A new report is bad news for the IT industry, finding that inflation is outpacing IT spending by a significant margin.
The IT industry, along with every other, is struggling with an economic downturn, with inflation increasing at near record highs. While IT spending is increasing, it’s not keeping pace with rising inflation.
Gartner surveyed more than 2,000 CIOs to gain insight into the state of IT spending. The survey found that, on average, CIOs expected their IT spending budgets to increase by 5.1% in 2023, but that’s behind the estimated inflation rate.
“The pressure on CIOs to deliver digital dividends is higher than ever,” said Daniel Sanchez Reina, VP Analyst at Gartner. “CEOs and boards anticipated that investments in digital assets, channels and digital business capabilities would accelerate growth beyond what was previously possible. Now, business leadership expects to see these digital-driven improvements reflected in enterprise financials.
“CIOs expect IT budgets to increase 5.1% on average in 2023 – lower than the projected 6.5% global inflation rate. A triple squeeze of economic pressure, scarce and expensive talent and ongoing supply challenges is heightening the desire and urgency to realize time to value.”
To help combat the trend, Gartner said CIOs must prioritize spending in the right sectors, such as
“CIOs must prioritize digital initiatives with market-facing, growth impact,” said Janelle Hill, Distinguished VP Analyst, Gartner. “For some CIOs, this means stepping out of their comfort zone of internal back-office automation to instead focus on customer or constituent-facing initiatives.”
“Leading CIOs are more likely to leverage data, analytics and AI to detect emerging consumer behavior or sentiment that might represent a growth opportunity,” added Hill.
“When I look at the conversational space I think it’s going to have as much impact as ecommerce or search or social,” says LivePerson CEO Rob Locascio. “The conversational space is going to be just as big. I think you’ll see one day that there will be a trillion dollar company in this space and I want it to be us. The things we’re investing in right now and setting up for will allow us to do that. That’s what’s important.”
Rob Locascio, CEO of LivePerson, predicts that the AI-driven conversational space will ultimately have as much impact and be as big an industry as ecommerce, search, or social. Locascio was interviewed by Jim Cramer on CNBC:
Ecommerce, Search, Social… and Conversational Space?
When I look at the conversational space I think it’s going to have as much impact as ecommerce or search or social. The ability to talk to a machine and have a natural conversation, it’s in the collective consciousness of people. We all believe the Alexa type situation should happen with every company.
We do that with Delta and T-Mobile and all these big brands. What we’re looking at now is how do we take that to the world? LiveIntent is proprietary technology to look at the intent that a consumer is having with the brand. In terms of I want to buy something, we have a way to analyze that and then use machine learning algorithms to then scale those conversations. That’s what this is about.
Healthcare Companies Defending Themselves From Amazon Via AI
In Q4 we signed a couple healthcare companies. They want to talk about defending themselves from Amazon because Amazon said they want to go into healthcare. The way they think they can do that is scaling the conversations they are having with their customers and creating a totally different experience. You go to a doctor, you have an experience with them, you capture that on a messaging platform and an AI will help you with whatever is wrong with you. You want to process a bill instead of calling and being put on hold, you do that through a conversational experience.
They want to game change it. The only way they’re going to defend themselves is to get into the conversational space. That’s what they see and we’re the company they’re trusting to scale their operations with the conversational platform.
Conversational Space Is Going To Be As Big As Search and Social
The conversational space is going to be as big as search and social. I think you’ll see one day that there will be a trillion dollar company in this space and I want it to be us. The things we’re investing in right now and setting up for will allow us to do that. That’s what’s important. The Amazon’s and the Facebook’s and Apple’s, they’re in the space. Jeff Bezos made a big bet obviously in Alexa to say this is the way it’s going to be.
It can’t just be Amazon and Alexa. It has to be other companies getting access to that technology and that’s what we are providing. Who else is providing it? We’re one of the largest companies in the world to do this. Even though we’re not big tech, we are large enough to go ahead and go after them. We are large enough to go ahead and define a space and win it.
The CEO of TrenDemon, Avishai Sharon, says that they created their cloud-based software solution in order to help companies prove that the marketing content they produced also achieved business goals and sales. In order to show this correlation, the TrenDemon software analyzes all of the different touchpoints the customer has had over his lifecycle and then reverse engineers those successful journeys in order to find out what content is working.
My personal background was heading a marketing agency for many years and one of my biggest struggles was how do I prove our value and our effort to our customers and how do you connect the impact of what we call content marketing to business goals and to sales? When we couldn’t find an easy way to show that correlation three and a half years ago we went ahead and founded TrenDemon to help companies do just that.
We connect their marketing efforts, which today rely mostly on content, you want your audience to consume valuable content, as opposed to just advertising. The big challenge is how do you attribute those efforts to sales? There’s actually a prior problem, how do you actually map the customer journey? How do you track those different touch points into one picture?
Reverse Engineering Successful Customer Journeys
The first thing we do is look at all the different touchpoints that a customer has had over his lifecycle. We ask the question, not just where do they come from, but how deep was their engagement? Did they actually watch the video? Did they actually read the article? Then you can start reverse engineering those successful journeys and say what’s common about all of these successful journeys.
What we found, and this is the interesting thing, we’re working with over 90 companies today worldwide and the vast majority of content the companies produce, over 90 percent, is ineffective at driving business goals. As you guys know it’s very expensive to create quality content and it takes a lot of effort.
If People Read the Right Content They Will Covert to a Sale
The second interesting thing is that if you do manage to find those 10 percent and you find a way to get it in front of the right people you’re actually able to improve dramatically your results. So there’s not just a correlation between what buyers did beforehand, there’s also a causation, a causal relationship, that if people read the right content at the right time they’re more likely to follow a path. We’re not probably as sophisticated as we believe that we are.
We’re a SaaS company, a cloud-based solution. We’re working a lot in the US and one of our biggest markets and growing markets is Japan. They’re investing a lot of content and a lot on technology. Essentially, because we look at the customer journey and not necessarily specific languages we can operate in any environment which allows us to grow pretty much anywhere. As long as they have content, which means that they’re producing something other than just advertising, they want people and audiences to actually engage with what they’re producing and they do have some business outcomes that they’re looking to measure.
About TrenDemon:
Founded in 2013, TrenDemon is the world’s leading content marketing attribution and optimization solution, helping marketers prove and improve their content’s impact.
TrenDemon insights can help you uncover your content marketing ROI, impact on business goals, and engagement to help guide the content strategy. Our optimization units will help you increase conversions and shorten time to convert on your owned assets.
TrenDemon proudly serves a wide range of customers, from Fortune 500s and brands to SaaS, B2B, and financial companies and is backed by leading VCs.
“We have seen significant acceleration since the COVID-19 pandemic,” says DocuSign CEO Dan Springer. “A significant portion of that (increase) was due to increased use cases from customers driving that digital transformation faster with services like DocuSign. We don’t see customers going back. Once they’ve got the benefits from that efficiency in their business, the better customer experience, and the better employee experience, they’re going to stay in a digitally transformed world.”
We’ve been really pleased with the growth we’ve had since going public a few years. We have also seen significant acceleration since the COVID-19 pandemic. It’s obviously a horrible pandemic and our number one priority has been the health and wellbeing of our employees so we can take good care of our customers. As you can see in our Q1 earnings we did see an acceleration of our bookings to 59 percent.
Traditionally, if you look at the billings-type metric they have been in the mid-30s’. A significant portion of that (increase) was due to increased use cases from customers driving that digital transformation faster with services like DocuSign.
Companies To Stay In This Digitally Transformed World
One of the things we’ve seen with the pandemic impact is that it has really accelerated the path that companies were already on to drive that digital transformation. We don’t see companies after the pandemic settles down going back and saying they want more paper and more manual processes.
Once they’ve got the benefits from that efficiency in their business, the better customer experience, and the better employee experience, they’re going to stay in a digitally transformed world. They are going to use DocuSign and other fantastic services to do that.
The Future Is Going To Have eSignature At The Center
We really think that the future is going to have eSignature at the center of what we call the overall Agreement Cloud. Companies want to be more agreeable. They want to be easier to do business with and be easier to do business for. They’re going to not just use DocuSign for signature but all of the other components of preparing agreements and managing those agreements digitally once they’ve been created. That’s why we’re excited about our very robust future.
We just past a billion dollars in revenue (for DocuSign eSignature). We are only four percent penetrated today and we’re six times larger than the next biggest player in the space. There’s not a lot of penetration yet in that core business. Notary is still predominantly done manually. We are making investments there. We believe we can bring the same ease of use that we brought to eSignature we can bring to notary.
AI To Power The DocuSign Agreement Cloud
Much bigger than that, even expanding upon the opportunity of eSignature is that broader Agreement Cloud opportunity. We think this is the next big cloud opportunity. You are going to see companies increasingly say I don’t just want to do the workflow and signature. I also want to drive the creations of those agreements. I want to think about artificial intelligence and search capability to manage my agreements. This would enable me to actually manage my business and make my company more agreeable.
Those are some of the investments we’re making. That’s why we just finished the acquisition of Seal Software last month so we can bring additional artificial intelligence and analytic capability to help people run their businesses better.
COVID Accelerated Digital Transformation, Says DocuSign CEO Dan Springer
ServiceNow CEO Bill McDermott has called cloud computing the “pervasive computing theme of the 21st century.”
The cloud computing market is experiencing major growth, due in no small part to the pandemic and the rise of hybrid work. All three of the top providers are experiencing major growth, with no signs of it slowing down. According to McDermott, cloud computing’s success is because of its “pervasive” and transformative nature.
“It simplifies everything. Everything’s on the mobile. Everything’s beautiful and easy to use,” McDermott told Yahoo Finance.
“It’s one platform that can single thread business across an entire enterprise, all functions of the business. So, it is a great unifier in a sense, because some people have very powerful Chief Information Officers, others have Chief Digital Officers, others have Chief People officers, others have these wonderful data managers,” McDermott added. “But to have one platform, that single thread, all of those powerful relationships to deliver great experiences is super exciting to us.”
While the economic downturn has many companies hedging their bets and cutting costs, McDermott believes the cloud computing market can continue growing, buoyed by companies’ digital first strategies.
“Ninety-five percent of CEOs have a digital first strategy. So, they’re leaning in to digital transformation. Because it’s the only way out. On one hand, it’s software as the great deflationary force,” McDermott said. “On another hand, if you can’t transform and recreate your business model, and innovate digitally, you lose the game. So, CEOs are very well aware of this. So, that tailwind is super strong.”
McDermott’s predictions are good news for the cloud market and underscore the opportunities available to cloud providers.
“Slack has already transformed the way we work at Salesforce,” says Salesforce Co-CEO Bret Taylor. “Since we have deployed Slack internally, we sent 46% fewer e-mails. And in the last 30 days alone, our employees have sent nearly 60 million Slack messages and conducted 500,000 Slack Huddles. We run Salesforce on Slack.”
Not only has Salesforce transformed the way they work with Slack but so are the customers of Salesforce. The company sees Slack as a core platform for powering digital transformation.
“Customer 360 and Slack are powering this transformation for companies in every industry in every region of the world,” said Taylor in yesterday’s earnings call. “Slack outperformed our expectations in the first full quarter as a part of the Salesforce family. The number of customers on Slack who spent over $100,000 was up 44% year-over-year. The adoption of Slack Connect was up an astonishing 176% year-over-year. Slack is not just a product, Slack is a network, and it’s just incredible to see that growth.”
The company seemed pleasantly surprised about how transformative Slack is to the operations of large enterprises. As Slack brought on millions of new users during the pandemic they focused on innovation that has made Slack much more than a simple communications platform.
“Slack also continues to innovate at an unbelievable pace,” notes Taylor. “Slack Huddles, which is Slack’s new real-time audio capability, is already used weekly by over 1/3 of Slack users. And Slack Clips, the new asynchronous video capability, are being played nearly 1 million times a week. And this month at Slack Frontiers, which I hope all of you have watched; and if you haven’t, you can watch it online. Stewart and the team are now the next generation of Slack’s platform, and it’s going to truly transform the way companies think about workflows and automation.”
Customer 360 and Slack are powering this transformation for companies in every industry in every region of the world, according to Taylor.
Slack outperformed our expectations in the first full quarter as a part of the Salesforce family. The number of customers on Slack who spent over $100,000 was up 44% year-over-year. Adoption of Slack Connect was up an astonishing 176% year-over-year. Slack is not just a product, Slack is a network, and it’s just incredible to see that growth.
Slack also continues to innovate at an unbelievable pace. Slack Huddles, which is Slack’s new real-time audio capability, is already used weekly by over 1/3 of Slack users. And Slack Clips, the new asynchronous video capability, are being played nearly 1 million times a week. And this month at Slack Frontiers, which I hope all of you have watched; and if you haven’t, you can watch it online. Stewart and the team are now the next generation of Slack’s platform, and it’s going to truly transform the way companies think about workflows and automation.
“That is definitely what I saw firsthand,” said Co-CEO Mark Benioff. “I was like, how could it be that an airline is basically front-ending their entire system with Slack? That’s a shock to me.”
“Slack is the system of engagement for every workflow, every application, every person on your enterprise,” added Taylor. “It’s really an amazing platform vision. And absolutely watch Slack Frontiers. If you haven’t seen it, I think it will blow your mind.”
“Every CEO and every Board I talk to is focused on how they can succeed in this era of flexible work,” says Taylor. “According to Slack’s research, 93% of workers are looking for flexibility when they work, and 76% are looking for flexibility where they work. Companies need to connect their employees, their partners, their customers from anywhere because we all know we’re not going to be in the office 5 days a week.”
“Our offices aren’t going away,” he said. “It’s just that your digital headquarters is going to be more important because it’s truly the infrastructure that connects all of it, and especially in this new normal. And Slack and Customer 360 together are really powering this transformation.”
Slack Has Already Transformed Salesforce, Says Salesforce Co-CEO Bret Taylor
Zoom has launched a $100 million fund to help stimulate and grow the app ecosystem surrounding the videoconferencing platform.
Zoom emerged as a front-runner in the early days of the pandemic, with companies, schools, religious organizations and individuals turning to the platform to stay connected. As a result, Zoom experienced meteoric growth, far outpacing some of its rivals.
The company is looking to ensure its long-term success, by helping build out the ecosystem of apps, hardware and integrations that will continue to improve the service Zoom offers.
“I founded Zoom in 2011, nearly ten years ago. Without the support of early investors, Zoom would not be what it is today,” said Eric S. Yuan, Founder and CEO of Zoom. “What I’ve learned over the past year is that we need to keep meetings productive and fun. My hope is that the Zoom Apps Fund will help our customers meet happier and collaborate even more seamlessly, and at the same time help entrepreneurs build new businesses as our platform evolves.”
According to Zoom, portfolio companies will be eligible for investments “between $250,000 and $2.5 million to build solutions that will become core to how Zoom customers meet, communicate, and collaborate.”
The Electronic Frontier Foundation (EFF) is partnering with DuckDuckGo to include the latter’s HTTPS dataset in its HTTPS Everywhere browser extension.
The EFF and DuckDuckGo are closely aligned in their commitment to protecting user privacy. DuckDuckGo’s privacy browser extension for the desktop, and its standalone privacy browser for iOS, rely on the company’s Smarter Encryption technology.
Smarter Encryption upgrades a standard unencrypted (HTTP) website connection to an encrypted (HTTPS) connection where possible. Smarter Encryption is more advanced than many competing options, since DuckDuckGo crawls and re-crawls the web to keep its dataset current.
The EFF is now adopting DuckDuckGo’s Smart Encryption dataset for use in its own HTTPS Everywhere browser extension. Like Smart Encryption, HTTPS Everywhere is designed to help upgrade insecure connections. The EFF’s solution previously used “a crowd-sourced list of encrypted HTTPS versions of websites,” a less efficient and less comprehensive solution than DuckDuckGo’s.
“DuckDuckGo Smarter Encryption has a list of millions of HTTPS-encrypted websites, generated by continually crawling the web instead of through crowdsourcing, which will give HTTPS Everywhere users more coverage for secure browsing,” said Alexis Hancock, EFF Director of Engineering and manager of HTTPS Everywhere and Certbot web encrypting projects. “We’re thrilled to be partnering with DuckDuckGo as we see HTTPS become the default protocol on the net and contemplate HTTPS Everywhere’s future.”
“EFFs pioneering work with the HTTPS Everywhere extension took privacy protection in a new and needed direction, seamlessly upgrading people to secure website connections,” said Gabriel Weinberg, DuckDuckGo founder and CEO. “We’re delighted that EFF has now entrusted DuckDuckGo to power HTTPS Everywhere going forward, using our next generation Smarter Encryption dataset.”
TSMC has delivered further bad news on the semiconductor shortage, predicting supplies chain tightness won’t completely ease until 2023.
The world is experiencing a significant shortage of semiconductors, with multiple industries currently being impacted. Intel CEO Pat Gelsinger has warned the shortage could last a couple of years, and now TSMC has issued a similar assessment.
TSMC specializes in manufacturing semiconductors for partner companies, and is the premier chipmaker for Apple. The company also makes chips for Qualcomm, Alphabet, AMD, NVIDIA and Huawei, and will make the i3 for Intel.
According to Bloomberg, TSMC believes shortages will begin to ease for the auto industry next quarter, but the overall industry will continue to experience shortages throughout the rest of the year and into next.
“We see the demand continue to be high,” CEO C.C. Wei said. “In 2023, I hope we can offer more capacity to support our customers. At that time, we’ll start to see the supply chain tightness release a little bit.”
IBM’s spree of purchases continues, with a deal to acquire myInvenio to help provide AI-powered automation.
IBM is moving aggressively with its plans to reinvent itself as a hybrid cloud provider. The company is preparing to split into two companies, spinning off its legacy business. To better position the core business as a cloud provider, IBM has been on a slew of acquisitions in an effort to shore up its portfolio of products and services.
myInvenio is a company based in Reggio Emilia, Italy, that specializes in helping companies find inefficiencies in their business processes and make the necessary improvements.
myInvenio capabilities reveal inefficiencies, bottlenecks and tasks that can benefit from automation, to help organizations significantly reduce their operating costs and improve customer service. Simulations can be run to assess automation opportunities to measure the benefits of applying automation at the outset of the automation journey. By analyzing historical process execution data and desktop behavior, myInvenio technology can help determine where to apply RPA bots, automated decisions, AI models, and other automations to have the most impact on a business.
The acquisition underscores IBM’s determination to become a “one-stop shop of AI-powered automation capabilities.” Once the deal closes, myInvenio’s capabilities will be integrated into IBM’s Automation portfolio, including IBM Cloud Pak for Business Automation.
“Digital transformation is accelerating across industries as companies face increasing challenges with managing critical IT systems and complex business applications that span the hybrid cloud landscape,” said Dinesh Nirmal, General Manager, IBM Automation. “With IBM’s planned acquisition of myInvenio, we are continuing to invest in building the industry’s most comprehensive suite of AI-powered automation capabilities for business automation so that our customers can help employees re-claim their time to focus on more strategic work.”
“Through IBM’s planned acquisition of myInvenio, we are revolutionizing the way companies manage their process operations,” said Massimiliano Delsante, CEO, myInvenio. “myInvenio’s unique capability to automatically analyze processes and create simulations — what we call a ‘Digital Twin of an Organization’ — is joining with IBM’s AI-powered automation capabilities to better manage process execution. Together we will offer a comprehensive solution for digital process transformation and automation to help enterprises continuously transform insights into action.”
No price was disclosed, and IBM expects the deal to close by the end of the quarter.
Dell has announced plans to spin off VMware as a standalone company, in a deal expected to bring in $9 billion.
VMware is a leading virtualization company, with its software powering some of the most critical digital infrastructure in the world. Dell originally acquired VMware as part of its EMC acquisition in 2015.
The two companies have agreed to a spin-off for VMware, one that will provide Dell with $9.3 – $9.7 billion.
“By spinning off VMware, we expect to drive additional growth opportunities for Dell Technologies as well as VMware, and unlock significant value for stakeholders,” said Michael Dell, chairman and chief executive officer, Dell Technologies. “Both companies will remain important partners, providing Dell Technologies with a differentiated advantage in how we bring solutions to customers. At the same time, Dell Technologies will continue to modernize its core infrastructure and PC businesses and embrace new opportunities through an open ecosystem to grow in hybrid and private cloud, edge and telecom.”
At the same time, VMware expects the spin-off to open new doors for their business.
“We will have an enhanced ability to extend our ecosystem across all cloud vendors and on-premises infrastructure vendors and a capital structure that will support growth opportunities,” said Zane Rowe, chief financial officer and interim chief executive officer, VMware. “Our strategic partnership with Dell Technologies remains a differentiator for us, and, as we execute on our multi-cloud strategy, we continue to provide customers our solutions and services on any public cloud and any infrastructure.”
Aside from those stated benefits, much of the relationship will remain unchanged, with the two companies continuing to work closely together. In fact, Michael Dell will remain chairman of the VMware board.
The deal is expected to close in the fourth quarter of 2021.
Google has made its low-code automation tool, AppSheet Automation, generally available.
Google bought AppSheet, one of the leading no-code development platforms, at the beginning of 2020. The company has been building on that acquisition by developing AI-based automation to help organizations automate their business processes.
Automation is more important than ever as companies and industries try to return to normal. According to Forrester, “automation has been a major force reshaping work since long before the pandemic; now, it’s taking on a new urgency in the context of business risk and resiliency… As we emerge from the crisis, firms will look to automation as a way to mitigate the risks that future crises pose to the supply and productivity of human workers.”
Google is clearly working to position AppSheet Automation as the platform of choice for companies looking to improve their automation.
Last fall, we announced early access for AppSheet Automation, a significant addition to AppSheet, our no-code development platform, that leverages Google AI to make it easier to automate business processes. Today, as part of our mission to further support the future of work, we are making AppSheet Automation generally available (GA). AppSheet Automation empowers even those without coding skills to reshape their own work with powerful new features including smarter extraction of structured data from documents and compatibility with a wider range of data sources like Google Workspace Sheets and Drive.
Google says companies around the world are already using AppSheet. AppSheet Automation should open up important new possibilities.
“Digital transformation will come out as a faster trend out of the pandemic,” says Workday co-CEO Aneel Bhusri. “What’s been interesting about the pandemic is that for companies that were in the cloud they figured out how to how to thrive and adjust to the new world. Companies that weren’t in the cloud realized that they needed the flexibility, agility, and ability to plan instantaneously. They needed those capabilities.”
Aneel Bhusri, co-CEO of Workday, discusses how the pandemic will drive digital transformation forward at an even faster pace:
Digital Transformation To Be Faster Trend Out Of Pandemic
The first three quarters during the pandemic were challenging. The vagaries of subscription accounting models are such that it is a lag indicator. We expect new bookings growth to accelerate this year and that is our primary indicator and the way we run the business. We’re very excited about where we’re headed. That acceleration will probably take at least a year to show up in subscription accounting numbers just because of the way the model works.
What’s been interesting about the pandemic is that for companies that were in the cloud they figured out how to how to thrive and adjust to the new world. Companies that weren’t in the cloud realized that they needed the flexibility, agility, and ability to plan instantaneously. They needed those capabilities. In many ways, companies like Nike that are just such great market-leading companies, recognize that they needed to move this capability to the cloud. So I think actually digital transformation will come out as a faster trend out of the pandemic.
Employee Engagement Rose To The Top Of The List
It comes back to the flexibility and agility that that cloud solutions like Workday provide. We’ve been very fortunate. We’re so happy to have Laboratory Corporation of America become a customer. J&J is a customer. Visor’s a customer. AstraZeneca is a customer. I just feel honored to be able to support these companies who are doing the best they can to save our lives and are just doing amazing work with the vaccines and testing. We’ve always had a strength in the pharmaceuticals and diagnostics role. We’re going to do everything we can to make sure that they’re successful because they’re taking care of all of us.
Coming back to what we learned during the pandemic, employee engagement just rose to the top of every CEO’s list and every head of HR’s list. In a remote work orientation, it was harder to really understand how do employees think about the company they work at, their engagement level, their comfort with their manager, and if they are feeling fulfilled at work. We were already down the path at Workday with something called Pulse Surveys. We recognized that this emerging trend was going to be critical going forward.
We Fell In Love With Peakon So We Acquired Them
We concluded that we had to get in this market now, the market’s happening now, and Peakon is the well-known leader in this category. Peakon is a UK-based company with an amazing management team. We fell in love with the product and the management team so we made them part of Workday. They’re one of the new generations of companies that’s machine learning first.
They really use machine learning in the right way to guide decisions and really give you insight into how employees are thinking about the company that they’re working for and how engaged are they. That is a supercritical set of information that’s going to drive companies going forward.
Digital Transformation To Be Faster Trend Out Of Pandemic, Says Worday co-CEO Aneel Bhusri
“Business is really simple, and people are more productive, and they’re doing things that can lead to growth and opportunity,” says ServiceNow CEO Bill McDermott. “That’s the whole point of digital transformation. Right now, companies are hunkered down with systems that are absolutely wearing them out. It’s time to make the bold move, pivot to ServiceNow, and let’s get in there and fix the job.”
Bill McDermott, CEO, and President of ServiceNow says that only one in four digital transformation projects actually deliver positive ROI due to lack of integration:
Most Digital Transformation Projects Don’t Deliver
We have a situation on our hands where digital transformation, cloud computing, and business model innovation, are all converging at once. ServiceNow is the platform, of all the enterprise platforms, that really makes business work. One of the big lessons that business has right now is trillions have been poured into digital transformation yet only one in four projects actually deliver positive ROI. The reason for that is lack of integration.
Our system integrates with all the existing systems as well as all the collaborative tools in the enterprise. From day one, the customer gets it up and running swiftly because it’s in the cloud. They begin to derive value from it because you automate the way the work is done and ultimately, you’re now in a position to serve your customers the way they want to be served. It’s a speed game and ServiceNow is at the top of its game.
Companies Have To Create New Business Models
We’re an example. If you’re going to grow your company you’re going to take advantage of digital transformation. This is the only way out and it’s the only way forward. In the 20th Century companies put in big heavy on-premise systems. The issue is now they can’t, in a frictionless economy, immediately pivot those business models because they haven’t digitally transformed their business.
About 25 percent of the opportunity of businesses out there today over the next three years will come from white space places they are not in today. They have to create new business models. They have to think about new partnerships and new routes to market. Without the baseline of a platform like ServiceNow they’re not going to get there.
That’s The Whole Point Of Digital Transformation
I am very optimistic that the economies of the world not only are going to recover but actually going to do very well this year because people are going to be investing in digital transformation. We have seen that does not cost jobs. On the contrary, it frees people up to do things like go after new markets, derive new ideas, and so forth, because the AI revolution is also on.
We have built-in machine learning and AI into our platform. So 80 percent of the soul-crushing work people don’t want to do is done by the Now platform. The 20 percent that involves a human immediately gets initiated through a workflow order from the Now platform.
Business is really simple, and people are more productive and they’re doing things that can lead to growth and opportunity. That’s the whole point of digital transformation. Right now, companies are hunkered down with systems that are absolutely wearing them out. It’s time to make the bold move, pivot to ServiceNow, and let’s get in there and fix the job.
Fastest-Growing Pure-Play SASS Silicon Valley Company
If you look at our actual earnings results, they were stunning and obviously achieved beyond expectations performance across the board. We also followed that through in the guide. We’ll continue to be the fastest-growing pure-play SASS Silicon Valley company. We will continue to have the best margin profile of all of them. Obviously, we’re going to continue to gain market share in industries around the world, in geographies around the world, particularly in Europe and Asia Pacific, and Japan.
We will also gain market share on personas. Lots of people are getting the memo now that ServiceNow obviously dominated the IT automation market but the same backbone platform has enabled us to change the employee experience, the customer experience. In these tough times with COVID we can write low-code onto our platform in minutes and roll out new applications to hundreds of thousands of people so companies can move super fast.
We keep the guide consistent with the revenue that we generated in 2020. If there’s an upside to that… fantastic. That’s what good companies should do. They should go beyond expectations when they can but we stand by the guide and we’re looking forward to having a great year.
ServiceNow Was Born In The Cloud
The whole idea of ServiceNow is so different than SAP which was a company that needed to pivot to the cloud in 2010. We did that and that was very successful. ServiceNow was born in the cloud. It’s a very young company with tremendous growth opportunity on the organic front. Having said that, (we would be in interested in an acquisition) if you have a situation where there is a partner out there that has a substantial TAM, that can be highly complementary and synergistic with ServiceNow on the revenue side.
It also would have to do great things for the customer, because we have a precious platform and we jealously protect the integration power of that platform. A lot of things would have to be right but I can tell you as responsible business people we always look at it. We don’t need it to make our goals but you always have to look at it. We do want to be the defining enterprise software company the 21st century. That’s our plan.
“Once you get to the cloud all of a sudden the lid is off,” says Snowflake CEO Frank Slootman. “People can just pursue their backlogs and whatever they can imagine. We’re now in a situation where technology is ahead of what people are capable of and imagining what they could actually do with it. That’s really a big part of what you see in Snowflake’s growth profile, a completely variable paradigm.”
Frank Slootman, CEO of Snowflake, says that on-premise data centers can only accommodate a tiny fraction of what their real demand for data analytics really is:
Once You Get To The Cloud The Lid Is Off
The important thing to understand is that there’s a couple of long-term secular trends that are coinciding and driving the development of the market overall. One is, as everybody knows, the movement towards cloud. It’s really a modernization play. We’re moving from on-premise data centers and we’re taking workloads to the cloud because we get to take advantage of better economics and utility models. Then we no longer have to manage capacity, we pay by the drink and all that sort of thing.
The other aspect that’s really important for our business is that we’ve had an extraordinary amount of pent up demand. The on-premise data centers could only accommodate a very tiny fraction of what their real demand for data analytics really is. Once you get to the cloud all of a sudden the lid is off. People can just pursue their backlogs and whatever they can imagine. We’re now in a situation where technology is ahead of what people are capable of and imagining what they could actually do with it. That’s really a big part of what you see in Snowflake’s growth profile, a completely variable paradigm.
Notion Of Headquarters Is Evaporating
We don’t have a yearning to go back to where we were. I can see why people would have that because of lockdowns and things of that sort. From a business standpoint, there’s a lot of positives to the shock to the system that we received. It’s almost like a wake-up call that is just opening our eyes to the opportunity. This whole notion that the office is your workday home we just realized that it’s nonsense. In other words, offices need to be there for specific purposes, for events, for training, for meetings specifically, but not a place to hang out nine to five. That’s definitely changing. It’s going to really reduce the real estate footprint that companies have.
The other trend and you’ve seen it with companies leaving California, the likes of Oracle and HP and Tesla, and so on is that the whole notion of headquarters is pretty much evaporating in front of our eyes. We’re no longer operating with a physical center of the universe. We’re completely virtual. We’re connecting as needed. We’ve been operating for the better part of a whole year without a headquarters and it’s just fine. All of a sudden everybody’s staring at each other and saying like what is the headquarters anyway. You’ve seen companies like Pinterest and you’re writing up massive leeches in San Francisco and saying we’re going to be headquarter-less. It’s just a concept whose time has gone away… and that’s very profound.
We Are Buying Talent And Technology, No M&A
Usually, big M&A is a function of people running out of market and running out of a lot of opportunity. They’re trying to invade adjacent territories to give themselves new runway. That is obviously not the case for Snowflake. We’re in a tremendous marketplace and we are buying talent and technology. We sometimes refer to it as stem cells that we can use that we don’t have ourselves that we can build very specific technologies around that are very much built snowflake way. We can really enable our platform mission or footer. That’s really been our mode. If you looked at our history we don’t have a history of doing big acquisitions.
Snowflake CEO Frank Slootman: Once You Get To The Cloud The Lid Is Off
Mozilla has been looking to expand its services and products beyond its Firefox web browser in an effort to diversify its profits. One of those endeavors is its VPN service that started life as a Firefox extension, before transitioning to a closed beta and then a publicly available service.
The initial releases, however, only supported Windows, Android and iOS. The company has now expanded its support to include macOS and Linux, rounding out support for every major platform.
Mozilla VPN currently offers service in the US, the UK, Canada, New Zealand, Singapore and Malaysia. This makes its focus far more narrow than competing services, such as ExpressVPN, although Mozilla says more countries will be added.
Mozilla promises it doesn’t log network activity and doesn’t restrict bandwidth. Like many of its competitors, Mozilla VPN can be run on five different devices from a single account.
The company has claimed that its service is faster than rivals because it uses less code. In our testing, however, those claims seem highly subjective, based on the selected VPN server.
For example, starting with an internet connection that averages 35 to 40 Mbps, we connected to Mozilla VPN using the three closest available locations. Two of the locations yielded speeds ranging from 0.37 to 0.44 Mbps. The third location, Chicago, yielded speeds of 32 and 33 Mbps.
Mozilla VPN Speed Tests
While not comprehensive, our brief testing shows Mozilla still has some work to do before it rivals ExpressVPN, widely considered the fastest service available.
Nonetheless, with Mozilla’s well-established reputation for protecting user privacy, their entry into the market is a welcome one.
As the global pandemic has accelerated cloud adoption, Microsoft Azure and AWS have emerged as the clear winners.
Flexera has released its 2021 State of Tech Spend Report. As expected, digital transformation and cloud adoption are on the rise. Some 56% of respondents said digital transformation was a top initiative for 2021, as opposed to 54% in 2020. Cloud adoption saw even greater jump, with 48% of respondents making it a top priority in 2021, vs 40% in 2020. Not surprisingly, work from home was the single biggest driver for change, with 74% citing it as the leading factor.
Of the cloud providers, Microsoft Azure and AWS were the clear winners. Some 61% of respondents said they were going to increase spending on Microsoft Azure in 2021. Similarly, 57% plan on increasing their spending on Microsoft SaaS, while 54% plan on spending more on AWS. Google appears set for more modest gains, with only 31% planning on increased spending on Google Cloud.
The forecast looks even worse for IBM and Oracle. Respondents plan on increasing their spending on IBM Cloud a mere 16%, with 14% planning to decrease spending. While 20% said they planned on increasing spending on Oracle Infrastructure Cloud, 13% plan on decreased spending. The outlook is even worse for Oracle Licensed Software, with 22% planning to increase spending, as opposed to 25% planning to decrease expenditures.
Flexera’s report is an important look into the cloud industry and the ongoing digital transformation, and is even better news for Microsoft and AWS.
Microsoft co-founder Bill Gates says that over 50% of business travel and 30% of time in the office will never come back even after pandemic restrictions are lifted:
My prediction would be that over 50% of business travel and over 30% of days in the office will go away. Now it’s not the gold standard that to fly all the way here to sit in front of me that. You can do the virtual connection. It will be a very high threshold to actually doing that business trip. There will be ways that you can work from home a lot of the time. Some companies will be extreme on one end or the other.
I just don’t like talking to African leaders and I always feel bad for African leaders. There are so many conferences in Europe and the US that they are expected to come to. Yet, their job in their countries is so important like their education or health system or collecting taxes or disability. Yet, they spend half their time on all these trips. The fact is now we can do a 20-minute call as needed and touch with base them. It’s been pretty impressive how a lot has gotten done. We will go to the office somewhat. We will do some business travel but dramatically less.
The fact that the (video communication) software doesn’t have any sort of serendipitous thing of people you run into after the meeting or gathering thing, there is some work to be done there. So no I haven’t run into somebody and made a new friendship. There is something missing there.
Bill Gates: Over 50% Of Business Travel To Go Away Permanently
“It’s a question of understanding what’s hybrid as opposed to pure public,” says IBM CEO Arvind Krishna. “I look at both Microsoft and Amazon as likely partners in this journey, not as being the one and two. In the hybrid world, the question is where does the client want to decide where the workload runs? They can run it on Amazon, they can run it on Microsoft, they can run it on IBM, or they can run it on private. What is the technology platform that goes across all of those? Red Hat gives a great answer to that technology platform.”
“There are many capabilities people need around integration and cybersecurity,” adds Krishna. “We’ll bring those to bear. Then we will bring our services to bear for those clients who would like to get that help both in improving the skills of their own people or for us to do the work for them. That is why you see us report $24 billion dollars in the trailing 12 months on total cloud revenue. That’s a hybrid market and not a singular public cloud market.”
IBM CEO Arvind Krishna On Hybrid Cloud: Microsoft and Amazon Likely Partners
“Digital transformation was the opportunity for our generation before COVID,” says ServiceNow CEO Bill McDermott. “Now with COVID, it has accelerated and exacerbated all the issues of broken systems and siloed operations. Before COVID they didn’t want to be told to go into a cubicle. Do you think after COVID once this thing clears up at some point in the future they are going to be told to go into a cubicle? No, they’re going to be digital.”
Digital transformation was the opportunity for our generation before COVID. Now with COVID, it has accelerated and exacerbated all the issues of broken systems and siloed operations. People are not realizing that 75% of the workforce by 2025 will be millennial generation people. Before COVID they didn’t want to be told to go into a cubicle. Do you think after COVID once this thing clears up at some point in the future they are going to be told to go into a cubicle? No, they’re going to be digital.
They’re also going to absolutely expect their employer to give them the best tools. The big idea if you want to give the customer a Michelin 3 experience is you have to fuse the employee experience and the customer experience on a common platform. This way most things can be automated for the customer on a self-service basis. The things that can’t be automated can immediately be workflow ordered to get the right person in the right place with the right skill set at the right time. That’s what we do and that’s why this is a thrilling moment.
Now Platform Is the Standard For Digital Transformation
The Now platform has become the standard for digital transformation in business today. If you think about most of these companies they’re grappling with the future of work. They have to accommodate their employees. They have very distributed workforces. How are they going to get them the tools that they need and onboard them properly? In some cases, they never even meet the people they hire. Then obviously, how are they going to manage the experience they have digitally?
This also goes direct to the customer. How do you go direct to the consumer? How do you make sure you give them a great service so they stay loyal to you? The ServiceNow Platform is at the epicenter of all of that. More and more, developers are building new innovation on the fly on the Now Platform. The Now platform has become a standard for large enterprises around the world. The ecosystem and the network effect building on that are truly sensational. We’re extremely fired up because we want to make work… work better for people all over the world. What we’re trying to do is get to the essence of everything.
ServiceNow CEO Bill McDermott: COVID Has Accelerated Digital Transformation
Microsoft announced today that it is launching Azure Space to focus on the burgeoning space industry. Microsoft says that Azure Space will bring together Azure technology and an extensive network of expert partners offering solutions for the industry. Additionally, Microsoft announced a major collaboration with SpaceX to provide satellite-powered internet connectivity on Azure.
“Today we’re launching Azure Space,” tweeted Microsoft CEO Satya Nadella. “A thriving ecosystem of satellite providers is essential to meet the world’s growing network needs, and we’re expanding our offerings to provide access to satellite data and connectivity from Azure.”
“Microsoft is taking the next giant leap in cloud computing – to space,” tweeted Azure head Tom Keene. “With the enormous challenges #space presents, there also comes great opportunity. Today, I am sharing details about our strategy for Azure Space.”
Tom Keene, Corporate Vice President of Azure Global, further discusses Azure Space:
Today, Microsoft is taking the next giant leap in cloud computing… to space. At Microsoft, our approach to space is different. This difference is evident across our platform, product, partnerships, and people.
We’re very excited about about the partnership between Microsoft and SpaceX and all of the incredible innovation that it brings for our customers and all of the possibilities that it offers to the future.
By building on new and existing partnerships within the space community, learning and leaning in to our culture of innovation and investing in people we are extending the Azure Edge capabilities with worldwide satellite connectivity.”
“If you think about Microsoft which is empowering people and organizations to achieve more and then you put that with SES which about doing the extraordinary in space to deliver amazing experiences anywhere on Earth and just look at the intersection of this,” says the CEO of SES Networks JP Hemingway. “I’ve got these fantastic cloud capabilities, this great intelligence, and we want to get to as many people as we can around the globe. Then you add that to what SES is doing. It’s providing that vehicle to get to everybody around the world whether they’re floating, flying, or in really hard to reach places.”
“What’s changing for space is that technology is propelling us forward,” says Azure Space Senior Director Steve Kitay. “Microsoft Azure Space is focusing on developing partnerships. There are many companies in the space community that have tremendous capabilities. We’re looking at bringing new and unique value along side those companies to the customers.”
Microsoft Launches Azure Space – Partners With SpaceX, SES
