On IT and SharePoint market segmentation

It is interesting to investigate both the IT and generally SharePoint market as well based on the following two dimensions: Market segment and customer flexibility (Figure 1). 

Figure 1. SharePoint market segmentation based on market segment and customer flexibility.

Market segment is basically the standard dimension that is usually described, we can scope from a simple business to customer market to a different business sizes ranging from small business to the enterprise.

The second dimension is perhaps a little bit less standard. It describes how much flexibility do we want to provide for our customers. The simplest way a basic product, that provides some functionality without a too much customization or extending possibility. It is like, if you buy a packed sandwich in a supermarket, you can choose which one do you want to buy, you can not really pack out your sandwich and fill with mayonnaise instead of ketchup. 

The next stage is products with the possibility to heavily customize. They are like eating sandwich at Mc.Donalds, you have the possibility for some variation or customization, however the possibilities are limited. But you can surely choose if you want to have an extra polonaise or ketchup.

Frameworks are not actually 100% ready products but some general building blocks that help you deliver a lot of different products in a fast and efficient way. It is like Subway, you do not really have ready sandwich,  but rather a coupe of basic foods and processes that help you to get a ready sandwich. 

Of course, the last stage is to have fully customized project, you can precisely describe each part of your product. It is as a 5 star restaurant where you can have a small appointment with the chef, describing what kind of a sandwich do you want to eat.

Certainly the bigger customer flexibility means as well that more preparation, more professional stuff are required and of course the whole process can be less automated. As a consequence more customer flexibility implies an increase in cost, so it is not surprising that IT provider companies offering more flexibility to the customers concentrating rather on the enterprise segment.

The SharePoint market can be characterized this way as well: 

- IT companies having small boxed products selling the product mainly as cloud solutions with self service buying possibility and primarily on the B2C market. Typical examples are SharePoint apps.

- As soon as a product has got a a bigger range of customization possibility a certain amount of consulting and pre-sales activity is practical to be delivered as well. Despite the product can be cloud hosted, but the whole sales process is not based on an online shop on a "buy if you want" basis. Such products are for example special Outlook or Mobile components that communicate somehow with SharePoint. 

- It is difficult to distinguish between a product and a Framework. I would say as you are having more and more possibility to customize, more and more possibility to further develop than it is better rather to speak about a framework than a product. The best examples are BPM frameworks like Nintex and K2, however SharePoint itself can be regarded as a general collaboration framework as well.

-  If everything has to be newly invented and developed, than it is better to speak about a 100% custom project. Certainly such projects are pretty much time and resource intensive: time and resources are required for specification for testing and quality for project management and so on. As an example .NET development from scratch can be regarded as custom project. 

Notes on SharePoint hybrid environments

Considering the new directions of SharePoint from Microsoft, I would note a couple if things:

- Building up hybrid technologies (partly cloud, partly on-premisse) makes SharePoint environment more difficult as ever. You do not only need SharePoint infrastructure, developer and business consultants, but cloud infrastructure and development experts as well.

- I am not sure if it provides a real value for an end-customer. I mean, a standard user needs some IT functionality that runs stable if it is on the cloud, on-premisse or hybrid does not really matter, at least not from end user perspective...

- From an internal CIO perspective having a hybrid environment does not necessarily make sense, actually with a hybrid environment you have both the problems of the on premisse and the new challenges of the cloud. Despite it perhaps make sense having a hybrid environment if there are some motivations to outsource only part of your IT infrastructure, like  for security reasons, or simply because clound is simply too new and perhaps too risky.

Fundamental or qualitative analysis on the IT market

"Fundamental analysis, in finance, is the analysis of a business's financial statements (usually to analyze the business's assets, liabilities, and earnings); health; and its competitors and markets. When applied to futures and forex, it focuses on the overall state of the economy, and considers factors including interest rates, production, earnings, employment, GDP, housing, manufacturing and management...." - source WikipediA

Certainly IT market is a little bit different from the general financial market, despite I think it makes sense to speak about fundamental or quantitative analysis on an IT market as well. Let we imagine the following situation: we have a company that provides different IT services for different customers. The first is to identify is the service portfolio to be offered.

Service portfolio: considering an IT company it provides special services to the customers and from the possible services they create revenue. The service portfolio usually contains some of the following major sources:
-   License Business: like reselling the product from another vendor for a certain marge.

-   Consulting : in the sense of either Business consulting or Technology consulting.

- Training: Training can be related from classical end-user training, to a more deep dive infrastructure, customization or development oriented training. 

-  Projects or project development: means setting up end user use-cases with a small team of software developer, infrastructure experts, project managers and business analysts, 

-  Product development: setting up and bringing to the market individual products based on a given technology can be part of the service portfolio as well. It usually requires software development teams, product manager, sales and marketing experts.   

The portfolio categories can certainly be fine tuned considering a specific company. As an example let we say we have a small company creating a specific product. It implies that the company will have the most revenue from the product development source and perhaps a little bit from specific consulting and training service that are related to the specific product. 

Market event: Technology is changing practically every day. New solutions and platforms and trends are emerging and old ones are withdrawn. Typical market events might be the followings:

- New IT Trends: like cloud computing is being more and more popular. 

- Platform and technology changes of a "big player": like Microsoft announces a self service BI platform.

- Legislation changes: like changes in the direction that certain companies are allowed to store certain private data only locally or in the cloud as well.   

Forecast: The major challenge is to identify at fundamental or qualitative analysis how certain market events influence the general service portfolio. Certainly it is pretty much different to create exact figures, however the direction can be certainly pretty well identified. Examples are the followings:

- Cloud computing trends imply a decline in all of the infrastructure oriented services: like Infrastructure consulting, Training related to infrastructure topics and infrastructure parts of projects.

-  Having a new user friendly user interface usually implies that the new interface has to be learned once again. It implies an increase in the Training services. 

- Introducing self service IT from a "big player" usually implies a decrease in the classical IT consulting services revenue. It is a little bit more difficult question how it behaves on the project development part, as most self service IT, is self service only till a certain technology limit. If the limit has been reached, usually hard core development competence is required to develop use cases.  

Notes on IT markets and partner markets

Perhaps it is surprising but a market growth or a market change of a big software vendor like Microsoft does not necessarily means market opportunity for the partner companies. Partner companies concentrating on the technology of big vendor usually make profit from the following sources:

  -  Reselling Product.

  -  Consulting services of the given technology.

  -  Project business: delivering changes or new functionalities for a customer.

  -  Product business: delivering products based on the technology for many customers.
  -  Training.

As some new innovative technology from a big vendor like Microsoft certainly produces a business growth for the vendor itself, it is not so sure how it produces business for the partner network. Examples are the followings:

  -  Innovating the basic technology very often implies that the partner products have to re implemented pretty often, It is certainly a question if it can be done profitable and if the end-customers accept the increased maintenance cost. 

  -  Setting up self-service functionalities certainly implies a decline in the consulting or the reselling market of the partners,

  -  Making only cloud services implies that the infrastructure consulting and services of the partner companies are being vanished.

  -   Focusing on products instead of frameworks implies that the project business of the partners will be decreased.
  -  New functionality or new user interface means increased training business possibilities for the partner companies.

Certainly there is chance to reinvent the partner business itself. Like one example might be to create disposable applications so reinventing the basic technology will be not such a huge problem, as the disposable application won't live so long. Although here is for example a question if Microsoft relative highly-prized positioning is really the best way to create such a disposable applications. 

Corporate finance summarized

If you ask from an unknown person for 10 euro, you are regarded as a beggar.

If you ask for 1 million, you are regarded as serious business man.

Software development methods compared

Let we compare the different software development models based on two dimensions, communication cost and delivery time.

Communication cost: this dimension summarizes how much effort must be taken into account to cover all of the communication during a software delivery. The dimension contains on the one hand elements like communicating with a customer, creating specifications, changing specification elements, coordinating the technical delivery, like for example with hosting companies and so one. On the other hand, communication means communicating with the development team internally. As thumb of rule, if part of the development team is offshore, there is surely an increased communication cost due to the intercultural, langue differences or simply because of the distance.

Delivery time: is the time, how fast can be deliver either a ready or a prototype solution for the customer. 

The following picture demonstrates the two dimensions and the proposed software development methods.

Figure 1. Software development models based on communication cost and delivery time

Let we suppose that the communication cost should be kept low, be for instance the customer does not have very much time for creating a specification or taking part each day in different stand-up meetings. In this situation, if we have to deliver something pretty fast, than the only possibility is a ready product. Supposing that the software solution does not have to be delivered very fast, but the communication cost should be despite kept low, than we can use the classical waterfall, V and W models. 

The other way, if a highly increased communication cost is accepted by the customer and in the team, like having a lot of meetings changing and redefining the specification or the scope of the project, Supposing that the delivery time should be fast, than we can use the different agile methods, like scrum. The last segment, in which the communication cost is huge, despite the delivery time is pretty slow is typical for the research and development projects. In these projects, the typical situation is "we do not know what, we do not know how". 

  

Notes on SharePoint Apps versus SharePoint Addins

Recent change from Microsoft that SharePoint Apps will be renamed as SharePoint Plugins. As it is theoretically only just a new name, despite it is interesting to a look which name describes the technology better. 

App Framework for mobile devices means something in the direction that you have a got a basic framework, that is the core mobile device. It is extended in a couple of directions by Apps. The basic Framework provides among the others the following services:

  - Framework and access to the touchscreen
  - Phoning
  - Data Transfer
  - Geo location service
  - Access to other hardware devices
  - ....

The idea is pretty much similar to the standard operation systems and applications. The operation system provides most of the core functionalities and the applications simply extend these functionalities. The core functionalities are for example the followings:

  - Access to the file system

  - Access to IO devices
  - Memory management
  - CPU Resource management
  - ...

As a consequent, if we speak about SharePoint Apps, we would expect something similar, a core framework that is extended by the SharePoint Apps themselves. So the question is what should be regarded as SharePoint basic functionalities. Having more than 6 years SharePoint development experience I would say that at least the following elements should be regarded as SharePoint core services:

  - Integration on Authentication

  - Integration on Authorization

  - Workflow integration

  - Data model integration, like standard Lists and extended data model elements.

  - User interface and design integration

  - Integrated operation model, like integrated logs or monitoring 

  - ...

Some of these functionalities are covered by the SharePoint hosted App model, however almost none of them are realized by a provider hosted App. Provider hosted App model realizes only the integration of the Authentication, everything else has to be developed from scratch, like building up ta SharePoint like user interface, realizing the same authorization model or developing web services and custom activities for workflow integration.

As a conclusion, a SharePoint hosted App might be called really as an App, but for a provider hosted App the name is surely pretty much misleading. One would expect a model and core functionalities that do not exist. In this sense AddIn is probably a much better naming choice.

  

cloud versus on-premise compared based on technology curves

Licensing model and cloud model might help to reduce the initial setup cost of a certain technology. As at setting up an on-premise environment and buying server license implies a huge cost and setup time, buying cloud pro user license definitely means a reduction in setup time and cost. Certainly the situation is not so simple, as on the one hand a user license based model can be more expensive on with a given number of users, On the other hand  the extension possibilities of a cloud model are usually more limited as with an on premise environment, meaning that the technology limit can be reached more easily. 

Set up time and cost (before Q1): Set-up time and cost are definitely much faster on a cloud environment.

Effective agile development (between Q1 and Q2): considering most software as a service cloud environment, the provided services are usually much more limited as on the on premise versions. Cloud soft wares are much more 'boxed' products.

Architecture limit (after Q2): Architecture limit can be much more easily reached on a cloud software as a service solution. Hence if the limit once reached there is much less possibility to create some extensions, if there is at all the possibility to create extention. 

As conclusion, a cloud based user license environment is certainly much faster and cheaper on a short run, however not necessarily the best choice on a long run.   

Figure 1, Cloud versus On-Premise compared base on cost-use-case model.

Cash flow models in software development

SharePoint evolution: from platform to product

Introduction.

It is pretty interesting to see the current evolution of SharePoint from an agile technology curve perspective. Briefly speaking if we consider a classical software project where we deliver services to a customer in a certain time frame, most project have got three typical phases:

1. Set up: most technology requires some kind of a setup phase, like installing the software, setting up the basics for the environment and usually buying licenses. This phase can be characterized with  increased efforts (setting up effort and license fees), on the contrary relative few direct user requirement are covered. This phase is typically realized by infrastructure teams.

2. Efficient agile phase: in this phase user requirements can be delivered fast and efficient. Use cases that are delivered here can really be regarded in an agile way, like without explicit specification, consulting with the customer on a daily basis, having sprints and delivering use-cases on a weekly basis. This phase is typically realized by small project teams of consultants and developers, usually working on site at the customer.

3. Architecture limit: Once the architecture limit has been reached further use-cases can only be delivered for a huge cost, usually needing to extend the architecture itself. In this phase agile cooperation can not really be efficiently supported, instead classical requirement engineering and product development are required. 

Figure 1. General Agile characteristic.

Platform versus product.

Comparing a classical product with a rapid application development framework from the agile technology curve there are major differences. Firstly setting up a product means delivering a lot of end-user functionalities as opposed with a framework where setting up usually means only a minimum scenario usually without covering too much end-user requirements.

Secondly, a product offers limited possibility for efficient agile development. There is certainly some possibilities to set some parameters but the situation can be very easily reached where the product itself has to be further developed, A rapid application development  framework is however planned to realize a long effective agile phase in which user requirements can be fast and efficient realized. 

From the architecture limit point of view there are not too many differences. If the limits reached than either the product or the framework itself has to be further developed that practically means slow and hard core software development.

Figure 2. Product versus framework compared.

Briefly formulate a framework is usually a general application development framework on which you can realize a lot different user requirements in an agile way with the help of a some IT consultants. A product is practically something ready, if you like it you get from the shelves and pay at the cash desk, if you do not like it, you look for another product. Extending the product itself usually realized only by the product manufacturer.

    

SharePoint evolution.

The last couple of years of SharePoint development was more or less going very strongly to the direction of Office 365. Even if there is still at least one version on premise, this version supposed to be similar with the cloud one. Besides, it seems that on a long run more or less the Office 365 will be the standard perhaps only on the cloud.  

From an infrastructural point of view Office 365 is similar to a normal cloud solution, it is practically a product. You have a couple of well defined services that you can order and buy right away and after some configuration the set up phase has been delivered. As it seems to be a good thing for the first side, however it is more or less the one size fits for all principle.You can build up perfect data models based on lists and document libraries supposing that you did not reach data view limit however as soon as you have reached there is gonna be difficult to extend, you are practically at the architecture limit Certainly provider hosted app and storing everything in an Azure database is a possible way, but then you should consider implementing the provider hosted app, the logging mechanism, the user interface, the integration of standard Office365 lists, search and workflows... it is a lot of work for practically zero functionalities. On the contrary with a classical SharePoint on premise environment there are some possibilities , like extending the data limit on the central administration, integrating BCS with SharePoint Designer and SQL Database, having some Visual Studio Development and developing BCS with like Oracle...

Similar limits are to banning the public pages, constraints on the cross site information, problems on the brand new workflow and so on.   

On the other hand the agile phase is definitive smaller at Office 365. There are smaller number of possibilities that one can click together, like the missing cross side or public page features. Hence the development styles are much more limited as well. Farm solutions are definitive missing, sandbox as well, as a consequent developing fast and efficient backed functionality is already not possible. Customization on the design or javascript side is still possible, however on the one hand only a limited number of functionality can be delivered as on a pure javascript basis, on the the proposed delivery way is to build an App that can be sometimes pretty much resource intensive. As soon as something more is required the only way is to implement a provider hosted App, however implementing a rpovider hosted App from scratch is pretty much resource intensive, one should consider implementing apart from the core functionalities, logging, SharePoint integrated user interface, SharePoint integrated data model, workflow and search integration. Such a development has got very much the characteristic of being outside of the agile phase: the development is slow, the requirements can not be changed too often, it is usually can not be sold in one project but the development has to be financed by several customer.

Conclusion.

Based on the agile characteristics it seems that SharePoint is appearing more or more in the direction of a product and not as a rapid application framework. There are a certain number of predefined components that you can by and configure but if your requirement is coincidentally not supported than you can buy another product or practically finance platform extension. Actually the naming conversion shows this direction as well: it is already Office 365 that implies that SharePoint is a similar product as Word, Excel or PowerPoint and not a Rapid Application Framework. Similarly future names of App are actually AddIn-s that also points into the direction of rather being a Product as a framework.