Critical for Black Friday and Cyber Monday: Contextual Commerce is Convenience, Context and Control

Written by: Sheryl Kingstone, Research Vice President & General Manager - VOCUL

The holiday season is right around the corner and so are the notorious shopping holidays of Black Friday and Cyber Monday. According to our Voice of the Connected User Landscape survey, 80% of respondents plan to spend the same as the previous year and the remaining 20% plan to modify their spending. Whether those modifications involve an increase or decrease in spending is difficult to determine based on trends with those respondents being almost evenly split – with 38% expected to spend more than last year and 45% expected to spend less.

With this in mind, we don’t anticipate how much people are spending to be of great interest, but rather where people are buying what they need this holiday season. According to our Global Unified Commerce Forecast, there could be nearly $6 trillion in global digital commerce sales by 2022 up for grabs. That is still a ways away, but digital commerce is still anticipated to dominate holiday spending shopping behavior with 42% of respondents planning to do most of their shopping online rather than in store – a 27% increase in online spending from last year. Additionally, 47% of high-income shoppers will do the majority of their shopping through digital commerce channels.
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How Machine Learning Acquisitions and Implementations Are Adding Value

The "How Machine Learning Acquisitions and Implementations Are Adding Value" webinar will be held on December 12 at 11 am ET. After that date, the recording will be available below.

Data is a company’s most-valuable resource, but only if the value can be unlocked. For most companies, Machine Learning is the key to unlocking that value. It may still be the early days for machine learning technologies, but nonetheless, companies are still making big strategic bets on how they are going to run their businesses in the coming era of smarter software, both in terms of acquisitions and implementation. For a comprehensive look at machine learning – covering everything from the technological underpinnings to the financial outcomes in the sector – join 451 Research’s Research Vice Presidents Brenon Daly and Nick Patience for a webinar on Dec. 12 at 11am ET as they make sense of the machine learning market including how some key tech acquirers are participating in the rapidly emerging market. Additionally, they’ll take a deep-dive into the machine learning technology itself, and how IT professionals are actually leveraging it.

Data is a company’s most-valuable resource, but only if the value can be unlocked. For most companies, Machine Learning is the key to unlocking that value. It may still be the early days for machine learning technologies, but nonetheless, companies are still making big strategic bets on how they are going to run their businesses in the coming era of smarter software, both in terms of acquisitions and implementation. For a comprehensive look at machine learning – covering everything from the technological underpinnings to the financial outcomes in the sector – join 451 Research’s Research Vice Presidents Brenon Daly and Nick Patience for a webinar on Dec. 12 at 11am ET as they make sense of the machine learning market including how some key tech acquirers are participating in the rapidly emerging market. Additionally, they’ll take a deep-dive into the machine learning technology itself, and how IT professionals are actually leveraging it.

Is IBM-Red Hat deal reaction a sign of mega-deal fatigue? New survey sounds off

Key Analyst: Jay Lyman, Principal Analyst, Cloud Native and DevOps

Last week, we offered some initial thoughts about the IBM-Red Hat acquisition. We talked about how it seemed a strong move in favor of hybrid cloud strategies, although somewhat bittersweet for a disruptive, open source software leader like Red Hat to be acquired. Since then, we checked in with our 451 Alliance, surveying several hundred enterprise leaders to get their sentiments on the deal, as we did three years ago in a similar Voice of the Enterprise survey about Dell-EMC.
IBM Red Hat survey blog image 1 overall impressionsAt first look, the overall impression about IBM’s acquisition of Red Hat was predominately neutral (40%), with only 20% of respondents saying they feel at least somewhat positive about the announcement, and 23% saying they feel somewhat negative. Looking at this data made us think about our 2015 survey on the $67 billion Dell-EMC deal. Similarly, respondents to the Dell-EMC survey felt mostly neutral about the deal (50%), although other responses leaned more positive when compared to the IBM-Red Hat acquisition survey, where 24% felt somewhat positive and only 16% felt somewhat negative.

While the majority of respondents to both surveys had a neutral outlook, the IBM-Red Hat acquisition has a more negative impression by comparison. This acquisition should carry the same weight of the Dell-EMC acquisition, even though one is more focused on hardware compared to software. So why is the sentiment so different? It may be a case of mega-deal fatigue.
IBM Red Hat survey blog image 2 negative impression reasonsWhen respondents were asked why they felt negatively about the IBM-Red Hat deal, the top reasons were: the companies are not a good fit (22%), there will be more vendor lock-in (20%), and this deal will limit product innovation (13%). Considering the IBM/Red Hat survey's open-ended responses, many of our neutral respondents had an apprehensive and confused tone. In addition, a lot of them want to be sure that IBM doesn’t change the Red Hat model and products, while others don’t understand the value of the acquisition. 

As one respondent put it in the open-ended verbatim section of the survey: “Technology companies continue to purchase other technology companies, thus reducing the solution landscape. Consolidation continues and that is not a particularly a good thing.”

Despite this M&A fatigue, the way we look at it, M&A deals in this space can be defined as successful if “1+1=3.” In other words, something new and impactful needs to result from the deal. The key question is whether IBM can truly maintain Red Hat’s independence, model and culture and thus its value in the market. The potential is in continued availability and integration of Red Hat software such as RHEL and OpenShift across the major public cloud providers, and the power of IBM’s sales and channel to sell it. The peril lies in Red Hat simply getting absorbed into IBM – as we’ve seen with previous Big Blue acquisitions such as Informix, Rational Software and SoftLayer.
IBM Red Hat survey blog image 3 positive impressionsWhile IBM and Red Hat represent very different cultures, they are both open source-savvy companies – a point that survey respondents seem to acknowledge. They also highlight multi-cloud improvements as a driver of positive sentiment about the deal. Respondents with a positive outlook on the deal believe open source (21%) and multi-cloud (18%) will improve as a result. 

Our survey results indicate a muted impact in the minds of enterprise IT professionals, who may have grown weary of mega-deals and more limited options in the market. There is customer concern around culture clash, vendor lock-in, and diminished innovation. However, there is also customer enthusiasm for a complementary pairing, open source and multi-cloud improvement as the acquisition unfolds.

IBM and Red Hat are no strangers, having collaborated extensively on critical enterprise software such as Linux and OpenStack in the past. If the combined company can build on those collaborations and integrations, while also maintaining the critical collaborations and integrations Red Hat has independently forged with the likes of AWS, Google and Microsoft, then customers stand to benefit. If IBM imposes significant changes in how Red Hat or its employees operate, then customer fears about another good set of technology lost to consolidation may, unfortunately, be realized.

We will have more content on this deal coming soon in the Research Dashboard. For now, check out this deal analysis.

Our Voice of the Enterprise research offers survey-based insight into the minds of IT decision makers, and tracks sentiment and intentions about technology adoption, IT spending priorities and drivers, and vendor selection. Voice of the Enterprise: Servers & Converged Infrastructure provides ongoing enterprise perspectives on the shift from traditional servers to new, hybrid approaches to computing.

Expecting the future with 4SIGHT

The "Expecting the future with 4SIGHT" webinar will be held December 4, 2018, at 10:00 am ET. After that date, the recording will be available below.

Planning for the future is a complicated business. Organizations have to align business objectives with market forces and the technology that they hope will support them. Early stage technologies can offer tempting options, but it can be hard to quantify the risk in using them.

451 Research has distilled two years of conversations with their clients, demand-side research and the insight of their analyst team into a planning framework that can help organizations take on the future on their own terms. It’s not a quadrant, a wave or a platform. It doesn’t admonish you with prescriptive technology imperatives. It’s our collective view of the most important factors shaping tomorrow, so we can begin to plan today. It outlines trends that are pushing them and the assesses the maturity of the technologies that are behind them. We have identified four key "forces" that define all the trends we foresee: Universal Risk, Invisible Infrastructure, Pervasive Intelligence, and Contextual Experience. Whether you’re an enterprise, a vendor or a service provider, these forces, together or in part, are rocking your world, and 4SIGHT is an essential tool to plan for better future outcomes. This webinar will look at 4SIGHT capabilities and some of the outcomes that it can achieve, and explore some examples of 4SIGHT dialogs.

Join Eric Hanselman, Robert Mahowald and Simon Robinson for this webinar and see how you can raise your planning game!

IBM acquires Red Hat, but what does that mean?

Key Analyst: Jay Lyman, Principal Analyst, Cloud Native and DevOps

Earlier this week, IBM announced its intent to acquire Red Hat for $33.4 billion, causing quite a buzz across the entire enterprise IT industry. That makes sense, given that the deal represents one of the industry’s biggest software acquisitions to date, IBM’s largest acquisition to date and considering the repercussions for key segments including cloud computing, hybrid cloud, automation and DevOps, containers and Kubernetes.

It feels like the end of an era in addition to the end of the road with Red Hat’s acquisition. This open source software pioneer helped force the enterprise IT industry, including software giants such as Microsoft and VMware, to take open source seriously. IBM acquiring Red Hat marks the beginning of the new age of open source – one populated by established giants and newer open source endeavors such as the dozens of projects that surround and support Kubernetes. That new age is also all about hybrid cloud and cloud-native applications. From a technology M&A standpoint, at $33.4 billion this acquisition marks the largest software transaction we’ve tracked since 2002 – which is impressive and validates the importance and prominence of open source software in the enterprise IT industry.

The deal is also very much about hybrid cloud. According to our Voice of the Enterprise: Cloud Hosting and Managed Services – Budgets and Outlook survey from earlier this year, 58% of respondents cited their organization is pursuing a hybrid strategy. Almost half (46%) of respondents said they expect their businesses to increase vendor spending to spread out more across vendors, either new or existing, as part of their hybrid strategy. IBM and other major public cloud providers like AWS, Microsoft and Google have also broadened their reach in hybrid cloud, but it has been limited mainly to their own clouds integrating with on-premises environments. In IBM’s case, all those public cloud players are already key partners and integrations for Red Hat’s software such as RHEL and OpenShift – expanding IBM’s hybrid cloud reach even further. This deal also follows collaboration and integration that IBM and Red Hat have already accomplished on software such as Linux, OpenStack, and containers and Kubernetes.

Despite how this deal is beneficial for both companies, there is some risk. Upholding Red Hat’s culture could be a challenge during the transition, despite both companies acknowledging its importance. To maintain Red Hat’s strategy and momentum and take full advantage of it, IBM will need to maintain Red Hat’s globally distributed work force with many remote employees rather than to consolidate it. Allowing Red Hat to operate as an independent unit would prove beneficial for everyone.

The deal is also an interesting consolidation of PaaS, given IBM based its former Bluemix PaaS software – later to become its CaaS – on the open source Cloud Foundry software and Red Hat's OpenShift PaaS is based on different open source code. For a deeper analysis on the deal, current clients can check out our deal analysis in our Research Dashboard.