As organisations stride towards digitalisation, re-evaluate their business continuity plans and define what the Future of Work will look for them, Cloud adoption is expected to surge. In June, there were several announcements that indicate the market is responding to this increased interest.
Cloud Providers Gearing up to Enable Economic Recovery
Global economies are slowly gearing up for a technology-led recovery phase and several organisations are taking advantage of the disruption to start or accelerate their digital transformation plans. Many are looking at this as a good opportunity to replace their legacy systems. Cloud providers are expected to lead from the front when it comes to helping the economy recover.
Government agencies have been immensely impacted by the COVID-19 crisis and will need to shift fast into the recovery mode. Salesforce launched a multi-tenant dedicated Cloud infrastructure for their US Federal, state and local government customers, government contractors, and federally funded research and development centres. Hosted on AWS GovCloud and FedRAMP compliant, it provides customers with a compliant and secure environment to deploy Salesforce’s CRM platform and industry solutions. The launch is expected to empower government agencies with the ability to deliver better services, scale to unprecedented demands and connect to citizens on their channel of choice.
Initiatives such as the UK Crown Commercial Service (CCS) and Google Cloud agreement will also help in the recovery phase. This allows qualified public sector agencies to avail of a discounted price for their Google Cloud deployments. Earlier in the year CCS entered into a price arrangement with Microsoft as well. If Cloud has to be the vehicle for economic recovery, such arrangements will benefit cash-strapped public sector organisations.
The recovery will also require the entire technology ecosystem to engage not only with large enterprises but also small and medium enterprises (SMEs). Alibaba Cloud announced an investment of US$ 283 million to revamp its global partner program. They plan to introduce new partner-customer communication processes to enhance response time and bring more opportunities to independent software vendors (ISVs) managed service providers (MSPs) and system integrators (SIs) as partners.
Europe Emerging as a Cloud Hub
As a fallout of the current political scenario, Europe is pushing for more cloud independence and to become an innovation hub as a vendor-neutral network for cloud computing providers and their customers.
GAIA-X Foundation is a federated data infrastructure project initiated to build a unified system of cloud and data services to be protected by EU Laws – including GDPR, the free flow of non-personal data regulation and the Cybersecurity Act. France and Germany kicked off the GAIA-X cloud project last year and the system is open for participation to national and European initiatives for exchange of data across industries and services such as AI, IoT and data analytics. GAIA-X took another step towards becoming a real option for European organisations with the establishment as a legal entity in June. Various organisations – including Dassault, Orange, Siemens, SAP, Atos, Scaleway and Deutsche Telekom are a part of this non-profit platform, working together on Cloud applications, high-performance computing as well as edge systems. The project is expecting to release a working model by early 2021 and will be further enhanced in phases.
Global Cloud leaders are also focusing on expanding their presence in Europe. In February, Microsoft announced a new data centre in Spain leveraging Telefónica infrastructure. In a similar move, Google Cloud announced its plans to expand in the region in partnership with Telefónica. Telefonica and Google are expected to jointly work on Spain’s digitalisation through edge infrastructure and 5G for consumers and telecom infrastructure.
Cloud Providers Bolstering their Cybersecurity Capabilities
2020 has witnessed a host of cybersecurity threats and data breaches. While Cloud providers have always evolved their cybersecurity capabilities, it has become important for them to become vocal about these measures to build trust in the industry.
To complement the Microsoft Azure IoT security, Microsoft acquired IoT security specialist CyberX, last month. The acquisition will enable greater security for the IoT devices connected to the Microsoft network and will help their customers to gain visibility through a map of devices thus allowing them to gather information on security risks associated with thousands of sensors and connected devices. This will enhance smart grid, smart manufacturing and digital assets and profiles and reduce vulnerabilities across production and supply chain.
In another move which will benefit the ISV and SI ecosystem, NetFoundry’s zero trust networking API is now available on RapidAPI. RapidAPI’s marketplace enables developers to easily find, connect to, and manage the APIs they need to build a range of applications. Now the ISV and developer community can access NetFoundry’s software-only, zero trust models on RapidAPI.
More Partnerships between Software/Industry Solutions Providers and Cloud Providers
The COVID-19 crisis has had a far-reaching impact on several industries. The technologies that are expected to see the most uptake are IoT and Future of Work technologies.
Ecosystm Principal Advisor, Kaushik Ghatak says, “COVID-19 has brought to the fore the need for managing risks better. And the key to managing risks is to have better visibility and drive data-driven decisions; the sweet spot for IoT technologies.”
Last week, Microsoft and Hitachi announced a strategic alliance to accelerate the digital transformation of the Manufacturing and Logistics industries across Southeast Asia, Japan and North America. The first solutions are expected to be made available in Thailand as early as this month. Hitachi brings to the table their industry solutions, such as Lumada, and their IoT-ready industrial controllers HX Series. These solutions will be fully integrated with the Microsoft cloud platform, leveraging Azure, Dynamics 365 and Microsoft 365.
Another sector that has seen significant disruption is Real Estate. Ecosystm Principal Advisor, Andrew Milroy in his blog Proptech: Driving Digital Transformation in the Wake of COVID-19 sees a real opportunity for the sector to transform. “Many activities within the property ecosystem have remained unchanged for decades. There are several opportunities for digital engagement and automation in this sector, ranging from the use of robots in construction to the ‘uberisation’ of the residential property customer journey.”
June saw Honeywell and SAP partner to create a joint cloud-based solution based on Honeywell Forge and SAP cloud. The cloud solution is aimed at real estate operators and customers providing aggregated financial and operational insights in real-time. The solution leverages the Honeywell Forge autonomous buildings solution and the SAP Cloud for Real Estate solution, enabling facility managers and building owners to reposition their real estate portfolios through parameters such as cost savings and energy efficiency and help improve the tenant experience.
As organisations struggle to maintain operations during the ongoing crisis, there has been an exponential increase in employees working from home and relying on the Future of Work technologies. Ecosystm principal Advisor, Audrey William says, “During the COVID-19 pandemic, people have become reliant on voice, video and collaboration tools and even when things go back to normal in the coming months, the blended way of work will be the norm. There has been a surge of video and collaboration technologies. The need to have good communication and collaboration tools whether at home or in the office has become a basic expectation especially when working from home. It has become non-negotiable.”
AWS and Slack announced a multi-year partnership to collaborate on solutions to enable the Workplace of the Future. This will give Slack users the ability to manage their AWS resources within Slack, as well as replace Slack’s voice and video call features with AWS’s Amazon Chime. And AWS will be using Slack for their internal communication and collaboration.
Delivering excellent customer experience in the midst of the crisis has proved to be difficult for organisations. Customer care centres have been especially impacted by high volumes of customer interactions – through voice and non-voice channels. This will see a major rise in adoption of cloud contact centre solutions. Contact centre providers are ramping up their capabilities in anticipation. Genesys selected AWS as their preferred cloud partner to deliver new features to customers and build a global and secure infrastructure.
The industry can expect more news from Cloud providers in the next few months as they ramp up their capabilities and channel their go-to-market messaging.
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On December 18, AWS launched Amazon Connect in ASEAN from the Singapore region. I was invited to the ASEAN launch of Connect in Singapore 3 weeks ago where Pasquale DeMaio, GM of Amazon Connect and Robert Killory, ASEAN Solutions Lead presented to analysts.
Pasquale told the audience that the Amazon Connect solution used today has been built over 10 years ago to serve Amazon’s internal needs of servicing millions of customer interactions for their e-commerce transactions. At that time Amazon could not find a solution that was pure cloud-based, cost-effective, scalable and that was easy to use. Since launching Amazon Connect a few years ago, AWS has seen not just small and medium enterprises using Connect – larger organisations have embraced the solution as well.
Amazon Connect has a list of notable clients – Intuit, Rackspace, John Hancock, CapitalOne, GE Appliances, Subway and many others. Intuit, as an example, has had difficulties running experiments in the past and proofs of concept were expensive, complex and time-consuming. With Amazon Connect these run on a test environment allowing their engineers to experiment and if they do not work out, it does not cost Intuit a lot of money to spin up a proof of concept. Philippines telecommunications provider, Globe Telecom wanted to automate and improve their services for their broadband and residential services. It was taking about 2-3 days from payment to the restoration of services. Amazon Connect was deployed to solve this problem by understanding the customer data when calls came through to the contact centre and by using APIs and the Connect suite of applications, there was deep integration with the CRM systems and other platforms that held various pools of data. This produced a faster and scalable way of integrating the payment process and customer service.
The demo of the solution showcased how features such as Amazon Lex can build conversational interfaces for an organisation’s applications powered by the same deep learning technologies like Alexa. With Amazon Lex and Polly, organisations can now build a chatbot without knowing or understanding code.
The Amazon Connect Solution – scaling to become more feature-rich
At ReInvent in Las Vegas in December 2019, Andy Jassy the CEO of AWS unveiled a new offering for their contact centre customers called Contact Lens. The solution is a set of machine learning capabilities integrated into Amazon Connect. The service can be activated through a single click in Connect and can analyse, transcribe calls including previously recorded calls. Jassy also talked about how it allows users to determine the sentiment of the call, pick up on long periods of silence, and times when an agent and customer are talking over the top of each other. These additions can help supervisors understand the challenges faced by agents that can then be addressed during training and coaching sessions. The machine learning models that power Contact Lens for Amazon Connect have been trained specifically to understand the nuances of contact centre conversations including multiple languages and custom vocabularies.
Several other announcements have also been made recently:
- Web and Mobile Chat for customers is a single unified contact centre service for voice and chat. Agents have a single user interface for both voice and chat, reducing the number of screens they have to interact with.
- Amazon Transcribe now supports 31 languages including Indonesian, Malay, Japanese, Korean, and several Indian languages. These are important languages as they expand further across ASEAN and the rest of Asia, given the diversity of languages spoken in the region. Contact centres can convert call recordings into text and analyse the data for actionable intelligence.
Deepening their relationship with Salesforce
At Dreamforce 2019 late last year, Salesforce announced that they will be offering AWS telephony and call transcription services with Amazon Connect as part of their Service Cloud call centre solution. The announcement indicates how the CRM world and the contact centre segments are starting to get closer. CRM vendors are starting to realise that whilst they own the agent at the desktop who have access to the CRM solution, the data from the calls and the actual calls are important. Voice/Telephony is also witnessing greater innovation with vendors in the contact centre space applying machine learning and AI to voice so that intelligence is gathered prior to the call coming to the contact centre and the agent is further empowered through prompts that they can apply when speaking to a customer. As CRM integrates deeper with contact centre solutions, the tight integration between these two solutions cannot be ignored. Salesforce is partnering to innovate in the voice space by applying machine learning at the core of all they do. This is a big announcement given the sheer size of both companies and how both companies are innovating in the contact centre space.
Cloud Contact Centre is high on the agenda in Asia Pacific
Ecosystm’s CX research finds that most organisations in Asia Pacific are at the inflection point of moving from an on-premise environment to a cloud model. Only 1% of CX decision-makers want to keep their contact centres on-premise – many organisations are evaluating which contact centre vendor they should use to migrate to the cloud. Some countries may see higher adoption than others. Australia and New Zealand have higher cloud contact centre adoption. In ASEAN many organisations are starting to build a wider CX strategy beyond the contact centre including areas such as customer journey analytics and data-driven personalised CX.
Ecosystm comments
In Australia, Amazon Connect has grown its customer base and these include some large enterprises. Big wins in the last 2 years include National Australia Bank and NSW Health. NSW Health shifted its IT service desk and shared services contact centres onto a new cloud-based contact centre platform as part of a broader digital transformation.
AWS has been gearing up for the launch in ASEAN over the last 6 months. The region is very competitive with some long-standing contact centre players having a large share and installed base in the large and medium enterprise accounts. The launch indicates how serious they are about growing their contact centre business in the region. There has been good progress so far in Singapore and the Philippines. Amazon Connect will look to grow its presence in Indonesia, Malaysia, Thailand, and Vietnam in the months to come. The market dynamics in each Asian country is unique and AWS will work with partners such as Accenture, Deloitte, DXC, ECS, NTT and VoiceFoundry to grow their presence in the region. Some of the more traditional partners will need education and upskilling to understand the Amazon Connect value proposition
Salesforce announced on Monday, June 10th (US time) the acquisition of data visualisation leader Tableau for US$15.7B. Some jaws dropped at the purchased and the price and some at the purchaser. It was inevitable that Tableau would be acquired, Oracle, IBM, or SAP could have been the suitor, but Salesforce is no surprise.
In all honesty, anyone who has watched Salesforce closely should neither be surprised or concerned by this acquisition. Salesforce is not merely your cloud CRM provider anymore. It has not been for years, but for some outdated perception is the reality.
Salesforce is an increasingly broad and complex enterprise software behemoth. It’s recently reported numbers highlight this. It is on track for US$20B in revenue by 2022, with year to year growth in the most recent quarterly reported numbers just shy of 25%. Sales and Service Cloud represent 60% of quarterly revenues, but the fastest growth is in the platform and increasingly new investment areas. What Salesforce does so well is to identify adjacencies to an evolving core product. The acquisition of Mulesoft in 2018 set the path to solving integration problems that challenged Salesforce deployment for customers. The purchase of Map Anything in April 2019, highlighted this adjacency approach as well as the ability of Salesforce’s ecosystem to develop partners through the AppExchange then acquire into Salesforce.
So how does Tableau fit into Salesforce?
For nearly US$16B, it had better be a precise fit. Tableau is the leader in data visualisation. It is not an analytics platform as such; one does not go to Tableau for deep statistical insight; instead, it uses it to communicate data to as broad an audience as possible. Salesforce has analytics capability as a core pillar, but this has been one of the more disappointing offerings from Salesforce and has far from reached the potential required. Salesforce will only benefit from a functionality and capability perspective with Tableau inside rather than as a partner or third-party application.
Quite simply across the product suite, and as a standalone offering, Tableau will significantly increase the visualisation, both automated and user-led capabilities of Salesforce. In terms of what it means for both companies, of course, there is good and bad. There is a very significant overlap in the customer bases of both products. It is not 100%, but there will be a balance of customer familiarity and the opportunity to cross-sell for Salesforce, and the extensive partner network that it oversees. There will be some cultural challenges, no doubt in the integration. Salesforce talks about Tableau as an independent organisation within Salesforce, and that will work until Mark Benioff believes it doesn’t. The internal but separate approach rarely works, and the Tableau logo will disappear at a point in time as a consequence.
There are a few differences between the integration of Tableau and the most comparable business Mulesoft. Mulesoft was literally up the street from Salesforce in San Francisco and culturally was based on many of the premises of Salesforce. For Seattle based Tableau, there will be a few differences culturally, although nothing that cannot be overcome with communication, honesty and much hard work on the cultural integration.
The on-premise and cloud capability of Tableau may disappear quicker than the road map that Tableau had, again, Salesforce places great import on the SaaS, no Software approach. Advanced analytics and AI capabilities of Tableau are not its fundamental value proposition so that Einstein will remain the lead there, with some added capability. The non-customer centric user of Tableau provides new client opportunities for Salesforce.
The final point of the acquisition is that it proves in 2019 and the future, you cannot be a one trick software firm. To remain relevant, you need multiple capabilities. Tableau struggled with this, VMware famously struggled until the “invention” of hybrid cloud to be more than virtualisation, and SAS Institute and ESRI remain the poster firms for relying on one old product suite.
Capture Point
Salesforce paid a premium for Tableau, even in a capital-rich 2019. In the world of Salesforce, that is rarely the point. One of the challenging aspects in the Salesforce 360 portfolio is fundamentally sharpened; it gains new users, new capabilities and opportunities for the core product to expand. As with all acquisition, the trick will be the integration, cultural alignment, and keeping developers and partners on board.
In a move that feels “back to the future”, Salesforce has agreed to acquire Tableau Software Inc for US$15.3 billion in a deal that is expected to close in the third quarter of 2019. It seems all independent BI and analytics companies (except SAS!) eventually get snapped up – Business Objects by SAP, Hyperion by Oracle, Cognos by IBM. The move comes less than a week after Google acquired BI and analytics provider Looker.
Today, many businesses use Tableau (over 86,000), including a lot of Salesforce customers. They have chosen Tableau because it is easy to deploy and use, and like Salesforce own applications, it targets the ultimate decision maker – the business user – and sometimes even the consumer. Recent research into the BI systems integrators in Asia Pacific shows that Tableau is one of the leading analytics platforms for the partner community in the region – the big SIs have many people focused on Tableau. But that dominance is being challenged by a re-energised Microsoft, whose Power BI is also witnessing strong growth – and who is typically the price leader in the market.
For Salesforce customers, there is some overlap between products – their own Einstein Analytics tools do much of what Tableau can do – although Tableau helps customers see insights from data stored both on the cloud and inside their own data centres. It also moves Salesforce closer to the Customer 360 vision – the ability to get a view of customers across the Commerce, Marketing and Service Clouds. Salesforce customers not using Tableau today will get a better user experience by using Tableau as the visualisation platform.
History has shown that it is hard to make such acquisitions successful. Tableau was a huge success because it was independent. The same was for Business Objects and Cognos before their acquisitions. History has shown that when the large BI and analytics vendors are acquired, others move into that space. While Salesforce has announced they will run Tableau as a separate business, it will no longer be independent. Partners will need to be maintained and provided a growth path – and partners are the cornerstone of Tableau’s success. Some of these partners might have strong ties to other software or cloud platforms too such as SAP, Oracle, AWS or Google. Customers of Tableau might feel sales pressure to move to a Salesforce environment – and will likely see Salesforce integration happen at a deeper level than on other platforms.
Tableau’s independence will disappear. However keeping Tableau as a separate business may not be the long term goal for Salesforce – it might be to offer the best application and analytics solution in the market – to make the entire suite more attractive to more potential buyers and users. It may be to take Salesforce beyond the current users in their customers to many other users who may not need the full application but need the analytics and visualisations that the data can provide. If this is the case, then the company is onto a winner with the Tableau acquisition.
BUT…
The long term goal is not analytics reports delivered to employees. It is not visualisation. It is automation. It is applications doing smart, AI-driven analysis, and deciding for employees. It is about taking the human out of the process. In a factory you don’t need a report to tell you a machine is down – you need to book a repair person automatically – or a service technician to visit before the machine has even broken down. And you don’t need a visualised report to show that a machine is beyond its life expectancy. You need the machine replaced before it fails catastrophically.
Too often, we are putting humans in processes where they are not required. We are making visualisations more attractive and easier to consume when, in reality, we just needed the task automated. While we employ humans, there will be a need to make decisions more effectively, and we will still require tools like Tableau. But don’t let the pretty pictures distract you from the main prize – intelligent automation.
If you would like to speak to Tim Sheedy or another analyst at Ecosystm about what the acquisition Tableau by Salesforce might mean to your business or industry, please feel free to schedule an inquiry call on the profile page.
When I wrapped up my visit to this year’s Mobile World Congress (MWC) in Barcelona, I had wondered if my pre-trip question of what would the 5G story be after several years of being told that each preceding year was ‘the’ year. However, this year had a very distinct vibe to it, and I was rewarded for my pilgrimage to the Grand Fira.
Let’s not forget that technology takes longer to roll out that all of us want to think and 5G is no different. We have had no excuses since we only have to look at how long it took 3G and LTE to become mainstream and how long the transition from the prior technology took to move to the next generation.
However, the mobile and telecom industry is not the same as it was when earlier telecommunication tech was being upgraded. In the past hardware, benchmarks feeds and speeds dominated the marketing messages, but now it is about software, cloud and ecosystem collaboration. Gone are the days when the telecom equipment vendors ruled the conversation about their technology – that has clearly been replaced by IT companies leading the charge with topics such as virtualization, IoT, analytics and new services. Once there was a US automobile commercial that touted the latest edition of its cars was ‘This is not your father’s Oldsmobile’. Well, 5G is not your father’s telecom infrastructure!
This time around, operator and equipment vendors may have to take the collaborative partner role in any new digital solution. Instead of 5G projects being dominated by Ericsson or Huawei for example, there is a role for the likes of VMware, Microsoft, and Salesforce to be the lead company. In some cases, it could be Bosch, PTC, or Siemens while in others it could be Audi, BMW or Mercedes. The overall trend here is that all of these companies are being digitally driven to deliver new services to a customer that is firmly at the center of an ecosystem. The one industry sector who might lose out could be the telco operators who could be squeezed by the surge from IT vendor relevance, despite them investing heavily on 5G licenses. However, this time the operators are in a much stronger position to be the perfect channel for the massive amount of intelligence-laden data being created by smart connected devices that are not typical mobile devices.
So what was the outcome at MWC? I visited both the Huawei and Ericsson booths following pre-MWC briefing sessions to see if the customer buzz was there – and indeed it was.
Ericsson may have won the prize for the most crowded booth, while Huawei’s sprawling booth wins the most lavish and largest booth. The two company’s 5G messages could not have been more different.
The Big Two
For me, Huawei had invested heavily in making its hardware products very compelling for operators to install. Clearly, there had been a lot of research had gone into replacing existing infrastructure with massive performance upgrades and deployment friendly attributes e.g. size and weight of base stations that could be mounted by individuals rather than by cranes. The result of this strategy is that Huawei’s customers can quickly deploy 5G platforms with lower CapEx and OpEx thus creating significant incentives for operators to migrate to 5G networks.
Ericsson’s leading story was about migrating to 5G by highlighting its key enablers (i.e. carrier aggregation, LTE-NR spectrum sharing, and dual mode 5G cloud core). It appeared that Ericsson had moved its message off hardware (which, by the way, is still table stakes in any selection process and Ericsson had plenty of new 5G related offerings) and onto a strategy of smooth evolution and deployment at scale – a much more business leader discussion than a network, driven by software. Finally, both companies had strong messages around their AI capabilities to help their service providers make sense of the growing complexity of services that will be generated by the connected smart IoT devices.
The Importance of IT Software On 5G
IT and industrial companies played an increasingly important role at this year’s MWC as service providers and they became involved in deeper partnerships. 2019 was the year when the gaps for 5G between the network and IT services were being filled in. For example, I saw AR (augmented reality) solutions by PTC supported by Microsoft and being fed by data off a 5G network. This showed how industry, cloud and network service providers will accelerate new technologies.
In another example, Salesforce showed how Edge Computing events triggered Salesforce SaaS-based enterprise management services while being supported by AT&T’s 5G network and the modules being designed and tested at AT&T’s Foundry. Here, AT&T 5G network was being used as a high-value channel for Salesforce’s customers to run their business functions at the edge of the network.
Digital twins have shown up as a digital representation of a physical device or asset. However, this year, I saw a Wipro example of how 5G could drive digital twin concepts beyond physical assets and into the workflow, supply chain management, logistics and worker safety. Every ‘asset’ that was to be used in a factory floor was digitized into a digital twin and then a 5G network was used to monitor and manage every aspect of the factory. It seemed that Industry 4.0 had arrived in its full glory.
Finally, VMware continues to be the IT company that service providers will either love or dislike – I still don’t know which one it will be. VMware’s virtualization and cloud management capabilities have been extended right into 5G networks. For example, NFV (Network Function Virtualization) is critical to operators as they slice the 5G bandwidth into the appropriate services. VMware has its strategy correct when it says that it could virtualize the network just as it has with the cloud, but in doing so is making itself either a partner or a competitor of the operators for their 5G services revenues. 2018 was the year when VMware made a big splash at MWC, 2019 was the year when they showed that they have something to offer – will 2020 be the year when they take over the network software virtualization profit pools just as they did with the enterprise server virtualization market?
Crawl, Walk, Run
In conclusion, MWC 2019 was the year that the 5G gaps to make end-to-end infrastructure solutions where clearly being filled in. Service providers had stepped up their willingness to be part of the customer-centric ecosystem that is almost certainly being led by IT software companies. Telecom equipment vendors were offering technology solutions to speed up 5G deployments while making forward compatible solutions much easier. Finally, 5G-supported applications remain the last piece of the puzzle that MWC hasn’t addressed fully. As a result of the massively varied 5G use cases, there is still a look of curiosity on which industry will be the lead for 5G – will it be the auto industry with autonomous cars, will it be Industry 4.0 and the smart factory, or will it be smart cities with video surveillance. In addition, it is certain that IoT is still very much a necessary part of any 5G strategy just as AI outcomes continue to fuel IoT-based sensors in technologies such as the self-driving cars, AR, and digital twins. 2019 may have been the year that decided that it won’t matter whether the connected IoT device used licensed (NB-IoT) or unlicensed (LoRa) spectrum protocols as both will be seamlessly connected to a 5G network. IoT was not dead, it had simply grown up and was now integrated with more valuable solutions.