Key mega-trends impacting WPLC market SOCIAL NETWORKS Technology & services that create unique profiles, map out relationships & leverage personal connections NEXT ERA OF THE DIGITAL AGE New business model for R&D and software development that enables companies to best match their demand for innovation with worldwide sources of talent and capital . GLOBALIZATION AND SHIFTING SKILLS Global economies are increasingly interdependent & developing regions are playing a bigger role in providing highly skilled labor . VIRTUAL WORLDS Forrester defines the X Internet as connecting information systems to physical assets, products and devices. BUSINESS PROCESS EFFICIENCY Shift of focus toward leveraging siloed processes/applications EXTREME COMPETITION Quickening pace of globalization creates both new markets and new competitors PRIVACY, SHARED ACCESS, AND SURVEILLANCE Increasingly, legislation on privacy (mostly US), data access and surveillance will lead to need for new access/database controls, federated identity and expanded storage/retrieval. FINANCIAL & PROCESS INTEGRITY Increased Regulatory compliance will force reforms in business to ensure process integrity and financial accuracy LIBERALIZATION OF GLOBAL FINANCE AND TRADE On-going liberalization of global finance and trade, with associated regulatory aspects, will drive need for increased security and catalyze IT management outside the data center. MULTI-GENERATIONAL WORKFORCE As older generations exit the workforce, younger – very different ones (Gen Y/X) with distinct needs & behaviors enter EMERGING POCKETS OF GROWTH Among emerging geographies, there are faster growing regions & pockets of even more rapid economic growth SUSTAINABILITY Energy-producing resources, the backbone of economic growth, show signs of supply weakness (e.g. move virtual offices) ECOLOGY Consumer and corporate behaviors, and government policies, are shifting due to the cost of energy, ‘social conscience’ trends and economic importance of energy SECURITY THREATS Threats at many levels: from theft of personal identity & safety to security of critical national infrastructures such as energy, banking systems, transportation, public health and food/water supply TAXATION AND SPENDING Taxation will shift focus to digital value-add and, along with spending initiatives, will continue to change behavior of businesses and population CONSUMERIZATION OF IT A shift is underway whereby technology is now trickling up to the enterprise from consumers .
US IT decision makers are focusing investments on web-based and authoring solutions to help solve real-time business monitoring and mobile workforce needs – but global economic issues will determine rate/pace of spending Socio-economic issues and mgt. conservatism could put a damper on IT spending Industry-specific solutions are key Source: IDC, The Next Big Things: IT Budget Outlook 2007,Doc #TB20061102, Oct 2006
“ A preliminary look at the worldwide enterprise portal software (EPS) license and maintenance revenue for 2006 provides an estimate of $896 million, with worldwide revenue projected to reach $1.4 billion in 2011.” (IDC, Worldwide Enterprise Portal Software 2007–2011 Forecast: Early Projections Show Steady Growth Ahead, Doc #206212, March 2007 )
“ Business process automation is the top driver for this investment, while Web 2.0 capabilities such as business networking applications and wikis are also high on the list of capabilities that respondents plan to add to their portals in the next 24 months. Continued investment in portal infrastructure is driven by the benefits organizations have experienced to date and the desire to refine the portal to deliver additional services.” (IDC, Worldwide Enterprise Portal Software 2007–2011 Forecast: Early Projections Show Steady Growth Ahead, Doc #206212, March 2007)
Integrated Collaborative Environments
IDC predicts that the worldwide market for Integrated Collaborative Environments is $2,537M in worldwide revenue in 2007 and will grow to $2,801M by 2010. (IDC, Worldwide Collaborative Applications 2007–2011 Forecast: A First Look at the Numbers, Doc #206167, March, 2007)
IDC predicts that the worldwide market for Team Collaborative Applications is $496M in worldwide revenue in 2007 and will grow to $573M by 2010. (IDC, Worldwide Collaborative Applications 2007–2011 Forecast: A First Look at the Numbers, Doc #206167, March, 2007)
Web Conferencing Applications
IDC predicts that the worldwide market for Conferencing Applications is $1,057M in worldwide revenue in 2007 and will grow to $1,442M by 2010. (IDC, Worldwide Collaborative Applications 2007–2011 Forecast: A First Look at the Numbers, Doc #206167, March, 2007)
WPLC competitors have diverse strategies depending on their collaborative “entry point”
Will appear at forefront of consumer/enterprise convergence, driving both SaaS and Social Software
With new launches—Live, Office, Windows—in 2007, marketing spend expected to be very heavy (est. $1B)
Partnership expansion efforts—especially unified communications and portfolio delivery
Expanding SharePoint empire: business intelligence, reporting, forms, compliance and maybe social software
Strategy is to lock-in customers via tight integration of apps/middleware (Project Fusion)
Increased competition in 2007/08, building on business solution strength and bolstered by SI and hardware acquisitions and/or partnerships
Dramatic growth strategy focused on mid-market (esp. outside EMEA)—will try to capitalize on Duet--and SaaS
Co-selling Microsoft Duet and Adobe LiveCycle creates a strong footprint in Netweaver accounts.
Has maintained application market share leadership but growth has slowed overall; now trying carrot and stick strategy – 5% penalty for staying on R/3, “free” use of Netweaver with mySAP
In LE, role as standalone Portal competitor has faded; now presents surround opportunity for WebSphere Portal
Has so far navigated its bifurcated portal strategy to ease customer concerns, but analysts have doubts
Messaging still focused primarily on BPM and SOA but has shown willingness to address nextgen technologies
Strong portal capabilities still unaccompanied by traditional collaborative tools
Has accelerated move to broaden collaborative software platform, focused via industry-specific solutions
Primarily advertising-driven revenue model, but so what?
Significant lead in driving new software business models and will act as bellwether for Web 2.0 market efforts
Enterprise collaborative portfolio now addressing most of WPLC space benefits from strong consumer brand
Greatly expanded relationship between web conferencing tool and Acrobat. Continuing strong threat in Forms
Rich client offering could present challenge via huge Adobe developer base and strong web push to reach others
Entry: Fin Apps Entry: O/S-SharePoint Entry: App Svr Entry: Search ubiquity Entry: Fin Apps/DB Entry: Publishing tools
The “Google” effect is beginning to take shape Both the Google brand and concept have begun to resonate with customers Enterprises are adopting web-based software Google as a brand for business is getting attention Source: IDC, IT Market Outlook 2007: Evolution of the IT Buyer Doc #DR2007_BBSM, Feb 2007
IBM is a market share leader across much of the Lotus portfolio
The MarketScope is copyrighted 2007 by Gartner, Inc. and is reused with permission. The MarketScope is an evaluation of a marketplace at and for a specific time period. It depicts Gartner's analysis of how certain vendors measure against criteria for that marketplace, as defined by Gartner. Gartner does not endorse any vendor, product or service depicted in the MarketScope, and does not advise technology users to select only those vendors with the highest rating. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
The Gartner Magic Quadrants are copyrighted 2006 and 2007 by Gartner, Inc., and are reused with permission. The Magic Quadrant is a graphical representation of a marketplace at and for a specific time period. It depicts Gartner’s analysis of how certain vendors measure against criteria for that marketplace, as defined by Gartner. Gartner does not endorse any vendor, product or service depicted in the Magic Quadrant, and does not advise technology users to select only those vendors placed in the “Leaders” quadrant. The Magic Quadrant is intended solely as a research tool, and is not meant to be a specific guide to action. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
Positioned in the Challengers’ Quadrant in 2007 Magic Quadrant for Finance Governance, Risk and Compliance Management Software, 2007 (Gartner, Magic Quadrant for Finance Governance, Risk and Compliance Management Software, 2007, French Caldwell, Tom Eid, 1 February 2007)
Workplace for Business Controls and Reporting Solutions - Compliance
Positioned between Visionaries’ and Niche quadrants in the 2006 Gartner Magic Quadrant for e-Learning Suites (Gartner, Magic Quadrant for E-Learning Suites, 2006, Waldir Arevolo De Azevedo Filho, Lou Latham, 29 September 2006)
#4 in worldwide e-Learning Suites total software revenue in 2005(Gartner, Market Share: E-Learning Suites and Management Systems Software, Worldwide, 2003-2005, 11 December 2006, Tom Eid)
Lotus Learning Management System Solutions - e-Learning
#1 in worldwide revenue for Portal Software in 2005 (Gartner, Market Share: AIM and Portal Software, Worldwide, 2005, Correia/Biscotti, June 2006)
#1 in worldwide revenue for Portal Software in 2005 (IDC, Worldwide Enterprise Portal Software 2006–2010 Forecast Update and 2005 Vendor Shares: When Less Is More, Doc #202688, July 2006)
Positioned in the Leaders’ Quadrant in 2006 Magic Quadrant for Horizontal Portal Products (Gartner, Magic Quadrant for Horizontal Portal Products, 2006,David Gootzit, Gene Phifer, Ray Valdes, 16 May 2006)
“ Promising” in 2007 MarketScope for Web Content Management (Gartner, MarketScope for Web Content Management, 2007, Latham, Jan 2007)
WebSphere Portal, Workplace Web Content Management Portal
#4 in worldwide revenue for Standalone Team Collaborative Applications in 2005 (IDC, Worldwide Standalone and Embedded Team Collaborative Applications 2005 Vendor Shares: Team Activities Are Everywhere, Doc #202856, August 2006)
Lotus QuickPlace, Lotus Quickr Standalone Team Collaboration
#2 in worldwide revenue for Enterprise Instant Messaging in 2005 (IDC, Worldwide Enterprise Instant Messaging Applications and Management Products 2006–2010 Forecast and 2005 Vendor Shares: IM Is on Its Way into the Workplace, Doc #203848, Oct 2006)
Positioned in the Challengers’ Quadrant in 2006 Gartner Magic Quadrant for Unified Communications (Gartner, Magic Quadrant for Unified Communications, 2006 Bern Elliot, Steve Blood, Drew Kraus, 2 June 2006)
Lotus Sametime IM / Web Conf / Unified Comms
#2 in worldwide revenue for Integrated Collaborative Environments in 2005 (IDC, Worldwide Integrated Collaborative Environments 2006–2010 Forecast and 2005 Vendor Shares: No Sign of Global Warming Affecting the ICE Market, Doc #202617, June 2006)
#2 in worldwide total software revenue for e-mail/Calendaring in 2005(Gartner, Market Share: Enterprise E-Mail and Calendaring, Worldwide, 2003-2005, Eid, June 2006)
Lotus Notes and Domino Enterprise e-Mail IBM Position (source) IBM Products Category
Collaboration platforms and client interfaces must accommodate needs and requirements of emerging Gen X/Y decision makers
A new generation of decision-makers demands always-ready, personalized IT solutions
New user interface and collaboration technologies take center stage
Most younger worker—and some older ones—will embrace:
Increased rates of end-user mobility will promote widespread use of
Social networking solutions for business
IDC: Web 2.0 applications are starting to gain some traction-- especially those apps available through Lotus Connections Source:/Notes: N= 138 IT and LOB respondents at U.S. organizations Multiple responses accepted IDC AppStats, Q1 07, Preliminary and partial survey results Source: IDC, Web 2.0 Applications: Distinction or Distraction for Business?, Doc #205729, Feb 2007 Which of the following capabilities do you currently use at your organization? 15% 15% 13% 12% 11% 10% 5% 19% 0% Don't know None External blogs Shared bookmarking Wikis Business/Social networking applications Mashups Online communities Internal blogs
McKinsey: Interest in Web 2.0 highest in Retail, Hi-Tech and Telco, India/AP most likely region
Why aren’t you using mashups/composite applications? US end users are driving demand for mash-ups as well as their promise of improving business processes Many firms just don’t know enough about the value of mash-ups to consider using them Need to strongly promote the business value of mash-ups, such as how they improve information context, application usability, reduce integration time and costs, in order to foment wider demand Source: IDC, Web 2.0 Applications: Distinction or Distraction for Business?, February 14, 2007, Kathy Quirk, Mark Levitt N = 24 IT and LOB respondents at U.S. organizations Multiple Responses Accepted IDC AppStats, Q1 07, Preliminary and partial survey results What’s driving your use of mashups/composite applications? N = 114 IT and LOB respondents at U.S. organizations Multiple Responses Accepted IDC AppStats, Q1 07, Preliminary and partial survey results 27% 6% 6% 7% 8% 8% 9% 17% 11% No business value Security concerns Corporate governanceissues Lack of commercial tools Lack of IT oversight into process Not on radar/too new Lack of infrastructure to support Other Don't know 24% 21% 17% 17% 16% 4% Improved business processes User demand Improved application usability Improved information context Reducing integration time/costs Other
McKinsey: Business value and internal collaboration are key Relationship between mash-ups and business value still unclear
SaaS is not just for SMBs according to industry analysts and consultants Source: IDC, Software on Demand Reality Check, Doc #201767, May 2006 (% of respondents) Use and Consideration of SaaS
McKinsey reports that in a 2005 survey, 38 percent of the senior IT executives interviewed said that they planned to buy software as a service. In its 2006 survey, that number rose to 61 percent
SMBs will spend $2.44 billion in 2007, up some 17 percent from 2006 spending levels.
Among the biggest SMB buyers of SaaS: the U.S. ($1 billion), Germany ($179 million) and Japan, Britain and France (a combined $318 million)
CRM has been the most popular SaaS investment, showing growth of 22 percent in 2006. (AMI
2006 Small (<99 employees) Medium (100–9,999 employees) 0% 10% 20% 30% 40% Neither purchased nor reviewing Reviewing Purchased Large (10,000+ employees)
Over half of the projects supported by collaboration/portal software are application-related with BPM in highest demand followed by CRM, Collaboration, Education, Industry-specific projects Note: DnB Weight (YTD) Project type by type of software purchased Applications supported by software purchased
Collaboration purchases are a team decision whereas portals are clearly much more IT driven either alone or in partnership Project Initiator IT vs. Non-IT by software type Detailed key project initiator by software type LOB and C-level management are much more involved in collaboration purchase decisions whereas IT is the major driver with portals and mobility Non-IT (LOB, C-Level alone) involved about 30% of the time except in mobile & portal decisions
Almost two-thirds of portal application projects require customization as compared to about 20% for projects using collaboration and 14% using mobile software Level of Customization in Application Projects by Product (3QYTD) *TBD as Data is Available Note: Volumetric Weight **Caution: Small sample size
Primary solution provider by software type Large or regional systems integrators are most often the primary solution provider across the portfolio -- much more frequently for portals
Numerous hot technologies are primed to make an impact on SMBs Source: AMR Research
Can deliver cost savings
Can unlock new features and services:
HP and Microsoft rolling out integrated, pre-packaged infrastructure and management shows value of integrated, automated, wizard-driven SMB solutions
An emerging alternative delivery strategy to SaaS for the SMB market.
A self-contained product with limited function
Greatly improved how businesses share data among partners
Must-have for SMBs.
SMBs use Wikis, Search, RSS, and Blogs to both sell their products and services as well as purchase IT products and services.
Helps SMBs by giving them greater access to their employees.
SMBs consider wireless essential to their businesses.
The SMB Long-tail represents a huge un-tapped $150B opportunity for IT vendors
SMB IT spending is growing much faster than that in large enterprises
Emerging markets are mostly SMB heavy
SMB firms have challenging demands
Obvious high business value
Simplicity in deployment and use
Using the Web as a platform to tap the potential in SMB via much more simplified offerings would add another $150B or more in annual, new IT market opportunity.
Source: IDC, Hyperdisruption and the Redefinition of Enterprise IT, Doc #DR2007_GSFG, Feb 2007
The SMB Long-tail represents a huge un-tapped $150B opportunity for IT vendors and it is the entry point into emerging markets
Hundreds of thousands of large enterprises spend an average of over $2 million per year on IT.
Millions of medium businesses spend $140,000 per year
Tens of millions of small businesses spend $2,000 per year
Difficult to profitably get IT to the long tail of SMBs. But SMBs account for 60% or more of global GDP, and about 70% of total worldwide employment.
Using the Web as a platform to tap the potential in SMB would add another $150B or more in annual, new IT market opportunity.
Emerging regions are SMB heavy Source: IDC, Worldwide SMB Technology Spending by Region:Update 2007, Doc #205112, Jan 2007
Collaboration, mobile and portals have similar demand in US across enterprise size and industry sector, however ICE is favored much more by LEs, Portals most in Health, least in Distribution Distribution Among Collaborative Projects by Company Size (3Q YTD 2006) Projects by Industry Sector and Company Size (3Q YTD 2006)
Portals is highest in Health, least for Distribution
Messaging, collaboration and mobile are about in equal use across industry sectors
Distribution of Collaborative Products by Industry Sector (3Q YTD 2006) 7% 25% 26% 11% 19% 27% 25% 23% MB 7% 21% 18% 7% 24% 26% 26% 33% LE Enterprise Portal Mobile Middleware and Infrastructure Software Authoring Software Other Collaborative Apps/ Social Networking SW Conferencing Applications Team Collaborative Applications (TCAs) Messaging Applications Integrated Collaborative Environments (ICEs) Collaboration Products 25% 22% 7% 31% 7% 8% MB 23% 25% 11% 25% 8% 8% LE Industrial Health/Public Finance Distribution Computer/Professional Services Communications Industry Sectors
The top business need driving 2007 IT investments in MM is the desire to improve operating efficiencies and reduce costs
Mid-Market companies are also investing to improve information collection/use, customer satisfaction and security/resiliency
% Rating a Significant Need Driving 2007 IT Spending
IT and LOB priorities are very similar, but IT executives are more likely to prioritize business continuity (45% vs. 35%)
The most commonly cited MM triggers of increasing IT spend are the need for faster business speed and regular buying cycles
Other common spending triggers are security needs, leveraging IT to support business objectives, and introducing new technologies
MM firms expecting large IT budget growth (50%+) in 2007 are more likely than those with small growth (< 10%) to report the following triggers for their rising IT budgets:
Need to increase business speed
Entering new markets/product categories
Significant revenue growth
Recent change in management
Mid market firms in the U.S. are most interested in applications-based collaboration and portal software purchases Mid market firms bought collaboration and portal software almost half the time to support applications For those application-specific projects, business performance management, collaborative and education applications were the most frequent Applications supported by software purchased Project type for which software was purchased
Non-IT is involved over half of the time in U.S. mid market firms when initiating decisions regarding collaboration, portal and mobile software Project Initiator – Mid Market LOB only C-level only IT only LOB & C-level LOB & IT C-level & IT LOB, C-level & IT
Primary solution provider: Mid market companies Most mid market firms purchase collaboration, portal and mobile software from regional or large systems integrators . Large SI Regional SI VAR Reseller ISV Developer Outsourcer HW Vendor ASP
Word of mouth marketing is key given the influence of colleagues and peers as major information sources -- attention to demo downloads should be noted Colleagues/Peers Vendor Information Customer References Search Engines Demo Downloads Industry Analysts Industry Events/Conferences Ads/Trade Journals/Newspapers Direct Mail None