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The Forrester TechRadar™ Methodology Guide
Optimize your technology selection
The Forrester TechRadar methodology assesses and plots technologies in a given category according to their ecosystem maturity, business value-add adjusted for uncertainty, and future trajectory. We make projections, based on the best information available at the time, for more than a decade into the future of these technologies.
Forrester uses the TechRadar methodology to make projections for more than a decade into the future of the use of technologies in a given category. We make these predictions based on the best information available at a given point in time. This document is your guide to understanding how we create a Forrester TechRadar report; it outlines the reasons behind and the methodology that our analysts use for writing TechRadars. Forrester updates its TechRadar assessments on a regular schedule to assess the impact of future technical innovation, changing customer and end user demand, and the emergence of new complementary organizations and business models.
Why Forrester Conducts Forrester TechRadar Evaluations
Technology management professionals face a challenge to make the best technology adoption, maintenance, and retirement decisions for their firms. Technology management professionals struggle with IT planning and strategy efforts because: 1) They involve many stakeholders and teams; 2) tech adoption decisions depend on a firm’s appetite for risk; and 3) analytical tools for tech adoption are either nonstandard or just plain nonexistent. Forrester’s TechRadar research simplifies these tasks by providing an analytical framework for experts and managers from different functional groups to jointly assess technologies. Forrester’s TechRadar analysis:
- Defines the maturity of a technology's ecosystem today. Our research indicates that the health and resilience of a technology’s ecosystem determines the technology’s success and future survival. Technical excellence alone is not sufficient. We define ecosystem maturity by: customer growth or decline; the volume and skill sets of people working with the technology; end user adoption and satisfaction; vendors’ resources and viability; the amount of support from complementary firms like services companies; and the blocking power of substitutes.
- Assesses the technology’s current business value-add, adjusted for uncertainty. When firms adopt, maintain, or retire a technology, the primary driver is its potential for improving business performance. The TechRadar methodology defines a technology’s business value by first assessing the maturity of its ecosystem and then seeking evidence of the business benefits achieved by existing customers (where such customers exist). We discount that assessment based on the volume of evidence available to prove that the technology delivers business value. For instance, the evidence for mobile security is vast; for grid computing, it is limited.
- Forecasts the technology’s business impact in future phases of maturity. Even technologies that successfully launch achieve varying levels of success, as measured by the business value they deliver. Based on our research into a technology’s ecosystem and the business value it creates today, our TechRadar analysis plots a technology on one of three generalized trajectories: 1) minimal success; 2) moderate success; and 3) significant success. Technologies rarely switch trajectories after implementation evidence becomes widespread.
- Predicts how long it will take to reach the technology’s next ecosystem phase. In addition to how a technology’s ecosystem will evolve, end users also want to know when the ecosystem will advance to the next phase. The point at which a technology’s ecosystem will move into the next phase is more important for tech planning teams than simply understanding when the vendors will release the next set of features and functions.
What Defines The Maturity Of A Technology’s Ecosystem?
Forrester believes that the health of the ecosystem is far more important than the quality or maturity of a standalone technology. Why? Because the technology industry is littered with examples of great technologies that failed because the vendors didn’t build enough momentum in terms of value-added service providers, happy customers, developers, evangelists, financial backers, or certified experts. We conclude that the primary elements of a healthy technology ecosystem consist of:
- Customers who buy the technology. A healthy ecosystem has a diverse group of customers in different countries and industries — and has either high annual customer growth rates or a large installed customer base.
- End users with high levels of satisfaction. For a healthy ecosystem to develop, end users need to adopt and embrace the technology and become proponents for its growth. For example, though technology managers started out suspicious of bring-your-own-device technologies, execs and sales reps loved them.
- Multiple vendors with strong financials. The survival of a technology in the marketplace depends on the collective resources, investment, cash flow, balance sheets, market reputation, and IP of the main vendors of the technology. Neither a few small vendors nor a single large vendor can sustain a technology’s future. It’s important to note that the TechRadar methodology is not a vendor selection aid; we are not evaluating vendors or their solutions. For each category, we provide a representative, not exhaustive, list of vendors to illustrate the category.
- Complementary organizations that profit from the technology’s growth. To survive, ecosystems need to build momentum through symbiotic relationships with supporting services and products. For example, mobile app development platforms and partners have thrived by supporting the massive growth in smart mobile devices.
- An absence of strong competitors. New technologies and mature technologies both face competition from other solutions to the business problems that they address. We factor the entrenchment level of older technologies into our assessment of potential replacements using proxies such as vendor concentration, intellectual property rights, installed customer bases, and brand loyalty.
- A vibrant community of experts and evangelists. A healthy ecosystem includes hundreds of evangelists, developers, industry analysts, and certified experts. Without a readily available group of people from product vendors, services firms, customer IT shops, and developer forums who are capable of implementing, integrating, debugging, and improving the technology, it will not achieve sufficient momentum to continue.
What Are The Five Phases Of Ecosystem Maturity?
Forrester has defined five major phases in the development of an ecosystem. This analysis extends through maintenance and retirement, as firms spend 70% of their IT budgets on existing operations. The phases are:
- Phase 1: Creation in the labs. In the Creation phase, the technology is not yet commercially available or is only available as an alpha version. Cutting-edge IT shops and emerging technology teams want to understand how long it will take to get their hands on beta versions. The technology is not ready for production implementation except in specialized cases, and its potential for business value-add is uncertain.
- Phase 2: Survival in the market. During the Survival phase, the very first commercial and open source products hit the market; initial production environment deployments take place; and the ecosystem expands to include suppliers, customers, and enablers like systems integrators. Leading-edge customers and end users begin to share their experiences with the product. There are many vendors competing to earn plaudits and early customer wins.
- Phase 3: Growth as adoption takes off. In the Growth phase, the ecosystem either reaches a level of diversity and resilience that sustains the technology’s existence or the ecosystem lacks momentum and the technology slowly slumps into decline and obsolescence. Widespread implementations produce piles of evidence, which allows potential customers to make better-informed decisions. The technology’s value proposition has crystallized and stabilized. Vendor consolidation begins. New entrants must acquire an existing player to enter the market.
- Phase 4: Equilibrium from the installed base. During the Equilibrium phase, which can last for several years — or even decades for hardware — the ecosystem is large and resilient. The benefits and limitations of the technology are documented and well known. At the end of this phase, installed customer numbers fall as some firms switch to new substitute technologies. The market is highly consolidated, customer numbers flatten, and revenues level off or decline.
- Phase 5: Decline into obsolescence. In the Decline phase, forcing factors — such as new regulations, changes in the business environment, a shrinking talent pool, or the launch of disruptive competing technologies — destabilize the ecosystem. Customers, vendors, and complementary organizations like service providers bail out. Some firms continue to run the technology, but vendors stop supporting it.
What Defines A Technology’s Business Value?
The primary measure for the adoption, maintenance, and retirement of technologies is business value-add, adjusted for uncertainty. Technology management professionals should largely ignore metrics like market buzz, hype, and visibility, as they measure vendors’ marketing success rather than the benefit that the technology brings to the customer’s business. Forrester’s TechRadar methodology assesses a technology’s business value and adjusts for uncertainty:
- Collecting evidence on costs, innovation, and disruption to assess potential value. The following factors define a technology’s business value: evidence and feedback from implementations; the investment required; the potential to deliver business transformation; criticality to business operations; change management or integration problems; network effects; and market reputation.
- Discounting the business value of technologies in early-phase ecosystems. New technologies often hold great promise, but because their ecosystems are at very early stages, it’s very difficult to be certain whether that potential will translate into business value. Thus, we adjust our assessment of the business value of early-stage technologies downward to compensate for this higher level of uncertainty. By contrast, for mature technology ecosystems like those in the Equilibrium phase, customers can rely on a large volume of evidence of the business value that the technology provides.
- Categorizing technologies as attaining significant, moderate, or minimal success. Technology planners with diverse skill sets and domain knowledge need a simplified model that they all can use to make and re-evaluate investment decisions. Forrester’s TechRadar analysis clarifies the alternatives and simplifies decisions by condensing the future of each of the technologies into one of three trajectories that characterizes its relative business impact over time.
What Do The Trajectories Mean For The Technology’s Future?
The three trajectories complete the framework for making smarter technology planning decisions. The trajectories reflect the reality that early evidence from customer implementations puts a technology on a defined path to success or failure. By the time the ecosystem is resilient, it is very unlikely that the technology’s future course will alter unless there is a dramatic change in the business environment. The trajectories consist of:
- Significant success. Every year, some new technologies deliver measurable and significant business benefits. For technologies to follow the path of significant success, they must hit all the right buttons: well-defined usage scenarios; measurable and widely known benefits; engaged end users; solid vendor financials; and powerful distribution channels. Examples include relational databases, customer propensity analysis, and sales automation.
- Moderate success. Many technologies — such as XML databases, IT service management, and marketing automation — deliver moderate benefits to the enterprise. Even technologies with very powerful ecosystems may end up being only moderately successful. The reason? Impact inhibitors like integration barriers, problematic interfaces, and weak use cases prevent end user sales reps, their managers, and their companies from achieving all of the possible benefits.
- Minimal success. The industry is littered with great technologies that failed to achieve their potential. Technologies falter for many reasons, but the key evidence that Forrester seeks out is the health of the ecosystem. A healthy ecosystem — defined by its size, diversity, and growth — is essential for a technology to flourish. No matter how large the vendors pushing a technology, those technologies cannot achieve more than minimal success without a resilient ecosystem.
How Quickly Will The Ecosystem Evolve To The Next Phase?
Technology management professionals want to know how a technology’s business value will evolve in the future, when that technology will be ready for them to implement, and when they should consider retiring it. Forrester’s TechRadar research addresses this need by predicting the time that the technology’s ecosystem will take to move to the next phase. How? We combine information about the current ecosystem (such as customers, vendors, end users, evangelists, community, complementary services, and substitutes) with expectations for that ecosystem’s future. Technology ecosystems have five speeds:
- Less than one year. This implies that a technology’s ecosystem is already poised to transition from one phase to another. Examples include: 1) a move from Creation to Survival because vendor road maps have public deadlines for new product launches that will bring the product to market; or 2) a move from Survival to Growth because we expect the number of customers with production installations to grow from 20 to 50 within a year. External forcing factors like new government regulations can also quickly shift technologies between phases.
- One to three years. At this velocity, there is trend data and evidence that the technology’s ecosystem is progressing through its current phase; in the Growth phase, for instance, growth rates are slowing toward less than 10% per annum, suggesting that the ecosystem is shifting toward Equilibrium, but there are no obvious external factors that will push the ecosystem into the next phase within 12 months. Ecosystems typically evolve faster during the crucial Survival phase as vendors plunge in.
- Three to five years. Technology ecosystem evolution is often slower in the Equilibrium phase and the Creation phase — although this varies across consumer technologies, software applications, hardware, and telecom equipment. Customers are loath to replace technologies due to: 1) the technology’s initial cost; 2) the cost and complexity of change; 3) its criticality to the business; 4) conservative attitudes; or 5) integration into other systems.
- Five to 10 years. Software technologies typically only fall into this category when they’re in the very beginning of the Creation phase, in the Equilibrium phase, or in the Decline phase. In contrast, hardware technologies’ physical production requirements mean that they will more often take between five and 10 years to move to the next phase.
- More than 10 years. Technologies that we expect to spend more than 10 years in their current phase fit into one of three discrete profiles: 1) hardware technologies that are in their very early stages (like fiber optics as of 1960 — scientists created the first modern-style optical fibers in the 1950s, but it took until 1970 to produce communications-capable fiber); 2) very successful hardware and software technologies that continue trucking along in the Equilibrium phase, such as the mainframe; 3) any technologies in the Decline phase that are difficult to eliminate.
Why Technology Management Professionals Should Embed TechRadar Methodology Into Their Tech Planning
TechRadar research simplifies the analytical challenge of technology planning, and we have designed it so that decision-makers in IT and business roles can understand it. Technology management professionals can apply the analysis from TechRadar research to:
- Better understand emerging technology opportunities. Technology planners often serve as the research arms of their firms; they gather information and advise their colleagues as new technologies become ready for prime time. For example, a director of applications at a manufacturer could use Forrester’s TechRadar analysis on supply chain technologies as the starting point for the long-term technology road map he’ll work on with his IT counterparts.
- Create a technology road map for the next five years. Technology management professionals typically maintain a five-year technology road map. Forrester will publish TechRadar research on core technology categories, such as infrastructure, systems management, operating systems, and desktop applications; this research will plot these technologies and forecast their evolution. IT teams can then use this research as the foundation to create and update firm-specific technology road maps that also include the firm’s current technology assets.
- Match custom-built installed technologies with potential packaged replacements. Application developers often need to compare the functionality of aging in-house applications with the functionality of new packaged applications that vendors claim are a suitable replacement. A good example is billing systems for telecom service providers. The TechRadar graphic provides a framework to plot and predict the velocity at which in-house apps will move toward obsolescence and, on the same chart, analyze the ecosystem maturity of the packaged applications. This enables the application development team to get the timing right for replacement projects.
- Assess fit relative to installed technologies. Sourcing professionals can use the TechRadar methodology to apply business value criteria (adjusted for uncertainty) to purchase decisions. For example, a technology manager may want to forge ahead with a SaaS-based web content management system. With TechRadar analysis, the sourcing manager can show that pure-play tools are in the Creation phase and are developing slowly. He can highlight the limited agility of the solutions in the market and point to alternative deployment models such as on-premises or hosted. The sourcing pro can help the technology manager weigh the potential uses of the SaaS-based technology against the business’ need to make campaign sites and microsites available quickly.
- Focus on what really matters — business value, not hype. As IT organizations merge into business technology operations, the only metrics that matter are business value metrics. Using TechRadar research to support tech planning decisions will force all decision-makers to focus on the likely business value of a technology — as well as the probability that it will survive and grow. Enterprise architects should highlight their use of business value (adjusted for uncertainty) in their technology decisions to emphasize their business decision-making credentials.
- Get better at predicting the future. Enterprise architects in IT organizations and CTOs at vendors frequently face questions from business colleagues about the readiness, potential success, or potential demise of a technology. Educate your business colleagues on TechRadar’s consistent analytical framework and language so that they can assess and predict technology success too. This will help nontechnical managers better understand why IT chooses certain technologies and steers clear of others.
- Standardize technology planning. By embedding TechRadar research in all tech planning decisions, firms can make it easier for senior managers with different domain knowledge, incentives, and responsibilities to come to a consensus. To begin, select a burning issue within the firm — such as “Big Table” DBMS technology — and use the relevant TechRadar research to inform the discussion.
- Create a learning loop. By consistently using TechRadar research, technology planners can capture their thinking in a standard framework and learn from past mistakes. Over time, this will help technology management professionals refine their decision criteria. Decision-makers should start by analyzing past adoption decisions that turned out not to provide much business value, and isolate the causes to tease out patterns. For instance, IT may consistently underestimate crucial factors like end user satisfaction or systems integrator support. Use this analysis to strengthen today’s decision criteria.
The Forrester TechRadar Methodology
Forrester uses the TechRadar methodology to make projections for more than a decade into the future of the use of technologies in a given category. We make these predictions based on the best information available at a given point in time. Here’s the detailed explanation of how we plot the TechRadar:
- The x axis: We divide technology ecosystem maturity into five sequential phases. Technologies move naturally through five distinct phases: 1) Creation in labs and early pilot projects; 2) Survival in the market; 3) Growth as adoption starts to take off; 4) Equilibrium from the installed base; and 5) Decline into obsolescence as other technologies take their place. Forrester places each of the reviewed technologies in the appropriate phase based on the level of development of its technology ecosystem, which includes customers, end users, vendors, complementary services organizations, and evangelists. Note that the five phases are not of any prescribed length of time.
- The y axis: We measure customer success with business value-add, adjusted for uncertainty. Seven factors define a technology’s business value-add: 1) evidence and feedback from implementations; 2) the investment required; 3) the potential to deliver business transformation; 4) criticality to business operations; 5) change management or integration problems; 6) network effects; and 7) market reputation. Forrester then discounts potential customer business value-add for uncertainty. If the technology and its ecosystem are at an early stage of development, we have to assume that its potential for damage and disruption is higher than that of a better-known technology.
- The z axis: We predict the time the technology’s ecosystem will take to reach the next phase. Decision-makers need to know when a technology and its supporting constellation of investors, developers, vendors, and services firms will be ready to move to the next phase; this allows them to plan not just for the next year but for the next decade. Of course, hardware moves more slowly than software because of its physical production requirements, but all technologies will fall into one of five windows for the time to reach the next technology ecosystem phase: 1) less than one year; 2) between one and three years; 3) between three and five years; 4) between five and 10 years; and 5) more than 10 years. Forrester will include relatively few technologies that we predict will take more than 10 years to reach the next ecosystem phase. Expect to see these 10-year-plus technologies only in the Creation phase for fundamental hardware innovations and in the Equilibrium and Decline phases for hardware and software on the “Significant success” trajectory.
- The curves: We plot technologies along one of three possible trajectories. All technologies will broadly follow one of three paths as they progress from Creation in the labs through to Decline: 1) significant success and a long lifespan; 2) moderate success and a medium-to-long lifespan; and 3) minimal success and a medium-to-long lifespan. We plot each of the most important technologies reviewed on one of the three trajectories to help decision-makers allocate their budgets and technology research time more efficiently. The highest point of all three of the curves occurs in the middle of the Equilibrium phase; this is the peak of business value-add for each of the trajectories — and at this point, the adjustment for uncertainty is relatively minimal because the technology is mature and well-understood.
- Position on curve: Where possible, we use this to fine-tune the z axis. We represent the time a technology and its ecosystem will take to reach the next phase of ecosystem development. Thus, technologies with more than 10 years until they reach the next phase will appear close to the beginning of their ecosystem phase; those with less than one year will appear close to the end. However, let’s say we have two technologies that will both follow the moderate success trajectory, are both in the Survival phase, and will both take between one and three years to reach the next phase. If technology A is likely to only take 1.5 years and technology B is likely to take 2.5 years, technology A will appear further along on the curve in the Survival phase. In contrast, if technologies A and B are truly at equal positions along the x, y, and z axes, we’ll represent them stacked.