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COVID-19 pushes automation to the forefront of business strategies

Automation shifts from a discussion to an imperative across all industries

The decision to embrace automation typically requires an organization to engage in careful strategic planning and analysis over a period of time. On one hand, automation enables a level of efficiency, consistency and quality that manual deployment alone cannot achieve. On the other hand, skeptics have long questioned the point at which automation can go too far and how to find balance and decide which tasks should and should not be automated. That debate is now over, as the deployment of automated processes and technology is imperative to fill in the innumerable voids in a new reality where COVID-19 is not just part of our vocabulary but a new abnormal in which we all live. 

Past discussions of whether to automate were typically highly dependent upon factors like industry vertical, whereby sectors with a heavy manufacturing arm, for instance, were much more likely to embrace automation than others. Massive staffing shortages are now the primary driver behind the call for widespread automation, and the interest has manifested itself in multiple forms, such as the deployment of robots, drones and AI — technologies that are being leveraged by industry verticals across the board.

Staffing shortages have affected every grocery store and pharmacy, and many are relying on robots to transport goods from warehouses and stores to delivery vehicles. In agriculture, there has been an increase in the use of terrain-based robots to convert agricultural units into disinfectant sprayers. In manufacturing and delivery, Baidu (Nasdaq: BIDU) has partnered with Neolix to deliver critical items such as food and supplies to hospitals in Beijing with the use of the Apollo autonomous vehicle. Baidu has additionally applied AI algorithms to track the spread of infection and predict where the next hot zone may crop up so that local facilities are better prepared. While the number of riders of public transport has plummeted, railways, buses and subways still must operate even if on a skeleton schedule. The deployment of automated technology such as self-driving trains has increased dramatically, as has the use of robots to disinfect and clean cars.

The healthcare industry faces the most pressing challenges as it seeks to employ remote workforce programs and develop scalable solutions on an emergency-fueled time line. While some degree of on-site presence is unavoidable, the risk is being mitigated, in some cases, by the use of disinfection robots, which were deployed by Xenex Corp. to over 500 hospitals in China and are also now being shipped to Italy. Drone delivery of medication is anticipated to be the next wave of automation, and companies like Drone Delivery Canada (DDC) Corp. predict that they will become commonplace, and soon. DDC President and CEO Michael Zahra stated, “The company is in dialogue with governments at various ministries and levels emphasizing that the current situation is an ideal use case for our proven drone logistics solution to limit person-to-person contact; bring needed medical and pharmaceutical supplies to remote, rural, and suburban communities; transport blood samples to laboratories for testing; and deliver other relevant supplies.”

The application of automated technologies is clearly not confined to one area and will continue to ease the burden that COVID-19 has placed on all of our lives. When the pandemic eventually subsides, the silver lining to the shortages, panic and crippling effect on the economy will be that healthcare providers, companies and individuals will be more apt to embrace the use of automated technology in almost every aspect of their daily lives.

Click here to listen to this audio clip, COVID-19 Business Impacts | Remote Work, in its entirety.

Two Back, Three Forward: Go-to-market strategies matter now more than ever

In our new weekly blog series Two Back, Three Forward, we look at two numbers in TBR reports from the prior week as well as three numbers from our upcoming reports, highlighting the analysis TBR provides and the vast amount of data — the numbers — we’re working with every day. It’s all about the data and what that data means to you.

Two Back

13, questions answered during our recent Digital Transformation Insights webinar: After presenting findings around digital transformation customers’ adoption of AI services and discussing some of the challenges across the market, Principal Analyst and Practice Manager Patrick Heffernan and Senior Analyst Boz Hristov fielded questions from attendees on industry-specific examples, selling software “as a Service,” understanding resource planning by both IT services vendors and their customers, and more. If you missed the webinar, check out the replay here.

4.34, total average TBR score for T-Systems: T-Systems is rated “challenged versus peers” in only Financial Model, one of the three categories on which TBR scores companies it tracks; the company scored essentially average in Go-to-market & Services and Resource Management.The company’s score has steadily crept upward. According to Analyst Kelly Lesiczka, “T-Systems continues down the path of transformation to improve its business operations and management as well as realign its portfolio to support growth areas such as IoT, security and cloud. We expect the overall score will increase behind go-to-market improvements, specifically in revenue and revenue growth.”

Three Forward

60.7%, Dell Technologies Services’ North America revenue, as a percentage of overall global revenue: As detailed in TBR’s upcoming full report, Dell Technologies’ $1.8 billion North Americas revenue in 4Q19 reflects continued success in driving new business and attached services opportunities in the region, benefited by the company’s robust partner ecosystem and traction from its sales and go-to-market strategies. In contrast, Dell Technologies’ revenue flattened in EMEA and declined in APAC for the third consecutive quarter. Macroeconomic conditions in those regions do not bode well for a turnaround in early 2020. 

30K, cloud projects completed by Accenture and curated for the company’s MyNav tool: Hristov’s upcoming event perspective on Accenture’s 2020 Technology Symposium will include his assessment of the MyWizard, MyConcerto and MyNav tools. Additionally, he will explain what it means to Accenture that every company is a technology company and how cloud sits at the heart of innovation.

$5B, the price of DXC Technology’s announced sale of its State & Local Health and Human Services business to Veritas: In January we noted DXC Technology’s intention to sell off parts of its healthcare IT services business and predicted the state and local practice would remain intact at DXC, based on its sustained success and apparent profitability. In a future blog, TBR will re-evaluate its overall position on DXC Technology as well as the vendor’s placement in our Healthcare IT Services Benchmark.

Establishing realistic expectations for AI potential requires vendors to address economies of change management first, technology second

AI is one of the technologies that will help standardize the digital transformation (DT) market and turn the wildly loose use of the term digital into tangible business results. Though the technology sparks urgency for many buyers to accelerate the execution of their DT programs, they need to carefully balance messaging with external and internal stakeholders around the possibilities with shutting out the critics, many of whom project AI will kill jobs.

Principal Analyst Patrick Heffernan and Senior Analyst Boz Hristov dug into this topic this week during TBR’s webinar, Are digital transformation buyers ready for AI? The webinar covered insights into buyer’s AI readiness, AI market maturity and opportunity, and more. Check out the replay any time on TBR’s YouTube channel.

Additional reports recently published by TBR’s analyst teams

4Q19 Lenovo Group: PC business performs well ahead of COVID-19 impact

Lenovo’s Data Center Group has the right investments in place to thrive in 2020. Its services business is picking up, the channel program is armed with new leadership ready to expand and its portfolio is aligned to address emerging demands like the edge. However, macro factors such as supply chain implications of COVID-19 and server market softness will likely impact financials for the next year or so despite strategic investments.

4Q19 Atos: Establishing an industry-led organizational structure

In 1Q20 Atos’ new CEO, Elie Girard, will implement a new industry-led organizational structure with six global industries and five regional business units that has been in the works since early 2019. The new structure will reshape Atos’ portfolio and go-to-market approach to better align with clients’ specific industry needs. This is a positive move for Atos that will accelerate its transformational activities with clients; however, Atos will have to expand its bench of business consultants with industry expertise to successfully compete with established industry-specialized providers, such as Accenture.

4Q19 ManTech: Aggressive efforts across the board lead to outstanding results

ManTech’s performance in 2H19 underscores the company’s success with its core Department of Defense (DOD) and Intelligence Community (IC) customers as well as the alignment of its services and solutions portfolio with federal IT spending priorities, especially in areas such as space and cybersecurity. DOD and IC budgets continue to expand, presenting a great opportunity for ManTech to capture more spend from its largest customers. ManTech has also been very judicious in its recent acquisitions, gaining access to new agencies as well as new capabilities that should allow the company to expand revenue growth with additional new customers.

4Q19 T-Systems: Leveraging digital and agile to drive profitable growth

T-Systems is better equipped to upsell growth areas on its own platforms as well as support its partners’ digital platforms with migration and managed services. Improving access to technology and industry areas within Deutsche Telekom allows T-Systems to fill portfolio gaps without pursuing acquisitions. However, as T-Systems refrains from acquiring or forging a strategic alliance around consulting services and maintains a relatively small practice compared to peers, the company could be restricted to managed services and integration services opportunities, hindering its ability to diversify revenues.

AI, Accenture and Amazon: HITS acquisitions update 2020

Accenture’s steady appetite, Amazon’s potential new offering and Google’s uncertain moves

Accenture’s acquisition of Clarity Insights follows the company’s INTIENT purchase and rounds out a typically active acquisition year for one of the leaders in TBR’s HITS benchmark. Clarity Insights brings Accenture AI and machine learning capabilities, 350 healthcare data scientists, and healthcare industry clients. As noted in our most recent full report on Accenture’s HITS business, “Accenture targeted the AI opportunity in life sciences in mid-2019, launching its INTIENT platform for collecting, storing, monitoring and analyzing data from life sciences clients’ business environments. The platform leverages Accenture Applied Intelligence to provide AI and analytics services, improving efficiency and data management.” Beyond extending Accenture’s capabilities, the Clarity Insights acquisition reinforces Accenture’s strategy around AI and life sciences that the INTIENT purchase supported. The report adds, “TBR believes Accenture must foster industry-specific partnerships to extend the capabilities of INTIENT and drive traction for the platform in the industry.” TBR will closely track how Accenture’s partnerships evolve and how the company drives new revenue based on these acquisitions.

Echoing Accenture’s focus on AI, Amazon acquired Health Navigator, a platform designed to foster more expeditious collaboration between healthcare providers and patients, in part through natural language processing and enhanced analytics. Amazon reportedly purchased the company amid efforts to build out Amazon Care, its in-house healthcare services, which it launched in September 2019. On the surface, Amazon’s healthcare-related acquisitions and moves denote neither an immediate threat to traditional HITS vendors nor a clear signal Amazon intends to become a different kind of player in the HITS space. Analyzing Amazon only on the surface would be foolishly shortsighted. Once the company irons out the challenges within Amazon Care, including fully integrating Health Navigator, TBR expects the company will craft a new offering for Amazon clients, potentially starting first with healthcare joint venture partners JPMorgan (NYSE: JPM) and Berkshire Hathaway (NYSE: BRK.A; NYSE: BRK.B). At 1.2 million employees for those three companies combined, Amazon would have a sizable test bed for enhancing current capabilities and developing new offerings. If Amazon can demonstrate an ability to provide top-notch healthcare services for its own employees and a few select partners, every household will wonder if the first step in getting healthcare should start with, “Alexa …”     

In acquiring Fitbit, Alphabet (Google) alarmed some data privacy and industry analysts concerned that the search engine and advertising giant bought the wearables company to gain access to massive amounts of personal, and specifically healthcare-related, data. Both companies’ executives declared data protections would be unchanged and the underlying reasons for the acquisition centered on Fitbit’s expertise and intellectual property around wearable devices and health-tracking applications, platforms and user experience. In TBR’s view, acquiring Fitbit conforms with Google’s overall expansion strategy and specifically boosts the company’s potential role in the overall HITS space. Enhancing Fitbit’s platform with Google’s AI capabilities could further minimize perennial HITS challenges, such as around data privacy and population health, but only if Google can manage the delicate tasks of leveraging user data without violating privacy, crafting and enhancing algorithms that improve the user experience, and maintaining the streamlined seamless flexibility of Fitbit even as the data flows into the highly regulated healthcare ecosystem.  

Are digital transformation buyers ready for AI?

An exclusive review of TBR’s Digital Transformation Insights Report: Voice of the Customer and Digital Transformation Insights Report: Emerging Technology

AI is one of the technologies that will help standardize the digital transformation (DT) market and turn the wildly loose use of the term “digital” into tangible business results. Though the technology sparks urgency for many buyers to accelerate the execution of their DT programs, they need to carefully balance messaging with external and internal stakeholders around the possibilities with shutting out the critics, many of whom project AI will kill jobs. Join us March 11 to discover what vendors need to know to compete effectively for AI-related opportunities in the quickly evolving DT market.

Join Patrick Heffernan and Boz Hristov as they dig into how enterprise adoption of DT solutions is evolving, with a specific focus on AI. Based on enterprise adoption research, TBR will give a snapshot on today’s digital transformation services marketplace.

Don’t miss:

  • The state of adoption for DT technology and services
  • Insights into buyers’ AI readiness
  • AI market maturity, opportunity and winning AI vendor strategies

TBR webinars are held typically on Wednesdays at 1 p.m. ET and include a 15-minute Q&A session following the main presentation. Previous webinars can be viewed anytime on TBR’s Webinar Portal.

For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].

IoT settles in for the long haul

Insights from TBR’s 2020 Devices & Commercial IoT Predictions

Join Principal Analyst Ezra Gottheil and Analyst Eric Costa for a presentation on TBR’s predictions for 2020 and beyond, concerning both devices and commercial IoT. IoT is playing an increasing role in the application of IT to business, and in IT spending, but it is not drawing as much attention as it once did. The role of AI in IoT is somewhat less than first expected, but it is still important. In the world of devices, voice interfaces and other conversational interfaces are due for explosive growth.

Don’t miss:

  • How customers and vendors are treating IoT, and how treatment has changed
  • The more purposeful role of AI in IoT
  • How the conversational interface, and smart speakers, have only begun to demonstrate their relevance

TBR webinars are held typically on Wednesdays at 1 p.m. ET and include a 15-minute Q&A session following the main presentation. Previous webinars can be viewed anytime on TBR’s Webinar Portal.

For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].

Leading CSPs and webscales implement new ICT architecture to fully capitalize on digital era

Insights from TBR’s 2020 Telecom Predictions

Key technologies, most notably cloud, virtualization, 5G, edge computing, AI and machine learning (ML), are coalescing to usher in a new era, commonly referred to as the digital era, but also referred to as the 5G era or the fourth industrial revolution (Industry 4.0). It is widely expected that during this era, industries will be fundamentally transformed, people’s lives will be greatly enhanced, and productivity will enter a new phase of sustained growth, all of which will contribute to an economic boom and improved standard of living. Communication service providers (CSPs) have a golden opportunity to play a critical role in the digital era by providing not only ubiquitous, intelligent connectivity but also value-added services that participate in and enable this economic development.

TBR’s research suggests 2020 will be a springboard year for the telecom industry’s development of the new architecture, with spend in the key markets of 5G, network virtualization and edge computing poised to ramp up significantly through the middle of the next decade. TBR also anticipates that systems integrators will play a much broader and key role in helping CSPs transform their businesses and networks and that webscales will increasingly encroach on CSP turf as they concurrently pursue new value created from the aforementioned technologies.

Join Principal Analyst Chris Antlitz on Feb. 12 as he provides leading-edge analysis on where the telecom industry is heading and how the digital era will impact stakeholders in the telecom ecosystem.

Don’t miss topics including:

  • Why webscales are building out the edge
  • How the open RAN and vRAN markets are developing
  • Why systems integrators will play a key role in CSP transformations

TBR webinars are held typically on Wednesdays at 1 p.m. ET and include a 15-minute Q&A session following the main presentation. Previous webinars can be viewed anytime on TBR’s Webinar Portal.

For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].

Technology Business Research, Inc. announces 1Q20 webinar schedule

Technology Business Research, Inc. (TBR) announces the schedule for its 1Q20 webinar series. The quarter’s webinars include TBR’s research predictions for 2020.

Jan. 8            A decade in, cloud’s real work begins

Jan. 15         Hardware commoditization pushes vendors into new ventures        

Jan. 22         The end of ‘digital’

Feb. 5           IoT settles in for the long haul

Feb. 12         Leading CSPs and webscales implement new ICT architecture to fully capitalize on digital era

Feb. 26         The emerging and evolving landscape of enterprise edge computing

March 11     Are digital transformation buyers ready for AI?

March 18     Enterprise adoption of private cellular networks poses opportunities and threats for telecom industry

TBR webinars are held typically Wednesdays at 1 p.m. EST/EDT and include a 15-minute Q&A following the main presentation. Previous webinars can be viewed anytime on TBR’s Webinar Portal.

For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].

Ericsson’s focused strategy and strong 5G position yield results

TBR perspective

Ericsson’s recovery continues into its third year, evidenced by revenue growth and expanding margins, trends that TBR expects to continue in 2020. A strong 5G position with respect to both RAN and mobile core is a significant driver of this improvement as Ericsson’s early technology bets and increased investment in Networks unit R&D are spurring CSP adoption of Ericsson’s competitive 5G portfolio. Ericsson has notched high-profile wins in 5G and grown its market share at Huawei’s and Nokia’s (NYSE: NOK) expense thanks to ERS, which offers an attractive total cost of ownership and a powerful baseband unit. As restructuring progresses, Ericsson will shift from an emphasis on cost reduction and efficiency to a disciplined growth mindset, evidenced by the recent acquisition of Kathrein’s antenna business and an effort to poach LTE customers from rivals for 5G upgrades. With China deploying 5G en masse in 2020 and the next wave of adopters expected to roll out through the early 2020s, Ericsson has the ability to wring a few more years of growth and market share gains from this cycle.

TBR views Ericsson’s turnaround as a success, but multiple headwinds will take shape over the next few years, such as vRAN; the rise of disruptive startups like Altiostar, Mavenir and Parallel Wireless; and uneven CSP spending. TBR believes Ericsson has baked 5G market share gains in China into its 2020 guidance. These gains are likely to come at Nokia’s expense.

Long term, Ericsson is hoping that emerging businesses including IoT Accelerator, Edge Gravity and eModo scale up. The company needs to succeed in an area outside of RAN and core to maintain share, but Ericsson is not currently preparing to expand its addressable market in terms of enterprise verticals.

Ericsson (Nasdaq: ERIC) hosted its annual Industry Analyst Forum in Boston, bringing along a range of executives to provide an update on the company’s corporate strategy, which includes continued restructuring, particularly within Digital Services, as well as infusing AI and automation across key product areas and selective expansion in emerging technology areas. 5G, however, was the dominant topic due to Ericsson’s market share gains spurred by the Ericsson Radio System (ERS), which is optimized to meet the cost-conscious needs of communication service providers (CSPs). Similar to last year, the tone of Ericsson’s 2019 analyst day was upbeat as the company continues to execute its focused strategy — now in its third year — which is driving improvement in its financial metrics. Following the main session, analysts could attend three tracks — Building the Network Platform, Automation in 5G Operations, or New Business Opportunities for Service Providers (i.e., IoT, private cellular networks and fixed wireless access [FWA]) — and then participate in one-on-one speed meetings.

Traditional business models continue shifting for management consultancies

This week TBR publishes its semiannual Management Consulting Benchmark, and Senior Analyst Elitsa Bakalova notes the following: “Vendors compete for holistic transformation opportunities and expand the breadth of their portfolios and resources to provide clients with offerings that augment consulting value propositions by integrating consulting with IP-based solutions and managed services. As consulting teams continue to diversify, combining consultants with data scientists, designers and solution architects, vendors’ strategies around human resource management will prove increasingly vital to long-term success. Recruitment will need to be paired with employee engagement initiatives, corporate social responsibility tactics and performance management systems that attract and retain top employees.”

Additional assessments publishing this week from our analyst teams

“DXC Technology’s leadership, headed by the company’s new CEO Mike Salvino, is actively pursuing strategic alternatives for three of DXC’s businesses: U.S., state and local health and human services; business process services; and workplace and mobility. TBR believes DXC’s decision to spin off these businesses will provide the vendor with much-needed capital to continue to scale out its digital healthcare portfolio, particularly as it comes under increasing competition from digitally fluent vendors including Allscripts and Cerner in core markets, such as electronic health records (EHR).” — Kevin Collupy, Analyst

“As Deloitte morphs its value proposition toward an ‘as a Services’ firm, bundling proprietary IP in service contracts helps it drive profitable growth. At the same time, attaining and retaining IT trained staff can prove difficult for a legacy consulting firm, compelling Deloitte to explore new ways to increase retention.” – Boz Hristov, Senior Analyst