The Impending Enterprise 2.0 Software Market Consolidation

Talk about a trip down memory lane…  Another excellent blog post yesterday by my friend and fellow Babson College alum, Sameer Patel, snapped me back a few years and gave me that spine tingling sense of deja vu.

Sameer wrote about how the market for Enterprise 2.0 software may evolve much the same way the enterprise portal software market did nearly a decade ago. I remember the consolidation of the portal market very well, having actively shaped and tracked it daily as an analyst and consultant. I would be thrilled if the E2.0 software market followed a similar, but somewhat different direction that the portal market took. Allow me to explain.

When the portal market consolidated in 2002-2003, some cash-starved vendors simply went out of business. However, many others were acquired for their technology, which was then integrated into other enterprise software offerings. Portal code became the UI layer of many enterprise software applications and was also used as a data and information aggregation and personalization method in those applications.

I believe that much of the functionality we see in Enterprise 2.0 software today will eventually be integrated into other enterprise applications. In fact, I would not be surprised to see that beginning to happen in 2010, as the effects of the recession continue to gnaw at the business climate, making it more difficult for many vendors of stand-alone E2.0 software tools and applications to survive, much less grow.

I hope that the difference between the historical integration of portal technology and the coming integration of E2.0 functionality is one of method. Portal functionality was embedded directly into the code of existing enterprise applications. Enterprise 2.0 functionality should be integrated into other applications as services. Service-based functionality offers the advantage of writing once and using many times.  For example, creating service-based enterprise micro-messaging functionality (e.g. Yammer, Socialcast, Socialtext Signals, etc.) would allow it to be integrated into multiple, existing enterprise applications, rather than being confined to an Enterprise 2.0 software application or suite.

The primary goals of writing and deploying social software functionality as services are: 1) to allow enterprise software users to interact with one another without leaving the context in which they are already working, and 2) to preserve the organization’s investment in existing enterprise applications. The first is important from a user productivity and satisfaction standpoint, the second because of its financial benefit.

When the Enterprise 2.0 software market does consolidate, the remaining vendors will be there because they were able to create and sell:

  • a platform that could be extended by developers creating custom solutions for large organizations,
  • a suite that provided a robust, fixed set of functionality that met the common needs of many customers, or
  • a single piece or multiple types of service-based functionality that could be integrated into either other enterprise application vendors’ offerings or deploying organizations’ existing applications and new mashups

What do you think? Will history repeat itself or will the list of Enterprise 2.0 software vendors that survived the impending, inevitable market consolidation consist primarily of those that embraced the service-based functionality model?

Join the Keynote Conversation at Gilbane Boston via our blog or Twitter

We hope to see many of you at our opening keynote panel at Gilbane Boston (December 2, 8:30 – 10:00am at the Westin Copley), but whether you are there physically or not, you can participate by asking questions in advance. K1. Opening Keynote Panel – A Conversation About Content, Collaboration & Customers includes:

Moderator: Frank Gilbane, CEO Gilbane Group
Panelists:
Susan Parker, Director, Mass.gov, Commonwealth of Massachusetts
Michael Edson, Director, Web and New Media Strategy, Office of the CIO, Smithsonian Institution
Luuk de Jager, Senior Director, B2C Organizational Empowerment, Central Marketing Office Online, Philips Consumer Lifestyle

See the complete description of the panel at: http://gilbaneboston.com/conference_program.html#K1

Four ways to ask questions:

  1. email questions to questions@gilbaneboston.com – be sure to identify which session the question is for
  2. include questions as a comment on this blog post
  3. Tweet your questions using the conference and session hash tags (see below)
  4. DM your question to http://twitter.com/gilbaneboston

A note on hash tags:

#gilbaneboston is the event hash tag. For individual sessions we’ll use the session codes listed with the session descriptions, for example #k1 for K1. Opening Keynote Panel – A Conversation About Content, Collaboration & Customers. For sessions with multiple codes, simply use the first, so for W9/E13/I7. Open Source CMS Powwow use #w9. For Pre-conference workshops use the workshop codes. For example for worksop A: How to Select a Web Content Management System use #a.

Ask away!

Box.net Offers Proof of Its New Enterprise Strategy

box_logo.gifBox.net announced today that it has integrated its cloud-based document storage and sharing solution with Salesforce.com. Current Box.net customers that want to integrate with Salesforce CRM can contact Box.net directly to activate the service. Salesforce.com customers may now download Box.net from the Salesforce.com AppExchange.

Box.net services will now be available in the Lead, Account, Contact, and Opportunity tabs of Salesforce CRM. In addition, the Box.net native interface and full range of services will be accessible via a dedicted tab on the Salesforce CRM interface. Users can upload new files to Box.net, edit existing files, digitally sign electronic documents, and e-mail or e-fax files. Large enterprise users will be given unlimited Box.net storage. The Box.net video embedded below briefly demonstrates the new Salesforce CRM integration.

While Box.net started as a consumer focused business, today’s announcement marks the first tangible manifestation of its emerging enterprise strategy. Box.net intends to be a cloud-based  document repository that can be accessed through a broad range of enterprise applications.

The content-as-a-service model envisioned by Box.net will gain traction in the coming months. I believe that a centralized content repository, located on-premise or in the cloud, is a key piece of any enterprise’s infrastructure. Moreover, content services — functionality that enables users to create, store, edit, and share content — should be accessible from any enterprise application, including composite applications such as portals or mashups created for specific roles (e.g. sales and/or marketing employees, channel partners, customers). Users should not be required to interact with content only through dedicated tools such as office productivity suites and Content Management Systems (CMS).

Other content authoring and CMS software vendors are beginning to consider, understand, and (in some cases) embrace this deployment model. Box.net is one of the first proprietary software vendors to instantiate it. Adoption statistics of their new Salesforce CRM integration should eventually provide a good reading as to whether or not enterprise customers are also ready to embrace the content-as-a-service model.

SharePoint – Migrating the Office Franchise to the Web

Microsoft has a lot to lose if they are unable to coax customers to continue to use and invest in Office.  Google is trying to woo people away by providing a complete online experience with Google Docs, Email, and Wave.  Microsoft is taking a different tact.  They are easing Office users into a Web 2.0-like experience by creating a hybrid environment, in which people can continue to use the rich Office tools they know and love, and mix this with a browser experience.  I use the term Web 2.0 here to mean that users can contribute important content to the site. 

SharePoint leverages Office to allow users to create, modify, and display "deep[1]" content, while leveraging the browser to navigate, view, discover, and modify "shallow[1]" content.  SharePoint is not limited to this narrow hybrid feature set, but in this post I  examine and illustrate how Microsoft is focusing its attention on the Office users.  The feature set that I concentrate on in this post is referred to as the "Collaboration" portion of SharePoint.  This is depicted in Microsoft’s canonical six segmented wheel shown in Figure 1.  This is the most mature part of SharePoint and works quite well, as long as the client machine requirements outlined below are met.

 

 Figure 1: The canonical SharePoint Marketing Tool – Today’s post focuses on the Collaboration Segment

Preliminaries:   Client Machine Requirements

SharePoint out-of-the-box works well if all client machines adhere to the following constraints:

  1. The client machines must be running Windows OS (XP, Vista, or WIndows 7)
    NOTE: The experience for users who are using MAC OS, Linux, iPhones, and Google phones is poor. [2]
  2. The only truly supported browser is Internet Explorer (7 and 8.) [2]
    NOTE: Firefox, Safari, and Opera can be used, but the experience is poor.
  3. The client machines need to have Office installed, and  as implied by bullet 1 above, the MAC version of Office doesn’t work well with SharePoint 2007.
  4. All the clients should have the same version of Office.  Office 2007 is optimal, but Office 2003 can be used.  A mixed version of Office can cause issues.
  5. A number of tweaks need to be made to the security settings of the browser so that the client machine works seamlessly with SharePoint. 

I refer to this as a "Microsoft Friendly Client Environment."

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[1] The terms "deep" and "shallow" are my creation, and not a standard.  By "deep" content I am referring to the complex content such as a Word documents (contracts, manuscripts) or Excel documents (complex mathematical models, actuarial models, etc…)

[2] Microsoft has addressed this by stating that SharePoint 2010 would support some of these environments.  I am somewhat skeptical. 

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Read More →

Integration of Social Software and Content Management Systems: The Big Picture

Jive Software’s announcement last week of the Jive SharePoint Connector was met with a "so what" reaction by many people. They criticized Jive for not waiting to make the announcement until the SharePoint Connector is actually available later this quarter (even though pre-announcing product is now a fairly common practice in the industry.) Many also viewed this as a late effort by Jive to match existing SharePoint content connectivity found in competitor’s offerings, most notably those of NewsGator, Telligent, Tomoye, Atlassian, Socialtext, and Connectbeam.

Those critics missed the historical context of Jive’s announcement and, therefore, failed to understand its ramifications. Jive’s SharePoint integration announcement is very important because it:

  • underscores the dominance of SharePoint in the marketplace, in terms of deployments as a central content store, forcing all competitors to acknowledge that fact and play nice (provide integration)
  • reinforces the commonly-held opinion that SharePoint’s current social and collaboration tools are too difficult and expensive to deploy, causing organizations to layer third-party solution on top of existing SharePoint deployments
  • is the first of several planned connections from Jive Social Business Software (SBS) to third-party content management systems, meaning that SBS users will eventually be able to find and interact with enterprise content without regard for where it is stored
  • signals Jive’s desire to become the de facto user interface for all knowledge workers in organizations using SBS

The last point is the most important. Jive’s ambition is bigger than just out-selling other social software vendors. The company intends to compete with other enterprise software vendors, particularly with platform players (e.g. IBM, Microsoft, Oracle, and SAP), to be the primary productivity system choice of large organizations. Jive wants to position SBS as the knowledge workers’ desktop, and their ability to integrate bi-directionally with third-party enterprise applications will be key to attaining that goal.

Jive’s corporate strategy was revealed in March, when they decreed a new category of enterprise software — Social Business Software. Last week’s announcement of an ECM connector strategy reaffirms that Jive will not be satisfied by merely increasing its Social Media or Enterprise 2.0 software market share. Instead, Jive will seek to dominate its own category that bleeds customers from other enterprise software market spaces.

Effective Authoring for Translation: An Interview with LinguaLinx

Fifth  in a series of interviews with sponsors of Gilbane’s 2009 study on Multilingual Product Content: Transforming Traditional Practices into Global Content Value Chains.

We spoke with David Smith, president of LinguaLinx Language Solutions, a full-service translation agency providing multilingual communication solutions in over 150 languages.  David talked with us about the evolving role of the language service provider across the global content value chain (GCVC), their rationale for co-sponsoring the research, and what findings they consider most relevant from the research.

Gilbane: How does your company support the value chain for global product support?

Smith: As a translation agency, we’ve realized that our involvement with global content should be much earlier in the supply chain. In addition to localization, we support clients in reducing costs and increasing efficiencies by providing consulting services that revolve around the content authoring process – from reuse strategies and structured authoring best practices to maximizing the inherent capabilities of content management and workflow systems. Rather than just adapting content into other languages, we assist with its creation so that it is concise, consistent and localization-friendly.

Gilbane: Why did you choose to sponsor the Gilbane research?

Smith: Of the many organizations and associations we belong to, we find that the research and topics of Gilbane studies and conferences alike most closely align with our interest and efforts to diversify our services and become a turn-key outsourced documentation consultancy as opposed to a traditional translation agency.

Gilbane: What is the most interesting/compelling/relevant result reported in the study?

Smith: The findings present two major points that we feel are relevant. First, there is definitely wide-ranging recognition of the benefits derived from the creation of standardized content in a content management system integrated with a localization workflow solution. 

Secondly, there are many, many different ways of approaching the creation, management, and publishing of global content.  There’s often a significant gap between the adoption of global content solutions – such as authoring software, translation management software, workflow linking different technologies – and the successful implementation of these solutions among those responsible for day-to-day content creation and delivery.  A major manufacturer of GPS technology is actually authoring directly in InDesign to a great extent even though it utilizes an industry-leading translation workflow tool – which provides an example of the lengths to which internal processes must be changed to realize truly efficient global content processes.

For more insights into the link between authoring and translation and localization, see the section “Achieving Quality at the Source” that begins on page 28 of the report. You can also learn how LinguaLinx helped New York City Department of Education communicate with 1.8 million families across 1,500 schools in which 43% of students speak a language other than English at home. Download the study for free.

 

Cloud Computing: The Recent Sidekick/Microsoft Loss of Data Was Inevitable, But a Good Thing For Cloud Computing

So Microsoft was asleep at the wheel and didn’t use good procedures to backup and restore Sidekick data[1][2]. It was just a matter of time until we saw a breakdown in cloud computing.  Is this the end to cloud computing?  Not at all!  I think it is just the beginning.  Are we going to see other failures? Absolutely!  These failures are good, because they help sensitize potential consumers of cloud computing on what can go wrong and  what contractual obligations service providers must adhere to.

There is so much impetus for having centralized computing, that I think all the risk and downside will be outweighed by the positives.  On the positive side, security, operational excellence, and lower costs will eventually become mainstream in centralized services.   Consumers and corporations will become tired of the inconvenience and high cost of maintaining their own computing facilities in the last mile.

Willie Sutton, a notorious bank robber,  is often misquoted as saying that he robbed banks "because that’s where the money is."[3]   Yet all of us still keep our money with banks of one sort or another. Even though online fraud statistics are sharply increasing [4][5], the trend to use online and mobile banking as well as credit/debit transactions is on a steep ascent. Many banking experts suggest that this trend is due to convenience.

Whether a corporation is maintaining their own application servers and desktops, or consumers are caring and feeding for their MAC’s and PC’s the cost of doing this, measured in time and money is steadily growing. The expertise that is required is ever increasing.   Furthermore, the likelihood of having a security breach when individuals care for their own security is high.

The pundits of cloud computing say that the likelihood of breakdowns in highly concentrated environments such as Cloud computing servers is high.  The three main factors they point to are:

  1. Security Breaches
  2. Lack of Redundancy
  3. Vulnerability to Network Outages

I believe that in spite of these, seemingly large obstacles, we will see a huge increase in the number of cloud services and the number of people using these services in the next 5 years.  When we keep data on our local hard drives, the security risks are huge.  We are already pretty much dysfunctional when the network goes down, and I have had plenty of occasions where my system administrator had to reinstall a server or I had to reinstall my desktop applications.  After all, we all trust the phone company to give us a dial tone.

The savings that can be attained are huge:   A Cloud Computing provider can realize large savings by using specialized resources that are amortized across millions of users. 

There is little doubt in my mind that cloud computing will become ubiquitous.  The jury is still out as to what companies will become the service providers.  However, I don’t think Microsoft will be one of them, because their culture just doesn’t allow for solid commitments to the end user. 

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[1] The Beauty in Redundancy, http://gadgetwise.blogs.nytimes.com/2009/10/12/the-beauty-in-redundancy/?scp=2&sq=sidekick&st=cse 

[2] Microsoft Project Pink – The reason for sidekick data loss, http://dkgadget.com/microsoft-project-pink-the-reason-for-sidekick-data-loss/

[3] Willie Sutton, http://en.wikipedia.org/wiki/Willie_Sutton.

[4] Online Banking Fraud Soars in Britain,  http://www.businessweek.com/globalbiz/content/oct2009/gb2009108_505426.htm?campaign_id=rss_eu

[5] RSA Online Fraud Report, September 2009,  http://www.rsa.com/solutions/consumer_authentication/intelreport/10428_Online_Fraud_report_0909.pdf

Top 20 List: World’s Largest Publishers

The list of the 20 largest publishers in the world shows a profoundly changing landscape in book publishing. The chart below is provided by Rüdiger Wischenbart from Publishing Perspectives in Germany. He has contributed some good insights into the transformation of the publishing industry. I offer my analysis on the state of the industry and its future.

 

Some publishers are fairing much better economically, while others are steadily sliding downward in revenue and in their global standing. The changing dynamics between the professional information, education and trade sectors has affected this year’s ranking.  The good news is that publishers that have reinvented themselves (responded to market demand by listening to the customer) have done much better than most.

Pearson, Thomson Reuters, Cengage are identified as star performers on the list. Four out of five dollars is generated through the digital integrated value chain. The digital content and e-book industry for professional information content is the high growth segment of the publishing industry. As an industry, we are weak in our recognition of the current size and opportunity of the digital marketplace. Education publishers and trade publishers are having trouble evolving. There is broad need for knowledgeable skilled digital workers, experienced strategic thinkers, scalable and flexible technology infrastructure, and streamlined workflow/processes that allow publishers to execute on updated strategic initiatives.

Asian publishers are becoming a force, as they are in many other market segments. They include companies like Korea’s Kyowon and China’s Higher Education Press. Their strong suit is “localizing” content (i.e. cultural adaptation), and the power and economics of a huge growing audience. They are hungry. They want their piece of the pie.

Trade publishers, experiencing a steady decline in revenues, are poorly positioned to compete. However, the strong performance of Penguin and Hachette are current exceptions in this segment. It remains to be seen if trade publishers can transform into a sustainable business model. Trade’s poor performance and outlook is due to several reasons, beginning with the fact that they have the farthest to go to find and serve today’s and tomorrow’s readers.

We have seen endless debate in trade on digital pricing and searches for new business models. The best solutions will leverage and be respectful of the stakeholders…all of them! That includes, but is not limited to; authors, agents publishers, libraries, distributors, wholesalers, physical bookstores, digital bookstores, printers, service providers, the media, reviewers, technology companies, etc. If publishers burry their heads in the sand by refusing to experiment with new content, pricing models, and sales channels, then there will be serious trouble.

On the bright side, if publishers aggressively discuss new ways to sell content with their channel partners, and seek out non-traditional channel partners that have the audiences with the demand for their products, there is the potential, not to just maintain current revenue, but to actually grow the size of the pie. I know that is a radical statement to make, yet the ‘book’ is being redefined, and publishing is becoming something new.

Several key findings:

  • The majority of Top Ranked Global Publishers are based in Europe.
  • Professional/knowledge, STM publishers have course corrected and are doing well.
  • The first major Asian Publishers are positioning towards competing as top global players.
  • Education sector is unstable.
  • Trade Publishers are, and will be, hit the hardest in the rapidly emerging digital marketplace.
  • Publishers that have reinvented themselves…are prospering!

I have high hopes for the publishing industry. However, until we can meet Peter Drucker’s market-centric definition where he says “…the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself.” Are we there yet? When we achieve this value statement the industry will once again be healthy. As for me…being part of the solution? I am passionate about helping our clients build a stronger publishing industry that is focused on improving the reading experience.

What are you thinking now?

*The “Global Ranking of the Publishing Industry” is an annual initiative of Livres Hebdo, Paris, researched by Ruediger Wischenbart Content and Consulting, and co-published with buchreport (Germany), The Bookseller (UK) and Publishers Weekly (US).

Follow Ted Treanor on Twitter: twitter.com/ePubDr