{"id":1644,"date":"2010-08-02T15:07:00","date_gmt":"2010-08-02T15:07:00","guid":{"rendered":"http:\/\/localhost\/projects\/horsesforsources\/wang-fersht1_080210\/"},"modified":"2010-08-02T15:07:00","modified_gmt":"2010-08-02T15:07:00","slug":"wang-fersht1_080210","status":"publish","type":"post","link":"https:\/\/www.horsesforsources.com\/wang-fersht1_080210\/","title":{"rendered":"Wang \/ Fersht uncut. Part I"},"content":{"rendered":"
\"\"<\/a><\/p>\n

Ray Wang is… er Ray Wang<\/p>\n<\/div>\n

There is only one Ray Wang.\u00a0 Thank the Lord, because if there were two,\u00a0 the Twitter servers\u00a0would likely fall-over and the industry wouldn’t need anymore analysts.<\/strong><\/p>\n

In all seriousness, Ray Wang is a true dynamo in the technology and social media world, having made his name as a superior analyst at Forrester Research, with spells at\u00a0PeopleSoft, Oracle and E&Y, before\u00a0co-founding research-based advisory firm Altimeter Group<\/a>.\u00a0\u00a0 He also has an industry-standard blog “A Software Insider’s Point of View<\/a>“.<\/p>\n

I only ever seem to meet Ray at the oddest times of the day – most recently he took me on a\u00a0midnight guided tour of his University town, Baltimore (Ray went to Johns Hopkins), and\u00a0we also\u00a0staged a\u00a0late-night pool tournament at a vineyard somewhere in Georgia.\u00a0 Anyhow, while I was\u00a0sinking the winning black, we threatened to share some views together on the industry, and thought we’d air some recent discussions we had about the world of social media and the convergence of\u00a0software delivery\u00a0and outsourcing… here’s Part I:<\/p>\n

Phil Fersht:<\/strong>\u00a0 Ray – you\u2019ve been pretty immersed in the world of social media for quite a while now. As it seems to be having a major impact on the potential customer experience, how do you think enterprises and service providers need to approach embracing social media and tools and technologies?<\/p>\n

Ray Wang:<\/strong>\u00a0 Companies need to quickly start embracing social tools, because their customers are increasingly using them. But some organizations don\u2019t even realize their customers have moved. For example, we met with a client about a month ago that had just discovered it could shift 20 percent of its marketing budget online and reach 40 percent of its audience. So the one thing we\u2019ve really been focusing on is customer insights. Who is your customer? Where are your customers going? Facebook? Twitter? Where are your competitors going? To do this, companies need to start with the analytics and the insights, build a social media case and then work their way from there.<\/p>\n

I also think there is a significant component when you think about BPO for the cloud. The reality is, we\u2019re actually moving very quickly back to the old service bureau models from 1960. If you think about what you need to do on social media analytics, what you can do to tie social back to contact centers \u2013 all of this is going to come back to having efficient services and operations that are better connected to how people are using those services. So when people argue that social is just a channel, I would counter that social is a different manner of how people are going to be working. And that\u2019s going to have an affect on all service providers.\u00a0<\/p>\n

Phil Fersht:<\/strong>\u00a0 Yes, absolutely, because the services business is an entirely people-driven business. The quicker you can get information, the quicker you can find solutions, the quicker you can bring minds together, the more powerful it can be. For example, we’ve had a\u00a0really interesting case discussion with the London School of Economics, which has been working on a grid computing project that essentially ties together six of the most eminent physics institutes in Europe into a private grid. They really feel they\u2019re at the point where they\u2019re almost walking into a room where 20 scientists are together exchanging views and information. It\u2019s a great example of a microcosm of what a private cloud, or ultimately the cloud, can do for a collective community.<\/p>\n

Ray Wang:<\/strong>\u00a0 And if you look at it from a dollars and cents perspective, a customer can probably shift today up to 25 percent of its marketing budget to digital and it really isn\u2019t going to make a difference to their non-digital efforts. It\u2019s the significant transformation occurring, or that must occur, at the chief marketing officer (CMO) level that will drive more results in digital. And here again, it\u2019s about the analytics. The role of analytics in decision-making is only going to expand. So CMOs have to be able to take that quantitative data and make qualitative decisions from it. And to do that in a social media world, they have to be tech savvy and course-correct within days, instead of weeks. They still have to be creative, but their role is going to continue to transform because they have to deal with the tests out there, and see if they\u2019re still engaging with their customers and improving the customer experience. The driver is really about engagement and influence.<\/p>\n

Phil Fersht:<\/strong>\u00a0 In terms of how clients can acquire these skills \u2013 not everybody can go out and find marketing people who really understand analytics and Google searching and things like that. Do you think there is going to be a move to providers who can deliver almost full service marketing coming in to play here? Or do you think it will be more disparate with little niche agencies coming up in certain areas?<\/p>\n

Ray Wang:<\/strong>\u00a0 Companies are super specializing, even in industries. It\u2019s really the micro verticals, the micro industries, where the profit margins and differentiators are for both software companies and service providers. Especially with Cloud \u2013 there\u2019s a whole bunch of stuff that just goes away, and if you don\u2019t specialize, you\u2019re pretty much going to be out of the picture. So things like storage technologies, middleware, databases, hardware platforms\u2026all the different kinds of commoditized infrastructure essentially go away. So as a software company or service provider, what\u2019s your next step? You\u2019re going to have to get into the applications, keep verticalizing solutions, and keep delivering on the value add whether building tools for creation or delivering an applications in the field.<\/p>\n

Phil Fersht:<\/strong>\u00a0\u00a0 So, in a roundabout way, that brings us to what software assets service providers should buy to reduce their dependencies on the big ERP\u00a0vendors. Unless you want to buy the support operations of an existing company to get into a particular industry, you need to acquire some genuine IP in an area that will bring customers to you. I keep a very close eye on M&As in this space, and see about one a week right now, where one of the large\u00a0BPOs picks up a $10 million piece of software and maybe 20 or so clients along with that.\u00a0 They\u2019re trying to do is trying to build a common set of processes and leverage it across as many clients as possible. And we\u2019re seeing this happen pretty aggressively in industries like financial services,\u00a0 and starting to see it in the healthcare space – and even\u00a0verticals like travel.<\/p>\n

Ray Wang:<\/strong>\u00a0\u00a0 Yes, all the verticals are starting to pick up pieces. What I don\u2019t get, is why the providers don\u2019t buy the integration software too? Because at the end of the day that\u2019s the more important piece and they\u2019re going to have to pull all this stuff together. So the Informaticas and all the hybrid SaaS offerings out there\u2026the service providers need those. They need the client-side ESBs or all the geeky middleware. They can keep OEMing it, but once they\u2019re big enough it doesn\u2019t make sense for them.<\/p>\n

Phil Fersht:<\/strong>\u00a0 You make a very good point, because when we look at the ITO space, integration of the service is a trend we\u2019re picking up. A lot of the new growth is happening with\u00a0enteprises expanding their\u00a0infrastructure services engagements.\u00a0\u00a0The up-and-coming service providers who want to have IBM\u2019s and HP\u2019s lunch \u2013 especially the Indian providers, we\u2019re seeing push heavily into the infrastructure space with their bold style of looking at a project, doing a quick assessment and thinking, \u201cLet\u2019s just do this\u201d.\u00a0 They\u00a0are realizing they should\u00a0develop some competency there, and are going to look increasingly\u00a0at picking up some of these infrastructure tools and capbilities. I think we\u2019ll start to see more of this happening aggressively as the market proliferates, and a lot of it comes down to when these companies are going to become more reasonably priced.<\/p>\n

In Part II we’ll get serious talking about the future of the outsourcing business…<\/span><\/p>\n

Ray Wang (pictured) is Enterprise Strategist and Disruptive Technologies Expert and a Managing Partner at analyst advisory firm, Altimer Group.\u00a0 You can rach Ray at R at Altimetergroup dot com.\u00a0 You cal also follow his tweets at @rwang0<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Ray Wang is… er Ray Wang There is only one Ray Wang.\u00a0 Thank the Lord, because if there were two,\u00a0…<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48,51,81,86,88,91],"tags":[126],"ppma_author":[19],"yoast_head":"\nWang \/ Fersht uncut. Part I - Horses for Sources | No Boundaries<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.horsesforsources.com\/wang-fersht1_080210\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Wang \/ Fersht uncut. 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