stack, enterprises are also grappling with challenges to the status quo in terms of faster application development, automated IT operations, the Internet of Things, and process fragmentation.
Following are five technology trends that rose to the top of our list for the important role they will play in enterprise technology in 2015.
Danish physicist and Nobel Prize winner Niels Bohr once commented that, “prediction is very difficult, especially if it’s about the future.” So, please join us out on the limb. What are your predictions for 2015 enterprise technology?
The mobile app space offers service providers the potential for new growth platforms. However, these are often small projects that are delivered quickly and are not a great revenue stream. But recent studies we came across reinforce our growing opinion that the mobile app space is changing.
Mobile apps are costing more and taking longer to develop; they’re far more expensive than expected. We believe there are a couple of reasons for this.
First, mobile apps are moving out of the experimental phase into the mainstream business and therefore are far more complicated. That alone requires more rigorous development and testing. But they also must be integrated in today’s IT ecosystem. So they are bigger projects that take far more effort testing. This should give greater opportunity for service providers to benefit.
Recall the early days of the Internet. In the beginning websites were simple and easy to launch. Now they are extremely important to eCommerce and branding and thus require significant resources to develop and maintain. We believe mobile apps are following the same path as the Internet.
So there is a frustrating aspect despite the fact that mobile apps are starting to generate revenue for service providers. Providers are impatient for mobile to take off and give them a new growth platform, but growth is slow.
We all understand the power of digital — it enables us to change the way we interact with our customers, employees, vendors and governments. Getting interactions right with those stakeholder groups gives us powerful strategic advantages. However, the digital world is like an iceberg, and we tend to see only the tip. Below the water is a mass of ice that can sink digital outcomes just as it sunk the Titanic.
Companies that can change their stakeholder conversations in a meaningful way can change the game, changing the competitive landscape almost overnight, reaping enormous wealth. Wal-Mart and Interstate Battery achieved this outcome when they changed their supply chains. And Amazon, Google and H&R Block completely changed the game in their markets.
So what’s the problem?
The business stakeholders see the tip of the iceberg. But the CIOs recognize that 90 percent of the expenses are below the surface and initially can’t be seen.
What we’re finding at Everest Group is that when companies switch to the digital world — such as creating a mobile app as a new way of communicating with Millennials about insurance offerings — there are huge pull-through implications on the rest of the organization.
For example, the company’s vendor systems may not be set up to interface to the new mobile app. Sure, the digital product enables the company to be able to spot new customers as they emerge. But the company needs to change its organizational systems to move into this instantaneous world so that the company can react quickly enough to take advantage of these opportunities or operate in a way that is digitally friendly in this new world.
We’ve all been through the experiences of the impact of the portion of iceberg under the water … such as the half promise when we’ve visited a website or used a mobile app to find we can only go part of the way. We get frustrated when the promise isn’t fulfilled.
As the figure above illustrates, many companies find a huge body of work that is not obvious when they start down the digital path. Although it looks like the cost and time required for launching a mobile app is small, the cost of getting to a great customer experience is high because it often requires huge amounts of infrastructure, application changes and organizational change to live in the new world.
In addition to the cost and time, there are other business risks in the iceberg portion below the water. And aligning the organization so it can operate at digital time requires significant effort and change management tactics. We tend to operate from committees. But in the digital world, that takes too long; it must be instantaneous.
Finally, providers need to venture into this new digital world while they still maintain the old world, thus increasing their investments in services capabilities. There are significant costs involved in dealing with the risks in the part of the iceberg hidden under the water.
click image to enlarge
Regional trends for mobile banking and payments, including Africa, Asia Pacific, Canada, Europe, Latin America, and United States
The state of today’s enterprise mobile apps industry is akin to the dark side of a jungle: a dense forest and tangled vegetation, inhabited by hundreds of largely unfamiliar animals and plants that rely on its delicate ecosystem to survive, perhaps to thrive. This is creating frustration among stakeholders including the CIO, CFO, CMO, and CEO, who believe they might have over-invested in mobility initiatives.
However, this is far from the truth. Mobile apps have a long way to go in enterprise. Yet, to avoid the earlier pitfalls, enterprises and technology providers need to be fully aware of the following dangers in the mobile apps jungle:
Business process transformation: Few enterprises or technology providers even consider that enforcing mobile access to an existing business process may be a poor idea. Making the end-user consume the same business process albeit through a different, perhaps “cooler,” app is not true mobility. User interest will not last if the business process is itself unsuitable for mobile. At the same time, not all business processes require this change. Enterprises must be selective in changing business processes while undertaking the mobility journey. Consultants, vendors, and others with vested interests will always extol the virtue of business process transformation for mobility, but enterprises should be very wary of this aggressive spiel.
Line of business collaboration: In their desire to be the first movers, many line of business managers are creating all kinds of mobile apps with little collaboration with other business units. Given the increasing influence of non-CIO budget centers to approve technology funding, the tried and tested processes of application development are being compromised under a convenient, self-pleasing argument that mobile apps do not require a structured or “traditional” approach.
Will this ad-hoc development blow up in our faces? I think it will. Can we prevent this? Unfortunately not. Business users are happy getting the needed application functionality on mobile devices, yet no one is thinking about the mobile application lifecycle. A long-term technology adoption framework is an unthinkable thought for these budget owners. They do not believe collaboration is their mandate or their responsibility. Their KPIs are linked to business outcomes, not to channelizing or seamlessly introducing mobile technology, and thus they will rarely ever have an incentive to create the needed structure.
Cost of mobility: Enterprises and technology providers need to understand that while business agility, flexibility, and access is all good, the cost of these should not outweigh the rewards. Therefore, enterprise mobility should be viewed in its entirety to understand whether the incremental business has come at a greater cost of management and complexity. Yet the existing mechanisms across enterprises, where different unconnected lines of businesses are creating their noodly soups of mobile apps, does not engender great confidence that they will take a view of the broader picture any time soon.
So what can enterprises do to quash the mobile apps jungle’s beastly flora and fauna?
If you are undertaking an enterprise mobile application initiative and want to share your experiences and perspectives, please comment below or reach out to me directly at [email protected].
Global mobile payment transaction volume reached $US235 billion in 2013 (+~45%), with expectations of reaching US$721 billion by 2017
Click image to enlarge
Leading banks’ mobile banking applications rating and functionality
Just as today’s enterprises are becoming accustomed to Mobile Application Development (MAD) and Mobile Device Management (MDM)…bam! They are realizing there is one more critical part of the story: Mobile Application Management (MAM). Unfortunately, while most organizations have established IT security and management policies to support mobile devices via a MDM solution, they’ve started to believe they don’t need to manage mobile apps, erroneously thinking that securing the devices is sufficient.
It seems the ease of consuming consumer-oriented mobile apps from public stores, e.g., Apple iOS, Blackberry World, Google Play, Windows Store, etc., has made buyers believe it will be just as easy within enterprises. But this is far from the truth. Organizations must have a mobile application development, distribution, maintenance, and support program to effectively cater to the business user’s requirements for mobile apps.
A MAM strategy goes way beyond securing data on mobile devices and deploying an access policy. MAM is about adopting a comprehensive lifecycle management for mobile apps (developing, distributing, maintaining, and retiring).
There are five foundational dimensions of an effective MAM strategy:
With enterprise mobility expanding its horizons and becoming pervasive, organizations can no longer avoid managing their mobile app portfolio. Yet, it is becoming increasingly common to see “mobile app sprawl” where enterprises have multiple mobile apps, but no mobile app strategy. So, how should they approach it? Major providers of MDM solutions such as AirWatch, Apperian, Good Technology, IBM, SAP, and Symantec also support mobile application management. All the mobile application development platform providers, such as Antenna, Appcelerator, Dojo, Kony, IBM, Microstrategy, Netbiscuits, and SAP, do as well. Therefore, enterprise buyers will typically deploy one of these solutions, assuming it is the only required foundation of their “mobile apps” strategy. This is where they confuse device management and application development with comprehensive application lifecycle management.
To add to the confusion and angst in a mobile apps environment, organizations face substantial challenges with development and distribution of mobile apps, and technology providers’ aggressive marketing and high decibel sales efforts continue unabated. For example, despite earlier investments in BYOD initiatives, per the assumption that MDM solutions would help them manage these, some buyers are now having second thoughts. Moving to rework their BYOD strategy, these buyers have become further indecisive and apprehensive about investing in MAD and MAM platforms. Moreover, there is a growing debate around whether buyers really need MDM, or whether MAM will suffice.
Given so many complexities and the rapidly changing environment, buyers need to closely watch the mobility space to create a coherent mobile strategy. None of them want mobility to end up in the same siloed and fragmented state as did traditional technologies adopted within their organizations.
If you are implementing a mobile application development and management strategy, feel free to reach out to me at [email protected] to share your experiences, good or bad.