The Google Cloud Platform Accelerates as it opens in Sydney, Australia

Finally, the Google Cloud Platform has a legitimate story to tell in the Asia Pacific region. Today (June 20th, 2017), it launched a Sydney region. This makes four regions in the region, following the opening of Singapore just last week. Mumbai is the next in line, opening up India. For more details follow this link from Google – https://cloudplatform.googleblog.com/2017/06/Google-Cloud-Region-in-Sydney.html?m=1

capioIT has closely followed the growth and expansion of Google from an enterprise perspective. Clearly, it has taken Google too long to be robust from a location, scale and strategy perspective, but it has accelerated in 2017. It has new regions open in Asia Pacific, with more to come. Globally, additional regions are scheduled to open in North America, Latin America and Europe. In all, a global footprint with scale is near completion.

What does it mean for organisations in Australia, Singapore and the rest of the region? The most important outcome is that innovation and choice driven by competition. The big three (AWS, Microsoft Azure and Google) are now all present in the region. Other providers such as Alibaba, IBM have facilities in the region with varied growth patterns and strategies. Oracle has an aspiration for the broader PaaS and SaaS market alongside an accelerating SaaS business.

This is positive news, not just on price and cost but from the perspective of capability, new services and redundancy. Competition and the need to gain customer share are fundamentally driving innovation across the IaaS, PaaS and SaaS ecosystems. No-one loses with the pace of innovation we are experiencing, except the laggards and Luddites. 

The challenges for Google is, of course, firstly to fill the capacity locally, but from a longer-term perspective, the most telling issue is to drive local, regional and global partnerships and skills ecosystems to scale out to Google levels of expectations.

Oh, it also has to deal with the momentum and scale of AWS and Microsoft across the region. As virtually every other cloud vendor has paid a high price to understand, AWS and Microsoft are dominant providers. The good news is that they also both have vulnerabilities. Google just has to exploit them.

 

Capture Point

Google has been slow from an enterprise perspective in fulfilling the clear potential it has. This is changing. It has greatly accelerated the pace of growth. Opening regions in both Singapore and Sydney within a week, provide greater scope and capability in the Asia Pacific region. It is now of course up to growth in the market and execution of the capability. Incumbents won’t give up easily, the good news is that the market has shown an appetite for cloud solutions, so it the opportunity lies with Google.

If you require further information, please contact Phil Hassey, CEO of capioIT. capioIT is an advisory firm focused on helping organisations to understand emerging technology as the world becomes Digital. Phil may be contacted easily in the digital and real world.

phil@capioit.com

+61422231793

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Amazon Acquires Whole Foods – World Forgets to Ask – Why was it for Sale?

Amazon Acquires Whole Foods – World Forgets to Ask – Why was it for Sale?

Amazon has announced the acquisition of biodynamic Kale store Whole Foods for US$13.5B. This has, of course, ramped up even further the excitement for Amazon online food delivery and the opportunities in the grocery market. This play is real. Whole Foods gets the best distribution and supply chain network in the world without peer.

This is the good news. The bad news is that Whole Foods was up for sale. Why? Same Store Sales (the performance benchmark for retail) fell 2.4% in the first quarter of this year. Store numbers declined for the first time ever. Whole Foods is not on its own. Retail is under pressure globally, but particularly at the commoditised and fashion sectors in the US. Brands are disappearing, and as Sears is finding out, sentiment doesn’t keep the bankruptcy issues away.

Customer feedback highlighted the ridiculous function, and overpriced nature of some products, not just Kale based ones. The demographic it targets is relatively narrow, the analysis of Cracker Barrel vs Whole Foods in the 2016 US presidential election is incredibly telling. Look at the distribution of stores in the Los Angeles Metropolitan Area. Santa Monica and Orange County are well covered. San Bernardino and Riverside barely have any. No guesses why.

The challenge for Amazon and Whole Foods is to fix the reason why Whole Foods was effectively for sale and under pressure anyway. Trader Joe’s was hurting it, ironically owned by the best bricks and mortar supply chain in the world – Aldi, as well as premium prices for biodynamic Kale not always matching the real world. It can improve the supply chain and delivery mechanisms, but it has to be delivering what the people want at a price they can afford. That is what Amazon is the master at.

Capture Point

The market clearly backs Amazon, and in our view, the brands fit well, and it should, in theory, be a successful deal. It may take the brand global. Management will change at Whole Foods, as will aspects of the supply chain, market proposition and stock management. Most importantly if it works, it won’t be the last of its type. The likes of hardware are arguably next on the line for disruption, with not many sectors left that are dominated by traditional retail.

 

If you require further information, please contact Phil Hassey, CEO of capioIT. capioIT is an advisory firm focused on helping organisations to understand emerging technology as the world becomes Digital. Phil may be contacted easily in the digital and real world.

phil@capioit.com

+61422231793

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Too many Bud Lights Gives SAP Brewers Droop

News broke last week that SAP was suing long-term client and global mega-brewer Anheuser-Busch InBev (brewers of Budweiser, Stella, Fosters amongst other beer of dubious quality) for the tidy sum of US$600M for license indiscretions. It is a staggering amount by any measure, and no doubt will be a complicated and bitter legal experience.
https://www.itnews.com.au/news/sap-seeks-817m-from-stella-artois-brewer-in-license-dispute-461321

My tip no-one wins, except lawyers. ABInBev won’t win, they will clearly have to change their approach to SAP regardless of the outcome and may have to make an expensive exit strategy.

Their loss is nothing in comparison with SAP. With Sapphire NOW starting this week, all the legal action proves is that SAP is an incredibly desperate legacy vendor. It is impossible to contemplate or fathom suing your client for $600M. The action should have been stopped several lawyer meetings ago and well before numbers of $600M were thrown around like drunks in a bar.

Last year SAP had ABinBev as a speaker, this year; it faces a $600M bill. It might make some speakers this year think twice if that is how large embedded clients are treated.

Despite the challenges faced by fellow legacy vendors IBM, Oracle, Dell Technologies and others, it is unlikely that they would resort to such public legal action, particularly the week before inviting their “beloved” customers to Orlando to be wined, dined and then potentially sued. There is no way that Salesforce, AWS or Google would treat their clients this way, nor would vendors such as Accenture, Microsoft and Adobe, who have successfully made the switch to a digital ecosystem contemplate such action.

The technology world is changing. SAP in 2017, does not have the power of SAP in 2012, let alone 2007. The development, pricing, distribution and the consumption model has changed for software and of course all other aspects of technology procurement. The old world is not coming back. SAP has illustrated as clearly as it could that they do not understand this and that they are not going to change to meet the market.

Before this action, I had some faith that SAP could defy its legacy status and remain indispensable to clients. Suing major and public clients for US$600M has undermined that change. It is simply a sign of a desperate vendor, one that hasn’t changed, and won’t change.

If you require further information, please contact Phil Hassey, CEO of capioIT. capioIT is an advisory firm focused on helping organisations to understand emerging technology as the world becomes Digital. Phil may be contacted easily in the digital and real world.

phil@capioit.com

+61422231793

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Some Legacy Vendors Still Underestimate AWS – As They Gasp for Air

“Amazon is propping it up.”

“They are just dev-test.”

“Their security is not up to standard.”

“They will fizz out.”

“They are not suited to the enterprise.”

Not a week goes by that I do not get told these “claims” and “insight” into Amazon Web Services (AWS). Yes, that AWS.

The insight comes from a small number of vendors, and individuals. It is easy to guess who they are, they collectively used to dominate, and still cannot understand why they no longer do. It is a perspective incredibly removed from reality.

Let’s put the dominance and performance of AWS into perspective. On current growth rates, it will be a $20B cloud and subscription platform company by the end of 2017. By the middle of 2018 it will be the same size as DXC Technology, which is the unified HP Enterprise Services, EDS and CSC.  It is larger than European IT Services powerhouse Atos, larger than Cap Gemini, with the list growing with each quarterly result publication.

AWS is not merely an IaaS provider. It has evolved to have a much deeper offering than what that out of date perspective suggests. It is a deep platform, covering IaaS, PaaS, Machine learning, Database and more. While not all offerings are entirely dominant and AWS, is far from perfect, it is still a once in a generation company.

Who is expert at dismissing AWS? The legacy vendors that have had their business hit so badly by AWS. Individually and collectively they hope that AWS is going to disappear as quickly as it has risen. These firms used to dominate, and believe that they have a divine right to continue to do so. Bad news. AWS is going nowhere. It will evolve, and that is perhaps even worse news for the legacy vendors. They cannot change or disrupt at the same pace as AWS, they do not have the customer focus, flexibility or reputation, and now languish, some with revenues that have halved in the last ten years, offering products no-one wants. These vendors included traditional IT Services providers, Telco’s, equipment manufacturers, distributors and managed services providers.

As I have written for many years, the only Tier 1 enterprise vendor who seriously has made the shift from legacy to the innovator, and that can compete up front with AWS is Microsoft. As highlighted, so many of the rest are still sitting in denial without the willpower, capital or culture to shift. (Of the smaller vendors, only Adobe can claim the transformation to SaaS and cloud is complete)

Is AWS perfect? No. Does it still have challenges? Yes, in the enterprise space, in the database space, in the partner area amongst other areas, challenges remain and will continue to. As highlighted by capioIT, some customer events need work as well. One day it may be threatened and toppled as the dominant provider. That day is not today or tomorrow. Old school vendors have to accept this.

Legacy vendors (and in a story for another day, legacy IT departments) have challenges that question their survival every day. They need to stop questioning AWS’s longevity, stop deflecting and make the dramatic, and traumatic from a business perspective, transition that they need to survive. Otherwise, they will still be underestimating and criticising AWS as they sink to the bottom of the IT market. Rackspace has done it, NetApps is trying to do it, still, others think it will pass.

Capture Point

Since its inception, too many competitors have not taken AWS seriously enough, even as their own strategy fell apart and revenue went into decline. While logic would dictate lessons have been learnt, too many individuals and their organisations still take the view that AWS will be a historical footnote in the great book of technology. They are wrong and need to wake up fast.

If you require further information, please contact Phil Hassey, CEO of capioIT. capioIT is an advisory firm focused on helping organisations to understand emerging technology as the world becomes Digital. Phil may be contacted easily in the digital and real world.

phil@capioit.com

+61422231793

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Tech vendors are killing the keynote

I go to a lot of tech conferences a year. Some would argue too many. As a result, I go to a lot of keynote speeches in a drab convention centre or hotel ballroom. As an analyst, we usually get front row seating. We appreciate this, but we then get close to the train wreck that increasingly hitting the vendor keynotes.

Google Next 17 – Ran about an hour late and almost all presenters had to use an Autocue they were that passionate about the topic

IBM Interconnect – Three customers, average age of the firms, 119 years, Bank – Check, Telco – Check, Tax Agent – Hold my seat, I am so excited.

AWS Summit  Australia – Five White Middle Aged Men, and not enough respect for the audience to even localise a local weather application to Sydney, we just got Seattle and Fahrenheit

Any Product Firm – CEO’s going straight to the product and miss the outcome and client benefit, using a demo that inevitably fails.

Oracle Open World – Mark Hurd – “Why does everyone look bored.” I will let you decide that one.

Keynotes must improve. This is the vendor’s time in the sun. Why they continue to not learn from their previous mistakes is beyond me. They need to know the audience, respect the audience and leave the audience wanting more. No-one does it anymore, but the vendor that does crack it will benefit and engage the audience. Use it or lose it. 

If you require further information, please contact Phil Hassey, CEO of capioIT. capioIT is an advisory firm focused on helping organisations to understand emerging technology as the world becomes Digital. Phil may be contacted easily in the digital and real world.

phil@capioit.com

+61422231793

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ANZ is the Guide for Where DXC Technology Needs to Go

In early April 2017, DXC Technology launched. Many were asking; Who is DXC Technology? It is simply the combination of Hewlett-Packard Enterprise Services and CSC, by way of EDS, UXC, Compaq and others, following the merger announced in 2016. Simple, no baggage of complexity, history and in recent years, unfulfilled potential.

Perhaps not. For those employees who made it through all the years of trauma, condition cuts, layoffs and general mayhem, it must be sweet relief to have the past behind them.

The reality is that DXC Technologies must put the past behind them incredibly quickly. No Red/Blue/EDS battles that hamstrung HP Enterprise Services. No talking about where individuals were, it has to be all about the future of the organisation and creating the momentum for it to have any chance of leading the future IT services market.

The new business will have global revenue of US$25B; this puts it behind Accenture, who has a trailing 12-month revenue of US$34B. That fact alone is a stunning comparison of the ongoing success that Accenture has provided shareholders vs. the components of DXC Technology. Accenture revenue is significantly larger than the combined CSC, HP Services (removing Technology Services, which is part of the new HPE), and EDS in 2017. Accenture used to be in each firm’s rear view mirror. No longer.

What is more stunning is the fact that EDS alone had revenues of US$22.1B in 2007 before the acquisition by HP. The decline in particular at the legacy EDS business has been dramatic, and frankly sad, acknowledging the number of employees who lost their jobs resulting from the lack of leadership, understanding, and capability of HP leadership, led by Mark Hurd, towards EDS and services. This was exacerbated by the CEO’s and boards that followed him.

Just a little more of the past to explain the future. DXC Technology has taken the structure of CSC before it from a geographic perspective. Asia-Pacific is broken into two separate entities, Asia and ANZ. The split reflects the traditional strength of CSC and legacy EDS/HPE, in the ANZ region. It also reflects that the market down under is different from most of Asia, although this is only a secondary consideration, as no Asia Pacific market is uniform in requirements, outcomes or capabilities.

UXC is the key reason as to why Australia is so important for DXC Technology? UXC was the largest Australian owned IT Services provider before acquisition by CSC in October 2015 – for capioIT’s analysis of that transaction, please see – https://capioit.wordpress.com/2015/10/07/csc-acquires-uxc-boosts-capabilities-in-australia/. More than just an acquisition, UXC provides insight into what the future for DXC needs to be, and how to get there. DXC in the current form is well set for infrastructure integration, management and consulting, particularly with AWS and Azure partnerships aligned with Private Cloud capabilities.

By contrast, it is relatively light in capacity, resources, and revenue in the application space, both in legacy apps such as Microsoft, SAP, and Oracle as well as applications such as Salesforce, and organisational analytics requirements. This is where UXC provides the roadmap. It has a strong capability, resources, and revenue in the Oracle, SAP and Microsoft ecosystems. In fact, this is the strength. Furthermore, it has valuable resources and capability in the Big Data space. This is where the broader DXC Technology business must evolve once it beds down the merger of the two parent entities.

Another key advantage is that it will enable DXC Technology to have deeper organisational relationships. IT services vendors do not win with only having relationships with the IT Director. It needs to develop business relationships outside of IT, and relationships that create business measurable outcomes, not just SLA’s.

The importance of UXC for the ANZ business is further underscored due to the fact that it ensures that DXC Technology is the largest IT Services provider in the Australian and New Zealand market. 

For DXC Technology to replicate the Australian experience, it will need to undertake further acquisitions. As the application services market struggles with the impact of the shift to automation, immigration tightening, and other growth-related issues, finding suitable acquisition targets should not be that difficult for DXC Technology. The likes of CapGemini, Infosys, and Cognizant have to be on the radar at some stage, if course,  the price is Ok.

Capture Point
DXC Technology is finally here. It will be a relief for employees of all the merger entities to get this out of the way and have a refresh. To fulfill the potential and meet more market challenges the new entity needs to look to the ANZ business to get an understanding of how the business must evolve. This is the what the future has to look like if it wants to answer enterprise issues for technology.

 

If you require further information, please contact Phil Hassey, CEO of capioIT. capioIT is an advisory firm focused on helping organisations to understand emerging technology as the world becomes Digital. Phil may be contacted easily in the digital and real world.

phil@capioit.com

+61422231793

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Google Maps gets Gas

For anyone interested in constant and regular innovation, Google Maps is always a great place to start. For those who are focused on the importance of Location Intelligence, it is, of course, a critical source of insight as well as innovation.

Google Maps is always identifying and leveraging new sources of information aka data for its platform. At the same time, an increasing number of partners are leveraging API’s to maximise this innovation and customer value.

One of the most recent innovations, accidentally found when organising logistics for an upcoming New York car rental drop off, is that Google now provides gas station pricing on the desktop, mobile and tablet version of Google Maps. It is a simple touch, but again one that gives innovation to the consumer. We consumers can instantly identify the cheapest fuel that meets our location requirements, i.e., where the car is, or needs to be.

The two photos from desktop and mobile provide the visual insight into the innovation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

It also creates competitive tension for the Gas/Petrol station vendors. They know their competitive pricing, and so do the customers. The vendors, therefore, must beat or meet with value added services, the pricing if they are to maximise their business for their well-informed customers. Of course, there have been many apps available to provide this fuel information in the past, and they will still have a role, but the convenience of having this information embedded into Google Maps and the inevitable search is what sets the innovation of Google Maps a part. It is fast, information rich and meets customer requirements, even if the customer does not always even know it yet.

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