CIO-Reinvented Blog - By Prashanth Rai

Interesting data / statistics about SAP ....(SAP Influencer Summit)

During the last couple of days at the SAP Influencer Summit, There were a lot of interesting discussions / sessions. I will post about them over the next couple of days. To start off, I wanted to just list out some of the interesting data points / stats that I heard.

• By 2011 - 12% of world wide software market will go to cloud computing / on demand route(Merrill Lynch)
• 60-70% of the world's population have mobile devices
  • 4.1 billion phone, 35m iphone, 20+ smartpone types
• 350m FB users, 2m SCN users, ~1m blogs updated / day
• 14 Billion devices will be connected to the Internet, ~1Trillion events
• Business By Design currently has 100 customers.
• To reach a market audience of 50 Million
  • Radio - 38 years
  • TV - 13 years
  • Internet - 4 years
  • Ipod - 3 Years
  • FB - 2 years
• SAP ERP 6.0 productive systems - 18721 in Nov'09 vs 11804 in OCT'08 - Half installed base using the latest version
• Transaction On these systems:
  • 3200 car engines per day
  • 50 million bank accounts
  • Processing 2.5 billion utility bills
  • Retail outlets - $330 million worth of transaction per day
• In Memory technology - Provides 1000x+ performance gain - Extreme advantage enables brand new value creation
• SAP Summit Attended by 275 People in attendance / 20 + Customer & Partners
• SAP has 8000 people in Goto Market division & 10000 in the services organization
• Newell Rubbermaid - SAP / BCone (Sap partner) Supply chain Project executed in 90 days, Sales process took 37 days.
• Business By Design - lot of work done by R&d for the suite, factor  20 reduction in TCO for SAP
• Johnson Products implemented Business By Design in 30days (Start to finish)
• SAP EcoHub - 400 partner solution on the hub / 10000 demos off the hub - Most available online from within the hub.
• SAP has 12 centers inside sales centers
• SAP has 5400 partners (VARs, resellers etc) - 2700 are Partners & 2700 Extended Business Partners
• In 2007 SME was setup as a separate service line within SAP
• 75% of SAPS 92000 customers are SME
  • SAP Acquire >35 new SME customer per working day
  • 70500 SME Customers in total
  • 50500 SME Channel customers
  • Tripled the SME customer base in 3 years
  • SAP SME Number further broken down:
    • Upper ME = 11%
    • Lower ME = 42%
    • SE = 47%
  • SAP has 25000 B1 Customers
• Green Blue Auto SME Customer (Canada) - Implementation in 4 Weeks

Tags: sapsummit - sap - sap+sme - erp - ecohub - sap+erp

Prashanth Rai

Application management services - Outsourcing / Interesting stats - Forrester

Saw this really interesting chart at a Forrester report

Couple of points that stood out:

The significant interest in Managed hosting services, it will be interesting to see how the Cloud computing trend impacts these stats.

• Currently outsourcing - 6%
• Will outsource to a 3rd part in the next 12 months - 17%
• People Interested & considering it - 44%

Another surprising insight is the low % of adoption of outsourcing in low value addition / undifferentiated heaving lifting type tasks / Summarized in Chart below:

This just emphasizes the opportunity size for outsourcing services.

Tags: outsourcing - appsupport - forrester

Prashanth Rai

Trends / Facts / Stats / Thoughts about the Mobile "Data" space....

Below are a list of points / trends / Thoughts about the Mobile space from various sources that I have been reading over the last couple of days:

Forrester Outlook of 2014 - United States

• By the end of 2009, 234 million US consumers — 76% of the population — will have a mobile phone subscription, and the total number of phone subscriptions will approach 270 million, representing 88% of the country’s population
• Most subscriber growth will be prepaid. Those without a mobile phone are less likely to be able to afford a postpaid option: 37% of those without mobile service have a household income of less than $25,000.
• Laptop or netbook — these connected PCs will account for nearly 11 million subscriptions by 2013
• A dizzying array of devices from cars to home alarm systems to eReaders to navigation devices are available today with a cellular connection, and new options such as health monitors and connected cameras are on the way. This diversity of connected devices will result in a proliferation of wireless subscriptions beyond the traditional mobile phone.
• Mobile Internet usage will boom. As 2008 drew to a close, more than 34 million US mobile subscribers accessed the mobile Internet on their phones at least once a month. That number will grow at an impressive 52% rate in 2009 to 52 million, and mobile Net users will continue to exhibit double-digit growth through 2014, when 106 million users, or a full 39% of all wireless subscribers, will become regular mobile Net users.
• Operators’ shift from metered to unlimited data plans has been one of the critical drivers for mobile Internet and data adoption, but these plans have a downside in that they limit future data revenues while encouraging wanton usage. To manage this risk, carriers will introduce new service tiers at lower  price points — with concomitantly lower data limits — that will reduce the barrier to entry for those subscribers not yet convinced that they get their money’s worth.
• Messaging +data services - these growth engines have only served to balance the concomitant decline in voice revenues — keeping ARPU nearly flat over the past few years. This trend will continue, as the growth in data subscriptions will be tempered by the introduction of lower-price voice offerings designed to maintain growth
• Data access revenues will approach $20 billion in 2014, the rate of growth will slow as the average monthly price of a data bundle decreases from $17.34 per month in 2009 to $16.64 in 2014
• Today, nearly one-third of active handsets are 3G; by 2014, more than four in five handsets will use 3G technology — whether that’s UMTS, a flavor of HSPA, or CDMA2000 — or its successor, LTE.
• Today, even the most recalcitrant voice-centric customer isn’t able to buy a new handset in this category, and these devices constitute a paltry 3% of active phones in the US market (see Figure 3). By 2014, this number will have fallen to less than 1% of all active handsets, confined to the remaining “glove box” users and those served by remote rural providers.

Economy + Internet Trends - Morgan Stanley

• Mobile Consumer - 10billion + Units

India - An interesting article in the Wallstreet journal

• Radio Via Phone - With the more than $200 million in revenues phone company executives expect this year, the radio via phone business already makes almost as
• much as consultants at KPMG estimate all the regular FM stations in India will make.
• ......requires tailored services that are delivered simply and can work even on a $20 phone.
• Monthly ARPU, Q4-2006 - 300+ Rs, Q2-2009 - <200Rs, The biggest phone companies have also started charging per second rather than per minute, further crimping the number of rupees they get from calls.
• The mobile value-added service business, which also includes standard nonvoice services like texting, will rise close to 70% in the next year to 165 billion rupees ($3.6 billion), according estimates by the Internet and Mobile Association of India.
• So far these types of services make up only about 10% of cellular companies' revenues, analysts say. But in the next five years the portion of revenue generated by these services could rise to as much as 25%, they estimate. Telephone Revenue from Non Voice Cellphone Services - 2006 - 25 Billion Rs, 2008 - 75 Billion Rs, (Estimated) 2009 - 100 Billion, (Estimated) 2010 - 160 billion Rs.
• New revenues won't come anytime soon from so-called 3G services. India has yet to even decide which private companies will be allowed to offer 3G services, though an auction of spectrum is expected early next year.
• many of India's 750,000 villages remain isolated except for the cellphone reception that now blankets almost the entire country after a decade of rapid expansion by operators

Source : 1,  2, 3

Tags: mobile - data - mobile+trends - ms - morgan+stanley - forrester - india - US - japan

Prashanth Rai

In conversation with Zia Yusuf - SAP TechEd 09

Yesterday we had a great conversation with Zia Yusuf. Zia  is the Executive Vice President, responsible for Global Ecosystem & Partner Group at SAP AG. It was an interesting conversation touching upon various dimensions of community, partners, SI's and social media. Zia & his team have a really tough job moving forward trying to change the perception and or reality of SAP in many areas like

1. the lack of trained quality consultants,
2. of being seen as a "innovation" laggard,
3. changes required in the services partners to deliver to the SME and deliver around solutions like BBD.
4. it being "white elephant" to implement & support,
5. ....etc

What was promising to see was that they seem to be moving slowly but steadily in that direction but they have a lot of work in front of them and they are open to collaborating and discussing on ways to achieve these results. Below are the key / interesting points or thoughts from the discussion that came up during this conversation:

• The community initiatives are thriving, it has reached 2 million now. And its also evident with the growing popularity of the SAP mentors and the initiatives they seem to be taking. The "Blue Jerseys" are great guys.
• The inclusion of SI (System integrators) into the Eco hub. This is a big move. . I think there seems to be a broad set of initiatives that SAP is taking to make the system integrators play nice. They seem to be taking small but progressive steps towards reducing that 1:7 (license cost :implementation cost) ratio, without ruffling too many feathers at the SI's end. Strangely I think a lot of enabling of this will be dependent on the customers and how much they are willing to adopt these changes & enforce some of these things with their SI's & service providers. On the question of SAP Ecohub or SDN becoming a services market place its an interesting discussion for sometime in the future.
• Enabling the Smaller partners - As a part of the ecosystem organization , there seem to be a set of Partner service advisor's that are looking at enabling partners particularly the small / mid sized ones by providing them access to the SAP product technology road map etc etc. This seems to be the only side of the SAP organization that has grown in headcount.
• Factoid - There seems to be a total of 400k SAP consultants globally with 250K of them being in large or in the organized sector the other 150k are typically independent contractors.
• Zia's thoughts on characteristics of great SAP SI firms:
  • Deeply involved with the evolution of the SAP Roadmap
  • Training & certification,
  • Dynamic in models offered,
  • customer service-value driven,
  • Ability to have a longer term relationship.
• A chance to collaborate - Zia is asking for "Use cases" that we can think of where "Social Media" will connect or interact with "Core business processes" that are a part of the Enterprise business processes. Specifically around crowdsourcing etc - Which will change the way business is done! Ideas welcome
• Community contribution into the product, the SDN / communities framework that was created for communities (SDN/BPX) is now a product called Collaborative Workspace and now has 1400 installations.
• SAP Safegaurding - Recently it has been communicated to all the SI's that they need to include / push safegaurding as a part of their implementations etc
• Job board has now been included in SAP Communities / SDN. First couple of days 180 jobs posted on it

Zia is now on twitter and you can follow him @ZiaYusuf

Tags: communities - sap - sapteched09 - zia+yusuf - sdn - bpx - partner

Prashanth Rai

Update: Looks like this would be the last event for Zia with SAP, All the very best to him for all his future ventures.

Disclosure: SAP paid T&E to TechEd.

IDC’s New IT Cloud Services Forecast: 2009-2013

New Cloud Services Forecast Publised by IDC - The new forecast, segmented by offering category, for 2009 and 2013:

Excerpts:

1. The five year growth outlook remains strong, with a five-year annual growth rate of 26% – over six times the rate of traditional IT offerings.
2. The revised figures are still in the same ballpark as last year’s forecast, although they reflect about a six month revenue knock back from what would have been expected from last year’s forecast, due largely to the global recession and, to a lesser degree, to better market tracking and tightened definitions.
3. This year, cloud services will total only about 5% of IT revenue. Even with a compound annual growth rate of 26% – over six times that of traditional IT – they will account for just 10% in 2013. Some might look at this, and conclude that cloud services are not very important – after all, in 2013, 90% of IT will NOT be from public clouds.
4. IT cloud services for the industry - $17B in 2009 and $44B in 2013
5. Of the $27 billion in net new IT revenue in 2013, 27% will come from IT cloud services. Given the 6X growth advantage of cloud services offerings over traditional ones, that percentage will grow very quickly in subsequent years – meaning that suppliers who don’t position themselves as IT cloud services leaders over the next several years, will forfeit larger and larger portions of the highest-growth markets.

Source: IDC

Some Global Mobile Stats - Nielsen Company

Some interesting excerpts / statistics from a post by Nielsen Company:

Web visitors using a mobile device increased 34 percent year-over-year, from 42.5 million mobile Web visitors in July 2008 to 56.9 million in July 2009 according to The Nielsen Company.

Year-over-year growth among the 13-17 and 65+ age groups outpaced the growth of the total mobile Web audience, with a youth increase of 45 percent and seniors surging upwards 67 percent in July.

While men continue to make up a larger portion of mobile Web users versus women, comprising 53 percent of the audience in July, the growth of female visitors outpaced the growth of male visitors during the month, with women increasing 43 percent YOY as compared to a 26 percent growth among men.

Source: Nielsen Company

Webcast to check out - Eli Lilly + Amazon AWS

Saw this note on the AWS site,

Learn how Eli Lilly uses AWSto deliver cloud services to scientists in this WebCast hosted by InformationWeekEditor John Foley

Tags: aws - amazon - eli+lilly - webcast - cloud

Prashanth Rai

Some interesting reading...

Notes from blog posts read today:

• Ratios of new license to maintenance revenues shift from 1:2 to 1:4 and in some cases 1:5.  Enterprise software vendors now in a better position to convert perpetual business models to subscription business models.  Do they have the guts and board approval?
• Indian System Integrators competiting for market share in Europe, Middle East, and Africa as they shift away from the North American market.
• Japanese CIO’s finally realizing that they need to break free from their existing ERP software vendor relationships.  SaaS options now in consideration.  Recent advancements by NTT to host Zoho, Siemens’ 420K employee move to Success Factors, and Flextronics 240k employee deal with Workday have shifted perception that SaaS can’t solve large enterprise requirements.
• Cloud computing - Broad acceptance that enterprises are interested - There's absolutely no question that cloud computing has moved into the mainstream of enterprise technology. Everyone from Microsoft to Accenture to HP to IBM to SAP admitted as much. With the worsening economic conditions and the maturation of cloud computing services, enterprises are actively investigating cloud computing. The main differences of opinion between the legacy vendors and companies like Salesforce and Amazon lie in how quickly and broadly companies will adopt cloud computing.
• Too much discussion of clouds at the infrastructure rather than platform layers - The entire cloud conversation at Structure was very focused on infrastructure. As Daryl Plummer of Gartner has noted, Cloud computing is not about infrastructure. It's about a new delivery and consumption model for IT services that are elastic, metered and abstract away the SW stack. The conference was mostly focused on the lowest layer of the stack and didn't really talk about how the cloud enables transformation at the business process level.

Source: 1, 2

Tags: cloud - saas - maintenance - cio - maintenance+revenue

Prashanth Rai

Telecommuting a way of life

 
Photo Credit David Gartner Photography | www.versusgoliath.com

Cisco recently published the results of their Telecommuting survey, it had some interesting pieces of information, below are excerpts from the same. This is an important trend to track from a productivity, sustainability & technology points of view. Companies specifically in the ICT industry (IT Services companies)should take the lead in this particularly given the nature of work, industry model etc.

Results from the survey:

Productivity and Collaboration

• Approximately 69 percent of the employees surveyed cited higher productivity when working remote, and 75 percent of those surveyed said the timeliness of their work improved.
• By telecommuting, 83 percent of employees said their ability to communicate and collaborate with co-workers was the same as, if not better than, it was when working on-site.
• 67 percent of survey respondents said their overall work quality improved when telecommuting.
• An improved quality of life through telecommuting was cited by 80 percent of survey respondents.
• Telecommuting can also lead to a higher employee retention rate, as more than 91 percent of respondents say telecommuting is somewhat or very important to their overall satisfaction.

Going Green

• In 2008, Cisco teleworkers prevented approximately 47,320 metric tons of greenhouse gas emissions from being released into the environment due to avoided travel.
• The average distance for round-trip commutes varied among global regions: employees in U.S. and Canada reported on average a 30-mile round-trip commute; Asia Pacific employees cited a distance of about 14 miles; Japanese employees cited a 26-mile commute; employees in emerging markets commute an average of 16 miles; and European employees reported a 46-mile commute.
• Cisco employees report a fuel cost savings of $10.3 million per year due to telecommuting.

Cisco Workforce

• Cisco employees spend about 63 percent of their time communicating and collaborating.
• 40 percent of Cisco employees say they are not located in the same city as their manager.
• The average Cisco employee now telecommutes 2.0 days per week.
• 60 percent of the time saved by telecommuting is spent working and 40 percent is spent on personal time.

Source:1

Tags: Cisco - telecommuting - ict - sustainability - productivity

Prashanth Rai

State of the Economy

A few interesting charts about the current economic state or state of the recession :)

Global trade collapsed in the fourth quarter of 2008 and first quarter of 2009 in a way never seen in the postwar era.

The Institute for Supply Management survey offers a forward-looking indicator of industrial production.A number above 50 in the ISM survey implies manufacturing growth whereas a number below 50 implies contraction.

Link to full report

Hat Tip: Imagining India

Prashanth Rai