Hortonworks Eats IBM — And Loves It

Brian  Hopkins

Big announcement at Dataworks today — IBM is transitioning Big Insights into a partnership with Hortonworks. This seems not unexpected and only mildly interesting until you think deeply about it. Then it hits you: Hortonworks, after digesting Microsoft, is now eating IBM. It’s a total reversal from the past, when big fish like IBM would eat little fish like Hortonworks. See my blog post from yesterday for more on this.

The tables are turned. Let me explain:

  • Working on distributed open source is new and complex. The young developers with the new skills and energy to work on this stuff don’t go generally to work for IBM or Microsoft. They go to work for valley startups who are challenging the big boys. This has been a problem for enterprise software vendors who have had issues developing and building a business around their open source work. Need proof? Microsoft got out of the Hadoop business first, then EMC did the same (through Pivotal, which then gave up), then Intel, and today IBM with their announced partnership with Hortonworks at Data Works 2017.
  • Proprietary data analytics tools are where the growth is. IBM isn’t  growing Infosphere; Teradata cut its prices in half to boost sales; and Oracle doesn’t even want to talk about Exadata in favor of “all cloud, all the time.” The future of these software giants is tied to how well they can navigate the disruption to their legacy business model, which is on-premises, scale-up, and centers on enterprise deals.
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Why Open Source Is Really Disrupting Enterprise Software

Brian  Hopkins

I had an epiphany today about a major reason open source is disrupting enterprise software. This is perhaps one of those things that you have heard so much, you've gone numb to it. All the big giants are still alive and kicking, however; so is this really happening? The answer is yes, however the mechanics are not what you think. It is not simply just a cost play. The acquisition - one of the main weapons that big software vendors had to fight disruptors - is losing effectiveness.  And that changes everything. Allow me to explain:

In the past, big vendors bought the smaller potential disruptors and got the code and customers. Cash disrupted the disruptor; investors got paid, and customers got the new technology as part of the big vendor's larger suite. Everyone was happy. 

In the open source model, the code is, well.....open source. The value is the people; and you can't keep most people from leaving, which they will. Cool, talented open source developers don't generally want to work for big, stoggie software vendors. Furthermore, customers bought into open source to avoid vendor lock in, so buying for the customers is not all that attractive either. This makes Hortonworks and Cloudera, for example, unattractive acquisition targets for the likes of IBM or Oracle. Hmmm...are you starting to see it?

Allow me to bring it all together: Open source is indeed erroding big software's vendor's profit; sure they are selling stuff, but open source disrupted sectors are not growing at the rate their stock price needs to keep investors happy. Investors will grow increasingly unhappy, cash will become scarce and big vendors will cut costs to prop up the bottom line and free up cash... for what - acquisitions? That doesn't work like it used to.  It's is a downward spiral.

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Operating Models Must Evolve To Address RPA Gaps

Craig Le Clair

The search for “quick” solutions to fragmented business applications has pushed RPA investment. I've taken over 200 inquiries on RPA in the past six months and attended Blue Prism, Automation Anywhere, NICE, and other vendor conferences and spoken to their customers. About half the enterprises I have talked with are just starting out either in vendor review or staging early POCs, with the other half in production and looking for the next process to robotize. I’d estimate only about 10% are in any form of large-scale opertations, and most have tackled simple processes that I define as fewer than 200 human clicks replaced by a bot that accesses fewer than three applications.

But things are moving quickly.  RPA tools are relatively cheap, and they work fast. There is no requirements document. You can download free RPA software and develop a bot in a few days. And who needs a business case when projects can be self-funded from productivity gains? Yet I’m sensing that early enthusiasm has led to tapping the brakes. Here’s why.

Stakeholders are not properly aligned to the emerging digital workforce. Yes, it might take only a month to build a digital worker, but it will take six times that long to get management and other stakeholders on board. In most organizations, the number of people working for a person is a measure of importance. So when you tell them you will replace humans with digital workers, they are threatened. Tech management also has a long list of objections and may resist small changes to legacy systems that make bots work better.  Senior technical leadership is often not on board. And that’s just for starters.

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RPA and the Future of Work: Dystopian Views

Craig Le Clair

In the past several months, I’ve given 10 talks on robotic process automation (RPA), its relationship to AI, and its future effect on jobs. These talks were mostly at tech conferences where the audience is a mix of corporate and government technology and business leaders. The industries represented are diverse, as is the process focus and expertise. But the participants are similar in important ways. They are excited, if not well-informed, about the potential of AI and robotics; the average IQ in the room seems well above average; and they all will benefit either professionally or financially from the progression of robotics.

No shame in making money; I wish I’d made more. But there is more then a hint of nervous discomfort just below the surface that stems from the removal of humans from the workforce. There are many cute references to taking the robot out of the human; this is supposed to mean that we are using humans essentially as robots, and the less we do that, the better off they will be. But the fact is that many workers today are good at routine tasks, feel productive, and may lack the mental quickness for other work. Several firms have given human names to their new digital workers, as if calling them Yoda or Jennifer will make them more accepted by the people they are replacing.

RPA Targets The Cubicle Working Class

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Why You Are Getting Disrupted

Brian  Hopkins

The overriding theme of every disruption story I’ve ever heard is that firms thought they had more time than they did. So, I’ve been pondering the why. We can see disruption happening all around us, but why is it so difficult to get out in front of it?

Then I slogged my way through Ray Kurzweil’s Law Of Accelerating Returns and it hit me. Digital disruption is about the clash between exponential change and our brain’s wanting things to be linear. Here is what I mean:

  • The law of accelerating returns says that evolutionary systems, like information technology, produce exponential changes. This happens because one generation of technology builds on and accelerates the returns of past generations. Think of how the Internet led to cloud, accelerating mobile apps, which build on broadband wireless, etc.
  • Accelerating returns produce exponential curves in a system’s fundamental measures. This is what Ray proved mathematically in his law. In information technology that means the measures of power and speed tend to double at consistent intervals, while costs are cut in half. Think Moore’s law.
  • The law of accelerating returns implies that Moore’s law is not the exception, it's the rule. So, we should expect many Moore’s laws, and if fact, that is what we have seen — look up Gilder’s Law, Metcalf’s Law, Kryder’s Law, etc.
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Uber....Pepsi....The Ringling Brothers Circus..... Our Values based analysis...

Henry Peyret

Three very different brands with an unfortunate commonality: Each has recently incurred the wrath of a growing segment that Forrester calls the values-based consumer.

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Google Drives Into The Business Content Services Segment of ECM

Cheryl McKinnon

Several Forrester colleagues and I attended the Google Next conference earlier this month, an event showcasing the Google Cloud Platform portfolio. One message, however, was distinctly NOT cloudy: Google is aiming at the enterprise market. And that includes your enterprise content.

 

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The Cloud Is Disrupting Hadoop

Brian  Hopkins

Forrester has seen unprecedented adoption of Hadoop in the last three years. We estimate that firms will spend $800 million in Hadoop software and related services in 2017. Not surprisingly, Hadoop vendors have capitalized on this — Cloudera, Hortonworks, and MapR have gone from a “Who?” to “household” brands in the same period of time.

But like any good run, times change. And the major force exerting pressure on Hadoop is the cloud. In a recent report, The Cloudy Future Of Hadoop, Mike Gualtieri and I examine the impact the cloud is having on Hadoop. Here are a few highlights:

●     Firms want to use more public cloud for big data, and Hadoop seems like a natural fit. We cover the reasons in the report, but the match seems made in heaven. Until you look deeper . . .

●     Hadoop wasn’t designed for the cloud, so vendors are scurrying to make it relevant. In the words of one insider, “Had we really understood cloud, we would not have designed Hadoop the way we did.” As a result, all the Hadoop vendors have strategies, and very different ones, to make Hadoop relevant in the cloud, where object stores and abstract “services” rule.

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Consolidations In Data Governance Tooling Are Emphasizing DG importance For Future Data Usages

Henry Peyret

While data governance has been a business need for years, it is becoming more visible as a center-stage business concern. Driving this shift are new regulations and new requirements addressing consumer data ownership, privacy, and business data monetization. Two of the most important regulations are the European General Data Protection Regulation (GDPR), and the Basel Committee on Banking Supervision regulation 239 (BCBS 239). Forrester recognized this change three years ago when we described the evolution of data governance away from “data  input  quality” toward “data usage,” which we call data governance 2.0. Some emerging data governance solution vendors, like Collibra and GDE, have moved aggressively to address the new requirements of data governance 2.0. However, larger established vendors like IBM, Informatica, SAS, and SAP have moved more slowly, instead prioritizing investments in developing a platform supporting systems of insight.

Two recently announced acquisitions demonstrate that the larger established vendors now recognize the need for renewed data governance offerings:

  • Informatica’s purchase of the Diaku Axon platform. Announced on February 22, the acquisition of the Diaku Axon platform adds business-oriented capabilities like vertical knowledge (finance) and support of regulations such as GDPR and BCBS 239 to Informatica’s current data governance execution capabilities (DQ, MDM, security/masking).
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The 2017 Enterprise Architecture Awards: Driving The Customer-Obsessed Digital Business

Alex Cullen

Just about every company Forrester works with tells us they are driving to become Digital Businesses.  But not just ‘digital’ as a technology imperative – they are investing in digital to dramatically change how they serve their customers – with target benefits rippling over to customer retention and acquisition.  We call this focus Customer-obsessed Digital Business. 

There are four critical success factors for customer-obsessed digital business:

  • They are customer-led. Their customers – what they value and how to best serve their needs — are the center of business strategy and their operating model.
  • They are insight-driven.  Decisions — both the day-to-day operational as well as the strategic — are based on deep insights into their customers, markets, and the broader ecosystem.
  • They move fast.  They use speed to continually evolve how they   go to market and serve their customers. They balance opportunity — which must be responded to quickly — with caution — a desire  to ‘be perfect  out of the gate’.
  • They are connected.   They break down silos so as to have a shared understanding of business goals, and use a multi-discipline approach executing on strategy. 
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