Market Transitions 2008 Michael O’Neil CEO and CCO, IT in Canada The IT/Business Landscape, and its Impact on Your Business Success

Agenda Technology Landscape Opportunity IT/business landscape IT business landscape Business landscape What distinguishes “free is fine” from “it’s okay to pay”? What the non-technical senior manager needs to see What this means for CRM/”xRM”

How the Market is Changing “The most powerful force in the universe is compound interest”

Demographic Milestones

Incoming and Outgoing CEOs: Fortune 500 Organizations, Average Age Age at Time of PC Introduction 25% of incoming CEOs 8% of outgoing CEOs Total Change: 12% of organizations

Other Management Data Points: Average Age at Time of PC Introduction 10 Spencer Stuart CEO survey UK survey of chief execsSpencer Stuart New CEOForbes C-level exec surveyTD Madison VP placementsTD Madison directors/mgrsExec MBA students New executives are much more likely to be “tech savvy” than their predecessors

What Does This Mean to You? (1) More non-IT executive involvement in IT purchasing likely results in: –Larger decision making groups –Longer sales cycles –More need to describe technology benefits in non-technical terms –More emphasis on products focused on addressing identifiable business issues – less on infrastructure for infrastructure’s sake

The Way of All Solutions (or, what happens when you go looking for a silver bullet) Alignment with Business Requirements Capability of Underlying Technology Field of Dreams Madly off in all directions

How the IT Business Landscape is Changing “Give me a place to stand and I will move the earth”

Leverage Through Partnerships Product Vendor Solution Implementation Partner

Leverage Through Partnerships Vendor Resale partners Implementation partners ISV partners

Leverage Through Partnerships

Another Source of Leverage

Cloud-delivered services are changing the definition of leverage for IT suppliers of all sizes and business models –Remote provision of applications, remote user support, remote infrastructure management, remote processing and data storage… No longer a “specialist” offering – important to all suppliers Organizations that do not currently have a cloud offering will need to build one – or more likely, partner to acquire one

Recent SP Survey Results Source: Amazon Consulting/Ziff Davis “Who Owns the Customer?” survey, May 2008

What Does This Mean to You? (2) More non-IT executive involvement in IT purchasing More breadth of opportunity for firms who… –Are effective at establishing and managing partnerships –Are effective in using the web to establish leverage for their businesses

The Broader Economic Environment "I don't think we're headed into a recession, but there is no question we are in a slowdown."

Key Industry Markets: 2007 and 2008 Source: IT in Canada study of SPs; n=56

Another View of 2008 Source: IT in Canada study of SPs; n=56

Another View of 2008 Source: IT in Canada study of SPs; n=56

What Does This Mean to You? (3) More non-IT executive involvement in IT purchasing More breadth of opportunity for firms who… –Are effective at establishing and managing partnerships –Are effective in using the web to establish leverage for their businesses The current market environment is difficult… –Key industries, geographies, and size-defined target segments are more likely to show contraction than expansion in However… Solution-defined segments show continued opportunity for growth –Consistent with increased involvement of non-IT executive buyers –But – what about the “madly off in all directions” issue?

The Current Technology Environment The architectural inconsistency that underlies the “madly off in all directions” syndrome is becoming less likely – because there is less scope for architectural inconsistency in the current technology environment From a software perspective, 4-5 ecosystems dominate the market

What Separates Free from Okay to Pay? The sense that the data is privileged and important –Helps define some application areas as “likely to gravitate to freeware” and others as “likely to be in the paid application domain” The value of the business process attached to the application –Defining “payback”: the benefit of application vs. cost More revenue Increased employee productivity –In a services environment, this latter factor is especially important – and services environments account for roughly 70% of Canadian GDP

What Does the Non-Technical Executive Need to See? Solutions focused on tangible, immediate business issues –References that demonstrate the ability to solve my problem, not a problem Sales/marketing language that provides clear links to business objectives –Benefits defined in terms of business problems rather than technological issues Evolutionary capabilities as a primary function of the ongoing relationship –Calls are triggered by business events, not technological domains –Customer is more interested in “your ability to solve this problem” than how you solve it A partner-driven approach is far better than no approach!

What Does this Mean for CRM/”xRM”? The sales function – and its associated cost – is an enormous issue in services-oriented environments –Customer value is seen in terms of ongoing interaction, not individual transactions –Differentiation and positioning is often based as much on relationship as offering attributes –“Corporate memory” and a thorough understanding of the “whole customer” are crucial to successful interactions/relationships Front office functions have historically been poorly automated Therefore… –There is relatively more scope for new technology approaches –There is a real opportunity to “connect the dots” of business benefit addressing high-priority management issues for the non-IT executive buyer

What Does This Mean to You? (4) More non-IT executive involvement in IT purchasing More breadth of opportunity for firms who… –Are effective at establishing and managing partnerships –Are effective in using the web to establish leverage for their businesses Solution-defined segments show continued opportunity for growth Applications that address high-priority management objectives – increasing revenue, and/or increasing the benefit derived from high-cost resources – are most likely to resonate with non-IT executives

Thank You! Michael O’Neil