Ray Wang Workday Rising Keynote 2009

Enterprise Applications in the
Era f th Cl d d Web 2 0
E of the Cloud and W b 2.0

R “Ray” Wang
Partner – E t
P t Enterprise St t
i Strategy
Altimeter Group

October 19th, 2009

Today s
Today’s themes

We must adapt to massive changes.

We can not allow our l
ll legacy
technologies to hold us back.

The future of business requires us to
adapt and i
d d integrate emerging
i
technologies.

© 2009 R Wang & Altimeter Group, LLC

3

Agenda
• Four massive forces of change
• Future of business
• Evolution of enterprise apps
• SaaS delivers the future today
• Recommendations


4

Organizations face massive and
unprecedented pace of change
• Loss of faith in capitalism • Changing workplace norms
• Commodity shortages • Distributed nature of work
• Political instability • New work force models
• Sustainability and • Mixed generations
environmental focus • Aging workforce
• Economic crisis
• Price spikes Macro Workplace • Global talent

conditions dynamics

• Pace of obsolescence
Pace of
increasing faster Business
than the rate of tech
adoption Models
• Consumer tech ahead
adoption • Globalization
• New stakeholders
of enterprise • Goliath vs start-up
• Digital divide closing • Public/ private / y
/p /hybrid
around the world
• Regulation/ deregulation
• Connected ubiquity drives
new adoption models • Business process
outsourcing

5

• Economic crisis
• Price spikes
Macro Workplace • Global talent
conditions dynamics

• Pace of obsolescence Pace of
than the rate of tech • Globalization
Models
adoption adoption • New stakeholders
• Consumer tech ahead • Goliath vs start-up
of enterprise • Public/ private /hybrid
• Digital divide closing
g g • Regulation/ deregulation
around the world • Business process
• Connected ubiquity drives outsourcing
new adoption models

6

• Economic crisis
• Price spikes
conditions dynamics

Models
new adoption models

7

• Economic crisis
• Price spikes
conditions dynamics

Models
new adoption models

8

Agenda
• Recommendations


9

Our top priorities leave us torn

Grow

Comply Innovate

Save

*Phone and in-person survey of 89 CIOS from August to October 2009

10

Convergence of themes drives today’s
g y
business
Consumer tech Individual and
Transactional
and business the
and behavioral
software community

Reactive and Company and
B2B and B2C
proactive the customer

Data
Top down and Evolution and
generation and
bottom up
b tt revolution
l ti
data analysis

Strategic and
S i d Horizontal and
H i l d
X and Y???
tactical vertical

© 2009 R Wang & Altimeter Group, LLC Contributors: Josh Weinberger – CRM Magazine

11

Top 3 challenges in today’s
organization/enterprise
CIO’s no longer Antiquated
determine technology impedes
technology adoption effective change
– businesses do. management.

The rate of
obsolescence
outpaces th rate at
t the t t
which companies
change.


12

Enterprises/organizations must evolve
how they conduct business

1) All i
) Allowing 2) D i i
) Designing 3) I
) Investing i
ti in
business units process innovation
to pilot new scenarios --even when it
technologies around user hurts.
and processes. roles – rather
than vendor
forced fit best
practices.
i


13

Agenda
• Recommendations


14

Existing enterprise apps address the
g p pp
business needs of the 20th century

Strengths from the 20th Challenges in today’s
century rapidly changing world
• Automating high volume • Addressing increasing
transactions complexity
• Delivering functional • Crossing functional
i
competencies fi fd
fiefdoms
• Standardizing business • Dealing with new
processes businesses models
• C t i massive
Capturing i • P idi b i
Providing business i i ht
insight
amounts of data • Providing flexibility
• Ensuring accuracy • Collaborating with new
• Securing information stakeholders


15

Existing enterprise apps have yet to
g p pp y
prove their value
1. 90 9% Reduce cost of ownership and complexity
1 90.9% - R d t f hi d l it

2. 83.7% - Address integration with existing investments
3. 81.9% - Complete original and promised product road map
4. 78.7% - Reduce cost of maintenance or show value
5. 74.7% - Renewed focus on innovation and Web 2.0
6. 68.3% - Better usability
7. 67.1% - Improved Integration to Microsoft Office
8. 61.1% - Less bullying and more relationship

Source: October 2009 Altimeter Group Survey “What we want from our RP vendor?” List of priorities from 221 global enterprise
apps customers

16

New social business/social enterprise
p
apps exhibit 10 key characteristics
Dynamic user Business process Community
experiences focus
f connectedness
d
• Role-based • Configurable & • Engaging for
design adaptive all
• Consistent • Outcome- stakeholders
experience focused & • Pervasive &
across results
results- natural
channels & oriented collaboration
deployment • Proactive, • Self-learning &
p
options p
predictive, &
, self-aware
• Contextual & actionable • Secure & safe
relevant
delivery of
information
i f i
Source: August 24th, 2009 Software Insider’s POV “Monday’s Musings: 10 Essential Elements For Social Enterprise Apps”
http://bit.ly/130WiO
.

17

Organizations already use a wide
g y
variety of Web 2.0 tools

© 2009 R Wang & Altimeter Group, LLC Source: June 2009 McKinsey Global Survey “How companies are benefiting from Web 2.o”

18

Web 2.0 technologies deliver greater
g g
knowledge sharing and collaboration

© 2009 R Wang & Altimeter Group, LLC Source: June 2009 McKinsey Global Survey “How companies are benefiting from Web 2.o”

19

Agenda
• Recommendations


20

SaaS users enjoy 7 key benefits
Richer user experience and user p
p productivity
y

Rapid IT implementation and optional higher quality deployment

More frequent cycles of innovation

Minimal upgrade hassles
pg

Access to the “always-on” SaaS tools regardless of location

Subscription pricing

Anytime scalability and dynamic capacity

Source: Altimeter Group September 2009 SaaS Benefits Survey of 91 end user clients and vendors.

21

SaaS adoption moves from tipping
point to mainstream

Are you actively considering software as an OnDemand (SaaS) service?

On Demand
On Premise

© 2009 R Wang & Altimeter Group, LLC Source: October 9, 2009 BofA Merrill Lynch Global Research “CIO Survey”

22

Organizations spending more on SaaS
and less on OnPremise perpetual license

Favor perpetual license OnPremise software (e.g. Oracle, SAP,
Microsoft, etc.) over OnDemand subscription (e.g. Salesforce.com,
NetSuite, Concur, Successfactors, Taleo, Workday, etc.)
Cutting back on perpetual license OnPremise software and
spending more on OnDemand subscription
No change in relative allocation


23

Despite the economy, SaaS adoption
accelerates as customers find value


24

Agenda
• Recommendations


25

Align your business priorities to your
organization’s hierarchy of needs
Brand
ate

g
Strategic
onomic clima

differentiation

Sales and growth

Operational efficiency
Eco

Regulatory compliance and controls


26
26

Design your enterprise strategy across
4 dimensions
Solution
Organizational
portfolio
dynamics
management

Enterprise
p
Strategy

Business
Technology
process
effectiveness
optimization


27

Start with these effective strategies…
h h ff

Focus on short term gains to pay for long term
innovations

Optimize commoditized business processes
through shared services and BPO

Consolidate infrastructure around a few key
technologies
t h l i

Use regulatory compliance requirements to
g y p q
pay for future investments

28

Consider the following key criteria for
future apps decision making

Usability of the solution

Pace of innovation

Ability
Abili to adapt to changes
d h

Ease of maintenance

Scalability

29

Use the SaaS Bill of Rights as a guide
to a win-win relationship

Source: Altimeter Group October 12th, 2009 “Customer Bill of Rights: SaaS”

Final thoughts
thoughts…

We can adapt to massive changes.

We will not allow our l
ll ll legacy
technologies to hold us back.

Our organizations can thrive by
adapting and i
d i d integrating emerging
i i
technologies.


Thank You

R “Ray” Wang

r@altimetergroup.com
@ li
http://blog.softwareinsider.org
Twitter: @rwang0
g
www.altimetergroup.com


32

Enterprises face massive and
unprecedented levels of change
• Commodity shortages
C dit h t • Distributed nature of work
• Economic crisis Macro Workplace • Global talent
• Price spikes
conditions dynamics

Models • New stakeholders
k h ld
adoption adoption • Goliath vs start-up
• Consumer tech ahead
• Digital divide closing • Regulation/ deregulation
around the world • B i
Business process
new adoption models

33

… and put together a road map
centered around your investment
Business Solution
Organizational Technology
Process Portfolio
Dynamics Effectiveness
Optimization Management

• Prioritize • Focus on • Leverage • Renegotiate
business automating reporting maintenance
requirements non tools and BI contracts
by hierarchy commoditized • Reduce before
of needs processes paperwork December
• Include ERP • Use workflow with • Innovate
requests in to stream line electronic sig around ERP
business business with SaaS
plans process solutions
• Identify areas • Enable other
for Office collaboration
integration tools for
• Address productivity
compliance


Ray Wang Workday Rising Keynote 2009

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