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Industry news - Autumn 2011

Chatter – challenges the new world of social media

Salesforce.com has unveiled its new Chatter Service…this allows enterprises to integrate and use publicly available information about their customers via social networking sites such as Twitter and Facebook with their CRM.

Chatter Service is intended to improve the customer’s experience because enterprises have a fuller picture of who they are. However, Melissa Stevenson, research analyst at IDC, argues that as enterprises look to use information on social networks, serious concerns arise surrounding the privacy of individuals.

“That’s not to say there isn’t demand for social interaction. Without a doubt, the way customers want to interact with their products and services is changing vastly, but it needs to be done carefully and with caution. Many customers want to interact socially on their own terms,” she added.

Stevenson suggests that the social aspect of customer care within the enterprise is still new and, as a result, the ‘rules of etiquette’ haven’t been established yet. “What are the processes around using this information and how are customer care agents trained in how to use it? While there are certainly some great opportunities, companies also have the potential to alienate customers by using this tool improperly,” she said.

Saleforce CEO Marc Benioff argued that the social enterprise, especially when interacting with customers, is a ‘new world’ that will take time to establish itself.

The rules are not clear. “They’ll be different based on different cultures and different industries. On the one hand we have the example of the Arab Springs, where the internet was shut down and what people were saying didn’t exist. I’m sure there are extremes on the other side, where there is overexposure and too much information used,” said Benioff. “Our job is to provide the platform, to provide the capability. Each customer has to find their own way and I don’t think there is a defined answer,” he added.

“I think we are in a new world – that’s the key point. If you go out and interview customers about this issue you will get 10 different answers, but at least they are thinking about it now. Two years ago they weren’t even thinking about it.”

What is clear is that the Chatter Service and services like it will revolutionise the impact of social media on the enterprise.

The next NCC conference on the 27th September will focus on Enterprise Social Networking – a report will be available to NCC members in October.


CIF calls for more clarity within the cloud sector

A recent survey from independent industry analyst house, IDC, highlighted five deciding factors of respondents purchasing cloud solutions: security, stability, reliability, integration and costs. The findings of the IDC report largely reflect those of Cloud Industry Forum’s independent research, released earlier this year.

Andy Burton, chairman of CIF, commented: “IDC’s research confirms that, even though cloud adoption has increased rapidly, the same concerns about data security and reliability are still top of the agenda to provide clarity and comfort around.

“CIF are aware that in order to eliminate end-user anxieties surrounding the cloud, CSPs should ensure they certify and comply with a credible code of practice. A code, such as the Cloud Service Providers Code of Practice managed by CIF, is required to ensure that a fair and consistent analysis of operational capability is provided to assist end users to select a service provider, on a rational basis, that is most suitable to their business. It should take into account three key points: transparency, capability and accountability to accurately define the service providers’ offering, conditions and practices.

“The respondents from CIF’s own research rated data security (64%) and data privacy (62%) as their main concerns regarding cloud adoption. Interestingly, almost half (46%) of the 450 organisations interviewed also stated a preference for data to remain in the UK from a data sovereignty and data protection perspective. However, even accepting these concerns, the research showed an extremely positive 94% satisfaction rate from customers using cloud services, and one in two interviewed already use a cloud service formally. So, we conclude, whilst the concerns are potentially slowing the current pace of adoption they are not in any way preventing adoption.

“The IT delivery model that we call cloud is still shaping in the minds of end-user organisations and, as with any technology, it can never be totally free from concerns when it involves forming trusted partnerships with third parties to achieve a result. However, it emphasises the need for further clarity and transparency within the cloud so that end users can have confidence to recognise it as a viable, efficient, secure and economical IT supply model. If we continue to encourage CSPs to offer transparent, reliable and secure services, then end users will be even more willing to invest in cloud services, and we will see greater collaboration, business models and opportunity,” concluded Andy.


HP buys Autonomy for £6.7 billion

HP, the world’s largest maker of computers, has confirmed it is exiting the tablet business and also intends to spin off PC sales in favour of software and services, and is buying UK software firm Autonomy for $11 billion (£6.7 billion).

The company will discontinue operations for webOS devices, specifically the TouchPad tablets and smartphones. It is examining options for exiting its PC business, including spinning it off to shareholders.

HP’s Personal Systems Group, which sells PCs, tablets and smartphones, has the company’s lowest profit margin although it accounted for nearly a third of HP’s overall revenues in 2010. PC sales, particularly consumer products, tend to fluctuate more than business solutions and services as they are more sensitive to seasonal buying trends and economic trends, said Charles King, principal analyst at PundIT.

“By spinning off PCs, HP could effectively isolate potentially volatile financial numbers and their effect on its more stable, higher-margin businesses,” King said.

HP is following in the footsteps of IBM, which spun off its PC business to Lenovo in 2005 to focus on the higher margin software and services business. HP may also feel pressure from Apple, which has released highly profitable consumer products such as smartphones and tablets. Apple’s tablets have hurt PC shipments, a market that HP dominates as the world’s largest PC vendor.

HP is cutting its losses in the smartphone and tablet market quite speedily: it unveiled its TouchPad tablet and new smartphones with much fanfare only in February. HP’s PC business has been marginally profitable, but the margins have shrunk over the years, said Roger Kay, president of Endpoint Technologies Associates.

The purchase of Autonomy would be “completely in keeping with the increased focus on software and business solutions that HP’s board had in mind when they hired Leo Apotheker,” said King. Based in Cambridge and San Francisco, Autonomy provides a variety of portal, enterprise search, content management and analysis tools to organisations.

“Autonomy focuses mostly on search and analytics of unstructured data and databases, which includes information that typically can’t be captured within traditional relational databases,” King said. It has grown a healthy business in the enterprise content space: Autonomy reported revenues of $870 million for 2010.

Traditionally, HP’s enterprise services and hardware sales have dwarfed its software sales. For fiscal 2010, services generated almost $35 billion in net revenue and enterprise hardware generated $18.5 million, while software brought in $3.5 billion. Autonomy’s sales could push that figure past the $4 billion mark.

While starting in the enterprise search space with inhouse technology, the company expanded its software portfolio through its acquisitions of Verity in 2005 and Interwoven in 2009. It also acquired informational governance software from CA Technologies in 2010.

Such a software portfolio would be “a natural complement to HP’s efforts and technologies” in the enterprise content space, King said. It would dovetail particularly well with HP’s Vertica database and 3PAR data storage products.

The software would also give HP a foothold in the emerging big data space where it could build systems to compete with EMC’s Greenplum and IBM’s Netezza. “Both companies consider big data a market with a potentially huge future,” King said.


ITAdviser 67 Autumn 2011

 

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