Boston-based Nucleus Research publishes its annual list of top 10 predictions for the forthcoming year, placing the continuing growth of Cloud Computing at its core.
According to the report, 2009 has seen an expansion in the number of organisations migrating some of their systems to the Cloud, as its benefits (such as the ability to recue capital expenditure and increase business agility) become clear. Nucleus expects the following factors to emerge in 2010:
• Accelerated growth of systems integrators that adopt the cloud as their platform of choice and help companies with traditional applications build roadmaps to migrate to the cloud.
• More internal IT teams embracing the cloud model as a means to accelerate development and trim ongoing operating and application maintenance costs.
• A shortening sales cycle for ISVs, even smaller ones, who have developed and tested their applications on a trusted cloud platform.
• Migration of traditional costly applications such as content management and imaging, contact centre operations, and even ERP to the cloud.
The increased adoption of platforms such as Salesforce.com’s Force.com has seen an expansion in enterprise apps on offer to companies, mirroring the explosive growth of bite-sized software in the consumer sector. Nucleus highlights independent software vendors (ISVs) as the winners, with platforms like Force.com allowing them to develop and monetise Cloud-based applications at a faster rate than previously possible. According to the research body, 2010 will see an increasing number of ISVs taking to the Cloud – with mergers and acquisitions on the cards for successful developers.
In contrast to its positive outlook for Cloud Computing, Nucleus Research’s assessment for SAP in 2010 is damning. Despite “applauding” the effort made by SAP in “avoiding newfangled trends like rapid deployment, ease of use, and positive ROI,” the study points out the company’s perceived failures. The limited demand for what Nucleus calls SAP’s “costly, complex software”, the ongoing pressures of margins as a result of increased competition from Oracle, and “a failed effort at delivering an on-demand ERP solution with Business By Design,” are just some of those cited by the report. Nucleus warns that in 2010, CFOs “will think twice about writing another big cheque to SAP.”
The continued penetration of Google into every aspect of people’s personal and business lives is also raised as a concern for the year ahead. Nucleus asks why the US government “has yet to look into what Google is doing with its near-monopoly on our personal data on the internet,” before pointing out 2010 could be the year conspiracy theorists add Google CEO Eric Schmidt’s place on President Obama’s technology advisory council to their lists.
According to the study, 2010 will see increased spending on analytics, with companies using business intelligence (BI) tools to make predictions. The study adds: “The analytics user population is expanding beyond the traditional base of analysts with statistical backgrounds to include marketers, risk managers, and even call centre staff.” The increased interest in analytics over the next 12 months is also attributed to acquisitions in the BI market, including IBM Cognos and Business Objects. Nucleus advises companies should, “stop thinking of predictive analytics as a shiny object that would be nice to have,” if they’re to take advantage of the trend. “Somewhere in all those bits of data in your databases are trends that can predict the future.”
The report also forecasts 2010 will see the introduction of a different profile of the ‘structurally unemployed’, especially with regards to IT and support: “As limited resources and economic uncertainty drive organisations to do more with less, the most successful organisations will be those that focus on increasing individual user productivity.” Nucleus predicts that even companies with the resources to employ will choose not to do so, thanks to procurements in new workflow and productivity tools.
The importance of CRM in 2010 hasn’t been underplayed in the report either. Nucleus offers a number of reasons why additional investment in the area will appear next year, including the following:
• The availability of on-demand CRM applications with relatively rapid, predictable deployment times and lower initial and ongoing costs are a less risky investment than other projects such as ERP upgrades or broad data warehousing initiatives.
• As aging on-premise customer contact centre applications become more costly to maintain and upgrade, customers are looking at options that can support multichannel communication, remote agents, and integration of customer community and social network feedback at a lower ongoing cost.
• Many organizations that moved call centre operations offshore in the first half of the decade are finding rising outsourcing costs, quality challenges, and lack of real-time access to data are driving reassessment of their contact centre strategy.
Away from Cloud services, the study expects 2010 to be a year of incremental investment in software, rather than one of “forklift upgrades, large user migration projects, or even a ‘flick the switch’ approach to Windows 7.” Nucleus forecasts companies will look to develop existing technologies to deploy projects for as little expenditure as possible.
The social media boom in 2009, especially surrounding micro-blogging website Twitter, has pushed Nucleus into firing a warning shot for companies, arguing they should weigh up the CRM benefits with recorded drop in worker productivity. According to the report, the average company currently loses 1.5% of employee productivity as a result of Facebook access during work hours. As for Twitter, Nucleus describes it as nothing more than an “interesting social phenomenon,” and that the value from the tweets of business users remained questionable. Rupert Murdoch’s aim to implement online subscriptions in 2010 is warned about a potential backlash in the report. Nucleus advises that until a solution to micropayments is found (multiple micropayments can trigger a fraud alert), “wise content providers will likely do better sticking with advertising.”
Finally, the report calls for a rethink of company mobility strategies in 2010. The continued convergence between PDAs, laptops, and mobile phones, over the next 12 months, coupled with the increase of in-flight wireless internet access, will see a demand for new policies on work-life balance and mobile connectivity expenses. Nucleus suggests, “a revamp of asset management policies may identify areas for savings, either by slowing device refresh rates or more aggressively negotiating with carriers.”
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