Broadgate 2013 Predictions – how did we do?

Posted on : 30-12-2013 | By : richard.gale | In : Innovation

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In December 2012 we identified some themes we thought would be important for the coming year. Let’s see how we got on…

1. Infrastructure Services continue to commoditise – for many organisations, Infrastructure as a Service (IaaS) is now mainstream. Technology advancement will continue to move the underlying infrastructure more towards a utility model and reduce costs in terms of software, hardware and resource.

This has happened and is continuing to grow, most organisations have the infrastructure in place to support IaaS with private clouds and virtualised environments. However, the flexibility and agility benefits have not always been realised as large organisation IaaS have sometimes been weighed down with the legacy change and build processes of the previous model. To circumvent this, many businesses are looking at public cloud for more flexible capacity. This will be the big growth area of 2014 especially with financial services organisations that, previously, have been hesitant in adopting public cloud solutions.

2. Application/Platform rationalisation – for many large firms there is still a large amount of legacy cost in terms of both disparate platforms, often aligned by business unit, and their sheer size/complexity. The next year will see an increase in rationalisation of application platforms to drive operational efficiency.

In 2013 the understanding and scale of the problem became more apparent but, with limited change/transformation budgets (in financial services mainly due to the burden of regulatory compliance requirements) not much action. Now these complex webs of legacy applications are starting to fail and seriously constrained business growth. 2014 will be a ‘crunch’ year when these expensive problems have to be tackled head on either through wholesale re-architecting or giving someone else the problem of running them whilst new solutions are built.

3. Big Data/ Data Science grows and market starts to consolidate – 2012 was the year that Big Data technologies went mainstream…2013 will see an increased focus on Data Science resource and technology to maximise the analytical value. There will also be some consolidation at the infrastructure product level.

In financial services we saw a fair amount of discussion, some large proof of concept projects focusing on consolidation (many seem to be targeting the risk and finance areas), but not the levels of take up we expected. MasterCard have come in with a big data restaurant review concept. We may have been slightly premature with this one. We think the understanding of Data Science is starting to go mainstream and, as with Cloud, the demand will come more from the business rather than IT architects in 2014.

4. Data Centre/Hosting providers continue growth – fewer and fewer companies are talking about building their own data centres now, even the very large ones. With the focus on core business value, infrastructure will continue to be hosted externally driving up the need for provider compute power.

 Many organisations either use external more flexible hosting solutions or have an excess of capacity in their existing data centres. This will continue and grow in pace in 2014.

5. More rationalisation of IT organisations – 2012 saw large reductions in operational workforce, particularly in financial services. With revenues under more pressure this year (and in line with point 1) we will see further reductions in resource capacity and relocation to low cost locations, both nearshore and within the UK.

In the financial services sector this may be at an end. There will be growth in demand for IT skills in 2014 but there will be some reductions particularly in the infrastructure/BAU space due to the continued commoditisation of technology and move to XaaS services.

6. Crowd-funding services continue to gain market share – there have been many new entrants to this space over recent years with companies such as Funding Circle, Thin-Cats, Bank-to-the-Future and Kickstarter all doing well. We see this continuing to grow as access to funds from traditional lenders is still hard. The question is at what point will they step in.

This one was an easy prediction as a low starting point combined with the banks reluctance to lend, low interest rates and increasing interest in the tech sector inevitably led to high levels of growth. 2014 will continue this trend but with a higher degree of regulation after the first high profile failure of a lending exchange…

7. ‘Instant’ Returns on investment required – growth of SaaS & BYOD is changing the perception of technology. People as consumers are now accustomed to an instant solution to a problem (by downloading an app or purchasing a service with a credit card). This, combined with historic patchy project successes, means that long lead-time projects are becoming harder to justify; IT departments are having to find near instant solutions to business problems.

Business users are leading IT departments on the adoption of SaaS in particular. IT is playing catch-up and the race will continue. We are not sure what 2014 will bring on this. It could be that IT departments regain control or, alternatively, are bypassed on a more frequent basis by impatient, IT savvy business users.

8. Technology Talent Wars – with start-ups disrupting traditional players in areas such as data analytics, social media and mobile payment apps, barriers to entry eroding and salaries on the rise we see a shift from talent wanting to join industries such as financial services and choosing new technology companies.

Relatively low demand from financial services firms (except for a few specific skills such as security) has deferred this. This is more likely to impact 2014 change and innovation programmes now.

9. Samsung/Android gain more ground over Apple – we already have seen the Apple dominance, specifically in relation to the Appstore, being eroded and this will continue as the potential of a more open platform becomes apparent to both developers and users of technology.

This has happened and will continue unless Apple can come up with some new magic. Phones/tablets are the new battleground, other operating systems such as Windows and potentially Jolla could disrupt the trend in 2014.

10. The death knell sounds for RIM/Blackberry – not much more to say. Most likely they will be acquired by one of the big new technology companies to gain access to the remaining smart phone users.

The only thing to add to this is that there may be a ‘dead-cat’ bounce for Blackberry in 2014.

 

Once again we hope you have enjoyed our monthly articles and have had a successful 2013. We wish you all the same for 2014!

 

Smartphone Wars – Android firmly in front

Posted on : 02-09-2013 | By : jo.rose | In : Innovation

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At the beginning of 2013 we published our 10 predictions for the year. At numbers 9 and 10 they included:

  • Samsung/Android gain more ground over Apple – “we already have seen the Apple dominance, specifically in relation to the Appstore, being eroded and this will continue as the potential of a more open platform becomes apparent to both developers and users of technology”.
  • The death knell sounds for RIM/Blackberry – “not much more to say. Most likely they will be acquired by one of the big new technology companies to gain access to the remaining smart phone users”.

Not everyone agreed (surprising in our view regarding Blackberry…) – but we thought that with the recent media focus now was a good time just to cast a few further thoughts.

A few weeks ago IDC published their worldwide phone tracker stats including the smartphone OS shipments (see below)

 

So, it looks like the Android is unstoppable at the moment with a 73.5% increase in the year to 2Q13, now commanding some 79.3% of the market. Whilst “technically” they were outperformed by Windows phone with 77.6% increase, the volumes pale in comparison.

On the mobile handset side, Samsung was the largest vendor in the world by a huge margin according to IDC’s data. The South Korea-based giant shipped an estimated 113.4 million cell phones worldwide in the second quarter to take 26.2% of the global market, up from 23.9% in the same quarter last year (Nokia retained the No.2 spot, but it handset shipments dropped 27% to 61.1 million units).

Apple sold 31.2 million iPhones last quarter which according to IDC represents 7.2% of the mobile handset market in Q2 (up from Apple’s 6.4% market share in Q2 2012).

It is rapidly becoming a two horse race, with Android representing more units in the last quarter than the entire smartphone market in the same quarter in 2012!.

Can IOS keep pace? On the current evidence it seems not. They are, however, still a long way ahead of the pack of which Windows phone seems the only credible each way bet.

So, on to Blackberry. BB10 hasn’t been the success that they desperately needed and will give the Windows Phone platform a boost. Indeed, as I write this article the rumour doing the rounds is that T-Mobile are stopping sales of Blackberry 10 devices in store and will offer online only…another blow.

Bert Nordberg, ex Sony Ericsson CEO and now on the board at Blackberry, is helping to shape the strategy going forwards, which includes operating as a more “niche maker of mobile hardware” and selling off certain assets. He recently told The Wall Street Journal “BlackBerry has cash and it has no debt, so I’m sure that we’ll piece something together”.

Not the most resounding endorsement or encouragement for Blackberry employees. The For Sale sign is firmly up…but the question is who will buy?

It’s official – the desktop is dead (well, nearly)

Posted on : 30-04-2013 | By : john.vincent | In : Innovation

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Having spent much of my earlier career in the desktop engineering space (I took the Microsoft Systems Engineering exam in 1995 which included the now “antique-like” Windows NT 3.1, SMS 1.0 and Microsoft Mail), I have followed the whole desktop domain closely over the years.

Back in the mid 90’s, and probably for 10 or so years from that, a whole industry developed helping enterprises manage, optimize and migrate their desktop and associated server infrastructure from one version to the next. Very knowledgeable (and expensive) contractors and consultants advised on the best desktop roadmaps, how to package and distribute applications without conflicts, how to access the corporate network using RAS (cutting edge at the time), how to migrate from Novell Directory Services to Active Directory etc… Indeed, the “Windows Guru” strode majestically through the enterprise hallways.

However, the world is clearly a lot different today. Whether you lay the blame at the rapid rise of consumerisation, the move of compute power to cloud/virtual hosts, the economic decline or, more specifically, January 27th 2010 and the launch of the iPad, the fact is that the desktop PC (and to a lesser extent, laptops), is an industry in decline.

Recent sales statistics do not make for rosy reading. IDC figures for Q1 showed that PC shipments declined 13.9% last quarter, marking two quarters of significant decline with the Q4 2012 also being off 10% from the previous quarter. Fairly depressing news if you are one of the major desktop PC manufacturers.

The bottom line is that the role that the PC plays in peoples day to day lives is changing. Do you still come through the door and “fire up” the old desktop (positioned on a dubiously assembled Ikea workstation under the stairwell) using the time whilst Windows configures its updates to perform household chores? Probably not. Like the tablets and smartphones we carry, I guess you will have been “always on”, consuming important corporate updates, world news and dealing with the backlog of emails built up during the day (plus, multi-tasking on Level 33 of Candy Crush…).

The combination of the way we work, socialise and use applications/data has certainly meant that being physically tied to a desktop or laptop just doesn’t fit anymore. At the weekend I saw someone balancing their laptop on their forearm and attempting to type as they got onto a train – I remember doing the same myself but wouldn’t dream of it now.

What about enterprises I hear you cry? Our users need the compute power and richness of business applications that just doesn’t exist on IOS or Android based devices. This is true, today.

I certainly wouldn’t want to suggest that the PC market for desktops and laptops is dead. What it has done is lost its value. for most enterprises the PC has become a necessity for running certain business applications rather than something which is seen as a differentiator, productivity enhancer, or agile.

According to figures, end users have found that they can perform as much as 80% of their day to day needs on a tablet. With the other 20% requiring a PC, one outcome is that people are no longer looking for the latest and greatest desktops or laptops – choosing instead to opt for cheaper options for compute needs and where possible, switch productivity applications to hosted solutions such as Google and Office365.

With the release of Windows 8 Microsoft have sought to capitalise on (and protect) their market through closing the divide between desktop computing and the key features of tablets through mobility and the touch screen interface. It is a large transition and one which, so far, doesn’t seem to have convinced end users.

So what does the future hold for the PC? Well, at the top end of the enterprise market it’s not all bad. The volumes at the higher performance end (£700 plus) seem to be holding up better with greater margins. Plus the indications are that at the lower end they will continue to drive the price down for Windows 8 tablets.

However, we are in the final throes of the PC as we know it. Companies that can evolve their roadmap in line with the needs of consumers and business users will survive. However, at the moment this doesn’t look like an extensive list.

And what about the desktop gurus updating those certifications? Well, at a quick glance it might be best to leave it to Generation Y…

 

Broadgate Predicts 2013 – Preview

Posted on : 29-01-2013 | By : john.vincent | In : Innovation

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Last month we published our 2013 Technology Predictions and asked our readers to give us their view through a short survey. We have had a great response…so much so that we are keeping in open for 2 more weeks.

However, we thought we would share a few of the findings so far, prior to us producing the final report.

Current Ranking

As we stand, the predictions that generated the most agreement are;

  1. Infrastructure Services Continue to Commoditise
  2. Samsung/Android gain more ground over Apple
  3. Data Centre/Hosting providers continue to grow

Some interesting commentary against these;

Many companies have come to terms with the security/regulatory issues concerning commoditisation and cloud services, although still chose to build in-house for now. It will take some significant time to see IaaS address the legacy infrastructure burden.

On the Apple debate, respondents agreed enough to place in 2nd place but differed a lot in terms of how this will develop…there is a feeling that Apple are struggling to continue to innovate ahead of the market and consumers are wiser now, together with a cost pressure that, if it is relieved, will cause users to stay with them.

Regarding Data Centres, the importance of cloud and managed services continues to drive expansion. Within heavily regulated industries such as Financial Services there continues to be a desire to Build vs Buy, but respondents questioned for how long. Having your own DC is not a competitive advantage.

At the other end of the scale, the prediction that respondents disagreed most with was;

  • Instant Returns on Investment required (followed closely by)
  • More Rationalisation of IT Organisations

Again, a pick of some of the additional comments;

Whilst there still exists demand for long term and large corporate technology initiatives, the stance is starting to change somewhat towards more agile, focused investments. Unfortunately, legacy issues and organisational culture continue to block progress.

Whilst the market conditions and technology evolution is facilitating a reduction in workforce, respondents cited other equal forces in areas such as risk and control, plus offshore operations delivering less value than expected, working to counteract this.

Please continue to send us your thoughts before we close!

Interestingly the largest number of No Comments (40%) came against the prediction that “Crowd-funding services continue to gain market share”…maybe an article for February.