Hype cycle for e commerce, 2010
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    Hype cycle for e commerce, 2010 Hype cycle for e commerce, 2010 Document Transcript

    • ResearchPublication Date: 3 August 2010 ID Number: G00205840Hype Cycle for E-Commerce, 2010Gene AlvarezE-commerce continues to rivet the attention of enterprises struggling to return to growth.This Hype Cycle will help enterprises evaluate the suitability of an exploding number ofe-commerce technological capabilities, long-established and emerging, and tounderstand their business value.© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any formwithout prior written permission is forbidden. The information contained herein has been obtained from sources believed tobe reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. AlthoughGartners research may discuss legal issues related to the information technology business, Gartner does not provide legaladvice or services and its research should not be construed or used as such. Gartner shall have no liability for errors,omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed hereinare subject to change without notice.
    • TABLE OF CONTENTSAnalysis ....................................................................................................................................... 5 What You Need to Know .................................................................................................. 5 Customer Experience .......................................................................................... 5 Social .................................................................................................................. 5 Globalization ....................................................................................................... 5 Mobile ................................................................................................................. 5 Software as a Service.......................................................................................... 5 The Hype Cycle ............................................................................................................... 6 Using the Hype Cycle .......................................................................................... 7 E-Commerce Foundational Components ............................................................. 7 Web Customer Experience .................................................................................. 8 Marketing ............................................................................................................ 8 Sales ................................................................................................................... 9 Service ................................................................................................................ 9 Mobile ................................................................................................................. 9 Social CRM ....................................................................................................... 10 New to the Hype Cycle ...................................................................................... 10 Mobile................................................................................................... 10 Social ................................................................................................... 11 Web Customer Experience ................................................................... 11 The Priority Matrix .......................................................................................................... 13 Off the Hype Cycle ......................................................................................................... 15 On the Rise ................................................................................................................... 16 Mobile Fraud Detection ..................................................................................... 16 Social-Shopping Sites ....................................................................................... 18 Context Delivery Architecture ............................................................................ 19 Persona Management ....................................................................................... 20 Rich Information Visualization............................................................................ 22 Customer-Centric Web Strategies ..................................................................... 23 Transactional Ad Units ...................................................................................... 24 E-Services......................................................................................................... 25 Online Advertising Data Exchanges................................................................... 26 Social Commerce .............................................................................................. 28 Context-Enriched Services ................................................................................ 29 Open-Source E-Commerce Software................................................................. 31 Campaign Management SaaS ........................................................................... 32 Web Content Product Recommendation Engine ................................................ 33 Customer Interaction Hub .................................................................................. 33 E-Invoicing ........................................................................................................ 34 Mobile Web Applications ................................................................................... 38 Social CRM for Sales ........................................................................................ 40 Social CRM: Community Marketing ................................................................... 41 At the Peak .................................................................................................................... 42 Mobile Coupons ................................................................................................ 42 Campaign Optimization ..................................................................................... 43 Mobile Consumer Application Platforms............................................................. 44 Loyalty Marketing .............................................................................................. 45 Web 3.0 ............................................................................................................ 46 Cloud/Web Platforms......................................................................................... 47 Enterprise Feedback Management .................................................................... 49Publication Date: 3 August 2010/ID Number: G00205840 Page 2 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Multichannel Campaign Management ................................................................ 49 Multicommerce MDM......................................................................................... 50 Consumer Web Mashups .................................................................................. 52 Predictive Campaign Analytics .......................................................................... 53 Sliding Into the Trough ................................................................................................... 54 E-Commerce on Demand .................................................................................. 54 Mobile Social Networks ..................................................................................... 55 Event-Triggered Marketing ................................................................................ 56 Content Analytics .............................................................................................. 57 Fraud Detection................................................................................................. 59 MDM of Product Data ........................................................................................ 61 MDM of Customer Data ..................................................................................... 63 Microblogging.................................................................................................... 65 Mobile Advertising ............................................................................................. 67 Customer Profitability Management ................................................................... 69 Distributed Order Management.......................................................................... 70 Virtual Environments for Consumer Sales .......................................................... 71 Online Video ..................................................................................................... 72 Virtual Assistants............................................................................................... 74 Consumer-Generated Media ............................................................................. 75 Campaign Segmentation ................................................................................... 76 E-Mail Marketing ............................................................................................... 76 Preference-Driven Personalization .................................................................... 77 Climbing the Slope......................................................................................................... 78 Consumer Digital Rights Management ............................................................... 78 Content Delivery Networks ................................................................................ 80 E-Commerce Web 2.0 Sales Tools .................................................................... 82 Mobile Search ................................................................................................... 84 Social Search .................................................................................................... 85 Web-to-Print Applications .................................................................................. 86 Integration as a Service ..................................................................................... 87 Knowledge Management for Customer Self-Service .......................................... 91 Wikis ................................................................................................................. 91 Web Analytics ................................................................................................... 93 Web and Application Hosting ............................................................................. 95 Sales Order Management.................................................................................. 96 Entering the Plateau ...................................................................................................... 97 Enterprise Portals .............................................................................................. 97 Podcasting ........................................................................................................ 98 Sales Configuration ........................................................................................... 99 Blogs............................................................................................................... 100 Consumer Content Creation Tools ................................................................... 101 Appendixes .................................................................................................................. 103 Hype Cycle Phases, Benefit Ratings and Maturity Levels ................................ 105Recommended Reading ........................................................................................................... 106LIST OF TABLESTable 1. Hype Cycle Phases..................................................................................................... 105Table 2. Benefit Ratings ........................................................................................................... 105Publication Date: 3 August 2010/ID Number: G00205840 Page 3 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Table 3. Maturity Levels ........................................................................................................... 106LIST OF FIGURESFigure 1. Hype Cycle for E-Commerce, 2010 .............................................................................. 12Figure 2. Priority Matrix for E-Commerce, 2010 .......................................................................... 15Figure 3. Hype Cycle for E-Commerce, 2009 ............................................................................ 103Publication Date: 3 August 2010/ID Number: G00205840 Page 4 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • ANALYSISWhat You Need to KnowThe weak economy and five key trends are driving new investment and upgrades in e-commercecapabilities. Client interest in e-commerce has been increasing since the last release of thisreport; however, prudence and a focus on improving sales and customer experience is guiding allinvestment activities.Customer ExperienceOrganizations want to improve their websites with rich online customer experiences. Driven byconsumerization, organizations are improving their site user interfaces with rich Internetapplication (RIA) capabilities for all types of commerce — business to business (B2B) andbusiness to consumer (B2C) — as websites are no longer compared with direct competitors, butare compared with leading consumer website customer experiences.SocialOrganizations are also adding social capabilities. Here, organizations are seeking to takeadvantage of many forms of social CRM capabilities. These range from building a following of"friends" in public communities, such as Facebook and Twitter, to enabling user-generatedcontent to contribute to the organizations website and other activities that involve leveraging the"wisdom of the crowd."GlobalizationOrganizations are going global for new customers; therefore, there is significant interest inenabling e-commerce in new countries and regions. This is driving requirements for localizationcapabilities, such as translation, localized currencies and payment processes, localimplementation services at local rates, and other key international capabilities.MobileOrganizations want to implement mobile e-commerce capabilities to take advantage of thegrowing populations, using Internet-enabled smartphones and tablets for Web browsing andcontext-aware applications. Advancements in mobile technologies and devices and demand fromconsumers for mobile applications and Web browser access are also gaining more hype asdevices, such as the Apple iPhone 4, iPad and other mobile devices, enable consumers andbusiness partners to access an organizations website for product/service investigation and topossibly make a purchase directly through the device.Software as a ServiceThe increasing number of providers and developments in e-commerce software as a service(SaaS), which is also referred to as e-commerce on demand, have opened e-commercecapabilities to a much broader audience of organizations than ever before, and the hypesurrounding SaaS offerings is increasingly due to current economic and market forces.Organizations that want to develop their e-commerce capabilities into next-generation customerexperiences and to increase sales and customer retention should use this Hype Cycle tounderstand the hype, technology maturity and business impacts of leading e-commercetechnologies. Because of the amount of technology available, organizations without thisPublication Date: 3 August 2010/ID Number: G00205840 Page 5 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • understanding risk investing in technologies that may not provide returns, may hurt customerrelationships and may negatively affect their already-complicated e-commerce capabilities.The Hype CycleE-commerce trends and technologies are transforming the way enterprises interact with markets,including prospects, customers and partners. Research from the "Magic Quadrant for E-Commerce" uncovered how interest in e-commerce has expanded to industries outside traditionalretail. The new industries investing in e-commerce capabilities are discrete manufacturing,distribution, telecommunication and publishing (see "Findings: CEOs Are Placing New Bets on E-Commerce as Part of Their Return-to-Growth Strategy").B2C organizations still lead in innovation, however, tapping into communities of consumers viasocial-network software (such as Facebook, MySpace and Twitter) as a way to engage withcustomers and improve the overall online shopping experience. Moreover, B2C organizations arecapitalizing on the increasing number of smartphones and Web-capable phones. Therefore,many are making sure that they have a mobile website that is easy to use via a mobile Webbrowser, and many are creating mobile applications for devices such as iPhone4 and iPad (see"How Mobile E-Commerce Should be Using Context, but Isnt" and "Top Eight Ways Context WillMake Your M-Commerce Applications Stickier").Consumerization continues to put pressure on organizations to offer rich customer experiencesas customers of all types continue to compare site capabilities with other popular sites, such asGoogle, YouTube, Yahoo, Amazon and eBay, regardless of the industry. Often, businesspartners will expect the capabilities of consumer sites for their purchasing requirements to becoupled with more-advanced B2B sales capabilities, such as sales configuration, customer-specific catalogs and links to electronic data interchange (EDI) capabilities. As organizations lookto capitalize on these trends, they are also challenging IT organizations and business owners tolower operating costs and provide reliable, highly scalable, available and stable 24/7environments.The 2010 Hype Cycle for E-Commerce illustrates the varying hype and maturity levels of e-commerce technologies, as well as their business dynamics and complexities. The sheer numberof technologies being hyped in the e-commerce market demonstrates the complexity of anorganizations e-commerce technology portfolio and strategy.E-commerce is often associated or confused with other synonyms, such as e-business, e-retailingor individual technologies (such as EDI). Therefore, we have provided a definition to use with thisHype Cycle: "E-commerce is a compilation of business models, processes and technologies thatenable online sales, service and marketing for B2B and B2C commerce. It facilitates transactionsover the Web, and supports the creation and continuing development of online relationships."E-commerce technologies are critical to key initiatives, such as CRM, partner relationshipmanagement, process improvements, sales growth, reduction of sales costs, brand building, anddelivering value to consumers and business partners. This is accomplished by enabling anenjoyable customer experience that exceeds sales and service expectations.Organizations are unable to purchase a single e-commerce solution that is a complete match withall their unique business requirements as they exist, or that is agile enough to support changingrequirements. Most organizations e-commerce initiatives can have as many as 15 to 20 primaryor core integration points to complete a business process, such as campaign to cash, and asmany as five to 10 vendors to provide the complete operational site. Additionally, some B2Borganizations find themselves managing multiple types of e-commerce beyond partner-direct(B2B), because of the varying IT capabilities of their partner networks.Publication Date: 3 August 2010/ID Number: G00205840 Page 6 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Using the Hype CycleUse this Hype Cycle to investigate, evaluate and prioritize individual technologies that will enableyou to create a unique Internet experience and address current and future e-commerce trends.The Hype Cycle for E-Commerce addresses 65 of the most-relevant and topical e-commercetechnologies, and groups them into seven key areas: E-commerce foundational components Customer Web experience Marketing Sales Service Mobile Social CRMThese groupings will enable you to align these technologies with your individual online strategies,tactical initiatives, and B2B or B2C objectives.E-Commerce Foundational ComponentsThese components enable B2B and B2C organizations to process orders; manage many types ofcontent and product information; locate products, exchange data, services and suppliers, as wellas analytics; and manage overall performance. Technologies in the group enable organization toconduct any type of commerce and are necessary to core functionality and business processessupported by e-commerce website. Technologies in this group include: Cloud/Web platforms Consumer digital rights management (DRM) Content analytics Content delivery networks Context delivery architecture Context-enriched services Customer interaction hub (CIH) Customer profitability management Distributed order management E-invoicing Fraud detection Enterprise portals Integration as a service (IaaS) Multicommerce master data management (MDM)*Publication Date: 3 August 2010/ID Number: G00205840 Page 7 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • MDM of customer data MDM of product data Online video Rich information visualization Web analytics Web and application hosting Web-to-print applications *Technology that became obsolete before it reached the Plateau of Productivity (see Hype Cycle figure)Web Customer ExperienceThese technologies enable organizations to provide an enjoyable Web experience at any pointduring the customer interaction life cycle. This customer life cycle will include marketing, sales orservice activities delivered over the Web. The focus of these technologies is providing anenjoyable online experience that is intuitive and easy-to-use for all types of customers.Technologies in this group include: Consumer content creation tools Consumer Web mashups Consumer-generated media Customer-centric Web strategies Persona management Podcasting Preference-driven personalization Web 3.0* Web content product recommendation engines *Technology that became obsolete before it reached the Plateau of Productivity (see Hype Cycle figure)MarketingThese technologies enable organizations to create customer demand and leads via the Webchannel. The technologies in this section enable organizations to use online marketingtechniques to acquire new customers, expand the number of product being offered to a customerand to win customers that may have left the organization. Technologies in this area include: Campaign management SaaS Campaign optimization Campaign segmentationPublication Date: 3 August 2010/ID Number: G00205840 Page 8 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • E-mail marketing Event-triggered marketing Loyalty marketing Multichannel campaign management Online advertising data exchanges Predictive campaign analytics Transactional advertising unitsSalesThese technologies enable organizations to select products and services and to processtransactions over the Web channel. The technologies in this section enable organizations toimprove their sales by offering full Web stores as a service, improvements to the user interface toincrease conversion, to configure products and services without the aid of a human and othersales capabilities. Technologies in this area include: E-commerce on demand E-commerce Web 2.0 sales tools Open-source e-commerce software Sales configuration Sales order management Virtual environments for consumer salesServiceThese technologies enable organizations to service customers before, during or after a sale, andto resolve customer issues. These technologies also offer the ability to collect feedback fromcustomers and enable online self-service. Technologies in this area include: Enterprise feedback management (EFM) E-service Knowledge management for customer self-service Virtual assistantsMobileThese technologies enable organizations to provide mobile-based e-commerce (m-commerce)and can complement all phases of the customer life cycle. Particularly in the m-commerce space,many enterprises are beginning to develop context-enriched applications for the purpose ofincreasing customer loyalty and improving sales. Since it is the early days of context-enrichedcommerce, many different approaches are being taken, such as leveraging customer location andsending Short Message Service (SMS) messages. These technologies include: Mobile advertisingPublication Date: 3 August 2010/ID Number: G00205840 Page 9 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Mobile consumer application platforms Mobile coupons Mobile fraud detection Mobile search Mobile social networks Mobile Web applicationsSocial CRMThese technologies enable organizations to use social techniques within their Web stores or totake part in larger external (both public or privately created) communities of customers. SocialCRM applications encourage many-to-many participation among internal users, as well ascustomers, partners, affiliates, fans, constituents, donors, members and other external parties, tosupport sales, customer service and marketing processes. Social CRM works in each of thesedomains, for example, to provide a social enterprise feedback mechanism in the service domain,as well as social monitoring or product development in the marketing domain: Blogs Microblogging Social commerce Social CRM: community marketing Social CRM: for sales Social search Social shopping WikisNew to the Hype CycleThe 2010 E-Commerce Hype Cycle covers 65 technologies. To respond to the market trendslisted above and to assist organizations looking to capitalize on these trends, the followingtechnologies have been added to the 2010 E-Commerce Hype Cycle:Mobile Mobile advertising Mobile coupons Mobile fraud detection Mobile search Mobile social networks Mobile Web applicationsPublication Date: 3 August 2010/ID Number: G00205840 Page 10 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Social Social commerce Social shopping sitesWeb Customer Experience Web content product recommendationPublication Date: 3 August 2010/ID Number: G00205840 Page 11 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Figure 1. Hype Cycle for E-Commerce, 2010Source: Gartner (August 2010)Publication Date: 3 August 2010/ID Number: G00205840 Page 12 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • The Priority MatrixVendors and companies are enabling e-commerce with a variety of technologies, in differentforms and at different rates of adoption. The Priority Matrix presents the potential benefitsattainable relative to the progression along the Hype Cycle. This is intended as a generalguideline, because the benefits and maturity of any technology will partly depend on industryconditions, unique business circumstances and the organizations ability to use the technologyeffectively.Transformational benefit, shorter time frame (less than two years): These technologies areaimed at addressing current or near-term transformational requirements of e-commerce from itscurrent state. Technologies in this category can present a return on investment (ROI) with a shorttime frame or offer a compelling competitive advantage that can transform the way anorganization does business. Only enterprise portals fall into this category, because they enableimprovements to B2B e-commerce personalization, presentation and system integration.Transformational benefit, moderate time frame (two to five years): These technologies areaimed at fundamentally changing the way organizations interact with customers online (e.g., viamobile consumer application platforms). Additionally, cloud/Web platforms can transform howorganizations procure and implement new e-commerce capabilities. However, these technologiesrequire some time to learn and understand where the opportunities are and how to use themproperly.Transformational benefit, longer time frame (more than five years): These technologies canenable a transformational change to an organizations e-commerce initiatives. However, due totheir complexity and harder-to-quantify benefits to obtain funding, these technologies are morestrategic in value than tactical. There are five in this category: content analytics, context deliveryarchitecture, context-enriched services, social CRM: community marketing, and virtualenvironments for consumer sales.High benefit, shorter time frame (less than two years): These technologies are moresubstantial in an e-commerce strategy, but in the context of common business practices, theyaddress current or near-term issues in the organization. They may apply to improvements in astand-alone function or a new area, such as campaign tracking and measurement, consumercontent creation tools, sales configuration, social commerce, and Web and application hosting.High benefit, moderate time frame (two to five years): These technologies are more tacticaland require planning and incremental investments. Technologies in this group enableimprovements in many areas of e-commerce. For example, improvements to online sales mayinvolve the use of e-commerce Web 2.0 sales tools; for service improvements, technologies suchas e-service and EFM may be used; for marketing improvements, event-triggered marketing andmultichannel campaign management can provide improvements; and for foundational e-commerce capability improvements, technologies such as content delivery networks may beused. (Refer to the Priority Matrix for the complete list of technologies in this category.) Thelargest collection of technologies for the Hype Cycle is in this area.High benefit, longer time frame (more than five years): These technologies are strategic andrequire long-term planning and incremental investments. There are seven technologies in thiscategory and, similar to moderate time frame technology improvements, they can be delivered inseveral areas: marketing (campaign optimization, e-commerce foundational capabilities); CIH,customer profitability management, distributed order management and rich informationvisualization; service (virtual assistants and mobile); and mobile fraud detection.Publication Date: 3 August 2010/ID Number: G00205840 Page 13 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Moderate benefit ratings: These technologies generally enable added capabilities to early-generation e-commerce deployments. Depending on the time frame, they can be deployed asrapid-implementation projects to deliver specific functionality, or built into longer-term plans toreduce capital outlays and operating expenses (see the moderate-level boxes in the PriorityMatrix).Low benefit ratings: Technologies in this group are not viewed as large contributors to overalloperational savings or to increases in marketing, sales or service capabilities(see the low-levelboxes in the Priority Matrix).Publication Date: 3 August 2010/ID Number: G00205840 Page 14 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Figure 2. Priority Matrix for E-Commerce, 2010Source: Gartner (August 2010)Off the Hype CycleThe following technologies were removed from the 2010 Hype Cycle for E-Commerce:Publication Date: 3 August 2010/ID Number: G00205840 Page 15 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Electronic bill presentment and payment for telecom providers E-marketing Insurance self-service portals Loyalty programs Online supplier directories Really Simple Syndication (RSS) for marketing Retail B2C mobile commerce Retail e-commerce usability and conversion analytics Secure Web stores Social CRM: customer service Social tools for retail websites Web 2.0This was done for one or more of the following reasons: The technology has reached maturity and is no longer part of the Hype Cycle. The technology is specific to a vertical industry and can be found in that vertical industrys Hype Cycle. The technology has been merged into another technology.On the RiseMobile Fraud DetectionAnalysis By: Avivah LitanDefinition: Fraud detection and prevention are used to protect customer and enterpriseinformation, assets, accounts, and transactions through the real-time, near-real-time, or batchanalysis of activities by users and other defined entities (such as kiosks) against accounts andrecords. The rapid and massive adoption of smartphone mobile applications is quickly driving theadoption of mobile-based transactions, generating the need for specific mobile fraud detectiontechnologies and models that heretofore have been nonexistent or hard to find.Fraud detection uses background server-based processes — transparent to users — thatexamine user and other defined entities access and behavior patterns. Then, it typicallycompares this information to a profile of whats expected and considered "normal." If tunedproperly, fraud detection systems can be highly effective at keeping criminals out. They are notintrusive to legitimate users unless the users activity is suspect. Access and behavior patterns onmobile computing devices are notably different from those on fixed-connection computing devices— hence, the need for new fraud detection modeling and profiling technology.Unlike mature fraud detection applications that exist through fixed connections — for example, ona PC or store-based — mobile fraud detection is in its embryonic stage, reflecting the emergenceof mobile platforms used to conduct sensitive transactions. The migration of transactions tomobile platforms will create high demand for fraud detection that operates in mobile environmentsPublication Date: 3 August 2010/ID Number: G00205840 Page 16 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • and compensates for features in the land-based environment that do not translate into the mobileone. Fraud prevention techniques that are particular to mobile platforms include: 1. Mobile device identification — Identification is typically enabled through a JavaScript on the server that the user logs into or through APIs from communications service providers, which captures whatever information it can get from the users browser and phone, depending on if the user is using a browser or native application. Client device identification is an effective tool for PC-based fraud detection, but it must gather different device parameters to be effective in the mobile world. 2. Location of device — The location of a device is relative to other location information an enterprise knows about the user: Enterprises may want to check the location of the device relative to anything else it knows about the users location through other systems the user may interact with at the enterprise. For example, if the users mobile phone is in Germany, but seconds earlier, the user was withdrawing cash from an ATM machine in the United Kingdom, the enterprise knows that one of those transactions (either the PC Web-based or the mobile Web-based) is suspect. 3. Mobile fraud detection models — Lastly, some online fraud detection vendors are starting to tune their risk-scoring models specifically for mobile applications — for example, by looking at the mobile device itself, the location of the phone and the behavior of the user while transacting from the phone. For example, some users may navigate an enterprises mobile applications differently from how they navigate their fixed-connection browser applications. Likewise, some users may shy away from executing high-value transactions from their mobile phones, while they execute them frequently from their fixed-connection browsers.This area is very new to the fraud detection vendors, as there is little mobile transactionexperience to draw upon to build effective risk models and scores. It tries to combine some of themethods listed above, including mobile device identification and examining the location of themobile phone in relation to other information known about the user and his or her location.Position and Adoption Speed Justification: Fraud detection is already prevalent in the creditcard market and is quickly gaining adoption in other markets, such as healthcare insurance,online transactions, benefits fraud, tax fraud and internal corruption. However, the mobile frauddetection market is embryonic, reflecting the fact that high-risk transactions conducted frommobile devices are just — but rapidly — beginning to gain traction with the rollout of smartphonesfrom which Web browsing is a practical proposition. Furthermore, most of the malware attackinglegitimate users and their accounts is targeted toward PC-based browsers, and there have beenminimal attacks against mobile devices and their browsers, which until now has reduced theimminent need for mobile fraud detection. We expect this situation to change quickly, however, asfraudsters increasingly target mobile devices as attack vectors.User Advice: Assume the criminals will start attacking mobile devices, primarily by droppingmalware hidden in applications that users download to their mobile phones. Look for opportunitiesto use information from smartphones and network operators as context to make decisions aboutcredit card and other payment instrument usage. Engage with vendors that provide mobile-basedfraud detection based on mobile device identification, location awareness that users do not haveto opt into, and fraud detection models specifically designed for mobile computing.Integrate the mobile fraud detection system with your enterprise fraud detection system so thatcustomer and account profiles can be shared and fraud alerts can be correlated across productsand channels.Publication Date: 3 August 2010/ID Number: G00205840 Page 17 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Business Impact: Mobile fraud detection watches for suspect user and mobile device activityspecifically in the mobile computing environment. It will become a cornerstone for commercialcontext-enriched services and should be positioned as a benefit to and protection for consumers.It should be integrated with other enterprise fraud management systems, as users are highlyunlikely to only use the mobile channel to conduct their transactions.Benefit Rating: HighMarket Penetration: Less than 1% of target audienceMaturity: EmergingSample Vendors: 41st Parameter; AT&T; RSA; The Security Division of EMC; ValidSoft;VodafoneRecommended Reading: "Where Strong Authentication Fails and What You Can Do About It""Pattern Discovery With Security Monitoring and Fraud Detection Technologies""Location Technologies""Magic Quadrant for Web Fraud Detection""Case Study: Bank Defeats Attempted Zeus Malware Raids of Business Accounts"Social-Shopping SitesAnalysis By: Gene AlvarezDefinition: Social-shopping sites are community websites where members are shoppers that"friend" each other based on similar shopping interests, such as taste in fashion. Thesecommunities enable shoppers to exchange information, opinions and, in some cases, shoptogether. These sites vary in how users post their interests; some leverage credit cardtransactions or e-commerce site purchases, while others enable consumers to post items ofinterest and link their posting to other like users. Here, users begin to share information abouttheir buying habits and interests to discover new items, and obtain feedback on items of interestand other points about products.Position and Adoption Speed Justification: Social-shopping sites are appearing rather rapidlyas vendors attempt to take advantage of online social-software trends. The vendors hope togather large user bases quickly to drive advertising revenue and pay-per-click revenue streams.User Advice: Organizations should monitor their incoming Web traffic for traffic from these onlinesocial-shopping sites. This should include monitoring of leads that actually converted into sales. Itshould be sales that guides any advertising investments or relationships with these social-shopping sites, not just traffic.Business Impact: Social-shopping sites can contribute to online sales; however, it should bepart of a much larger online social commerce strategy for the organization. This is because thisoption can provide sales from certain smaller online segments to which the organization may notbe marketing.Benefit Rating: LowMarket Penetration: Less than 1% of target audienceMaturity: EmbryonicPublication Date: 3 August 2010/ID Number: G00205840 Page 18 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Sample Vendors: Blippy; Kaboodle; MyItThings.com; StyleFeeder; Swipely; ThisNext; WistsContext Delivery ArchitectureAnalysis By: William Clark; Anne LapkinDefinition: Context-aware computing is about improving the user experience for customers,business partners and employees by using the information about a person or object’senvironment, activities, connections and preferences to anticipate the user’s needs andproactively serve up the most appropriate content, product or service. Enterprises can leveragecontext-aware computing to better target prospects, increase customer intimacy, and enhanceassociate productivity and collaboration. From a software perspective, context is information thatis relevant to the functioning of a software process, but is not essential to it. In the absence of thisadditional information, the software is still operational, although the results of the softwaresactions are not as targeted or refined.Most context-enriched services are implemented in siloed systems, where a particular person,group or business process profits from being situationally aware. To replicate, scale and integratesuch systems, certain repeatable patterns emerge that will require a new enterprise solutionarchitecture known as context delivery architecture (CoDA).Gartner defines CoDA as an architectural style that builds on service-oriented architecture (SOA)and event-driven architecture (EDA) interaction and partitioning styles, and adds formalmechanisms for the software elements that discover and apply the users context in real time.CoDA provides a framework for solution architects that allows them to define and implement thetechnology, information and process components that enable services to use context informationto improve the quality of the interactions with the user. The technologies may include contextbrokers, state monitors, sensors, analytic engines and cloud-based transaction processingengines.As context-aware computing matures, CoDA should also define data formats, metadata schemas,interaction and discovery protocols, programming interfaces, and other formalities. As anemerging best practice, CoDA will enable enterprises to create and tie together the siloedcontext-aware applications with increased agility and flexibility. As with SOA, much of the pull forCoDA will come from packaged-application and software vendors expanding to integratecommunication and collaboration capabilities, unified communications vendors and mobile devicemanufacturers, Web megavendors (e.g., Google), social-networking vendors (e.g., Facebook),and service providers that expand their roles to become providers and processors of contextinformation.The CoDA architecture style considers information, business and technology domain viewpoints.The technology domains are application infrastructure, communications infrastructure, networkservices and endpoints (devices). Thus, CoDA provides a framework for architects to discovergaps and overlap among system components that provide, process and analyze contextualinformation. A key challenge of CoDA will be information-driven, not technology-driven. This keychallenge will revolve around what information sources can provide context, then whattechnologies enable that information to be provided in a secure, timely and usable manner, andhow this information can be folded into processes.Position and Adoption Speed Justification: Gartner introduced the term CoDA in 2007, basedon developments in areas such as mobile communications and cloud computing. By 2011, weexpect that aggressive enterprise architects and project managers will weave elements of CoDAinto their plans to orchestrate and build context-enriched services that rely not only on federatedinformation models, but also on federated delivery services. CoDA relies on SOA as anunderpinning and also is related to EDA, because enterprise architectures need to be agile andPublication Date: 3 August 2010/ID Number: G00205840 Page 19 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • scalable to support context-aware computing. SOA and EDA have not yet reached the Plateau ofProductivity. We expect CoDA to reach the Plateau of Productivity gradually, after 2014.User Advice: Although CoDA, is an emerging architectural style, Type A organizations canbenefit in the short term by applying its principles as they experiment with use of contextinformation to provide improved user experiences in both customer-facing services and enterpriseproductivity. Leading-edge organizations need to begin to incorporate CoDA constructs ininfrastructure and services to gain competitive advantages with the early use of context-awarecomputing. Type A organizations should now be identifying which information sources, bothwithin the enterprise and external to it (e.g., from social-software sites), will provide contextinformation to a range of applications.Build competencies in CoDAs technology domains, particularly in communications, because themigration of voice from silos to general applications will be a key transformation, opening upfurther opportunities to create applications enhanced by context-enriched services. Anunderstanding of mobile development will also be key. The refinement of your enterprisearchitecture to include CoDA constructs assumes prior investment in SOA. Most mainstream,risk-averse organizations should not invest in building a CoDA capability, but should explore theacquisition of context-enriched services through third parties.Business Impact: Context awareness is a distinguishing characteristic of some leading softwaresolutions, including Amazon e-commerce, Google Search, Facebook, Apple and others. Duringthe next three to five years, context-aware computing will have high impact among Type Abusinesses in two areas: extending e-commerce and mobile commerce initiatives towardconsumers, and increasing the efficiency and productivity of the businesses knowledge workersand business partners.Context-aware computing will evolve incrementally, and will gain momentum as more informationsources become available and cloud-based context-enriched services begin to emerge. However,these will be siloed and will not use a standard or shared CoDA model. Emergence of formalCoDA protocols and principles will translate into a new technology category and feature set,affecting all application infrastructure and business application providers.Benefit Rating: TransformationalMarket Penetration: Less than 1% of target audienceMaturity: EmergingSample Vendors: Appear Networks; Apple; Google; IBM; Interactive Intelligence; Nokia; Pontis;Sense NetworksRecommended Reading: "Fundamentals of Context Delivery Architecture: Introduction andDefinitions, 2010 Update""The Seven Styles of Context-Aware Computing""Context-Enriched Services: From Reactive Location to Rich Anticipation""Fundamentals of Context Delivery Architecture: Provisioning Context-Enriched Services, 2010Update"Persona ManagementAnalysis By: Adam SarnerPublication Date: 3 August 2010/ID Number: G00205840 Page 20 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Definition: Persona management is the nascent class of tools to help people keep track of whatthey are saying and posting to the different online communities in which they participate. Aspeople go through their day, they constantly slip between several different personas; one minutethey are a boss, the next an employee. They are parents as well as spouses and, often, children;rock music fans and cloud-computing experts. Navigating these different roles in the real worldcan be tricky, but millennia of practice have made humans reasonably adept at handling theseshifts.In the online world, it is not so straightforward. As private and business interactions in the onlineworld increasingly overlap, social-media participants are faced with a dilemma: How can theymanage communications and interactions from all the different roles they play in their complicatedlives? Persona management helps people establish different personas and channelcommunications, as appropriate. For example, a persona manager would ensure that photosfrom a college reunion would only appear on social networks where those friends participate, andnot be posted to business-oriented networks.Position and Adoption Speed Justification: The need for persona management is muchgreater than the technology currently available to help do it. A few basic tools are available tomanage multiple Twitter accounts, or establish groups on Facebook and other social-networkingsites to channel postings, but these fall well short of what real persona management wouldrequire. Some requirements for a hypothetical persona management product include: Control of interactions across multiple public and corporate social-networking sites Filters to channel postings to appropriate sites based on semantic analysis and predefined policies Strong cross-directory authentication and single sign-on facilities Impeccable security and operational infrastructures Recall functions to withdraw "mistakes"This is a formidable list of requirements, so it will take some time for this technology to establishitself. Identity management initiatives like OpenID and Windows Live ID address some of thesecurity and identification aspects. Aggregation services like Ping.fm or FriendFeed distributepostings to multiple sites. Neither of these types of services include the wider facilities needed tomanage personas, although any of these could develop into persona management.We expect to see startups entering this market with specific offerings, as well as establishedplayers like Google, Microsoft and IBM making a play. Existing social networks like Facebook andLinkedIn are also likely to add elements of cross-network management to their offerings, whichcould evolve into useful persona management.User Advice: In the absence of effective personal management, individuals are largely on theirown to manage how they conduct their online lives. In the absence of technological assistance,prudence and forethought are the next best things. Enterprises need to establish guidelines as towhat are acceptable and desirable behaviors for their employees when participating in publicsocial media.Business Impact: Individuals will receive the primary benefits of persona management, since itwill make managing their personal and business online lives easier. Enterprises will also benefit,however, as these tools will reduce the embarrassment and worse from misplaced postings. Ascommunity and social-media sites proliferate both for business and personal use, these kinds oftools become even more important. Without them, many communities will lack participation,Publication Date: 3 August 2010/ID Number: G00205840 Page 21 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • simply because users cannot cope with any more places to put "stuff," shutting off potentiallyrewarding avenues of participation.Benefit Rating: ModerateMarket Penetration: Less than 1% of target audienceMaturity: EmbryonicRecommended Reading: "Policies and Procedures to Manage Enterprise Internet Reputation""Five Major Challenges Organizations Face Regarding Social Software""CMOs Need New Skills to Engage Generation Virtual""The New World of Two-Way Engagement With Customer Personas""Whats Hot in CRM Applications in 2009"Rich Information VisualizationAnalysis By: Michael MaozDefinition: Context is critical to both consumers and the employees of an enterprise. Customerservice agents, for example, use rich visualization to receive customers account information,analyzed in such a way that it can be displayed in a highly understandable manner. The need tovisualize includes a customers physical location, preferences, value, appearance, circle offriends, family, affiliations and most-frequent "interaction paths" — Web, telephone, kiosk,automated teller machine and other sources. The requisite technologies exist in the form ofanalytics, CRM information, GPS, satellite mapping and Internet Protocol (IP)-enabled videocameras, as well as face and voice recognition. However, the software applications have not yetbeen developed. Organizations quickly discover that visualization is only as good as the data thatunderlies it, making master data management (MDM) a big factor.Position and Adoption Speed Justification: Small design firms, rather than commercial tools,deliver rich visualization capabilities. Privacy issues and the need for product development willcontinue to hinder adoption during the next five years. Analytics vendors will be key tomainstream adoption. Consumers are ever-more sophisticated regarding anonymity and privacyissues (that is, little is not already known), and this will lower barriers in the five- to 10-yearhorizon, accelerating adoption. Software as a service (SaaS), the computing power of thedesktop — and, to a lesser extent, PDAs — will be available during the next 10 years, as well asmore-efficient screens for agents and consumers to enable a series of successful "single view ofthe customer" projects (for agents viewing the customer) or consumer applications that willprovide increased viewing of their relationships with the business.User Advice: Type A organizations (aggressive technology adopters) should place a mentalcheck mark next to "rich visualization." In the meantime, they should ask questions such as, "Howdo we prepare for this opportunity to better understand more dimensions of our customers?"There is a close link to analytics. Bringing this content together to form a complete picture willrequire strong integration with analytical systems. Systems will need clean data that has beenstructured for purpose and target.Business Impact: The business impact is high because getting rich visualization "right" from atiming perspective will yield a first-mover advantage. Jumping in too soon will exposeorganizations to claims of invasion of privacy.Publication Date: 3 August 2010/ID Number: G00205840 Page 22 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Benefit Rating: HighMarket Penetration: Less than 1% of target audienceMaturity: EmergingSample Vendors: Adaptive Engineering; Google; MicrosoftCustomer-Centric Web StrategiesAnalysis By: Michael MaozDefinition: A customer-centric Web strategy (technology strategy and business strategy) is acohesive approach to ensuring that a website is intuitive to the visitor of that site, placing thecustomer at the center of the relationship. It focuses on tying the customer, prospect or partnerdeeply into the enterprise or organization, and harmonizes the various interaction channels. Itstarts with improvements to the website, but extends beyond it to other related interactionchannels and external services, such as social networking and other forms of social media. Thetechnologies, integrations, analysis, content, communication and business applications aredesigned and deployed through a collaborative effort between the business and the externalcustomer to achieve this goal of serving the customer need consistently with business goals. Itwill be used to optimize advertising via e-mail, search or other online approaches.Position and Adoption Speed Justification: A customer-centric Web is still a very immatureconcept and strategy for most businesses outside of online retail, where the concept is maturing.The challenge (beyond the process synchronization required) is that the technologies are notavailable as a suite, but rather cobbled together. There have been good reasons for this: theneed to rapidly innovate because of the evolving nature of user interaction patterns; emergingtechnologies, such as real-time analytics, social networking and recommendation/reputationengines; and highly fragmented reporting structures for the people tasked with building Webcapabilities. Creating a Web presence that draws customers in because it is engaging,responsive, reliable and intuitive to their needs will be a strong business differentiator.User Advice: Create an inventory of tools, technologies and applications required to deliver acustomer-centric Web. Appoint a project leader who has the approval of the board or CEO to runa customer-centric Web effort. Tap the community of customers, prospective customers, partnersand employees as a way of uncovering the true impact and effectiveness of your website. Lookfor redundancies in systems, and overlapping organizational responsibilities. Test ideas bymeasuring the impact before deploying fully.Business Impact: The business impact is high, because businesses waste a tremendousamount of money on marketing, sales and technical support as a way of overcoming theweaknesses in their websites. The desire to better control and optimize spending, and measurecosts and Web effectiveness, will drive customer-centric Web programs.Benefit Rating: HighMarket Penetration: Less than 1% of target audienceMaturity: EmergingSample Vendors: Accenture; DeloitteRecommended Reading: "A Framework for Creating the Future Customer-Centric Web"Publication Date: 3 August 2010/ID Number: G00205840 Page 23 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Transactional Ad UnitsAnalysis By: Andrew FrankDefinition: Transactional ad units are advertiser-supplied active display elements that canoccupy a standard position on a Web page or mobile or interactive TV application, such as abanner or text overlay, and that expands to present a secure transaction. When engaged by aconsumer using a mouse, touchscreen or remote control, these units will generally fill the screenor browser to provide additional space for merchandising and interaction, but they do not take theuser away from the underlying page, app or program. Like any display ad, they can be placedusing a variety of methods, such as contextual or behavioral targeting.Placement can be within an app or Web page, in which case the underlying content provider canbe compensated using a number of possible payment conventions. Placement can also betriggered by external input, such as a camera or map in an augmented-reality scenario thatprovides overlays to a live image.In addition to direct sales, transactions can include applications such as secure couponing, leadgeneration, secure notification, and authentication-based upsell and cross-sell sample scenarios.Position and Adoption Speed Justification: The idea of embedding transactions in Web adsfirst surfaced in the late 1990s, but failed to gain much traction primarily due to security concernsand technical challenges. In 2010, the concept got a strong boost from Apple, whose iAdsplatform was announced with great fanfare and featured transactional capabilities within the appadvertising platform.The benefits of this type of unit are clear: Collapsing the chain of events between advertising andsales not only enables advertising to become much more efficient and accountable formerchants, but also causes publishers to see much higher yields as a result of hosting sales ontheir sites. For consumers, the availability of impulse-buying opportunities in relevant contextscould also be seen less as intrusive advertising and more as an attractive feature of a site.There are, of course, impediments as well. Security concerns are an issue due to the possibilityof phishing attacks (as the merchants URL will not appear in a protected browser field), althoughthis could be seen as an advantage for name brand publishers and tightly controlled platform-based ad networks, like Apples, which have the capacity to supply a trusted context that isabsent within unknown sites and blogs. Perhaps the biggest issue, however, is channel conflict.E-commerce sites have strong incentives to process transactions on their own sites, both tominimize revenue payouts and protect their own brands and traffic, while manufacturer brandsmay be wary of undercutting established online channels with experimental ones, especially in ashaky economy. Still, the improvement in the cost per sale for many manufacturers andmerchants will prove hard to resist.In addition to Apple, several large Internet companies, including Google (Checkout), eBay(PayPal) and Facebook (Pay With Facebook), are reportedly experimenting with transactional adunits. With the drive to raise efficiency and squeeze more revenue out of the online channel forcommerce, its likely that transactional ad units will eventually become a productive staple ofdigital marketing, particularly for impulse purchases of soft goods and gifts.User Advice: Online publishers, especially those with trusted offline brands, should look foropportunities to employ embedded transactions in websites and apps, and build predictivemodels to optimize decisions about transaction targeting, based on behavioral and other relevantvisitor data.Publication Date: 3 August 2010/ID Number: G00205840 Page 24 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Online merchants should evaluate transactional ad units as a method to extend their storefrontsacross the Web. Online merchants will also need to make marketing and merchandising worktogether to enable these opportunities.Ad networks and agencies should develop near-term strategies for evaluating transactional adunit models and performance, either with partners or on their own.Business Impact: Although sales within ad units may initially be limited to certain categories,when the concept is extended to include opt-in lead generation, couponing and other nonsalestypes of transactions, the impact becomes broad across a wide range of product categories.Transactional ad units have the capacity to significantly raise ad yields for publishers, whilesimultaneously lowering the cost per sale for marketers.Benefit Rating: HighMarket Penetration: Less than 1% of target audienceMaturity: EmergingSample Vendors: Adgregate Markets; Alvenda; Apple; Lemonade; Mpire; nooked; PontiflexE-ServicesAnalysis By: Juergen WeissDefinition: E-services are offered by life insurers to their customers as part of their client-facingwebsites. E-services are usually part of a secure Web environment and include, in our definition,a wide range of customer self-services, including some or all the following service functions: Displaying policy details Downloading policy documents Switching investment funds (in the case of life insurance unit-linked products) Change of address Changing bank details Displaying premium bills Paying premium bills Creating alarms or notifications Downloading additional documents, such as tax declarations Changing passwords or requesting new onesAccess to these e-services is usually restricted to existing clients in a type of personalized "myaccount" section of the insurers website, and it requires previous registration. Gartner doesntconsider simple e-mail forms or requests that can be downloaded, printed and then physicallysent to the insurer as e-services.Position and Adoption Speed Justification: Gartner has decided to add e-services as a newentry on the 2010 Hype Cycle for life insurance, because more and more life insurers in manyregions are adding e-services to their customer websites. There is a lack of adoption amonginsurance customers, though, because of cumbersome onboarding procedures and the absencePublication Date: 3 August 2010/ID Number: G00205840 Page 25 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • of incentives from life insurers. Gartner expects more life insurers to add e-services to theircustomer portals because of potential cost savings and other reasons. This will constantly movee-services along the Hype Cycle, but because of staggering customer adoption, this technologywill not reach the Plateau of Productivity before the next two to five years.User Advice: Life insurers that plan to introduce e-services, or aim to expand their use, shouldconsider incentives, such as discounts or transaction fee savings, to promote e-service adoptionin their customer base. In addition, life insurers need to analyze the back-office businessprocesses that they want to offer as e-services to clients. Some of these processes wont besuitable for real-time or near-real-time online access, because theyre batch-based and will fail tomeet customer expectations. Customers who pay premium invoices via the Internet will, forexample, expect to see the impact on their outstanding receivables immediately, and wont waitfor a batch run to happen every week.Finally, life insurers shouldnt consider offering any e-services without a proper and scalableback-office integration with relevant systems, such as policy administration or billing. Havingfewer but tightly integrated services is much better than having many services that are based onsimple online forms, and where information has to be manually entered in the back office.Business Impact: Life insurers pursue a number of goals by providing e-services to their clientbase. The most obvious and most often mentioned reason is convenience for the policyholders.Instead of having to call the insurer or its agents/brokers, clients can have access to basic self-services in an almost 24/7 mode, thereby eliminating the submission of paper-baseddocumentation. In Gartners opinion, there are at least two other reasons — costs and customerretention. Life insurers that offer e-services with a sophisticated back-office integration (withoutmanual re-entry of data) can save a considerable amount of costs. Organizations will not onlyavoid interactions with their call centers and reduce error rates because of manual processes, butthey will also be able to shift routine tasks to their customers.Another important driver for e-services is customer retention. In general, life insurers face theproblem of having very few interactions (actually often none at all) per year with their clients.Offering e-services is a means of increasing the frequency of interactions (for example, allowingclients to periodically review and adapt their portfolios), and also a means of meeting changingcustomer expectations. Internet users are used to initiating requests via the Internet withouthaving to print and physically send in forms.Benefit Rating: ModerateMarket Penetration: 1% to 5% of target audienceMaturity: EmergingSample Vendors: MajescoMastek; Oracle; SAP; StoneRiverRecommended Reading: "Life and P&C Insurers Lack Incentives to Drive E-Service AdoptionAmong Customers""Creating a Comprehensive Service Strategy for Life Insurance and Annuities"Online Advertising Data ExchangesAnalysis By: Andrew FrankDefinition: An online advertising data exchange is a Web-based trading platform that enablespartners to buy and sell data intended to boost ad-targeting effectiveness for Web displayadvertising.Publication Date: 3 August 2010/ID Number: G00205840 Page 26 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • In contrast with an online ad network or ad exchange, data exchanges do not sell ads orimpressions. The separation of data from media is intended to benefit publishers, e-commercesites and marketers that desire the benefits of an exchange for targeting (liquidity, scale andopenness) without having to bundle data with media inventory. This gives data suppliers thechance to monetize ad impressions beyond their own share of Web traffic, and data buyers thechance to reach targeted consumers in a wider variety of contexts.The data involved is generally consumer intent data, also known as behavioral targeting (BT)data, that identifies a cookied website visitor as being in-market for (or at least interested in) acertain product category, based on the observed browsing history. However, other data, such asdemographics derived from registration data or other sources, may also be offered.Position and Adoption Speed Justification: Advertising data exchanges first appeared in 2007with the launch of an Israeli firm called eXelate, but didnt get much traction until 2008, whentrends aligned to build enough favorable opinion to attract major publishers that were underpressure to increase online revenue and saw an opportunity to leverage both data and brand.(The brand aspect comes into play as a trust factor, since the quality of such data is almostimpossible to verify ahead of its use to generate a response, which is often delayed.)Unlike the ad exchange model, data exchanges do not have as much pressure to attractmarketers on the buy side, as publishers can trade data among themselves and use it to raiseyields on their respective sites that they can still sell directly to advertisers.In 2009 and 2010, the rise of real-time bidding (RTB) has given a boost to these systems, as RTBincreases the opportunities to utilize targeting data in a real-time context. This has given rise to anew generation of data providers offering more-segmented selections of targeting data.Meanwhile, 2010 saw an upturn in the cyclical pattern of privacy concerns, focused in part on theissue of giving consumers transparent access to their BT profiles. In April, U.S. congressmanRick Boucher floated draft legislation to require ad networks to either obtain users opt-in consentprior to tracking them, or provide "prominent notice" and supply consumers access to view andedit profiles to qualify for opt-out consent status. Responding to this, BlueKai, a prominent dataexchange, recently released a white-label tool to give Web publishers the ability to allowconsumers to access and edit the targeting segments they have been placed into. Adoption bypublishers and consumers, as well as the course of legislation, remains speculative, althoughGartner considers it unlikely that legislation will have a significant chilling effect on the currentself-regulated online ad-targeting marketplace in the U.S. Other regions (particularly in theEuropean Union) with more-stringent prohibitions may remain unattractive to data exchanges.Another question regarding the future of data exchanges is whether they will ultimately beconsolidated into ad exchanges. There is a growing glut of online consumer data available fromvarious sources at a time when some marketers are beginning to question the ubiquity ofbehavioral targeting, putting pressure on the extent to which transaction values can continue toexceed overhead. While separation of data from media may produce efficiency advantages, thereare likely to be economies of scale and performance benefits from combining these two types oftransactions on the same exchange platform, meaning that data exchanges may wind upconsolidated with ad exchanges at Google, Yahoo and Microsoft. This may provide an attractiveexit for some pioneers in the category, and the independent data exchange concept mayultimately fade.User Advice: Publishers and online merchants should investigate the possibility that onlineadvertising data exchanges could be a source of both direct revenue and more targeting value fortheir advertising customers or activities, respectively. Before participating as sellers, they mustverify the quality of their data by its ability to generate positive results (higher click-through ratesPublication Date: 3 August 2010/ID Number: G00205840 Page 27 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • and more conversions) in trials with partners. Before participating as buyers, they should have inplace methods for tracking data quality through similar metrics and keep score of sources.Ad agencies and ad networks need to regard data exchanges as both potential partners andpotential disintermediaries. Advertising holding companies need to consolidate data pools at theirmedia agencies and may consider acquiring or building data exchanges of their own. However,privacy and client confidentiality issues must be well vetted and protected against data leakage.E-commerce merchants are likely to have behavioral data of value to manufacturers and categorypublishers, but need to prevent its sale to competitive retailers. On the buy side, BT is an effectiveway to increase marketing efficiency.All potential users should subject plans to scrutiny by privacy experts (both legal and technical)prior to participating, and carefully monitor issues as they arise. Best practices and industry groupstandards should be studied and adopted as they emerge.Business Impact: Online data exchanges represent acquisition targets for large ad exchangesor networks.Brand-name publishers and e-commerce merchants have the strongest opportunity to tap newrevenue from the sale of anonymous consumer data.Communications service providers (CSPs) have examined the potential to use techniques suchas deep packet inspection (DPI) to acquire and market targeting data from ISP traffic; however,the privacy backlash at this time appears prohibitive.Benefit Rating: ModerateMarket Penetration: Less than 1% of target audienceMaturity: EmergingSample Vendors: Adknowledge; BlueKai; eXelate; Media6DegreesRecommended Reading: "Targeted Advertising and the Privacy Predicament""Making Digital Advertising Work for Media Companies""Online Ad Exchanges Change the Game""Real-Time Bidding Heralds Growth in Cloud Advertising"Social CommerceAnalysis By: Gene AlvarezDefinition: Social commerce is the use of social-software tools and user-generated contentwithin an e-commerce context. Social commerce is used to create sales lift by providingcustomers with information and content from other customers that assists with the evaluation of aproduct or service. Techniques can vary from the creation of an online store within an existingcommunity, such as Facebook, to the use of product reviews, blogs, wikis, and question-and-answer threads to drive sales.Position and Adoption Speed Justification: Facebook has reached 500 million users and thepercentage of time that users spend on their Facebook accounts continues to grow.Organizations have begun to see Facebook as a viable marketing and sales channel. In addition,user-generated content, such as product reviews, videos, wikis and blogs, continues to grow in itsinfluence on consumers buying decisions. Techniques like a company store within Facebook orPublication Date: 3 August 2010/ID Number: G00205840 Page 28 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • the use of user-generated content on ones website are the foundation of social commerce, and itis growing due to the consumers ability to filter out traditional market media, such as direct mail,e-mail and TV advertisements. Therefore, we believe that social-commerce techniques andtechnology will rapidly climb in hype, and as organizations discover the pros and cons of socialcommerce, they will move this technology quickly through the Hype Cycle to maturity.User Advice: Business-to-consumer (B2C) organizations should use social-commercetechniques and technologies in 2011 and 2012 for B2C sales initiatives. However, these shouldbe targeted and focused on the specific propose of driving sales, not just the number of followersor friends. Therefore, organizations should focus on techniques with proven value, such as saleson top-rated products or friends-only promotions. Moreover, organizations should experiment withvarious tools, because one tool may only address a single customer segment.Business Impact: Social commerce can create new customer segments that are based on aconsumers interests in a Web environment. This can enable the targeted selling of products thatare related to group interests and activities.In addition, social commerce can help to drive down the cost of sales, because it is used in themore cost-effective digital channels (marked by considerably less need for human intervention),and can be an extension of brand personality to create greater brand awareness.Benefit Rating: HighMarket Penetration: 5% to 20% of target audienceMaturity: EmergingSample Vendors: Bazaarvoice; Dell (Dell Swarm); Demand Media; Groupon; Jive Software;LivingSocial; ShopIgniterRecommended Reading: "Magic Quadrant for Social CRM"Context-Enriched ServicesAnalysis By: William Clark; Anne LapkinDefinition: Context-enriched services use information about a person or object to proactivelyanticipate the users need and serve up the content, product or service most appropriate to theuser. The IT industry is beginning to recognize a pattern where augmented reality offerings,mobile location-aware ads, mobile search and social mobile sites fall under the umbrella term"context aware." Context-enriched services are the fundamental unit of software for improvinguser experiences through context, and are an implementation foundation for context-awarecomputing. These terms denote services and APIs that use information about the user tooptionally and implicitly fine-tune the software action with better situational awareness. Suchservices can proactively push content to the user at the moment of need, or suggest products andservices that are most attractive to the user at a specific point in time.Context is relative and describes the environment, history or setting in which a user interactionoccurs. From a software perspective, context for a service is information (data) that can add valueto the functioning of the service, but is not essential to it. In the absence of context information,the service is still operational, but may not provide results that are as finely targeted. Thecurrency and quality of the context information will determine the value it adds to the service.Most applications that benefit from context-enriched services will subscribe to them using service-oriented architecture (SOA) techniques and implementations.Publication Date: 3 August 2010/ID Number: G00205840 Page 29 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Context-enriched services will also require sophisticated reasoning to determine how softwareactions should be changed to make them more appropriate for the users context.The more current and selective the context information, the more precise the functioning of theservice. Context-enriched services are provided by context brokers, which are designed toretrieve, process and stage this information so that subscribing functions can use relevant contextin addition to processing incoming data. When an application uses context-enriched services, it isa context-aware application. As a best practice, context-enriched software services have themodularity and accessibility of SOA and use SOA-related standards.Position and Adoption Speed Justification: Context enrichment refines the output of servicesand improves their relevance. We observe implementations today in mobile computing, socialcomputing, identity controls, search and e-commerce — the areas in which context is emergingas an element of competitive differentiation. However, the current context-aware solutions arefragmented — they are individually designed, custom-developed and deployed, and, because oftheir competitive importance, are often not widely distributed or advertised. The movement insocial computing to open and share social-relationship (social graph) information is an early steptoward the standardization of context-aware computing APIs; however, most of the requiredstandardization effort has not yet begun. Context-enriched services will require multiple stages ofinnovation and platform technology evolution before their essential benefit is well-understood inthe broad mainstream computing markets.In 2010, we are seeing the beginning of generic services, whereas before all these services werecustom-built. Context-enriched services have advanced significantly during the past year, movingfrom an early post-trigger position to a point half way up the Slope of Enlightenment. We areseeing an increasing number of applications that, while they may not use the term context-awarecomputing, are clearly using context information to improve the user experience. These includeApples recent developer guidance regarding location-aware advertising, the augmented realitysystems that give you information on an object shown in the camera lens of your phone, and theability of Google Android-based phones to augment services based on the users contacts,behavior and other components of context information.In the long term, there will be a shift from reactive to proactive services, so push and subscribewill be more prevalent, and the number and richness of information sources will rise.User Advice: Context-enriched services will begin with simple scenarios (one category, such aslocation) and evolve into compound patterns (e.g., taking into account location, presence andgroup behavior). Application developers and service providers should take advantage of the widerange of contextual opportunities in their e-commerce, security, social-computing and mobile-computing systems. Some early context processing can be achieved using event processing andcomplex-event-processing technologies; enterprises need to plan to incrementally develop orsource more context enriched services in step with their ambition levels of improving userexperience.Business Impact: Context-enriched services will be transformational for solution providers.Context enrichment is the next frontier for business applications, platforms and developmenttools. The ability to automate the processing of context information will serve users by increasingthe agility, relevance and precision of IT services. New vendors that are likely to emerge willspecialize in gathering and injecting contextual information into business applications. Mostcontext-aware applications are likely to arrive as incremental enhancements to SOA, without amajor disruption to prior architecture. However, the new kinds of business applications that willemerge as the function of full context awareness may end up being revolutionary and disruptiveto established practices.Benefit Rating: TransformationalPublication Date: 3 August 2010/ID Number: G00205840 Page 30 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Market Penetration: 5% to 20% of target audienceMaturity: EmbryonicSample Vendors: Appear Networks; Apple; Google; Pontis; Sense NetworksRecommended Reading: "Context-Aware Computing: The Future Is Now""Key Issues for Context-Aware Computing, 2010""Context-Enriched Services: From Reactive Location to Rich Anticipation""Context-Aware Computing: Its Time to Carefully Choose Your Vendors""Apple Note Signals Move to Claim Context-Aware Advertising"Open-Source E-Commerce SoftwareAnalysis By: Gene AlvarezDefinition: Open-source e-commerce software enables the creation of all (for example, an entireWeb store application) or part (for example, a shopping cart) of a Web store. This software hasfeatures such as shopping cart functionality, product catalogs and other capabilities that enablestore owners to set up, run and maintain online stores. This software is available for free under aGNU general public license; however, other fees may exist for varying types of membership. Thisdoes not include the use of open-source software (OSS) used for development, Web, databaseor application servers commonly known as the LAMP platform. However, open-source Ajaxtoolkits are part of the portfolio of OSS packages that can indirectly enable e-commerce sites (inthe same fashion as application servers, relational database management systems [RDBMSs],etc.).Position and Adoption Speed Justification: Web 2.0 companies that were created using theLAMP platform, such as Facebook and Wikipedia, have captured so much market attention thate-commerce managers are frequently asking Gartner about their open-source options for e-commerce. Although adoption of OSS for certain aspects of e-commerce, such as applicationservers, operating systems and databases (LAMP platforms), has been a mainstream activity forat least five years, enterprises have been wary of adopting open source for actual e-commerceapplication software.The key issue that has clients concerned about open source for e-commerce is the question: "Ise-commerce OSS scalable, secure and robust enough for large-scale transactional sites, giventhat many Web 2.0 startup companies that use open source are not transactional?" The answeris that it will take at least five years for this software to mature to the standards of todaysenterprise e-commerce licensed software, and at least the same number of years to match thecapabilities of the current software-as-a-service (SaaS) e-commerce offerings. However, thesepackages were not designed to compete with high-end, complex e-commerce solutions. Theywere designed to service low to midrange requirements that can meet the requirements oforganizations with low to midrange e-commerce transactional needs.User Advice: Enterprises that have large-scale transactional Web stores should not use theseopen-source e-commerce software solutions. Instead, they should employ other aspects of opensource in their stacks — the most common being the application server. Users of publishing sitesthat have databases of content they wish to publish for free can use these open-source solutions.Business Impact: In their current state, open-source e-commerce software offerings remainincapable of meeting the needs of a large enterprise. However, for startup companies and smallenterprises, these offerings can be beneficial solutions, because they are low-cost alternatives.Publication Date: 3 August 2010/ID Number: G00205840 Page 31 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Benefit Rating: ModerateMarket Penetration: Less than 1% of target audienceMaturity: EmergingSample Vendors: AgoraCart; CubeCart; dashCommerce; Interchange; LiteCommerce; Magento;Nexternal Solutions; osCommerce; Shopify; VirtueMart; X-Cart; Zen CartCampaign Management SaaSAnalysis By: Adam SarnerDefinition: On-demand campaign management involves the deployment of campaignmanagement solutions in a subscription-based, multitenant model.Position and Adoption Speed Justification: Specific campaign management functions — suchas e-mail, A/B testing (a technique to isolate and test campaign variables), online cross-sellingand upselling, and customer-focused Web analytics and lead management — are available in anon-demand model and are mature. However, more-complex implementations (such asmultichannel campaign management applications) often require more connections with multipleback-end systems that are less mature. The speed of adoption has accelerated, with multiple new(and often lower-priced) software-as-a-service (SaaS) campaign management offerings releasedduring the past 18 months.User Advice: Marketers should consider on-demand deployment models for more-tacticalcampaign management deployments, particularly in e-marketing areas. To date, e-marketing-focused applications (such as Web analytics, e-mail marketing, online dialogue management andonline A/B split testing) are being offered as on-demand deployment models. More-strategic andcomplex integration requirements for multichannel campaign management are still likely torequire on-premises implementations.Business Impact: Less internal IT involvement, lower maintenance costs and predictable,subscription-based cost structures are the potential benefits of campaign management ondemand. Companies can use specific functionality — such as A/B testing, lead management,community marketing or e-mail marketing, which are available in an on-demand offering — tojustify building larger, multichannel campaign management initiatives. For example, in B2Borganizations, companies use lead management applications in on-demand models. Business-to-consumer organizations use A/B and multivariant testing tools to serve up optimal offers or themost effective page layouts. Large vendors are likely to offer more-complete multichannelcampaign management and a choice of deployment options (hosting on-premises and licensedsoftware).Benefit Rating: ModerateMarket Penetration: 5% to 20% of target audienceMaturity: AdolescentSample Vendors: ATG; Eloqua; Marketo; Neolane; Responsys; RightNow; smartFOCUS; UnicaRecommended Reading: "Software as a Service in Campaign Management, 2008""Magic Quadrant for Multichannel CRM Campaign Management"Publication Date: 3 August 2010/ID Number: G00205840 Page 32 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Web Content Product Recommendation EngineAnalysis By: Bill GassmanDefinition: A Web content product recommendation engine provides an algorithmic derived list ofitems to be published in a Web page or other online content such as e-mail or display advertising.The algorithm can be configured to provide items that most others have searched for, put into ashopping cart, purchased or recommended to others. Recommendations can be biased by stock-on-hand, brand or price affinity and user profile dimensions, such as geography, time of day orhistorical behavior. The algorithmic engine can be run as a cloud-based service or on-premises.Recommendations are fed into content management systems or substituted directly into dynamiccontent formats.Position and Adoption Speed Justification: Although this is the first year that this technology isbeing tracked in our Hype Cycles, it has been adopted in high-end retail sites for some time. Inaddition, manual approaches are used by some organizations. The cost to deploy is still fairlyhigh, keeping it away from low volume sites, but prices should fall as demand picks up. Evolvinguses include service resolution recommendations, greater ties with customer and transactioninformation from back-office systems and context aware computing. Placement in the pre-peakhype segment is justified by the relatively low penetration of commercial products but increasingnumber of vendors coming to market.User Advice: Start with an ROI calculation to see if an uplift of 5% in website revenue will justifythe cost. This is a conservative but realistic result. Dedicate at least one full-time resource tolearn and operate the tool, and to train others to work with the rules that bias therecommendations. Develop an attribution model with a control that takes into account how manypeople would buy an item anyway. Adopt the advanced features such as inventory and margindata integration once the basic skills are mastered.Business Impact: The potential is high, but most organizations we have spoken with arerealizing a 2% to 5% uplift in revenue. As the algorithms improve, along with context-awarecomputing and integration with back-end systems, so will the customer experience and upliftyield.Benefit Rating: ModerateMarket Penetration: 1% to 5% of target audienceMaturity: EmergingSample Vendors: ATG; Baynote; Certona; Coremetrics; MyBuys; Omniture; RichRelevanceRecommended Reading: "Tutorial: Web Content Product Recommendation Engines""Coremetrics Intelligent Offer Recommendation Engine"Customer Interaction HubAnalysis By: Johan JacobsDefinition: The customer interaction hub (CIH) is a multichannel infrastructure that includesvoice, Web chat, e-mail, fax, self-service, interactive voice response (IVR), collaborative browsingand social feeds like Twitter, and that focuses on centralized processing for external customerinteractions. It is integrated with back-end CRM, ERP and supply chain management (SCM)systems. The key functions are centralized business rules, aggregated integration points, channelindependence and customer experience management.Publication Date: 3 August 2010/ID Number: G00205840 Page 33 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • The primary objective of CIH is to solve as many transactions as possible in an automatedmanner, or to provide operators with the necessary information and tools in one interface toresolve an interaction request at the first point of contact. The CIH must ensure that everyinteraction is understood (analyzed) and dealt with in an optimal manner (priority, agent, channel,automated or manual, etc.). For example, an inbound fax might trigger an outbound phone call ifthe content was important.Position and Adoption Speed Justification: Automation, self-service, and the consolidation ofWeb customer service and voice channels are some of the top issues for customer interactions(or any interaction). Reducing the cost of solving inquiries, while delivering a consistentexperience across all the channels, is high on the priority list for customer service organizations,because customer satisfaction increases when problems are resolved faster and better.Therefore, bringing in and supporting new channels at a minimal cost will be a key focus area forthe next five years.This integrated framework or hub can be used for providing a real-time, thorough view of thecustomer across all channels to all relevant customer-facing employees and partners currentlyand for the future, and will consist of solutions from many different service providers. Until thebusiness processes of the organization become more integrated and customer-centric, the CIHwill be considered a Technology Trigger for consolidation and integration toward a single-sourcesolution, which is expected in five to eight years.User Advice: Establishing an infrastructure deployment requires several technology solutions tobe integrated, with few vendors currently promising a complete solution. Therefore, focus on theexisting customer service technology stack to leverage what you already have, or integrate newsolutions without breaking down or doing away with working solutions. Focus also on extendinginto new channels, and on aggregating processing for all existing and new channels through thehub, while delivering a consistent customer experience across all channels.Business Impact: The CIH can help centralize interaction resolution, automate transactionexecution, reduce the cost of operations, and leverage existing efforts and modules into newchannels.Benefit Rating: HighMarket Penetration: 1% to 5% of target audienceMaturity: EmergingSample Vendors: eGain; Interactive Intelligence; RightNow; SAPE-InvoicingAnalysis By: Paolo MalinvernoDefinition: Electronic invoicing (e-invoicing) cuts through many disciplines, requires a lot ofknowledge (spanning business, regulations and IT) and involves a lot of complexity. A gooddefinition of e-invoicing is "the interchange and storage of legally valid invoices in electronicformat only among trading partners." (See "Cost Savings Finally Make the (European) E-InvoicingSteamroller Pick Up Speed"for more details.)The interchange does not use or require paper-based invoices. The e-invoices have legal validity,and can be used to prove compliance or as tax originals. In general, most considerations for e-invoicing apply whether you are sending e-invoices or receiving them. Operationally: The seller must ensure that the invoice contains the correct data and is authentic.Publication Date: 3 August 2010/ID Number: G00205840 Page 34 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • The buyer must verify the authenticity of the invoice, match it to goods or services received, and execute payment. Both the seller and the buyer (or a third party on their behalf) must store the readable and authentic (this comes with a lot of added strong security) invoice for a period of time, and must make it available to a tax authority on request.Position and Adoption Speed Justification: E-invoicing touches internal business processes,mutual agreements among business partners, financial transactions, tax and legal implications,and a lot of the IT infrastructure that supports all that. Several studies and surveys are availableon the current e-invoicing uptake, and on the projected growth of the market in the next years.The results are somewhat different, as there are several vested interests in play, but aconservative estimate indicates that, in 2009, tens of thousands of European corporations andseveral million consumers exchanged tens of millions of e-invoices. So, e-invoicing is possible,viable and beneficial today, not only in Europe, but across the world.Normative standards abound across the world; as always happens in B2B, standardsaccumulate, and too many standards means that there is no standard at all. In Europe, theEuropean Union (EU) issued a directive in 2001, and revised it in 2006, with a view to"simplifying, modernizing and harmonizing the conditions laid down for invoicing with respect tovalue-added tax in the EU" for all member states. A core theme of the directive was to promotethe efficient cross-border creation, transmission, acceptance, storage and retrieval of invoices. Toallow for technological differences among all member states, and to stay technology-neutral, thedirective allowed several ways of meeting conditions for e-invoicing. For example, therequirements to ensure authenticity and integrity can be met either through advanced or qualifiedelectronic signatures, or through electronic data interchange (EDI) with contractual securitymeasures.Unfortunately, this technological flexibility has led member states to adopt state-specific versionsof the directive that have disparate requirements for meeting the functional objectives. Theserequirements, in turn, have led to more-stringent or less-stringent controls, depending on themember state. Several governments in Europe (and other governments around the world)mandate the use of e-invoicing for government agencies, and more are likely to follow suit in thenext year or two.Many intricacies are associated with cross-country e-invoicing projects (supplier e-invoicing andgeneric e-invoicing projects with all business partners in one country are considerably easier).There are several axes of variance for e-invoicing requirements (internal and multienterprisebusiness processes, IT infrastructures, law and security, to name a few), and they cause manydifferences from the sellers and the buyers perspectives; frequently, for example, different lawsapply to buyers and to sellers. This is, by far, the most common source of difficulties in e-invoicingprojects, and is compounded by regulations and general requirements not fixed in time. Anothercomplication is that most requirements, in practice, are not published by member states and areextremely difficult or expensive for businesses to obtain, interpret and monitor.The European Association of Corporate Treasurers identified the average processing cost of apaper invoice across Europe to be around €30. It also determined that by using e-invoicing, an80% cost savings is possible. Confirming that data, initial case studies also indicate that e-invoicing has been proved to reduce the cost of processing a single invoice to less than €7. E-invoicing offers a range of potential benefits, including improvements in accounts payable (AP)processes by reducing invoice processing time and minimizing manual intervention, thus leadingto a reduction in operating expenses. This fact alone has prompted some companies to start e-invoicing projects; it makes many others look deeper into the e-invoicing conundrum.Publication Date: 3 August 2010/ID Number: G00205840 Page 35 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • However, after a few dormant years, e-invoicing adoption is finally taking off. None of thefollowing reasons in isolation is enough to warrant continued growth, but all of them together aredriving and will drive more widespread adoption: Strong user demand, because of the benefits, especially savings Increasing supply, and an associated increase in the maturity and effectiveness of e- invoicing solutions; in particular, several banks are promoting e-invoicing in their strategies (especially in Spain, Finland and Switzerland) More governments mandating e-invoicing, especially in the EU Increasing availability of viable (and compelling) e-invoicing references and case studies as more companies adopt e-invoicingE-invoicing will grow steadily in the next few years, despite all the difficulties associated with it,simply because the momentum of the four factors above is stronger than the decelerating force ofthe difficulties. However, many difficulties are associated with normative functions in differentcountries, so we do not expect e-invoicing to reach the Plateau of Productivity before three to fouryears.User Advice: Calculate your current average invoice processing cost, and confirm it with thebusiness. Focus your initial e-invoicing projects in countries where B2B and invoice exchange arealready happening and maturing, such as the Nordic nations, Germany and the U.K. Be aware ofthe further constraints and limitations based on where the countries you do e-invoicing to andfrom allow e-invoices to be stored.E-invoicing services are sprawling across the world, especially in Europe and South America, somake sure the solution you choose addresses internal and multienterprise business processes, ITinfrastructures, laws and security, and that its certified by tax auditors for as many countries aspossible, especially those where you have a steady flow of invoices to and from that connect withother service providers, certified e-invoice networks and banks.Multicountry e-invoicing projects last years, so dont sell the benefits internally to your companytoo quickly. In a large project, if you make 50% of your invoicing traffic electronic in two years,youre doing great. Never underestimate the consequences of the diversity of regulations acrosscountries; work with your auditors and process architects, because e-invoicing is cross-functionalby nature. Research and track on an ongoing basis the value-added tax (VAT) laws and e-invoicerequirements in each country, or work with your e-invoicing solution supplier to provide theseservices.Implement e-invoicing in conjunction with e-procurement or another procure-to-pay or B2Binfrastructure, if possible, to leverage purchase order information for a higher match rate to theinvoice.No matter what vertical or financial shape your company is in, start looking for e-invoicing projectsavings opportunities now. Dont hold out for regulations and interoperability to get better; youcan reap good benefits from e-invoicing today.Business Impact: Plan your e-invoicing projects according to how many invoices you canprocess automatically in the countries the invoices will progressively touch; plan globally from thestart, even if you are starting to execute locally. The faster you build critical mass, the greater thedifference to your companys bottom line.Current case studies indicate that you can quantify e-invoicing savings in many ways: the costper invoice, the total savings due to reduced number of resources and computing power (60% toPublication Date: 3 August 2010/ID Number: G00205840 Page 36 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • 80%, compared with paper invoice processing), or a percentage of a midsize to large companysturnover (around 1%). Whichever way you put it, the clear indication from case studies is that thesavings for companies that have to deal with a large volume of invoices (more than 100 per day,inbound and outbound) are significant (see "Supplier E-Invoicing Networks"), because of theeconomies of scale obtained by aligning technical, business and compliance strategies.Other benefits of e-invoicing, when implemented through e-invoicing networks or as part of abroader B2B solution with ad hoc applications, include: Better spending analysis, leading to some spending reduction Faster processing times and payment cycles Enhanced contract performance analysis Better tracking and enforcing of trading partner compliance with commercial terms Improved dispute handling and avoidance Opportunity to realize more supplier rebates and discounts Better auditability of invoices through integrity and authenticity guarantees Easier availability of data for regulatory compliance, e.g., for supply chain traceability Greener approach, big reductions in consumption of paperThe potential for benefits is much greater for the buyer than the supplier/customer, because thebuyer is improving its internal processes for handling invoices, and typically has to process a lotof them, compounding the benefits (which is why we are seeing a bigger uptake in buyer e-invoicing and then customer e-invoicing). However, e-invoicing does provide benefits to senders,too, such as improved customer satisfaction, reduced administrative costs in credit collection,more-effective capital management and cash flow control (suppliers can see when invoices willbe settled, so they can forecast receipts more effectively) and, above all, lower customer churn.This would apply also to smaller senders, which would not have the e-invoicing volumes of thesuppliers. However, small and midsize companies are likely to have to send e-invoices to severalnetworks, depending on the demands of the organizations they supply. This problem can beaddressed by managed service-based solutions, and is a well-known general issue in B2B,certainly not limited to e-invoicing.As always in B2B, the key in e-invoicing projects lies with the recognition of the shared benefitsthat suppliers and buying organizations alike can realize; this typically implies improved businessprocesses (with the associated organizational and change management challenges) andtechnology additions.Benefit Rating: HighMarket Penetration: 1% to 5% of target audienceMaturity: EmergingSample Vendors: Anachron; Basware; Comarch; Crossgate; Edicom; GXS; Maventa; OB10;Tieto; TrustWeaverRecommended Reading: "Cost Savings Finally Make the (European) E-Invoicing SteamrollerPick Up Speed""Electronic Invoice Presentment and Payment Vendor Landscape"Publication Date: 3 August 2010/ID Number: G00205840 Page 37 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • "Magic Quadrant for Integration Service Providers""Supplier E-Invoicing Networks""Taxonomy and Definitions for the Multienterprise/B2B Infrastructure Market""EU Enterprises Face Obstacles in Using Electronically Signed Invoices""Accounts Payable Invoice Automation""EIPP Can Improve Finance and Purchasing Management""The Role of Evaluated Receipt Settlement in EIPP""The Role of Procurement Cards in EIPP""The Role of Procurement Networks in EIPP""The Role of Supplier Portals in EIPP"Mobile Web ApplicationsAnalysis By: David Mitchell Smith; William ClarkDefinition: Mobile Web applications refer to applications for mobile devices that require only aWeb browser to be installed on the device. They typically use HTML and Ajax (and, increasingly,HTML5 components), although they may make use of augmented rich Internet application (RIA)technologies, such as Flash, JavaFX and Silverlight, but are not written specifically for the device.Rich, mobile Web applications have roughly equivalent usability to PC-rich Web applications (orRIAs), when designed specifically for the smaller form factor. Simple mobile Web applicationslimit the use of RIA technologies and aim to present information a readable, actionable format.Mobile Web applications differ from mobile native applications in that they use Web technologies,and are not limited to the underlying platform for deployment.Position and Adoption Speed Justification: For many years, there has been hope for mobileWeb applications going mainstream. While acceptance in some geographies has been higherthan in others, the experience had been less than ideal, until the introduction of the iPhone byApple. Its Safari browser, along with good JavaScript support and overall ease of use, has madethe difference.When the iPhone was introduced, the only way to develop for it was via Web programming.Although, subsequently, Apple has moved emphasis toward native applications (via the AppleApp Store), its contribution greatly raised the bar for mobile Web applications. In addition, Appleand other vendors (for example, PhoneGap, WebApp.Net, CiUI and MotherApp) have librariesthat allow for a richer-than-expected user experience, using primarily HTML and Webtechnologies. Often, these are used in conjunction with extensions or native code wrappers forJavaScript that enable mobile Safari applications to access the accelerometer, geolocation,multitouch and, in the future, camera, sound and vibration functions.Googles Gmail is a Web application without any wrapper that uses Safaris HTML5 functions andSQLite offline storage to provide a user experience comparable to the native iPhone Mailapplication, without any installation or upgrade. Improvements in other platforms and browsers(e.g., Googles Android and Palms webOS), continue this push. Research In Motion (RIM) hasacquired a WebKit-based browser, and is in the process of integrating it into its BlackBerrysmartphones. Nokia has long been focused on the mobile Web, and has continued its efforts andemphasis on widgets. Nokias Web Runtime (WRT) framework allows Web applications toPublication Date: 3 August 2010/ID Number: G00205840 Page 38 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • approximate a rich user experience through asynchronous and synchronous functions foraccessing on-device resources, such as the users contact list.Microsoft has incrementally improved its browser support, and continues to gradually improve itsofferings as it moves toward its Windows Phone 7 release. The real movement will happen ascritical mass for various pieces of HTML5 materializes; however, testing and interoperabilityissues will remain due to implementation differences. For example, the HTML5 spec leaves somecaching implementation details to the browser supplier; thus, there will be differences in howoffline modes operate. The proliferation of WebKit-based browsers in mobile will help with this.HTML5 is early in the Hype Cycle, but is seeing adoption of components of the specification now.The hype has not yet peaked.User Advice: The mobile Web experience is driven by consumer applications first. It is a result ofthe direct impact of consumerization on the organization. Organizations wishing to address mass-scale opportunities through mobile Web adaptation platforms need to consider Netbiscuits,InfoGin, Volantis Systems and Usablenet. The iPhone points the way toward a newconsciousness of richer user interfaces and services on mobile clients.Portability among applications in the mobile world remains a challenge. Gartner recommendsWeb standard approaches when portability and ease of development are goals.Other issues such as form factor (small screens are not optimal) and connectivity (intermittentand costly in many cases) also need to be factored into decisions.HTML5 and Web technologies make most sense for uses when reach across multiple platforms isa strong requirement. Native approaches make more sense when needing to take advantage ofthe leading-edge device capabilities.Business Impact: Mobile presence, as a result of the success of the iPhone, has become acritical requirement for reaching consumers and, increasingly, business users. The mobile Web,as first delivered in a satisfactory way by the iPhone, has made mobile Web clients feasible.While many organizations may have started down a mobile Web path with early-generationtechnologies such as Wireless Application Protocol (WAP), the advent of native applications forthe iPhone and other smartphones has recently been the focus. Online strategies mustincreasingly take into account not just a native mobile application experience, and need to reachmore platforms; a mobile Web experience is a good way to do this.The major reasons to go with mobile Web applications are to hedge your bets regarding platformsand to support multiple platforms. Another consideration is security, because direct access todevice software introduces additional security concerns. Java has not delivered its promise ofcross-platform deployment in mobile (Java Platform, Micro Edition does provide somestandardization) in the mobile sector. Flash and Silverlight are choices only for a subset ofdevices (i.e., not the iPhone). Mobile Web applications can, in certain scenarios and with carefulattention to application programming interfaces and extensions, provide a rich user experiencethat does not equal native applications, but approximates it at a fraction of the development effortand with greater portability and flexibility.Benefit Rating: HighMarket Penetration: 5% to 20% of target audienceMaturity: Early mainstreamSample Vendors: Apple; Google; InfoGin; Microsoft; Netbiscuits; Nokia; Palm; Research InMotion; Usablenet; VolantisPublication Date: 3 August 2010/ID Number: G00205840 Page 39 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Recommended Reading: "Magic Quadrant for Mobile Consumer Application Platforms""Using the Web to Improve the Customer Experience"Social CRM for SalesAnalysis By: Michael Dunne; Chris FletcherDefinition: Social CRM for sales represents a segment that exploits social-software technologyto facilitate internal communications, interactions and information sharing within sales teams;among sales, marketing and customer support departments, and externally between sales andcustomers, or sales and indirect sales channels. Social CRM for sales allows users to leveragecommunities, discussion forums, blogs, wikis, polls and voting, instant messaging, tracking andmonitoring applications (publish-and-subscribe functionality, triggers and filtering features,relationship matching), search and related analytics.Position and Adoption Speed Justification: Significant hype is rapidly emerging for socialCRM for sales, in many cases driven by vendor marketing, and by the more general excitementaround social software and the interest of employees in direct and indirect sales roles (salesmanagement, business development, operations, field marketing, IT, etc.). Despite increasingvisibility around social CRM for sales, efforts to exploit social software as a formal strategy remainlimited and in the preliminary stages for many sales organizations, due to concerns about howbest to integrate these technologies with sales practices and enterprise systems. In addition, thenumber of software solutions targeting sales as a constituency remain few and relatively new,while quantifiable, practical business benefits and use cases will be realized only after a period ofexperimentation.Going forward, adoption will be gated by sales management concerns over managing confidentialinformation and due to concerns over distracting sales teams with too much information or newfeatures. To date, key entry points for social software in sales and marketing organizations areprimarily focused on support prospecting, lead management (mining leads from externalcommunities, across the Web, etc.), customer interactions, peer networking, connecting sales tosubject matter experts, and administrative tasks (e.g., HR job referrals).User Advice: Above all, be practical, and avoid distracting the sales organization. Social CRM forsales is often a by-product of the hype resulting from dramatic developments in adjacent CRMdomains, specifically marketing, PR and, to a lesser extent, in customer support. Firms shouldcarefully consider the practical entry points for social software that present paths for easiestadoption by sales channels and quick wins in realizing business benefits. In the near term, salesorganizations, particularly those with B2B sales models, should concentrate on experimentingwith applications supporting prospecting, front-line account research and accessing subjectmatter experts for specific content (i.e., product specifications, competitive intelligence, proposallanguage, etc.), as well as networking with peers for assistance in handling specific scenarios insales cycles (i.e., objections, key sales messages, sales tactics, etc.).Business Impact: Social CRM software provides new interface paradigms and tools madepopular by trends in consumer IT that are more user-friendly for nontechnical salespeople whooften struggle with conventional sales automation applications. For near-term impact, social CRMfor sales will improve the effectiveness of sales organizations in conducting narrowly definedresponsibilities, such as managing contacts, front-line account research, recruiting anddeveloping sales deliverables (i.e., presentations, RFP responses, proposals and productdemonstrations). Innovation in contact management (establishing connections, gaining insightfrom peers, self-policing and correcting inaccuracies or outdated details) will prove helpful tosales teams in improving the quality of data in sales systems, especially for those that spendsignificant amounts of nonselling time sourcing leads on their own (more than 20% of a workPublication Date: 3 August 2010/ID Number: G00205840 Page 40 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • week). Similarly, teams that need to research accounts will benefit from technologies that minekey details of prospects and clients from social sites across the Web (in one case, salespeoplewere able to reduce the time to research accounts by more than 50%).For sales organizations that rely on bid response teams, sales engineers or other subject matterexperts to advance sales cycles, communities will help improve agility in sharing criticalinformation across sales teams and departments. For organizations struggling to hiresalespeople, social networks help sales management with accelerating efforts to gather jobcandidates. To earn a higher business benefit rating, over the long-term, social CRM software forsales will need to demonstrate broader practical contributions to improving sales processes, helpfacilitate closer collaboration between sales and marketing, and provide tools that increase theimpact of sales interactions with prospects and accounts (i.e., elevate sales effectiveness).Benefit Rating: LowMarket Penetration: 1% to 5% of target audienceMaturity: EmergingSample Vendors: Comcast; Doostang; Hubbard One; InsideView; Jive Software; LinkedIn;Lithium Technologies; Oracle CRM On Demand; salesforce.com; Spoke Software; ThomsonReuters; Viadeo; Xing; Yammer; ZoomInfoRecommended Reading: "Magic Quadrant for Social CRM""Social CRM Market Definition and Magic Quadrant Criteria""Cool Vendors in CRM Sales, 2010""Lithium Buys Scout Labs for Social Media Monitoring""Jigsaw Buy Will Give salesforce.com Data Services in the Cloud"Social CRM: Community MarketingAnalysis By: Adam SarnerDefinition: Community marketing is the harnessing of customer input and the cultivation ofcustomer advocates. It includes social monitoring, moderated message boards, blogs, podcasts,list server applications, rating and reputation systems, customer review entries, and other word-of-mouth techniques. Community marketing can use company-sponsored public communities(anyone can join) or private communities (invited or registered users only). Marketers alsoparticipate in communities created and maintained by communities themselves.Position and Adoption Speed Justification: Web 2.0 (which includes concepts and technologysurrounding community input) is raising visibility and speeding up adoption around the power ofcommunities and how marketers can start tapping into that power to get a fuller understanding ofcustomers wants and needs. Ownership and maintenance of community-enabling technology,such as podcasts or message boards, are still forming, because technology can be "operated" bycompanies or other communities. In addition, other collaboration and community-marketingmethods are still emerging. Data collection for segmentation, reputation and even influencescoring capabilities are developing in mainstream markets, such as Web analytics andmultichannel campaign management.User Advice: Consider an online community as a pipeline for customer feedback. Marketers canparticipate in and collect data from communities to define, create and improve marketingcampaigns and promotions, as well as future product and service planning. Feedback isnt alwaysPublication Date: 3 August 2010/ID Number: G00205840 Page 41 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • positive, and harnessing a group and establishing trust means relinquishing a great deal ofcontrol to the community. If a company is hosting a community, then some ground rules can beset, such as conduct, but companies must be prepared to accept the bad with the good.Accepting the negative feedback with the positive feedback will show that the company is trulyinterested in receiving contributions. If a company isnt willing to address any of the negativecomments, then it shouldnt host a community or actively solicit customer input.Business Impact: Community marketing can keep people engaged with a company, alignproducts and services with individual needs, and lead prospects through a buying process. Itcreates customer advocates who can be powerful influencers of purchasing decisions. Customersuggestions, feedback (such as links to a formal enterprise feedback management strategy),desires and more can be collected from community sites and used for branding, campaignmanagement, loyalty, segmentation data or group/individual satisfaction measurement, and salesconversion.Benefit Rating: TransformationalMarket Penetration: 1% to 5% of target audienceMaturity: EmergingSample Vendors: Communispace; Jive; KickApps; Leverage Software; Lithium Technologies;Mzinga; PassengerRecommended Reading: "Magic Quadrant for Social CRM""The Business Impact of Social Computing on CRM""Five Best Practices for Establishing an Online Community for Marketing Benefits""World-Class Building Blocks for Multichannel Campaign Management"At the PeakMobile CouponsAnalysis By: Hung LeHong; Gale DaikokuDefinition: Mobile phones are becoming a device on which consumers can receive coupons andinformation on promotions. There are two main categories of mobile coupons and promotions.The first consists of coupons or vouchers that are identified through a code, bar code or othermeans and can be sent to a mobile phone via SMS, mobile application, mobile URL or othermobile technology. These types of coupons are controlled in their distribution and redemption.They are usually made available to a subset of the overall customer base (either by consumersrequesting the coupon or by being sent to a customer segment). The second category consists ofcommunications of promotions that are available to all consumers. For example, a retailer maysend out an SMS message to consumers who opt in that a sale on womens outerwear will takeplace next week. This sale is available to all consumers and is also advertised and communicatedthrough other channels such as in the store and through print and broadcast. In this situation,mobile phones merely act as another communications channel rather than as a distributionchannel for a coupon.Context-aware technology (such as location awareness on mobile phones) and print-to-mobilecoupons (such as scanning a bar code or texting a code advertised on print material) areemerging technologies in mobile couponing. The biggest advantage that mobile coupons haveover e-coupons obtained on the Web or paper coupons is that they are immediately execution-Publication Date: 3 August 2010/ID Number: G00205840 Page 42 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • ready (that is, transportable via mobile device). Mobile coupons do not have to be retrieved,printed and brought to store via paper.This was part of the Retail B2C Mobile Commerce entry in the 2009 Retail Technologies HypeCycle. In 2010, we decided to separate it out to be able to more specifically describe thistechnologys progression in the retail industry.Position and Adoption Speed Justification: The retail industry is still immature in thedistribution and redemption of mobile coupons. It is also immature in the communication ofpromotions via the mobile phone. Our consumer surveys in 4Q09 showed that there is willingnessto adopt mobile coupons and promotions but that many consumers have still not shown interest(see the Recommended Reading section). Retailers such as Kroger, Target and JCPenney havestarted using mobile coupons.User Advice: To get a quick start with mobile couponing, retailers can use outsourcers andmobile-only coupon technology vendors. However, in the midterm to long term, mobile couponswill have to be part of a multichannel e-coupon strategy. The biggest mistake that retailers canmake is to implement a mobile-only system and not expect to integrate it with other channels.Consumers will want to be able to access and redeem a coupon in any channel, so retailers willneed to make sure that technology used in the mobile coupon process is multichannel-capable.Tight integration between campaign systems and the couponing systems of the brandmanufacturers will be required. Retailers will also need to be able to tightly control opt-in andprivacy settings to avoid spamming customers.Business Impact: The benefits of mobile coupons center on increasing the frequency of visitsand transaction value. Sales, margins and customer loyalty are all targeted to increase as aresult.Benefit Rating: ModerateMarket Penetration: Less than 1% of target audienceMaturity: EmergingSample Vendors: Air2Web; Cellfire; CodeBroker; Coupons.com; Infinian; Scanbuy; Sybase; YouTechnology; ZaversRecommended Reading: "Mobile Coupons: U.S., U.K., Canada and France ConsumerPreferences, 4Q09""How Can Retailers Get Started in Mobile Commerce?""How Retailers Should Develop Their Mobile B2C Capabilities""Personalized Offers: Do Consumers Value Them?"Campaign OptimizationAnalysis By: Adam SarnerDefinition: Campaign optimization is the balancing and coordination of multiple constraints (suchas budget, channel, customer value and customer contact saturation) to maximize the expectedvalue from single-campaign offers or multiple campaigns. Campaign optimization functionalityhelps marketers decide which campaign is best for which channel, and details the expected valueand outcome of each campaign.Publication Date: 3 August 2010/ID Number: G00205840 Page 43 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Position and Adoption Speed Justification: Campaign management continues to evolve fromsingle-step, direct-mail campaigns to a multichannel, multistep, multicampaign environment. Thisis an advanced use of campaign management, and deployments have been limited to 60% ofType A organizations and approximately 15% of Type B companies. During the next two years,we will see significant online channel optimization adoption, where marketers can utilize new andolder-type behaviors to improve interactions, particularly involving online interactions through theuse of Web analytics.User Advice: Marketers should view campaign optimization as an iterative process. Start with areconciliation of available campaigns targeted at specific segments, and prioritize the valuebenefits of each campaign. Then, move to other factors, such as channel, timing and clientinteraction saturation constraints. Each additional factor will raise the complexity of the project.More-advanced campaign offerings, such as predictive analytics (including Web analytics), canprovide further input to optimize the outcome in a more comprehensive way.Business Impact: Campaign optimization results can significantly affect campaign profitabilityand return on investment (ROI) by determining the most valuable campaign and offering mix, aswell as reducing cost by eliminating ineffective campaigns. Although this is particularly relevantwhen marketing budgets are highly scrutinized and audited, profitability and ROI are alwaysimportant.Benefit Rating: HighMarket Penetration: 5% to 20% of target audienceMaturity: AdolescentSample Vendors: Experian; Omniture; Portrait Software; SAS; SPSS; UnicaRecommended Reading: "Magic Quadrant for CRM Multichannel Campaign Management"Mobile Consumer Application PlatformsAnalysis By: William Clark; Nick Jones; Michael KingDefinition: Mobile consumer application platforms (MCAPs) include a wide range ofinfrastructures, tools and distribution capabilities that enable consumer-facing enterprises to build,test, deploy and support mobile applications for a wide variety of devices. Applicationarchitectures supported include: Messaging-Based — for example, Short Message Service (SMS) and Multimedia Messaging Service (MMS), and mobile e-mail outbound and return applications. Browser-Based — this involves thin clients, ranging from rudimentary Wireless Application Protocol (WAP) to full mobile browsers (such as Safari, Pocket Internet Explorer [Pocket IE] and Opera), with scripting and access to on-device resources. Thick Clients/Rich Clients — this includes native applications (e.g., Apple, Symbian, Windows Mobile, Palm and BlackBerry); high-end Java Platform, Micro Edition (Java ME); and Binary Runtime Environment for Wireless (BREW). Streaming Audio/Video — examples include Adobe Flash and Microsoft Silverlight; these provide rich animation and interactivity on the client device.Gartner has observed that more-sophisticated applications and services, which blend the firstthree types of architecture, have become more prevalent in the past two years. We expect thistrend to accelerate during the next three years; hence, these disparate technology bases will bePublication Date: 3 August 2010/ID Number: G00205840 Page 44 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • drawn closer together to support more-sophisticated use cases. The streaming use case willcontinue to be initiated by one of the other three, but still requires special tools and thoughtconcerning how those platforms will craft user experiences. Device- and OS-specific platforms(such as Apples combination of tools, handsets and application stores) and device- and OS-independent platforms (such as broad SMS platforms and cross-compilers for multiple OSplatforms) will thrive. Both will pose design challenges in sourcing consumer-facing applicationson mobile devices.Position and Adoption Speed Justification: The rapid growth of smartphones and theincreased capabilities they offer will cause them to quickly become primary computing platformsfor consumers in North America, Asia and Western Europe. In 2010, Gartner saw an increase inactivity around cross-platform tools that includes mobile enterprise application platform (MEAP)vendors crossing over to support consumer applications and new venture-backed vendors. Basedon this reality, coupled with the growing requirement for enterprises to reduce customerinteraction costs, as well as the comfort level that most consumers younger than 30 have withSMS and mobile browsing, we expect increasing adoption of these technologies during the nexttwo to five years. Most of these platforms support one or the other, but over the longer term (twoto three years), a single infrastructure will support and integrate experiences across multiplechannels. In three to five years, MCAP functionality will begin to overlap with MEAP functionality,requiring deeper application infrastructure integration, and HTML5 will bring this further together.User Advice: Always think of user interactions in terms of their styles — thick, thin or messaging.Investigate native platform development tools for streaming and thick for most popular platforms,or for those that require higher performance. Devise a thin-client application strategy to servicethe remaining customer base. Recognize the immense installed customer base for SMS and theattractive segment of mobile e-mail users. Reconcile investments against current CRM and e-commerce investment profiles. Assess MCAP vendors ability to provide analytics and integrationwith other platforms.Business Impact: MCAPs are significant for consumer-facing companies, government agencies,telecom, financial services firms, and utilities with requirements for increased communication withcustomers constituents and users — the impact can be measured by improved click-through,page views or messages delivered.Benefit Rating: TransformationalMarket Penetration: 5% to 20% of target audienceMaturity: AdolescentSample Vendors: Appcelerator; mBlox; Microsoft; Motricity; Netbiscuits; Openwave; Sybase;VolantisRecommended Reading: "Magic Quadrant for Mobile Consumer Application Platforms""Context-Aware Computing: The Importance of Mobile Consumer Application Platforms"Loyalty MarketingAnalysis By: Adam SarnerDefinition: Loyalty marketing orchestrates value propositions, incentives and campaigns thatencourage improved life cycle management — acquisition, maintenance, retention and cross-sell/upsell. It differs from loyalty programs in that loyalty programs are essentially operationallyfocused, automated incentive plans revolving around discounts and reaching purchasingthresholds.Publication Date: 3 August 2010/ID Number: G00205840 Page 45 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Position and Adoption Speed Justification: Loyalty programs are being reinvented to focus oncustomer life cycle management and to move beyond "giveaways," credit card schemes, travelrewards and grocery store promotions. Future generations of loyalty programs will involve pricingand bundling, as well as co-marketing, within the broader demand network. Most companiesseparate their loyalty systems from their campaign management systems. Loyalty programs areoften "siloed" from other business functions, such as customer service and sales.Many companies do not have a complete view of a customers loyalty or status. Therefore,interactions outside the loyalty programs often erode the value of the loyalty programs byproviding unsatisfactory experiences for the customer. Although some vendors are offeringloyalty/reward-points tracking and management, new vendors will incorporate loyaltymanagement within the broader marketing suite.Few vendors have an integrated vision for loyalty management and campaign management,much less a vision for how to manage loyalty across all customer interactions. Eventually, loyaltymanagement will become part of a larger-scale CRM focus on managing the customerexperience globally, rather than treating loyalty management as just another customer silo ordivision.User Advice: Use marketing applications to develop, manage and measure loyalty. Integratethese capabilities with campaign management (B2B and B2C) and broader CRM initiatives thatrecognize customer loyalty across all customer interactions and communications. During the nextfive to 10 years, the differentiation of strategies and applied technologies will provide acompetitive advantage for companies that focus on driving customer loyalty across the broadercustomer experience.Business Impact: Loyalty marketing enables companies to increase customer loyalty to expandcustomers relationships/portfolios, extend the relationships with profitable customers andincrease customers lifetime value.Benefit Rating: HighMarket Penetration: 1% to 5% of target audienceMaturity: AdolescentSample Vendors: Carlson Marketing; Loyalty Lab; Maritz; Oracle-Siebel; SAPWeb 3.0Analysis By: Gene PhiferDefinition: As Web 2.0 becomes mainstream, the term "Web 3.0" is becoming a contender forlabeling the next generation of the Web. The Web is a complex ecosystem, not a product thatfollows a well-defined road map. The X.0 label is ambiguous and unsuited for the evolution of theWeb. The X.0 label is only meaningful when preceded by a well-defined entity, such as a productoffering. Placed after a phenomenon such as the Web, it provides no descriptive value and mustbe further defined. This invariably leads to confusion, because different parties espouse differentdefinitions in the hopes of achieving their own ends.Many people, including vendors, technology proponents, analysts, bloggers and authors, aretrying to use the term Web 3.0 to describe their needs and visions. At least five factions arecompeting to establish the Web 3.0 term for their own benefit, including Semantic Webproponents, virtual world advocates, ubiquitous-computing fans, mobility proponents and cloud-computing supporters. More are expected, which will lead to significant hype and confusion,followed by potential missteps for IT leaders.Publication Date: 3 August 2010/ID Number: G00205840 Page 46 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • The term "Web 2.0" term caught on, but it wasnt a planned generational release of the Web, oreven a prediction. Web 2.0 was observed and labeled. This is a critical distinction between thegenesis of the Web 2.0 designation and the beginnings of Web 3.0.With its openness, community/participation model and new business opportunities, Web 2.0 wasa step-function change from Web 1.0. The Web wont see a similar step-function change in thenext few years. Therefore, Web 3.0 will not occur as many would like us to think it will.Position and Adoption Speed Justification: Although Web 2.0 innovation experienced arelative spike, the Web will evolve steadily during the next five to seven years, making radicalshifts more difficult to pinpoint, and minimizing the possibility of another step-function changesuch as Web 2.0.The next generation of the Web will focus on the expansion of the social Web, the Semantic Web,the programmable Web, the mobile Web, and the real-time Web. It will also encompass "the Webof things," where there are direct connections between the online world and the physical world.These changes are long-term, multifaceted and infrastructural, and, therefore, will occur in amuch longer time frame than the rapid explosion of innovation that occurred with Web 2.0.Additionally, the increasing fragmentation of devices used to interact with the Web will make Web3.0 unlikely. With the addition of contextual-awareness, it is likely that many people will movefrom sharing the same Web to favoring their personalized views on specialized devices.Jockeying for the Web 3.0 position will only increase confusion and hype, decreasing the odds ofany one prediction emerging as the successor to Web 2.0. Despite being inappropriate andineffectual, the Web 3.0 term may persist because of the popularity of the Web 2.0 term, becauseWeb 2.0 technologies and approaches are seeing broad adoption in enterprises, and becausevendors are always looking to sell "the next big thing."User Advice: IT leaders should not adopt, promote or search for meaning in the term Web 3.0.The term will remain confusing and ineffectual. IT leaders must recognize the shortcomings of theterm Web 3.0 and concentrate on extracting business value from existing and emerging Webtechnologies, practices, products and services. Look for Web 2.0 to develop along anevolutionary path — Web 2.1 and Web 2.2 would be more appropriate to use than Web 3.0.Business Impact: Danger surrounding the hype of a catchy term, such as Web 3.0, arises fromits tendency to consume "mind share." Business and IT leaders risk being distracted by "Web 3.0mania" before realizing the potential benefits of current and emerging Web technologies.Benefit Rating: LowMarket Penetration: Less than 1% of target audienceMaturity: EmbryonicRecommended Reading: "Key Issues for Web 2.0 and Beyond, 2010""Predicts 2010: Web Technologies Evolve in Multiple Dimensions: Mobile, Social and Real Time""Cool Vendors in Web Technologies, 2010""What Is Web 2.0" (http://www.oreillynet.com/pub/a/oreilly/tim/news/2005/09/30/what-is-Web-20.html)Cloud/Web PlatformsAnalysis By: Gene Phifer; David Mitchell SmithPublication Date: 3 August 2010/ID Number: G00205840 Page 47 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Definition: Cloud/Web platforms use Web technologies to provide programmatic access tofunctionality on the Web, including capabilities enabled not only by technology, but also bycommunity and business aspects. This includes, but is not limited to, storage and computingpower. We use the terms "Web platform" and "cloud platform" interchangeably, and sometimesuse the term "Web/cloud platforms." They have ecosystems similar to traditional platforms, butWeb platforms are emerging as a result of market and technology changes collectively known as"Web 2.0." These platforms will serve as broad, general-purpose platforms, but, more specifically,they will support business flexibility and speed requirements by exploiting new and enhancedforms of application development and delivery.Web platforms reuse many of the capabilities and technologies that have been accessible onwebsites for more than a decade through browsers by adding programmatic access to theunderlying global-class capabilities. Reuse is occurring via Web services, and is being deliveredvia Web-oriented architecture (WOA) interfaces, such as representational state transfer (REST),plain old XML (POX) and Really Simple Syndication (RSS). In addition to the capabilities of Web2.0, these platforms provide programmatic access to cloud-computing capabilities. The public APIphenomenon has taken WOA beyond consumer markets (e.g., Twitter) into enterprise B2Bintegration.Position and Adoption Speed Justification: The use of Web/cloud platforms is happening inconsumer markets. In addition, the concepts are apparent in enterprises use of service-orientedbusiness applications. Enterprise use of Web-based capabilities, such as Amazon SimpleStorage Service (Amazon S3) and Amazon Elastic Compute Cloud (Amazon EC2), has begun aswell. However, mainstream adoption of Web/cloud platforms hasnt begun yet. Additionally, earlyadopters have limited experience with Web/cloud platforms, and will inevitably run into challengesand issues.User Advice: Web platforms and related phenomena have affected consumer markets first, butenterprises should evaluate the growing space as an appropriate extension to internal computingcapabilities. Use of Web platforms will drive WOA, which enterprises should adopt whereappropriate, along with simple interfaces, such as REST, POX and RSS (wherever possible), toexploit the interoperability, reach and real-time agility of the Internet.Business Impact: Web platforms can be leveraged as part of business solutions, and will formmuch of the basis for the next generation of interest in the virtual enterprise. Web platforms candecrease barriers to entry, and can deliver substantial value for small and midsize businessesthat could not afford to build and maintain capabilities and infrastructures. Examples includeAmazon Web Services (including S3 and EC2), salesforce.coms Force.com, Googles AppEngine and Microsoft Azure Services Platform. Note that the term "Web/cloud platform" isbroader than and includes multiple layers in cloud-computing terminology (e.g., integration as aservice [IaaS], platform as a service [PaaS] and software as a service [SaaS]) and the use of theterm "platform" is different from the term "PaaS."Benefit Rating: TransformationalMarket Penetration: 1% to 5% of target audienceMaturity: Early mainstreamSample Vendors: Amazon.com; Google; Microsoft; salesforce.comRecommended Reading: "Web Platforms Are Coming to an Enterprise Near You""Predicts 2010: Application Platforms for Cloud Computing""NIST and Gartner Cloud Approaches Are More Similar Than Different"Publication Date: 3 August 2010/ID Number: G00205840 Page 48 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Enterprise Feedback ManagementAnalysis By: Jim DaviesDefinition: Enterprise feedback management (EFM) solutions provide enterprisewide,multichannel surveying tools suitable for diverse departmental needs. Their use ranges from one-off tactical surveys to ongoing strategic feedback that provides better understanding ofcustomers, employees, products and processes.Position and Adoption Speed Justification: Weve seen incredible progress in the EFM marketduring the past 12 to 18 months. More than 60% of organizations have adopted some method ofsurveying their customers, and many of these organizations are deploying second- and third-generation EFM initiatives. Consolidation in the market, which was expected, has broughttogether the largest players and created some new vendors with stronger offerings. Furthervendor consolidation is expected during the next few years, with interest from the mainstreamCRM vendors growing. Functional enhancements will focus on analytics (to determine what to dowith the data collected) and better alignment with social software. Listening to the customer is akey requirement for social CRM, and several EFM vendors are developing solutions to hostcommunities and capture feedback from them. During the next two to three years, vendors willbegin to align with specific industries to provide differentiated preconfigured solutions.User Advice: As a result of mergers and acquisitions to extend channel support, manymultichannel EFM solutions have multiple development tools and different code bases. Thesesolutions are engineered to share data, but companies should conduct a deep architecturalreview. Designate a person or committee to be responsible for approving feedback events, and toprevent the overuse of any single group of customers. Implement panel management techniquesand software to increase your response rates and to keep customers satisfied. Embracefeedback as a way to collect data for further analysis, not as the end result of the initiative. Followproper best practices for survey creation to ensure good response rates and valid responses.Business Impact: An EFM deployment will provide a holistic view of feedback data acrosscustomers, employees and partners. This simply isnt possible with multiple siloed departmentaltools. The EFM deployment will ensure that the right individuals are surveyed at the right time, onthe right channel and with the right questions, thus ensuring maximum response rates andbusiness insights. This will improve customer satisfaction and customer management.Benefit Rating: HighMarket Penetration: 5% to 20% of target audienceMaturity: AdolescentSample Vendors: Allegiance; CDC Software; Clicktools; Confirmit; CustomerSat; Digium;Empathica; Fizzback; Globalpark; Interview SA; MarketTools; Medallia; Mindshare; Qualtrics;QuestBack; Quick Search; Ransys; ResponseTek; SPSS; VoviciMultichannel Campaign ManagementAnalysis By: Adam SarnerDefinition: Multichannel campaign management processes enable companies to communicateoffers to customer segments across a multichannel environment, such as direct mail, call centers,websites, e-mail and communities. This can include integrating marketing offers/leads with salesfor execution. Basic campaign management includes segmentation, campaign execution andcampaign workflow. Advanced analytic functionality includes predictive analytics and campaignoptimization. Advanced execution functionality includes event triggering and real-timePublication Date: 3 August 2010/ID Number: G00205840 Page 49 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • recommendations (offer management) in inbound and outbound environments. E-marketingfunctionality includes Web analytics, community marketing and search marketing. The speed ofadoption in these newer online functionality areas, many times with alternate deployment options(such as software as a service), will take time to mature.Position and Adoption Speed Justification: The basic campaign management market ismature, but the requirements have changed. Marketers are shifting investments from mass-marketed, one-channel, one-way, company-driven campaigns to more-advanced multichannel,measurable, interactive, customer-driven campaigns, such as event-triggered campaignsinbound marketing and offer management. Applications are combining basic campaignfunctionality (such as customer segmentation and dialogue management) with advancedcapabilities (such as predictive analytics and e-marketing integration). Advanced functionality andgreater e-marketing integration in campaign management are enabling campaign managementvendors to reinvigorate their value propositions.User Advice: Shift from purely push-oriented, outbound campaign management strategies tomore inbound, multichannel capabilities. Marketers must create a centralized campaignmanagement strategy and expand their projects to include growing customer-aware channels,such as the Web, which has the greatest propensity for campaign interaction. Although much ofthe business-to-consumer (B2C) market has been traditionally focused on B2C environments,B2B companies should use campaign management as a key source for a customer acquisitiongrowth strategy. Major collaboration in the marketing and sales organizations can begin in onlinecommunication channels, such as a companys website, webinars and customer-driven messageboards, where lead management tools are used for marketing, and sales for acquisition.Business Impact: Multichannel campaign management is used to orchestrate the customerrelationship. In many companies, it is the system of record for a conversation or interaction.Multichannel campaign management is used for directly targeting customers, acquisitions andgrowth more effectively. Benefits also include help for companies that rely onpartners/distributors/indirect sales to reach, gain insight on or exercise influence over endcustomers.Benefit Rating: HighMarket Penetration: 20% to 50% of target audienceMaturity: Early mainstreamSample Vendors: Aprimo; Infor; Neolane; Oracle-Siebel; Responsys; SAS; Teradata; UnicaRecommended Reading: "World-Class Building Blocks for Multichannel CampaignManagement""Magic Quadrant for CRM Multichannel Campaign Management"Multicommerce MDMAnalysis By: Andrew White; Gene AlvarezDefinition: Multicommerce master data management (MDM) represents a technologyconvergence of separate MDM solutions that historically would support a "single view" of specificand separate domains for individual selling channels. Enterprises interact with their customers viamany channels — for example, print, Web, direct, kiosk, service, fulfillment, returns, electronically— and customer service and business performance is maximized when important master data isunified across these channels. This is often addressed by individual technologies and solutions —MDM of customer data and MDM of product data, and content management systems; however,Publication Date: 3 August 2010/ID Number: G00205840 Page 50 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • users are increasingly asking their initial vendors (whichever one they start with) to master theother important master data.Other master data is being included, such as location, and hierarchy for reporting. As a result,users are looking for a convergence in the technology to simplify the information infrastructure.Multicommerce MDM is likely to be a short-term convergence in MDM technologies, before MDMsuites support all data domains (multidomain) and data types (including content).Position and Adoption Speed Justification: Through 2009, IT departments had to contend withurgent needs to cut and optimize costs. Even customer-facing programs were often put on holdand only reinstated when the survival of the business had been reasonably ensured. Later in2009 and early 2010, we began to see an increase for customer-facing programs, althoughproduct data is now facing the same cycling of slower growth. Interest and hype in manycustomer-facing technologies is increasing.Vendors are continuing to expand their focus and capabilities to larger sets of users and usecases, such as multicommerce, that combine several previously separate segments of the overallMDM landscape. Organizations have multiple and differing MDM requirements, depending ontheir situations. This particular view of MDM focuses only on a subset of the scenarios in MDM(for other scenarios, see "Mastering Master Data Management"). MDM for multicommerce isemerging from the application of MDM to product data and customer data, including contentmanagement. Multicommerce MDM technologies will replace potentially separate MDMimplementations for product, customer and/or site master data, and will be replaced by MDMsuites, once they mature to support all requirements.User Advice: Organizations selling and interacting with customers across multiple channels andvia multiple interaction styles should simplify and govern master data via one discipline supportedby multicommerce MDM technology. Address governance, organizational process and metricsissues for product, customer, location and other important information assets, in addition tocreating a technical reference architecture for MDM. Align your MDM initiative with the objectivesof the organizations enterprise information management (EIM) program.Look for reuse of product, location and party data across all your selling systems and processes,and align the governance of that data in one process. Avoid the hype about "multidomain MDM"or "MDM suites," because most are not yet mature enough to meet complex requirements acrossmultiple channels.Build an MDM road map, working with your business stakeholders and your enterprisearchitecture team to demonstrate how the facets of MDM will be addressed. This should includethe need for rationalization of multiple MDM initiatives in your organization for the long term.Business Impact: Multicommerce MDM, which aligns benefits from MDM of customer data,MDM of product data and other master data, supports: Enhancing customer service through consistent product and customer information across all customer points of interaction Reducing cycle times for processes such as new product introduction Optimizing CRM initiatives that seek to understand customer behavior across multiple channels Enhancing inventory assets through greater integration of supply chain and demand chain processesPublication Date: 3 August 2010/ID Number: G00205840 Page 51 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Implementing an enterprise service-oriented architecture strategy within a broader MDM strategy Single view of customer and product through customer-facing (CRM) and supplier-facing (supply chain management) end-to-end processBenefit Rating: HighMarket Penetration: 1% to 5% of target audienceMaturity: AdolescentSample Vendors: Enterworks; Heiler Software; Hybris; IBM; Stibo SystemsRecommended Reading: "Ten Best Practices for MDM of Product Data""Single View of Product Data Can Improve Supply Chain and Drive Product PerformanceManagement""How to Determine the Generations of CRM E-Commerce Customer Experience""Mastering Master Data Management""10 Best Practices for Customer Data Integration"Consumer Web MashupsAnalysis By: Jim MurphyDefinition: Consumer Web mashups are lightweight composite applications built using consumerWeb-based mashup infrastructures, that consume publicly available consumer Web resources.Consumer Web mashup infrastructure providers claim to target average Web users, but most useis by amateur developers and hard-core hobbyists.Position and Adoption Speed Justification: Although the term "mashup" originated in themusic world, mashups in a technology context originated and gained their initial momentum onthe consumer Web. They began as composite Web applications that leveraged Web-basedcontent and functionality from consumer-oriented sites to deliver applications for externalaudiences using only a thin layer of JavaScript aggregation code on the client. There arethousands of consumer Web mashable components (or "mashables," often in the form of widgetsand gadgets), and users of sites ranging from Google to Yahoo to Amazon leverage them tocreate consumer Web mashups. ProgrammableWeb.com and Mashable.com provide anoverview of the range of consumer Web mashups available. Enterprises that are experimentingwith consumer Web mashups for enterprise use have largely found that they provide limitedproduction value without additional work to manage their use in a secure fashion underappropriate governance. The beginnings of a backlash against consumer Web mashups hasstarted among some Web developers.User Advice: Enterprises should look to consumer Web mashups to demonstrate the mashupconcept to business leadership (see "A Process for Successfully Selling Mashups to EnterpriseLeaders"). However, enterprises looking to leverage consumer Web mashups for enterpriseneeds should be wary about their limitations and risks. Few consumer Web mashupinfrastructures provide security or governance functionality, and consumer Web mashups dontprovide connectivity to on-premises applications and content repositories. However, companiesthat overcome these hurdles may find considerable benefit in employing consumer Webmashups.Publication Date: 3 August 2010/ID Number: G00205840 Page 52 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Organizations should consider embedding Web mashups in business-to-employee portals,intranet pages and dashboards to provide easy access to information sources for users. But theyshould choose only safe and reliable sources, and they should not expect or attempt deepintegration with enterprise resources. With the same cautions in mind, organizations shouldconsider using consumer Web mashups to augment and enhance information they provide tocustomers on their websites. Companies looking to extend their Web presence beyond their ownwebsite should consider providing mashables (in the form of gadgets or widgets) or mashups forconsumption on sites like iGoogle and myYahoo.Business Impact: Consumer Web mashups can deliver business value in three areas: First, consumer Web environments serve as excellent demonstration tools to expose business leaders to the mashup concept. Consumer Web mashups provide a ready catalog to demonstrate several different use cases for mashups. Second, some consumer Web mashups can be used in enterprise settings with appropriate governance and security. Doing so eliminates the need to rely on traditional application development organizations to develop their own mashups for those use cases, or if a portal framework is deployed, to create some custom portlets. Enterprises seeking to extend their services can attract and engage customers by making widgets and gadgets available to consumers using sites such as iGoogle and myYahoo.Benefit Rating: LowMarket Penetration: 20% to 50% of target audienceMaturity: Early mainstreamSample Vendors: Google; Microsoft; Netvibes; Pageflakes; YahooPredictive Campaign AnalyticsAnalysis By: Adam SarnerDefinition: Predictive campaign analytics involves the analysis of customer behavior in campaignmanagement for the purpose of forecasting or projecting specific patterns, trends or outcomes.Position and Adoption Speed Justification: Business-to-consumer marketing organizationsare including more-advanced analytic techniques to increase response rates among targetedaudiences. Multichannel campaign management vendors continue to add predictive analytics totheir offerings to fill functionality gaps. Newer marketing techniques, such as inbound marketing,are taking advantage of predictive analytics, with offer management applications that putrecommendations in front of marketing analysts and campaign managers.B2B organizations and smaller companies in the midmarket are beginning to use predictiveanalytics for B2B campaign management, lead management, and churn and risk assessments.Predictive analytics must move from the statisticians and the IT organization to marketingbusiness analysts, who have access to and can leverage business insight without buildingcomplex data models. The software-as-a-service delivery option is increasing the speed ofadoption, with easier access and choice of in-line predictive tools (such as offer management) incampaign creation.User Advice: Choose predictive analytic technology based on the internal skills of the marketingdepartment, as well as the channels used for campaigns, such as an inbound call center or Web,and/or an outbound channel, such as direct mail. Invest in power users in the marketing functionPublication Date: 3 August 2010/ID Number: G00205840 Page 53 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • to better extract value from this technology. Start with simpler, more-developed channels togauge accrued benefits — for example, to determine correlations between the use of predictiveanalytics and increased lift realized, higher response rates or greater customer retentionachieved.Business Impact: Predictive analytics for campaign management can increase the capacity ofan organization to understand and respond in its target markets and, potentially, in new markets.Segmenting customers and prospects — based on their propensity to churn, purchase, beupsold, etc. — can significantly increase response and conversation rates.Benefit Rating: HighMarket Penetration: 5% to 20% of target audienceMaturity: Early mainstreamSample Vendors: Infor; Kxen; Oracle; Portrait Software; SAS; UnicaRecommended Reading: "Magic Quadrant for CRM Multichannel Campaign Management"Sliding Into the TroughE-Commerce on DemandAnalysis By: Gene AlvarezDefinition: E-commerce on demand is a suite of functionality to facilitate Internet selling functions(such as shopping carts, search, product catalogs, pricing, personalization, settlements, etc.) thatare used to serve consumers and business partners, and foster long-term customer relationshipsvia the Web. The application is owned, delivered and managed remotely by one or moreproviders. The provider delivers an application based on a single set of common code and datadefinitions that are consumed in a one-to-many model by all contracted customers anytime on apay-for-use basis or as a subscription based on use metrics. The technology offered is primarilyfocused on retailing organizations; however, some branded manufacturers have adopted thetechnology. It offers a set of core e-commerce capabilities that are commodities, and thesecapabilities can meet the normal expectations of a Web store.Position and Adoption Speed Justification: We believe that the limitations of software-as-a-service (SaaS) e-commerce, such as the overall maturity of the vendors (many vendors are stillunder $100 million in e-commerce SaaS service revenue), and concerns over the ability toprovide a differentiated online experience have been a gating factor to SaaS e-commerceadoption. The latter has been the largest client concern, because they believe that competitorscan sign up easily with the same SaaS e-commerce provider and deliver an equal onlinecustomer experience. The low barrier to entry has clients remaining focused on a hosted or on-premises ownership model that enables greater control and opportunities for differentiation.Issues concerning the flexibility of offerings in accommodating unique business practices andsophisticated integrations represent additional gating factors. Furthermore, some organizationshave not developed overall SaaS strategies, and have not determined the effect of SaaS on theirtotal IT portfolios.User Advice: Retail industry users and organizations that have sales models similar to onlineretailing should determine whether a total cost of ownership (TCO) cost savings can be realizedin the long and short terms before moving to an on-demand model. Users in other industries —especially those with complex ship-to-order, assemble-to-order or engineer-to-order configurationissues, or complex order fulfillment through downstream partners or other B2B-specificrequirements — should avoid these offerings due to the complexity of these sales. E-commercePublication Date: 3 August 2010/ID Number: G00205840 Page 54 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • on demand can be used to service customers in smaller or unique markets, without necessitatingIT resources or software ownership. However, this type of e-commerce doesnt provide uniquedifferentiating functions, because the on-demand solution is equally available to all users.Business Impact: Organizations that are losing money online because their spending outpacesonline sales can reduce the TCO for e-commerce and bring their online store spending in linewith their online revenue. In addition, organizations that want to try new online businesses canbring an online store live in a shorter time frame. However, site differentiation via uniquefunctionality isnt possible.Benefit Rating: ModerateMarket Penetration: 1% to 5% of target audienceMaturity: EmergingSample Vendors: ATG; Demandware; Imano; Infopia; NetSuite; Venda; VolusionRecommended Reading: "CRM Software-as-a-Service Guidelines for E-Commerce""SaaS Impact on E-Commerce"Mobile Social NetworksAnalysis By: Monica BassoDefinition: Mobile social-networking services enable individuals to connect to their socialcommunities with a mobile device, through one or more available mobile channels. Membersshare experiences, interests, opinions, presence information and personal content through theirmobile phones.Position and Adoption Speed Justification: Many startup companies around the world havelaunched social-networking services for mobile users only. The business opportunity is to addresstodays four billion (and growing) mobile phone users worldwide with dedicated services thatleverage location data. Mobile phones are also the predominant tool used by people to stay intouch with members of their real communities.A range of pure-play providers that focus predominantly on mobile channels is emerging. Someproviders partner with mobile carriers to give access to their mobile communities to the carrierssubscribers through a link on the default page of mobile phone browsers (for example, JumbuckEntertainment and airG). Other providers work independently of carriers (for example,MocoSpace, Twitter and GyPSii). Most are federated with Web social networks, such asFacebook and MySpace. Beyond such examples, many companies offer some blend of servicesin this area (such as myGamma, Mobimii, Bluepulse, Funambol, mobikade, Crush or Flush).Leading social networks, such as Facebook, MySpace and Bebo, as well as other community-oriented services, such as YouTube, Flickr, LinkedIn and Plaxo, are accessible through optimizedclients for most mobile platforms. Finally, megaplayers in the Internet and mobile industry havelaunched different initiatives to enable social-networking experiences on mobile devices. Forexample, Google bought Jaiku, and has ongoing deals with Zingku (a pure mobile play) foracquisition, Yahoo offers oneConnect, Microsoft offers Windows Live Spaces and Nokia offersOvi.Such a crowded market will go through consolidation during the next 18 months. Startupcompanies will fight to gain brand recognition and grow subscribers (perhaps throughpartnerships with bigger players), mostly on a regional or local basis. Some will be acquired bylarger companies, such as Internet portals, handset manufacturers and carriers. Through 2011,Publication Date: 3 August 2010/ID Number: G00205840 Page 55 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • the pure-play mobile social-networking market will consolidate around five players or less. Social-networking companies will target a multichannel audience with context-oriented services. Internetcompanies will consolidate multichannel social-networking services.According to Gartner surveys, 15% of mobile phone users are currently accessing social-networking sites on the phone. Todays biggest social network, Facebook, claims that 25% of itsover 400 million active users currently access services through their mobile devices. Adoption isexpected to grow rapidly among mobile users. By 2014, mobile social-network users will reachone billion.User Advice: Organizations should explore mobile social networks to find opportunities forinnovating their communication styles with employees, clients, partners and markets (forexample, to enable salespeople to collect and share geolocated information about customers inreal time). However, organizations need to evaluate emerging risks in the areas of IT securitythreats, legal liabilities and reputation.Business Impact: Mobile social networking is likely to have an impact across many verticalsectors, particularly where organizations deal with large client or user communities (such aseducation, healthcare and government sectors), or have larger distributed workforces in sales orother client-facing activities (such as the pharmaceutical, transportation and utility sectors).Benefit Rating: HighMarket Penetration: 1% to 5% of target audienceMaturity: AdolescentSample Vendors: bliin; Facebook; Funambol; GyPSii; MocoSpace; MySpace; Twitter; Yammer;ZybRecommended Reading: "The Emerging Market of Mobile Social Networks Offers NewBusiness Opportunities""Social Trends Are Influencing the Adoption of Mobile and Web Technology""Gartners Top Predictions for IT Organizations and Users, 2010 and Beyond: A New Balance"Event-Triggered MarketingAnalysis By: Adam SarnerDefinition: Event-triggered marketing includes identifying, categorizing, monitoring, optimizingand executing of events (such as channel reconciliation). It can be applied in a multichannelrelationship (such as direct mail, inbound call conversions, lead management and e-mailmarketing). Its an approach to B2B and business-to-consumer marketing that addresses theappropriate timeliness of offers from the customers perspective, rather than the companysperspective.Position and Adoption Speed Justification: This technology is still immature. Fixed detection(such as for birthday events, new customers and renewals) can be automated because it ispredictable. It also can be rule-based, which isnt difficult. Variable and more-behavioral eventdetection (such as a drop in spending or a customer shift in segment) is more difficult to detectand trigger. However, when significant events can be automated with a level of accuracy, it cansignificantly impact the effectiveness of campaigns. Speed of adoption is likely to increase duringthe next two years, as the fast-growing software-as-a-service (SaaS) lead management markethighly leverages event-triggering techniques.Publication Date: 3 August 2010/ID Number: G00205840 Page 56 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • User Advice: Successful event triggering begins with an understanding of which events aresignificant to a customer and how to align an event with a business goal. In particular, there aretwo important aspects of variable events that clients must get right to be successful in event-triggered marketing: Leading trigger and lagging trigger events — Leading triggers are indicators that an event is likely to happen in the near future for churn or cross-selling (for example, declining deposits, fewer transactions or atypical deposits). A lagging trigger typically indicates a missed opportunity (for example, a customer closing an account or stopping service means that he or she may have already "switched," and a win-back strategy should be used). Leading indicators are better sources of opportunities than lagging indicators. Execution — Having the right information, you must use the right channel, skill set and follow-up plans to execute once a trigger has been identified.Business Impact: Event-triggered marketing enables more-relevant offers to customers, basedon segmented meaningful events, rather than nonsegmented mass campaigns, which can causecustomer contact fatigue. Event-triggered marketing has seen five times the response rate ofnontimed mass-marketing campaigns. Event-triggered marketing will have a significant impact oncustomer profitability and, ultimately, company revenue.Benefit Rating: HighMarket Penetration: 5% to 20% of target audienceMaturity: AdolescentSample Vendors: Eloqua; Eventricity; Marketo; SAS; Teradata; UnicaRecommended Reading: "Magic Quadrant for CRM Multichannel Campaign Management""Five Steps to Successful Event-Triggered Marketing"Content AnalyticsAnalysis By: Rita E. KnoxDefinition: Content analytics applications process content to derive answers to specificquestions. Content types include photo captions, blogs, news sites, customer conversations (bothaudio and text), social network discussions, faces, maps, multimedia and documents.Applications include varieties of text analytics — sentiment analysis, reputation management,trend analysis, affinity, recommendations, face recognition, speech analytics, visualization, andindustry-focused analytics such as "voice of the customer" to analyze call center data, frauddetection for insurance companies, crime detection to support law enforcement activities,competitive intelligence and understanding consumer reactions to a new product.Multicomponent functions are constructed by serializing simpler functions. The output of oneanalysis is passed as input to the next. As virtually all content analytics applications useproprietary APIs to integrate functions, today theres no way to construct analyses fromapplications created by different vendors. In the future, the Unstructured Information ManagementArchitecture (UIMA), governed by the Organization for the Advancement of StructuredInformation Standards (OASIS), may serve this purpose. Such a standard for unstructured datawould serve a similar purpose to Structured Query Language (SQL) for structured data.Publication Date: 3 August 2010/ID Number: G00205840 Page 57 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • "Content analytics" is not a household term. But as "Band-Aid" is used as a category label foradhesive strips, application websites, such as Google and Twitter, are used as category labels(and even verbs) for social content.Position and Adoption Speed Justification: In 2009, we "slowed" the adoption speed ofcontent analytics due to increased analytic complexity. In 2010, weve advanced its position andadoption speed because of the explosion of social networking analyses. Use of both general- andspecial-purpose content analytics applications continues to grow as stand-alone applications andas extensions to search and content management applications. But the greatest growth comesfrom generally available resources.Websites use different content analytics functions. Examples include: Bookmarks to associate related content — http://delicious.com. Affinity and recommendations to create community networks — www.facebook.com, www.linkedin.com. Recommendations — www.amazon.com. Tagging content to enable multimedia content sharing — www.youtube.com. Analyzing trends — http://www.google.com/trends.User Advice: Enterprises should employ content analytics to replace time-consuming andcomplex human analyses. Firms should identify the analytics most able to simplify and demystifycomplex business processes. Users should identify vendors with specific products that meet theirrequirements and they should review customer case studies to understand how others haveexploited these technologies. An oversight committee can support application sharing, monitorrequirements and understand new content analytics to identify where they can improve keyperformance indicators. Social networking applications should be used wherever possible todeliver information, gain access to customers, and understand public opinion that may berelevant.Business Impact: Content analytics is used to support a broad range of functions. It can: identifyhigh-priority clients, product problems, customer sentiment and service problems; analyzecompetitors activities and consumers responses to a new product; support security and lawenforcement operations by analyzing photographs; and detect fraud by analyzing complexbehavioral patterns. Increasingly, it replaces difficult and time-consuming human analyses withautomation, often making previously impossible tasks tractable. Complex results are oftenrepresented as visualizations, making them easier for people to understand.Benefit Rating: TransformationalMarket Penetration: 1% to 5% of target audienceMaturity: EmergingSample Vendors: Attensity; Autonomy; BBN Technologies; CallMiner; Clarabridge; ClearForest;Facebook; IBM; IxReveal; MetaCarta; Nexidia; Nice Systems; Stratify; Trampoline Systems;Twitter; UtopyRecommended Reading: "Exploiting Content Analytics""Content Analytics Category: Text Analytics""Definition of Content Analytics"Publication Date: 3 August 2010/ID Number: G00205840 Page 58 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Fraud DetectionAnalysis By: Avivah LitanDefinition: Fraud detection and prevention are used to protect customer and enterpriseinformation, assets, accounts and transactions through the real-time, near-real-time, or batchanalysis of activities by users and other defined entities (such as kiosks) against accounts andrecords. Fraud detection uses background server-based processes — transparent to users —that examine user and other defined entities access and behavior patterns. It typically thencompares this information to a profile of whats expected and considered "normal." If tunedproperly, fraud detection systems can be highly effective at keeping criminals out. They are notintrusive to legitimate users unless the users activity is suspect.Fraud detection is a mature technology; it has been used successfully in the credit card industrysince the 1980s and in the e-commerce market since the late 1990s. In 2010, many financialinstitutions and other large companies are moving to enterprise fraud detection, where fraud isholistically managed across multiple products and channels. In contrast, fraud detection formobile applications is just emerging, as mobile transactions are just starting to become moreprevalent with the rollout of smartphones. (A separate Hype Cycle entry has therefore beencreated for mobile fraud detection.)Enterprise applications are integrated with a fraud detection engine that assesses the fraud risk ofa transaction, from user access to any type of activity, such as change of address or fundstransfer. It can also profile other defined entities, such as ATM machines to similarly spotabnormal transaction behavior from that machine (for example, "too many" transactions in a givenodd hour of the night). The severity of transaction risk is ascertained through various methods —for example, by "fingerprinting" the users access device (if there is one) or by analyzingtransaction behavior.In addition to comparing information at the transaction, account or customer level — for example,to a profile of whats expected — fraud detection also includes other techniques, such as peergroup analysis, which compares an individual entity or group of individual entities to their peers tospot suspect deviations. Fraud detection also uses methods such as collective network analysis(akin to entity link analysis) to detect, for example, criminal rings or linked individuals engaged infraudulent behavior.Fraud detection vendors use one of two basic methodologies for catching fraud — rule-based(based on what humans know) or mathematically predictive (artificially intelligent) scoringtechniques (see "Magic Quadrant for Web Fraud Detection"). Most enterprise users want bothrules they can easily update, as well as a mathematically predictive scoring system that runs inparallel with the rules. The general goal is for enterprise users to be able to improve upon apredictive models results with their own rules, until such time that the model learns the newscenarios controlled by the rules. This way, for example, enterprises can quickly respond to newtypes of attacks they are subjected to that may not yet be known by the predictive model. Oncethe model learns the new attack method, the rule can be retired from the system.Position and Adoption Speed Justification: This technology profile covers fraud detectiontechnology that is already productized and working across the globe. Some of this technology isquite mature — for example, credit card fraud detection — and some is less mature — forexample, enterprise fraud detection that prevents fraud across channels and products. Together,however, the blended position of fraud detection — excluding mobile fraud detection — is about45% post-Peak of Inflated Expectations. In contrast, attacks in the mobile computing channel arestill rare, since mobile environments are harder to crack and still originate a small fraction of e-commerce transactions, which is in part why we have a separate technology profile for mobilefraud detection.Publication Date: 3 August 2010/ID Number: G00205840 Page 59 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • In particular, fraud detection is already prevalent in the credit card market, where, since the1990s, most card issuers use neural networks to analyze the behavior of card transactions andcompare them to whats expected of the cardholder. In other markets and channels, frauddetection is less mature, although it has been quickly driven by increasing fraud attacks in thenon-face-to-face channels (online and telephone) across the world.Banking regulators in the U.S. further drove adoption of online fraud detection in the U.S. in 2006,with the introduction of rules and guidance that stipulated stronger security controls for onlinebanking. Further, strong authentication systems rolled out across the world have beencircumvented and beaten by hackers, strengthening the need for background fraud detectionsystems that can spot transaction anomalies even after a user has been strongly authenticated.Therefore, adoption of fraud detection is quickly increasing in countries that previously reliedprimarily on strong user authentication to control access to sensitive applications and functions.User Advice: Assume the criminals will compromise credentials used by your employees,contractors or customers by stealing them from systems and applications often outside yourenterprises control. Use a layered security approach, which includes using fraud detection to flagsuspect activity within your monitored applications. Fraud detection should work across multiplechannels, functions and other customer touchpoints, and that often means integrating multiplebest-of-breed products. Priority should be given to analytics, alerts and case management, sothat fraud analysts can effectively manage and stop fraudulent activities. Apply lessons learnedfrom past fraud to legacy systems that touch customers and sensitive data.Gartner clients often look for one vendor that can help them manage several fraud-related usecases. The fraud management market is fragmented and characterized by many niche vendorsthat support one or two functions. However, a handful of software vendors provide enterprise-level fraud management applications focused on managing fraud across enterprise silos andsystems. Many organizations dont see a compelling need for enterprise-level fraud management.This suboptimal approach will prove damaging to enterprises when it comes to managing fraudrisk. Until an enterprise fraud management system is implemented, enterprises must maintainseparate profiles, rule sets or models, whose results are tracked and acted upon in separate casemanagement systems or transaction verification systems.Fraud detection systems must be properly tuned, or else they will generate too many falsepositives, causing unnecessary and wasteful work for fraud investigators and analysts. Inenvironments such as wire money transfers, where real-time execution is imperative, a high false-positive rate is clearly unacceptable because it stops too many time-sensitive legitimatetransactions.Business Impact: Fraud detection watches for suspect user and other defined-entity (forexample, kiosks and beneficiary accounts) activity in an application within a given access channel(for example, Web, phone or in person) or across applications, access channels or evenorganizations (where, for example, "blacklists" of bad IP addresses are shared acrossorganizations). This can range from detecting abnormal access (for example, simultaneousaccess by one device from two disparate geographic locations) to a suspect transactionsequence (for example, a change in address followed by a high-value money transfer). Bydefault, it can also spot unauthorized employee activities if done in an application that ismonitored by the fraud detection application.Since fraud detection operates in the context of an application, it cannot detect rogue andpotentially fraudulent processes that are external to the application. Fraud detection also cannotdetect suspect behavior that is not defined to its engine because the rules are not aware of theactivity pattern, the model has not learned enough to single it out, or the application integration isnot providing enough relevant data to the fraud risk assessment engine.Publication Date: 3 August 2010/ID Number: G00205840 Page 60 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Benefit Rating: HighMarket Penetration: 5% to 20% of target audienceMaturity: Early mainstreamSample Vendors: 41st Parameter; Accertify; Actimize; ACI Worldwide; Arcot; Detica; Entrust;FICO; Guardian Analytics; Intellinx; Memento; Norkom Technologies; RSA; SAS Institute; TheSecurity Division of EMCRecommended Reading: "Where Strong Authentication Fails and What You Can Do About It""Pattern Discovery With Security Monitoring and Fraud Detection Technologies""Location Technologies""Magic Quadrant for Web Fraud Detection""Case Study: Bank Defeats Attempted Zeus Malware Raids of Business Accounts"MDM of Product DataAnalysis By: Andrew WhiteDefinition: Master data management (MDM) of product data (formerly known as productinformation management [PIM]) is a discipline that seeks to achieve a "single version of the truth"for product data enterprisewide. The discipline is technology-enabled as a workflow-driven ortransaction-oriented process to cleanse, identify, link, harmonize, publish and protect commonproduct information assets. The technologies create and manage a physical, database-basedsystem of record, often called a "central product master," and enable the delivery of a singleproduct view across channels, systems and lines of business, usually, but not only, in theoperational environment. This can greatly aid an organizations ability to increase revenue,optimize cost, increase agility and meet compliance requirements.MDM of product data systems is relevant to all industries and government, but the projects takedifferent forms. This depends on whether the product is a physical product or a service, on thecomplexity of the product structure and consuming business processes, and on whether the focusis on the sell or buy side of the business.An MDM of product data strategy is part of a wider, multidomain MDM strategy (potentiallyencompassing customer, product, supplier, employee, location, asset and financial master data).An MDM program is a key part of a commitment to enterprise information management (EIM) andhelps organizations and business partners break down operational barriers, enabling greaterenterprise agility and simplifying integration activities.Position and Adoption Speed Justification: During the past 18 months, growth in the MDM ofproduct data solutions market has slowed because of changes in MDM business drivers, with agreater focus on cost optimization and asset utilization. In 2010, we see a slow return to businessgrowth and customer service drivers. Related hype in the past 12 months had slowed, but isshowing signs of responding to or leading spending trends.MDM of product data is increasingly defined by complex requirements (see "Magic Quadrant forMaster Data Management of Product Data"), which have converged around different user-oriented focal points. Adoption and maturity of this technology varies by industry, technologyadoption criteria and vendor strategy:Publication Date: 3 August 2010/ID Number: G00205840 Page 61 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Industry adoption varies where enterprises with physical products (not services) focus on this technology longer than other enterprises, due to the need to share such data among organizations in B2B relationships. Innovators (Type A organizations) have adopted this technology and are deploying the second master data domain (e.g., customer). Fast followers (Type B organizations) are active with the technology and are implementing it. Mass-market (Type C) organizations are showing signs of interest, as the global economy seems to be improving. This suggests the start of a significant upswing in demand and hype. Large megavendors (IBM, Oracle, Microsoft and SAP) have acquired and/or developed their MDM of product data capability, and this is at the heart of their information architecture strategy. Small, niche or custom-made solution vendors in this market — like Data Foundations, Kalido, Orchestra Networks and DataFlux — continue to survive by offering differentiated capabilities. Open-source MDM technology made a splash in 2009 with Talend, an open-source vendor of data integration and data quality technology.This market has spawned other MDM segments, MDM of asset data and MDM of purchasedparts, two other "things" of differentiation across industry, use case, drivers, implementationstyles, etc. Some vendors have specialized across these data domains. 2011 will be a key yearfor MDM of product data vendors as they race against MDM of customer data vendors to claimthe lead in mastering multiple domains. By 2012, product MDM will introduce ways to managegeneric master data domains and another wave of vendor consolidation.User Advice: Make MDM of product data part of your overall MDM strategy, and determinewhen, not whether, to adopt MDM. Seek business benefits across all IT programs, and businessintelligence and application programs, that can be addressed with one information managementapproach, rather than a piecemeal approach. Review the organizations capabilities andchallenges in governance, process and organizational change, toward uniformly managingproduct data, as well as its ability and political willingness to use one product view. Educate theorganization about the challenges and their effects on the business.Create a vision (how sustaining a single view of product/thing data supports preferred businessoutcomes like reduced time to market) for what can be achieved. Consider creating a centralMDM for a product data repository that integrates with established source systems and becomesthe system of record for master product data in a synchronized, heterogeneous environment.Focus on key business problems, and build a business case based on benefits.Analyze likely short- and long-term scenarios where the enterprise wants to use an MDM system.This will guide your choice of a vendor, because products have different sweet spots that differ byindustry and implementation style. MDM of product data systems must have rich, tight-knitfacilities, including a comprehensive data model, information quality tools, workflow engine andintegration infrastructure. Evaluate MDM products, including those embedded within businessapplications, based on objective, balanced criteria, including industry experience. Start small,"think big," and deliver early and often.Business Impact: Large, complex and heterogeneous enterprises and many midsize enterprisesspread product data across many systems. It is fragmented and often inconsistent. This makes ithard for organizations to streamline business processes and operations efficiently, and to developnew, agile business processes. Without a single view of a product, organizations cant effectivelydeliver better effectiveness across the supply chain or a sustained and effective customerexperience, leverage operational benefits from merger and acquisition activity, identifyPublication Date: 3 August 2010/ID Number: G00205840 Page 62 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • efficiencies on the buy side with deep insights on spending data analysis, or a competitive new-product introduction process.There will be upsell and cross-sell inhibitors if organizations dont have a good handle on theproducts and services customers have acquired. Thus, the single-product view is key formanaging the value chain. The impact on business applications and intelligence can besignificant, as organizations grapple with the complex workflow of this initiative. MDM and,specifically, MDM of product data, impact all business applications and intelligence data stores, inthat it becomes the centralized governance framework across all data stores.Benefit Rating: HighMarket Penetration: 1% to 5% of target audienceMaturity: Early mainstreamSample Vendors: DataFlux; IBM; Kalido; Oracle; Riversand; SAP; Stibo Systems; Teradata;Tibco SoftwareRecommended Reading: "Mastering Master Data Management""Ten Best Practices for MDM of Product Data""How MDM Can Help Enterprises Achieve a Single View of Product""Toolkit Best Practices: Strategies for Successful MDM Implementation"MDM of Customer DataAnalysis By: John RadcliffeDefinition: Master data management (MDM) of customer data technology enables the businessand the IT organization to collaborate in a workflow-driven or transaction-oriented process toensure the uniformity, accuracy, stewardship, semantic consistency and accountability of theenterprises official, shared customer master data assets. An MDM of customer data solutioncreates and manages a physical, database-based system of record, often referred to as a"central customer profile," and enables the delivery of a single customer view across channels,systems and lines of business, usually in the operational environment. This can greatly assist anorganizations ability to cross-sell, cross-market and retain customers, and to provide aconsistent, appropriate customer experience. MDM of customer data systems fulfill a differentpurpose to data warehouses and data marts, which may also create a "single view of thecustomer," but which are more specifically designed for analytical purposes in terms ofspecialized schemas, as well as storing detailed data and aggregated summary data.MDM of customer data technology is relevant to all industries and government. However, projectswill take a different form, depending on whether the customer is an individual consumer or ahierarchy of business entities, and what the focus is of the single view in that industry or part ofgovernment — for example, citizen, taxpayer or patient. An MDM of customer data programshould form part of a wider, multidomain MDM program (potentially encompassing customer,product, supplier, employee, location, asset and financial master data). It is a key part of acommitment to enterprise information management (EIM), which helps organizations andbusiness partners break down operational barriers, enabling greater enterprise agility andsimplifying integration activities.Position and Adoption Speed Justification: The market for packaged (as opposed tohomegrown) MDM of customer data systems has grown rapidly since customer data integration(CDI) emerged in 2003. This technology continues to mature, with leading vendors particularlyPublication Date: 3 August 2010/ID Number: G00205840 Page 63 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • focusing on fleshing out facilities for data stewardship and data governance. Early adopters (TypeA organizations) have achieved business value and created best practices. The early majority(Type B organizations) are now building business cases and investing in MDM. Organizations arenow recognizing that MDM is not just about technology, but that issues such as governance canmake or break initiatives.The market is maturing in terms of the degree of market consolidation, and the fact thatmegavendors (such as IBM, Oracle and SAP) are focusing on this area, seeing MDM of customerdata as key to their overall visions for service-oriented-architecture (SOA) applicationinfrastructures. These megavendors are successfully selling into their extensive customer bases,and they own approximately 50% of the MDM of customer data market.In early 2010, the leading best-of-breed specialists, Initiate Systems and Siperian, were acquiredby IBM and Informatica, respectively. However, several small MDM specialists, such asAtaccama, Data Foundations, Kalido, Orchestra Networks and Visionware, remain in the marketand are doing well. Microsoft and the commercial open-source vendor, Talend, entered themarket in 2010. Finally, large vendors, such as Information Builders and Teradata, that havebeen successful in other markets are playing for a share of the MDM of customer data market.User Advice: Large and midsize organizations with heterogeneous IT portfolios containingcustomer data fragmented across many systems should think in terms of buying or building acentral MDM of customer data system that integrates with established source systems andbecomes the system of record for master customer data.Evaluate MDM of customer data products based on a set of objective, balanced criteria, includingfacilities for data modeling, data quality, integration, business services and workflow,measurement and manageability. Vendors products vary in terms of maturity and capability, andtheres likely to be further vendor consolidation in the market.Success in an MDM program is not just about having the right technology. Create a holistic,business-driven MDM of customer data vision and strategy that focuses on key businessproblems. Build a business case based on the ability to improve key business process metricsand ensure that you address governance, organizational and process issues. Keep the long-termMDM vision in mind, and approach the individual steps of an MDM of customer data projectbased on business priorities.Business Impact: Organizations with fragmented and inconsistent customer data have problemsmanaging customer relationships. The ability to identify customers correctly and to leverage atrusted, accurate and comprehensive single customer view in customer-centric processes andinteractions is valuable to marketing, sales and service, and other functions that interact withcustomers. It can help them deliver the appropriate customer experience, and execute end-to-endprocesses in an efficient and effective manner.An increasing number of Type A organizations can point to quantifiable business benefits.However, a number of projects have failed or stalled. Type B organizations are now starting toinvest in MDM of customer data programs.Benefit Rating: HighMarket Penetration: 1% to 5% of target audienceMaturity: Early mainstreamSample Vendors: DataFlux; D&B Purisma; IBM; Informatica; Information Builders; InitiateSystems; Oracle; Oracle Siebel; SAP; Tibco Software; VisionWarePublication Date: 3 August 2010/ID Number: G00205840 Page 64 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Recommended Reading: "Magic Quadrant for Master Data Management of Customer Data""The Seven Building Blocks of MDM: A Framework for Success""Use the Gartner MDM Maturity Model to Create Your MDM Road Map""Creating an MDM Vision, Strategy and Road Map"MicrobloggingAnalysis By: Jeffrey MannDefinition: "Microblogging" is the term given to a narrow-scope mode of social communicationpioneered by the social network site Twitter.com and followed by similar services from Plurk,Yammer, Socialcast and Identi.ca. The concept is surprisingly simple: users publish a one-linestatus message to their contacts, who have decided to follow their activities on the service. Userscan see the collected statuses of the people they choose to follow. Even those who do not wantto follow many people can search through the microblogging stream for topics or tags they areinterested in. Trending topics provide a condensed view of what everyone on the service istalking about. The content of status messages (called "tweets" on Twitter) ranges from themundanely trivial ("I am eating eggs") to a random insight ("I think blogging is our onlinebiography in prose, and Twitter is the punctuation") to a reaction to an event ("A passenger planejust landed on the Hudson River!").Twitters dominance has led to the practice being called "twittering" but it is also referred to asmicroblogging to broaden the focus from a single vendor, as well as to point out how this style ofcommunication has augmented and partially replaced blogging. Even though it superficiallyresembles instant messaging (IM), tweets are published to a group of interested people, making itmore similar to blogging than the person-to-person nature of IM.The trendsetting Twitter system intentionally constrains messages to 140 characters, which iswhat can be sent via a Short Message Service text message on a mobile phone. This simpleconstraint enhances the user experience of those who consume this information. Tweets aresmall tidbits of information, easily digested and just as easily ignored, as the moment dictates.Other intentional constraints are designed to provide a high-impact user experience throughminimalist design: no categories, no attachments, no scheduled postings. These constraints are amatter of some debate among users, leading Twitter to add more functionality in the last year(groups or lists, trending topics and retweets).Competitors offer more full-featured alternatives (Plurk, FriendFeed) or open-source approaches(such as Identi.ca based on Status.Net), but have not been able to challenge the dominance ofTwitter in the consumer market. One key factor behind Twitters success over its competitors hasbeen its early offering of an application programming interface to third-party developers. This hasled to dozens of packages that enable users to access the Twitter service and post content, eitherthrough a mobile device or a more full-featured desktop client. Examples include Seesmic,TweetDeck, Twitterific and TwitterBerry. These third-party packages can provide offline capability,as well as features that fill in the gaps of Twitters online offering. Twitter recently offered its ownBlackBerry client as well.Twitters open nature makes it largely unsuitable for internal use within enterprises or forconfidential communications with partners, leaving an opportunity for new offerings. Servicesincluding salesforce.coms Chatter, Yammer, Socialcast and Present.ly provide microbloggingservices aimed at individual companies, with more control and security than the public serviceslike Twitter provide. Microblogging is also quickly becoming a standard feature in enterprise socialsoftware platforms, such as Socialtext, Microsoft SharePoint 2010, IBM Lotus Connections andPublication Date: 3 August 2010/ID Number: G00205840 Page 65 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Jive SBS. By 2011, some form of enterprise microblogging will be a standard feature in 80% ofthe social software platforms on the market.Position and Adoption Speed Justification: Microblogging in general, and Twitter in particular,continue to gain in popularity, becoming a widely-recognized part of popular culture. A plannedmaintenance shutdown for Twitter became an international political issue when scheduled duringan election crisis in Iran. The volume of Twitter traffic makes it valuable as a real-time news feed.Major events are almost always signaled first on Twitter before the traditional media can respond.This high profile has led many organizations to question whether they should be using Twitter orother microblogging platforms for communication between employees or to communicate withcustomers and the public. Many companies have expanded their Web participation guidelines foremployees to include microblogging alongside the more traditional blogging and communityparticipation. With wide adoption comes the inevitable backlash. Microbloggings superficialityand potential for time-wasting have led many to dismiss it as a passing fad, which is typical of apost-peak Hype Cycle position.Twitter has worked to stabilize its technology and reduced many (but by no means all) of theservice interruptions that previously plagued the system. Twitter problems are announced by theappearance of the "fail whale" graphic on Twitters home page, a term that has received widepublic adoption. Twitters dominance has made it difficult for competitors to gain a foothold,although enterprise suppliers such as Yammer and salesforce.coms Chatter have had somesuccess. Several companies in the young microblogging space have already disappeared,including Quotably, Swurl and Pownce. Summize was acquired by Twitter, FriendFeed byFacebook and Ping.fm by Seesmic.User Advice: Adopt social media sooner rather than later, because the greatest risk lies in failure to engage and being left mute in a debate in which your voice must be heard. Before using social media to communicate, listen to the channel, learn the language and become familiar with the social norms. Only then should you begin speaking. As with any other language, good results are achieved with regular, consistent practice, rather than with spotty participation. Remind employees that the policies already in place (for example, public blogging policies, protection of intellectual property and confidentiality) apply to microblogging as well. It is not always necessary to issue new guidelines. As Twitter is a public forum, employees should understand the limits of what is acceptable and desirable.Business Impact: Despite its popularity, microblogging will have moderate impact overall on howpeople in organizations communicate and collaborate. It has earned its place alongside otherchannels (for example, e-mail, blogging and wikis), enabling new kinds of fast, witty, easy-to-assimilate exchanges. But it remains only one of many channels available. Microblogging hasgreater potential to provide enterprise value than these other channels by coordinating largenumbers of people and providing close to real-time insights into group activities. These mass-coordination and mass-awareness possibilities are being explored by some early adopters, buthave not achieved wide adoption.Benefit Rating: ModerateMarket Penetration: 5% to 20% of target audienceMaturity: AdolescentPublication Date: 3 August 2010/ID Number: G00205840 Page 66 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Sample Vendors: Blogtronix; Identi.ca; Jaiku; salesforce.com; Seesmic; Socialcast; Socialtext;Tweet Scan; Twitter; YammerRecommended Reading: "Four Ways in Which Enterprises Are Using Twitter""Twitter for Business: Activity Streams Are the Future of Enterprise Microblogging""Case Study: Social Filtering of Real-Time Business Events at Stratus With Salesforce.comsChatter""Should Retailers Use Twitter?"Mobile AdvertisingAnalysis By: Andrew FrankDefinition: Mobile advertising is advertising or other paid placement on mobile device screens.This category was formerly limited to handset-based screens; however, with the introduction ofmedia tablets, such as Apples iPad, the category has expanded to include these screens as well,although larger display formats have somewhat blurred the distinction with Web displayadvertising.Examples of mobile-specific formats include text links sent via Short Message Service (SMS);Multimedia Messaging Service (MMS); mobile Internet and Wireless Application Protocol (WAP)ad banners; paid mobile search listings; and ad insertion into SMS, mobile TV, radio, especiallyapplications, and mobile couponing. The rise in popularity of mobile apps, in particular onsmartphones, driven by the popularity of iPhone and Android devices, along with Apples muchheralded launch of its iAds platform for mobile-app-based ads has focused attention in 2010 onthe app channel.Position and Adoption Speed Justification: The mobile advertising category has evolvedconsiderably in the past year with the rapid rise in smartphone adoption, which has spurredsignificant competitive investments in the category from Apple and Google. Google has acquiredthe leader in the category of independent mobile ad networks, AdMob, while Apple acquiredAdMobs competitor Quattro and built a new mobile app-based ad platform, iAds, on top of itstechnology. Both companies have also sought to patent and otherwise control various aspects ofmobile advertising, signaling not only more competition ahead, but also a potentially complexlandscape for advertisers, carriers, developers and publishers in the coming years. Internet mediacompanies, in particular, see mobile advertising as a top initiative for the next two years. Foradvertisers and retailers, the promise of location-based advertising is enticing and has achievedsome positive results, but remains hampered by privacy concerns and questions regarding thelimits of consumer acceptance.Advertisers have largely moved beyond experimentation with the medium and are likely toallocate a small but growing portion of media budgets to mobile channels, although there remainsan overall lack of accord as to the best use of the medium and whether these allocations shouldremain separate from the overall category of "digital." In any case, these allocations are expectedto grow as Apple, Google and other entities, such as Yahoo in alliance with Nokia, along withnewer ad networks and ad exchanges, continue to invest in marketing and innovation for theirmobile advertising platforms.Along with smartphone-specific formats, a number of mixed-media concepts have emerged thatinvolve the use of handset-based cameras to capture a bar code or image from print or out-of-home media to receive information or a promotion for a product or service. These have attractedstrong interest from print media hoping to deliver performance advertising and return oninvestment through enhanced measurability to slow or reverse declines in ad revenue. SuchPublication Date: 3 August 2010/ID Number: G00205840 Page 67 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • platforms show strong promise for retail and other direct-response advertisers already committedto print channels for promotion.Despite these positive signs, significant questions and impediments stand between the currentsituation and the emergence of a stable and scalable marketplace that can support the significantgrowth Gartner believes is inevitable. For example: Lack of a stable marketplace. The relationships among manufacturers, mobile application platform providers, telecommunications service providers, Internet and mobile ad networks, and content providers remain volatile as each group competes for control on a region-by-region basis. This fragments the mobile audience and creates confusion and complexity for advertisers. Formats and standards. Existing ad standards from organizations such as the Mobile Marketing Association (MMA) and the Interactive Advertising Bureau (IAB) are widely considered to be too limited to execute creative branding campaigns (already constrained by screen size) and are trailing the capabilities of more-advanced smartphones and tablets by a considerable margin, leading to the emergence of nonstandard device-specific platforms, such as Apple iAds, that have high creative potential but are limited in terms of reach and the supply of expertise in the labor market, as well as being expensive and unproven. In particular, Apples highly publicized rejection of Adobe Flash on its platform has created a difficult choice among content providers and creative agencies for whom Flash is embedded in their video and interactive production practices. Metrics and measurement. The mobile metrics picture, considered by many advertisers and agencies to be a baseline requirement for any major media investment, remains undeveloped and hampered by technical difficulties. Privacy and targeting. The issue of privacy norms and regulations, especially for potentially attractive but controversial location-based concepts, has also created uncertainty and reluctance, particularly on the part of communications service providers (CSPs), to use customer data for ad targeting.In summary, although growth is likely to accelerate in the coming years, it will remain constrainedon the high end until fundamental issues are resolved. In the near term, growth will be dividedbetween high-end application-oriented brand advertising in developed markets, and more high-volume, low-cost text- and banner-oriented SMS/MMS campaigns in fast-growing emergingmarkets where mobile advertising may be well on its way to becoming the primary channel forreaching mass consumers.User Advice: Brands and agencies must develop methods of evaluating the effectiveness ofmobile campaigns across various mobile channels to optimize the use of mobile media in themarketing mix. This is likely to vary considerably by product category, audience profile andregion. In particular, brands and agencies must consider ways to use mobile channels as aresponse mechanism in concert with other noninteractive formats, such as print and TV.Local advertisers, in particular, must understand how to leverage the mediums ability to delivernearby traffic to their offline stores and venues.Content providers, developers and publishers need to understand how to incorporate elementslike social features, maps and video into applications that will attract both users and advertisers.CSPs and manufacturers need to be decisive about their intended roles in mobile advertising andacknowledge that, with few exceptions, success will require both strong partnerships andPublication Date: 3 August 2010/ID Number: G00205840 Page 68 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • strategic acquisitions to quickly establish key roles in end-to-end solutions that can deliverefficiency and scale to advertisers.CSPs must also determine their posture on data privacy, according to regional regulations andconsumer research.CSPs and advertisers should not overlook handset telephony capabilities for contextual click-to-call and save-contact features in ads.For developing markets, SMS will remain a good way to distribute marketing messages to massaudiences, and may provide enough economic value to subsidize the expansion of access tomore-advanced low-cost handsets and service plans.Business Impact: Mobile advertising will grow to more than $13.5 billion worldwide by 2013.This amount will be small compared with the $400 billion to $500 billion in overall advertisingspending worldwide.Mobile advertising will be a key driver for mobile content and applications during the next fiveyears and beyond.Benefit Rating: HighMarket Penetration: 5% to 20% of target audienceMaturity: AdolescentSample Vendors: AOL; Apple; Celltick; Google; Greystripe; Jumptap; Microsoft; MillennialMedia; Nokia; SinglePoint; YahooRecommended Reading: "Mobile Advertising Quietly Grows""An Introduction to the Mobile Search Market""Dataquest Insight: Mobile Advertising Bucks Ad Spending Trend"Customer Profitability ManagementAnalysis By: Gareth HerschelDefinition: Customer profitability analysis enables the organization to understand the financialcontribution each customer makes to the enterprise, using detailed transaction data. This task issometimes performed by, or with the assistance of, the finance organization (especially costallocation decisions to move from revenue to profitability assessments of customer value), but theresulting analysis is usually consumed by customer-facing elements of the marketing, sales andservice organizations.Position and Adoption Speed Justification: Most enterprises estimate a customerscontribution to enterprise profitability, but few have established the rigorous, repeatableprocesses that are required for an analysis of this strategic importance. Although there is interestin improving the quality of this analysis, most tools on the market come from a financebackground, and lack the customer-centric perspective necessary for a solution to be of help tothe marketing, sales or customer service functions. For example, the ability of vendors with abackground in activity-based costing (ABC) to allocate overhead costs to each customer is not asuseful when making customer treatment decisions as the ability to compare current and lifetimevalue. Analysis to support more-strategic decision making (such as the ability to run what-ifanalysis to understand how the imposition of a fee for different types of behavior would changethe profitability of customers) is lacking. The unique industry characteristics of cost allocationPublication Date: 3 August 2010/ID Number: G00205840 Page 69 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • (particularly for service-based industries) make developing prepackaged solutions a significantchallenge.User Advice: To be successful, the finance and CRM teams must work jointly on initiatives.Although solutions in this space are emerging, all have functionality gaps, so integrating apparentcompetitors may be required for a best-of-breed solution. The correct depth of analysis to pursueshould be based on the nature of the decision the analysis will feed (more-important orpersonalized decisions require deeper analysis). Detailed transactional data and overhead costallocation may not be necessary for most customer-value-related decisions, and should beconsidered for later phases of a project, rather than be included in the initial assessment. Insteadof expending effort getting "deeper" into an analysis of customer profitability (e.g., by allocatingoverhead costs), enterprises may be better-served by doing a faster and simpler analysis ofcustomer profitability, and then balancing this perspective with other views of customer value,such as wallet share, advocacy or lifetime value.Business Impact: The ability to understand customers value to the enterprise is fundamental todeveloping a mutually profitable relationship. Understanding customers profitability enablesenterprises to make intelligent decisions about the level of marketing, sales and serviceinvestment they should give to customers (for example, lowering service levels to ensureprofitable interactions). Understanding what variables have the most-significant effect oncustomers profitability enables enterprises to make intelligent decisions about re-engineeringbusiness processes or strategic decisions, such as which customer segments are worth targeting.However, the business effect of better understanding profitability is constrained in manycompanies by poor understanding of how to apply this knowledge to the customer experience.For example, airlines have priority lanes for high-value customers, but retailers do not; airplanemanufacturers set prices factoring in the ongoing maintenance revenue, but car dealerships donot. Deciding whether the enterprise is ready to trust assessments of profitability enough todisrupt existing "everyone is equal" processes is the acid test for adoption of this technology.Benefit Rating: HighMarket Penetration: 1% to 5% of target audienceMaturity: EmergingSample Vendors: Acorn Systems; Business Objects; SAS; TeradataRecommended Reading: "Marketing and Finance Must Collaborate to Define CustomerProfitability""How to Assess Whether Activity-Based Costing Is Needed for Customer Value Analysis"Distributed Order ManagementAnalysis By: Gene AlvarezDefinition: Distributed order management (DOM) enables an organization using e-commerce tocapture a multiline order containing items such as products and services, and DOM can be usedfor multichannel order capture. However, after the order is captured, DOM can manage the orderacross partner systems (for example, distributors, wholesalers and resellers) outside the firewall,or multiple internal back-office systems inside the firewall as one single order.Position and Adoption Speed Justification: The adoption of this technology has been slow,because few early adopters have been able to deploy DOM, and downstream partners have beenresistant. This is due to process challenges, such as how to sell and bundle a product that thePublication Date: 3 August 2010/ID Number: G00205840 Page 70 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • enterprise sells with services that are delivered by a partner. There are also technical issues,such as managing technology inside and outside the firewall, and integrating multiple systemsinside and outside the enterprise, which can be complex and expensive to implement. However,some industries, such as automotive and high technology, have been using DOM, and retail andcommunications have also begun to adopt the technology.User Advice: Focus on communicating the value of this technology to downstream partners and,in B2B cases, with end customers to gain acceptance. Organizations that intend to sell bundledofferings that can be fulfilled from multiple distribution points or partners should evaluate DOM.This is necessary to avoid fulfillment issues, which can arise from disconnections between salesorders and the fulfillment systems and partners.Business Impact: DOM can significantly reduce costs, such as the interoperation costs forcoordinating a sale with a partner, eliminate manual intervention during a sale by enabling theorganization to work with partner systems information and eliminate manual intervention requiredto follow through or correct partner orders. DOM can also enable an organization to sell productsand services it doesnt own or stock — selling a product or service that is fulfilled by a channelpartner or distributors. DOM can create partner loyalty by reducing the number of errors a partnerneeds to resolve after a sale and decreasing the amount of support during a sale. Additionally,organizations are beginning to use DOM solutions for their multichannel and cross-channel ordermanagement where orders now go into a single DOM queue from multiple customer channels.Benefit Rating: HighMarket Penetration: 1% to 5% of target audienceMaturity: AdolescentSample Vendors: CommerceHub; Jagged Peak; Manhattan Associates; Oracle; OrderMotion;SAP; Sterling CommerceVirtual Environments for Consumer SalesAnalysis By: Gene AlvarezDefinition: Virtual environments (aka "worlds") — such as Activeworlds, Entropia Universe, EveOnline, Second Life, The Sims, There.com, Club Penguin and others — enable consumers tocreate avatar personalities online that can interact with other avatars in the virtual world. Theseenvironments enable interactions that can include the purchase of goods virtually and physicallyby the avatar and its owner.Position and Adoption Speed Justification: Even during the down economy, there is a growingnumber of online users in these virtual worlds, and many enterprises are looking for new ways foremployees to interact with customers. Enterprises can use this interaction capability to generatesales or customer interest that leads to offline sales. Although most of the activity is external andwithin brand-marketing range, commerce occurs with virtual items and is being extended into thephysical world with physical goods. However, enterprises will need time to determine how tocommunicate and interact with customers in these new worlds, and to teach employees how todirectly interact with those customers. Moreover, conducting sales in a virtual world wont be aseasy as real-world sales, and concerns about privacy and security can present major road blocks,such as: Understanding how virtual worlds work, such as the simple navigation of avatars or building virtual corporate locationsPublication Date: 3 August 2010/ID Number: G00205840 Page 71 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Learning how to use the virtual world of avatars to create sales in the online world or the offline real world Determining which worlds the organization should join or create, because users fit the demographics to which the organization wishes to sellHowever, the real challenge is understanding how to derive value from investments of time,money, human resources, and organizational and personnel learning curves. The technology cantransform how an organization sells, because the organization can interact directly withcustomers. Therefore, new sales methods, such as guided sales in a virtual world, can develop.User Advice: Brand-conscious enterprises, such as branded manufacturers, retailers and high-technology vendors, should at least explore virtual worlds to understand them, and to look forways to reach customers. Organizations should leverage "out of hours" pockets of expertise andexperience among employees to keep initial investment costs low. Organizations may create avirtual storefront or company headquarters online for brand marketing to begin interacting withonline avatars and their owners, and to investigate and evaluate — not necessarily to build —brand value or add value. When this is complete, organizations should look for opportunities tolink to avatars interests and sell goods to them in the virtual and physical worlds, and for ways tomake these connections happen.Business Impact: Virtualization of the enterprise will enable organizations to interact withindividuals and communities online. These interactions can contribute to branding, product designand marketing, and can generate sales.This technology can transform how an organization sells, because the organization can interactdirectly with customers. Therefore, new sales methods, such as guided sales in a virtual world,can develop. Imagine a sales associate helping an avatar choose virtual outfits that also can bepurchased online in the real world.Benefit Rating: TransformationalMarket Penetration: 1% to 5% of target audienceMaturity: EmergingSample Vendors: Activeworlds; Entropia Universe; Eve Online; Second Life; The Sims;There.comRecommended Reading: "Campaign Management: Extending Relationships Through theGaming Console""Social Shopping Will Shape the Future of E-Commerce""Five Best Practices for Establishing an Online Community for Marketing Benefits""Improving the Online Customer Experience""How Generation V Will Change Your Business"Online VideoAnalysis By: Andrew Frank; Michael McGuireDefinition: Online video describes the delivery of video on online portals over broadbandconnections to PCs, consumer smartphones and Internet-connected TVs. While short-form clips(one to five minutes) drove the initial popularity of online video, by the end of 2009 and carryingover to 2010, long-form professional and semiprofessional content — TV episodes and movies —Publication Date: 3 August 2010/ID Number: G00205840 Page 72 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • are growing in popularity. Since professional content — TV shows, movies and sportsprogramming — has its own market dynamics, Gartner addresses those in the "Internet TV" HypeCycle entry. Online video content ranges from trailers and clips deployed by incumbent mediacompanies and music videos from the music labels, to consumer uploads of many types of video,including TV clips or full episodes captured by computers with TV tuner cards or ripped from fixedmedia, as well as pure user-generated video (created and uploaded by consumers).To date, advertising is frequently mentioned as the primary monetization option, but it appearsthat broadcasters and content creators tend to see online videos primary value as a promotionaltool for content. However, by mid-2010, Hulu, an ad-supported online video site featuring TVshows and movies, decided to start charging a subscription fee to access content.Position and Adoption Speed Justification: The popularity of online video continues in 2010,with many consumers enjoying scanning mainstream content — clips of TV shows uploaded byconsumers, complete TV shows, sports clips and news shows, as well as consumer-createdvideo content — on their PCs and connected devices. These sites represent a significantopportunity for incumbent media companies looking to leverage the vast reach of portals such asYouTube, MySpace and the like.The disruptive nature of online video, and in particular how it is affecting the strategies of mediacompanies, was underscored by Viacoms decision in March 2010 to pull "The Daily Show" and"The Colbert Report" from Hulu, which is a joint venture of News Corp., NBC Universal and TheWalt Disney Company. The online versions of those shows are available on their respectivewebsites.By the end of 2009, consumer fatigue with the glut of unfiltered user-generated video, along withthe challenges of copyright enforcement and a persistent reluctance on the part of brandadvertisers to fully embrace the medium, led to a clear sense of disillusionment about theeconomic potential of online video. This has been reinforced by the admission of major players,such as Google with YouTube and News Corp. with MySpace, that monetization of online video isa bigger challenge than they anticipated.User Advice: For media companies and rights holders, short-form online video represents apowerful promotion tool for existing and future content properties. Handled properly, incumbentmedia companies can use online video as a useful vehicle for new types of market research — atool for establishing and nurturing online communities focused on multiple media companyproperties. This opportunity is best approached assertively but carefully. What short-form onlinevideo delivers in the form of large audiences, it can take away quickly with one snide ordismissive comment that spreads as quickly as, perhaps even more quickly than, the promotionalvideo or show segment a content company puts into the system.Advertisers can also potentially reach massive audiences, but they need to feel comfortable thatthe ads theyve placed in and around a video will not be juxtaposed with something objectionable.We expect larger portals to need pressure to provide more control over content and placementand to deliver better metrics.Enterprises can use the low-cost infrastructure of online video for corporate communications,training or other networked video-intensive applications that may once have been cost-prohibitive.Business Impact: Online video will impact all promotional activities of media companies andadvertisers, especially in political and cause-related domains. Online video has a global impacton market research, corporate communications, and copyright protection and licensing.Benefit Rating: HighMarket Penetration: 20% to 50% of target audiencePublication Date: 3 August 2010/ID Number: G00205840 Page 73 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Maturity: Early mainstreamSample Vendors: Dailymotion; Hulu; MySpace; Veoh; YouTubeVirtual AssistantsAnalysis By: Johan JacobsDefinition: A virtual assistant (VA) is a conversational, computer-generated character thatsimulates a conversation to deliver voice- or text-based information to a user via a Web, kiosk ormobile interface. A VA incorporates natural-language understanding, dialogue control, domainknowledge (for example, about a companys products on a website) and a visual appearance(such as photos or animation) that changes according to the content of the dialogue. The primaryinteraction methods are text-to-text, text-to-speech, speech-to-text and speech-to-speech.Position and Adoption Speed Justification: Computer-generated characters have a limitedability to maintain an interesting dialogue with users; they need a well-structured and extensiveknowledge management engine to become efficient self-service productivity tools. Asorganizational knowledge engines become increasingly better-structured and intelligent, self-service deployments relying on this source for knowledge are increasing. The adoption of VAs inservice, sales and education is starting to see deployment from some Fortune 1000 companies.End-user acceptance of VAs, driven mostly by their larger presence, is becoming less of achallenge than it was a few years ago. The growth in the art of image rendering has also seenincreasingly sophisticated human-like forms taking over from the cartoon-type charactersassociated with Generation 1 and Generation 2 VAs. Fourth-generation VAs are more easilyaccepted by many users as opposed to the first-generation VA depictions as cartoon-basedcharacters. The organizations that successfully deploy VAs often support the implementationthrough the use of artificial-intelligence engines that assist natural-language dialogues.First-generation VAs were stationary, with little visual appeal. Second-generation VAs broughtanimation and generated customer interest. Third-generation VAs look like humans and haveexcellent visual appeal, with responses to questions becoming increasingly accurate. Fourth-generation VAs not only look human, but also are embedded with speech and text interactions.The new fifth-generation VAs that are just emerging have excellent human-like image qualities,are able to understand multiple questions and have highly developed natural-language support.The first through third generations are very mature, but the technologies for fourth generationsand, especially, for the fifth generation, are emergent.User Advice: To use VAs successfully in customer service you need to focus the VA on onespecific area, and not apply the VA to all areas of the organizations products and services. UseVAs to differentiate your website and increase the number of self-service channels available toyour target market. Support VAs with a strong knowledge management engine for self-service tocreate meaningful and productive interaction, and focus on delivering a similar experience in thisand other self-service channels. Also, support VAs through invisible Web chat agents once theknowledge delivery of the VAs drops below an 85% relevance-of-response rate.Business Impact: Effective use of a VA can divert customer interactions away from anexpensive phone channel to a less-expensive, self-service channel. The use of a VA that is voice-enabled in a kiosk or an ATM can alleviate the need for typed interventions and can assist increating an interesting interaction for a nontraditional audience.Benefit Rating: HighMarket Penetration: 20% to 50% of target audiencePublication Date: 3 August 2010/ID Number: G00205840 Page 74 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Maturity: EmergingSample Vendors: Alicebot; Anboto; Artificial Solutions; Bangle Group; Cantoche; CreativeVirtual; eGain; Icogno; UmanifyRecommended Reading: "Self-Service and Live Agents Work Together"Consumer-Generated MediaAnalysis By: Michael McGuireDefinition: Consumer-generated media (CGM) refers to any written, audio or video contentcreated by end users, using basic or semiprofessional tools. CGM can include one-consumer-to-many applications such as photo sharing, publishing via blogs, podcasting, videoblogging and thelike, as well as "auteurs" looking to get their content to an audience.Position and Adoption Speed Justification: CGM is filling content pipelines with material thatcompetes with established media for consumer time share. While many types are fairly genericconsumer content such as photos and digital videos, recent events are showing such consumer-generated media in the form of videos and still images captured by mobile phones and uploadedto online sites. The potential of CGM is clearly understood by companies such as Yahoo asevidenced by its recent acquisition of Associated Content. This acquisition, in fact, was evidenceof the rapid evolution of this Hype Cycle entry and the difficulty of tracking technologies in theoverall media space.One could see the proliferation of CGM sites in the past year or two, and the evolution of earlymarket leaders such as YouTube to include more premium content offerings, as evidence thatCGM passed through the Trough of Disillusionment in late 2009. As we noted in 2009s HypeCycle, "the companies that emerge (from the trough) will be those that are able to generatemeaningful revenue streams from the large audiences they can attract." Additional evidence forthe impact of CGM can be seen in how news organizations are leveraging crowdsourcing ofinformation in the form of video and still images captured by consumers with camera-equippedmobile phones or low-cost HD cameras.User Advice: Elements of CGM must be embraced by traditional media companies and used totheir advantage, but with the caveat that vigilance is required. The proper mix of premium contentand CGM that supports many premium titles provides a 360-degree offering to consumers andprovides cross-marketing and multichannel advertising opportunities. While media companiesshould be diligent about tracking CGM publishing sites for potential copyright violations, theyshould also look to create relationships that enable consumers to legally share and embedsnippets of copyrighted work in their own creations.Business Impact: Because of the relatively low barrier to entry enjoyed by individual consumercreators, media incumbents could find it difficult to gain and maintain the attention of a meaningfulaudience in the short term if their primary motivation is to drive significant new revenue streams.However, Gartner believes that over the long term — three to five years — CGM creators anddistribution sites will provide marketing and promotional opportunities for media incumbents, aswell as a source for breaking news and information for news organizations.Benefit Rating: ModerateMarket Penetration: 20% to 50% of target audienceMaturity: Early mainstreamSample Vendors: Demand Media (Pluck); Flickr; Twitter; YouTubePublication Date: 3 August 2010/ID Number: G00205840 Page 75 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Campaign SegmentationAnalysis By: Adam SarnerDefinition: Campaign segmentation is the grouping of customers along multiple dimensions.Functionality includes the ability to group customers based on different attributes. For example,traditional attributes have focused on products owned/not owned and on demographics, whilesegmentation regarding customer value and life stages (needs) and the growing area ofanonymous persona management are newer. Modeling, clustering algorithms, visualization anddata mining can help companies determine key attributes to improve campaign segmentation.Position and Adoption Speed Justification: Many enterprises perform segmentation at a basiclevel, regarding product use and demographics. However, most enterprises do not use value-based or need-based segmentation — such as lifestyle or life stage, or psychographic personasegmentation (Generation V) — in an online environment. Value-based segmentation in the formof profitability analysis and long-term approaches to customer needs, as well as the emergingdata visualization techniques and data mining in the hands of a marketer, rather than astatistician, are moving campaign segmentation into the mainstream.User Advice: Move beyond simplistic one- or two-dimensional analyses. Use segmentationtechniques based on a combination of needs, wants and actions to build a more complete view ofthe relationship than schemas, which are based on only one or two dimensions. Create eight to12 formal customer segments around which overarching customer strategies can be developed.These should be descriptive in nature and easily communicated to the rest of the organization.Then, use tactical segmentation based on multiple attributes/modeling that help target eachformal segment with actual offers and campaigns.Business Impact: Campaign segmentation helps refine and better align the value propositions ofcompanies and products with customers. Life cycle types of segmentation strategies areparticularly relevant in the financial industry, where reconciliation of multiple services occursaround a time dimension.Benefit Rating: HighMarket Penetration: 20% to 50% of target audienceMaturity: Early mainstreamSample Vendors: Alterian; smartFOCUS; SAS; SPSS; Teradata; UnicaRecommended Reading: "Magic Quadrant for Multichannel Campaign Management"E-Mail MarketingAnalysis By: Adam SarnerDefinition: E-mail marketing is the use of the e-mail channel as a method for deliveringmarketing messages.Position and Adoption Speed Justification: E-mail marketing continues to have high visibility.Many companies have experimented with it or are sending e-mail marketing messages on aconsistent basis. However, many use e-mail as a stand-alone mass-advertising bulk tool, ratherthan for targeted communication. As a result, a backlash has developed, and the averageresponse rate for mass-marketing messages has dropped to below 3%. The "intrusion factor" fore-mail marketing makes it a poor technique for customer acquisition, with privacy laws forcingopt-in policies that mandate asking each customers permission before sending any type ofmarketing message via e-mail.Publication Date: 3 August 2010/ID Number: G00205840 Page 76 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Marketers have discovered that the pressure to achieve cost benefits has outweighed theconsideration of e-mails usefulness to customers. Techniques for marketing are slowlyimproving, with event-triggered marketing and lead management processes that seek to addrelevance, such as right time and right customer to the medium. Using contextual/relevanttechniques will raise the value of the e-mail for the customer, rather than using the tool as justanother way to push out material to customers.User Advice: Most e-mail marketing technology is used for execution and delivery of e-mailmarketing campaigns. However, it is more important to focus on what will go into a marketingmessage. Companies need an understanding of to whom the e-mail will be sent and how it tiesback to the organizations goals. Do not create another stand-alone, siloed channel for customermessages, or your organization will risk excessive contact and duplication with other messagingchannels. Integrate e-mail marketing in campaign management applications that coordinatecustomer preferences, segmentation, predictive analytics and more. This will create relevant,targeted messages that improve e-mail conversion rates and overall campaign managementeffectiveness.Business Impact: As part of an overall campaign management strategy, e-mail marketing canserve as an effective marketing communication tool between marketers and customers. A well-crafted, targeted e-mail (i.e., one that is better-targeted, and sent in smaller lots to specificsegments) can receive a 10% to 15% response rate, which is higher than nontargeted, stand-alone mass mailings. In addition, your company can collect real-time information about customersand use this data as part of an overall marketing strategy.Benefit Rating: ModerateMarket Penetration: More than 50% of target audienceMaturity: Mature mainstreamSample Vendors: Axicom; e-Dialog; ExactTarget; Experian; Harte-Hanks; Silverpop; StrongMailSystemsRecommended Reading: "Magic Quadrant for CRM Multichannel Campaign Management"Preference-Driven PersonalizationAnalysis By: Adam SarnerDefinition: Preference-driven personalization involves the detection and collection of explicitpreferences, and the determination of actions, treatments or types of interactions. Functionalityincludes online user profiling, rule-based triggers (automated business logic), collaborativefiltering (using similarities among customers for recommendations), configuration techniques(having the user configure a product or service to his or her specific needs), and online taggingand/or voting capabilities.Position and Adoption Speed Justification: The term "personalization" has been hyped by themarket and is not clearly defined or understood. Personalization is a strategy of relevancy andhas been geared toward implicit inferences based on past customer behaviors using data-miningtechniques, such as predictive analytics, clustering and behavioral scoring. However, factors suchas privacy and trust concerns will shift the market from hidden, implicit techniques to visible,explicit ones, where customers are choosing services and marketing content, and defining andmaintaining customer contact rules, rather than the company deciding them.Preference management techniques are geared toward "opt in" techniques, where the customerexplicitly gains more control over what information is being shared and why. It also enablesPublication Date: 3 August 2010/ID Number: G00205840 Page 77 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • companies to get a permission-based view of customers wants and needs. Preferencemanagement techniques are being added to campaign management, particularly as e-marketingautomation becomes integrated with traditional campaign management solutions. Web 2.0, whichcenters on customer control and the ability to share preferences (for example, social CRM) isaccelerating preference personalization techniques within marketing automation. More than 80%of campaign management vendors will have more options for this by year-end 2010.User Advice: Take advantage of the high interactivity of the Web channel (including customerswillingness to engage companies with their input). Create opportunities for customers tocontribute to their user preferences to add, change and refine what, where and how they want toreceive tailored marketing interactions. Shift from push-type communications to pull-orientedcommunications that use explicit customer preferences as the context for the communication.Business Impact: By taking advantage of customer preference techniques, organizations cangather and reconcile behavior and customer events that take place online with offline interactions,such as the call center, branch or store, for a more-consistent (and better targeted) campaignstrategy. Using a preference profile will promote engagement and explicit suggestions on whatcustomers actually want from you.Benefit Rating: ModerateMarket Penetration: 5% to 20% of target audienceMaturity: Early mainstreamSample Vendors: ATG; e-Dialog; ExactTarget; Oracle-Siebel; UnicaRecommended Reading: "Marketing Framework: Essential Building Blocks for MultichannelCampaign Management Functionality""Magic Quadrant for CRM Multichannel Campaign Management"Climbing the SlopeConsumer Digital Rights ManagementAnalysis By: Michael McGuireDefinition: Consumer digital rights management (DRM) technologies control how consumers canuse copyrighted material that is distributed in digital form, such as music or video files, or text ine-books.Position and Adoption Speed Justification: For one media industry sector — music —encrypted DRM solutions are deployed only on online music subscription services, with all a lacarte retail downloads being open (unprotected) MP3s (Amazon, Rhapsody download store,others) or AAC files (Apples iTunes). Legitimate online music distribution continued its verystrong overall growth in 2009, with Apples iTunes dominating the market.In January 2009, the company announced it succeeded in convincing all the major labels, andmost independent labels, to sell unprotected files. While the sale of unprotected digital files is nowthe norm for the a la carte segment of the online music market, Gartner believes music labels, TVnetworks and movie studios will, at varying times, adapt their content protection strategies toembrace the ability to use combinations of watermarking and tracking technologies that allowconsumers to sample and virally share content.In late 2009 and early 2010, a number of online music services started leveraging a newly flexiblelicensing posture by the major labels and started testing cloud-based music services in whichPublication Date: 3 August 2010/ID Number: G00205840 Page 78 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • consumers can stream large catalogs of major- and independent-label content to their PCs andsmartphones, with the additional capability of allowing the consumer to cache collections of songs(limited only by the available storage of a smartphone), thus allowing consumers to listen to thecontent when their devices are not connected to the Internet. It must be noted that DRMtechnology, from entities such as Microsoft, is used to protect the cached music on the device.However, for consumers, this does make the DRM virtually unnoticeable when compared withprevious incarnations of online music subscription services.For other types of content, such as movies, TV shows and e-books, the levels of user flexibilitywill vary by content, determined by such factors as production cost (feature-length movies cost farmore to produce than individual song tracks), usage mode (music tends toward repeat usage,while most video content is single use), business model (ad-supported versus end-user-paid) andmedia format considerations (music CDs and free-to-air TV are less protectable than Blu-rayDVDs and e-books).Previously, we had written about industry efforts at creating interoperable DRM solutions, but anew consortium of Hollywood and technology companies — the Digital Entertainment ContentEcosystem (DECE) — is slightly lowering its aim from interoperability to compatibility. Gartnerremains skeptical of this consortium because of what we believe will continue to be hassles overIP and licensing, given DECEs membership. It includes technology and consumer electronicsvendors such as Microsoft, Sony, and Toshiba; DRM providers such as Widevine and Verimatrix;content companies such as NBC Universal and Warner Bros. Entertainment; and cable networkproviders such as Comcast. Conspicuously absent is Apple.In the e-book space, there is a potentially troublesome fragmentation in the marketplace, asAmazons Kindle device/service combination is utilizing both a proprietary file format and DRMscheme that locks consumers into the Kindle ecosystem. Other competitors and book publishersare standardizing on the Epub file format and usage of Adobes DRM technology. Yet, evenwithin this, there is some fragmentation. While both Barnes & Noble and Sony utilize Epub andAdobes DRM technology, they do not both utilize Adobes Digital Editions software, meaning thatSony e-bookstore clients cannot purchase from Barnes & Nobles store, or vice versa. Given thatthe e-book market is still very young, this situation is likely to change in the next one to two yearsas the marketplace — consumers — vote with their wallets.User Advice: Content companies and rights holders should never expect to achieve perfectcontent protection. Instead, they should invest their energies into creating business models thatassume consumers will continue to share content. Any type of consumer DRM must enable theselinks to form.Rights holders must partner with DRM providers and others to create solutions that protectcontent but enable it to be used in social networks and encourage viral sharing. Viral sharing (aform of viral marketing) is becoming a cornerstone of promotion and marketing of content in theage of digital natives.Rights holders intent on using DRM to restrict unauthorized copying must ensure that usage rulesand denial-of-access scenarios for users do not create sufficient frustration that ordinary usersrebel against these technologies and bring manufacturers and retailers with them, as hasoccurred with music. Apples FairPlay DRM would appear to be the standard here.Business Impact: The technology protects copyrighted intellectual property and preventsredistribution. There is a risk for vendors that emphasize the lockdown aspect of DRM and thatare not able to refocus their technologies to enable rights holders to use DRM as primarily atracking, accounting and marketing tool. By shifting the emphasis from locks to accounting andtracking, media and technology companies can look to increase the reach of their content withoutgiving up the ability to monetize it via highly targeted advertising, for example, or subscriptionPublication Date: 3 August 2010/ID Number: G00205840 Page 79 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • models. Once the focus is on tracking and accounting, media companies can craft new businessmodels based on existing consumer behavior, as opposed to trying to curtail or eliminate thebehavior by technology approaches that, by and large, have not worked.While we have listed the technologys benefit as limited, and we fully acknowledge its limitations,the reality of "network effects" and the potential for unfettered social sharing of copyrightedcontent — without compensation for the content creator — could be far worse.Benefit Rating: ModerateMarket Penetration: 20% to 50% of target audienceMaturity: Early mainstreamSample Vendors: Adobe; Apple; Microsoft; WidevineRecommended Reading: "Foundations for Digital Experience Management Are in Place""Charting the Shift of DRM to Digital Experience Management"Content Delivery NetworksAnalysis By: Lydia Leong; Michael McGuireDefinition: Content delivery networks (CDNs) are a type of distributed computing infrastructure,where devices (servers or appliances) reside in multiple points of presence on multihop packet-routing networks, such as the Internet, or on private WANs. These devices are used to deliver avariety of application-fluent network services. If peer-assisted delivery is used, clients may alsobe used to augment delivery via a peer-to-peer protocol.A CDN offloads origin servers via edge caching and offers improved latency via closer proximityto the user, as well as intelligent optimization techniques. CDN delivery of static objects — HTMLfiles, image files, JavaScript libraries and the like — is called content offload. A CDN can be usedto distribute rich media — such as audio and video — as downloads or streams, including livestreams. It can also be used to deliver software packages and updates, as part of an electronicsoftware delivery solution.Finally, a CDN may also provide services such as global load balancing, Secure Sockets Layeracceleration and dynamic application acceleration via WAN optimization techniques. Within themedia industry, all of these uses are common and rich-media delivery via progressivedownloading is the most frequently used service. Use of all of these services is also commonwithin the e-commerce industry and content offload is the most frequently used service.Position and Adoption Speed Justification: Two irresistible forces are driving increaseddemand for bandwidth: Media companies are seeking competitive advantages by moving more content to online distribution points. Consumer-generated digital media in the form of podcasts or videoblogs are being published on social networking sites.The resulting demand for bandwidth to support the efficient uploading and downloading of digitalmedia files (and related business opportunities for creating sites and services to accommodatethese forces) has created the need for CDNs. In the media industry context, the CDN market willmature rapidly, as media companies scramble to develop multiple distribution options to deal withthe fragmentation of their core audiences and reassert control points lost in the move fromPublication Date: 3 August 2010/ID Number: G00205840 Page 80 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • physical to digital media. Importantly, CDNs can be the foundation for enhanced services, suchas license management, copyright control, spam filtering and virus scanning.In the context of the e-commerce industry, a rapid fall in CDN prices over a three-year period hasled to a dramatic improvement in the return on investment for using a public CDN to augment e-commerce website performance and to provide resiliency and continuous availability. The rise of"cloud" CDNs with no contractual commitments allows even the smallest e-commerce sites toreap its benefits.Using a CDN is often less expensive than buying servers and bandwidth. While deploying a CDNfor a well-structured e-commerce site is simple and straightforward, sites that have been badlystructured and implemented can lead to difficult CDN deployments and vendor lock-in.User Advice: Media companies, content providers and emerging media titans must carefullyassess the opportunities for partnering with CDNs. As more consumers look to online serviceoptions for searching and acquiring content, an efficient and seamless experience will mean thedifference between success and failure. CDNs can assist in improving end-user performance,such as streaming of cached assets, as well as helping to reduce bandwidth costs for high-volume and content-heavy sites.Companies that are engaged in e-commerce should also assess CDN services, even for smallsites. Not only can a CDN reduce direct costs, but site performance improvements can help driveincreased page views, longer site visits, higher conversion rates and higher "shopping cart" value.CDN assessments should always include real-world testing, which compares the technicalperformance and business metrics for the site with and without a CDN, for each CDN underevaluation.Business Impact: Content providers and media companies have the most to gain, in terms ofcreating strong partnerships with CDN providers. New entrants to the CDN market, as well as theincreasing demands of delivering online videos to multiple distribution channels, have placedstrong pricing pressure on the commodity CDN services, especially no-frills progressivedownloading of video.We believe CDNs will explore all avenues for improving efficiencies and driving demand forvalue-added services, such as large-library content management or direct-to-consumerdistribution models for individual media companies. Network service providers are increasinglyentering the CDN market, in their race to build out value-added services that can providedifferentiation and defy the bandwidth commoditization trend. However, broadband serviceproviders are wary of the impact of the net neutrality debate; if net neutrality regulations orequivalent market forces prevail, they may be unable to offer CDN services of their own, sincethese offer a differentiated quality of service for Internet delivery.E-commerce companies also have much to gain from a relationship with a CDN. Such companiesoften use many of a CDNs value-added services, not just its basic content delivery capabilities,and make use of dynamic delivery capabilities. This leads to greater vendor lock-in and a lesscommoditized market. Because e-commerce traffic is much lower than rich-media traffic, e-commerce companies pay much higher prices, per byte, than media companies do; they do notreceive large-volume discounts and they are likely to buy value-added services for which there isless competition and therefore greater pricing power for the CDNs that offer them.We believe that CDNs will continue to increase the breadth and scope of these additionalservices, expanding the range of application-fluent network services and facilitating relationshipsbetween e-commerce partners, including advertisers.Benefit Rating: HighPublication Date: 3 August 2010/ID Number: G00205840 Page 81 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Market Penetration: 5% to 20% of target audienceMaturity: Early mainstreamSample Vendors: Akamai; AT&T; CDNetworks; ChinaCache; Internap; Level 3 Communications;Limelight NetworksE-Commerce Web 2.0 Sales ToolsAnalysis By: Gene AlvarezDefinition: E-commerce Web 2.0 sales tools are based on three anchor points for Web 2.0: Technology and architecture: Web 2.0 implies the development of Web-oriented architecture (WOA), which is a subset of service-oriented architecture (SOA). WOA provides a globally linked, decentralized model that is network-centric (as opposed to device-centric) and extensible. Relevant technologies include Really Simple Syndication (RSS), Ajax, Web services, plain old XML (POX) and representational state transfer (REST). Community and social: Technologies such as blogs, wikis, folksonomies and others clearly are changing the way citizens and consumers relate to their suppliers and each other. Business and process: There is a new business dimension, such as new advertisements, and pricing models have appeared thanks to the emergence of Web services and mashups — the ability to mix content from more than one source on the Web in the same application, assuming that government policies are conducive to this.Web 2.0 techniques like Ajax, mashups and user-defined content (e.g., blogs, wikis and productreviews), are used with an e-commerce solution to improve Internet sales through an enterprisesWeb channel.Position and Adoption Speed Justification: Organizations desire to increase Internet salescontinues to push websites forward and drive site upgrades. As a result, the market is reacting intwo ways: Software solution providers are adding new Web 2.0 functions to their solutions, such as product reviews or other user-generated content, like wikis or blogs and RSS feeds, and rich Internet application (RIA) capabilities, like mouse-over information previews. User organizations are leveraging Web 2.0 techniques to enable ease-of-use improvements, and to provide new capabilities that "spice up" and differentiate the Internet selling experience by using RIAs to help customers locate products and improve customer experiences online.However, Type A organizations in industries like retail have been leading the way with their use ofWeb 2.0 sales tools, and many fast-follower Type B organizations have also adopted RIAs. Otherindustries, such as industrial manufacturing, are beginning to adopt these tools, and some B2Borganizations, such as distributors, are benefiting from the use of RIAs, because the productsdemonstrate characteristics similar to those sold to consumers — for example, using the sameRIAs, protective welding gloves can be sold as skiing gloves.User Advice: Enterprises should begin to enable these technologies to create rich Internetcustomer experiences. Technologies like Ajax can provide visible site experience improvements.For example, Ajax can be used to create applications that can enable improved productPublication Date: 3 August 2010/ID Number: G00205840 Page 82 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • visualizations, provide prepopulated fields and improve guided selling. Enterprises should beginby conducting site audits to identify processes that require multipage interactions with customersand target these for redesign using Ajax.Another option is the use of mashups that can combine various functions into a more meaningfuluser experience: For business-to-consumer (B2C) sales product inventory, information can be mashed together with store location/mapping applications to enable in-store pickup of Web- initiated, e-commerce transactions. In B2B sales, sample product configurations can be combined with product reviews of individual components to highlight popular or highly rated configurations.However, enterprises must be disciplined in creating mashups. These should enable task orbusiness process improvement. Therefore, enterprises must always ask, "What does thisimprove?" Users should look for ways to integrate multiple Web 2.0 technologies to provide aconsistent customer experience. Evaluate Web 2.0 technologies with a view toward providing aclearly defined ROI or business benefit and an improved site experience.Furthermore, user-defined content can help customers with product evaluations and with anunderstanding of the products use and performance. It can also provide an enjoyable, easy-to-use user experience. Organizations should enable user-defined content, starting with productreviews that provide product comparisons and leverage noteworthy issues to guide the creationof RSS feeds that increase sites appeal.Users should not think of these three Web 2.0 technologies (Ajax, mashups and user-definedcontent) as distinct. Instead, they should view them as promoting a new, overall customerexperience for buying. Moreover, other Web 2.0 technologies may not have a clearly definedROI, and may have legal issues associated with them (for example, user-defined productreviews). Therefore, users should focus on those Web 2.0 technologies that provide siteexperience improvements and useful sales tools.Business Impact: Due to the influence of Web 2.0, the online shopping experience for B2B and B2C will change dramatically. Ajax, RSS and user-contributed content will deliver the most value to the customer, and will drive customer conversion rates higher than ever before. Ajax, RSS and user-contributed content can be directly linked to the online selling process and can directly influence sales. Web 2.0 sales tools will drive standards on intuitive, browser access to applications for B2B constituencies within inside sales, field sales and partner networks, also driving improved usability and sales adoption of specific sales automation systems.Benefit Rating: HighMarket Penetration: 5% to 20% of target audienceMaturity: Early mainstreamSample Vendors: Adobe; Allurent; Amazon; Bazaarvoice; eBay; Google; IBM; Microsoft; Oracle;PowerReviews; SAPPublication Date: 3 August 2010/ID Number: G00205840 Page 83 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Recommended Reading: "Nine Web 2.0 Tools Can Boost E-Commerce Sales"Mobile SearchAnalysis By: Sandy ShenDefinition: Mobile search enables people to search for information on a mobile phone.Position and Adoption Speed Justification: There are five types of mobile search service: SMS-based: The user sends a text query via Short Message Service (SMS) to a service provider and receives a reply from an automated or human-assisted system. Examples are Google SMS and ChaCha. Browser-based: This is similar to online searching, but uses a mobile phones Wireless Application Protocol or full browser facility. The experience is less user-friendly than on a PC, and the results tend to be less satisfactory. Examples are Google and Yahoo Search for mobile. Location-based: This can use location technology, or not. When used with location technology, search is a feature of a location application. When used without location technology, it can be a stand-alone local search service in which, for example, the user enters a zip code to access local directories and weather forecasts. Image-based: The user takes a picture, sends it to a server and receives the results back — alternatively, a client application on the phone may fetch the results from the server. Examples include Mobot and SnapTell (now part of Amazon), which allow users to send pictures to find out more information or receive coupons. Voice-based: This can be achieved using a phone with voice recognition capabilities, or provided by an operator using a client/server architecture. Examples include Nuances Voice Search.SMS-based searching remains relatively niche. It needs to gain scale if it is to be sustainable.Browser-based searching has been adopted by the mass market, following the pattern of onlinesearch. Performance has improved since the early releases, thanks to the availability of moremobile content and optimized search engines and indexing for mobile sites.Location-based searching is increasing fast due to the proliferation of location-related servicesand applications. This is the second most popular form of searching after browser-based search.The ease of searching using location applications — as opposed to having to open a separatebrowser — makes for a smoother experience.Image-based searching is available, but the quality varies considerably by provider. Somespecialize in product or point-of-interest searches; others in human faces, which requires moreadvanced algorithms.There are other application-specific search services, such as for music, video and social-networking feeds. These are provided as embedded features of the application.The future of mobile search will involve a mix of technologies and service providers catering todifferent use cases and user preferences. In local markets, a single technology or a couple ofproviders will not dominate mobile search as is currently the case with online search. On a globallevel, a few worldwide players with huge cloud-based data infrastructures are likely to dominate.Publication Date: 3 August 2010/ID Number: G00205840 Page 84 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • User Advice: Companies should optimize mobile Web designs and indexing to achieve betterresults. They should also explore the potential of advertising through mobile search, especiallylocation-based searching — provided the results are relevant to users.Business Impact: Site owners can use mobile search to increase site traffic from mobile users.Mobile operators can expect higher network traffic and more content purchases as a result, andmay also share advertising revenue with search providers.Organizations in some lines of business are more suited than others to exploit search-basedadvertising: the former include restaurants, hotels, car rental firms, parking lot companies, gasstations, hospitals and cash point providers.Benefit Rating: ModerateMarket Penetration: 5% to 20% of target audienceMaturity: AdolescentSample Vendors: Baidu; ChaCha; GeoVector; Google; Jumptap; Medio Systems; Microsoft;Nuance; V-Enable; YahooRecommended Reading: "Dataquest Insight: The Top 10 Consumer Mobile Applications in2012""Dataquest Insight: Impact Ranking of Consumer Mobile Applications, 2009"Social SearchAnalysis By: Whit AndrewsDefinition: Social search uses elements of user behavior, implicit and explicit, to improve theresults of searches inside and outside enterprises. Such elements are typically stored asmetadata, making social search a sort of metadata mining. It also enables users to disambiguateresults from their queries more effectively. Examples include such steps as: saving searches toshared folders; tagging searches or documents to express what they are about for other users;and the use of implicit indicators of value, such as saving documents as shared bookmarks orprinting documents for later use.Position and Adoption Speed Justification: Social search is an element of Internet searchbehavior and provides significant value to Web users. Consumer expectations have driven it intothe enterprise, where it augments search capabilities and allows for "people," instead of"document," finding. Microsofts inclusion of social search elements in its current edition ofSharePoint will serve as a major factor in its increased adoption.User Advice: Include elements of social search in your projects, but do not expect it todramatically improve results. Disambiguation will benefit from social search use as usersscrutinize colleagues and fellow searchers results to establish meanings and relationships.Business Impact: Enterprise workers and customers will get better results faster through the useof social search.Benefit Rating: ModerateMarket Penetration: 5% to 20% of target audienceMaturity: AdolescentSample Vendors: Autonomy; Digg; Endeca; Furl; Microsoft; Vivisimo; YahooPublication Date: 3 August 2010/ID Number: G00205840 Page 85 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Recommended Reading: "What Social Search Means to Your Enterprise""Injecting Web 2.0 Innovation Into Enterprise Search"Web-to-Print ApplicationsAnalysis By: Pete BasiliereDefinition: Web-to-print (W2P) applications (which technology providers sometimes refer to as"print e-procurement") are a specialized class of e-commerce solutions that support the uniqueand complex specification development and RFP process associated with buying printedmaterials and services. W2P technology is used by printing companies involved with B2B andretail consumer sales.Position and Adoption Speed Justification: The limitations inherent in many general e-procurement solutions have opened the door to a wide variety of niche solutions for complexcategories of spending. The most popular categories for these specialized e-procurement toolsinclude printing, contingent labor, travel, facilities and telecommunications. While generic e-procurement solutions can be used for print procurement, they often need adaptations, such as e-forms or built-in RFQ functionality, to accommodate the exact specifications and othercharacteristics inherent in print buying.The amount of printing sourced through specialized W2P tools is growing as buyers gravitatetoward solutions that are well-grounded in print and procurement workflows. Many tools havedemonstrated the ability to streamline the print-buying process, reduce production errors and cutcosts. These successes have caused numerous small companies to enter the market, offeringW2P applications in addition to the other print workflow tools they have developed.User Advice: Print spending sourced through general-purchasing and e-procurement solutionswithout print-specific features inhibit those solutions ability to handle the many nuances of printbuying. As a result:Sourcing and procurement professionals must either force the generic solution to handle theunique elements of the print market or use a W2P procurement application for the purchase ofprinted materials and related services.End users must also look to category-specific e-procurement tools to drive efficiencies and on-contract spending for complex purchases. A general rule for considering a category-specificsolution is a minimum of $1 million in spending for that category. However, print spending in therange of $250,000 to $500,000 often warrants a W2P tool since savings of more than 10% (andfrequently as much as 25%) are not uncommon, offering a quick and permanent ROI.Business Impact: Enterprises with a significant level of print spending will certainly benefit froma W2P solutions specialized functionality and full-process support. Given that manyorganizations do not have people with in-depth print- and paper-buying expertise, a W2P solutionwill produce savings by streamlining the order processing workflow, reducing print errors, andrationalizing and reducing the variety of printed materials.Benefit Rating: ModerateMarket Penetration: 5% to 20% of target audienceMaturity: Early mainstreamSample Vendors: Bitstream; Cirqit; Claritum; e-Lynxx; Emptoris; Mtivity; NewlineNoosh;NowDocs; P3Software; Printellect; Standard RegisterPublication Date: 3 August 2010/ID Number: G00205840 Page 86 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Recommended Reading: "The Print Sourcing and E-Procurement Market "Integration as a ServiceAnalysis By: Benoit Lheureux; Paolo MalinvernoDefinition: Integration as a service (IaaS) is integration functionality — i.e., secure B2Bcommunications, data and message translation, and adapters for applications, data and cloudAPIs — delivered as a service. IaaS is always scalable, sometimes elastic, but is almost alwaysdeployed with enough multitenancy capabilities (see "Reference Architecture for Multitenancy:Enterprise Computing in the Cloud") such that one instance of a providers IaaS functionality cansupport multiple B2B integration projects across multiple B2B communities.There are two categories of IaaS: IaaS for traditional e-commerce projects IaaS for cloud service integrationThe first category has existed for over 20 years and is associated with traditional e-commerce(supply chain integration) projects, and the second category has emerged in the last four years inconjunction with the emergence of cloud services. While these two forms of IaaS share much interms of their definitions and functionality, they differ substantially in terms of their approach toimplementation, usage scenario, vendor landscape and user ecosystem.IaaS for Traditional E-CommerceTwenty years ago, providers of IaaS were generally called value-added networks (VANs), tradingnetworks, Internet VANs, etc. However, in recent years, traditional EDI vendors have evolved,and new vendors have introduced new types of IaaS to address various forms of e-commerce. ITproviders have labeled their various IaaS offerings as VANs, transaction delivery networks, Webservices networks, business process networks, business integration networks, business processhubs, integration service providers, marketplaces, EDI SaaS, integration SaaS and so on.Regardless of what vendors have named their B2B services, we have considered and rated themas integration service providers for the purposes of the "Magic Quadrant for Integration ServiceProviders." Nearly 100 IT service providers worldwide offer some form of IaaS, but other than thatpoint of commonality they are exceptionally diverse in their overall portfolios of IT services andindustries served. Such providers include: Evolving EDI VANs — for example, GXS, Inovis and Sterling Commerce Emerging Internet VANs — for example, EasyLink Services International, Hubspan and SPS Commerce Providers from a particular industry (but now serving multiple industries) — for example, Compuware (Covisint), Elemica, Liaison Technologies, Quadrem and Railinc E-commerce-focused providers offering SaaS and IaaS — for example, E2open, eZCom Software, RedTail Solutions and SPS Commerce SIs offering IaaS — for example, Atos Origin, Bluewolf, HP Enterprise Services and IBMIaaS for Cloud Service Integration/SaaS IntegrationAs SaaS and other forms of cloud services proliferate, there has been a corresponding increasein the need to integrate cloud service functionality with on-premises business applications anddata, or to link cloud services directly among various cloud service providers. While integrationPublication Date: 3 August 2010/ID Number: G00205840 Page 87 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • software is one approach to solving this requirement, many IT users choose IaaS for cloudservices, in part because that is consistent with their desire to shift the cost of IT infrastructurefrom a capital to an operational expense.From the basic functionality point of view, IaaS for cloud service integration is much like IaaS fortraditional e-commerce — it includes secure communications, data translation and adapters. Butbeyond these functional similarities, IaaS implementations for cloud service integration differsubstantially. Most providers of IaaS for cloud service integration (see "Whos Who in Cloud-Computing/SaaS Integration, Volume 1"and "Whos Who in Cloud-Computing/SaaS Integration,Volume 2") leveraged the intellectual property they originally developed for traditional e-commerce integration projects and enhanced it — e.g., by adding or improving multitenancy,provisioning capabilities and direct cloud API support — prior to launching new IaaS offerings forcloud service integration projects.Many IaaS for cloud service integration offerings — e.g., from Bluewolf, Boomi, Cast IronSystems and Informatica —include cloud-based integration development environments (IDEs)that can be executed from a standard Web browser. IaaS solutions for cloud service integrationare often distinguished by their emphasis on packaged integration specifically for cloud serviceintegration problem scenarios, such as synchronizing customers and orders betweensalesforce.com and Intuit (QuickBooks).Position and Adoption Speed Justification:IaaS Adoption for Traditional E-CommerceCompanies worldwide heavily leverage IaaS for traditional e-commerce projects (such as supplychain integration in retail and manufacturing) and for various other industry-specific requirements(such as track-and-trace in logistics or claims adjudication in healthcare). IaaS for such uses isquite mature, and providers of IaaS have invested in their IT operations to enhance functionality(e.g., adding business activity monitoring and improved community management), and to driveincreasing scale and efficiencies (e.g., switching to more-modern, scalable IaaS architectures).Those IT modernizations, combined with increasing adoption and the prevailing perception thatIaaS is increasingly a commodity, have been driving down IaaS prices for nearly a decade.Nevertheless, IaaS for traditional e-commerce is still a valuable IT service for companies doingB2B integration; therefore, adoption continues to increase, as indicated by the increasingnumbers of companies and transactions handled by the providers of IaaS each year (generallyranging from a 10% to 100% increase in the number of companies served and transactionsexchanged per year, depending on the size of the provider). This trend has been consistentworldwide year to year — even during the current worldwide recession — as more companiesseek outsourcing (subscription) alternatives to the significant (capital) cost of expanding B2Binfrastructure and staffing when it is necessary to scale up their B2B projects.IaaS Adoption for Cloud Service IntegrationCloud service integration is a relatively new B2B integration project scenario, yet the buyers ofIaaS for cloud service integration range from line-of-business IT buyers — primarily only focusedon the cloud service to on-premises integration problem — to more-traditional IT buyers —focused on cloud service integration and on traditional e-commerce integration. Providers of IaaSfor cloud service integration often sell directly to IT end-users; they also sell a substantialproportion of their IaaS services (we estimate 50%) through IT channel partners such as SaaSproviders, system integrators, value-added resellers and megavendors, such as Amazon andGoogle. This is because many IT service providers — particularly SaaS providers — mustaddress cloud service integration, yet would prefer to invest their limited R&D capabilities ondifferentiated functionality that builds a barrier to entry in their target markets, rather than makingPublication Date: 3 August 2010/ID Number: G00205840 Page 88 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • substantial investments to solve a technically complicated integration problem. Four years ago,there was basically no market for IaaS for cloud service integration. Today, we estimate thatcompanies spend $50 million on IaaS for cloud service integration, and that this IT marketsegment will grow at 25% CAGR for the next five years.IaaS Position JustificationThe widespread use of IaaS for traditional e-commerce projects has been pulling IaaS steadily upthe slope toward the Plateau of Productivity, and the fast-growing adoption of IaaS formultienterprise SOA projects and cloud-computing/SaaS integration projects is helping to driveIaaS momentum up the slope and ultimately into the Plateau of Productivity during the next fewyears. IaaS is being offered by a wide range of providers, from vendors that are primarily focusedon traditional e-commerce projects (such as GXS) and those focused primarily on cloud-computing/SaaS integration projects (such as Boomi).Although the Trough of Disillusionment is several years past, IaaS is slowly traveling up the slopeto the Plateau of Productivity. Vendors continue to expand and refine their IaaS offerings toincorporate new capabilities, including programmatic APIs (such as from Loren Data) to provisionand access IaaS services. Vendors are also implementing Web-based IaaS development insupport of IT end-user and independent software vendor (ISV) self-provisioning of IaaSfunctionality; adding better Web services and governance to support multienterprise service-oriented architecture (SOA) projects; expanding operations, including multisite regional datacenters to more effectively support international B2B projects; and improving communitymanagement tools to enable self-service IaaS and drive down costs for hubs managing largemultienterprise communities.User Advice: Consider IaaS for traditional e-commerce when you need to electronically exchange transactions, documents and messages with external business partners, and you do not wish to deploy your own B2B-enabled integration middleware and directly connect to the members of your B2B community directly. Consider IaaS for cloud service integration when you must integrate cloud services among cloud providers or with on-premises applications or data, and you prefer to consume this capability as a service, rather than purchase and deploy integration software. Multinational IaaS capabilities are maturing, but prospects should always verify whether a potential IaaS provider can meet their particular country-by-country requirements, including local-language support, e-invoice formats and regulations, and in-country IaaS network points of presence. When negotiating an agreement with providers, look for transparent and predictable pricing. Customers are increasingly signing deals with "bundled" B2B integration features, such as a tiered number of external business partners and volume, fixed-price in-line translation, and process visibility that associates relevant B2B documents (for example, purchase orders, advanced shipment notices and invoices for order to cash).Refer to the "Magic Quadrant for Integration Service Providers," "Whos Who in Cloud-Computing/SaaS Integration, Volume 1" and "Whos Who in Cloud-Computing/SaaS Integration,Volume 2" to gain an understanding of the highly diversified IaaS vendor landscape.Integration projects can be deceptively complex, and, by itself, IaaS doesnt always sufficientlyaddress customer requirements. Determine whether your IaaS provider also offers such servicesPublication Date: 3 August 2010/ID Number: G00205840 Page 89 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • as B2B integration outsourcing (see "Taxonomy and Definitions for the Multienterprise/B2BInfrastructure Market").Business Impact: IaaS has been widely deployed worldwide for more than a decade. In 2009,IaaS generated more than $1 billion in IT revenue worldwide for traditional e-commerce projectsand more than $50 million in IT revenue for cloud service integration. This makes IaaS one of themost widely adopted and well-established forms of application infrastructure delivered as SaaS(see "Application Infrastructure for Cloud Computing: An Emerging Market"). Although manycompanies still implement B2B projects themselves, leveraging a combination of in-houseintegration middleware and B2B standards or Web APIs, companies of all sizes in all industriesand in most well-developed regions have the option to outsource their B2B infrastructures, ratherthan licensing and deploying some form of in-house B2B integration software.Multienterprise projects are typically mission-critical, but the increased modernization, reliabilityand scale provided by most providers of IaaS mean that companies have a viable alternative toB2B software and in-house B2B infrastructure projects. Hence, from a sourcing point of view,they should treat B2B infrastructure investments like any other IT investment when choosingbetween implementing an in-house B2B infrastructure or relying on IaaS.Even the simplest in-house, single-server B2B infrastructure project may require off-site hosting,high-availability server configurations, disaster recovery capabilities, monitoring tools, archival ofbusiness documents and a well-trained staff. Service providers with well-established, multitenantinfrastructures can generally achieve economies of scale to deliver such capabilities. Forcommon integration scenarios, they often provide some form of configurable or customizableprepackaged integration solutions. This means they have the opportunity to save companies 10%to 30% on the cost of implementing B2B infrastructure themselves in-house, by leveraging theirpackaged integration, as well as fault-tolerant and disaster recovery capabilities across multipleB2B communities.Benefit Rating: HighMarket Penetration: More than 50% of target audienceMaturity: Mature mainstreamSample Vendors: Bluewolf; Boomi; BT Group; Cast Iron Systems; Comarch; Crossgate;DiCentral; E2open; EasyLink Services International; Elemica; GXS; Hubspan; Informatica; Inovis;Kewill; Liaison Technologies; Mincom; nuBridges; OmPrompt; Perfect Commerce; PervasiveSoftware; Railinc; RedTail Solutions; Seeburger; SPS Commerce; Sterling Commerce; T-Systems; Tieto; True CommerceRecommended Reading: "Forecast: Sizing the Cloud; Understanding the Opportunities in CloudServices""Whos Who in Cloud-Computing/SaaS Integration, Volume 1""Whos Who in Cloud-Computing/SaaS Integration, Volume 2""Cool Vendors in Multienterprise B2B, 2010""Magic Quadrant for Integration Service Providers""SaaS Integration: How to Choose the Best Approach""Cost Savings Finally Make the (European) E-Invoicing Steamroller Pick Up Speed"Publication Date: 3 August 2010/ID Number: G00205840 Page 90 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Knowledge Management for Customer Self-ServiceAnalysis By: Johan JacobsDefinition: Knowledge management for self-service includes corporate knowledge, agentknowledge, social knowledge, hosted community knowledge, partner knowledge and searchknowledge, and is the accumulation and management of a knowledge repository and the deliveryof that knowledge through a self-service interface. It involves a process of maintaining andexpanding the collection and categorization of knowledge to enable faster retrieval through aWeb-based interface of the appropriate data elements at the proper time to reduce dependenceon a human operator.Position and Adoption Speed Justification: Knowledge management, as an enterpriseinitiative, has been available for years. What is new is the rapid expansion into the areas of socialWeb communities. Within Web customer service (WCS), the knowledge database needs to bewell-structured to allow at least an 85% relevance of responses to searches and questions asked.Organizations that successfully exploit this self-service option have their knowledge databasessupported by dedicated knowledge workers who constantly update and fine-tune the knowledgeengine to allow an increasingly accurate level of response.The increased focus on social and community knowledge and authoring from external sourcesdirectly into the corporate knowledge repository has placed renewed focus on knowledgemanagement for self-service, resulting in a slow move across the Slope of Enlightenment.Organizations will use knowledge collection tools to harvest information that is being written abouta companys products and services. These collection tools will bring the information in-house,where it is reviewed and analyzed. If the information is valuable, then the knowledge base isupdated with the information. If the information is not usable, then it is discarded; and if theinformation is inflammatory or a complaint, then a decision is needed on how best to respond.User Advice: A knowledge repository takes six to eight months to structure well and to matureenough to allow an 85% resolution on first request. Appoint a dedicated team of knowledgeworkers to continuously evolve and expand the knowledge engine and provide feedback, or an"unresolved" facility on the self-service website, so that the user can notify the knowledge teamwhen a user query is not resolved. Also, implement a service-level agreement (SLA) of 24 hoursfor the knowledge team to capture a resolution to all unresolved items. Make sure that all thechannels (i.e., Web self-service) and agents in the contact center and Web chat use the sameknowledge repository to ensure a consistent and accurate response, irrespective of whichchannel the question is asked.Business Impact: This technology affects creating, acquiring, storing and maintaining corporateknowledge, information and data in a format that a Web-based, self-service application can easilyaccess, and the collection of knowledge from websites and hosted communities.Benefit Rating: HighMarket Penetration: 5% to 20% of target audienceMaturity: Mature mainstreamSample Vendors: Consona; Convergys; InQuira; Kaidara Software; Neocase Software; ParatureWikisAnalysis By: Nikos DrakosPublication Date: 3 August 2010/ID Number: G00205840 Page 91 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Definition: A "wiki" is a collaborative authoring system for creating and maintaining linkedcollections of Web pages. A wiki enables users to add or change pages in a Web browser withouthaving to worry about where and how the content is stored. A wiki simplifies the modification andreorganization of information and encourages what is often referred to as "wiki gardening." This isthe process of incrementally editing a wiki to preserve continuity, make additional connectionsand links, and generally clean it up.Key functions are: User-friendly "click to edit" features that make it easy to create, link, edit and reorganize the information users see on the screen, without having to understand the underlying file organization. The abilities to track changes, compare different versions and revert to a previous version, which make it easier to insert changes in the knowledge that any mistakes can be reversed easily. Static Web addresses for any wiki page, and even for any component of a wiki page (such as a paragraph), which makes it easy to link or refer to wiki content from other Web pages or Web-enabled systems and to integrate, search and access wiki content from elsewhere.The widespread use of wikis is influencing the way individuals and organizations think aboutcreating and sharing information beyond simple text. "Wiki-style" is becoming synonymous with acollaborative way of working in which multiple participants directly modify a common resource(text, table, report, photo, video, model, form and so on) in the same environment in which it isconsumed.Position and Adoption Speed Justification: Wiki products are available from many vendors,including established enterprise vendors. There are also open-source products.Wikipedia is the best-known publicly available wiki. It has raised awareness to the point whereusers often demand wiki-style collaboration support from their IT departments.Although wiki functionality is at the core of many social software products, it is beginning to resistsimple categorization as it becomes part of larger social software suites that also support blogs,discussions, user profiles and tagging.Wikis are increasingly being offered by content management and portal vendors.User Advice: Understand that there are advantages to using a wiki, rather than a conventionalrepository-style collaboration system. Be receptive to users who argue that a wiki will improveteam collaboration. Now is the time to broaden systematic deployments, as appropriate, and toevaluate the suitability of wikis in different collaboration scenarios (if this has not been donealready).Caution is required when setting up stand-alone wikis, as although these may help to solve short-term problems, they could also create additional content silos. Other potential problems with wikisinclude the need to deal with the variability of content quality, especially when once-thriving wikipage collections fall into disrepair when abandoned by their main contributors. Also, where wikisare used to create or maintain formal content (for example, client communications, productdescriptions and technical documentation), it may be necessary to introduce additional policiesand management controls to ensure appropriate quality and governance.Business Impact: Wiki-style information creation and sharing has significant advantages overtraditional collaboration environments in terms of improved transparency, usability andPublication Date: 3 August 2010/ID Number: G00205840 Page 92 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • information reuse. It encourages the creation of a "Web of interrelated information," where it isjust as easy to create internal cross-references as it is to reference external resources. Withinbusinesses, wikis are used as informal repositories for maintaining technical documentation,client communication, issue tracking, e-learning and training, general information sharing andknowledge management. They are also used to support communities of practice or interest,product development and idea exploration.Benefit Rating: ModerateMarket Penetration: 20% to 50% of target audienceMaturity: Early mainstreamSample Vendors: Atlassian; CustomerVision; IBM; Jive Software; MediaWiki; Microsoft;MindTouch; Socialtext; TWiki; XWikiRecommended Reading: "Magic Quadrant for Social Software""Moving Social Software Deployments Beyond Experimentation Project Overview 2009"Web AnalyticsAnalysis By: Bill GassmanDefinition: Web analytics are specialized analytic applications used to understand and improveonline channel user experience, visitor acquisition and actions, and optimize digital marketingcampaigns. Commercial products offer reporting, analytical and performance management,historical storage and integration with other data sources and processes. The tools are used bymarketing professionals, content developers and the websites operations team, and increasinglyprovide input to automated tools that target improved customer experience.Position and Adoption Speed Justification: More than 90% of the addressable market is usingsome form of Web analytics tools, although while millions use the free Google Analytics product,less than 50% of the addressable market is using advanced functions, such as customer-basedsegmentation, data warehousing and to export user activity events into remarketing products andcontent management engines. New challenges in analysis are video usage, mobile users, nativemobile applications and social media.The market has consolidated to the point where eight vendors represent more than 90% ofmarket revenue. However, there is a trend for content management vendors to add limitedanalytics functionality to their products. Although market growth slowed down in 2009, onlinechannels are recovering faster than the economy overall, driving increased interest in optimizingWeb activity. The free Google Analytics offering, continues to disrupt the market with everincreasing functionality, although still with significant limitations. The leaders in market revenuehave responded with a suite of marketing optimization tools to complement their analyticsproducts, high-performance ad hoc query tools for warehoused data, strong technology partnerprograms and consulting services. Leading vendors are building an "ecosystem" of Internet-based marketing products and partners tied together with its analytics platform. Partnerintegration includes data and process, and, in some cases, analytics are tied, in real time, withWeb content management systems.Since the 2009 Hype Cycle, has seen Omniture acquired by Adobe, to ease the integration ofanalytics into Flash applications. However, the market is still without open standards forinstrumentation or well-adopted metrics, and each vendors approach is unique. Delivery of Webanalytics solutions continues to be largely software as a service (SaaS) rather than in-houseproducts. More than 80% of total revenue comes from a SaaS subscription model. The biggestPublication Date: 3 August 2010/ID Number: G00205840 Page 93 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • challenges the market faces as it moves into the Plateau of Productivity are user maturity, smartmobile devices, context aware computing, social networking, support of portals and packagedapplications, and the lack of instrumentation standards. Some of these problems will beaddressed in the next two years, but there are big gaps between those who stretch the productsability and those who struggle to use them.User Advice: Most enterprises with a website have a reporting package, but there is a gapbetween basic reporting and the potential value that analysis features in the tools offer. Use thestrategic value of an enterprises website as a guide to how much investment in analytics skill andprocess is warranted. Business users should be the primary users of the tools, with support fromthe IT organization in the areas of instrumentation, data integration, process management andcomplex report generation. A business executive champion is important to drive the analyticculture. Ensure there are sufficient skills, create a training program that teaches employees withinroles how to use the products in their job, promote success and use consultants (external or froma vendor) to overcome technology hurdles in using the tools.If still using log files rather than JavaScript tags for instrumentation, explore the value of tagging.If not already doing so, start using the tools for multivariate testing. Analyze users by segments,including those using mobile devices and social channels. Find opportunities to try integratingcross-channel data, such as online data with the call center or point of sale. For advancedenterprises, start building a user-experience management ecosystem that blends analytics withsearch, social networking, content management, and automated outbound marketing.Business Impact: Using Web analytics has significant implications for marketing-orientedenterprises, or where the Web channel is strategic. The core process is to collect, analyze andmonitor customers behavioral activities on websites. A view into what is working and what is nothelps to optimize the online channel. The impact of search engine advertising, e-mail campaigns,cross-sell or upsell targeting and social media activity can be measured and refined through Webanalytics. Customer data can be gathered and incorporated into personalized and context richcontent for marketing campaign decisions (such as profitability analysis and segmentation), andleveraged for every interaction channel in a campaign management strategy. It is not uncommonfor business metrics of Web channels to double over baseline benchmarks within six months ofstarting a Web analytics program. It takes as long as three years to achieve advanced skills, atwhich point a continuous improvement process should be in place.Benefit Rating: ModerateMarket Penetration: More than 50% of target audienceMaturity: Early mainstreamSample Vendors: AT Internet; Coremetrics; Google; Nedstat; Omniture; SAS; Unica; Webtrends;YahooRecommended Reading: "Predicts 2010: Customer-Centric Web Strategies""Incorporating the Web Into Cross-Channel Customer Analysis""Customer Experiences With Omnitures Test&Target Website Product""Is Google Analytics Right for You?""Five Best Practices for Web Analytics Initiatives""Key Challenges in Web Analytics, 2009"Publication Date: 3 August 2010/ID Number: G00205840 Page 94 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Web and Application HostingAnalysis By: Ted ChamberlinDefinition: Web hosting, which includes custom and packaged application hosting, is theoutsourcing of some or all the infrastructure and management associated with Web-basedcontent and applications. Customers are provided with Internet data center facilities, bandwidth,computing capacity, security and storage, as well as associated managed services. Thisinfrastructure may be shared, dedicated, virtualized or provisioned on a utility basis. Typically, theWeb hoster is responsible for the day-to-day operation of the infrastructure. In application hosting,the provider will provide day-to-day application management tasks, in addition to infrastructuremanagement. The transfer of technical and staff assets is relatively rare, with customers tendingto provide their own software licenses and hardware.Position and Adoption Speed Justification: Web and application hosters have mastered thebasics of network, infrastructure and operational support in dedicated environments, and nowmust look to extend this level of competence to virtualized and cloud-centric environments.Although hosting providers have improved customer support processes, this area still continuesto be problematic for some. This movement toward "hybrid" hosting environments, whereapplications are hosted on a combination of dedicated and virtualized platforms, will start toseparate the leading providers from those that offer only partial solutions.The increased interest in cloud-computing and software-as-a-service (SaaS) models continues topush hosting providers to develop additional complimentary service stacks where compute,storage and network are provisioned in an elastic manner, and billing is based on consumption ofresources. These usage-based services, commonly referred to as "utility or infrastructure as aservice," focus heavily on server, storage and file-sharing capabilities; commercial enterpriseapplication hosting continues to thrive on dedicated enterprise server platforms, but is starting toincorporate virtualization and utility compute for nonproduction architectures.As hybrid hosting offerings become more user-friendly, enterprises will start to divide applicationsand workloads between both dedicated and multitenant-based hosting services. This drive towardmore-hybrid hosting will have financial implications for the hosters, in terms of capital investmentsneeded to fund virtualized compute and storage estates, and in terms of advanced automation forfabric control and for metering/billing systems.User Advice: Most enterprises should consider external hosting in their tactical and strategicsourcing decisions, because the services and products have become standardized and mature.Not every service provider can deliver all levels of support (especially enterprise applicationmanagement and utility/cloud services), so we recommend engaging in a competitive bidsituation to ensure that the provider has the requisite processes, facilities, networks and servicelevels.Business Impact: Web and application hosting provides a greater reliability, scalability andtechnology expertise than in-house hosting for all but a few enterprises that have complexapplication integration needs, or whose IT operations are large enough to match the scale of aWeb hoster. Web hosters typically also have higher-quality facilities, diverse carrier networks anddeeper system support personnel than enterprises. However, the customer is restricted to thetechnologies supported by the Web hoster, and, as with all outsourcing, there may be some lossof control.Benefit Rating: HighMarket Penetration: 20% to 50% of target audienceMaturity: Mature mainstreamPublication Date: 3 August 2010/ID Number: G00205840 Page 95 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Sample Vendors: AT&T; CSC; HP/EDS; IBM; Interoute; Macquarie Telecom; NaviSite; OrangeBusiness Services; Quality Technology Services; Rackspace; Savvis; Secure-24; SingTel;SunGard Availability Services; Terremark Worldwide; The Planet; Verizon BusinessSales Order ManagementAnalysis By: Gene AlvarezDefinition: The primary focus of sales order management is capturing and managing orders viamultiple channels (such as the Web, field sales and the call center), and coordination with ERPback-office applications. Sales order management systems provide technology and functionalityfor: Automating order entry and capture Capturing and coordinating with fulfillment systems and processes at the point of sales Increasing sales productivity when closing sales Documenting accurate deal terms and enforcing terms/ensuring order accuracy Coordinating fulfillment postorder capture Integration with other systems, such as sales configurators, proposal generators and quoting tools, e-commerce sites and other key sales systemsPosition and Adoption Speed Justification: Many organizations are extending their ERPsystems to support multiple sales channels such as e-commerce sites and call centers — all ofwhich are spurring the heavy adoption of sales order management. However, sales ordermanagement is a technology segment that has fallen between the cracks" of many CRM andERP systems, with some companies managing sales order management processes through ERPor financial management systems, and others through their CRM systems. As a result, there areseveral third-party vendors that specialize in providing distributed order management capabilitythat bridges ERP, CRM and financial management (see Distributed Order Management).User Advice: Because e-commerce user adoption is high, and due to the sale of bundledproducts and services, enterprises should ensure that their order management capabilities —specifically, order capture accuracy and integration with fulfillment systems — provide highfulfillment levels (that is, more than 95%) to achieve increases in customer satisfaction. If not,users should evaluate distributed order management solutions, since these are the nextgeneration of order management, which enables more order coordination across many systems.Business Impact: Improvements to order management increase order accuracy, enabling higherrevenue by reducing the hidden, aftersale costs of correcting improper orders. Moreover, ordermanagement capabilities should reduce the cycle time required to complete orders and getproduct deliveries to customers on schedule, which reduces returns and markdowns. This shouldalso impact the customer experience with the organization, since there will be fewer orders withissues that end up creating returns and markdowns. Increasing order accuracy enables fieldsales/inside salespeople to focus on selling activities.Benefit Rating: ModerateMarket Penetration: 20% to 50% of target audienceMaturity: Early mainstreamPublication Date: 3 August 2010/ID Number: G00205840 Page 96 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Sample Vendors: Amdocs; CommerceHub; Jagged Peak; Oracle; OrderMotion; SAP; SterlingCommerceEntering the PlateauEnterprise PortalsAnalysis By: Jim MurphyDefinition: An enterprise portal is a comprehensive website providing access to and interactionwith relevant information assets (such as information/content, applications and businessprocesses), knowledge assets and human assets by select targeted audiences, delivered in ahighly personalized manner. Enterprise portals may face various audiences, including employees,customers, business partners, citizens and community members. Enterprise portals provide userswith a cohesive experience across many systems, processes and interactions, and they provideIT organizations with unified platform for access and delivery of Web applications. Enterpriseportals are used widely to improve corporate communication, knowledge management, employeeproductivity, customer engagement and service, and process efficiency with partners, amongnumerous other purposes. Enterprise portals may be delivered via on-premises deployment ofhorizontal portal products, custom solutions requiring significant integration, traditional hostingmodels or cloud-based service offerings.Position and Adoption Speed Justification: Most Fortune 2000 enterprises have adopted oneor several portal platforms, and smaller organizations are actively adopting portal technologies aspackaged portal products become more readily consumable. Most enterprise portalimplementations were once geared toward B2E scenarios, often replacing first-generationintranets, but newer portal investments often address a broader range of scenarios, includingbusiness-to-customer, business-to-citizen and B2B initiatives.Unfortunately, too many enterprise portal initiatives have failed to deliver value. The reasons arenot entirely attributable to technology, and include poor governance, misalignment with businessobjectives, difficulty in integration and adaptability, and a failure to appeal to users. Nevertheless,newer-generation portal products must incorporate technologies to help companies addressthese problems, increasing the portals value and refining the user experience, and enterprisesmust employ user-centered design and usability testing methodologies as part of acomprehensive governance strategy. Evolved portal products invoke Web 2.0 capabilities, socialcomputing and rich Internet application (RIA) technology to offer more-engaging and more-adaptable experiences for business users. They offer simpler means of integration, includingwidgets and mashups, to improve interoperability and customization. New portal products employanalytics and optimization to help measure value and determine needed refinements. With itspromise of unifying user access, aggregating information and personalizing the experience forusers, the portal is often used as a foundation for mobile strategies and context-aware computing.While the market for portal products will continue well into the future, portal frameworks will soonbecome part of a broader user experience platform (UXP). The UXP will provide integration of thetechnologies used to deliver portals, mashups, RIAs, Ajax-enabled websites, Web contentmanagement and mobile applications. Integrated UXPs, whether provided as suites or singleproducts, will facilitate the development of portals and other rich Web and mobile applications.User Advice: Organizations should continue to consider enterprise portals as foundationalelements of their architectures, both as a means to extend ITs ability to deliver innovation tomore people, and as a means for the business to improve processes, exploit knowledge andengage customers, partners and employees.Publication Date: 3 August 2010/ID Number: G00205840 Page 97 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Many enterprises that have deployed portals face multiple, siloed deployments using differentportal frameworks. These enterprises should investigate appropriate portal containment andrationalization initiatives.Enterprises should leverage the portal framework as a foundation for a broader UXP strategy.Business Impact: The benefits of enterprise portals include controlling "info flood," providingsingle sign-on, enhancing customer support and enabling tighter alignment with partners. Thebenefits of internally facing portals include cost avoidance via employee self-service, facilitatingcollaboration and supporting content publishing. However, the most compelling business impactcan be improved business agility, velocity and throughput. Externally facing portals can provideincreased revenue and profitability. The enterprise portals biggest business impact is in reducingcycle times and improving the quality of process execution.Enterprise portals have been using Ajax to improve the quality of the user experiences theydeliver. Other RIA approaches can augment enterprise portal delivery. Portal products positionedto provide enterprise portals are also being used as deployment environments for enterprisemashups; in some cases, these include mashup assembly features.Benefit Rating: TransformationalMarket Penetration: More than 50% of target audienceMaturity: Mature mainstreamSample Vendors: BroadVision; Covisint; DotNetNuke; Drupal; Fujitsu; IBM; Liferay; Microsoft;Oracle; Red Hat JBoss; SAP; Tibco Software; Vignette/Open TextRecommended Reading: "Magic Quadrant for Horizontal Portal Products""Get Ready for the Portal-Less Portal"PodcastingAnalysis By: Allen WeinerDefinition: Podcasting started out as radiolike broadcasts of spoken word content, ranging fromeither individual recorded essays or free-form rants to more conventional multihost talk-show-likeformats across a varied set of content themes. Podcasts — video or audio — are delivered viaReally Simple Syndication (RSS). Since 2007, podcasts have evolved from these radiolike"everyman" creators, to an important alternative channel for established media companies — TVand radio alike — such as National Public Radio in the U.S. — which has a podcast version ofvirtually every show. Podcasts are primarily consumed on portable media players such as theiPod, with iTunes software (or Zune software for Zune devices), and on the growing class ofconsumer smartphones such as Apples iPhone.Position and Adoption Speed Justification: Podcasting established itself as a user-generatedcontent channel starting with voice-based podcasts, but it has subsequently evolved into videowith the emergence of videoblogs and has become an expected offering on any top-tier mediaportal. In fact, podcast aggregators such as Mevio (formerly known as PodShow) are increasinglyfocused on video as opposed to spoken word. Podcasts are increasingly used to augmentcontent offerings from print (newspapers and magazines), TV, and even conventional radiobroadcast networks. Revenue generation will come from advertisements (sponsorships andinserted audio ads), but virtually all podcasts are primarily viewed as audience development tools.User Advice: Advertising technology companies and agencies must continue to enhance theirofferings with podcast ad insertion capabilities (developed or licensed) and creative work thatPublication Date: 3 August 2010/ID Number: G00205840 Page 98 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • delivers campaigns and ads designed to work in the time-shifted context of podcasts. Mediacompanies are viewing podcasting as a cost-effective way to extend the value of content tanks byproviding a new channel for promotional efforts for movies, concerts, TV programs and the like.Newspapers are using podcasts judiciously to augment their online offerings with items such ascomplete interviews with the subjects of news stories or as an outlet for columnists.Business Impact: Podcasting has achieved its objective as a tool to let radio, TV and newspaperoutlets supplement and promote their mainstream offerings. As important is that it has givenconsumer-creators of broad- and niche-topic content a powerful communication tool. Additionally,it has found a niche as a useful enterprise communication tool.Benefit Rating: ModerateMarket Penetration: More than 50% of target audienceMaturity: Mature mainstreamSample Vendors: Apple; MevioSales ConfigurationAnalysis By: Gene AlvarezDefinition: Sales configuration systems represent a class of software applications that helpsorganizations represent product information, underlying components and options in a buyingprocess, as well as enforces specific standards or policies. Sales configurators reduce complexityand improve productivity by helping salespeople or customers in self-serve environments matchcustomer needs to unique products and service offerings. Sales configuration systems are usedto configure ship-to-order, assemble-to-order and engineer-to-order products, and to configurenonproduct information, such as pricing, discounts and customized financing plans.Position and Adoption Speed Justification: The technology is offered by large, establishedsoftware suite vendors, and is readily available for mainstream organizations with moderatelycomplex requirements. The vendor community is moving the market forward in several ways. Thecommunity is now offering new deployment options, such as software as a service (SaaS), and isincreasing its capabilities to support the configure price and quote/proposal business process.Additionally, mobile access to the Web is beginning to reduce the requirement for local (laptop)configuration tools that work on a synchronization model.Best-of-breed sales configuration vendors are taking the lead in developing cohesive configure,price, quote suites based on their flagship offerings, to help companies realize greaterefficiencies, effectiveness and competitive advantages with sale processes around needsassessment, pricing, quoting and proposal generation. ERP vendors, such as Oracle and SAP,will continue to expand functionality and tighten integration for sales configuration systems,making it difficult for best-of-breed vendors to maintain market share. Other than for small verticalniches or new deployment models, such as SaaS, some vendors will continue to struggle. ExpectERP vendors to continue to disproportionately own market share. However, interesting things arehappening in specific vertical markets, and for vendors interested in SaaS.User Advice: Strike a balance between acquiring differentiating functionality and managing therisk of working with smaller vendors. Evaluate best-of-breed vendors, because there are stillfunctionality gaps in larger suite vendors offerings, especially where a heterogeneous ERP orCRM environment may exist, or where heavy, industry-specific capabilities are important.Publication Date: 3 August 2010/ID Number: G00205840 Page 99 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Evaluate all vendors for support of the configure, price and quote/proposal process, as moreorganizations are moving toward the approach of dynamic in-line pricing during the configurationprocess and passing on a priced configuration to a quoting or proposal tool.Make sure that the sales configuration supports both rules and constraints, and offers an easy-to-use user interface that business users, not IT, can use in the sale process and model support.Business Impact: Sales configuration systems reduce costs by mitigating expenses associatedwith misconfigured orders and noncompliance by salespeople. In addition, sales configurationsystems increase revenue by facilitating greater flexibility at the point of sale regarding aligning acompanys products and services with customers needs. A reduction in customer confusion inconfiguring products/services through the Web channel can occur, and can increase the use ofself-service sales environments. This also can reduce the need for human guidance in dealingwith customer confusion. Sales configurators help salespeople save time in preparing for a clientcall, and in postcall work, thus clearing more time to schedule other sales activities.Benefit Rating: HighMarket Penetration: 20% to 50% of target audienceMaturity: Mature mainstreamSample Vendors: BigMachines; Cameleon Software; Cincom; Click Commerce; FPX; Infor-SSAGlobal; Oracle-Siebel; Oracle E-Business Suite; Oracle JD Edwards EnterpriseOne; SAP;Sterling Commerce; Tacton; TDCI; WebcomRecommended Reading: "Top Six CRM Sales Processes to Improve in a Cost-ConstrainedEconomy"BlogsAnalysis By: Michael McGuireDefinition: A blog, which derives from the term "weblog," is a website designed to make it easyfor users to create entries in chronological order. The entries are then displayed in reversechronological order (most recent entry first) and are generally archived on a periodic basis. Blogsare mostly used to express opinions on topical events such as sports, music, fashion or politics,but in the past two years, they have emerged as established communication channels forbusinesses as well as individuals. "Microblogging" has emerged via a platform such as Twitter,which not only allows users to write 140-character posts and share them with humanity, but alsoserves as an impressive news- and taste-sharing too, because a blog author or journalist can useit to drive awareness of new posts, articles and so on.Position and Adoption Speed Justification: Blogs are pervasive. Google, Yahoo, Six Apartand MSN, among others, have blogging platforms, and publishers have begun to monetize blogs.New users are coming onto the Internet every day, more than a few of whom are or will beutilizing blogs. Enterprise- and CEO-authored blogs are commonplace, with some companyexecutives regularly posting. Companies such as Yahoo or Google frequently announce new-product betas on their blogs. Those who promulgate the "blogs have peaked" position also ignorethe real trend toward extending the blogging phenomenon to mobile devices, with companiessuch as Nokia spearheading this effort. Twitters emergence as a very popular mobile phoneapplication is a great example of how the blog platform has continued to evolve.Gartner believes this will be blogs last year on the Hype Cycle, as they have become apermanent part of the communication ecosystem for individuals, media companies andenterprises. In business, blogs from executives or prominent employees are often the primaryPublication Date: 3 August 2010/ID Number: G00205840 Page 100 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • form of communications with customers, investors, partners and the public. (Gartner believesthat, at some point, financial regulators may examine how blogs can, or cannot, be viewed as"official" communications for publicly traded companies. If company blogs for publicly tradedcompanies do come under some form of regulation, such as how press releases on significantnews must be reviewed by the SEC prior to release, Gartner does not believe it will curtail orhinder their continued use.)User Advice: As a mainstream platform for content distribution, blogs are forcing the alignmentof IT and business forces, resulting in things such as blogging policies for public-facing divisionsof companies, not to mention the use of internal blogs to keep teams apprised of developmentsand more. Its generally a best practice to involve the companys public relations group in thereview of an enterprises blog and, if it is a public company, to involve investor relations.Companies should fully disclose the provenance of their blogs and eschew temptations to createfalse or deceptive "fan" blogs, often called "flogs," which almost invariably backfire into publicrelations disasters.Business Impact: Print content companies — from magazines to newspapers — have addedblogs to the list of established content streams. Public-facing media companies and enterpriseshave or are establishing blogging strategies and policies, including Gartner. A need for betterblogging tools will continue to drive developer and hosting business opportunities.By lowering the barrier to online publishing, blogs have also increased the business pressure onmainstream media outlets. For example, in June 2008, The Associated Press (AP) let it be knownthat it would be cracking down on bloggers who engaged in very liberal citation and quotation ofAP content. This disagreement hinges on the copyright principle known as "fair use" — as domany things in a media market where consumers exert tremendous control over contentdistribution. How bloggers use copyrighted material and the bloggers role in the dissemination ofinformation are challenges to incumbent media companies and underscore the disruptive natureof blogging technology. As a result, media companies and brand marketers have to invest inmonitoring tools in order to protect syndication policies in the case of media companies, andbrand integrity in the case of marketers. Several tools support the monitoring of brand mentions inblogs, and at least one tool — Attributor — can identify specific instances of copyrighted text inblogs.Benefit Rating: ModerateMarket Penetration: 20% to 50% of target audienceMaturity: Mature mainstreamSample Vendors: Blogger; Six Apart; Traction Software; WordPressConsumer Content Creation ToolsAnalysis By: Michael McGuireDefinition: Consumer content creation tools are used to capture, organize, convert, edit,embellish and publish consumer-created content on the Web. Within this class of tools, there arededicated PC-based applications and application suites, such as Adobes CS5 or Apples iLife, aswell as an increasing number of Web-based tools, such as Livestream and Ustream.Position and Adoption Speed Justification: Much application-based functionality is migratingto browser-based capabilities. Consumer adoption of these tools, especially among "digitalnatives," is significant. As these tools evolve further, these hybrid systems — browser-basedtools and online storage and publishing platforms — will enable new business opportunitiesbeyond software sales, such as premium subscriptions, various advertising forms andPublication Date: 3 August 2010/ID Number: G00205840 Page 101 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • promotional services for content creators. Mainstream media companies have adopted many ofthese technologies — publishing consumer-captured photos and videos, for example — toestablish and maintain a link with their consumers. In 2008 and early 2009, users startedleveraging their social-network pages as outlets for the content they developed using these tools.Given the spread of these tools, we believe this technology will move to "off the Hype Cycle"status by the middle of next year.User Advice: Software platform providers targeting the consumer market need to extendprograms from pure management of photos, videos and the like to providing simple (as fewbutton clicks as possible) file conversion and publishing options for content. Consumer contentcreation tools represent an important channel for media companies to promote new properties.Content companies must continue to work with technology companies to enable these channelsand ecosystems where consumer content creators can reuse copyrighted material for their ownnoncommercial uses. In addition, consumer content creators want to be able to add effects andpublish via social-networking sites, blogs and so on.Business Impact: Increasingly, easy-to-use digital editing tools for consumers, combined withmultiple publishing options, will have an effect on everything from service-related businesses tosoftware development. Media entertainment businesses will see major shifts in how and whatthey monetize. Libraries of older content could become very valuable as source material.Benefit Rating: HighMarket Penetration: More than 50% of target audienceMaturity: Early mainstreamSample Vendors: Adobe; Apple; Avid; Livestream; Microsoft; Sonic SolutionsRecommended Reading: "Predicts 2010: Ecosystems for Content Experiences""Key Issues for the Media Industry, 1H10"Publication Date: 3 August 2010/ID Number: G00205840 Page 102 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • AppendixesFigure 3. Hype Cycle for E-Commerce, 2009 Publication Date: 3 August 2010/ID Number: G00205840 Page 103 of 107 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Source: Gartner (September 2009) Publication Date: 3 August 2010/ID Number: G00205840 Page 104 of 107 © 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Hype Cycle Phases, Benefit Ratings and Maturity LevelsTable 1. Hype Cycle Phases Phase Definition Technology Trigger A breakthrough, public demonstration, product launch or other event generates significant press and industry interest. Peak of Inflated Expectations During this phase of overenthusiasm and unrealistic projections, a flurry of well-publicized activity by technology leaders results in some successes, but more failures, as the technology is pushed to its limits. The only enterprises making money are conference organizers and magazine publishers. Trough of Disillusionment Because the technology does not live up to its overinflated expectations, it rapidly becomes unfashionable. Media interest wanes, except for a few cautionary tales. Slope of Enlightenment Focused experimentation and solid hard work by an increasingly diverse range of organizations lead to a true understanding of the technologys applicability, risks and benefits. Commercial off-the-shelf methodologies and tools ease the development process. Plateau of Productivity The real-world benefits of the technology are demonstrated and accepted. Tools and methodologies are increasingly stable as they enter their second and third generations. Growing numbers of organizations feel comfortable with the reduced level of risk; the rapid growth phase of adoption begins. Approximately 20% of the technologys target audience has adopted or is adopting the technology as it enters this phase. Years to Mainstream Adoption The time required for the technology to reach the Plateau of Productivity.Source: Gartner (August 2010)Table 2. Benefit Ratings Benefit Rating Definition Transformational Enables new ways of doing business across industries that will result in major shifts in industry dynamics High Enables new ways of performing horizontal or vertical processes that will result in significantly increased revenue or cost savings for an enterprise Moderate Provides incremental improvements to established processes that will result in increased revenue or cost savings for an enterprisePublication Date: 3 August 2010/ID Number: G00205840 Page 105 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • Benefit Rating Definition Low Slightly improves processes (for example, improved user experience) that will be difficult to translate into increased revenue or cost savingsSource: Gartner (August 2010)Table 3. Maturity Levels Maturity Level Status Products/Vendors Embryonic In labs None Emerging Commercialization by First generation vendors High price Pilots and deployments by Much customization industry leaders Adolescent Maturing technology Second generation capabilities and process Less customization understanding Uptake beyond early adopters Early mainstream Proven technology Third generation Vendors, technology and adoption More out of box rapidly evolving Methodologies Mature mainstream Robust technology Several dominant vendors Not much evolution in vendors or technology Legacy Not appropriate for new Maintenance revenue focus developments Cost of migration constrains replacement Obsolete Rarely used Used/resale market onlySource: Gartner (August 2010)RECOMMENDED READING"Understanding Gartners Hype Cycles, 2010""Magic Quadrant for E-Commerce""Context-Aware Computing and E-Commerce""Magic Quadrant for Social CRM""Emerging Technology Analysis: E-Commerce On-Demand""Findings: CEOs Are Placing New Bets on E-Commerce as Part of Their Return-to-GrowthStrategy"This research is part of a set of related research pieces. See "Gartners Hype Cycle SpecialReport for 2010" for an overview.Publication Date: 3 August 2010/ID Number: G00205840 Page 106 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
    • REGIONAL HEADQUARTERSCorporate Headquarters56 Top Gallant RoadStamford, CT 06902-7700U.S.A.+1 203 964 0096European HeadquartersTamesisThe GlantyEghamSurrey, TW20 9AWUNITED KINGDOM+44 1784 431611Asia/Pacific HeadquartersGartner Australasia Pty. Ltd.Level 9, 141 Walker StreetNorth SydneyNew South Wales 2060AUSTRALIA+61 2 9459 4600Japan HeadquartersGartner Japan Ltd.Aobadai Hills, 6F7-7, Aobadai, 4-chomeMeguro-ku, Tokyo 153-0042JAPAN+81 3 3481 3670Latin America HeadquartersGartner do BrazilAv. das Nações Unidas, 125519° andar—World Trade Center04578-903—São Paulo SPBRAZIL+55 11 3443 1509Publication Date: 3 August 2010/ID Number: G00205840 Page 107 of 107© 2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.