We Need More Female Industry Analysts

I have been an industry analyst for close to 20 years, and run capioIT for eight. I have met hundreds of Industry Analysts and Analyst Relations professionals. Some have been newcomers to the industry; others had the experience 20 years ago that I have now. I’ve made close friends on both the analyst and the Analyst Relations and client-side. In short, it has been an enjoyable and fulfilling career journey. I thought it worth taking time to look at an issue that has grown over the last 20 years — gender diversity.

In the Asia Pacific region, we have an excellent record of diversity from a country perspective. Great analysts come from anywhere, India, China, Australia, Korea it doesn’t matter.

Unfortunately the same cannot be said for gender. While there are excellent female analysts, the industry is the Asia Pacific region, and in other markets, most notably, North America is dominated by males. Of course, there are great female analysts in every market, but there is a distinct under-representation. IDC is perhaps the strongest, globally and in the Asia Pacific region, in part reflecting their broader levels of experience from an analyst perspective. The numbers are significantly worse for independent analyst firms. Intermedium is the only independent analyst firm led and founded by a female in the Asia Pacific region; globally, there is only a small number.


The contrast with analyst relations professionals is incredibly stark. My reading of the top 10 AR programs in the Asia Pacific region, females lead eight. While not as dominant globally, a lot of highly rated programs such as IBM, Microsoft, Oracle and Informatica are led by women.

The questions are, of course, does it matter, and how to improve it.
Yes. It matters. The status quo cannot remain.

As to why, in discussion with the industry, I believe there are contributing factors. The lack of female participation in STEM training, employment and the overall technology sector is a problem that runs more profound than the Industry Analyst profession. We are not immune. This will drive a gender imbalance. Actions to increase female participation in STEM and related fields have had mixed results, although it will take perhaps a generation to be markedly and consistently successful.

Not all analysts come from a computer science or STEM background. I certainly didn’t. The source roles and skills of the industry analyst are diverse. A significant source of analysts of all genders includes professions such as journalism and communications, as well as market research, all-female friendly industries.

Market and customer-facing analysts have to travel. It is a professional fact of life. Travel requirements are an issue that is critical for many women, particularly those with children. I know first hand given my travel schedule that this is not a female-only issue. Due to societal expectations, it is more pronounced for the majority of women than men. The further challenge in Asia is that the distances, especially from India, New Zealand and Australia are substantial.

Outside of the STEM and travel issue, there is no clear structural reason as to why we have fewer female analysts. It would be great to get some feedback on this. I sincerely believe that industry is far from misogynistic, so there is no deep flaw in that regard. If you accept that a stronger gender balance is right from an analyst perspective, then we need to work in objective and subjective ways to get more balance. The more diversity we have, the better we are as an industry and profession.

Capture Point
Females are successful in Analyst Relations. Unfortunately, this has not migrated across to the actual Analyst role as much as it could. We need more female-led, and female-founded analyst firms to help drive further diversity in insight, capability and temperament. It is for the benefit of the entire industry.

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Freshworks wants you to Refresh to a Customer For Life

Freshworks is one of the more interesting SaaS startups that has reached the scale of being a viable and reliable long term business. It originated in Chennai, which at the time of founding in 2009 was not a hub of technology perhaps aside from a then-nascent Zoho.

As an aside, Chennai is now on the rise from a tech perspective, looking to attract skills and dollars from the larger Indian centres such as Bangalore and Delhi. Freshworks, Zoho and others can take credit to as drivers for the rise of Chennai as an innovation and employment hub. 

Freshworks was one of the quickest SaaS providers to grow from US1M to US$100M in revenue, doing so in just over five years, beating ServiceNow and Shopify to this metric. Starting as Freshdesk, it has expanded to offer ten key products all centred around customer experience. The breadth of the portfolio is, therefore, significant for a relatively small company with the related challenges and opportunities that this presents. 

In September this year, Freshworks held the Refresh19 customer and partner conference. It attracted over 500 customers to Las Vegas the week after Labor Day, and also had its inaugural industry analyst day. Refresh attendees had doubled from the 2018 Refresh18 event in New York, showing the interest in Freshworks and the importance that enterprises are placing in a unified customer experience and engagement platform. The growth in attendance reflected the client investment in the firm and the increase in capabilities that it has invested in recent years.

The analyst day was attended by a small but hand-picked assortment of analysts. The Freshworks executives certainly were made aware of the collective and individual perspectives of the analysts, and to the executives’ credit, they appeared to relish the at times, pointed advice.

Freshworks started as Freshdesk providing cloud-based customer support software. Due to the growth in capability, and for precise strategic purposes, Freshdesk became Freshworks, with Freshdesk remaining as an anchor product. There are now nine other products in the Freshworks offering portfolio. Key product offerings include:

  • Freshcaller – Contact Centre 
  • Freshservice – IT Support Management
  • Freshmarketer – Marketing Automation and Support
  • Freshconnect – Customer and Employee Collaboration 
  • Freshsales – Sales Support and Management

The two most recent offerings announced at Refresh19 were 

  • Freshrelease – Project Management
  • Freshping – Website Availability and Management

As mentioned, revenue is US$100M and growing; success is more than marketing and talk. One of the critical success factors of Freshworks highlighted at the event is customer satisfaction. For any SaaS firm (let alone every single firm or government agency) customer satisfaction is the anchor for renewals and expansion of investment. Engaging with some of the 555 customer attendees, it was clear that there was a high level of customer satisfaction with the investment in Freshworks and with the overall experience and business outcomes generated by this investment. Freshworks wants it’s customer’s customers to be customers for life. It wants that on the Freshworks platform directly or through the required marketplace.

Freshworks has strong leadership and has not been afraid to bring talent into the organisation to enable the next phase of growth, positioning and customer narrative. Expansion globally has accelerated, with three offices in Europe, two in Australia and one in Singapore alongside India and Silicon Valley. The technology is touted as easy to install and easy to use, which enables deeper penetration. Simplicity is a crucial mantra for Freshworks; it has taken an IKEA view of the world to the development of the product set. Given this philosophy, it is not surprising that French sporting goods retailer, Decathlon, an IKEA for sporting goods is a client. 

Of course, there is more that needs to be done by Freshworks. capioIT suspects that more cross-selling is required to boost the average number of products used per customer, particularly for the traditionally targeted small to mid-market customer. As it looks for more enterprise engagement, it will have to engage more with SI’s rather than the current partner base, which is more technology vendor and fellow SaaS provider-based. It also must develop a stronger position in terms of security, and how to ensure that clients understanding of the role of security is paramount.

Capture Point

Freshworks have had success so far in providing customer experience based SaaS platforms for clients. This success has enabled it to scale past US$100M in revenues and to become a key player in the marketplace. This success can continue on the back of the philosophy of making technology more accessible, and customer engagement easier for clients. Clients are, of course, the ultimate judge and the run to US$200M and beyond will be the measure of how successful Freshworks can be in the future. 

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Salesforce and Alibaba team up to take on China

China is a problematic market for most non-Chinese technology vendors to penetrate.  In the 20 years that I have been an analyst covering China, the amount of money that I have seen lost, particularly by US-based firms in China is staggering. Politically, things have become more difficult in the past two years. The Trump administration has engaged in a series of trade sanctions, tariffs and other economic measures to put pressure on the Chinese government over trade. The omnipresent and rarely helpful Trump tweets increase the economic and political stakes and uncertainty in equal doses.

In the background of this, Salesforce recently announced a partnership with Alibaba to help provide Salesforce capabilities direct to the Chinese market. It is focused on the PRC, Macau, Hong Kong and Taiwan markets, and will enable Salesforce to have a capacity in the market that is effectively quarantined from the rest of the Salesforce market. Alibaba is the obvious Chinese partner for Salesforce for market reach, capability and cultural reasons. capioIT expects that Alibaba will be the primary go-to-market vehicle. In briefings from Salesforce, it is clear that this is a long term and well-considered investment. Both Alibaba and Salesforce have rightly taken an approach that minimises impacts from both administrations and is focused on customer outcomes. At the same time, the importance of data privacy, and Chinese hosting laws cannot be understated, hence the expectations of quarantining.  

The other important aspect of the deal is that both parties can join together to provide confidence for clients in the market. capioIT believes that the initial target will be MNC’s looking to enter or expand into the Chinese markets. This will be particularly true for industries such as retail and luxury goods. Salesforce is rightly planning to have one consistent UI of Salesforce, aside from clear localisations, customers will know it is Salesforce, and for customers who are also clients outside of China, it will have the same look, feel and capability. This is critical for both markets.

From a partnering perspective, the Chinese market is a modest but growing Services opportunity. Unlike some markets such as Hybrid Cloud and Strategy Consulting, the challenges of China has meant that it lags in terms of opportunity size, but not growth behind Australia and Japan. In 2019 the market is forecast by capioIT to be worth US$146.4M, rising to US$496.3M in 2023. As with the customer base, there will be two distinct markets,  larger MNC’s investing inwards to China, and the domestic organisations that invest with Salesforce and Alibaba.

Capture Point
China is a difficult market. It is not going to become more accessible or straightforward in the foreseeable future for both political and economic reasons. Cloud providers such as Salesforce have to be conservative and pragmatic on their entry to China. The opportunity is there, but it is not as easy as other markets. As a result, the well-considered approach of Salesforce in teaming up with Alibaba to provide capability across China, Hong Kong, Macau and Taiwan markets makes business and geopolitical sense. Trusted parties on both sides can ensure that the opportunity is there for Salesforce to match the growth and scale it enjoys in other markets in the Chinese marketplace.

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IBM Asia Pacific Analyst Insights – Red Hat has arrived at IBM

IBM recently held its 20th annual Asia Pacific Industry Analyst event in Singapore. Firstly kudos to IBM. No other vendor has had 20 Asia Pacific Industry Analyst events. IBM is not the same company that hosted a small number of analysts in Sydney just after the 2000 Sydney Olympics. I have attended 18 of the events; perhaps if I didn’t have three kids, I might have carved out a full 20.

In the initial Year 2000 event, not only was I childless and two months into an analyst career that is still going 19 years later, there was no talk of cloud, Watson or Red Hat, IBM was focused on large scale IT Outsourcing, Mainframes and PCs. The world was different. Digital was a technology company, not an essential business driver or a cliche depending upon your perspective. 

Fast forward to 2019. From an IBM watching perspective, the most significant development this year has of course been the closing of the Red Hat acquisition. Once the deal finally closed and IBM paid the $36 Billion to Red Hat shareholders it was time for the reality to set in. How would IBM integrate Red Hat? Would it become lost in the business, maybe holding onto the name for six months, or would it be treated how Red Hat, customers and partners wanted; that is part of IBM but separated from the IBM tentacles?

The talk is what the market wanted to hear. IBM appreciates the value of Red Hat’s partnership and depth of customers. Red Hat will remain independent, and at the same time, IBM is now fully open. That certainly is a change from 2000. IBM is in effect a partner of Red Hat that happens to hold the ownership papers. 

In principle, Red Hat independence is precisely what is needed; the challenge is going to be maintaining this at the same time that IBM must recoup the investment that it has made. IBM will be watched closely in the next 24 months and beyond to ensure that commitments to an open approach are maintained for Red Hat specifically and technology more broadly. 

The Red Hat acquisition has been rolled into the overall perspective of IBM for Hybrid Cloud. Of course, Hybrid Cloud is the buzz word of 2019; everyone is jumping on the bandwagon. For good reason. Perhaps in a pure world, 100% public cloud is a reality, but in the grittiness of enterprise IT, it is clear that the Hybrid Cloud is the critical model for infrastructure delivery across the next five years or more. The big cloud providers know this, and the legacy vendors know this. Of course, awareness is 1% of the battle for success in the Hybrid Cloud. IBM has a particularly significant opportunity across services, platforms and software for the Hybrid Cloud market, but it is going to take a substantial change internally and by customers, for it to execute. This change will relate to culture and perceptions in customers minds, particularly outside of the largest enterprises in the region. 

For example, the Hybrid Cloud Services market is a truly enormous opportunity, driven by ensuring automation and cloud to produce technology and business outcomes. No-one is there yet, and while IBM should be front and centre in this, it still has a long road to go to drive the growth and outcomes that will be considered a success in the Hybrid Cloud market including services. 

There is a lot more to IBM than Hybrid Cloud and Red Hat. The Hybrid Cloud opportunity for the first time in many years subsumes the Cognitive Enterprise (GBS, Watson, etc.). The Cognitive Enterprise market is increasingly competitive across a breadth of services, and IBM has to do more to differentiate in this space. It has had leadership before but needs to raise the bar higher to regain this position. 

Capture Point

It is a credit to IBM that they have invested in the Asia Pacific Industry Analyst ecosystem for 20 years. No one can claim this length of engagement, while perhaps all the IBM faces have changed, and many of the analysts, the continuity is appreciated. Red Hat was the key drawcard this year. The plans for Red Hat are very cognisant on the importance of an Open approach and the Red Hat ecosystem. If IBM and Red Hat can execute through this, then it has a genuine opportunity to be a leading provider of Hybrid Cloud services. Of course, it is much harder than this, but IBM has no choice, it has to make it successful, that should provide the motivation alone to get it right. 

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capioIT forecasts the Asia Pacific Salesforce Services Market to reach US$4.9B by 2023

capioIT forecasts the Asia Pacific Salesforce Services Market to reach US$4.9B by 2023 – Dominated by Japan and Australia, with India, The Philippines and China the fastest-growing markets

Salesforce is the clearly leading SaaS provider, not just in CRM, or Customer Experience, but it sets the benchmark across the market. Revenues in the Asia Pacific region have exceeded US$1B, and with growth at 26%, it is enabling the services ecosystem to grow at an accelerated rate.

In 2019, capioIT forecasts that the Asia Pacific Salesforce Services market will be US$1,635M. In 2023 we forecast that it will reach US$4,857M. The CAGR from 2019 to 2023 is 31.8%. The largest market in 2019 and 2023 will be Japan. It will make up 33.3% of the 2019 market, and 32.5% of the 2023 market. ANZ is close behind, representing 30.2% of the 2019 market, and 25.6% of the 2023 market.

The key trends are shown in the two tables below.

Screen Shot 2019-08-29 at 5.28.09 pm

From a country perspective, as noted in terms of market size. $$$ potential, in 2018 and 2023 Japan leads the way, followed by Australia. In 2023 they are 32.5% and 22.7% of the total market respectively. Korea is 10.7% and India 8.5% in 2023. With China the fifth-largest services opportunity, the top five markets represent over 80% of the total opportunity. China is perhaps a smaller market than anticipated, capioIT is very conservative about the long term prospects for growth in China. We expect that the political environment will deteriorate, and China is also on a path to develop compatible technology itself for applications and infrastructure rather than to rely on US or Western-based technology. This is despite Salesforce making strong long term relationships with Alibaba in the local market, albeit initially for MNC relationships. The market remains difficult to forecast.

The figure below highlights the growth rates of each market from 2018-2023. Despite a small base, the Philippines is the fastest-growing market followed by the substantially larger PRC and Indian markets. Clearly, these will increase in importance through the forecast period and belong. The slowest growing markets are the more mature markets of Australia, New Zealand and Taiwan.

Screen Shot 2019-08-29 at 5.37.19 pm

 

 

Capture Point

Salesforce is clearly the strongest SAAS provider globally and across broad technology, not just the breadth of customer experience markets that it provides solutions. The services opportunity presented by Salesforce has been rapidly increasing. Focused on Australia and Japan primarily, it is increasingly covering the entire region, and customers create their own requirements and opportunities. Services vendors need to have the flexibility to deliver services across Salesforce offerings, geography and industry. Failure to do this, drive automation and deliver the customer experience will lead to a loss of market share and opportunity. 

 

Note – Salesforce Services are defined as externally provided services for the integration of Salesforce into an organisation regardless of industry.

IT services refer to the business and technical skills and resources to support organisations to identify, develop, manage and optimise information and business processes. The Business and IT services market is characterised by the type of outcomes and skills required such as Design of solutions, building solutions and management of outcomes.

Note – The following countries are included in the Asia Pacific region

  • ASEAN
    • Indonesia
    • Malaysia
    • Philippines
    • Singapore
    • Thailand
  • ANZ
    • Australia
    • New Zealand
  • Greater China
    • Hong Kong
    • PRC
    • Taiwan
  • India
  • Japan
  • Korea
  • Rest of Asia Pacific
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Veeam – Hybrid Cloud is the next Act

Veeam recently held its fourth annual analyst summit near San Diego. I have been able to attend 3 of these events, and since the first event in 2016, I have seen it double in size, and gain confidence, scale and customer importance on the back of Ratmir Timashev and Andre Baronov’s leadership. 

As an analyst event, they always do a great job, it is focused, yet they provide the opportunity to ensure attendees have an enjoyable experience along the way.

Veeam officially broke the US$1B revenue mark earlier this year, joining an elite band of software firms to achieve this. It has also done this, wisely, in my view, maintaining a privately held status. The private ownership has enabled Veeam to make the path it chooses, not what the market decides for it. While this has some risk, and the founders could certainly cash into the billions with an IPO, it has so far resisted this path.

It has reached the magical billion-dollar mark mainly based on providing backup to the enterprise data centre. That was Act 1. Act 2, of course, involves supporting to the Hybrid Cloud environment. Hybrid Cloud for enterprises large and small is a default model of infrastructure deployment. To do this, Version 10 will have a range of enhancements to integrate backup across any workload sources, e.g. Public Cloud, Private Cloud. It is not just the product that is enhanced; any push towards the cloud environment requires subscription pricing and delivery, again an increased but essential option for customers. Subscription pricing is a transition for Veeam, partners and customers; however, a transformation that had to occur, and one that will set up the base for the future. 

Overall Veeam is a very successful organisation and has significantly optimised customer outcomes with a significant Net Promoter Score in the 70s. It is increasing presence in the enterprise market, as well as having a play across most industry, geography and company size definitions. It is not without challenges, but most of the problems in perspective come from doing more and maximising outcomes rather than any significant deficiencies.

For example, there is considerable opportunity for it to be more active in the regulatory and compliance market to help manage risk for organisations. As it increases enterprise presence, and by a proxy relationship with the likes of Deloitte and PwC, compliance will be a distinct opportunity to meet. This type of opportunity further provides for deeper customer relationships and new roles beyond the infrastructure teams. Of course, this is critical for it to make the step to Act 2, and $2Billion in revenue and beyond.

Capture Point
Veeam is a remarkable case story. They have reached the US$1 billion mark in revenue. Success in any language. However, it knew that it had to evolve to the next act if it was to maintain growth, impact and of course, retain the skills. Act 2 is all about Hybrid Cloud. It is well placed to indeed be the lead provider in Data Management in Hybrid Cloud. It can be more than this if it executes on customer requirements, so expect there to be an Act 3 to reflect this once it conquers the current customer requirements. 

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Salesforce – Acquires Tableau, accelerates analytics as it plays a Customer 360 game

Salesforce announced on Monday, June 10th (US time) the acquisition of data visualisation leader Tableau for US$15.7B. Some jaws dropped at the purchased and the price and some at the purchaser. It was inevitable that Tableau would be acquired, Oracle, IBM, or SAP could have been the suitor, but Salesforce is no surprise.

In all honesty, anyone who has watched Salesforce closely should neither be surprised or concerned by this acquisition. Salesforce is not merely your cloud CRM provider anymore. It has not been for years, but for some outdated perception is the reality.

Salesforce is an increasingly broad and complex enterprise software behemoth. It’s recently reported numbers highlight this. It is on track for US$20B in revenue by 2022, with year to year growth in the most recent quarterly reported numbers just shy of 25%. Sales and Service Cloud represent 60% of quarterly revenues, but the fastest growth is in the platform and increasingly new investment areas. What Salesforce does so well is to identify adjacencies to an evolving core product. The acquisition of Mulesoft in 2018 set the path to solving integration problems that challenged Salesforce deployment for customers. The purchase of Map Anything in April 2019, highlighted this adjacency approach as well as the ability of Salesforce’s ecosystem to develop partners through the AppExchange then acquire into Salesforce.

So how does Tableau fit into Salesforce? For nearly US$16B, it had better be a precise fit. Tableau is the leader in data visualisation. It is not an analytics platform as such; one does not go to Tableau for deep statistical insight; instead, it uses it to communicate data to as broad an audience as possible. Salesforce has analytics capability as a core pillar, but this has been one of the more disappointing offerings from Salesforce and has far from reached the potential required. Salesforce will only benefit from a functionality and capability perspective with Tableau inside rather than as a partner or third-party application.

Quite simply across the product suite, and as a standalone offering, Tableau will significantly increase the visualisation, both automated and user-led capabilities of Salesforce. In terms of what it means for both companies, of course, there is good and bad. There is a very significant overlap in the customer bases of both products. It is not 100%, but there will be a balance of customer familiarity and the opportunity to cross-sell for Salesforce, and the extensive partner network that it oversees. There will be some cultural challenges, no doubt in the integration. Salesforce talks about Tableau as an independent organisation within Salesforce, and that will work until Mark Benioff believes it doesn’t. The internal but separate approach rarely works, and the Tableau logo will disappear at a point in time as a consequence.

There are a few differences between the integration of Tableau and the most comparable business Mulesoft. Mulesoft was literally up the street from Salesforce in San Francisco and culturally was based on many of the premises of Salesforce. For Seattle based Tableau, there will be a few differences culturally, although nothing that cannot be overcome with communication, honesty and much hard work on the cultural integration.

The on-premise and cloud capability of Tableau may disappear quicker than the road map that Tableau had, again, Salesforce places great import on the SaaS, no Software approach. Advanced analytics and AI capabilities of Tableau are not its fundamental value proposition so that Einstein will remain the lead there, with some added capability. The non-customer centric user of Tableau provides new client opportunities for Salesforce.

The final point of the acquisition is that it proves in 2019 and the future, you cannot be a one trick software firm. To remain relevant, you need multiple capabilities. Tableau struggled with this, VMware famously struggled until the “invention” of hybrid cloud to be more than virtualisation, and SAS Institute and ESRI remain the poster firms for relying on one old product suite.

Capture Point
Salesforce paid a premium for Tableau, even in a capital-rich 2019. In the world of Salesforce, that is rarely the point. One of the challenging aspects in the Salesforce 360 portfolio is fundamentally sharpened; it gains new users, new capabilities and opportunities for the core product to expand. As with all acquisition, the trick will be the integration, cultural alignment, and keeping developers and partners on board.

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