Hype cycle for e commerce, 2010

Research
Publication Date: 3 August 2010 ID Number: G00205840

Hype Cycle for E-Commerce, 2010
Gene Alvarez

E-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 of
e-commerce technological capabilities, long-established and emerging, and to
understand their business value.

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TABLE OF CONTENTS

Analysis ....................................................................................................................................... 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 .................................................................... 49

Publication 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 ................................ 105
Recommended Reading ........................................................................................................... 106

LIST OF TABLES

Table 1. Hype Cycle Phases..................................................................................................... 105
Table 2. Benefit Ratings ........................................................................................................... 105


Table 3. Maturity Levels ........................................................................................................... 106

LIST OF FIGURES

Figure 1. Hype Cycle for E-Commerce, 2010 .............................................................................. 12
Figure 2. Priority Matrix for E-Commerce, 2010 .......................................................................... 15
Figure 3. Hype Cycle for E-Commerce, 2009 ............................................................................ 103


ANALYSIS

What You Need to Know
The weak economy and five key trends are driving new investment and upgrades in e-commerce
capabilities. Client interest in e-commerce has been increasing since the last release of this
report; however, prudence and a focus on improving sales and customer experience is guiding all
investment activities.

Customer Experience
Organizations want to improve their websites with rich online customer experiences. Driven by
consumerization, organizations are improving their site user interfaces with rich Internet
application (RIA) capabilities for all types of commerce — business to business (B2B) and
business to consumer (B2C) — as websites are no longer compared with direct competitors, but
are compared with leading consumer website customer experiences.

Social
Organizations are also adding social capabilities. Here, organizations are seeking to take
advantage 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-generated
content to contribute to the organization's website and other activities that involve leveraging the
"wisdom of the crowd."

Globalization
Organizations are going global for new customers; therefore, there is significant interest in
enabling e-commerce in new countries and regions. This is driving requirements for localization
capabilities, such as translation, localized currencies and payment processes, local
implementation services at local rates, and other key international capabilities.

Mobile
Organizations want to implement mobile e-commerce capabilities to take advantage of the
growing populations, using Internet-enabled smartphones and tablets for Web browsing and
context-aware applications. Advancements in mobile technologies and devices and demand from
consumers for mobile applications and Web browser access are also gaining more hype as
devices, such as the Apple iPhone 4, iPad and other mobile devices, enable consumers and
business partners to access an organization's website for product/service investigation and to
possibly make a purchase directly through the device.

Software as a Service
The 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-commerce
capabilities to a much broader audience of organizations than ever before, and the hype
surrounding SaaS offerings is increasingly due to current economic and market forces.
Organizations that want to develop their e-commerce capabilities into next-generation customer
experiences and to increase sales and customer retention should use this Hype Cycle to
understand the hype, technology maturity and business impacts of leading e-commerce
technologies. Because of the amount of technology available, organizations without this


understanding risk investing in technologies that may not provide returns, may hurt customer
relationships and may negatively affect their already-complicated e-commerce capabilities.

The Hype Cycle
E-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 traditional
retail. 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 via
social-network software (such as Facebook, MySpace and Twitter) as a way to engage with
customers and improve the overall online shopping experience. Moreover, B2C organizations are
capitalizing 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 Web
browser, and many are creating mobile applications for devices such as iPhone4 and iPad (see
"How Mobile E-Commerce Should be Using Context, but Isn't" and "Top Eight Ways Context Will
Make Your M-Commerce Applications Stickier").
Consumerization continues to put pressure on organizations to offer rich customer experiences
as customers of all types continue to compare site capabilities with other popular sites, such as
Google, YouTube, Yahoo, Amazon and eBay, regardless of the industry. Often, business
partners will expect the capabilities of consumer sites for their purchasing requirements to be
coupled with more-advanced B2B sales capabilities, such as sales configuration, customer-
specific catalogs and links to electronic data interchange (EDI) capabilities. As organizations look
to capitalize on these trends, they are also challenging IT organizations and business owners to
lower operating costs and provide reliable, highly scalable, available and stable 24/7
environments.
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 number
of technologies being hyped in the e-commerce market demonstrates the complexity of an
organization's e-commerce technology portfolio and strategy.
E-commerce is often associated or confused with other synonyms, such as e-business, e-retailing
or individual technologies (such as EDI). Therefore, we have provided a definition to use with this
Hype Cycle: "E-commerce is a compilation of business models, processes and technologies that
enable online sales, service and marketing for B2B and B2C commerce. It facilitates transactions
over the Web, and supports the creation and continuing development of online relationships."
E-commerce technologies are critical to key initiatives, such as CRM, partner relationship
management, process improvements, sales growth, reduction of sales costs, brand building, and
delivering value to consumers and business partners. This is accomplished by enabling an
enjoyable customer experience that exceeds sales and service expectations.
Organizations are unable to purchase a single e-commerce solution that is a complete match with
all their unique business requirements as they exist, or that is agile enough to support changing
requirements. Most organizations' e-commerce initiatives can have as many as 15 to 20 primary
or core integration points to complete a business process, such as campaign to cash, and as
many as five to 10 vendors to provide the complete operational site. Additionally, some B2B
organizations find themselves managing multiple types of e-commerce beyond partner-direct
(B2B), because of the varying IT capabilities of their partner networks.


Using the Hype Cycle
Use this Hype Cycle to investigate, evaluate and prioritize individual technologies that will enable
you 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-commerce
technologies, and groups them into seven key areas:

E-commerce foundational components
Customer Web experience

Marketing
Sales

Service
Mobile

Social CRM
These groupings will enable you to align these technologies with your individual online strategies,
tactical initiatives, and B2B or B2C objectives.

E-Commerce Foundational Components
These components enable B2B and B2C organizations to process orders; manage many types of
content and product information; locate products, exchange data, services and suppliers, as well
as analytics; and manage overall performance. Technologies in the group enable organization to
conduct any type of commerce and are necessary to core functionality and business processes
supported 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)*


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 Experience
These technologies enable organizations to provide an enjoyable Web experience at any point
during the customer interaction life cycle. This customer life cycle will include marketing, sales or
service activities delivered over the Web. The focus of these technologies is providing an
enjoyable 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)

Marketing
These technologies enable organizations to create customer demand and leads via the Web
channel. The technologies in this section enable organizations to use online marketing
techniques to acquire new customers, expand the number of product being offered to a customer
and to win customers that may have left the organization. Technologies in this area include:
Campaign management SaaS

Campaign optimization

Campaign segmentation


E-mail marketing
Event-triggered marketing

Loyalty marketing

Multichannel campaign management
Online advertising data exchanges

Predictive campaign analytics

Transactional advertising units

Sales
These technologies enable organizations to select products and services and to process
transactions over the Web channel. The technologies in this section enable organizations to
improve their sales by offering full Web stores as a service, improvements to the user interface to
increase conversion, to configure products and services without the aid of a human and other
sales 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 sales

Service
These technologies enable organizations to service customers before, during or after a sale, and
to resolve customer issues. These technologies also offer the ability to collect feedback from
customers and enable online self-service. Technologies in this area include:

Enterprise feedback management (EFM)

E-service
Knowledge management for customer self-service

Virtual assistants

Mobile
These 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 of
increasing customer loyalty and improving sales. Since it is the early days of context-enriched
commerce, many different approaches are being taken, such as leveraging customer location and
sending Short Message Service (SMS) messages. These technologies include:

Mobile advertising


Mobile consumer application platforms
Mobile coupons

Mobile fraud detection

Mobile search
Mobile social networks

Mobile Web applications

Social CRM
These technologies enable organizations to use social techniques within their Web stores or to
take part in larger external (both public or privately created) communities of customers. Social
CRM applications encourage many-to-many participation among internal users, as well as
customers, partners, affiliates, fans, constituents, donors, members and other external parties, to
support sales, customer service and marketing processes. Social CRM works in each of these
domains, 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

Wikis

New to the Hype Cycle
The 2010 E-Commerce Hype Cycle covers 65 technologies. To respond to the market trends
listed above and to assist organizations looking to capitalize on these trends, the following
technologies 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 applications


Social
Social commerce
Social shopping sites

Web Customer Experience
Web content product recommendation


Figure 1. Hype Cycle for E-Commerce, 2010

Source: Gartner (August 2010)



The Priority Matrix
Vendors and companies are enabling e-commerce with a variety of technologies, in different
forms and at different rates of adoption. The Priority Matrix presents the potential benefits
attainable relative to the progression along the Hype Cycle. This is intended as a general
guideline, because the benefits and maturity of any technology will partly depend on industry
conditions, unique business circumstances and the organization's ability to use the technology
effectively.
Transformational benefit, shorter time frame (less than two years): These technologies are
aimed at addressing current or near-term transformational requirements of e-commerce from its
current state. Technologies in this category can present a return on investment (ROI) with a short
time frame or offer a compelling competitive advantage that can transform the way an
organization does business. Only enterprise portals fall into this category, because they enable
improvements to B2B e-commerce personalization, presentation and system integration.
Transformational benefit, moderate time frame (two to five years): These technologies are
aimed at fundamentally changing the way organizations interact with customers online (e.g., via
mobile consumer application platforms). Additionally, cloud/Web platforms can transform how
organizations procure and implement new e-commerce capabilities. However, these technologies
require some time to learn and understand where the opportunities are and how to use them
properly.
Transformational benefit, longer time frame (more than five years): These technologies can
enable a transformational change to an organization's e-commerce initiatives. However, due to
their complexity and harder-to-quantify benefits to obtain funding, these technologies are more
strategic in value than tactical. There are five in this category: content analytics, context delivery
architecture, context-enriched services, social CRM: community marketing, and virtual
environments for consumer sales.
High benefit, shorter time frame (less than two years): These technologies are more
substantial in an e-commerce strategy, but in the context of common business practices, they
address current or near-term issues in the organization. They may apply to improvements in a
stand-alone function or a new area, such as campaign tracking and measurement, consumer
content creation tools, sales configuration, social commerce, and Web and application hosting.
High benefit, moderate time frame (two to five years): These technologies are more tactical
and require planning and incremental investments. Technologies in this group enable
improvements in many areas of e-commerce. For example, improvements to online sales may
involve the use of e-commerce Web 2.0 sales tools; for service improvements, technologies such
as e-service and EFM may be used; for marketing improvements, event-triggered marketing and
multichannel campaign management can provide improvements; and for foundational e-
commerce capability improvements, technologies such as content delivery networks may be
used. (Refer to the Priority Matrix for the complete list of technologies in this category.) The
largest collection of technologies for the Hype Cycle is in this area.
High benefit, longer time frame (more than five years): These technologies are strategic and
require long-term planning and incremental investments. There are seven technologies in this
category and, similar to moderate time frame technology improvements, they can be delivered in
several areas: marketing (campaign optimization, e-commerce foundational capabilities); CIH,
customer profitability management, distributed order management and rich information
visualization; service (virtual assistants and mobile); and mobile fraud detection.


Moderate benefit ratings: These technologies generally enable added capabilities to early-
generation e-commerce deployments. Depending on the time frame, they can be deployed as
rapid-implementation projects to deliver specific functionality, or built into longer-term plans to
reduce capital outlays and operating expenses (see the moderate-level boxes in the Priority
Matrix).
Low benefit ratings: Technologies in this group are not viewed as large contributors to overall
operational savings or to increases in marketing, sales or service capabilities(see the low-level
boxes in the Priority Matrix).


Figure 2. Priority Matrix for E-Commerce, 2010

Source: Gartner (August 2010)

Off the Hype Cycle
The following technologies were removed from the 2010 Hype Cycle for E-Commerce:


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 2.0
This 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
industry's Hype Cycle.

The technology has been merged into another technology.

On the Rise
Mobile Fraud Detection
Analysis By: Avivah Litan
Definition: Fraud detection and prevention are used to protect customer and enterprise
information, assets, accounts, and transactions through the real-time, near-real-time, or batch
analysis of activities by users and other defined entities (such as kiosks) against accounts and
records. The rapid and massive adoption of smartphone mobile applications is quickly driving the
adoption of mobile-based transactions, generating the need for specific mobile fraud detection
technologies and models that heretofore have been nonexistent or hard to find.
Fraud detection uses background server-based processes — transparent to users — that
examine user and other defined entities' access and behavior patterns. Then, it typically
compares this information to a profile of what's expected and considered "normal." If tuned
properly, fraud detection systems can be highly effective at keeping criminals out. They are not
intrusive to legitimate users unless the user's activity is suspect. Access and behavior patterns on
mobile 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, on
a PC or store-based — mobile fraud detection is in its embryonic stage, reflecting the emergence
of mobile platforms used to conduct sensitive transactions. The migration of transactions to
mobile platforms will create high demand for fraud detection that operates in mobile environments


and compensates for features in the land-based environment that do not translate into the mobile
one. 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 user's 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 user's location through other systems
the user may interact with at the enterprise. For example, if the user's 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 enterprise's 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 transaction
experience to draw upon to build effective risk models and scores. It tries to combine some of the
methods listed above, including mobile device identification and examining the location of the
mobile 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 credit
card 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 fraud
detection market is embryonic, reflecting the fact that high-risk transactions conducted from
mobile devices are just — but rapidly — beginning to gain traction with the rollout of smartphones
from which Web browsing is a practical proposition. Furthermore, most of the malware attacking
legitimate users and their accounts is targeted toward PC-based browsers, and there have been
minimal attacks against mobile devices and their browsers, which until now has reduced the
imminent need for mobile fraud detection. We expect this situation to change quickly, however, as
fraudsters increasingly target mobile devices as attack vectors.
User Advice: Assume the criminals will start attacking mobile devices, primarily by dropping
malware hidden in applications that users download to their mobile phones. Look for opportunities
to use information from smartphones and network operators as context to make decisions about
credit card and other payment instrument usage. Engage with vendors that provide mobile-based
fraud detection based on mobile device identification, location awareness that users do not have
to opt into, and fraud detection models specifically designed for mobile computing.
Integrate the mobile fraud detection system with your enterprise fraud detection system so that
customer and account profiles can be shared and fraud alerts can be correlated across products
and channels.


Business Impact: Mobile fraud detection watches for suspect user and mobile device activity
specifically in the mobile computing environment. It will become a cornerstone for commercial
context-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 highly
unlikely to only use the mobile channel to conduct their transactions.
Benefit Rating: High
Market Penetration: Less than 1% of target audience
Maturity: Emerging
Sample Vendors: 41st Parameter; AT&T; RSA; The Security Division of EMC; ValidSoft;
Vodafone
Recommended 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 Sites
Analysis By: Gene Alvarez
Definition: Social-shopping sites are community websites where members are shoppers that
"friend" each other based on similar shopping interests, such as taste in fashion. These
communities enable shoppers to exchange information, opinions and, in some cases, shop
together. These sites vary in how users post their interests; some leverage credit card
transactions or e-commerce site purchases, while others enable consumers to post items of
interest and link their posting to other like users. Here, users begin to share information about
their buying habits and interests to discover new items, and obtain feedback on items of interest
and other points about products.
Position and Adoption Speed Justification: Social-shopping sites are appearing rather rapidly
as vendors attempt to take advantage of online social-software trends. The vendors hope to
gather 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 online
social-shopping sites. This should include monitoring of leads that actually converted into sales. It
should 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 be
part of a much larger online social commerce strategy for the organization. This is because this
option can provide sales from certain smaller online segments to which the organization may not
be marketing.
Benefit Rating: Low
Maturity: Embryonic


Sample Vendors: Blippy; Kaboodle; MyItThings.com; StyleFeeder; Swipely; ThisNext; Wists

Context Delivery Architecture
Analysis By: William Clark; Anne Lapkin
Definition: Context-aware computing is about improving the user experience for customers,
business partners and employees by using the information about a person or object’s
environment, activities, connections and preferences to anticipate the user’s needs and
proactively serve up the most appropriate content, product or service. Enterprises can leverage
context-aware computing to better target prospects, increase customer intimacy, and enhance
associate productivity and collaboration. From a software perspective, context is information that
is relevant to the functioning of a software process, but is not essential to it. In the absence of this
additional information, the software is still operational, although the results of the software's
actions 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 integrate
such systems, certain repeatable patterns emerge that will require a new enterprise solution
architecture 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 formal
mechanisms for the software elements that discover and apply the user's context in real time.
CoDA provides a framework for solution architects that allows them to define and implement the
technology, information and process components that enable services to use context information
to improve the quality of the interactions with the user. The technologies may include context
brokers, state monitors, sensors, analytic engines and cloud-based transaction processing
engines.
As context-aware computing matures, CoDA should also define data formats, metadata schemas,
interaction and discovery protocols, programming interfaces, and other formalities. As an
emerging best practice, CoDA will enable enterprises to create and tie together the siloed
context-aware applications with increased agility and flexibility. As with SOA, much of the pull for
CoDA will come from packaged-application and software vendors expanding to integrate
communication and collaboration capabilities, unified communications vendors and mobile device
manufacturers, Web megavendors (e.g., Google), social-networking vendors (e.g., Facebook),
and service providers that expand their roles to become providers and processors of context
information.
The CoDA architecture style considers information, business and technology domain viewpoints.
The technology domains are application infrastructure, communications infrastructure, network
services and endpoints (devices). Thus, CoDA provides a framework for architects to discover
gaps and overlap among system components that provide, process and analyze contextual
information. A key challenge of CoDA will be information-driven, not technology-driven. This key
challenge will revolve around what information sources can provide context, then what
technologies enable that information to be provided in a secure, timely and usable manner, and
how this information can be folded into processes.
Position and Adoption Speed Justification: Gartner introduced the term CoDA in 2007, based
on developments in areas such as mobile communications and cloud computing. By 2011, we
expect that aggressive enterprise architects and project managers will weave elements of CoDA
into their plans to orchestrate and build context-enriched services that rely not only on federated
information models, but also on federated delivery services. CoDA relies on SOA as an
underpinning and also is related to EDA, because enterprise architectures need to be agile and


scalable to support context-aware computing. SOA and EDA have not yet reached the Plateau of
Productivity. We expect CoDA to reach the Plateau of Productivity gradually, after 2014.
User Advice: Although CoDA, is an emerging architectural style, Type A organizations can
benefit in the short term by applying its principles as they experiment with use of context
information to provide improved user experiences in both customer-facing services and enterprise
productivity. Leading-edge organizations need to begin to incorporate CoDA constructs in
infrastructure and services to gain competitive advantages with the early use of context-aware
computing. Type A organizations should now be identifying which information sources, both
within the enterprise and external to it (e.g., from social-software sites), will provide context
information to a range of applications.
Build competencies in CoDA's technology domains, particularly in communications, because the
migration of voice from silos to general applications will be a key transformation, opening up
further opportunities to create applications enhanced by context-enriched services. An
understanding of mobile development will also be key. The refinement of your enterprise
architecture 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 the
acquisition of context-enriched services through third parties.
Business Impact: Context awareness is a distinguishing characteristic of some leading software
solutions, including Amazon e-commerce, Google Search, Facebook, Apple and others. During
the next three to five years, context-aware computing will have high impact among Type A
businesses in two areas: extending e-commerce and mobile commerce initiatives toward
consumers, and increasing the efficiency and productivity of the businesses' knowledge workers
and business partners.
Context-aware computing will evolve incrementally, and will gain momentum as more information
sources 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 formal
CoDA protocols and principles will translate into a new technology category and feature set,
affecting all application infrastructure and business application providers.
Benefit Rating: Transformational
Maturity: Emerging
Sample Vendors: Appear Networks; Apple; Google; IBM; Interactive Intelligence; Nokia; Pontis;
Sense Networks
Recommended Reading: "Fundamentals of Context Delivery Architecture: Introduction and
Definitions, 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, 2010
Update"

Persona Management
Analysis By: Adam Sarner


Definition: Persona management is the nascent class of tools to help people keep track of what
they are saying and posting to the different online communities in which they participate. As
people go through their day, they constantly slip between several different personas; one minute
they 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 world
can be tricky, but millennia of practice have made humans reasonably adept at handling these
shifts.
In the online world, it is not so straightforward. As private and business interactions in the online
world increasingly overlap, social-media participants are faced with a dilemma: How can they
manage communications and interactions from all the different roles they play in their complicated
lives? Persona management helps people establish different personas and channel
communications, as appropriate. For example, a persona manager would ensure that photos
from a college reunion would only appear on social networks where those friends participate, and
not be posted to business-oriented networks.
Position and Adoption Speed Justification: The need for persona management is much
greater than the technology currently available to help do it. A few basic tools are available to
manage multiple Twitter accounts, or establish groups on Facebook and other social-networking
sites to channel postings, but these fall well short of what real persona management would
require. 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 establish
itself. Identity management initiatives like OpenID and Windows Live ID address some of the
security and identification aspects. Aggregation services like Ping.fm or FriendFeed distribute
postings to multiple sites. Neither of these types of services include the wider facilities needed to
manage personas, although any of these could develop into persona management.
We expect to see startups entering this market with specific offerings, as well as established
players like Google, Microsoft and IBM making a play. Existing social networks like Facebook and
LinkedIn are also likely to add elements of cross-network management to their offerings, which
could evolve into useful persona management.
User Advice: In the absence of effective personal management, individuals are largely on their
own 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 to
what are acceptable and desirable behaviors for their employees when participating in public
social media.
Business Impact: Individuals will receive the primary benefits of persona management, since it
will 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. As
community and social-media sites proliferate both for business and personal use, these kinds of
tools become even more important. Without them, many communities will lack participation,


simply because users cannot cope with any more places to put "stuff," shutting off potentially
rewarding avenues of participation.
Benefit Rating: Moderate
Maturity: Embryonic
Recommended 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"
"What's 'Hot' in CRM Applications in 2009"

Rich Information Visualization
Analysis By: Michael Maoz
Definition: Context is critical to both consumers and the employees of an enterprise. Customer
service 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 to
visualize includes a customer's physical location, preferences, value, appearance, circle of
friends, family, affiliations and most-frequent "interaction paths" — Web, telephone, kiosk,
automated teller machine and other sources. The requisite technologies exist in the form of
analytics, CRM information, GPS, satellite mapping and Internet Protocol (IP)-enabled video
cameras, as well as face and voice recognition. However, the software applications have not yet
been developed. Organizations quickly discover that visualization is only as good as the data that
underlies 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 will
continue to hinder adoption during the next five years. Analytics vendors will be key to
mainstream adoption. Consumers are ever-more sophisticated regarding anonymity and privacy
issues (that is, little is not already known), and this will lower barriers in the five- to 10-year
horizon, accelerating adoption. Software as a service (SaaS), the computing power of the
desktop — and, to a lesser extent, PDAs — will be available during the next 10 years, as well as
more-efficient screens for agents and consumers to enable a series of successful "single view of
the customer" projects (for agents viewing the customer) or consumer applications that will
provide increased viewing of their relationships with the business.
User Advice: Type A organizations (aggressive technology adopters) should place a mental
check mark next to "rich visualization." In the meantime, they should ask questions such as, "How
do 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 will
require strong integration with analytical systems. Systems will need clean data that has been
structured for purpose and target.
Business Impact: The business impact is high because getting rich visualization "right" from a
timing perspective will yield a first-mover advantage. Jumping in too soon will expose
organizations to claims of invasion of privacy.


Maturity: Emerging
Sample Vendors: Adaptive Engineering; Google; Microsoft

Customer-Centric Web Strategies
Analysis By: Michael Maoz
Definition: A customer-centric Web strategy (technology strategy and business strategy) is a
cohesive approach to ensuring that a website is intuitive to the visitor of that site, placing the
customer at the center of the relationship. It focuses on tying the customer, prospect or partner
deeply into the enterprise or organization, and harmonizes the various interaction channels. It
starts with improvements to the website, but extends beyond it to other related interaction
channels and external services, such as social networking and other forms of social media. The
technologies, integrations, analysis, content, communication and business applications are
designed and deployed through a collaborative effort between the business and the external
customer to achieve this goal of serving the customer need consistently with business goals. It
will 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 immature
concept 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 not
available as a suite, but rather cobbled together. There have been good reasons for this: the
need to rapidly innovate because of the evolving nature of user interaction patterns; emerging
technologies, such as real-time analytics, social networking and recommendation/reputation
engines; and highly fragmented reporting structures for the people tasked with building Web
capabilities. 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 a
customer-centric Web. Appoint a project leader who has the approval of the board or CEO to run
a customer-centric Web effort. Tap the community of customers, prospective customers, partners
and employees as a way of uncovering the true impact and effectiveness of your website. Look
for redundancies in systems, and overlapping organizational responsibilities. Test ideas by
measuring the impact before deploying fully.
Business Impact: The business impact is high, because businesses waste a tremendous
amount of money on marketing, sales and technical support as a way of overcoming the
weaknesses in their websites. The desire to better control and optimize spending, and measure
costs and Web effectiveness, will drive customer-centric Web programs.
Maturity: Emerging
Sample Vendors: Accenture; Deloitte
Recommended Reading: "A Framework for Creating the Future Customer-Centric Web"


Transactional Ad Units
Analysis By: Andrew Frank
Definition: Transactional ad units are advertiser-supplied active display elements that can
occupy a standard position on a Web page or mobile or interactive TV application, such as a
banner or text overlay, and that expands to present a secure transaction. When engaged by a
consumer using a mouse, touchscreen or remote control, these units will generally fill the screen
or browser to provide additional space for merchandising and interaction, but they do not take the
user away from the underlying page, app or program. Like any display ad, they can be placed
using 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 can
be compensated using a number of possible payment conventions. Placement can also be
triggered by external input, such as a camera or map in an augmented-reality scenario that
provides overlays to a live image.
In addition to direct sales, transactions can include applications such as secure couponing, lead
generation, secure notification, and authentication-based upsell and cross-sell sample scenarios.
Position and Adoption Speed Justification: The idea of embedding transactions in Web ads
first surfaced in the late 1990s, but failed to gain much traction primarily due to security concerns
and technical challenges. In 2010, the concept got a strong boost from Apple, whose iAds
platform was announced with great fanfare and featured transactional capabilities within the app
advertising platform.
The benefits of this type of unit are clear: Collapsing the chain of events between advertising and
sales not only enables advertising to become much more efficient and accountable for
merchants, but also causes publishers to see much higher yields as a result of hosting sales on
their sites. For consumers, the availability of impulse-buying opportunities in relevant contexts
could 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 possibility
of phishing attacks (as the merchant's URL will not appear in a protected browser field), although
this could be seen as an advantage for name brand publishers and tightly controlled platform-
based ad networks, like Apple's, which have the capacity to supply a trusted context that is
absent 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 to
minimize revenue payouts and protect their own brands and traffic, while manufacturer brands
may be wary of undercutting established online channels with experimental ones, especially in a
shaky economy. Still, the improvement in the cost per sale for many manufacturers and
merchants 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 ad
units. With the drive to raise efficiency and squeeze more revenue out of the online channel for
commerce, it's likely that transactional ad units will eventually become a productive staple of
digital marketing, particularly for impulse purchases of soft goods and gifts.
User Advice: Online publishers, especially those with trusted offline brands, should look for
opportunities to employ embedded transactions in websites and apps, and build predictive
models to optimize decisions about transaction targeting, based on behavioral and other relevant
visitor data.


Online merchants should evaluate transactional ad units as a method to extend their storefronts
across the Web. Online merchants will also need to make marketing and merchandising work
together to enable these opportunities.
Ad networks and agencies should develop near-term strategies for evaluating transactional ad
unit 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 nonsales
types 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, while
simultaneously lowering the cost per sale for marketers.
Maturity: Emerging
Sample Vendors: Adgregate Markets; Alvenda; Apple; Lemonade; Mpire; nooked; Pontiflex

E-Services
Analysis By: Juergen Weiss
Definition: E-services are offered by life insurers to their customers as part of their client-facing
websites. 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 ones
Access to these e-services is usually restricted to existing clients in a type of personalized "my
account" section of the insurer's website, and it requires previous registration. Gartner doesn't
consider simple e-mail forms or requests that can be downloaded, printed and then physically
sent to the insurer as e-services.
Position and Adoption Speed Justification: Gartner has decided to add e-services as a new
entry on the 2010 Hype Cycle for life insurance, because more and more life insurers in many
regions are adding e-services to their customer websites. There is a lack of adoption among
insurance customers, though, because of cumbersome onboarding procedures and the absence


of incentives from life insurers. Gartner expects more life insurers to add e-services to their
customer portals because of potential cost savings and other reasons. This will constantly move
e-services along the Hype Cycle, but because of staggering customer adoption, this technology
will 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, should
consider incentives, such as discounts or transaction fee savings, to promote e-service adoption
in their customer base. In addition, life insurers need to analyze the back-office business
processes that they want to offer as e-services to clients. Some of these processes won't be
suitable for real-time or near-real-time online access, because they're batch-based and will fail to
meet customer expectations. Customers who pay premium invoices via the Internet will, for
example, expect to see the impact on their outstanding receivables immediately, and won't wait
for a batch run to happen every week.
Finally, life insurers shouldn't consider offering any e-services without a proper and scalable
back-office integration with relevant systems, such as policy administration or billing. Having
fewer but tightly integrated services is much better than having many services that are based on
simple 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 client
base. 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-based
documentation. In Gartner's opinion, there are at least two other reasons — costs and customer
retention. Life insurers that offer e-services with a sophisticated back-office integration (without
manual re-entry of data) can save a considerable amount of costs. Organizations will not only
avoid interactions with their call centers and reduce error rates because of manual processes, but
they 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 the
problem 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, allowing
clients to periodically review and adapt their portfolios), and also a means of meeting changing
customer expectations. Internet users are used to initiating requests via the Internet without
having to print and physically send in forms.
Market Penetration: 1% to 5% of target audience
Maturity: Emerging
Sample Vendors: MajescoMastek; Oracle; SAP; StoneRiver
Recommended Reading: "Life and P&C Insurers Lack Incentives to Drive E-Service Adoption
Among Customers"
"Creating a Comprehensive Service Strategy for Life Insurance and Annuities"

Online Advertising Data Exchanges
Analysis By: Andrew Frank
Definition: An online advertising data exchange is a Web-based trading platform that enables
partners to buy and sell data intended to boost ad-targeting effectiveness for Web display
advertising.


In contrast with an online ad network or ad exchange, data exchanges do not sell ads or
impressions. The separation of data from media is intended to benefit publishers, e-commerce
sites and marketers that desire the benefits of an exchange for targeting (liquidity, scale and
openness) without having to bundle data with media inventory. This gives data suppliers the
chance to monetize ad impressions beyond their own share of Web traffic, and data buyers the
chance 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) a
certain product category, based on the observed browsing history. However, other data, such as
demographics derived from registration data or other sources, may also be offered.
Position and Adoption Speed Justification: Advertising data exchanges first appeared in 2007
with the launch of an Israeli firm called eXelate, but didn't get much traction until 2008, when
trends aligned to build enough favorable opinion to attract major publishers that were under
pressure 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 almost
impossible 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 attract
marketers on the buy side, as publishers can trade data among themselves and use it to raise
yields 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 RTB
increases the opportunities to utilize targeting data in a real-time context. This has given rise to a
new 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 the
issue of giving consumers transparent access to their BT profiles. In April, U.S. congressman
Rick Boucher floated draft legislation to require ad networks to either obtain users' opt-in consent
prior to tracking them, or provide "prominent notice" and supply consumers access to view and
edit profiles to qualify for opt-out consent status. Responding to this, BlueKai, a prominent data
exchange, recently released a white-label tool to give Web publishers the ability to allow
consumers to access and edit the targeting segments they have been placed into. Adoption by
publishers and consumers, as well as the course of legislation, remains speculative, although
Gartner considers it unlikely that legislation will have a significant chilling effect on the current
self-regulated online ad-targeting marketplace in the U.S. Other regions (particularly in the
European Union) with more-stringent prohibitions may remain unattractive to data exchanges.
Another question regarding the future of data exchanges is whether they will ultimately be
consolidated into ad exchanges. There is a growing glut of online consumer data available from
various sources at a time when some marketers are beginning to question the ubiquity of
behavioral targeting, putting pressure on the extent to which transaction values can continue to
exceed overhead. While separation of data from media may produce efficiency advantages, there
are likely to be economies of scale and performance benefits from combining these two types of
transactions on the same exchange platform, meaning that data exchanges may wind up
consolidated with ad exchanges at Google, Yahoo and Microsoft. This may provide an attractive
exit for some pioneers in the category, and the independent data exchange concept may
ultimately fade.
User Advice: Publishers and online merchants should investigate the possibility that online
advertising data exchanges could be a source of both direct revenue and more targeting value for
their advertising customers or activities, respectively. Before participating as sellers, they must
verify the quality of their data by its ability to generate positive results (higher click-through rates


and more conversions) in trials with partners. Before participating as buyers, they should have in
place 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 and
potential disintermediaries. Advertising holding companies need to consolidate data pools at their
media 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 category
publishers, but need to prevent its sale to competitive retailers. On the buy side, BT is an effective
way 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 group
standards should be studied and adopted as they emerge.
Business Impact: Online data exchanges represent acquisition targets for large ad exchanges
or networks.
Brand-name publishers and e-commerce merchants have the strongest opportunity to tap new
revenue from the sale of anonymous consumer data.
Communications service providers (CSPs) have examined the potential to use techniques such
as deep packet inspection (DPI) to acquire and market targeting data from ISP traffic; however,
the privacy backlash at this time appears prohibitive.
Maturity: Emerging
Sample Vendors: Adknowledge; BlueKai; eXelate; Media6Degrees
Recommended 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 Commerce
Definition: Social commerce is the use of social-software tools and user-generated content
within an e-commerce context. Social commerce is used to create sales lift by providing
customers with information and content from other customers that assists with the evaluation of a
product or service. Techniques can vary from the creation of an online store within an existing
community, 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 the
percentage 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 its
influence on consumers' buying decisions. Techniques like a company store within Facebook or


the use of user-generated content on one's website are the foundation of social commerce, and it
is growing due to the consumer's ability to filter out traditional market media, such as direct mail,
e-mail and TV advertisements. Therefore, we believe that social-commerce techniques and
technology will rapidly climb in hype, and as organizations discover the pros and cons of social
commerce, they will move this technology quickly through the Hype Cycle to maturity.
User Advice: Business-to-consumer (B2C) organizations should use social-commerce
techniques and technologies in 2011 and 2012 for B2C sales initiatives. However, these should
be targeted and focused on the specific propose of driving sales, not just the number of followers
or friends. Therefore, organizations should focus on techniques with proven value, such as sales
on top-rated products or friends-only promotions. Moreover, organizations should experiment with
various tools, because one tool may only address a single customer segment.
Business Impact: Social commerce can create new customer segments that are based on a
consumer's interests in a Web environment. This can enable the targeted selling of products that
are related to group interests and activities.
In addition, social commerce can help to drive down the cost of sales, because it is used in the
more 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.
Maturity: Emerging
Sample Vendors: Bazaarvoice; Dell (Dell Swarm); Demand Media; Groupon; Jive Software;
LivingSocial; ShopIgniter
Recommended Reading: "Magic Quadrant for Social CRM"

Context-Enriched Services
Analysis By: William Clark; Anne Lapkin
Definition: Context-enriched services use information about a person or object to proactively
anticipate the user's need and serve up the content, product or service most appropriate to the
user. 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 improving
user experiences through context, and are an implementation foundation for context-aware
computing. These terms denote services and APIs that use information about the user to
optionally and implicitly fine-tune the software action with better situational awareness. Such
services can proactively push content to the user at the moment of need, or suggest products and
services 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 interaction
occurs. From a software perspective, context for a service is information (data) that can add value
to 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. The
currency 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.


Context-enriched services will also require sophisticated reasoning to determine how software
actions should be changed to make them more appropriate for the user's context.
The more current and selective the context information, the more precise the functioning of the
service. Context-enriched services are provided by context brokers, which are designed to
retrieve, process and stage this information so that subscribing functions can use relevant context
in addition to processing incoming data. When an application uses context-enriched services, it is
a context-aware application. As a best practice, context-enriched software services have the
modularity and accessibility of SOA and use SOA-related standards.
Position and Adoption Speed Justification: Context enrichment refines the output of services
and improves their relevance. We observe implementations today in mobile computing, social
computing, identity controls, search and e-commerce — the areas in which context is emerging
as an element of competitive differentiation. However, the current context-aware solutions are
fragmented — they are individually designed, custom-developed and deployed, and, because of
their competitive importance, are often not widely distributed or advertised. The movement in
social computing to open and share social-relationship (social graph) information is an early step
toward the standardization of context-aware computing APIs; however, most of the required
standardization effort has not yet begun. Context-enriched services will require multiple stages of
innovation and platform technology evolution before their essential benefit is well-understood in
the broad mainstream computing markets.
In 2010, we are seeing the beginning of generic services, whereas before all these services were
custom-built. Context-enriched services have advanced significantly during the past year, moving
from an early post-trigger position to a point half way up the Slope of Enlightenment. We are
seeing an increasing number of applications that, while they may not use the term context-aware
computing, are clearly using context information to improve the user experience. These include
Apple's recent developer guidance regarding location-aware advertising, the augmented reality
systems that give you information on an object shown in the camera lens of your phone, and the
ability of Google Android-based phones to augment services based on the user's 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 subscribe
will 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 as
location) and evolve into compound patterns (e.g., taking into account location, presence and
group behavior). Application developers and service providers should take advantage of the wide
range of contextual opportunities in their e-commerce, security, social-computing and mobile-
computing systems. Some early context processing can be achieved using event processing and
complex-event-processing technologies; enterprises need to plan to incrementally develop or
source more context enriched services in step with their ambition levels of improving user
experience.
Business Impact: Context-enriched services will be transformational for solution providers.
Context enrichment is the next frontier for business applications, platforms and development
tools. The ability to automate the processing of context information will serve users by increasing
the agility, relevance and precision of IT services. New vendors that are likely to emerge will
specialize in gathering and injecting contextual information into business applications. Most
context-aware applications are likely to arrive as incremental enhancements to SOA, without a
major disruption to prior architecture. However, the new kinds of business applications that will
emerge as the function of full context awareness may end up being revolutionary and disruptive
to established practices.
Benefit Rating: Transformational


Maturity: Embryonic
Sample Vendors: Appear Networks; Apple; Google; Pontis; Sense Networks
Recommended 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: It's Time to Carefully Choose Your Vendors"
"Apple Note Signals Move to Claim Context-Aware Advertising"

Open-Source E-Commerce Software
Definition: Open-source e-commerce software enables the creation of all (for example, an entire
Web store application) or part (for example, a shopping cart) of a Web store. This software has
features such as shopping cart functionality, product catalogs and other capabilities that enable
store owners to set up, run and maintain online stores. This software is available for free under a
GNU general public license; however, other fees may exist for varying types of membership. This
does not include the use of open-source software (OSS) used for development, Web, database
or application servers commonly known as the LAMP platform. However, open-source Ajax
toolkits are part of the portfolio of OSS packages that can indirectly enable e-commerce sites (in
the same fashion as application servers, relational database management systems [RDBMSs],
etc.).
Position and Adoption Speed Justification: Web 2.0 companies that were created using the
LAMP platform, such as Facebook and Wikipedia, have captured so much market attention that
e-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 application
servers, operating systems and databases (LAMP platforms), has been a mainstream activity for
at least five years, enterprises have been wary of adopting open source for actual e-commerce
application software.
The key issue that has clients concerned about open source for e-commerce is the question: "Is
e-commerce OSS scalable, secure and robust enough for large-scale transactional sites, given
that many Web 2.0 startup companies that use open source are not transactional?" The answer
is that it will take at least five years for this software to mature to the standards of today's
enterprise e-commerce licensed software, and at least the same number of years to match the
capabilities of the current software-as-a-service (SaaS) e-commerce offerings. However, these
packages were not designed to compete with high-end, complex e-commerce solutions. They
were designed to service low to midrange requirements that can meet the requirements of
organizations with low to midrange e-commerce transactional needs.
User Advice: Enterprises that have large-scale transactional Web stores should not use these
open-source e-commerce software solutions. Instead, they should employ other aspects of open
source in their stacks — the most common being the application server. Users of publishing sites
that 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 remain
incapable of meeting the needs of a large enterprise. However, for startup companies and small
enterprises, these offerings can be beneficial solutions, because they are low-cost alternatives.


Maturity: Emerging
Sample Vendors: AgoraCart; CubeCart; dashCommerce; Interchange; LiteCommerce; Magento;
Nexternal Solutions; osCommerce; Shopify; VirtueMart; X-Cart; Zen Cart

Campaign Management SaaS
Analysis By: Adam Sarner
Definition: On-demand campaign management involves the deployment of campaign
management solutions in a subscription-based, multitenant model.
Position and Adoption Speed Justification: Specific campaign management functions — such
as e-mail, A/B testing (a technique to isolate and test campaign variables), online cross-selling
and upselling, and customer-focused Web analytics and lead management — are available in an
on-demand model and are mature. However, more-complex implementations (such as
multichannel campaign management applications) often require more connections with multiple
back-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 released
during the past 18 months.
User Advice: Marketers should consider on-demand deployment models for more-tactical
campaign management deployments, particularly in e-marketing areas. To date, e-marketing-
focused applications (such as Web analytics, e-mail marketing, online dialogue management and
online A/B split testing) are being offered as on-demand deployment models. More-strategic and
complex integration requirements for multichannel campaign management are still likely to
require 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 on
demand. 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 — to
justify building larger, multichannel campaign management initiatives. For example, in B2B
organizations, 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 the
most effective page layouts. Large vendors are likely to offer more-complete multichannel
campaign management and a choice of deployment options (hosting on-premises and licensed
software).
Maturity: Adolescent
Sample Vendors: ATG; Eloqua; Marketo; Neolane; Responsys; RightNow; smartFOCUS; Unica
Recommended Reading: "Software as a Service in Campaign Management, 2008"
"Magic Quadrant for Multichannel CRM Campaign Management"


Web Content Product Recommendation Engine
Analysis By: Bill Gassman
Definition: A Web content product recommendation engine provides an algorithmic derived list of
items 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 a
shopping 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 or
historical 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 dynamic
content formats.
Position and Adoption Speed Justification: Although this is the first year that this technology is
being tracked in our Hype Cycles, it has been adopted in high-end retail sites for some time. In
addition, manual approaches are used by some organizations. The cost to deploy is still fairly
high, keeping it away from low volume sites, but prices should fall as demand picks up. Evolving
uses include service resolution recommendations, greater ties with customer and transaction
information from back-office systems and context aware computing. Placement in the pre-peak
hype segment is justified by the relatively low penetration of commercial products but increasing
number of vendors coming to market.
User Advice: Start with an ROI calculation to see if an uplift of 5% in website revenue will justify
the cost. This is a conservative but realistic result. Dedicate at least one full-time resource to
learn and operate the tool, and to train others to work with the rules that bias the
recommendations. Develop an attribution model with a control that takes into account how many
people would buy an item anyway. Adopt the advanced features such as inventory and margin
data integration once the basic skills are mastered.
Business Impact: The potential is high, but most organizations we have spoken with are
realizing a 2% to 5% uplift in revenue. As the algorithms improve, along with context-aware
computing and integration with back-end systems, so will the customer experience and uplift
yield.
Maturity: Emerging
Sample Vendors: ATG; Baynote; Certona; Coremetrics; MyBuys; Omniture; RichRelevance
Recommended Reading: "Tutorial: Web Content Product Recommendation Engines"
"Coremetrics' Intelligent Offer Recommendation Engine"

Customer Interaction Hub
Analysis By: Johan Jacobs
Definition: The customer interaction hub (CIH) is a multichannel infrastructure that includes
voice, Web chat, e-mail, fax, self-service, interactive voice response (IVR), collaborative browsing
and social feeds like Twitter, and that focuses on centralized processing for external customer
interactions. It is integrated with back-end CRM, ERP and supply chain management (SCM)
systems. The key functions are centralized business rules, aggregated integration points, channel
independence and customer experience management.


Hype cycle for e commerce, 2010

Hype cycle for e commerce, 2010

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