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Service Providers in 2020

mikeshaw747

CORE AND CONTEXT SERVICES

 

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It all starts with "core and context". I believe that by 2020 the majority of IT departments will focus on that IT that differentiates the business, leaving the non-differentiating IT to service providers.

 

The IT that differentiates the business is called “core”. The IT that does not differentiate the business is referred to as “context”.

 

Providing Context Applications

And there lies the first opportunity for Service Providers in 2020 – hosting the context services that IT has chosen to let someone else perform. The range of context services is huge – expenses, payroll, travel, training systems, HR performance management, email, collaboration tools, social media platforms, and sales force management, to name just a few.

 

Providing Context Business Process Steps

That’s context services. What about core services? A core service is typically a multi-step business process. The core/context rule can be applied to business processes too. There are core steps, steps through which IT can give the business differentiation. And there are context steps – steps that are generic and that don’t differentiate the business.

 

The context business process steps are more fine grain than the whole context applications we talked about above. For example, a context app might be “expenses”. While a context business process step might be “book a taxi” or “calculate the materials requirements of a new house build”.

 

Hosting Context Business Process Steps that Enterprises don’t want to run themselves

Context business process steps will probably be created by Enterprises, big and small. These Enterprises may well decide that running cloud services (customer management, billing, massive scalability) is not something they want to do. And herein lies the second service provider opportunity – hosting context business process steps that Enterprises don’t want to run themselves.

 

I believe that by 2020, we will see Service Providers who host a whole series of business process step “cloud services”. Service Providers will probably arrange themselves vertically. For example, you might see a Service Provider who has a collection of business process step cloud services for architects.

 

Business Process Management and Integration Services

By 2020, I believe that the typical business process will be a mosaic. A mosaic of process steps owned by Enterprise IT (the steps that provide differentiation) and “context” business process steps, supplied by cloud service providers.

 

How is the mosaic business process glued together? Using a business process management tool and thru integration technology that does format conversion.

 

And here lies the third opportunity for Service Providers – to provide business process management and integration tools as a service. Enterprises will probably want to run their own business process and integration tools, but small and medium size businesses may not. (I actually believe that business computing groups, independent of central Enterprise IT, may want to use business process and integration as a service too).

 

Providing Application Platforms as a service

Let’s further dissect the core business process steps – the ones that Enterprise IT owns because they provide differentiation.

 

Does Enterprise IT run the whole application? Possibly; but not necessarily. Increasingly, apps are built on platforms. While we used to think of SAP as an application, it’s increasingly being used as a high-level application platform from which applications are built. I believe that customers will increasingly look to someone else to run these high-level application platforms for them.

 

And herein lies the forth Service Provider opportunity – hosting high-level application platforms like SAP.

 

Summary of Core and Context Services

OK – that’s core and context …

 

  • Context apps will be provided by service providers
  • Many context business process steps will be created by Enterprises, but may well be hosted by Service Providers
  • There is an opportunity to provide business process management and integration as a service
  • High-level application platforms will be hosted by Service Providers

 

Let’s now look at the massive rise of smart devices and the role service providers can play in the smart device eco-system.

 

SMART DEVICES

 

I agree with Ericsson, who predict at least 50 billion smart devices by 2020. I also believe that much of the “smarts” in smart devices will come from the back-end cloud services to which they talk.

 

I think that the applications in smart devices will be created by business computing groups. These groups will probably also create the back-end services to which the smart devices talk.

 

Hosting Back-end Cloud services to which Smart Devices talk

And this brings us to our next Service Provider business opportunity. It is pretty likely that business computing groups won’t want to get into the business of running the backend cloud services with their unpredictable scaling needs, their user management and billing requirements and their security and compliance adherence needs.  I believe that Service Providers will offer hosting services for the cloud services to which these 50 billion smart devices will talk.

 

 

Maintenance Services for bungles of Smart Devices

Imagine the typical home of 2020. It will be stuffed with smart devices. What happens if they go wrong? How do will we know what is wrong with them when they do go wrong? We may need a “truck roll” to go to the home to repair the device. Same for factories and offices stuffed with smart devices.

 

I believe is an opportunity for companies to act as “smart device repair services”, having the skill to repair a range of smart devices in peoples’ homes, offices and factories.

 

Let’s now look at small and medium businesses (SMBs). We believe that the SMB market will be well served by Service Providers in 2020.

 

SMALL AND MEDIUM BUSINESSES

 

SMEs need to focus. They can’t afford to run applications that don’t differentiate them versus their competitors, or that don’t allow them to grab new business opportunities.

 

But they often don’t have the time to shop for each individual context application that they need. What they want is “plug-in and go”.

 

Bundles of “context” services so the SME can “plug-in and go”

And this brings us to our next business opportunity for Service Providers in 2020.  SMEs need someone to provide them with the basket of context applications they need to run their business. They need single billing across the suite; compliance and security checking verification across the suite; and if possible, data integrations across the suite.

 

So, there exists an opportunity for Service Providers to act as cloud service aggregators.

 

Generic bundles of services and Specialized bundles of services

I believe there will be two types of service aggregation.

 

The first is the obvious one – generic context services like payroll, expenses, travel, email, collaboration, sales force automation and so on.

 

The second will be specialized baskets of services. For example, there may be a basket of services that small pharmaceutical research companies need; or that architectural companies need; and so on. This latter bundling will require a vertical knowledge of the market(s) being served.

 

Big Data Analysis Services

We at HP are big believers in the future of big data. We see that the amount of data that we store and need analyze will increase massively by 2020 (44X times according to IDC).  This data increase will come from:

 

  • Micro-transactions. Today, information is recorded throughout a transaction, but we only keep data from the key points in the transaction. For example, masses of data are recorded from the engines during a flight, but much of it is thrown away.
  • Sensor data. I believe that by 2020 the granularity of data generated and recorded from sensors will increase, as will the number of sensors. For example, today we may record the number of cars passing, say, a traffic light. In 2020, we will know the type of car, its speed, direction, emissions and so on.
  • Unstructured data like social media interactions, voice and video.

 

The storage and analysis of this 44X increase in data is not easy and many SMEs may feel that they don’t want to defocus themselves doing it. So, an opportunity will present itself for Service Providers. They will provide a service to store and analyze “big data” on behalf of the SMEs, providing the SMEs with timely (real-time, if possible) insights from the data.

 

As with the specialized service bundles, I believe that this opportunity will also need market knowledge.

 

Supporting “Enterprise Mosaics”

I believe that the number of people directly employed in Enterprises will continue to fall, with agencies and “super-temps” being increasingly used for specialist, short-term projects.  We’ll find that one agency / super-temp will be serving a number of Enterprises at one time.

 

I believe that by 2020, tools will be created to support this working model. The key attribute of these tools will the management of data privacy in the workflows that the combined “mosaic teams” need to perform.  For example, an Enterprise may allow an agency to see some parts of collaborative documents, but not all.

 

I believe there is a business opportunity for Service Providers to create and provide these “privacy-aware”, workflow-based, collaboration tools. Because the agencies talk to many Enterprises and Enterprises talk to many agencies (it’s a many-to-many relationship), it’s perfectly suited to a trusted third party (i.e. a Service Provider) delivering the service.

 

SUMMARY

I believe that Service Providers will deliver many of the wondrous services available in 2020. Specifically:

 

  • Providing context applications (applications that are generic and don’t differentiate the business) like payroll, expenses, travel, email, collaboration tools
  • Providing context business process steps (business process steps that don’t differentiate the business). Either creating the functionality themselves or hosting services created by Enterprises
  • Providing business process management and integration services
  • Providing application development platforms like SAP as a service
  • Hosting the back-end services to which the 50 billion smart devices of 2020 talk
  • Providing maintenance services to bundles of smart devices in the home, in offices and in factories
  • Providing aggregated bundles of generic context services for SMEs
  • Providing aggregated bundles of specialized service for SMEs in a specific industry
  • Providing Big Data collection, storage and analysis services. Again, almost certainly focused on a certain industry
  • Providing many-to-many collaboration tools that support the workflow and privacy needs of the “Mosaic Enterprises” where Enterprises use mosaics of agencies and super-temps

 

I believe the future is very bright for Service Providers. 

 

Author : Mike Shaw

Mike Shaw
Director Strategic Marketing

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About the Author

mikeshaw747

Mike has been with HPE for 30 years. Half of that time was in research and development, mainly as an architect. The other 15 years has been spent in product management, product marketing, and now, strategic marketing. .

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