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At this year’s annual SAP user conference, SAPPHIRE, the technology giant showed advances in its cloud and in-memory computing efforts. It has completed the migration of its conventional 
application suite and portfolio of tools to operate on SAP HANA, its in-memory computing platform, and made improvements in its cloud computing environment, SAP HANA Enterprise Cloud. The last time I analyzed SAP HANA was when it won our firm’s 2012 Overall IT Technology Innovation Award. Now HANA has been transitioned from just a database technology into a broad platform. SAP wisely consolidated its efforts previously known as SAP NetWeaver into SAP HANA. This resolves some confusion regarding HANA and NetWeaver in the cloud, which I assessed. The recently announced SAP HANA Platform now provides the enterprise class of HANA implementation in the cloud. It comes with a trial edition of the data and visual discovery technology now called SAP Lumira, whose price has been reduced to encourage adoption (and which I discuss more below). The use of in-memory databases for big data is accelerating: According to our technology innovation research, 22 percent of organizations are planning to use this technology over the next two years, and through 2015 it will have a higher growth rate than other approaches.
SAP HANA is gaining functionality as a platform and has made an important step forward with its service pack 6. This new release expands integration of the technology into data across its applications and systems. HANA now has virtualized access to data in 
Hadoop and a range of other databases along with supporting the necessary data integration. Integrated with Sybase SQL Anywhere, HANA enhances mobile use of that technology; it also works with Sybase ESP to integrate event streams and machine data, and with Sybase Replication Server to connect with Sybase ASE and other databases. HANA’s increased spatial processing capacity handles this type of data, which then can be accessed by tools and applications. Our latest research into location analytics finds new applicability for this across business processes and our next-generation business intelligence research reveals that applying location-based analytics is important to 40 percent of organizations. The latest version of HANA has advanced data modeling capabilities through SAP HANA Studio to make it easier to use data and build a range of business models including predictive ones. Majorities of research participants said that such capability through predictive analytics provides a competitive advantage (68%) and new revenue opportunities (55%).
SAP supports text or natural-language processing needs. At some point I hope it enables HANA to dynamically create text as a result of its analytics; that could communicate better with people than just showing charts and data. This capability already is available in the workforce analytics products of SuccessFactors, whose Headlines technology won our 2012 Overall Business Innovation Technology Innovation Award; however, that does not yet seem to be part of SAP HANA and other applications, which could be a business benefit and product differentiator.
SAP also is expanding its software partner ecosystem to spread use of HANA with a range of applications. An early example is Tagetik, whichprovides its financial application suite on HANA for in-memory computing. SAP also announced recognition of innovative SAP HANA based applications including Warwick Analytics and Semantic Visions that are well worth examining. SAP also is adding integration points with other network storage, data center integration and even business intelligence and analytics. To this point, however, not many vendors are certified on SAP HANA, and my inquiries with various software company executives found they have more work to do and are not getting strong support from SAP to streamline the process to become certified. Elsewhere in its technology ecosystem, SAP announced further cooperation with HP in what is called Project Kraken to create an appliance with 16 processors and 12 terabytes of memory, designed to operate SAP HANA effectively for any range of analytical and transactional needs. Success of this computing appliance is equally important to HP, which is in a do-or die-battle against IBM and Oracle who are advancing in this area. At the same time SAP’s one-time partner Teradata has a competitive approach, whose recent advances in in-memory computing with its new intelligent memory and appliance that I assessed is well worth examining.
HANA is now part of SAP’s overall business intelligence strategy, as my colleague Tony Cosentino has pointed out. This is a positive step as the company works through the challenges of keeping a very large customer base happy as it moves its product line into the future. One of its key points for its future is the newly announced SAP Lumira, which was previously known as SAP Visual Intelligence, a more self-explanatory product name for the intended audience that is engaged in business analytics or even big data analytics. SAP Lumira is really the new face of its business intelligence products whether on-premises or in the cloud; it meets a need for discovery technology, which I outlined and is important to the future of business analytics. This was challenged by partners MicroStrategy and Tableau who were demonstrating their approaches at SAPPHIRE showing its competitive approach and how it can make good use of data from SAP and inevitably SAP HANA as they work through integration of the technology. Our research into technology innovation found that data and visual discovery is not available to 19 percent of organizations, ranking third behind the most unavailable predictive analytics (27%). SAP Lumira interoperates with other SAP products along with supporting Microsoft Excel spreadsheets. SAP also has released SAP BusinessObjects 4.1 with improved access to Hadoop through MapReduce and Hive, and also to Oracle’s Exadata and Essbase technologies. A new edition of SAP Crystal Server and Edge edition furthers support of BI for small and midsize businesses (SMB). SAP continues to have fierce competition in IT departments for BI and to overcome it is working to help business analysts and management use business analytics.
In the realm of business applications, SAP has fulfilled its promise to make HANA the underlying platform across on-premises deployments and the cloud. Its SAP Business One application suite version 9 is designed for SMB and runs with HANA and even Microsoft SQL Server. Simultaneously, the SAP Business Suite is now available on SAP HANA. As my colleague Robert Kugel explained, that makes it possible for customers to avoid using Microsoft or Oracle database technology and take advantage of new technology and applications built on HANA. Examples of this are SAP’s release of its fraud management application on HANA, which Robert assessed, as he did for advances in its EPM portfolio for finance. A word of caution here: Companies that use SAP’s applications on third-party databases have to be careful as the license in most cases only allows for application-specific access to the database, limiting the potential of other business uses. The range of new applications and tools running on HANA is steadily increasing as partners make progress adapting to it; SAP’s digital marketplace dedicated to HANA shows what is available.
SAP is so bullish on its ability to design consumer-friendly 
applications that it also announced efforts to bring that quality into the enterprise through the SAP Fiori apps for common business functions; it also has simplified the user experience of its applications. This is nothing new for SAP which has long emphasized usability and made improvements in a continuous improvement cycle. SAP has invested significantly into the user experience and created AppHaus to build demonstrations of the latest advances. Even so, after looking at the range of new applications, I think SAP still has to improve upon the user experience and design of the applications. SAP is heading in the right direction, but it ought to build an application assembly and design environment that the teams at SAP, and its customers and partners, all can use to build people-centric applications, especially for use on the Web and mobile devices. I got to test applications that demonstrate user experience advancements, but they all were custom-built, and I saw others with primitive user interfaces for business applications; these fall short in trying to engage users across a range of experience and facilitate the natural collaborative aspects of their responsibilities. Those aspects are critical, as our research across every line of business finds usability to be the top evaluation category for software evaluation, and it was the top criterion in 64 percent of all organizations. My analysis suggests that SAP needs to consider the critical aspects of personalization based on role, responsibility and experience and adapt the user experience to them. As well, less can be more when presenting information for the majority of business purposes, and guiding individuals to what is relevant is more important that piling up charts or information on the screen.
Separately from its HANA efforts, SAP has advanced enterprise-class readiness for mobile technology, has outlined a comprehensive mobility framework and deepened support for security through a partnership with Mocana for any applications that embrace SAP’s mobile portfolio and technology. This addresses an evident need, as our technology innovation research into mobile technology finds the top barrier to business deployment is security and risk issues, found in 47 percent of organizations. SAP has to also consider in the world of BYOD the preference for native platforms (39%) over the Web or HTML5 (33%), along with no preference (20%); it won’t be easy for SAP to make everyone happy, especially when half of individuals have a distinct preference for their type of smartphone or tablet. Our research finds fewer than one-third (32%) of people satisfied with their organization’s mobile access to applications and information. I did not hear much about SAP HANA in the company’s mobile strategy except that it powers tools and applications that operate on a smartphone or tablet. But overall SAP is investing more into advancing mobile technology than other technology suppliers, and its potential is yet to be realized as business and IT begin a transformation to mobile readiness.
Since my analysis after last year’s SAPPHIRE SAP has brought to reality its cloud computing strategy with products that are now available. I thought that more could have been highlighted in SAP’s sustainability efforts in including its software, for which last year 
we provided a 2012 Leadership Award to its customer Danone for its use of SAP products. I was more surprised that SAP was rather quiet about its efforts in business and social collaboration as it works to transform its technology by embedding the Jam product in its software. SAP is working to ensure its products are simple but sophisticated, available on any platform or device and localized to any country in the world – and that they operate on SAP HANA. It is also working to deliver faster methods to onboard and experience its software through rapid deployment. SAP’s focus is to inject the technology innovations into its platform and applications while also supporting what our technology innovation research finds is the desire for a variety of access methods: on-premises, on-demand and hosted approaches that are distributing quite rapidly. It is clear that organizations want choice in how they access technology and applications; SAP is prepared to address this as it enters a new era of opportunity built on SAP HANA.
Regards,
Mark Smith
CEO & Chief Research Officer
At its recent user conference, Interactions 2013, Interactive Intelligence (Nasdqaq: ININ) showcased its extensive product portfolio and its ambitious plans to improve the products both technically 
and functionally. I have written more than once about the complexities of building a contact center, which is getting even more complex as companies begin to support more channels of interaction as inbound ones are distributed around the organization including sales (59%), marketing (46%) and CRM team (41%) and distribute to many different contact center sites according to our customer relationship maturity research. To keep up with developments, I divide contact center systems and applications into five groups:
- Communications includes voice, email, fax, mail, chat, mobile access, instant messaging, portals, social media and universal queue for interaction routing.
- Workforce optimization covers interaction recording, agent quality monitoring, workforce management, e-learning, coaching, compensation management and agent-related analytics.
- CRM focuses on marketing, sales and service.
- Analytics includes structured and unstructured data, event monitoring and big data.
- Customer experience management deals with customer feedback, the agent desktop, natural-language processing, customer portals, mobile interaction and virtual agents.
Interactive Intelligence (InIn) offers products and services in most of these. Its flagship product is Customer Interaction Center (CIC). The core functionality includes a software-based PBX and IP-PBX, a software-based ACD, IVR, an outbound dialer and multimedia queuing and routing: These are all the core capabilities required to manage voice-based communications. Companies can add optional capabilities to manage email, chat and a customer portal, which give the product a multimedia dimension. CIC also supports workforce optimization with capabilities for multimedia recording, desktop screen recording, quality monitoring, workforce management and agent-related reporting. InIn enhanced its workforce management capabilities through the acquisition of Bay Bridge Decision Technology, which added long-term resource forecasting, planning and analysis of required agent numbers. CIC doesn’t include CRM per se, but it does support knowledge management and tools that enable integration with major CRM systems from Microsoft, Oracle/RightNow and salesforce.com. These tools support tight integration between the products, predominantly through CTI connectors, and companies can embed windows for CRM into CIC or vice versa.
As well as standard reports and analysis of contact center and agent performance, CIC includes a real-time speech analytics product. This is a recent addition that is just beginning to gain adoption. Companies first build a library of words and phrases that they want to spot while calls are taking place. Users can set up rules to trigger predefined action if a particular word or phrase is spotted; for example, a supervisor could be alerted to listen in to the call. The rules can also be set up to raise alternative actions if certain words or phrases are not spotted, such as if the agent fails to inform the caller of a required regulatory statement. The recordings of any calls in which designated words are spotted can be tagged for future analysis and use in quality assessments.
InIn now is taking a stronger position in the customer experience space where, in addition to managing multimedia communications, CIC includes a software-based IVR application that can be configured to request feedback from the caller. The results can be used in the quality management process and as input into analytics. InIn was one of several vendors that during 2012 announced a product that enables companies to build mobile customer service apps, an area in which demand is growing. This set of tools enables companies to build mobile apps that take advantage of smart device capabilities such as touch screens, integrate the app to back-office systems that use location information to enhance responses, and perhaps most importantly include a call-to-call button that allows callers to bypass IVR, route the call to the agent most qualified to handle the interaction, and keep the call in context by providing the agent with information the caller already entered into the app. I detected that, despite the exponential growth of smart devices, InIn, like other vendors, is disappointed by adoption rates for the product so far, but it did indicate that several customers have trials under way.
All these capabilities add up to InIn providing the broadest coverage of any vendor in the capabilities required to build a modern 
contact center. It is also important that these applications are tightly integrated which enables sharing of data between applications, common administration capabilities and a common user interface. InIn also has improved the underlying architecture to be more reliable, scalable and distributable. This last point is key to InIn’s strategy of making the system deployable on premises, in the cloud or as a combination of both, which it calls a hybrid environment. At the conference the company presented figures showing an increasing trend for organizations to opt for at least some capabilities in the cloud. In my own research into the contact center in the cloud, 40 percent of companies indicated they would be moving to cloud-based systems over the next few years and almost three quarters (73%) are doing this to improve agent performance through training and coaching. This seems to be particularly true in Europe where InIn said half of its new business is cloud-based. The improvements in architecture also enable InIn to offer a new option, CaaS Small Center. This is a version of the cloud-based option for communications as a service (CaaS) that is targeted at centers of up to 50 seats, although I suspect the size of user sites is likely to increase over time as new cloud-based hardware options become available. Small Center doesn’t include all the capabilities of the full version, but InIn said it has plans to expand capabilities to include everything currently available; even then, however, it will be in available only in the cloud, which for me begs the question which option is right for which.
On another front, InIn has released Communications-Based Process Automation (CBPA), which I covered recently. In summary CBPA routes work items to the employees best suited to handle them, tracks progress in performing them and provides an analysis of the end-to-end process. Looking ahead, InIn announced a new product, Interactive Content Management, that will provide management of all forms of content such as text images and video; it’s an enhanced version of document management for today’s needs.
As well has giving a company overview update, InIn CEO Don Brown hosted a session on new developments that he said in his view will have the most impact on contact centers in the future. There were a couple of in-house developments and a three from partners. There was a demonstration of the integration with salesforce.com. This essentially uses the new salesforce.com CTI connector to share data, and allow configurations that either allows ININ to be a window in a CRM screen or vice versa. There was also a demonstration of a new mobile application for contact center supervisors that will enable them not only to access performance information about those they manage but also to carry out certain configuration tasks such as routing of interactions to different queues and locations.
There was an intriguing demonstration from a partner called Orgspan that describes its product as “cloud-based employee directory on steroids.” Using it companies can extract data from any number of internal data sources and build profiles of employees and their place in the organization. Integration with CIC offers the option for callers to see a profile of who is available to take their call and then to select the person they prefer; this is a complete reversal of skills-based routing that I am not sure will appeal to many contact center managers. There was also a demonstration from Vidyo of its video platform which when integrated with CIC can add video as a channel to support some forms of interaction. In the example the presenters used (not as funny as I think they thought it would be) a biker called in asking how to blow up a tire; the agent used video not only to communicate with the biker but to point to where the valve was. This is perhaps not the most valuable application of the tool, but, as my research on the contact center in the cloud shows, video is an emerging channel, and as consumers use video more on their smart devices, it is probably a channel for the near future.
Against the background of all these product announcements, case studies from selected customers and news off a growing ecosystem of partners, Don Brown expressed concern about “the innovator’s dilemma.” InIn has grown from a startup that brought innovations to the communications marketplace to a successful big vendor with a growing portfolio of products. Even though it goes against what his financial advisors would like, Brown said, the company continues to invest 20 percent of its revenue in R&D. The dilemma is whether this is enough to prevent another little innovative company coming along to pull the rug from under it. I doubt that will occur because InIn pays close attention to what is happening in the market and is working hard to stay ahead.
If I have concerns, they relate to whether it is trying to do too much. As this discussion has shown, InIn now has a very large portfolio of products and it is trying to be the best in class” with each of them. In my sphere will always be small innovative companies with niche products that excel at a few capabilities. The trick for a “portfolio” company is integration. All my research shows that organizations face an increasing challenge to be more customer-centric. To achieve that they must break down barriers between the lines of business (especially marketing, sales and service), allow processes to flow across different activities (as from marketing to sales to service, agent performance to customer satisfaction, and quality monitoring to training and coaching) and be consistent across communication channels, all in a quest to deliver quality customer experiences. As saleforce.com has done and continues to do in disrupting the CRM market, I believe InIn should focus on doing the same in the contact center and customer engagement markets and retain its reputation as a vendor to watch.
Regards,
Richard J. Snow
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