“EMERGING TECHNOLOGIES” · “EMERGING TECHNOLOGIES” Honorio J. Padrón III Principal. Global Practice Leader for Global Business Services May 6, ... Eurostat Data, BLI Data

“EMERGING TECHNOLOGIES”

Honorio J. Padrón III

Principal. Global Practice Leader for Global Business Services May 6, 2011

| 2 © 2011 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.

Global Forces

Technology Trends

A New Normal

Discussion Topics


Global Forces

Technology Trends

A New Normal

Discussion Topics


World Democratization continues to move forward

China 39%

India 8%

Euro +UK 16% Japan 10%

N America 27%

2010 GDP numbers North America $ 16,188 Japan $ 5,391 Euro zone + UK $ 14,257 China $ 5,745 India $ 1,430


Employment base continues to shift driving US / EU losses

-5.0%

0.0%

5.0%

10.0%

15.0%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

% R

ates

Unemployment and Growth Rates 2000-2010*

Europe Unemployment Rate US Unemployment Rate Europe Real GDP Growth US Real GDP Growth China Real GDP Growth

Source: Eurostat Data, BLI Data


Content creating patterns continue to evolve into the masses

6

Content value B

usin

ess

Gen

erat

ion

Content volume

Mass Generation

The Long Tail

New Zone


7

The Experience Economy

Engineering The Employee Experience

Deeper Understanding Of Business Human

Behavior

Engineering The Customer Experience

Deeper Understanding Of The Customer

Exponential World Development

A “Smaller” & Integrated World

Expansion Of Virtual Models

Disruptive Technologies

Cumulative Current Environment Capability Drivers

Behavioral Drivers

The Single Experience Economy

Mass Customization


Global Forces

Technology Trends

A New Normal

Discussion Topics


Technology Trends  Communications

 Services Platforms

 Sensory Networks

 Consumerization

 Social media

Discussion Topics




 Sensory Networks

 Consumerization

 Social media

Discussion Topics


Access gets better and better…

The World Summit on the Information Society (WSIS), held in Geneva (2003) and Tunis (2005), brought together governments, civil society and the business sector to discuss a broad range of subjects related to information and communication technology (ICT) for development. In the end, governments agreed on a set of commitments and actions to foster the establishment of an inclusive information society. In particular, ten targets were identified

The targets, to be achieved by 2015, range from connecting villages, schools, health centers, libraries and government agencies to developing content, incorporating ICTs in school curricula and providing broadcasting services to all people in the world.


… to all parts of the world

2010 74% of the world population

has cellular coverage 2010 25% of the world population

have internet access

2015 50% of the world

population will have internet

access


Value Units Service

28.8 kbps Plain Old Telephone System (POTS)

56 kbps Switched 56

56 kbps

Switched Multimegabit Data Service (SMDS)

64 kbps Integrated Services Digital Network (ISDN)

64 kbps DS0

128 kbps ISDN Dual Channel

230.4 kbps LocalTalk

640 kbps

Asymmetric Digital Subscriber Line (ADSL) Upstream

100 Mbps 100Base-T Ethernet (Fast Ethernet) 100 Mbps Ultra DMA Hard Disk 100 155.52

Mbps Asynchronous Transfer Mode (ATM)

155.52

Mbps OC-3/STM-1

160 Mbps Fast Wide SCSI 160 Mbps Ultra SCSI 274.176

Mbps DS-4/T4

320 Mbps Wide Ultra SCSI 320 Mbps MicroChannel Card 400 Mbps FireWire (IEEE 1394) 466.56

Mbps OC-9/STM-3

480 Mbps USB 2.0 622.08

Mbps OC-12/STM-4

640 Mbps Wide Ultra2 SCSI

2 Gbps PCI bus at 66 MHz bus speed

2.1 Gbps AGP 1X port 2.488 Gbps OC-48/STM-16 2.56 Gbps Ultra320 SCSI

3.2 Gbps PCI bus at 100 MHz bus speed

4.2 Gbps PCI bus 64 bit at 66MHz

4.2 Gbps AGP 2X port 4.976 Gbps OC-96/STM-32 8.5 Gbps AGP 4X port 9.953 Gbps OC-192/STM-64

10 Gbps 10G Ethernet (IEEE 802.3ae)

13.271 Gbps OC-255

… speed growth is exponential


…facilitating content proliferation and platform capabilities…

Common Name Used With Time to Transfer 1 Megabyte

Time to transfer 50 Megabytes

28.8Kbps Modems 4.5 Min 3.8 Hrs 56.6Kbps Modems 2.3 Min 2 Hrs 128Kbps ISDN 1 Min 50 Min

460Kbps Some Cable Modems 17 Sec 14.5 Min

1Mbps Home PNA 1.0, Cable Modes 8 Sec 6.5 Min

1.6Mbps HomeRF 5 Sec 4 Min 10Mbps Ethernet 1 Sec 40 Sec 100Mbps Fast Ethernet 1 Sec 4 Sec


…with wireless catching up as well




 Sensory Networks

 Consumerization

 Social media

Discussion Topics


PLATFORM- CENTRIC

INTEGRATION- ORIENTED

FOCUS •  Internally sourced processes & technology • Vendor proprietary technical standards • Enterprise-specific semantic standards • Value realization, efficiency improvement

FOCUS • Selectively outsourced processes

& technology • Vendor-controlled technical standards • Value-chain proprietary semantic standards • Value realization through effectiveness

improvement

SERVICES ECOSYSTEMS

Time

Valu

e

OS 390

FOCUS • Selectively outsourced processes & “on-demand” technology • Open & ecosystem controlled technical standards • Value-chain-specific open semantic standards • Value realization through business model innovation

SOA

R/3

MoM

Commoditization

Commoditization

Innovation

Innovation

Innovation

“Wintel”

Source: The Hackett Group

SaaS

PaaS

Virtualization

IaaS

Commoditization

Client/Server

.COM Y2K

SARBOX BW

Global Crisis

Market D

rivers

Globalization

Macro Trend: The Service Economy

Internet

Web services


Cloud computing - internet-based computing, whereby shared resources, software, and information are provided to computers and other devices on demand

Definition


Cloud adoption perspective •  Cloud is following a typical technology adoption curve – the hype is significant - but actual

take up is cautious, targeted and specific •  Two differentiated groups are creating the cloud environment:

•  Early adopters: Companies that have implemented cloud based solutions and have realized benefits – We termed these ‘Cloud Adopters’

•  Early Majority: Companies that are experimenting with cloud solutions but too early to realize benefits – We termed them ‘Peers’

Technology Adoption Curve Dimension Cloud Adopter Peer

Average Revenue

$4.50 bn $5.21 bn

Average # Employees

13,658 17,387

Employee Growth Rate

2.75% 0.23%

Capital Spend Growth Rate

1.45% 4.95%

Summary Smaller companies with high growth and low spend

Larger companies, mature, with large capital bases

Differentiating Dimensions



Content in the Cloud – Transforming the Content Life Cycle Architecture Plays by Cisco and IBM

21

▪  Video production HW / SW ▪  SW for image / video editing, HW

and SW for real-time collaboration

▪  Cloud-hosted datacenter HW, SW and network equipment

▪  Intelligent content tagging and transcription HW / SW tools

▪  User search analytics tools

▪  SW / video tools to program and embed links in content, advanced interactivity

▪  Video format conversion tools ▪  Automated distribution tools

▪  Analytics tools to track video downloads / traffic, and correlate to business performance (sales)

Public / private hosted cloud

Collaborative content creation

Content storage/

aggregation

Content transcription /

tagging

Content activation

Content transcoding / distribution

Performance tracking

Business Integration &Solutions consulting

IBM

Cisco

Cisco + IBM

Cisco + 3rd party

▪  Cisco would provide SW and HW for collaboration, tagging, activation , data center and storage, and content distribution

▪  IBM would provide SW tools for content management, analytics, tagging, activation and performance tracking, and HW for data center and storage, and solutions consulting services

▪  Ecosystem partners would provide end device, network, content distribution, and SW tools for content editing, DRM management, and vertical business applications

SOURCE: joint report by McKinsey, Cisco, IBM, Aug. 2010


The Variance Between Current And Future Trends Show Technology Sourcing Following Application Sourcing…

4%

5%

5%

6%

7%

7%

7%

9%

11%

14%

16%

21%

22%

33%

Core business applications

Application development platforms

Storage capacity

BI / analytics

Application integration / BPM / Data management middleware

Permanent server capacity

Temporary server capacity

End user productivity tools

Integrated extensions of core business applications

Testing platforms and capacity

Other collaboration and knowledge management tools

IT service management tools

Stand alone business applications / point solutions

Email / messaging

Cloud Computing as the Preferred Sourcing Option: Now In 2 Years

Notes: Weighted average scores

16%

17%

20%

19%

10%

29%

41%

24%

19%

22%

34%

24%

31%

57%


The Human Cloud




 Sensory Networks

 Consumerization

 Social media

Discussion Topics


Sensor networks support a “touchless” environment




 Sensory Networks

 Consumerization

 Social media

Discussion Topics


Screen convergence

A Multi-Screen Consumer is defined as an adult between the ages of 18 and 64 who has and uses a TV, computer, and smartphone, and who also accesses the Internet at least 2–3 times each week using both their computer and smartphone. An estimated 33 million Americans with internet access are considered Multi-Screen Consumers.

Source: Microsoft Researches Three Screen Strategies for Marketing


Typical multi screen consumer usage profile

Consumerazition


"   Support the growing “typical” workplace, including homes and public venues "   For offsite and home-based workers, virtualize full

desktops "   For mobile workers, store settings/data in a

centralized location and virtualize applications

Boosting Productivity with New Ways of Connecting & Sharingers to Productive Remote Working

Source: Microsoft Consumerization of IT


Delivering IT Flexibility while Managing Security

"   Deliver a consistent user experience from any computer with virtualization:

"   Enable corporate network access seamlessly, more securely without a VPN

"   Help protect sensitive business information by encrypting portable drives

USER STATE (DATA AND SETTINGS)

APPLICATIONS

OPERATING SYSTEM

HARDWARE

User state virtualization

Application virtualization

Desktop virtualization

Source: Microsoft Consumerization of IT




 Sensory Networks

 Consumerization

 Social media

Discussion Topics


Collec&ve Talent

New Media and Digital Engagement & Collaboration represents the next frontier for how companies conduct business

Consider tradi&onal music development …

Changing rules of engagement: • Consumers create their own market pulse •  Insight is created in how the community engages Changing rules of mone&za&on: •  Early trend idenOficaOon • Unique channel opportuniOes • Content and informaOonal value beyond the community

… technology enables a drama&c new model

It changes the way we think about serving customers … … and bringing together enterprise talent

E-‐Jamming IniOal

Track StarOng Musician

IteraOve Musicians

Personal IteraOons

Final represents the last available itera/on

By changing the way knowledge-‐workers operate: •  Tap the collecOve wisdom •  Engage consOtuents when needed with what’s needed • PrioriOze inputs, acOons and outcomes in-‐the-‐moment •  Simplify complex surroundings Organiza&ons can achieve breakthrough gains: •  Faster, leaner and more precise outcomes •  Engaged parOcipants

Musician

Small Circle Of Friends

The Band

Small Audience Feedback

The Product?

An idea… Lots of refinement

Months or years to “product” Days or weeks to “product”


Solutions can appear across the full value chain

OperaOons Support Revenue Support Revenue GeneraOon

Starbucks

Local Insight Media

Marrioa

Dell

•  Greater consistency •  Improved operaOng controls •  Greater throughput •  Reduced occurrence of errors

•  Improved turnover •  Shortened learning curves and cycle Omes

•  Increased speed of decision-‐making

•  Increased speed of acOon •  Improved precision of acOon •  Faster market entry/response Omes

•  Improved revenue visibility and transparency

•  Greater depth of penetraOon

•  New forms of revenue •  Faster access to new segments

•  Improved segmentaOon •  MoneOzing data intelligence

Primary objec&ves …


Solutions can appear across the full value chain

OperaOons Support Revenue Support Revenue GeneraOon

Starbucks

Local Insight Media

Marrioa

Dell

Consumer ProducOvity

Knowledge Worker ProducOvity

0% •  CreaOon of an “Enterprise Asset” that couldn’t have been tapped in tradiOonal ways

•  Bringing Disparate players together in a community to collaborate in fundamentally different and more producOve ways

•  Very low investment, very big return

Consistent Characteris&cs

Prim

ary Focus


What some companies are already doing

 Starbucks – originating oatmeal. With lackluster in-store experiences, Starbucks creates a community of interested actors that includes store personnel and most corporate functions, charged with promoting ideas to improve customer experiences. Using dynamic proposing/voting technology from SalesForces.com, a Starbucks store manager floats the idea of offering oatmeal. The result, oatmeal becomes the fastest food-item introduction in Starbucks’ history and the faster revenue growth item in their history

 Dell – A tweet for early adopters. Tweets go out to a self-adopting community on specials, deeply discounted aging popular items and previews of new-release technology. The channel has very high signal-to-noise: the community is comprised of early adopters who are looking for access to Dell deals. The profile match of message to audience is almost perfect. The audience is interested, motivated and on-the-whole well-qualified.


Global Forces

Technology Trends

A New Normal

Discussion Topics


Revenue, GM, OP

EPS, ROE, ROA

Service, Cost and Strategic Enablement

Performance Motivators Work Distribution

Sales / Marketing / Operations

Business Strategy

Service Provisioning

Service Management

Protection / Performance / Culture

Enterprise / Portfolio Strategy

BU

SIN

ESS

UN

ITS

“SH

AR

ED”

SER

VIC

ES

CO

RPO

RAT

E

Leveraging

Tran

sact

ions

Kno

wle

dge

Optimizing work based on core competencies and mission focus


Rapid but logical progression Ef

fect

iven

ess

Effic

ienc

y

Des

ired

Expe

cted

Complexity Reduction

(ELIMINATE, SIMPLIFY, AUTOMATE, CONSOLIDATE, GLOBALIZE)

Operating Excellence (DECISION SUPPORT, CASH OPTIMIZATION,

RESPONSE TIME, ERROR RATES)

CO

ST

SER

VIC

E ST

RAT

EGIC

Strategic Business Enablement (BUSINESS INTELLIGENCE, COLLABORATION,

CAPABILITY, FLEXIBILITY, AGILITY)

 Technology is facilitating a leveling of the playing field

 Smaller/mid-sized organizations are jumping to rather than evolving to strategic enablement, without the capital investment

 Technology is quickly enabling companies to become ‘business agile’ through leveraging “converged” business solutions


World outcomes…

 People and information are at the center of all activities instead of Governments

 Business and personal time converge with conflicting impacts on the quality of life

 The enterprise is more agile, effective, efficient and truly GLOCAL

George San Jose at 60 years old


Statement of Confidentiality and Usage Restrictions

This document contains trade secrets and other information that is company sensitive, proprietary, and confidential, the disclosure of which would provide a competitive advantage to others. As a result, the reproduction, copying, or redistribution of this document or the contents contained herein, in whole or in part, for any purpose is strictly prohibited without the prior written consent of The Hackett Group.

www.thehackettgroup.com

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“EMERGING TECHNOLOGIES” · “EMERGING TECHNOLOGIES” Honorio J. Padrón III Principal. Global Practice Leader for Global Business Services May 6, ... Eurostat Data, BLI Data