Vision for Application Providers

Micro Focus Vision of the Future for Application Providers

The ability to make sense of the complex factors driving change in the software industry is one of the great strengths Stephen Kelly brings to Micro Focus in his role as CEO. Here he explains why, in the next generation of corporate computing, new ways of engaging with customers and new business relationships will be as vital as new functionality for application providers.

The Accelerating Speed of Change

Developments in IT technology have the capacity for causing profound and rapid changes in the way we live and do business. It’s easy to forget that, only 15 years ago the Web was not a part of our lives, nor was email, and computers were only used by the technically proficient. Yet in a few short years the internet reached across the globe and now there is hardly an aspect of life it does not touch. Certainly, the business world would struggle to function without it.

Until recently, all IT functions in the workplace were provided, and controlled, by the IT department. Now, everybody turns to the Web for answers on any topic and our dependency on ever more capable web applications is increasing daily. Amazingly powerful devices including all kinds of portable and embedded computers, smartphones and media players are in use everywhere, providing unprecedented flexibility and quality of user experience.

Ironically, corporate IT organizations have often been an inhibitor to the use of external technology – banning early cellphones, external email and web usage as three examples. Security was regularly cited as the issue.  The future has to be about the IT community innovating change and technology adoption rather than setting prevention policies. Consumers and workers use web facilities to get the job done and productivity has been enormously improved as a result. Today, more enlightened IT managers are finding ways to integrate web technology with their enterprise applications to drive business innovation. The most competitive companies will be those that actively leverage new technology with existing applications from all available sources.

In the past, adoption of new technologies in the workplace has sometimes been slow. This was because the majority of people had little experience of computing, and training was needed. Today, intuitive user interfaces and multi-media devices have improved ease of access to the available technology. But the pace for tomorrow will be set by the expectations and abilities of the new generation that has grown up with technology and take innovation for granted.

Young people today are already much more sophisticated in the use of technology than the average professional in the workplace and will drive the market for applications. Fuelled by wireless everywhere, plus ever more powerful and often free devices, the demand for instant access to services for business or pleasure, from anywhere and at any time will grow fast.

The new opportunities for software application providers

The power of convergence

Dramatic though the developments of the past decade have been, the pace of innovation is now even faster and is still increasing. The force behind innovation, and an endless source of opportunity, is convergence. Whether it’s the fusion of television, telephony, wireless communications and computing, or the integration of search engines, global mapping and financial applications, the possibilities inherent in convergence are limited only by the imagination.

The industry standards that support convergence, together with modular software architectures, also allow great flexibility in the way applications are built. So why couldn’t software companies marketing their applications s exploit this flexibility to offer built-to-order applications, offering customers the ability to customize their applications automatically? Mass customization techniques have been highly effective in manufacturing for business growth and greatly improved customer satisfaction?

New ways of doing business

New products and services, however, are not the only opportunities for application providers. The power of convergence applies equally to business models and relationships. Companies are already beginning to mix conventional software license models with free, advertising supported offerings. And well established software vendors are increasingly using subscription and open source models to access new markets. But the greatest changes in the future will be in the way businesses co-operate, aggregating their offerings to present more comprehensive services and better buying experiences to the marketplace.

Evolutions in the insurance industry illustrate the type of changes that will occur in the applications market. Not long ago, vertical integration was typical, with an end-to-end product from a single insurance company being offered. Now, you can buy insurance from a wide variety of sources, from supermarkets to internet providers, who can deliver the best deal for your needs from the entire industry.

The ability to separate intellectual property (IP), production and service delivery gives the software entrepreneur unprecedented opportunities to bring products to market quickly and with greatly reduced up front costs. The IP owner can outsource development offshore and market the application via aggregators, who will be able to deliver tremendous choice in applications and combine their functionality without limits through the power of web services.

New relationships

Another area that will see great innovation is customer relationships. Information about purchasers, both from observing behavior and from direct collaboration will be used to personalize applications and enable suppliers to take a much more proactive approach to marketing.

B2B software providers, including companies like Micro Focus, have a great opportunity to use the immediacy of web-base collaboration to give their customers open access to their roadmaps and receive direct input on the priorities of their customer base. A well-executed customer driven development strategy can bring huge benefits in development cost efficiency, agility, speed and customer loyalty.

New alliances between companies will be formed to share information about customers and achieve synergy by combining complementary offerings for more focused marketing. For example, travel bookings could trigger offers relating to related clothing or financial services products, anticipating a customer’s needs.

In the future, customers will drive the value chain and the prize will go to the companies that take the opportunity to really innovate with the customer at the heart of their businesses.

New players

The global reach of the internet, together with its new application environments, opens the market for applications to a variety of new players. For example, large corporate IT departments, common in the financial sector, employ hundreds of developers and have the capacity to re-purpose their internal applications for general consumption as web services.

For new entrants to the applications business the internet has been transformational. Not long ago, small startups faced huge investments in offices, staff and marketing to move into a new geography. Now they can bring niche products, augmented by powerful web tools, to a worldwide audience with minimal costs. The ability to easily take products into new international markets enables small software companies to increase their value significantly, making for a profitable exit strategy through corporate sale.

In short, the vehicle of the internet with its new ways of doing business has provided numerous ways of turning business value, wherever it exists, into revenue.

Software techniques for the internet world

The new Web 2.0 technologies, together with open industry standards, are pivotal in enabling software providers to capitalize on the opportunities provided by the emergence of the internet as the definitive application platform. Language and platform independent protocols that enable applications to work together seamlessly, wherever they are located, are key to harnessing the power of convergence.

Software providers will ensure that their offerings can participate in open Service Oriented Architectures (SOAs), which evolve to be a standard for application architecture in the future.  Modular components, easily identified and usable applications that support web service interfaces are essential for growth.

In tomorrow’s fast moving marketplace, there will be little time to rewrite applications to meet emerging needs or respond to competition. The ability to quickly reuse existing software, integrated with new functionality from external sources and expose the business rules, process and IP to contemporary devices will be critical for survival. This underlines the importance of sound application structure, with clear separation of functions such as user interfaces and databases, which allows applications to be easily adapted to new environments. 

The benefits for application providers

A major benefit of the internet as a computing platform is the enormous flexibility it gives application providers, whether integrating external applications and services, enabling new business relationships, delivering services or generating revenue. Plus the ubiquitous presence of the internet gives application developers the ability to reach new users anywhere, whether in the office, at home or traveling.

Another area that will have a huge effect on the market for applications is the potential for cost reduction and increased agility that arises from hosting applications centrally, as opposed to distributing multiple copies. The cost savings for the end customer of this deployment model can be even greater than for the supplier.

Upgrading a distributed application in a large organization with thousands of users can be a daunting and expensive exercise, because of the inter-dependencies of the specific versions of all the components in the supporting software stack. Today, the effect on a business of a major software upgrade is often disruptive, so the ability to have the supplier deal with the problem and render the process invisible is compelling.

For the software provider, having only a centrally managed instance to maintain not only reduces costs but also, more importantly, dramatically reduces time to market and risk. It is now practical to test market a new application quickly, anywhere in the world.

The Micro Focus advantage

As a leading provider of development tools, Micro Focus has decades of experience meeting the needs of the software development community and works closely with the industry leaders who are shaping the future. We are actively involved in the process of establishing the industry standards that are essential to unlocking the power of software assets.

Making sure our products deliver the leading edge technology application providers need for their competitiveness is crucial, so we make sure we understand the future directions of the industry as early as possible. This makes us uniquely positioned to build a bridge from the past to the future for our customers.

The far-reaching changes occurring in the way the software industry operates affects us as much as our customers, so we are always looking for ways to maximize our effectiveness in the web-enabled world. Our Application Provider Program is focused on forging closer links with our customers to explore better ways of doing business together.

Micro Focus invests heavily in research and development that enables our customers to leverage the latest developments in software, architecture and the web, but the service we provide goes far beyond just providing advanced software tools and technical support by including the following elements:
• Vision – bringing together the insights from Micro Focus industry experts and our partners to create a vision of the future, identifying the key issues and opportunities for application providers
• Strategy – recommending innovative, actionable plans for our customers and collaborating on their execution to maximize competitive advantage
• Partnership – collaborating with our customers to build new and effective business relationships for mutual competitive advantage.

Our aim is to improve both our own and our customers’ responsiveness to new market opportunities through a combination of shared vision and collaboration in addition to innovative technology. We believe that major gains in competitiveness can be gained by removing the barriers to communication between organizations with common goals and that the resulting speed of reaction will prove to be decisive.

Summary

The web and its associated technologies have completely changed the way we live and do business in a remarkably short time. And we have seen the effect of that change on the those companies that have ignored it, as demonstrated by the disappearance of a whole raft of the best known computer companies of twenty years ago and the collapse of the traditional consumer businesses like music.

With a whole generation of young people who have grown up with technology entering the workforce, as innovators and users, the pace of change is on the increase. Rapid convergence of both technology and industries is generating a multitude of possibilities for new products, services and business models that presents a tremendous opportunity for the well-prepared application provider.

At Micro Focus, we believe that by keeping constantly in touch with industry directions, plus working closely with partners and customers, it is possible to anticipate and help shape the future. Success lies in combining the vision and energies of businesses with common interests to create a more powerful value proposition.