Dec 19, 2011
Sep 12, 2011
Aug 12, 2011
Jul 10, 2011
What is happening now?????
I am following it for the last decade and it usually can forecast IT market behavior.
I cannot understand the behavior NOW........ ???????
Apr 24, 2011
Apr 10, 2011
STKI Methodology
METHODOLOGY (Equilibrium Model)
Starting after our annual STKI Summit (this year it was our 18th) we maintain our market model and update it (our segmentation is adjusted when the market changes) constantly.
STKI activity year goes from Summit to Summit, in other words from 1 of April till the end of March. Our summit has been scheduled at a time that all budgets have been closed and we have time to meet and discuss them with clients. At that time vendors can also discuss the past year and new strategies with us.
What does STKI do ?
INTRODUCTION: How did it all start?
25 years ago when People & Computers (http://www.pc.co.il/), the Interdisciplinary Center for Technology Forecasting (http://ictaf.tau.ac.il) in Tel Aviv University together with IBM and Digital (I was in Digital at that time) tried to understand the Information Technology Market in Israel (with a clear focus on Hardware and Software Products).
The study highlighted the problems involved in making surveys in a small market with very few players. We received about 1000 interview results (by Tel Aviv University students) from vendors and users. We tried to get a result we could agree on but failed. The numbers showed that the procurement managers (although they agreed to the survey interview) distorted the truth. The vendors were sure to double or triple their sales numbers. If we added the “interview dollar results”; the amount that industries bought with what the vendors sold, there was a one to ten correlation.
After the unsuccessful first try, some of us (vendor marketing) decided to work together and try to share data that wouldn’t be used (by the others) except for the statistical results. So by 1986 we started sharing data for analysis (I am sure we all added a little to make our results better) and we started to get a picture of the market. Each one of us used the data together with their own analysis/methodology.
I tried to correlate data with account managers (sales) but found that when sales quotas are involved I couldn’t get a straight answer. I couldn’t get them to understand the difference between total IT spent and Digital’s sales potential in a certain account. Example: when an AS/400 or IBM Mainframe was in an account, Digital sales people didn’t count IBM sales in that account in their reports…. IT spent not relevant (they said).
Conclusions for the first Israeli IT Market studies:
1. Hardware and software could be checked (at that time) because there were import tariffs and they were in the public domain. The complication was that every vendor used different import categories for its products in order to minimize taxes.
2. Value added services were given as an add-on to hardware/software sales and was subsidized.
3. IT budgets sat on the table of CIOs and they were not going to share it with “students”.
4. Every vendor recognized revenue in a different way (i.e.: hardware/software recognized when installed or when used, project recognized when sold or when invoices are paid, percent of software recognized as revenue in Israel, percent of software maintenance recognized as revenue) and none represented the IT market that interested me .
5. Every user recognized his “IT expenditure” differently based on his financing, amortization and company budgets (i.e.: building, electricity, IT salaries and communication costs are not always in the IT books) and again none represented the IT market that interested me.
6. There were a lot of contractor/subcontractor relationships that blurred the real IT vendor in a project (a lot of double bookings). The vendor with the knowledge compared to the vendor that got the project.
7. Vendor evaluations in value added services should be done by a combination of the amount of employees in a certain area of expertise and the revenues in that area. Giving more value to “fixed price” projects than “cost plus with no SLA” project.
8. Israel has two areas where some of the vendors sell their products/services and none is really part of the IT Market:
a. Military Projects that are not IT projects had to be taken out of the market size. The IDF has IT units and those should be taken into account.
b. High Tech companies use computer professionals and buy software/hardware products to incorporate into their products (OEM) : this is not part of the IT Market. The same High Tech companies have IT departments and that should be counted.
9. The sum of all IT expenditures (from users) has to be equal to all IT sales (from vendors). This is called an EQUILIBRIUM MODEL. Most research firms are either a “demand-based” (market information based on data from users of IT) or “supply-based” (market information based on data from IT vendors). STKI is one of the only research firms using an equilibrium model in the world and the only one in Israel.
10. The three distinct markets (hardware, software and value added services) and their sub-parts have to be clearly defined (what it encompasses , the players and the buyers)
11. In some markets, international vendors sell direct and through partners that add value to the sale or not. We had to show the double booking and the value added.
12. This meant I had to define “Israel IT Market” so that it could be meaningful for both vendors and user departments.
13. We also understood that Public Companies presenting their annual reportsin good faith and under regulation but the financial reports do not show:
a. Real revenues of software licenses and maintenance.
b. Real revenues of hardware sales.
c. Differentiate between new projects and continuing projects revenues. New projects should count more.
d. Separate work/ products for OEMs and military non-IT projects.
e. Distinguish between work done by the vendor’s employees and work outsourced to another vendor.
f. Show the revenues from projects done in fixed price, cost plus (SLA defined) and staff augmentation (non SLA) projects.
g. Distinguish between work done by high level professionals in a project and staff augmentation employees in the clients IT department.
h. Distribution of profits between staff augmentation (highly profitable) and projects (less profitable).
STKI’s “Israeli IT Market” Definition & Model:
STKI definition of the Israeli IT market should include the following:
1. Basically we want to count everything that IT departments buy and vendors sell for the IT use in Israel.
2. While personnel expenditures of employees’ salaries is not counted, staff augmentation is counted.
3. Hardware expenditures are counted taking out any amortization and other financial amounts.
4. Software expenditures include licenses and maintenance costs.
5. Value Added Services had to neutralize contractor/subcontractor relationships and give credit for the project only to the vendor doing the actual work.
6. IT Market covers all “outside” expenditures of IT departments in Israel.
a. IT departments of multinational companies that have their headquarters in Israel are counted but not the expenses of subsidiaries outside of Israel that buy their products or services locally.
b. Only local expenditures of Israeli subsidiaries of multinationals are counted.
So what STKI analysts do during the year?
1. During the year STKI analysts meet with clients (users) and answer inquiries for them. 2010-11 we had over 600 meetings face to face with clients (CIOs and their managers) and answered over 2,000 inquiries. We also meet with groups of 15-30 users and discuss predetermined subjects (we call this round tables). Between 11/2009 till 3/2011 STKI hosted over 90 round tables. STKI runs about 30 surveys a year about subjects from security implementation to software development. In our interactions with IT users (e.g. CIOs, IT managers), our objective is to understand the role of IT in the organization and the corresponding IT strategy, as well as to gain an overview of ongoing and planned projects and strategic decisions. Furthermore, there is an exchange of thoughts on the users’ experience with IT vendors and their criteria for vendor selection.
STKI analysts are involved in:
a. Quality assessments of products and vendors
b. Strategy and architectural solutions
c. Procurement questions
d. Decisions on new technologies
e. Understand their budget
f. Help in best practices/staffing ratios for the Israeli Market
g. Much more
2. During the same time they meet with vendors and answer inquiries for them. During 2010-2011 we had over 500 face to face meetings and answered over 1,500 inquiries. We also met with over 60 vendors for vendor briefings (vendors describe their past performance and future strategies). Through the interactions with IT vendors we gain a profound understanding of the organization, portfolio, and the market positioning of the relevant vendors. This way we can assess the revenue information by different dimensions. Moreover, we discuss the market perspectives and outline our market development scenario.
STKI analysts are involved in :
a. Market understanding
b. Industries needs and projects
c. New products and services
d. Product packaging and marketing strategies
e. Much mor
So how does STKI deliver it’s research ?
To present our results we use several methods:
1. Trends and Technologies (look at STKI Summit presentations)
3. Israeli Vendor Tiers presentation s
4. Projects/services market positioning in over 100 categories
5. Israeli IT department Staffing Ratios
Mar 30, 2011
KM, BI and other enterprise applications presentations
KM, BI and other enterprise applications presentations
http://www.slideshare.net/Einats/presentations
http://www.slideshare.net/Einats/presentations
Security and other Infrastructure Services presentations
Security and other Infrastructure Services presentations
http://www.slideshare.net/shaharmaor/presentations
http://www.slideshare.net/shaharmaor/presentations
Mar 29, 2011
STKI Tiers......
As always (I have been doing this for over 25 years) vendors are angry with STKI about how we saw them in the tier research.
I know that the work is not perfect but it is the best that I can do.
I talked (personally) to over 130 CIO)s about what they did in 2010 and which companies did the work and how was it done: staff augmentation, time and materials or fix price. What was the scope of the projects, etc. The other 4 analysts did interviews and surveys to about 300 separate companies.
All the analysts sat with the vendors in a session called vendor briefing... during that session vendors went over what they did in 2010. Plus all vendors sent a survey putting numbers behind their work.
Finally, all analysts and myself sit together and do the rankings (using also the 90 round table materials).
It takes us a whole 45 days of full time work to finish our rankings.
STKI is sorry if any mistakes were done, we tried our best to be fair to big and small vendors .
STKI Summit 2011
Today at STKI’s 18th annual conference, 1,500 IT professionals heard five presentations showing the changes, intricacy and workings of the Israeli IT market. There were surprises and deep insights, which gave the attendees much to think about. STKI is the leading IT analysis company in Israel.
Dr. Jimmy Schwarzkopf presented his vision of the future for the next two years. Dr. Schwarzkopf showed the causes of the first technological implosion: PC Ecosystem; Client/server Ecosystem; LAN/WAN Ecosystem; Internet/Web Ecosystem; X86 Ecosystem and Relational DBMS Ecosystem, and the second technological implosion: Mobility Devices Ecosystem; Cloud Services Ecosystem; Analytic tools/appliances for data boom and Social Commerce Ecosystem.
Dr. Schwarzkopf spoke of the 5th generation of computing, showing how cloud/mobility lead to democratization. Dr. Schwarzkopf maintains that social commerce and core applications, mobility devices and applications, data boom and analytics and hybrid cloud services all come together to form a knowledgeable economy. He called on CIOs to recognize and accept the game changers:
· Support business model innovation
· Consumerized IT and knowledge individuals
· Death of technology and multi-channel strategies
· Birth of business process and multi-touch point strategies
· Curated Computing
· Storage and bandwidth
· New OS for the Internet
· Hybrid, private and public clouds: BPaaS; PaaS; SaaS; IaaS
· Web 2 + 3
· Gamification
· Sensors
· New data base and analytic toolsNew generation of appliances
· Mobile Apps
· E-bizz
· New generation CORE applications
· IT and Marketing
The second part of Dr. Schwarzkopf’s presentation dealt with the ranking of 350 Israeli companies according to 200 categories. For the fifty-two vendor companies showing their products at the conference, as well as for all the other vendors present, this was the highlight of the conference and what they had all been waiting for.
The Israeli IT firms serve their clients in three different categories; very few of them are active in all three groups: hardware, software and the biggest of all, the value-added services. (see pictures included).
During the presentation all Vendor CEOs wait for the results of the tiers in the Value Added Services category. This is the category where the local integration and development companies compete.
Software and hardware categories are usually comprised of international vendors that import their hardware and/or software.
Galit Fein, the STKI analyst in charge of Office of the CIO, mobile and sourcing found that the Israeli culture differs from global demand, and therefore Israeli companies should not place too much value on results of international surveys.
Shachar Maor, STKI analyst in charge of security, networking and Green IT, says Cloud Computing is here to stay. Information Security is an EASY showstopper, but CISOs will have to be agile and creative in order to keep up with the trend.
Pini Cohen, the STKI analyst in charge of infrastructure and software development, draws attention to the huge amount of storage needed by Israeli companies according to his survey.
Einat Shimoni is the STKI analyst in charge of software applications.
Nov 11, 2010
The new mobile world
Check out this SlideShare Presentation:
The new mobile world
View more presentations from Dr. Jimmy Schwarzkopf.
Sep 17, 2010
Is the Bank of Israel fudging data ???
downloaded in July 2010
downloaded in September 2010
If you compare both pictures (deviation from the trend of State of the Economy Trend) you can see that the values for months April-May have been changed......
How can the Bank of Israel Research Department do that ? Why?
Can we trust them???????????
I hope there is an explanation for it or we live i a third world country.....
Aug 5, 2010
What happenned in 2Q2010 ?
This is the graph of the Deviation from the Trend (State of the Economy Index of Bank of Israel). Over time we have found correlation between this index and the IT spending Index of STKI.
we can see that the correlation continues:
Q2 in IT was a bad quarter not as bad as last year's but something happened.
We feel that it was a 60 day downturn that has corrected itself.
Our vendor felt it but couldn't explain it.
I feel the same.
for information on the index:
Jul 24, 2010
The Statics and Dynamics of the Mutual Fund Industry
This talk is an overview of my son's work as a graduate fellow at the Santa Fe Institute on different aspects of the statics and dynamics of the mutual fund industry. They began with the question of how much control is concentrated in the hands of the largest mutual funds. Then they study the distribution empirically and show that it indicates less concentration than, for example, personal income. Argueing that the dominant economic factor that determines the size distribution is market efficiency and as a result the mutual fund industry can be described using a random entry, exit and growth process.
Is “curation” the answer for IT complexity?
Introduction to “curation”
Welcome to the new decade. This new decade will be remembered for the complex environments the previous decade left us with and how we dealt with them.
The interconnected and interdependent economic environment, the new competitive arena and the new technologies available have left most of us grasping to find a way to minimize risk in what we do and offer to our organizations and clients.
Even our private worlds have been turned upside down with new emerging cultural practices. The philosopher Prof. Zygmunt Bauman used the term “Liquid Modernity” in order to explain this new complex and rapidly changing state of affairs. As a technologist I recognize that information technology and the digitalization of knowledge have been at the center of this revolution.
In order to survive we will have to do several things in order to reduce complexity or better still, cope with it. Complexity usually can be handled by innovation, simplification, management techniques and standardization.
While flying to visit my new born grandson last month several important things happened to me besides the fact of becoming a grandfather.
Coming to a new city I looked for museums to visit and the nice passenger beside me explained all about how a museum visit is basically a “simplified” (in IT terms: vanilla) tour organized by the “curator”. This curator looks at all the artifacts the museum owns and can get from outside sources in order to organize the perfect (in his view) experience for the visitors he thinks will come and enjoy it. He defines the visitor, the experience and then organizes the show.
The second was when I read an opinion piece by Forrester analyst Sarah Rotman Epps where she talks about how the -“iPad ushers in a new era of personal computing that we call "Curated Computing"—a mode of computing where choice is constrained to deliver less complex, more relevant experiences. Let me repeat that, because it's the essence of the Curated Computing experience: less choice; more relevance”- . Given that I had just learned about curators this really hit home.
The third was that I had to prepare a presentation about IT innovation to be presented when I returned. While trying to connect cloud, SaaS, PaaS, multichannel marketing, mobile technologies, new hardware industry in a box products, new ERP/vertical software packages and other new innovations I realized what is happening and I will use the following term for it. Curated Computing.
What I am trying to say is that all the above terms represent very complex technologies that the vendors have simplified in order to make our and our company’s life easier. Every vendor has simplified in a different way, each one has a different way to do it and we (the users) have to choose the one that comes closer to the experience we want.
In other words we choose the CURATOR that fits our way of managing complexity.
How can “curation” fit into IT history
If we look at the above graph we can see “curated “ computing as the fifth generation of computing.
The first generation was very autocratic and we could say dictatorial. The data center was the king, programmers served the center and optimized their applications so that the “king computer” could process their command optimally. This was done without concern for the users, as they were secondary.
Then the PCs came, woow what a difference. Users could finally do their own thing without asking the Data Center for permission. They could even have the same software in both the office and at home. CIOs fought unsuccessfully against the use of PCs in the firm. At the end it democratized the end user experience.
The third generation opened up the world of information to everybody. We didn’t need the company’s librarian or information specialist who used to get us the needed information. We were free. Again CIOs fought unsuccessfully against free use of internet in most places. They said we all were porno junkies and that a securitywould be breached. Most companies found a way to democratize information to most employees. At home we were all free.
Next came SOA. The real term means “service oriented architectures” although some CIOs will call it “same old applications”. What did SOA bring? It allowed applications in the company and of outside partners to share data. This revolution came at the same time that users understood that IT basically had to provide automation for business processes and analytics. With SOA data collected in one part of the company was available to others without much IT investment. SOA democratized data bringing finally the dream of one version of the truth throughout the company.
Now we are entering the “curated” computing era. I am sure that many CIOs will fight this but they will lose again. We will choose vendors by looking at how they curated a certain IT problem our IT users want solved. Because this process allows vendors to sell their solution as is to many clients , the price is reduced; some of them will charge “on demand” and so smaller companies or departments with few users of a certain application will be able to afford the product. In other words, application democratization.
Curated computing everywhere
CURATED computing is here and we will all use it at home, in the office and wherever we are.
Cloud Computing, SaaS, PaaS and other forms will allow us to use “curated” IT products on demand. This means by user/month. Mostly we won’t be able or want to make changes and will use it as the vendor/curator designed it.
ERP/vertical software packages: most companies will look and decide according to the vendor/curator road map and strategy. Minimum amount of changes will be done in order to be able to move easily into the future that the vendor/curator mapped for us.
Hardware/industry in a box appliances: several vendors like NCR (Teradata), Oracle (Exadata), Cisco (Vblock), HP (Matrix) and IBM (CloudBurst) among others offer an appliance that the vendor/curator optimized for certain uses. Goodbye to buying multipurpose hardware and then integrating it at great cost for database servers, application servers or other uses.
In the mobile world we are all asked to make sort of a decision that has many consequenses. We have to decide the curator of our phone/tablet world. We are deciding between Apple and Google or maybe between Apple and Microsoft or even between Blackberry and Nokia. Our decision will influence our banks, insurance companies, medical and other service providers. They all have to provide us service no matter who our vendor/curator is. They will have to support us on our terms, exactly as our vendor/curator dictated. No extra complexity for us, the user, although for IT complexity might increase.
Welcome to the new simplified and curated world.
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