Delivering Data Analytics Through Workday SaaS ERP Applications Empowers Business Managers at Actual Decision Points

Transcript of a sponsored BriefingsDirect podcast on benefits of moving to a SaaS model to provide accessible data analytics.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Sponsor: Workday.

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About Workday
This BriefingsDirect podcast features software-as-a-service (SaaS) upstart Workday, provider of enterprise solutions for human resources management, financial management, payroll, spend management, and benefits management.

Dana Gardner: Hi, this is Dana Gardner, principal analyst at Interarbor Solutions, and you’re listening to BriefingsDirect.

Today we present a sponsored podcast discussion on how software-as-a-service (SaaS) applications can accelerate the use and power of business analytics.

We're going to use the example of a human capital management (HCM) and enterprise resource planning (ERP) SaaS provider to show how easily customizable views on data and analytics can have a big impact on how managers and knowledge workers operate.

Historically, the back office business applications that support companies have been distinct from the category of business intelligence (BI). Certainly, applications have had certain ways of extracting analytics, but the interfaces were often complex, unique, and infrequently used.

Often, the data and/or tools were off-limits to the line-of-business managers and workers, when it comes to BI. And the larger data gathering analytics from across multiple data sources remain sequestered among the business analysts and were not often dispersed among the business application users themselves.

By using SaaS applications and rich Internet technologies that create different interface capabilities -- as well as a wellspring of integration and governance on the back-end of these business applications (built on a common architecture) -- more actionable data gets to those who can use it best. They get to use it on their terms, as our case today will show, for HCM or human resources managers in large enterprises.

The trick to making this work is to balance the needs that govern and control the data and analytics, but also opening up the insights to more users in a flexible, intuitive way. The ability to identify, gather, and manipulate data for business analysis on the terms of the end-user has huge benefits. As we enter what I like to call the data-driven decade, I think nearly all business decisions are going to need more data from now on.

So, to learn more about how the application and interfaces are the analytics, with apologies to Marshall McLuhan, please join me in welcoming our panel today. We have with us Stan Swete, Vice President of Product Strategy and the CTO at Workday, the sponsor of this podcast. Welcome back to the show, Stan.

Stan Swete: Thanks, Dana.

Gardner: We're also here with Jim Kobielus, Senior Analyst for BI and Analytics at Forrester Research. Welcome, Jim.

Jim Kobielus: Hi, Dana. Hello, everybody.

Gardner: And Seth Grimes, Principal Consultant at Alta Plana Corp., and a contributing editor at TechWeb's Intelligent Enterprise. Welcome, Seth.

Seth Grimes: Thank you, Dana.

Gardner: As I said, I have this notion that we're approaching a data-driven decade, that more data is being created, but increasingly more data needs to be brought to more decisions, and the enterprise, of course, is a primary place where this can take place.

So, let me take this first to you, Jim Kobielus. How are business workers and managers inside of companies starting to relate better to data? How is data typically getting into the hands of those who are in a position to take action on it best?

Dominant BI tool

Kobielus: It's been getting into hands of people for quite some time through their spread sheets, and the dominant BI tool in the world is Microsoft Excel, although that’s a well-kept secret that everybody knows. Being able to pull data from wherever into your Excel spreadsheet and model it and visualize it is how most people have done decision, support, and modeling for a long time in the business world.

BI has been around for quite a long time as well, and BI and spreadsheets are not entirely separate disciplines. Clearly, Excel, increasingly your browser increasingly, and the mobile client, are the clients of choice for BI.

There are so many different tools that you can use now to access a BI environment or capability to do reporting and query and dashboarding and the like that in the business world we have a wealth of different access members to analytics.

One of the areas that you highlighted -- and I want to hear what Stan from Workday has to say -- is the continued growth and resurgence of BI integrated with your line-of-business applications. That’s where BI started and that’s really the core of BI -- the reporting that's built-in to your HCM, your financial management systems, and so forth.

Many companies have multiple customer data repositories, and that, by its very nature, creates a quality issue.

Gardner: But, Jim, haven’t we evolved to a point where the quality of the data and the BI and the ability of people to access and use it have, in a sense, split or separated over the years?

Kobielus: It has separated and split simply because there is so much data out there, so many different systems of record. For starters, many companies have multiple customer data repositories, and that, by its very nature, creates a quality issue, consolidating, standardizing, correcting, and so forth. That’s where data warehouses have come in, as a consolidation point, as the data governance focus.

If the data warehouse is the primary database engine behind BI, BI has shared in that pain, in that low quality, relating to the fact that data warehouses aren’t even the solutions by themselves. Many companies have scads of data warehouses and marts, and the information is pulled from myriad back-end databases into myriad analytic databases and then pushed out to myriad BI tools.

Quality of data is a huge issue. One approach is to consolidate all of your data down to a single system of record, transactional, on-line transaction processing (OLTP) environment, a single data warehouse, or to a single, or at least a unified, data virtualization layer available to your BI environment. Or, you can do none of those things, but to try to consolidate or harmonize it all through common data quality tools or master data management.

The quality issue is just the ongoing pain that every single BI user feels, and there’s no easy solution.

Gardner: Stan, we've heard from Jim Kobielus on the standard BI view of the world, but I am going to guess that you have a little different view in how data and analytics should get in the hands of the people who use it.

Tell us what your experience has been at Workday, particularly as you've gone from your Release 9 to Release 10, and some of the experience you have had with working with managers.

Disparate data sources

Swete: A lot of the view that we have at Workday really supports what Jim said. When I think of how BI is done, primarily in enterprises, I think of Excel spreadsheets, and there are some good reasons for that, but there’s also some disadvantages that that brings.

One addition I would have on it is that, when I look at the emergence of separate BI tools, one driver was the fact that data comes from all kinds of disparate data sources, and it needs aggregation and special tooling to help overcome that problem.

Taking an apps focus, there’s another causal effect of separate BI tools. It comes from the fact that traditional enterprise applications, have been written for what I would call the back-office user. While they do a very good job of securing access to data, they don’t do a very good job of painting a relevant picture for the operational side of the business.

A big driver for BI was taking the information that’s in the enterprise systems and putting a view on some dimensionality that managers or the operational side of the business could relate to. I don’t think apps have done that very well, and that’s where a lot of BI originated as well.

From a Workday perspective, we think that you're going to always need to have separate tools to be data aggregators, to get some intelligence out of data from disparate sources. But, when the data can be focused on the data in a single application, we think there is an opportunity for the people who build that application to build in more BI, so that separate tooling is not needed. That’s what we think we are doing at Workday.

Grimes: Dana, I'd love to riff on this a little bit -- on what Jim said and what Stan has just said. We're definitely in a data-driven decade, but there’s just so much data out there that maybe we should extend that metaphor of driving a bit.

The real destination here is business value, and what provides the roadmap to get from data to business value is the competencies, experiences, and the knowledge of business managers and users, picking up on some of the stuff that Stan just said.

It’s the systems, the data warehouses, that Jim was talking about, but also hosted, as-a-service types of systems, which really focus on delivering the BI capabilities that people need. Those are the great vehicle for getting to that business value destination, using all of that data to drive you along in that direction.

Gardner: Traditionally, however, if you look at back office applications -- as on-premises, silo, stack, self-contained, on their own server -- making these integrations and these data connections requires quite a bit of effort from the IT people. So, the IT department crew is between the data, the integrations, the users, and the people.

What’s different now, with a provider like Workday moving to the SaaS model, is that the integration can happen more seamlessly as a result of the architecture and can be built into more frequent updates of the software. The interface, as I said earlier, becomes the analytics, rather than the integration and the IT department becoming the analytics -- or becoming a barrier to the analytics.

I wonder, Jim Kobielus, if you have a sense of what the architecture-as -destiny angle has here, moving to SaaS, moving to cloud models, looking at what BI can bring vis-à-vis these changes in the architecture. What should we expect to see?

Pervasive BI

Kobielus: "Architecture as destiny." That’s a great phrase. You'd better copyright that, Dana, before I steal it from you.

It comes down to one theme that we use to describe where it’s going, as pervasive BI ... Pervading all decisions, pervading everybody’s lives, but being there, being a ready decision support tool, regardless of where you are at and how you are getting into the data, where it’s hosted.

So in terms of architecture, we can look at the whole emerging cloud space in the most nebulous ways as being this new architecture for pervasive, hosted BI. But that is such a vague term that we have to peel the onion just a little bit more here.

I like what you said just before that, Dana, that the interface is the analytics. That’s exactly true. Fundamentally, BI is all about delivering action and more intelligence to decision agents. I use the term agents here to refer to the fact that the agents may be human beings or they may be workflows that you are delivering, analytic metrics, KPIs, and so forth to.

The analytics are the payload, and they are accessed by the decision agents through an interface or interfaces. Really, the interfaces have to fit and really plug into every decision point -- reporting, query, dashboarding, scorecarding, data mining, and so forth.

What we are really talking about is a data virtualization layer for cloud analytics to enable the delivery of analytics pervasively throughout the organization.

If you start to look, then, at the overall architecture we are describing here for really pervasive BI, hosted on demand, SaaS, cloud, they're very important. But, it's also very much the front-end virtualization layer for virtualization of access to this cloud of data, virtualization of access by a whole range of decision agencies and whatever clients and applications and tools they wish, but also very much virtualization of access to all the data that’s in the middle.

In the cloud, it has to be like a cloud data warehouse ecosystem, but it also has to be a interface. The interfaces between this cloud enterprise data warehouse (EDW) and all the back-end transactional systems have to be through cloud and service oriented architecture (SOA) approaches as well.

What we are really talking about is a data virtualization layer for cloud analytics to enable the delivery of analytics pervasively throughout the organization. At the very highest level, that’s the architecture that I can think of that actually fits this topic.

Gardner: All right. That’s the larger goal, the place where we can get to. I think what Workday is showing is an intermediary step, but an important one.

Stan, tell us a little bit about what Workday is doing vis-à-vis your release 10 update and what that means for the managers of HR, the ones that are looking at that system of record around all the employee information and activities and processes.

Swete: I agree with the holistic view of trying to develop pervasive analytics, but the thing that frequently gets left out, and it has gotten left out even in this conversation, is a focus on the transactional apps themselves and the things they can do to support pervasive analytics.

Maintaining security

For disparate data sources, you're going to need data warehouses. Any time you've got aggregation and separate reporting tools, you're going to need to build interfaces. But, if you think back to how you introduced this topic Dana, how you introduced SaaS, is when you look at IT’s involvement, if interfaces need to get built to convey data, IT has to get involved to make sure that some level of security is maintained.

From Workday’s point of view, what you want to do is reduce the times when you have to move data just to do analysis. We think that there is a role that you can play in applications where -- and this gets IT out of it -- if your application, that is the originator of transactional data, can also support a level of BI and business insight, IT does not have to become as involved, because they bought the app with the trust in the security model that’s inherent to the application.

What we're trying to is leverage the fact that we can be trusted to secure access to data. Then, what we try to do is widen the access within the application itself, so that we don’t have to have separate data sources and interfaces.

This doesn’t cover all cases. You still need data aggregation. But, where the majority of the data is sourced in a transaction system, in our case HR, we think that we, the apps vendor, can be relied on to do more BI.

What we've been working on is constantly enhancing managers' abilities to get access to their data. Up through 2009, that took the form of trying to enhance our report writer and deliver more options for reports, either the option to render reports in a small footprint, we call it Worklet, and view it side by side, whether they are snippets of data, or the option to create more advanced reports.

This is an ability to enhance our built-in report writer to allow managers or back-office personnel to directly create what become little analysis cues.

We had introduced a nice option last year to create what we call contextual reporting, the ability to sort of start with your data -- looking at a worker -- and then create a report about workers from there, with guidance as to all the Workday fields, where they applied to the worker. That made it easier for a manager not to have to search or even remember parts of our data dictionary. They could just look at the data they knew.

This year, we're taking, we think, a major step forward in introducing what we are calling custom analytics. This is an ability to enhance our built-in report writer to allow managers or back-office personnel to directly create what become little analysis cues. We call them matrix reports.

That’s a new report type in our report writer. Basically, you very quickly -- and importantly without coding or migrating data to a separate tool, but by pointing and clicking in our report writer -- get one of these matrix reports that allows slicing and dicing of the data and drilling down into the data in multiple dimensions. In fact, the tool automatically starts with every dimension of the data that we know about based on the source you gave us.

If you say, I want the worker, probably we will pop up about 12 different dimensions to analyze. Then, you actually reduce them down to the ones that you want to analyze -- maybe last performance review, business site, management reporting level, for example, and, let’s say, salary level. So, you could quickly create a cue for yourself to do the analysis.

Then, we let you share that out to other managers in a way in which you don’t have to think about the underlying security. I could write the thing and share it with either someone who works for me or a coworker, and the tool would apply the security that they head to the system, based on its understanding of their roles.

We're trying to make it simple to get this analysis into the hands of managers to analyze their data.

Self-service information

Kobielus: What you are saying there is very important. What you just mentioned there, Stan, is one thing I left off in my previous discussion, which is self-service information and exploration through hierarchical and dimensional drill down and also mashup in collaborative sharing of your mashups. It's where the entire BI space is going, both traditional, big specialized BI vendors, but also vendors like yourself, who are embedding this technology into back office apps, and have adopted a similar architecture. The users want all the power and they're being given the power to do all of that.

Swete: We would completely agree with that. Actually, we like to think that we completely thought this up on our own, but it really has been a path we have been pushed along by our customers. We see from the end users that same demand that you're talking about.

Gardner: Seth, to you. You've focused on web analytics and the interfaces involved with text and large datasets. When you hear about a specific application, like a HCM, providing these interfaces through the web browser, rich and intuitive types of menuing and drop-downs and graphics, does something spark an interest in you? When I saw this, I thought, "Wow, why can’t we do this with a lot more datasets across much more of the web?" Any thoughts about how what Workday is doing could be applied elsewhere?

Grimes: Let me pull something from my own consulting experience here. A few years ago I did a consulting stint to look at the analytics and data-warehousing situation at a cabinet level, U.S. federal government agency. It happens to be headed by a former 2008 Presidential candidate, so it’s actually internationally distributed.

They were using some very mainstream BI tools, with conventional data warehousing, and they had chaos. They had all kinds of people creating reports in different departments, very duplicative reports.

The web is going to be a great mechanism for interconnecting all of the distributed systems that you might have and bringing in additional data that might be germane to your business problems.

There was a lot of cost involved in all of this duplication, because stuff had to get re-proven over and over again, except that when you had all those distributed report creation, with no standards, then nothing was ever done quite the same in two different departments, and that only added to the chaos.

There were all kinds of definability problems, all kinds of standardization problems, and so on. When you do move to this kind of architecture that we are discussing here, architecture is destiny again. The architecture maybe isn't the destiny in my mind, but it creates an imprint for the destiny that you are going to have.

Add in the web. The web is going to be a great mechanism for interconnecting all of the distributed systems that you might have and bringing in additional data that might be germane to your business problems, that isn’t held inside your firewall, and all that kind of stuff. The web is definitely a fact nowadays and it’s so reliable finally that you can run operational systems on top of it.

That’s where some of the stuff that Stan was talking about comes into play. Data movement between systems does create vulnerability. So, it's really great, when you can bundle or package multiple functional components on a single platform.

For example, we've been discussing bundling analytics with the operational system. Whether those operational systems are for HCM, ERP, or for other business functions, it makes security sense, but there are a couple of dimensions that we haven’t discussed yet. When you don’t move your data, then you're going to get fresher data available to the analytical systems. When people create data warehouses, they still often do refreshes on a daily or even less-frequent basis.

See a demo on how Workday BI offers business users a new experience for accessing the key information to make smart decisions.

About Workday
This BriefingsDirect podcast features software-as-a-service (SaaS) upstart Workday, provider of enterprise solutions for human resources management, financial management, payroll, spend management, and benefits management.

Data is not moving

You're also going to have better performance, because the data is not moving. All this is also going to add up to lower support costs. We were talking about IT a little bit earlier. In my experience, IT actually wants to encourage this kind of hosted or as-a-service type of use, because it does speed the time for getting the applications in place. That reduces the IT burden and it really leverages the competencies, experience, and knowledge of the line-of-business users and managers. So, there's only good stuff that one can say about this kind of architecture’s destiny that we have been talking about.

Gardner: I'd like to dive in a bit more on this notion of "the interface is the analytics." What I mean by that is, when you open up the opportunity for people to start getting at the data, slicing it and dicing it based on what they think their needs are, to follow their own intuition about where they want to learn more, maybe creating templates along the way so they can reuse their path, maybe even sharing those templates with other people in the organization, it strikes me that you are getting toward a tipping point of some sort.

The more the people use the data, the better they are at extracting value, and the more that happens, the more that they will use the tools and then share that knowledge, and it becomes a bit of a virtuous adoption opportunity. So, analytics takes on a whole new level of value in the organization based on how it’s being used.

Stan, when you have taken what you are doing with Workday -- rolling out update 10 -- what’s been the response? What’s been the behavioral implication of putting this power in the hands of these managers?

We also have stories from customers who have used this in production to create reports for management that would have taken them weeks, and they did it in less than an hour.

Swete: We have been rolling out 10. I think about half of our customer population is on it, but we have worked through design with our customers and have done early testing. We've also gotten some stories from the early customers in production, and it’s playing out along a lot of the lines that you just mentioned.

A customer we worked particularly close with took their first look. We sat back and looked at what they would build for themselves. The very first analysis they did involved an aging analysis by job profile in their company. They were able to get a quick matrix report built that showed them the ages by job code across their organization.

Then, they could not only look at sort of just a high-level average age number, but click down on it and see the concentration of the detail. They found certain job categories where not only was there a high average age, but a tight concentration around that average, which is an exposure. That’s insight that they developed for themselves.

Pre-Workday 10, the thought might have occurred to us to build that and deliver it as a part of our application, but I don’t think it would have been in the top 10 reports that we would have delivered. And this is something that they wrote for themselves in their first hours using the functionality.

We also have stories from customers who have used this in production to create reports for management that would have taken them weeks, and they did it in less than an hour. That’s because we eliminated the need to move data and think about how that data was staged in another tool, secured in another tool, and then put that all back on to Workday.

Aggressive adoption

So, so far so good, I'd say. Our expectation is that these kinds of stories will just increase, as our customers fully get on to this version of Workday. We've seen fairly aggressive adoption of lot of the features that I have mentioned driving into Workday. I think that these requirements will continue to drive us forward to place sort even more power into the insight you can get from our reporting tools.

Grimes: Isn’t that what it's all about, speeding time to insight for the end-users, but, at the same time, providing a platform that allows the organization to grow. That evolves with the organization’s needs, as they do change over time. All of that kind of stuff is really important, both the immediate time to insight and the longer term goal of having in place a platform that will support the evolution of the organization.

Swete: We totally agree with that. When we think about reporting at Workday, we have three things in mind. We're trying to make the development of access to data simple. So that’s why we try to make it always -- never involve coding. We don’t want it to be an IT project. Maybe it's going to be a more sophisticated use of the creation of reports. So, we want it to be simple to share the reports out.

The second word that’s top of my list is relevance. We want the customers to guide themselves to the relevant data that they want to analyze. We try to put that data at hand easily, so they can get access to it. Once they're analyzing the data, since we are a transaction system, we think we can do a better job of being able to take action off of what the insight was.

I call it transalytics. It's a combination of transaction systems and analytics systems. And really it's a closed loop. It must be.

So, we always have what we call related actions as a part of all the reports that you can create, so you can get to either another report or to a task you might want to do based on something a report is showing you.

Then, the final thing, because BI is complex, we also want to be open. Open means that it still has to be easy to get data out of Workday and into the hands of other systems that can do data aggregation.

Kobielus: That’s interesting -- the related action and the capability. I see a lot of movement in that area by a lot of BI vendors to embed action links into analytics. I think the term has been coined before. I call it transalytics. It's a combination of transaction systems and analytics systems. And really it's a closed loop. It must be.

It's actionable intelligence. So, duh, then shouldn't you put an action link in the intelligence to make it really truly actionable? It's inevitable that that’s going to be part of the core uptake for all such solutions everywhere.

Gardner: Jim, have you seen any research or even some anecdotal evidence that making these interfaces available, making the data available without IT, without jumping through hoops of learning SQL or other languages or modeling tools, that it’s a tipping point or some catalyst to adoption? It adds more value to the BI analytics, which therefore encourages the investment to bring more data and analytics to more people. Have you seen any kind of a wildfire like that?

Tipping point

Kobielus: Wildfire tipping point. I can reference some recent Forrester Research. My colleague, Boris Evelson, surveyed IT decision makers -- we have, in fact, in the last few years -- on the priorities for BI and analytics. What they're adopting, what projects they are green lighting, more and more of them involve self-service, pervasive BI, specifically where you have more self-service, development, mashup style environments, where there is more SaaS for quick provisioning.

What we're seeing now is that there is the beginnings of a tipping point here, where IT is more than happy to, as you have all indicated, outsource much of the BI that they have been managing themselves, because, in many ways, the running of a BI system is not a core competency for most companies, especially small and mid-market companies.

The analytics themselves though -- the analysis and the intelligence -- are a core competency they want to give the users: information workers, business analysts, subject matter experts. That's the real game, and they don't want to outsource those people or their intelligence and their insights. They want to give them the tools they need to get their jobs done.

What's happening is that more and more companies, more and more work cultures, are analytic savvy. So, there is a virtuous cycle, where you give users more self-service -- user friendly, and dare I say, fun -- BI capabilities or tools that they can use themselves. They get ever more analytics savvy. They get hungry for more analysis. They want more data. They want more ways to visualize and so forth. That virtuous cycle plays into everything that we are seeing in the BI space right now.

What's happening is that more and more companies, more and more work cultures, are analytic savvy.

Boris Evelson is right now doing a Forrester Wave on BI SaaS, and we see that coming along on a fast track, in terms of what enterprises are asking for. It's the analytics-savvy culture here. There is so much information out there, and analytics are so important.

Ten years ago, it may have seemed dangerous to outsource your payroll or your CRM system. Nowadays, everybody is using something like an ADP or a Salesforce, and it's a no-brainer. SaaS BI is a no-brainer. If you're outsourcing your applications, maybe you should outsource your analytics.

Gardner: Alright, Stan, let's set this up to ask Workday. You've got your beachhead with the HCM application. You're already into payroll. How far do you expect to go, and what sort of BI payoff from your model will you get when your systems of record start increasing to include more and more business data and more applications?

Swete: There are a couple of ways we can go on that. First of all, Workday has already built up more than just HCM. We offer financial management applications and have spend-management applications.

A big part of how we're trying to develop our apps is to have very tight integration. In fact, we prefer not even to talk about integration, but we want these particular applications to be pieces of a whole. From a BI perspective, we wanted to be that. We believe that, as a customer widens their footprint with us, the value of what they can get out of their analysis is only going to increase.

I'll give you an example of that that plays out for us today. In the spend management that we offer, we give the non-compensation cost that relate to your workforce. A lot of the workforce reporting that you do all of a sudden can take on a cost component in addition to compensation. That is very interesting for managers to look at their total cost to house the workforce that they've developed and use that as input to how they want to plan.

Cost analysis

We do a good job of capturing and tracking contingent labor. So, you can start to do cost analysis of what your full-time employees and your contingent workers are costing you.

Our vision is that, as we can widen our footprint from an application standpoint, the payoff for what our end-users can do in terms of analysis just increases dramatically. Right now, it's attaching cost to your HR operations' data. In the future, we see augmenting HR to include more and more talent data. We're at work on that today, and we are very excited about dragging in business results and drawing that into the picture of overall performance.

You look at your workforce. You look at what they have achieved through their project work. You look at how they have graded out on that from the classical HR performance point of view. But, then you can take a hard look at what business results have generated. We think that that's a very interesting and holistic picture that our customers should be able to twist and turn with the tools we have been talking about today.

Grimes: There is a kind of truism in the analytics world that one plus one equals three. When you apply multiple methods, when you join multiple datasets, you often get out much more than the sum of what you can get with any pair of single methods or any pair of single datasets.

Some users are really going to get down and dirty with the data and with the analytical methods, and you want to support them, but you also want to deliver appropriate sophistication of analytics to other users.

If you can enable that kind of cross-business functions, cross-analytical functions, cross-datasets, then your end-users are going to end up farther along in terms of optimizing the overall business picture and overall business performance, as well as the individual functional areas, than they were before. That's just a truism, and I have seen it play out in a variety of organizations and a variety of businesses.

Swete: That’s why we think it’s really important not to introduce any seams in the application. Even today, when we've got a customer looking at their HR data, they're able to do analysis and the dimensions of how their cost centers are structured, not just how their supervisory organization is structured. So, they can get rollups and analysis along those lines. That’s just one example. We have to bridge into wider and wider financial and operational data.

Grimes: You get to a really good place, if your users don’t even know that they are pulling data from multiple sources. They don’t even really know that they are doing analytics. They just think that they are doing their job. That sounds like the direction that you all are going, and I would affirm that’s a very good direction to be going.

Some users are really going to get down and dirty with the data and with the analytical methods, and you want to support them, but you also want to deliver appropriate sophistication of analytics to other users. There are an awful lot of users in the organization who really do need analytics, but they actually don’t need to know that they are doing analytics. They just need to do their job. So, if you can deliver the analytics to them in a very unintrusive way, then you're in really good shape.

Swete: We would agree. Our challenge for doing multidimensional analysis, which you can do on these matrix reports, is to deliver that to a customer without using the word multidimensional.

Grimes: A lot of the jargon words that we have been throwing around in this podcast today, you don’t want to take those words anywhere near your end-users. They don’t need to know, and it might just cause some consternation for them. They don’t really need to know all that kind of stuff. We who provides those services and analyze them need to know that kind of stuff, but the end-users don’t usually.

Using small words

Swete: One vendor, of course, put the word pivot into the name of a product that does this dimensional exploration. Other vendors quite often talk about slice and dice. You definitely want to boil it down to words that maybe have fewer than four syllables.

Gardner: Let me throw this out to our analysts on the call today. Is there something about the SaaS model -- and I'll even expand that to the cloud model -- that will allow BI analytics to move to the end-user faster than it could happen with an on-premise or packaged application? And, is analytics, in effect, an accelerant to the adoption of the SaaS model?

I might be stretching it here, but, Jim Kobielus, what do you think? Is what Workday and Stan have been describing compelling on its own merits, regardless of some of the other SaaS benefit to start adopting more applications in this fashion?

Kobielus: Analytics generally as an accelerant to adopting a SaaS model for platforms and applications?

Grimes: Maybe it's the other way around. Maybe the platform is an accelerant to analytics. As we were talking about before, if you can eliminate some of the data movement and all of the extract, transform, and load, you're going to get faster time to data being analytically ready from the operational systems.

The analytics will migrate to where the data lives. If the data lives in the cloud or in a SaaS environment, the analytics will certainly migrate to that world.

If you adopt it as a service model, then you don’t need to have your IT staff install all the software, buy the machines to host it, all that kind of stuff. That’s a business consideration, not a technical one. You have faster time to analytics, just in the sense of the availability of those analytics.

Then, you also can accelerate the adoption of analytics, because you reduced the entry cost with a hosted solution. You don’t have to lay out a lot of money up front in order to buy the hardware and license the software. The cloud as a service will potentially enable on demand pricing, pay-as-you-go types of pricing. So, it’s a different business model that speeds the availability of analytics, and not even a technical question.

Kobielus: I agree. The analytics will migrate to where the data lives. If the data lives in the cloud or in a SaaS environment, the analytics will certainly migrate to that world. If all your data is in premises-based Oracle databases, then clearly you want a premises-based BI capability as well.

If all your data is in SaaS-based transactional systems, then your BI is going to migrate to that world. That’s why BI SaaS is such a huge and growing arena.

Also, if you look at just the practical issues here, more and more of the BI applications, advanced analytics, that we're seeing out there in the real world involve very large datasets. We're talking about hundreds of terabytes, petabytes, and so forth. Most companies of most sizes, with typical IT budgets, don’t have the money to spend on all of the storage and the servers to process all of that. They'll be glad to rent out a piece of somebody’s external cloud to host their analytical data mart for marketing campaign optimization, and the like.

A lot of that is just going into the SaaS world, because that’s the cheapest storage and the cheapest processing, multitenant. The analytics will follow the data, the huge big datasets to the cloud environment. SaaS is an accelerant for pervasive advanced analytics.

Gardner: Stan, did we miss anything in terms of looking at the SaaS model and your model in terms of where analytics fit in and the role they play?

Change delivery vehicle

Swete: I agree with everything that was just said. The thing that always occurs to me as an advantage of SaaS is that SaaS is a change delivery vehicle. If you look at the trend that we have been talking about, this sort of marrying up transactional systems with BI systems, it’s happening from both ends. The BI vendors are trying to get closer to the transactional systems and then transactional systems are trying to offer more built-in intelligence. That trend has several steps, many, many more steps forward.

The one thing that’s different about SaaS is that, if you have got a community of customers and you have got this vision for delivering built-in BI, you are on a journey. We are not at an endpoint. And, you can be on that journey with SaaS and make the entire trip.

In an on-premise model, you might make that journey, but each stop along the way is going to be three years and not multiple steps during the year. And, you might never get all the way to the end if you are a customer today.

SaaS offers the opportunity to allow vendors to learn from their customers, continue to feed innovation into their customers, and continue to add value, whereas the on-premise model does not offer that.

It’s not just about the time of the journey. It’s about do you bring all your customers along with you, because that’s the real value.

Gardner: So, a logical conclusion from that is that, if an on-premises organization takes three, six, nine years to make a journey, but their competitor is in a SaaS model that takes one, two, three years to make the journey, there is a significant competitive advantage or certainly a disparity between the data and analytics that one corporation is going to have, where it should be, versus the other.

Swete: We think so. It’s not just about the time of the journey. It’s about do you bring all your customers along with you, because that’s the real value, right? If we build the flashiest new analytic tool and there is an expensive upgrade to get there and all of our customers have to go through that at their own pace and with their own on-premise project, that’s sort of one value proposition that’s reduced.

I mentioned we are in the midst of delivering Workday 10. In two or three weeks, all of our customers will be on it, and we'll be looking forward to the next update. That’s the other value of SaaS. Not only are you able to deliver the new functionality, but you are able to keep all your customers up on it.

Gardner: Well, we're just about out of time. We've been discussing how SaaS applications can accelerate the use and power of business analytics.

I want to thank our panel today. We've been joined by Stan Swete. He is the Vice President of Product Strategy and CTO at Workday. Thank you, Stan.

Swete: Thanks.

Gardner: We've also been joined by Jim Kobielus, Senior Analyst at Forrester Research. Thanks, Jim.

Kobielus: It’s been a pleasure.

Gardner: And, Seth Grimes, Principal Consultant at Alta Plana Corp., and a contributing editor at TechWeb's Intelligent Enterprise. Thank you, Seth.

Grimes: You're welcome. Again, I appreciate the opportunity to participate.

Gardner: This is Dana Gardner, Principal Analyst at Interarbor Solutions. You've been listening to a sponsored BriefingsDirect podcast. Thanks for joining us, and come back next time.

See a demo on how Workday BI offers business users a new experience for accessing the key information to make smart decisions.

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This BriefingsDirect podcast features software-as-a-service (SaaS) upstart Workday, provider of enterprise solutions for human resources management, financial management, payroll, spend management, and benefits management.

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Transcript of a sponsored BriefingsDirect podcast on moving to a SaaS model to provide accessible data analytics. Copyright Interarbor Solutions, LLC, 2005-2010. All rights reserved.

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BriefingsDirect Analyst Panelists Peer into Crystal Balls for Latest IT Growth and Impact Trends

Edited transcript of BriefingsDirect Analyst Insights Edition podcast, Vol. 49, with panel of analysts discussing the future of cloud computing, SOA, social networks and the economy.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Charter Sponsor: Active Endpoints.

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Dana Gardner: Hello, and welcome to the latest BriefingsDirect Analyst Insights Edition, Vol. 49. I'm your host and moderator Dana Gardner, principal analyst at Interarbor Solutions.

This periodic discussion and dissection of IT infrastructure related news and events, with a panel of industry analysts and guests comes to you with the help of our charter sponsor, Active Endpoints, maker of the ActiveVOS business process management system.

Our topic this week hones in on the predictions for IT industry growth and impact, now that the recession appears to have bottomed out. We're going to ask our distinguished panel of analysts and experts for their top five predictions for IT growth through 2010 and beyond.

To help us gaze into the new IT trends crystal ball we are joined by our panel. Please join me in welcoming Jim Kobielus, senior analyst at Forrester Research. Hey, Jim.

Jim Kobielus: Hey, Dana. Hi, everybody.

Gardner: Joe McKendrick, independent analyst and prolific blogger. Howdy, Joe.

Joe McKendrick: Hi, Dana. Very nice to be here.

Gardner: Tony Baer, senior analyst at Ovum. And, Brad Shimmin, principal analyst at Current Analysis. Hi, Brad.

Brad Shimmin: Hey, Dana.

Gardner: Dave Linthicum, CEO of Blue Mountain Labs. Good to have you with us, Dave.

Dave Linthicum: Hey, guys.

Gardner: Dave Lounsbury, vice-president of collaboration services at The Open Group. How do you do, Dave? [Disclosure: The Open Group is a sponsor of BriefingsDirect podcasts. See more on the consortium's recent conference in Seattle.]

Dave Lounsbury: Hello, Dana. Happy to be here.

Gardner: Jason Bloomberg, managing partner at ZapThink.

Jason Bloomberg: Good morning, everybody.

Gardner: And, JP Morgenthal, independent analyst and IT consultant. Good to have you with us, JP.

JP Morgenthal: Good to be here.

Gardner: I've decided to do this in a random order this time. So, based on the pick of the short straw, Brad Shimmin, you're up, what are your top five predictions for IT in 2010?

Brad Shimmin

Shimmin: Thanks, Dana. And, I have got a set of five. Obviously, mine are geared toward collaboration and conferencing, so I'll just put that out there as a caveat, but I think it will help if we're going to try to strive for consensus later on.

Let me just begin with the first and most obvious, which is that clouds are going to become less cloudy. Vendors, particularly those in the collaboration space, are going to start to deliver solutions that are actually a blend of both cloud and on-premise.

We've seen Cisco take this approach already with front-ending some web conferencing to off-load bandwidth requirements at the edge and to speed internal communications. IBM, at least technically, is poised do the same with Foundations, their appliances line, and LotusLive their cloud-based solution.

With vendors like these that are going to be pulling hybrid, premise/cloud, and appliance/service offerings, it's going to really let companies, particularly those in the small and medium business (SMB) space, work around IT constraints without sacrificing the control and ownership of key processes and data, which in my mind is the key, and has been one of the limiting factors of cloud this year.

Next up, I have "software licensing looks like you." As with the housing market, it's really a buyer's market right now for software. It's being reflected in how vendors are approaching selling their software. Customers have the power to demand software pricing that better reflects their needs, whether it's servers or users.

I think the weapons will be user facing enterprise apps that work in concert with line-of-business solutions on the back-end.

So, taking cues from both the cloud and the open-source licensing vendors out there, we will see some traditional software manufacturers really set up a "pick your poison" buffet. You can have purchase options that are like monthly or yearly subscriptions or flat perpetual licenses that are based on per seat, per server, per CPU, per request, per processor, or per value unit, with a shout out at IBM there -- or any of the above.

You put those together in a way that is most beneficial to you as a customer to meet your use case. We saw last year with web conferencing software that you could pick between unlimited usage with a few seats or unlimited seats with limited usage. You can tailor what you pay to what you need.

Third for me is the mobile OS wars are going to heat up. I'm all done with the desktop. I'm really thinking that it's all about the Google Chrome/Android. I know there's a little bit of contention there, but Google Chrome/Android, Symbian, RIM, Apple iPhone, Windows Mobile, all those devices will be the new battle ground for enterprise users.

I think the weapons will be user facing enterprise apps that work in concert with line-of-business solutions on the back-end. We'll see the emergence of native applications, particularly within the collaboration space, that are capable of fully maximizing the underlying hardware of these devices, and that's really key. Capabilities like geo-positioning, simultaneous web invoice and, eventually, video are really going to take off across all these platforms this year.

Win or lose

But, the true battle for this isn't going to be in these cool nifty apps. It's really going to be in how these vendors can hopefully turn these devices into desktops, in terms of provisioning, security, visibility, governance, etc. That, to me, is going to be where they're going to either win or lose this year.

Four is "The Grand Unification Theory" -- the grand unification of collaboration. That's going to start this year. We're no longer going to talk about video conferencing, web conferencing, telepresence, and general collaboration software solutions as separate concerns. You're still going to have PBXs, video codecs, monitors, cameras, desk phones, and all that stuff being sold as point solutions to fill specific requirements, like desktop voice or room-based video conferencing and the like.

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But, these solutions are really not going to operate in complete ignorance of one another as they have in the past. Vendors with capabilities or partnerships spanning these areas, in particular -- I'm pointing out Cisco and Microsoft here -- can bring and will be bringing facets of these together technically to enable users to really participate in collaboration efforts, using their available equipment.

It will be whatever they have at hand. They're not forced to go to a particular room to participate in a conference, for example. They can just pick up their mobile phone or their preferred method of communication, whether they just want to do voice, voice/video, or chat.

For enterprise-focused vendors, we're going to see them playing in the waves in a number of ways.

And last but not least ... I'm sorry. I'm probably going to get kicked for this, but, because I'm a technical optimist . . . the Google Wave is really going to kick in in 2010. I may be stating the obvious, or I maybe stating something that's going to be completely wrong, but I really feel that this is going to be the year that traditional enterprise collaboration players jump head long into this Google Wave pool in an effort to really cash in on what's already a super-strong mind share within the consumer ranks.

Even though they have a limited access to the beta right now, there are over a million users of it, that are chunking away at this writing code and using Wave.

Of course, Google hosted rendition will excel in supporting consumer tasks like collaborative apps and role playing games. That's going to be big. For enterprise-focused vendors, we're going to see them playing in the waves in a number of ways. They're going to embed them within existing collaborative applications. They're going to enable existing apps to interact with Google Waves.

This is the case with Novell’s recently announced Pulse. You guys saw that. They're going to extend existing apps to make use of wave-like capabilities. They're going to create some competitive functionality that looks like a Google Wave but isn't a Google Wave, and doesn't really care what Google is doing with Wave. And that's it, Dana.

Gardner: Well, Brad, that was an excellent list. If I can plumb through this a little bit, it sounds like we are going to be using Google Wave to do unified collaboration on a mobile operating system, coming from the cloud and we are going to get to negotiate for the price we will pay for it.

Shimmin: Perfect. You strung them together like jewels on a thread. Thanks.

Gardner: Dave Linthicum, you're up next. What are your top five?

Dave Linthicum

Linthicum: My top five are going to be, number one, cloud computing goes mainstream. That's a top prediction, I'm just seeing the inflection point on that.

I know I'm going out on the edge on this one. Go to indeed.com and do a search on the cloud-computing jobs postings. As I posted on my InfoWorld blog few weeks ago, it's going up at an angle that I have never seen at any time in the history of IT. The amount of growth around cloud computing is just amazing. Of course, it's different aspects of cloud computing, not just architecture with people who are cloud computing developers and things like that.

The Global 2000 and the government, the Global 1, really haven't yet accepted cloud computing, even though it's been politically correct for some time to do so. The reason is the lack of control, security concerns, and privacy issues, and, of course, all the times the cloud providers went down. The Google outages and the loss of stuff with T-Mobile, hasn't really helped, but ultimately people are gearing up, hiring up, and training up for cloud computing.

We are going to see a huge inflection point in cloud computing. This can be more mainstream in Global 2000 than it has been in the past. It's largely been the domain of SMBs, pilot projects, things like that. It's going to be a huge deal in 2010 and people are going to move into cloud computing in some way, shape, or form, if they are in an organization.

People are pushing back on that now. They’ve had it. They really don’t want all of their information out there on the Internet ...

That's going to continue going forward. I don’t think we are going to outsource everything as a cloud, but, in the next five years, there is going to be a good 10-20 percent existing on the cloud, which is huge.

The next is privacy. I’ll shift gears a bit. Privacy becomes important. Facebook late last year pulled a little trick, where they changed the privacy settings, and you had to go back and reset your privacy settings. So, in essence, if you weren’t diligent about looking at the privacy settings within your Facebook account and your friends list, your information was out on the Internet and people could see it.

The reason is that they're trying to monetize people who are using Facebook. They're trying to get at the information and put the information out there so it's searchable by the search engines. They get the ad revenue and all the things that are associated with having a big mega social media site.

People are pushing back on that now. They’ve had it. They really don’t want all of their information out there on the Internet, who their friends are, who they are dating, all these sorts of things. They want it secured. I think the rank and file are going to demand that regulations be set.

People are going to move away from these social media sites that post their private information, and the social media sites are going to react to that. They're going to change their policies by the end of 2010, and there's going to be a big uproar at first.

Cloud crashes

Next, the cloud crashes make major new stories. We've got two things occurring right now. We've got a massive move into the cloud. That was my first prediction. We have the cloud providers trying to scale up, and perhaps they’ve never scaled up to the levels that they are going to be expected to scale to in 2010. That's ripe for disaster.

A lot of these cloud providers are going to over extend and over sell, and they're going to crash. Performance is going to go down -- very analogous to AOL’s outage issues, when the Internet first took off.

We're going to see people moving to the cloud, and cloud providers not able to provide them with the service levels that they need. We're going to get a lot of stories in the press about cloud providers going away for hours at a time, data getting lost, all these sorts of things. It's just a matter of growth in a particular space. They're growing very quickly, they are not putting as much R&D into what these cloud systems should do, and ultimately that's going to result in some disasters.

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Next, Microsoft becomes cloud relevant. Microsoft, up to now, has been the punch line of all cloud computing. It had the Azure platform out there. They've had a lot of web applications and things like that. They really have a bigger impact in the cloud than most people think, even though when we think of cloud, we think of Amazon, Google, and larger players out there.

Suddenly, you're going to see Microsoft with a larger share of the cloud, and they're going to be relevant very quickly.

With Azure coming into its own in the first quarter of next year in the rise of their office automation applications for the cloud, you are going to see a massive amount of people moving to the Microsoft platform for development, deployment, infrastructure, and the office automation application. The Global 2000 that are already Microsoft players and the government that has a big investment in Microsoft are going to move in that direction.

Suddenly, you're going to see Microsoft with a larger share of the cloud, and they're going to be relevant very quickly. In the small- and medium-sized business, it's still going to be the domain of Google, and state and local governments are still be going to be the domain of Google, but Microsoft is going to end up ruling the roost by the end of 2010.

Finally, the technology feeding frenzy, which is occurring right now. People see the market recovering. There is money being put back into the business. That was on the sidelines for a while. People are going to use that money to buy companies. I think there is going to be a big feeding frenzy in the service-oriented architecture (SOA) world, in the business intelligence (BI) world, and definitely in the cloud-computing world.

Lots of these little companies that you may not have heard about, which may have some initial venture funding, are suddenly going to disappear. Google has been taking these guys out left and right. You just don’t hear about it. You could do a podcast just on the Google acquisitions that have occurred this week. That's going to continue and accelerate in 2010 to a point where it's almost going to be ridiculous. Well, with that, Dana, those are my predictions.

Gardner: Excellent, Dave. We appreciate that. Let's go to other Dave today. This is Dave Lounsbury. Tell us please from your perspective at The Open Group, what your top five predictions are?

Dave Lounsbury

Lounsbury: I'm going to jump on the cloud bandwagon initially. We’ve seen huge amounts of interest across the board in cloud and, particularly, increasing discussions about how people make sense of cloud at the line-of-business level.

Another bold prediction here is that the cloud market is going to continue to grow, and we'll see that inflection point that Dave Linthicum mentioned. But, I believe that we're going to see the segmentation of that into two overarching markets, an infrastructure-as-a-service (IaaS) or platform-as-a-service market (PaaS) and software-as-a-service (SaaS) market. So that's my number one prediction.

We'll see the continued growth in the acceptance by SMBs of the IaaS and PaaS for the cost and speed reasons. But, the public IaaS and PaaS are going to start to become the gateway drug for medium- to large-size enterprises. You're going to see them piloting in public or shared environments, but they are going to continue to move back towards that locus of controlling their own resources in order to manage risk and security, so that they can deliver their service levels that their customers expect.

My third prediction, again in cloud, is that SaaS will continue to gain mainstream acceptance at all levels in the enterprise, from small to large. What you’ll see there is a lot of work on interfaces and APIs and how people are going to mash up cloud services and bring them into their enterprise architectures.

Of course all of this is set against the context that all distributed computing activities are set against, which is security and privacy issues.

This is actually going to be another trend that Dave Linthicum has mentioned as a blurring of a line between SaaS and SOA at the enterprise level. You’ll see these well on the way to emerging as disciplines in 2010.

The fourth general area is that all of this interest in cloud and concern about uptake at the enterprise level is going to drive the development of cloud deployment and development skills as a recognized job function in the IT world, whether it's internal to the IT department or as a consultancy. Obviously, as a consultancy, we look to the cloud to provide elasticity of deployment and demand and that's going to demand an elastic workforce.

So the question will be how do you know you are getting a skilled person in that area. I think you'll see the rise of a lot of enterprise-level artifacts such as business use cases, enterprise architecture tools, and analytic tools. Potentially, what we'll see in 2010 is the beginning of the development of a body of knowledge: practitioners in cloud. We'll start to recognize that as a specialty the way we currently recognize SOA as a specialty.

Of course all of this is set against the context that all distributed computing activities are set against, which is security and privacy issues. I don’t know if this is a prediction or not, but I wonder whether we're going to see our cloud harbor in 2010 its first big crash and the first big breach.

We've already mentioned privacy here. That's going to become increasingly a public topic, both in terms of the attention in the mainstream press and increasing levels of government attention.

There have been some fits and starts at the White House level about the cyber czar and things like that, but every time you turn around in Washington now, you see people discussing cyber security. How we're going to grow our capability in cyber security and increasing recognition of cyber security risk in mainstream business are going to be emerging hot topics of 2010.

Gardner: Thanks so much. Next up, Jim Kobielus. Tell us where you see things going in 2010. Your top five, please?

Jim Kobielus

Kobielus: Yes, my top five in 2010. In fact, I blogged that yesterday. I blogged six yesterday, but I'll boil it down to five and I'll make them even punchier. It's only going to be focused on analytics my core area.

Number one: IT more or less gives up BI. Let me constrain that statement. IT is increasingly going to in-source much of BI development of reports, queries, dashboards, and the like to the user through mash up self-service approaches, SaaS, flexible visualization, and so forth, simply because they have to.

IT is short staffed. We're still in a recession essentially. IT budgets are severely constrained. Manpower is severely constrained. Users are demanding mashups and self-service capabilities. It's coming along big time, not only in terms of enterprise deployment, but all the BI vendors are increasingly focused on self-service solution portfolios.

Number two: The users who do more of the analytics development are going to become developers in their own right. That may sound crazy based on the fact that traditionally data mining is done by a cadre of PhD statisticians and others who are highly specialized.

Basically, we're taking data mining out of the hands of the rocket scientists and giving it to the masses through very user-friendly tools.

Question analysis, classification and segmentation, and predictive analytics is coming into the core BI stack in a major way. IBM’s acquisition of SPSS clearly shows that not only is IBM focusing there, but other vendors in this space, especially a lot of smaller players, already have some basic predictive analytics capabilities in their portfolios or plan to release them in 2010.

Basically, we're taking data mining out of the hands of the rocket scientists and giving it to the masses through very user-friendly tools. That's coming in 2010.

Number three: There will be an increasing convergence of analytics and transactional computing, and the data warehouse is the hub of all that. More-and-more transactional application logic will be pushed down to be executed inside of the data warehouse.

The data warehouse is a greater cloud, because that's where the data lives and that's where the CPU power is, the horse power. We see Exadata, Version 2 from Oracle. We see Aster Data, nCluster Version 4.0. And, other vendors are doing similar things, pointing ahead to the coming decade, when the data warehouse becomes a complete analytic application server in its own right -- analytics plus transaction.

Predictive analysis

Number four: We're seeing, as I said, that predictive analytics is becoming ever more important and central to where enterprises are going with BI and the big pool of juicy data that will be brought into predictive model. Much of it is coming from the whole Web 2.0 sphere and from social networks -- Twitters, Facebooks and the like, and blogs. That's all highly monetizable content, as Dave Linthicum indicated.

We're seeing that social network analysis has a core set of algorithms and approaches for advanced analytics that are coming in a big way to data mining tools, text analytics tools, and to BI. Companies are doing serious marketing campaign planning, optimization, and so forth, based on a lot of that information streaming in real-time. It's customer sentiment in many ways. You know pretty much immediately whether your new marketing campaign is a hit or a flop, because customers are tweeting all about it.

That's going to be a big theme in 2010 and beyond. Social network analysis really is a core business intelligence for marketing and maintaining and sustaining business in this new wave.

Right now, we're in the middle of a price war for the enterprise data warehousing stack hardware and software.

And, finally, number five: Analytics gets dirt cheap. Right now, we're in the middle of a price war for the enterprise data warehousing stack hardware and software. Servers and storage, plus the database licenses, query tools, loading tools, and BI are being packaged pretty much everywhere into appliances that are one-stop shopping, one throat to choke, quick-deploy solutions that are pre-built.

Increasingly, they'll be for specific vertical and horizontal applications and will be available to enterprises for a fraction of what it would traditionally cost them to acquire all those components separately and figure it out all themselves. The vendors in the analytics market are all going appliance. They're fighting with each other to provide the cheapest complete application on the market.

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You can see what Oracle has already done with Exadata Version 2, 20K per usable terabyte. We see other vendors packaging even more functionality into these appliances and delivering them to mid-market and large enterprises. Small companies can deploy a complete analytics environment with BI, ETL, and everything for much less than they could just a few years ago.

And, one last thing. There is a cloud twist in everything I am describing or discussing here. Analytics gets dirt cheap, and even more so, as more of this functionality is available in the cloud. We're seeing a boom of SaaS-based BI and data warehousing vendors. In the coming years, pay-as-you-go, subscription-based, low risk, fund it out of OpEx rather than CapEx, is coming to analytics everywhere. So, that will be a huge trend in the coming year.

Gardner: Thanks Jim. Next, we're going to Joe McKendrick. Joe, what's your top five for 2010?

Joe McKendrick

McKendrick: Thanks, Dana. You also gave us the option to talk about the decade ahead, and I was thinking whether I should talk about the year ahead or the decade ahead. It occurred to me that just as we had a 2000 problem a decade ago, we now have a year 2012 problem. I just saw the movie 2012 a couple of weeks ago. The world is going to end and it's going to get flooded.

Gardner: So, the cloud is going to be big, dark, and made of soot. That's it. It's all over. We are all going to – cloud.

McKendrick: Exactly. I might have some arks floating around, and you worry about the IT systems on those arks.

Gardner: Well, you are a pessimist. Back down to earth.

McKendrick: Back down to earth. Okay, 2010. My world, of course, is SOA, and the big question for 2010 is what will Anne Thomas Manes have to say about SOA to start off the year?

Gardner: What's dead this year?

McKendrick: Right. In the first week of this year, Anne came out and said that SOA is dead. That caused a lot of angst, anxiety, discussion, and brooding for pretty much the entire year. It really had an impact.

Gardner: It kept you in page views.

McKendrick: Yeah, thanks, Anne. So, I am hoping Anne will come out with something good at the beginning of 2010. She'll probably say that SOA is still dead. That's my prediction.

Gardner: What is the state of SOA in 2010, Joe?

McKendrick: Part of it will be tied into the economy. By all indications, 2010 is going to be a growth year in the economy. We're probably in this V shape. See, I'm actually an optimist, not a pessimist. The world may end in 2012, but for 2010, we're going to have a great economy. It's going to move forward.

For this decade, we're looking forward to the rise of something called "social commerce," where the markets are user-driven and are conversations.

What happened with SOA? SOA really proved itself through 2009. I know a lot of instances where companies had a service-oriented culture, had flexibility, had visibility into their applications, their services, and their data. This played a great role in helping them pull through in terms of visibility into the supply chains and logistics. I know of a home builder -- and that's a tough industry -- where a SOA implementation really increased its sales turnaround time and enabled it to tighten up, be more efficient, and pull through this economic dark hole we went through.

I think 2010 will be a year of growth. As I said in previous podcast, we had these economic downturns: 2000-2001, 1990-1991, 1981-82. These downturn periods were always followed by periods of spectacular growth, especially in terms of technology -- and usually a huge paradigm shift in technology.

It's hard to say what. Nobody at the time of those downturns could have predicted what was ahead. Nobody predicted the dot-com boom back in 1992. But, what we're seeing is the service-oriented thinking. It's not just IT. It's service-oriented across the board -- the idea of the loosely coupled business, businesses that could start on a shoe string budget in IT, thanks to the availability of cloud, and move forward in the market.

Ten years ago, we saw the rise of e-commerce. For this decade, we're looking forward to the rise of something called "social commerce," where the markets are user-driven and are conversations. To use the quote from the book "The Cluetrain Manifesto," markets will be driven by users who interact with each other. Companies that will succeed and get ahead will encourage this social commerce, the interaction with customers over social networking sites.

Gardner: Alright Joe, I'm confused. Are we still on number one prediction or are you on number two?

McKendrick: That was my number one prediction, the impact of the economy. We're going to start seeing some new paradigms rising. Folks here talk about cloud computing.

The new normal

Number two: Cloud computing. We’ve all been talking about that. That's the big development, the big paradigm shift. Clouds will be the new "normal." From the SOA perspective, we're going to be seeing a convergence. When we talk about cloud, we're going to talk about SOA, and the two are going to be mapped very closely together.

Dave Linthicum talks a lot about this in his new book and in his blog work. Services are services. They need to be transparent. They need to be reusable and sharable. They need to cross enterprise boundaries. We're going to see a convergence of SOA and cloud. It’s a service-oriented culture.

Number three: Google is becoming what I call the Microsoft of the clouds. Google offers a browser and email. It has a backend app engine. It offers storage. They're talking about bringing out an OS. Google is essentially providing an entire stack from which you can build your IT infrastructure. You can actually build a company’s IT infrastructure on the back of this. So, Google is definitely the Microsoft of the cloud for the current time.

Microsoft is also getting into the act as well with cloud computing, and they are doing a great job there. It’s going to be interesting to see what happens. By the way, Google also offers search as a capability.

Gardner: Is there anything that Google won’t do? That’s the easier list. What won’t Google get into this year?

McKendrick: They probably won’t get into building and selling hardware.

Gardner: I heard about a phone they’re into selling. Are they in partnership with a phone?

Everybody will be providing and publishing services, and everybody will be consuming services.

McKendrick: Right, with Verizon, but it's the only thing they won’t really touch.

Gardner: My prediction is that they won’t get into snow plowing. Google will not get into snow plowing in 2010. That’s my only safe bet.

McKendrick: That’s probably about it.

Number four: We're going to see less of a distinction between service providers and service consumers over clouds, SOA, what have you. That's going to be blurring. Everybody will be providing and publishing services, and everybody will be consuming services.

You're going to see less of a distinction between providers and consumers. For example, I was talking to a reinsurance company a few months back. They offer a portal to their customers, the customers being insurance companies. They say that they offer a lot of analytics capabilities that their customers don’t have, and the customers are using their portal to do their own analytic work.

They don’t call it cloud. Cloud never entered the conversation, but this is a cloud. This is a company that’s offering cloud services to its consumers. We're going to see a lot of that, and it’s not necessarily going to be called cloud. You're not going to see companies saying, "We're offering clouds to our partners." It’s just going to be as the way it is.

Number five: In the enterprise application area, we've seen it already, but we're going to see more-and-more pushback against where money is being spent. As I said, the economy is growing, but there is going to be a lot of attention paid to where IT dollars are going.

I base this on a Harvard Medical School study that just came out last month. They studied 4,000 hospitals over a three-year period and found that, despite hundreds of millions of dollars being invested at IT, IT had no impact on hospital operations, patient care quality, or anything else.

Gardner: And, that’s why I don’t go to hospitals.

McKendrick: There are ramifications for other industries as well. What’s the impact of all this IT expenditure? Ultimately, this may help the cloud model in the long run. Okay, that's my five.

Gardner: Excellent. Let’s go to JP Morgenthal. What are your top five predictions, JP?

JP Morgenthal

Morgenthal: First, I'm going to predict that Microsoft, Oracle, Google, IBM -- none of them are going to be supporting Tiger Woods as a sponsor next year.

Gardner: Another risk-taker.

Morgenthal: Sorry, man. I had to throw it out there. It was just sitting there, and no one else picked it up, like a $100 bill on the street. Okay, number one: Cyber security. As someone stated earlier, it's interesting what’s going on out there. I am beginning to understand how little people actually understand about the differences between what security is and information assurance is, and how little people realize that their systems are compromised and how long it takes to eliminate threat within an organization.

Because of all of this connectedness, social networking, and cloud, a lot of stuff is going to start to bubble up. People who thought things were taken care of are going to learn that it wasn’t taken care of, and there will be a sense of urgency about responding to that. We're going to see that happen a lot in the first half of 2010.

Number two: Mobile. The mobile platforms are now the PC of yesterday, right? The real battle is for how we use these platforms effectively to integrate into people’s lives and allow them to leverage the platform for communications, for collaboration, and to stay in touch.

It seems everywhere I go, people are willing to spend a lot of money on their data plan. So, that’s a good sign for telecoms.

My personal belief is that it overkills information overlook, but that’s me. I know that everywhere I go, I see people using their iPhones and flicking through their apps. So, they hit upon a market segment, a very large market segment, that actually enjoys that. Whether small people like me end up in a cave somewhere, the majority of people are definitely going to be focused on the mobile platform. That also relates to the carriers. I think there still a carrier war here. We've yet to see AT&T and iPhone in the US break apart and open up its doors to other carriers.

Gardner: Let that happen in 2010.

Morgenthal: We all say that, but this is a fertile ground for priming what’s been a notoriously dead pump. Two years ago, I wrote a blog entry about what happens to technology in an era where the economy is down? It seems everywhere I go, people are willing to spend a lot of money on their data plan. So, that’s a good sign for telecoms.

Gardner: Yeah, the human species has spoken. They like mobile and they like ubiquitous broadband, and that’s not going to change, right?

Morgenthal: I agree with you. But the question is, should people pay for it or should the government give to you free? In the US, I hear a lot of social groups saying, "Hey, everybody should have broadband like it’s electricity."

Gardner: So, maybe Tiger Woods pays for everybody’s broadband for six months. He's got the money to do it, and then everybody will forget about this marriage thing.

BI and analytics

Morgenthal: I think you’ve got a new business model. Number three: Business intelligence and analytics, especially around complex event processing (CEP). CEP is still in an immature state. It does some really interesting things. It can aggregate and correlate. It really needs to go to that next step and help people understand how to build models for correlation. That’s going to be a difficult step.

As somebody was saying earlier, you had these little Poindexters sitting in the back room doing the stuff. There's a reason why the Poindexters were back there doing that. They understand math and the formulas that are under building these analytical models. Teaching your average USA Today reader how to build an analytical model is akin to teaching everybody how to write programs by drawing pictures. It still hasn’t happened. There's a reason why.

Gardner: So, you are saying that this is a year of CEP, that’s your stake in the ground?

Morgenthal: CEP and analytics -- and the two tied together. You’ll see that the BI, and data aspects of the BI, side will integrate with the CEP modeling to not only report after the fact on a bunch of raw data, but almost be proactive, and try to, as I said in my blog entry, know when the spit hits the fan.

Gardner: Right. So, at this time next year, I won’t be having analysts on to predict that what’s going to happen in 2011. We’ll just plug it into a CEP engine and we’ll get all the right answers.

Morgenthal: That’s assuming you could find the right people to program it, which is a whole other issue. I had done as my number five, so I’ll save that, but number four is collaboration. We’ve crossed the threshold here. People want it. They're leveraging it.

The labor market has not caught up to take advantage of these tools, design them, architect the solutions properly, and deploy and manage them.

I've been seeing some uptake on Google Wave. I think people are still a little confused by the environment, and the interaction model is not quite there yet to really turn it on its ear, but it clearly is an indication that people like large-scale interactions with large groups of people and to be able to control that information and make it usable. Google is somewhat there, and we'll see some more interesting models emerge out of that as well.

Gardner: So, is there another way to say that, JP, which is the people stop living in their email and start living in something more like Google Wave?

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Morgenthal: I don't see them doing that and wouldn't predict that, but they are clamoring for collaboration, and I think the market will respond.

Gardner: Alright.

Morgenthal: New and innovative ways to collaborate.

Gardner: Alright, number five for you.

Morgenthal: Labor. We're at a point where the market is based on all these other things based on the cloud. We had a lot of disruptive technologies hit in the past five years -- enterprise mashups, SOA, and cloud computing. The labor market has not caught up to take advantage of these tools, design them, architect the solutions properly, and deploy and manage them.

I think that 2010 has to be a year for training, rebuilding, and getting some of those skills up. Today, you hear a lot of stories, but there is a large gap for any company to be able to jump into this. Skills are not there. The resources are not there and they are not trained. That's going to be a huge issue for us in 2010.

Gardner: Thanks. We're on to our next analyst prediction, and that would be with Jason Bloomberg. Jason, what are your top five?

Jason Bloomberg

Bloomberg: Thanks for getting to me, Dana. I'm going to be a bit of the naysayer of the bunch. We work primarily with enterprise architects now, so we are on the demand side more than the supply side for IT capabilities. So, our perspective is colored through the glasses of the architect.

Dana, you asked us for not just the one- or 10-year predictions, but also positive and negative. So, my first four are things that I predict won't happen, and we can fill in the blanks in terms of what will happen.

First of all, sorry, Dave, I just don't see cloud computing striking it big in 2010. When we talk to enterprise architects, we see a lot of curiosity and some dabbling. But, at the enterprise scale, we see too much resistance in terms of security and other issues to put a lot of investment into it. It's going to be gradually growing, but I don't see such a point coming as soon as you might like.

Small organizations are a different story. We see small organizations basing their whole business models on the cloud, but at the enterprise level, it's sort of a toe in the water, and we see that happening in the 2010.

Another thing we don't see really taking off in any big way is Enterprise 2.0. That is Web 2.0 collaborative technologies for the enterprise. You know, "Twitter On Steroids," and that kind of thing. Again, it's going to be more of a toe in the water thing. Collaborative technologies are maturing, but we don't see a huge paradigm shift in how collaboration is done in the enterprise. It's going to be more of a gradual process.

Another thing that we are not seeing happening in 2010 is CIOs and other executives really getting the connection between business process management (BPM) and SOA. We see those as two sides of the same coin. Architects are increasingly seeing that in order to do effective BPM you have to have the proper architecture in place. But, we don't see the executives getting that and putting money where it belongs in order to effect more flexible business process. So, this is another work in progress, and it's going to be a struggle for architects to make progress over the course of the year.

Gardner: Alright, Jason, would today's announcement that IBM is acquiring Lombardi be a buttress to your point there?

Bloomberg: Well, that's a software story at this point. It's not a best practice story. IBM, being on the supply side, is attempting to push products like this into the market and they have this strategy for integrating the Lombardi technology with their existing technology. That doesn't necessarily mean that, from the buyer perspective, they see the full connection of how BPM and how SOA fit together and how leveraging architecture will support the business process optimization efforts in the enterprise.

Software vendors were hoping for a huge year, but they're going to be disappointed. It's going to be a growth year, but it's going to be moderate growth for the vendors.

So, tools are there and the tools are maturing, but as far as the demand, I see it growing slowly in fits and starts, as people figure out the role architecture plays.

Gardner: Okay, next one please.

Bloomberg: As far as the end of the recession, yeah, we're all hoping that the economy picks up, and I do see that there is going to be a lot of additional activity as a result of an improving economy, but I don't see a huge uptake in spending on software per se.

Spending in IT is going to go up, but in terms of what the executives going to invest in, they're going to be very careful about purchasing software. That's going to drive some money to cloud-based solutions, but that's still just a toe in the water as well.

Software vendors were hoping for a huge year, but they're going to be disappointed. It's going to be a growth year, but it's going to be moderate growth for the vendors.

Gardner: So that must be why Oracle bought Sun, right?

Bloomberg: Well, we'll have to see. There's been a lot of press on their core strategy in terms of what they are trying to do. Clearly, consolidation is in the cart. I'd agree with that. Part of that is because there are only so many software dollars to go around, and that's going to continue to be the case for a while.

Gardner: Okay, thank you. What’s your next point?

Bloomberg: Those are my first four. Those are the negatives. Not to be too negative, in terms of the positive, what we see happening in 2010 is increased focus on "MSW." You know what MSW is, right? Politely speaking it's "Make Stuff Work." Of course, you could put a different word in there for the S, but Make Stuff Work, that's what we see the architects really focusing on.

They have a good idea now of what SOA is all about. They have a good idea about how the technology fits in the story and the various technologies that have been mentioned on this call, whether it's analytics, data management, SaaS, and the cloud-based approaches. Now, it's time to get the stuff to work together, and that's the real challenge that we see.

SOA-Plus

The SOA story is no longer an isolated story. We're going to do SOA, let's go do SOA. But, it's SOA plus other things. So, we're going to do SOA, BPM, and the architecture driving that, despite the fact that the CIO may not quite connect the dots there.

SOA plus master data management (MDM) -- it's not one or the other now. It's how we get those things to work together. SOA plus virtualization. That's another challenge. Previously, those conversations were separate parts of the organization. We see more and more conversations bringing those together.

SOA and SaaS -- somebody already mentioned that SaaS is one segment of the cloud category. It's little more mature than the rest. We see more organizations understanding the connection between those two and trying to put them together.

Gardner: Are you that we're seeing services orientation of the enterprise?

Bloomberg: You can put it that way, and we like putting it that way, because we're the SOA guys. It depends on who you talk to whether the people in the organization see it that way or, rather, see that that there's a role for architecture as part of how you do things right. When we talk about architecture broadly, we're just talking about general best practices.

No one piece of the story is the whole story anymore. It's going to be a heterogeneity story in the enterprise and how we actually get this stuff to work together.

If you think about governance, for example, as a core set of best practices for running an organization, the key best practice is for it to be architecture driven, and that simply means best-practice driven. So, you can think of architecture as a way of codifying and communicating IT best practices as well as organizational best practices for leveraging IT.

We see that becoming more prevalent over time, as organizations understand the importance of connecting architectural best practices with the other things they're doing.

Before, we had this disconnect. We'll do middleware and we'll do SOA, but we don't really see the connection where we confuse one for the other, and that was a big issue. A large part of why Anne Manes said SOA was dead was because we were confusing SOA with the software enablers that vendors were trying to sell them. With the SOA label on the box, they opened the box and said, "Where's my SOA? I don't get it."

Well, organizations are getting that. Now, they're seeing that there is a connection, and they're trying to get this stuff to work together. In the enterprise context where it's heterogeneous, it needs to scale. It’s broad based, and there are a lot of moving parts. No one piece of the story is the whole story anymore. It's going to be a heterogeneity story in the enterprise and how we actually get this stuff to work together.

Gardner: A services-oriented whole greater than the sum of the IT parts?

Bloomberg: Yeah. We're happy to call this services-oriented, even though the organization, as a whole, may call it variety of different things, depending on the perspective of the individual.

Gardner: Great. Thanks so much. Okay, last but not least, Tony Baer, are you still out there? Thanks for your patience.

Tony Baer: I am here, present, and I am alive.

Gardner: You have to be quick, because we're almost out of time. What are your top five, Tony?

Tony Baer

Baer: Not a problem. I’ll make it very, very quick. Actually, I am just going to add various comments. On cloud and virtualization, basically I agree with Jason, and I don't agree with David or with Joe. It’s not going to be the "new normal." We're going to see this year an uptake of all the management overhead of dealing with cloud and virtualization, the same way we saw with outsourcing years back, where we thought we'd just throw labor costs over the wall.

Secondly, JP, I very much believe that there is going to be convergence between BI and CEP this year. I agree with him that there's not going to be a surge of Albert Einsteins out there. On the other hand, I see this as a golden opportunity for vendors to package these analytics as applications or as services. That's where I really see the inflection curve happening.

Number three: Microsoft and Google. Microsoft will be struggling to stay relevant. Yes, people will buy Windows 7, because it's not Vista. That’s kind of a backhanded compliment to say, "We're buying this, because you didn't screw up as badly as last time." It doesn't speak well for the future.

Google meets a struggle for focus. I agree with Joe that they are aspiring to be the Microsoft of the cloud, but it may or may not be such a good thing for Google to follow that Microsoft model.

Finally, I agree with Jim that you are going to see a lot more business-oriented, whether it's BI, BPM, or IBM buying Lombardi. I hope they don't mess up Lombardi and especially I hope they don't mess up Blueprint. I've already blogged about that.

I very much believe that there is going to be convergence between BI and CEP this year.

One other point -- and I don't know if this fits into a top five or not -- but I found what Joe was talking about very interesting in terms of the let-down on health-care investment in IT. There's going to be lot a of pushing in electronic medical records (EMR) this year. I very much believe in EMRs, but, on the other hand, they are no panacea. We're going to see a trough of disillusionment happen on that as well.

I don't know if that's fast, but that's my story and I am sticking to it.

Gardner: Well, that was great, very zippy, I appreciate that and I'm afraid we're out of time. I want to thank our guests and our panel for these very insightful predictions. It's going to be a fun year. Everything from Google and snow plowing to cheap, but not private and not secure, cloud -- a lot to look forward to.

Let me again thank our panel, Jim Kobielus, senior analyst of Forrester Research, thank you so much.

Kobielus: Have a good, happy new year everybody.

Gardner: Joe McKendrick, independent analyst and prolific blogger. Thank you, sir.

McKendrick: Thank you and looking forward to a great 2010.

Gardner: Tony Baer, senior analyst at Ovum, thank you.

Baer: Yes, thanks.

Gardner: Great insights from Brad Shimmin, principal analyst at Current Analysis. Thanks.

Shimmin: Thanks much, Dana.

Gardner: Dave Linthicum, CEO of Linthicum Group, again appreciating your insights.

Linthicum: Thanks, everybody.

Gardner: Dave Lounsbury, vice president, collaboration services at The Open Group, thanks so much for joining us.

Lounsbury: Thank you, Dana.

Gardner: Jason Bloomberg, managing partner at ZapThink. Very good. I appreciate your input.

Bloomberg: Thanks, Dana.

Gardner: And JP Morgenthal, independent analyst and IT consultant. Thank you, sir.

Morgenthal: Thank you, Dana. Thank you for inviting me. It's always a pleasure to be with this group.

Gardner: And, I would like to thank our sponsors for the BriefingsDirect Analyst Insights Edition, Active Endpoints.

This is Dana Gardner, principal analyst at Interarbor Solutions. Thanks for listening, and come back next time. Have a great and happy new year.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Charter Sponsor: Active Endpoints.

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Edited transcript of BriefingsDirect Analyst Insights Edition podcast, Vol. 49, with panel of analysts discussing the future of cloud computing, SOA, social networks and the economy. Copyright Interarbor Solutions, LLC, 2005-2010. All rights reserved.

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