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- 11/22/12--07:38: _Comments on "5+ gar...
- 11/29/12--22:52: _Amazon's AWS powers...
- 01/23/13--11:54: _An evening with Gil...
- 02/04/13--22:03: _Why Oracle is buyin...
- 02/05/13--22:58: _How Blackberry 10 m...
- 02/06/13--17:37: _Why is analytics so...
- 02/07/13--23:10: _Takeaways from Orac...
- 02/12/13--12:39: _UIX done right!? De...
- 02/14/13--15:28: _A Persona Driven In...
- 02/15/13--17:15: _5 Reasons why it's ...
- 02/19/13--22:01: _Next in your mall.....
- 02/20/13--23:02: _6 Misunderstandings...
- 02/21/13--21:55: _Why Application Unl...
- 02/22/13--09:45: _What will Michael W...
- 02/22/13--21:00: _A new software cate...
- 02/25/13--14:24: _Why SAP acquired Sm...
- 02/26/13--20:29: _Life in transition ...
- 02/28/13--08:48: _How many Pivots mak...
- 02/28/13--15:13: _I am worried about ...
- 03/07/13--15:44: _Why SAP acquired Ca...
- 11/22/12--07:38: Comments on "5+ garages to service your car? Sure"
- Technology ruptures happen all them time - but the last time it really 'weeded out' applicaton vendors was the move from mainframe to client server (SAP is the only mainframe survivor and managed to do a re-write). All other technology ruptures - the thin client / web change, the web services changes and right now the cloud change - have not shed any past vendors. Somehow they managed to move their core over to the next platform, kept their TCO low, kept their customers 'happy' etc.
- The other aspect is business innovation. In the 2nd half of the 90ies e.g. Forrester declared 'ERP dead', the music was playing in CRM, SCM, SRM etc. At one point Siebel Systems had more license revenue than SAP, Oracle, Peoplesoft and JD Edwards combined (!). But slowly the ERP vendors (SAP, Oracle and Peoplesoft) gained critical, 'good enough functionality' and they recovered lost customers, kept existing ones etc. Today all former CRM vendors are gone (Aurum (to Baan), Clarify (Nortel to SAP), Scopus (to Siebel), Siebel (to Oracle) and Vantive (to Peoplesoft), the SCM vendors are gone / a shade of themselves (I2, Manuguistics) and the SRM vendors (Ariba, CommerceOne - both SAP)... More recently vertically specialized ERP vendors disappeared (Lawson to Infor, Retek to Oracle), because their market was too small, they could not innovate fast enough.
- 11/29/12--22:52: Amazon's AWS powers on - Day 1
- 01/23/13--11:54: An evening with Gil Amelio
- 02/04/13--22:03: Why Oracle is buying ACME Packets
- 02/05/13--22:58: How Blackberry 10 matters to the enterprise
- Given Blackberry's security DNA - it's the first smartphone OS that provides complete isolation between corporate and private content on a device. In today's world not allowing your employee to use a company issued smartphone for private needs beyond the call home - is not acceptable. On the flip side employees respect the privacy needs of companies to protect their proprietary data. Yes, there are a number of MDM vendors out there who say they can do the same - but I still prefer this to be a capability of the OS.
Let me illustrate this: If your employer offers you a smartphone that will reliably prevent a wipe of your private data in case of a separation event (from your smartphone or from the employer) - versus the scenario where you can only rely on the 'best effort' of a MDM vendor, what would be your choice? Anyone who has experienced a remote wipe of their smartphone knows how traumatic that experience can be and may likely opt for BB10.
- Blackberry's productivity DNA comes through on many features of BB10:
- The BB10 Hub gives a user the power of a unified inbox. Anyone every having worked with the simpler inbox on the Blackberry OS7 devices will likely look forward to it. But there is a learning curve for anyone used to the notification mechanism of iOS and Android devices. BB10 will also have to find ways to filter messages more efficiently - e.g. you don't want to always see all tweets in between your emails. But it's a fundamentally different starting point to how information is presented and processed than in the other smartphone OS in the marketplace. .
- No Blackberry without a great keyboard. While the Blackberry Q10 with the physical keyboard isn't out yet - the reviews of the virtual keyboard of the Z10 are very positive. Finally a keyboard that can learn and anticipate what the next word will be. As will all disruptive innovations - it will take some time to get used to it, some reviews only speak of a few hours, which is encouraging..
- No 'Home' button anymore... call me Tayloresque - but why do I have to take my finger of the touchscreen area, to press a button and then move back to the touch screen area for the next step? Not efficient and if Steve Jobs would still be alive I wonder what his take on this design would be. As a side effect - it's esthetically more pleasing and allows more real estate to what really matters - the screen.
- Given the multitasking advantage - the peek gesture that allows you to see what messages, calls etc you have - from every app - brings a known PC feature to the smartphone. No longer you loose the content and context by pressing a home button, loading the app(s) you want to check and then return to where you had been...
- The browser has long been the achilles heel of Blackberry devices, BB10 brings in a new browser (based on webkit) and is the only smartphone browser to support Adobe's Flash. This matters because despite all the hoopla around HTML5 - there is still a number of enterprise applications using flash out there (take the e.g. popular Workday HRMS apps).
- BB10's QNX base allows efficient message transfer - so there should be no surprise that BBM added video - and more importantly in the productivity field - screen sharing. Its not desktop sharing - where the view of the other device becomes the other desktop - but you can see content of both devices next to each other - unique for smartphones at this point.
- [Inserted] Additionally BB10 supports an 'Android player' that allows to run native Android apps in emulation mode. Early reports say that they don't perform as well as on a native Android platform - but that should not come as a surprise. This capability give enterprises the option to run Android apps on BB10 - reducing app licenses, management, support and maintenance costs. And just in: Blackberry announces to upgrade the player to the latest flavor of Android - Jelly Bean.
- 02/06/13--17:37: Why is analytics so hard? Or: The holy grail
- effect of your Superbowl ad on sales,
- the effect a celebrity embracing your product on Facebook,
- the effect of a power outage in New Jersey, the effect of floodings in Thailand etc.
- Jeff Bertolucci (@JBertolucci) over at IDC points out how there is a skills shortage, predicted by McKinsey to be 140-190k data analyst experts. He wrote about this earlier, too.
- And Chris Murphy (@Murph_CJ) points out how the enterprises are trying to help themselves - with P&G hosting a conference with other enterprises (McDonalds, Boeing, BP, Disney, Fedex, GE, Goldman Sachs) and networking about the use of analytics.
- Phase 1 - Only experts can apply the technique to make the innovation happen.
- Phase 2 - Through tools more trained professionals in the relevant technology can make the innovation happen.
- Phase 3 - A business user can - with appropriate, but affordable training - use the innovation.
- Phase 4 - Any user can use the innovation, with no / minimal training.
- 02/07/13--23:10: Takeaways from Oracle Cloudworld LA
- Oracle started 5 years ago on its journey to the cloud - which would make it 2008. That was when the original Fusion Apps were supposed to ship - not sure if Oracle wants to portray such a sequential timeline - but the dates fall in place.
- The subscription value of the Oracle cloud products exceeds 1B US$ and is growing at 35% yoy. This is a healthy growth rate and puts Oracle at par with pure cloud vendors. You may ask for the breakdown, how much of that is organic growth vs acquired revenue - but of course you won't get an answer.
- Kurian claimed that you can run your company now fully on Oracle Cloud applications - which is a key milestone. The question remains the functional richness of these applications vs the legacy 'Application Unlimited' products. But we got some data points:
- A significant increase of finance functionality in the cloud will occur in the near future as Kurian announced the 'soon to be' production of Hyperion in the cloud.
- HCM in the cloud is now localized to 11 countries and available for 7 languages. Remind me - where does Workday stand on this?
- The pending Eloqua acquisition will be a key functional building block for the Social Relationship Management (SRM) product family, which is completely cloud based... sometimes it's good to be late to the party.
- The format of the keynote was for Kurian to give a high level overview of a product family (Financials, HCM, Talent (wonder why separate them, but ok), CRM, SRM, followed by customer testimonials played in via video.
- I was pretty happy that Kurian led with the business apps, a top down approach to walk through the Oracle cloud portfolio - and only then came to the technology. In the past Oracle too often and in my view wrongly - would present 'bottom up' - starting with the datbase. No word of the database at this event, btw.
- Kurian mentioned that Oracle will announce a Storage Service soon - and I wonder how competitive that will be - but from a completeness perspective it's certainly needed.
- Flexibility was the key argument used by Kurian, with the same stack deployed inhouse or in the cloud,with the same management tools your technology users are already comfortable with. Later I learnt that 70% of the cloud code is also running on premise, which is good engineering practice, but begs the (of course unanswered question) what is in the other 30%.
- Many companies have 'accidental' cloud architectures - someone buys something and the accident has happened. Then they try to fix things up.
- No timeline was given for the Taleo integration with the Fusion Apps / the Apps Unlimited products - no surprise.
- The RightNow UI looked dated and in need for an overhaul.
- Also no timeline for RightNow integration with Fusion - but incidents will be visible, and agents will see leads, opportunities etc.
- I was impressed by ambition, capability and scope of the SRM suite. Oracle seems to be serious in this area and is embedding social data and functions deep into Fusion. This could be a game changer years from now, when it comes to the social enablement of Fusion no longer being desirable and nice to have, but a must-have requirement.
- Ad Oracle's Cloud Products:
This is an impressive stack - both in scope and breadth - something nobody else - apart from maybe Microsoft - is undertaking right now. If Oracle manages to master the integration of the many acquired pieces, gets the functionality to a critical level while not loosing compelling TCO arguments - we are watching the ongoing work on the largest hardware-software engineering project out there. The synergies and benefits - once working - could be enormous. Till then there is a lot of hard work left for Oracle executives and engineers.
- Ad Oracle's CloudWorld event:
If you want to come up to speed or catch up on the latest about Oracle's products - this is a day well invested. Personally I would have preferred more live software and live customers in attendance, but that's always a compromise at events of this type.
- 02/12/13--12:39: UIX done right!? Dexplora for salesforce.com
- Tacticaly they can make difference to sales people's productivty. Also note how the pitch caters to the sales rep, not the sales manager, the IT manager etc. If done right the getsalesdone app may go viral very, very fast and be a phenomenon as a viralsocial app in the B2B space.
- On the strategic side: If they succeed, they may be able to create a new software category - the UIX software vendors. The enterprise vendors won't like that - at the end of the day.
- 02/14/13--15:28: A Persona Driven Innovation Model (PDIM)
- Nobody today would argue that client server technology completely disrupted the enterprise software space. Lower Total-Cost-of-Ownership (TCO) weeded out mainframe based ERP vendors, SAP being the only survivor of the mainframe age of ERP systems.
- Likewise no one would argue that the Oracle relational database provided much necessary platform capability to the client server age.
- And nobody would discuss that e.g. SAP's Hana in memory database is a potential disruptive innovation.
- if e.g. SAP's Hana will disrupt the enterprise software space.
- Or even more who would argue that e.g. Blackberry10 will not disrupt they Bring-Your-Own-Device (BYOD) market.
- Or are ARM processors will disrupt the PC market - or only supporting the tablet market?
- Is the innovation available for all our users - 'out of the box', no training needed? We are in Phase 4.
- Is it available for business users - but they need some training? That's Phase 3.
- Is it available for our trained technical users? Phase 2.
- Is it available for our technical experts (only)? And Phase 1.
- Assess what benefits innovations can bring to user groups, use persona to guide the project
- Will it be beneficial to move innovations to the next user group?
- Will that move disrupt your market and can you gain a competitive advantage from it?
- Can you make an innovation work on the technology at hand?
- What is the addressable market if you move that innovation along the S-Curve in the PDIM?
- Can you move it towards a new quadrant and not get disrupted yourself by technology challenges?
- They are happy with their existing applications. At least happy enough to not look for alternatives to their existing application. Otherwise they would invariably know about Fusion.
- Oracle 'Applications Unlimited' program must be working. The functional enhancements and roadmaps Oracle has put out, must create enough value (or 'stickiness') to keep customers happy.
- It also seems that the support and maintenance services vs payments seem to be in balance enough for existing Oracle application customers. They are not looking for alternatives. And a certain percentage of customers using 3rd party support keeps Oracle honest.
- There is none of the typical pressure tactics to force customers to upgrade, namely to end support and maintenance for older products or older versions, which forces the installed base to upgrade or even purchase a new license (from the incumbent or a competitor). You can bet the news services and blogsphere would be all over this when it happens - rightly so.
- It's also a good thing for Oracle as it gives their product development teams enough time to enhance, mature, extend and develop the Fusion Applications. [Watch for a post on this in the near future.]
- 02/19/13--22:01: Next in your mall... SAP and Oracle!?
- Vendors could use their stores for education purposes:
Check out that new user interface, see the latest release, learn more some features, offer certifications and trainings. Or:
- Ask your SAP Genius on how to get that material code propagated.
- Ask your Oracle Guru how to close that book in e-Business suite faster.
- It would create a point of presence for customer service:
With new cloud based software architectures, new service strategies could be brought to the mall: Bring in your iPad so we can install the newest SAP mobile client, upgrade your old Business Objects Explorer... all while you shop somewhere else.
- It's a non threatening entry point for competitive strategies:
With standardized APIs, guerrilla marketing is in reach: Similar as Dexplora is putting an new UI on top of salesforce.com - why not look at your Oracle or SAP system through a new (Workday anyone) UI? (I know this far fetched and a lot of heavy lifting has to happen in the background, but Dexplora shows, how that can work).
- Float the trend:
We are all witnessing the 'consumerization' of IT. Nothing embodies thinking this process through all the way than finding yourself in a mall, where consumers are present. Why not be present there, too - a consumer is usually also a worker that somehow uses an enterprise application.
- Could this be the DTC for enterprise software - DTU:
Similar as the pharmaceutical industry saw a marketing surge when DTC marketing was allowed, enterprise vendors could market directly to the user (call it DTU).
- Brand promotion:
How many employees in the IT field do you see proudly wearing and carrying vendor paraphernalia? Give them a chance to buy it for the whole family at the mall.
- 02/20/13--23:02: 6 Misunderstandings of Analytics
- Vendor viability
If you are worried about your vendor not making it to the next quarter, you know you have a problem that you better solve soon. The viability of a vendor may also be affected by acquisitions in the market place. It may not even be your vendor being acquired - but their closest competitor maybe snapped up by Oracle or SAP and now they have much deeper pockets, reach etc.
- Technology obsolescence
You saw it coming all the way - the technology you are running your systems on is becoming obsolete - it is no longer supported, can't be maintained etc. Luckily we haven't seen that too much in the last decade, since somehow vendors managed to transition from client server to the internet architecture and from there (somewhat) to the cloud infrastructure.
- Total Cost of Ownership(TCO)
The technology you run you enterprise application on, is still supported, but getting punishingly expensive. Someone in your enterprise maybe 'sleeping at the wheel'. I have seen the fair share of this in action, with eg vendors buying Visual Basic runtime licenses on the grey market to keep their offering afloat. Enterprises collecting database licenses that are no longer sold etc. And TCO has been very real in shaping today's enterprise vendor landscape - as client server turned out to be so much better in TCO than mainframes (IBM will differ) - but that's the reason why Dun&Bradstreet, GEAC, AMS et al are no longer in the enterprise application business.
Maintenance is partially related to vendor viability but still a key factor on its own. Enterprises pay for maintenance and rightfully expect not only bug fixes but also the further continuation of functionality development. These functional roadmaps are to keep business software close to best practices, regulations etc. If your vendor does not have a credible roadmap, you need to look somewhere else.
Even with the most seasoned in house team, you rely on the support of your vendor. If the support is not available, not acceptable or too expensive - you may no longer tolerate or be able to afford to use that vendor's system. You may disassociate from your vendor slowly by using cheaper 3rd party support options from the RiminiStreets et al.
- Location - what food sources are available
- Previous Meals
- Grocery receipts (what's in the fridge if he's at home)
- Restaurant receipts (where does he usually eat, what type of food he eats when eating out)
- Restaurant data - which restaurants are around, frequency to visit, whats on the menu
- Calendar data - who is he meeting with
- Social data - Facebook or Twitter may give away the dinner plan
- Couponsphere- He may have vouchers from Groupon and likes
- Credit card balance - may determine how much will be spend for dinner tonight
- 02/22/13--21:00: A new software category - User Experience Software?
- What is UES?
UES is software, that changes the user experience of an enterprise application, but is not built by the vendor of the application.
- How does it work?
The UES uses (public) APIs to the application that it provides a user experience to. It needs to leverage open authorization / identification mechanisms as well.
- We need to see openness of the enterprise applications to expose their business functionality to a different user interface. The good news is, that technically all modern software systems are able to do that - the question is - will the vendors allow that. Salesforce for instance does, Workday does not.
- We need to see massively greater UI talent with the UES vendors than the enterprise application vendors have in house or can procure. If the enterprise vendors could provide the best user experience to their back end systems - then the category will fall flat instantly. Luckily for any UES vendors out there - this hasn't happened and I do not expect it to happen. Compensation of the talent, which today resides mainly in UI consulting firms (eg frog design) should be easy - as UES vendors should have deeper pockets thanks to the license revenue they can charge than the service providers they compete with for talent.
- There needs to be enough license revenue to create a market. But since user experience is critical for the acceptance and usage of enterprise systems - I would not be concerned about it. I think a UES vendor can easily charge 20-30% of the license price of the back end system.
- 02/25/13--14:24: Why SAP acquired SmartOps
- 02/26/13--20:29: Life in transition is hard - SAP HCM
- 02/28/13--08:48: How many Pivots make a Pirouette? Salesforce's latest Pivot
- 02/28/13--15:13: I am worried about ... Workday
With the executive brain trust of Workday coming from the mainframe and client/server time, management may just not have grasped the opportunity - yet.
- Non Elastic Architecture
Elasticity is the key enable for virality. If your architecture is not really elastic, you cannot execute this strategy as it will be too expensive to enable.
- Customers don't buy that way
Certainly the customer is king in every sale. But if a vendor has transformative technology in their possession and does not try to change the sales process - it's their risk and potential loss and worst, demise.
- 03/07/13--15:44: Why SAP acquired Camilion
Here is my comment in 'one run' to fitzecarraldo's comment here:
@fitzecarraldo: Likewise - nice meeting you. At this point it seems I cannot comment on my own blog.... need to debug what is going on between blogger, google, google+ etc.
Would be interesting to see the PI vs Tibco comparison - though they really are not in the same markets... Tibco vs other standalone integration tools would be interesting (and has real decisions behind it in the marketplace). SAP PI vs Oracle Fusion Middleware would be interesting (but not much of a marketplace interest as enterprises decide on their ERP package and then need to 'live' with the decision in respect of integration services offered).
@both: Also your examples are interesting and good - and to my point- they fall into the scenarios where not more than 2 key enterprise apps are running in the same package. By then the quality and capabiity of the integration platform is a matter of survival for the company, fully agreed.
Where I think I differ is in the assumption that we are moving more towards integration era or application suites era. Enterprises want to save on automation - and you can save more, if you buy integrated automation. Companies like Deutsche Post in your example don't go down the integration path because they want to - but because of a lack of pre-built automation solutions for their enterprise.
In my view there are two reasons the 'enterprise automation ice plates' can break and drift apart (or even melt and disappear) - that is technology and business innovation.
So to stay with the ice plates analogy -- we have fewer ice plates than since a long time, and that reduces the market and need for integration. You may argue that there are new SaaS companies like salesforce, workday and NetSuite. But the interfaces to CRM and HCM systems are well understood and have been there since a long time (SAP customer to a Siebel system, Oracle customer to a Peoplesoft system) and NetSuite offers a 'closed' suite with integration tools themselves, they are an 'incarnation' of Oracle or SAP - only based on a cloud philosophy and architecture.
In conclusion: The integration need exists, but it ebbs and flows with the tides of 'automation ice plates' - and in that regards we have seen 'global cooling' in the last 20 years.
This was Amazon's first developer conference - so I thought it would be important to spend some observation time and thought cycles on what they presented and announced in the keynotes around what I believe is the most dominant cloud infrastructure out there. 1st post is about Andy Jassy’s keynote, 2nd will be on Werner Vogels.
Andy Jassy's keynote on Tuesday started with a customer overview - with Pinterest, Instagram, Dropbox, Foursquare and Sprotify to large enterprises like Shell, Samsung, Hitachi - and many government and academic institutions working now with AWS. It begs more and more the question - who does not use AWS?
Some landmark data points are:
AWS has expanded to 9 regions and 25 availability zones (aka data centers) with 1 in the West, 2 on the East Coast of the US, one in Europe, one in Brazil, one in Tokyo, one in Singapore and the newest one in Australia. And one more, the 'gov cloud' for government in the US. The content delivery network now has 38 'edge' sites.
What amazes me the most is the variety of use cases - from media and streaming apps, to conventional business apps, consumer apps and even to games. That generic hardware can support these very different applications, without more specialization of the configuration is quite surprising (but more on the new instance types soon).
It was impressive to see how AWS helped JPL to stream the Mars Rover landing earlier this year. Theatrical how the throughput needed to scale up as the rover came closer and closer to Mars' surface. Ironic that the JPL website - built on traditional web infrastructure crumbled from the requests by eager viewers - but the AWS streaming instance kept up, serving up to 80 GBit / sec. I remember also impressive numbers from Google App Engine powering the Royal Wedding in the UK last year - so it looks like streaming events are the the true scalability tests of cloud infrastructures.
A true point in how Amazon's infrastructure gets better and cheaper is that Amazon has passed 26 price reductions to their AWS customer. And good plug to state that S3 will be about 25% cheaper to be used. Jassi also pointed out how capacity planning is less crucial thanks to AWS and showed some impressive instance delivery statistics. The combination of all these features allows for more experiments, more options to test out new innovative ideas. Moreover he made a good point that by AWS taking over the 'plumbing' (data centers, servers, networks etc), customers can focus on what is strategic - building great applications. And not surprisingly AWS gives you an excellent springboard to a worldwide platform.
As a public cloud vendor, Jassy of course needed to compare the public cloud to the private cloud, which according to Amazon does not even closely deliver the benefits of the public cloud. He then went on to quote some 'old guard technology' vendor statements, having some fun with them:
The Amazon stab against the 'old guard technology' vendors is that they are 60-80% gross margin businesses, that cannot think like Amazon, a high volume low profit margin business. Obviously this is the better company DNA to run a public cloud vendor.
The showcase of Netflix with CEO Reed Hastings on stage was impressive. Not only is it again a streaming business that taxes any infrastructure, but it's also a competitor of Amazon (Amazon Video Service) that trusts AWS to run its infrastructure on it. Not many other businesses would have even vaguely considered to run their key delivery IT infrastructure ... on that of a competitor. Hastings seemed to be very comfortable with that. How much Netflix could really have built this infrastructure themselves is of course another story. But today already 95% of Netflix runs on AWS. I was impressed with Hastings' cloud saviness - he called the current state of cloud 'assembly language phase' - comparing it to developers in the pre compiler age carefully having to assign registers to their programs. He also raised the ability to moving running live instance (with a mention of VMware - Jassi didn't look too amused) and sees that as the next stage for cloud platform providers. On the client side Hastings sees touch interfaces, lot's of personal computing power in the hands of people, but cloud assisted - Siri was the example. He also talked about the famous analytic problem to serve the right video content to their customers, which is the 'fundamental ranking' problem to the Netflix business.
The progression of functionality and features in AWS is remarkable - from a few dozens a few years back - to well over 150. The driver really is to make any application be able to run in AWS. It's worth mentioning that DynamoDB - only launched in January 2012 is the fastest growing AWS service.
So what is the next AWS service? Not surprisingly - almost the logical step given the existing capabilities AWS has for storage and analytics - this is Amazon redshift - a data warehousing service. Platforms range from 2 TB / 16 GB RAM nodes to 16 TB local disk and 128 GB RAM, you can configure up to 100 nodes (up to 1.6PB). Data (not surprisingly) is stored in columns and standard SQL as well as JDCB / ODBC queries are supported.
Amazon tested Redshift with their own traditional data warehouse (quite impressive - 32 nodes, 4.2TB of RAM, 1.6 PB disk (sic the size of the new instances?!) - and a several million investment) and was able to run it in two 16 TB / 128 GB RAM nodes (less space needed due to column storage) at $3.65 / hour or $32k p.a. - a pretty compelling business case. Drink you own champagne...
Looks like the tools vendors have realized this as Redshift supports Microstrategy, Jaspersoft, SAP Business Objects and Cognos through ODBC / JDBC / Postgres SQL access. Redshift is in preview mode today and will be officially launched in 2013.
Equally Amazon has done a lot of security certifications and adoptions of standards for AWS to improve businesses concerns around security. Nasdaq invested into FinQloud on AWS, adding credibility to the AWS security features.
Finally Amazon has done a lot of work to help customers move their applications to AWS, an effort also supported by a lot of partners in the ecosystem. The enterprise software group running on AWS is impressive - not only the 800 pound gorillas of SAP and Oracle / Peoplesoft - but also infor, Appian, Pega... oddly Microsoft Sharepoint was on the same slide.Sanjay Poonen did the honors for the segment - didn't hurt he and Andy were together at HBS. SAP now supports Business Objects, the mobility platform, Hana One and Business One on AWS.
And in closing Jassi mentioned that the Obama campaign used AWS to power their grass roots campaign. Well there AWS really helped to shape history and the near term future of the US.
myPOV: A promising start for the AWS reinvent conference. Not sure where the re-invention is – as this is an impressive progression of the AWS platform. As mentioned earlier – who does not move AWS in some sort of fashion – and can you really afford not to look at AWS in 2012?
More tomorrow when we hear from the CTO of AWS, Werner Vogels.
He thinks there is not enough public discussion about productivity – which dwarfs more popular topics such as the deficit and the fiscal cliff in importance.
An entrepreneur should be prepared to answer the following 3 basic questions of potential investors (only 10 words):
myPOV: Always enjoy to listen to great individuals who really held the fate of an industry in their hands - and learn how they saw things back then and now. Always good to listen and learn, and this event exceeded my expectations.
Before market opening Oracle announced the intent to acquire ACME Packet (ACME), subject to ACME shareholder approval and the usual regulatory details. It's Oracle's first acquisition of 2013 and values ACME at $1.7B at net cost. Quite a lot of money for a public company that's not growing and loosing money.
|View of Oracle 500 Parkway|
So why did Oracle buy at an unusual high multiple and a 22.2% premium? Let's see what the strategists in Oracle 500 Parkway maybe looking at:
Oracle chases growth alleysOracle revenue growth has largely been fueled by acquisitions and may slowing down, so Oracle is looking for good strategic investments to keep revenue growing. ACME is interesting in that respect, as it has seen a reduced market value because of poor business performance - while it still has a commanding lead with telcos around the world (89% use them) and is a leader in Gartner's Magic Quadrant for the SBC (Session Border Protocol).
There is more growth potential - higher than what you can achieve in Oracle's traditional technology and application software business - in the SBC market space: Carriers need to revamp their 2G networks to 3G and and 4G networks. Data volumes are growing exponentially here - so SBC capabilities get even more critical. On the enterprise side the replacement of older protocols with SIP is an equal growth opportunity. If executed right and with Oracle's global presence - the ACME software assets can grow significantly faster than any of the other Oracle businesses.
Another engineered system optionOracle doesn't get tired at pointing to their strategy of engineered systems. Bundling low level networking and SBC capabilities in to an 'ExaNetNet' server (100% made up product by me) - is something I would not be surprised to see. Especially since Sun had a very successful hardware and IP combo in the dot com boom. Those corporate memory functions are strong - even post acquisition.
Growth for the Communications DivisionThis is the most conservative scenario for Oracle, and makes sense by itself - though IMHO it does not justify the price paid. But this is how Oracle is playing this with the standard procedure letter to customers by Bhaskar Gorti, the SVP in charge of Oracle Communications.
Oracle's co-President Mark Hurd make comments along this line in the press release :
“The proposed acquisition of Acme Packet is another important piece in Oracle’s overall strategy to deliver integrated best-in-class products that address critical customer requirements in key industries. The addition of Acme Packet to Oracle’s leading communications portfolio will enable service providers and enterprises to deliver innovative solutions that will change the way we interact, conduct commerce, deliver healthcare, secure our homes, and much more.”
Here is how ACME helps service providers:
But Oracle would not play their cards too early. Since they are really up to core telco provider territory and up against competitors like Cisco, Alcatel Lucent, Huawei, ZTE etc.
The bigger pictureThe real limiting factor for the cloud are Internet speeds - how fast can elastic applications be provided to the user inside and outside the enterprise. In any case - no matter if private or pubic cloud - SBC will be the code that will channel IP packets, handle the over efficiently between IP networks. What if a session delivery network could deliver complete instance images more efficiently by prioritizing, grouping and moving the related IP packets? .
In more general terms - here is how ACME helps enterprises:
Owning this infrastructure can give Oracle a performance advantage for Oracle IP traffic and a leg up on the competition. And while its unlikely Oracle will use this against 'other' IP packets - I expect Oracle to earn an implicit trust advantage over other offerings, similar to the one Cisco routers have - when it comes to use a Cisco VoIP solution.
And this ties again to Oracle's corporate DNA: Since founding Larry Ellison has had a key eye on Total Cost of Ownership (TCO). No Oracle project ever got started without a specific ambition to lower TCO for customers, usually at the expense of existing or older technologies (usually from competitors).
Owning the SBC architecture of enterprises and telco service providers will give Oracle significant strategic advantages when it comes to deploying cloud solutions and architectures in a more and more mixed packet IP stream.
After significant delays RIM - now renamed as Blackberry - has launched it's Blackberry 10 (BB10) operating system - or as the company refers to - a platform. Reviews are genuinely positive with the biggest criticism coming for lack of apps (see e.g. Walt Mossbergs (@waltmossberg) column here) and questions if the new phones (the N10 and Q10) combined with the platform will be enough to entice new smartphone users to drop their phones and move to Blackberry and thus stem the dramatic decline in market share the Blackberry brand has seen in the last years.
But how does BB10 matter to the enterprise?
Blackberry is (still) a force in the enterpriseAs Dennis Howlett (@dahowlett) points out there is still significant market share of Blackberry in the enterprise (see here). Quite a number of CIOs will look at this as the chance to offer a smartphone that is regarded as "at par" to the most modern iOS and Android devices. As we all know, IT never likes to loose control - also because IT professionals sense, that they will be blamed in case of an issue afterwards. And many IT executives have not forgotten that most iOS devices found their way into their company 'top down': An executive wanted an iPad (or often just bought one) and IT had to make it work. In todays corporate culture it wasn't long that iOS devices could be kept from lower management levels and thus mushroomed across the enterprises, creating a few headaches. Blackberry reacted with opening BES to manager other devices, and today has significant administration options for non Blackberry devices (see e.g. here). But that wasn't enough to put a stop to the loss of mind share and market share. Now IT not only has a good MDM functionality, but also at least 'good enough' devices to give to their employees to re-establish control lost through the BYOD trend.
Innovation mattersSeldom a completely new platform is offered in the smartphone market place. In the last 10 years we only saw 5 platforms making it to the market - iOS, Android, Palm, Windows and now BB10. Palm's WebOS is long gone and somewhere sitting on HP's books being written down. If you then consider that iOS developed from the iPod age further to today's iPhones, granted with a lot of additions, it brings the number of built from scratch smartphone operating systems (OS) even further down. But even counting iOS - we only see a new smartphone OS make it to them market every 2-3 years since the turn of the century.
What makes BB10 unique is that it was developed by a company who's culture and values are deeply rooted in providing the best R&D efforts - without taking shortcuts. Accepting even company endangering delays (sic!) before shipping something incomplete / not ready. An previous example for the company's commitment to R&D is, how the then RIM, re-wrote the 3g subsystem - while all competitors took them from the shelf. This is why when you land in a different country, your Blackberry will in 99% have you on a 3g network faster than your iOS, Android or Windows device. Or how the Blackberrys "claws" to the next closest antenna, when competitive smartphones have lost signal a long time before.
Moreover, BB10 supporting real multi-tasking is something that was missing in other smartphone platforms. It offers process separation and runs every program as a reloadable process. We know that iOS and Android 'could' support multitasking, but say they don't, to avoid battery drain. Windows Phone 7 used a similar argument. But shouldn't the 21st century smartphone user have the choice? Run more applications and have less battery or less application and preserve battery? I have never seen a laptop maker using the same argument.... but the same mechanics apply to a laptop battery and CPU usage.
Finally, very little has been reported of the fundamental different nature of BB10 coming from it's QNX roots. While the other smartphone OS have a large microkernel, BB10 has one of the smallest kernels (Neutrino) for any commercial OS out there. In fact Neutrino is so small it fits into the L1 cache of the CPU. At the end of the day this boils down to an OS that can efficiently and easily connect to messages (data) that are on different devices. You can see this already on the Blackberry Playbook to some extent, with the video chat capability. Or with the great support for products like Dropbox in BB10.
And next to the 'fundamental engineering' DNA of now Blackberry, the company is deeply rooted in the B2B world, where security, productivity and reliability matter. Take all this together and you will find a technically very competitive smartphone OS. And more competition on ideas and concepts keeps all participants on the toes, making sure we see innovation across all smartphone vendors.
BB10 features that matter to the enterpriseHere is a list of features that IMHO are key differentiators for BB10:
|BB10 Hub (from TechRadar)|
|BB Keyboard with word prediction (from Blackberry)|
|No Home Button (from Computerwelt DE)|
|BB10 Peek (from TechRadar)|
I have been going over this for a while and today a twitter interaction with @DAHowlett, @InFullBloom and @JimHolincheck put me into action - thanks for the jolt!
Let's look at the scope, as I understand it and use it going forward: I am NOT talking about the marketing buzz word analytics but the place where Analysis happens and Actions / Guidance result from it. Wikipedia pretty much nails it:
So let's start with analysis. The problem with analysis is - it keeps moving, moving and then moving.
Sales Data analysis is good example to illustrate the problem: Today every enterprise user with appropriate access can get total sales. So far so good. But now it gets more complicated - you can splice sales data by product, geography, customer, sales organization, sales channel, etc. And quickly you come a datawarehouse situation. Datawarehouses are well understood and billions have been spent to create and maintain them. Can they answer all sales analysis questions? To a certain extent, as the dimensions of the star schema foresee them. Not when you need to add new dimensions and vast volumes of data, take for example the
[Sidebar: Ironic that MapReduce / Hadoop were developed to predict sales data - predict a fair price for a display ad from understanding who has been doing similar searches with certain socio-demographic characteristics.]
It get's trickier with the other aspect of analytics - the action / guidance. To do that you need to create a model that can predict outcomes. And the model often also needs to know which outcomes are favorable.
And now to the holy grail: Yes you can analyse data and you can give the end user tools to perform analysis in the confines of a datawarehouse. The reality test of course is - will your user use your datawarehouse... or Microsoft Excel, as Josh Greenbaum points to correctly in a side conversation:
When you need to open it up to MapReduce / Hadoop you can't empower the end user anymore - the tools are not there yet - the whole 'bigdata' industry is still too much in its infancy. We are in the 2nd phase of maturation of the industry where tools are being created to allow more programmers to get to the problem (see Pig etc). Far away from handing them to the end user.
As far as modelling is concerned - we are even more in the infancy of applying models. Though models are well understood and modelling techniques do not see too much innovation - the heavy lifting is still left to the 'eggheads' and PhDs. We haven't even seen the 2nd phase of maturation as with MapReduce / Hadoop. Some very brave and smart startups are trying to leapfrog the 2nd phase and move right away to broad end user enablement (see e.g. Sparklinglogic) of the 4th phase.
This is why - IMHO - the enabling of the end user is the 'holy grail' of analytics. Whoever manages to tackle this first will have a first mover advantage and a solid lead and opportunity in a very big market.
Interesting enough there were more publications with thoughts and data that Analytics is still in phase 1 / 2.
End user enabled analytic apps are a very different problem to what @JimHolinchek refers to above with TurboTax. Even though very complex, the tax code has a number of finite possibilities to fill out your tax return. And TurboTax does a great job empowering the taxpayer to provide their tax returns. The technique is what @InFullBloom calls interrogatory configuration. I called it - like Oracle - self service setup. Only not applied to tax returns, but to HRMS setup or general business application setup. But we are far away from that today - if we want to use it for analytical class problems and applications.
Here are the 4 phases of innovation I refer to:
I had the pleasure to attend Oracle CloudWorld in Los Angeles last week - it was a good opportunity to catch up on where Oracle's latest efforts around the cloud are.
The conference was part of a worldwide tour of CloudWorld conferences, the Los Angeles stop was the 2nd event, the whole series kicked off in Dubai. It looks like Dubai was well attended with 1500 participants, the Los Angeles event was probably a thousand attendees with many Oracle employees in the audience. I was a bit surprised given that this is the only CloudWorld event happening on the West Coast - and one of two in the US (New York being the other location on April 2nd).
Charlene Li (@charleneli) from Altimeter kicked off the event, with a good keynote on the effects of social. "Social will be like air" was the tag line to be expected from her previous work and presentations. She provided hands on advice with the 6 step plan to become social - which provided value to some in the audience. You can find her always interesting slides on slideshare, here.
After that it was up to Thomas Kurian - who I haven't seen speaking in a few years - and must say he has become a much improved presenter. He is also much more comfortable to speak about business applications than back then, which is great. Here are some tidbits from his keynote:
|Thomas Kurian delivering keynote at |
Cloudworld Los Angeles
I attended presentation from the cloud integration, CRM, SRM and HCM tracks - and they were solid and informative, but lacked a little bit the glitz, as to be expected. There was a demo area - but I was expecting also some live demos in these tracks, instead mostly canned videos of demonstrations were shown. This is unfortunate as it degraded the overall pretty positive experience of the conference.
Takeaways from the small sessions:
In an interesting development today, Dexplora got their iOS app GetSalesDone approved for salesforce.com. For those you who haven't heard of Dexplora before - it's a Swedish startup, formed by a former founder of The Astonishing Tribe (TAT), the company that contributed a lot to the current Android UI and got acquired by the then RIM 2 years ago and added a lot of their ideas to the current Blackberry 10 user experience.
I am not surprised that when looking for something as a new challenge, the crew ended up in CRM. And given the importance of mobile coupled with the TAT expertise in mobile - to pick a mobile sales application. It turns out that sales people are one of most fickle user groups to build a business application for - because they are 'voluntary' users. No contributing sales rep will be terminated for not using a CRM application... instead the reluctance of sales reps to use a new CRM application is one of the main contributors to the over 50% failure rate why CRM applications fail.
The pitch caters to the sales rep...
We turn the CRM from reporting into planning, so you can focus more on what you will do rather than what you've done. And our app shows activities you can do to achieve better results. Our ambition is that you should get your bonus with less hassle. And it's elegant and easy to use, something most CRM systems can only dream of. Currently we support Salesforce and iPhone, but expect more.So Dexplora built a very clean iOS app that shows in this video the creation of an account, contact, opportunity and the creation of a task that nicely flows from iPhone to iPhone to desktop and inevitably ends with the successful closure of a sales opportunity. As an ironic sidenote - a Samsung business card is the start of the demo (on iOS and previous company was sold to Blackberry - coincidence? Or a pitch to the new Samsung VC fund?). And as we talk on curiosities - the demo creates ''Metis Samsung" - are we talking about the titan goddess of good counsel, craftiness and wisdom? Or a person born to parents who belong to different groups defined by visible effects (Dexplora and salesforce)? Both apply!
The problem with CRM UIX is - that it always starts easy - and clean - but then gets complicated... Just in the demo, Dexplora skirts (and it would be interesting if they have added the functionality and it was just cut from the demo video for time reasons) adding products to the opportunity, the creation of a sales team, mentioning the competition. These are staples of basic opportunity management. On the nice task / delegation functionality - it skirted the more complex UIX to delegate task to different users - on and off the sales team. And we are not talking about creating the opportunity from a lead, converting opportunity data elements to a quote or proposal, splitting the opportunity, forecasting on it etc. But let's be fair - it's a promising start. But it always starts easy...
There are some innovative UIX ideas in the demo - like pull down the list of entities and then release to create a new entity. The activity flow of the opportunity demos great:
[Inserted] The app also uses some of the newer screen animations see here, which increase the 'fun' factor using an app:
|All screenshots courtesy of Dexplora|
The other interesting aspect is, that Dexplora focused on the UIX only. The whole business functionality resides in salesforce. Pure UIX layers can add significant value for users - not only in CRM but take e.g. NorthgateArinso's euHReka HCM product that provides a user friendly front end to SAP R/3. The good news here seems to be that salesforce welcomes work like Dexplora's as it fits into their 'platform' strategy. On the flip side - we all know: Who owns the eyes of the users, owns their wallets (or the software license - ultimately). If you get sales people to use an application for it's great UIX and they get 'hooked' to it - they don't care where the APIs run into ... a salesforce, a Siebel, a Oracle Fusion CRM, a mySAP CRM. This is ultimately not in the interest of these vendors.
MyPOV: A very talented group of UIX people is tackling one of the toughest UIX areas - CRM and mobile.
In my recent post about the adoption of analytics (or 'Why is Analytics so hard'). I referred to an innovation model that has been firing synapses in my brain since quite a while, so it's about time to blog on it:
There are a lot of models about innovation - since its the driver of mankind's progress. There are even fellow bloggers who have dedicated blogs to collect everything innovative coming about. A lot for work has also been done to formalize the innovation process and evaluate ongoing innovations. One model that IMHO sticks out, is the focus of Harvard's Christensen disruptive innovation model, as it differs between sustaining and disrupting innovation.
|Christensen, from WikiPedia|
|Constellation RG - more here|
The alternative is to go after the actual user of a new innovation. This is what I am proposing in the "Persona driven Innovation Model" (PDIM) below.
Why pick the persona / user metaphor? Because it makes it easier to assess innovation from an enterprise perspective. Let's remind ourselves that enterprises are not in the business of innovating per se -- but at deploying innovations to automate their enterprise processes. And enterprise processes are driven by users. So instead of pondering what kind of 'type' of company an enterprise is - or if they are a 'laggard' vs a 'fast follower' - just ask these questions:
Now lets put this into the ubiquitous quadrants:
And I have added two more elements - the 'S-Curve' which shows, how an innovation could migrate through the PDIM. Many innovations will not make it all the way, some of them have their right by themselves to stay in the bottom left quadrant or the bottom two quadrants (e.g. a compiler, a engineering tool etc), as they are only targeting technical users.
Moreover, the innovation will always have to cross the 'disruption zone' when moving from phase to phase - which is both an opportunity and a risk. The opportunity lies in the disruption of the market, the risk is, that there are significant hurdles to move the innovation forward - as it may never make it. Or it make take a very long time (e.g. Analytics in the hands of a business user).
Let's test the model with these innovations:
Probably most enterprises are happy to have their CAD / CAM systems only used by their technical experts (Phase 2). But maybe some of them want to give an easier to use version down to some trained business users, making it (Phase 3).
Or: Do we want to put analytical tools in the hands of business users? If the enterprise decides to do so - they create demand for moving from - in the example of analytics - from Phases 1/2 to 3. That demand is what vendors want to capitalize on and build for. Staying with the example - the vendor that will be successful to put analytical tools in the hands of business users - will win the 'holy grail' of analytics.
The vendor perspective
Forrester Research grabbed some headlines on the news services this week with a report titled: "Oracle's Dilemma: Applications Unlimited Versus Oracle Fusion Applications".
In true tradition of headline grabbing reports, Forrester claims, that Oracle's customers are confused about Fusion applications and that 65% of them do not plan to upgrade.
And in true Oracle tradition, the company published a rebuttal later in the week, criticizing some of the Forrester findings, methodology and statements. No surprise. The 2nd wave of comments from bloggers is out - and I like Dennis Howlett's here and ORCLville.
But it made me think - is it such a bad thing if Oracle application customers do not know about Fusion? Only if Oracle would actively marketing, selling - in short pushing - Fusion. In this case it would be bad marketing, futile sales efforts and probably a value proposition that is challenged.
But as we all know, Oracle is not pushing Fusion. Then it's not bad thing Oracle Application customers do not know about Oracle Fusion Applications. Au contraire. Here are 5 reasons why:
MyPOV: I think the executives in 500 Oracle Parkway know what they are doing. The co-existence of 'Application Unlimited' products and Fusion products has served Oracle well. If Oracle was in dire application license revenue pressure - then Oracle would need to 'push' fusion and that message we would all hear loud and clear, rest assured.
In today news we learnt, that Google is likely going to follow Apple, Blackberry and Microsoft with opening stores in malls. Google has tested this strategy already in Dixon's outlets in the UK and some Best Buy outlets in the US. Mainly for promoting the Google Chromebook.
And it seems to be intuitively right - as numerous Apple Stores have shown, hand-holding the consumer is key to brand loyalty and product success. Likewise Google should do with their Nexus phones, tablets and the Chromebooks.
10 years ago nobody would have expected to see anything even remotely close to this. Profit margins of retailers are traditionally razor thin, operations are complex (see Apple's issues with time management and overtime) and should be dilutive to share price - compared to the profit one can wring out of, say the search business (Google), the high end consumer goods market (Apple), software business (Microsoft) and even handset and OS making (Blackberry). The trick is to provide a high end brand and price strategy coupled with excellent customer support. The outlets are not a Tiffany's or Hermes store - but will beat most other retailers in sales per square foot.
Could a retail presence be interesting for enterprise software vendors, too? When reading the news I sheepishly asked this morning:
Google's move was also spotted by SAP's CMO - Jonathan Becher (@jbecher) and I was able to get into a short Twitter conversation with him on this (and kudos for a responsive executive!) :
So physical stores are not be seen in the near future of SAP... but digital stores in physical locations? Which begs the question - what is a digital store? Google Image searches mostly show physical retail stores:
|Apple Digital Store in Manchester - top Google hit for Image search for 'Digital Store'|
Or maybe a digital store is an apps store like we know them from iTunes, or Google Play? Possibly - and then based in kiosks in the malls.Or how does an apps store get a physical presence? Guess we will have to wait for the SAP retail strategy to pan out.
It's worth noting that both Oracle and SAP have dabbled in kiosks - anybody flying out of SFO's United Terminal will have seen them in the last years, they came and left. As we haven't seen more of them, I assume the strategy wasn't too successful and maybe only spurred by one-upping each other in the hyper competitive years between the two companies.
But a high frequency retail presence could make sense for an enterprise software vendor, here are a few reasons:
|SAP 2012 Fact Sheet|
Alright - some far fetched, I agreed. But consider this: SAP has an ambition to reach 1B (Billion) users in the next years - that will only be possible with some consumerization of products, which leads to "digital stores in physical places" as mentioned by SAP CMO Jonathan Becher above..
Crazy? Maybe - care to comment - please do so!
I had the pleasure today to join the #AnalyticsChat "How the Next-Gen CMO Harnesses Analytics" hosted by Gavin Heaton (@ServantOfChaos) from Constellation Research Group. It was a blast of tweets, a lot of fun - but also made me aware of some fundamental misunderstandings around the what 'analytics' is about.
(1) Analytics! - Beware the 'false' analytics:As mentioned earlier, analytics is the combination of analysis and derived actions (or at least guidance).
(2) Too much dataThe data problem of analytics has been solved by BigData - namely Hadoop and MapReduce. No need to worry anymore if you can afford to store the data and how to store it.
Not enough skills is the problem - this is why Analytics is hard and 'stuck' in Phase 1 / 2 of the Persona Driven Innovation Model (PDIM). A marketing professional can not create analytics - the tools for that are not yet made user friendly enough. And - to find the right predictive model to drive to the action is equally not solved.
(3) Which data to store - which notOf course you need to store all data you can get your hands on. What may not look like important today - maybe relevant tomorrow. The business impact of not storing the data, will be very likely to outweigh the cost of storing it in the meantime. So don't be afraid to store all that you can get your hands on. Don't fall in trap from the time before the BigData era of thinking you can save money by storing less data. You won't. And you will regret it.
(4) Too many silos of dataThe history of enterprise automation is full of data silos. But since ERP - Enterprise Resource Planning - the silos are something not caused by the vendors (yes there are exceptions) - but by the users preferring to control their own silos. Except for the CEO, CFO and CIO - all other executives like their silos - including often the CMO. And again - with the answer of (2) storing the data is no longer a problem.
(5) Start with the questions - No, start with the dataUsually a smart approach for all kinds of engineering - but not for analytics in the current state. With the data storage problem solved - but not the predictive models for the action element. So we don't know which models to run and we usually also don't know which questions to ask. So don't worry about the questions. This maybe even detrimental to your analytical success as you may end up ruling out data categories, that you may need later. Store all data you can get hold off. No discrimination. It won't cost you much. Keep adding data as you can get hold of it. Never get in a waterfall project mentality with data - you need a continuous data collection and enrichment strategy.
Then Start asking questions. Many of them. More. Remember there are no stupid questions - only stupid answers. Because the analytic software vendors have not solved the 'holy grail' of analytics yet - serving you the answer through the automatic selection of the right models - you need to run them yourself. Find a way to automate running them - as today's lame questions maybe hot on tomorrows (enriched) data.
(6) Content, Context and the never ending debate - store all dataDon't worry about them too much, store what you can get. Then ask questions. What is one questions context maybe the content of the next question. The recursive nature of data can make nice discussions - but should not hinder you from your BigData and Analytics success.
And here is the storification by storify of all the tweets I was involved:
I am getting surprised how Oracle's Application Unlimited (AU) program is getting a bad reputation in the news and blogsphere recently... probably all triggered by the recent Forresterreport that is being widely discussed.
Let's first understand why enterprise software customers switch products:
Back when Oracle designed AU the pressure on the company was mainly on vendor viability and maintenance. There were no doubts on Oracle's company viability, but the question was, if there would be enough talent left at the acquired companies to maintain viable offerings. On the maintenance side Oracle needed to dispel the concerns that the acquisitions would be stopped in their tracks and customers forced to move over to Oracle's e-Business Suite. There was no TCO pressure on the acquired products and likewise there was no concern on Oracle providing adequate support. The 3rd party support market saw a small boom as some enterprises used the Oracle acquisition to clear house in regards of the enterprise vendor strategy and thus opted for 3rd party support during the transition time as they were off to another vendor.
At the time Oracle also realized, that enterprises only change their vendors if they really, really have to. It's very hard to switch systems and vendors. If you take away the concerns, build the trust and do what you say - enterprises will trust you and stick around. Many nervous Peoplesoft and Siebel customers agreed to wait for one year and see what would happen. Most of them are still with Oracle, as Oracle delivered on the AU promises. Despite all attempts from the competition (remember 'Fusion Confusion') there have not been significant takeaways of customers from Oracle by other vendors.
At first AU was put away as 'typical' Oracle marketing, then Oracle's commitment to keep going at AU was questioned. Ironically now AU gets blamed from preventing Oracle customers to move to Fusion.
|Taken from Oracle's website|
But what if Oracle had mandated a hard stop in maintenance for the acquired products? Oracle explicitly countered that with their lifetime support pledge. But let's play it through - a hard end of maintenance would have forced customers to move to Oracle e-Business Suite (a concern that never materialized) or to the new Fusion Apps. We all know what would have happened: Unhappy and angered customers would have headed to the exits. Massive pressure on Oracle's product development teams to deliver as soon as possible. Worries about missing business functionality. Quality compromised. Skilled labor shortage. Etc. Oracle would have deserved bad press for it. But that didn't happen - as we all know.
Instead AU's maintenance strategy is providing customers with more needed business functionality and with that making it harder for the Fusion product development teams to reach functional equivalency. But it would be false for Oracle to even chase that strategy. Bad things happen to enterprise software vendors when they chase functional parity with a previous product line. Just look what happened with Dun&Bradstreet trying to build the same functionality in their new client server products than what they had in their mainframe product (they never made it). Or look at what happened when SAP's product development teams were on the 'death marsh' to provide functional equivalence between old R/2 and new R/3. There was some urgency here - as mainframes became unattractive to operate (see the above TCO argument) - but it cost SAP dearly as product development was looking at past processes and old best practices and the company missed major business trends and whole software categories with CRM, SCM and Purchasing. So Oracle's Fusion development teams are not chasing every piece of functionality that is being used in Oracle e-Business Suite, Peoplesoft, Siebel and JD Edwards products - but instead looking at next generation best practices and the specific exploitation of capabilities of the Fusion technology stack (e.g. collaboration) that will help to differentiate Fusion applications from the AU applications.
So when will Oracle pull the trigger and force customers to Fusion Applications? I think that will only happen when Oracle is ready - and Oracle will be ready with Fusion Applications when the TCO of running them will be so compelling that customers want to move to Fusion Application by themselves. Though Oracle never makes a public statement in this regards, TCO is baked in the company's DNA. Remember that the original business idea of Oracle was to build a cheaper to operate (TCO) database. And we all know, that Oracle will make the TCO message heard loud and clear (1st page Wall Street Journal - as usual).
But what about the Oracle customers? As long as they get good support, good maintenance and the technology they operate on will not get obsolete - they are in a good spot. They can keep Oracle honest with threatening to move to other vendors or by talking to 3rd party support vendors. This simple system of checks and balances has been working well for customers since 2006. The only risk for customers is, when the customer population on an AU product gets too small for Oracle to be interested in these customers, as support and maintenance gets too expensive.
MyPOV: Oracle's Applications Unlimited strategy has proven to work in a very competitive market place. Kudos to enterprises to wait and let Oracle deliver and gain their trust, kudos to Oracle for delivering on it (so far). Applications Unlimited also allows Oracle to build better Fusion Applications than otherwise possible, the argument to move the existing customers on the acquired products needs to be TCO - and that's a good message for the whole industry.
Following the AnalyticsChat earlier this week Michael Wu (@mich8elwu) kept tweeting on a specific question that Michael brought up - is predicting what he will have for dinner a 'small' data problem (fits on his laptop?) or a BigData problem?
Here is a piece of the Twitter exchange:
So what would we need to predict Michael's dinner in specific - and any person's dinner in general?
Of course we would throw this in a BigData cluster and I would just 'start playing' with the data - and see what it can predict. One practical problem is, that we have no positives in the sense, that without Michael's participation we would not know what he really has eaten. All will get easier if we can get his consumed dinner information for as many as possible occasions. We could make it easy for him to expose that information by linking grocery shopping items to recipes (for home cooking) and by linking restaurant credit / debit card payments with menu information. The beauty of this approach is that we could coax Michael into training and selecting its own model.
In general I would not settle on specific analytical models at this point - given that data sources will remain very dynamic and the questionable amount of given dinner information. A bootstrap approach using different analytical models and using cloud storage (AWS Redshift anyone) is my gut feel approach here.
Michael makes a good point that the 'right' data is more important than to have lots of data. Fair enough, but that thinking may restrict data from being stored to be available - and that could restrict insight on the dinner preferences. And while maybe (with a big HDD) all the data to predict Michael's dinner tonight may fit on a laptop - it certainly does not to predict for any generic person. Even in Michael's specific case - assuming he meets with friends for dinner - we should predict their preferences and then try to find out where the group will go for dinner. At this point we are beyond typical laptop storage capacity - by a lot. So beware of some of the fallacies and misunderstandings of analytics - read more here.
With that said - I am predicting Michael will eat out tonight (Friday, with friends), in Berkeley (where I guess he live), at Shen Hua on College Avenue. Pretty sure on Shen Hua. Why? I am in the process of sending him a 10$ voucher... valid only tonight! ;-)
But keep in mind - analytics is hard for everyone.
The other week Dexplora from Sweden garnered some attention in the news services with their release of a iPhone front end to salesforce dubbed 'getsalesdone'. You can read my review here.
Spending some thought cycles around this, I realized that we maybe witnessing the birth of a new software category - the category I will name 'User Experience Software' (UES). Let's do some definitions first:
To see this new category to strive - we will need to see a few things happen:
Another thought has to be - why hasn't there been a UES market before? Well, for the longest time it wasn't technically possible. Client Server famously was two tier, and when three tier was required for the Internet architectures, the communication between browsers / the UI and the business logic was completely proprietary and locked up. I would even today seen traditional reflexes from enterprise vendors and to see them trying to lock out the UES vendors. But with self confident customers that move will only succeed, if the vendors provide a better or at least 'good enough' user experience to their products. If not their products won't be used and be successful and that will be too much for them to risk to loose.
Ironically the iOS and less the Android app architecture favors a move to UES, too - as they allow the creation of proprietary 'thick' applications, that require an opening of the communication protocols between the application on the smartphone and the business application logic residing somewhere in the cloud.
We have seen more layers of the ISO stack being markets for themselves. The most prominent being the database software category. Likewise the application server software category. Will 2013 see the birth of the UES category?
Late on Friday SAP issued a press release about their acquisition of privately held SmartOps. The acquisition is minor and supposed to conclude this calendar quarter.
An acquisition from the ecosystemSmartOps has been a key partner for SAP in the supply chain space since 2006, and their customer list reads like a who-is-who of SAP's North American customers.
The company was founded by Sridhar Tayur, who is a professor of operations management at Carnegie Mellon, and he was the CEO of SmartOps till last year. SmartOps algorithms are supposed to strengthen SAP's Demand Signalling and Advanced Planning & Optimization (APO) products.
Demand Sensing meets In MemorySmartOps started out with a more traditional aspect of Supply Chain Management (SCM) - Inventory Optimization, but recently added demand sensing, a technique developed in the more volatile CPG markets, aiming at better predicting product demand. Traditionally this was completely done by using POS data, but with the rise of the internet, social networks, coupon networks, loyalty programs etc demand sensing became more and more a BigData problem. And like many of the best practices out of the CPG space - demand sensing is making inroads in other industries, too. One of the challenges of demand sensing is, that data is available to all market participants (often for a fee) - so speed of analysis and execution will determine the winner between two competitors. So in memory technology looks attractive.
Enters SAP Hana, the 'little girl' that SAP - rightfully - is very proud of. When loading all the signals available into Hana - new demand patterns maybe recognized and put into execution plans. And SAP is looking hard for finding uses of SAP Hana in the business application space - which is SAP's core competence.
The SAP SCM IronyThe SAP SCM development team, originally lead by former board member Claus Heinrich, was the first (and pre Hana only) development team to embrace in memory technology for its APO code. Originally developed internally (yes there was a in memory offering at SAP before Hana), the functionality benefited greatly from SAP's acquisition of Sofware AG's adabas database (now SAP DB) and became the SAP liveCache functionality in SAP SCM.
Despite the pioneering efforts, that functionality will now be largely shelved and re-platformed with the help of SmartOps and Hana. This will not only give thoughts to some engineers, but as well the (my)SAP SCM and APO customer community.
It's the algorithms, stupid!The other relevation about the acquisition is, that while the raw speed of in-memory is the enabler - the 'raw iron' to borrow from a SAP competitor, it's the intelligent software on top that matters, more specifically the algorithms to optimize the supply chain. In the early SCM times of the 90ies that company used to be iLog and everybody uses and used their algorithms. But then IBM acquired iLog and though the sharing of the algorithms is secured by (very) long term contracts - SAP may have grown weary of the co-opetition with IBM. With IBM focusing on analytics and being a database vendor - in memory is not far away. Or maybe IBM is working on a Watson for Supply Chain already?
But this is an industry wide problem - as everyone relied and relies on iLog algorithms. And SmartOps only addresses a portion of the algorithm sourcing problem for SCM. Look for SAP to make more acquisitions in this space, as SAP does not have the internal expertise and competence to develop powerful algorithms.
Smart Ops - Opportunity or Challenge?As with any acquisition out of a vendors partner ecosystem, the question is: Why now? And while above is a technology view, it may well be, that there are business aspects, too. SmartOps may have gotten too strategic for some large SAP customers, and these may have pushed SAP to start the acquisition. Where it may have rang a bell at SAP. Or SmartOps was planning this in the longer term, moving away the founder and CEO and putting an executive in place with the stamina (he has finished the famous Vasa Cross Country Ski race) to pitch the company to SAP.
Like with any acquisition - retaining the SmartOps talent will be a key challenge for SAP. But it also uncovers the deeper challenge SAP has going forward. While the company successfully mastered navigating down on the technology stack and providing an innovative in memory database product, it has not been able to move up in the direction of powerful algorithms, or in another buzzword - the true Analytics space. This poses an overall challenge for SAP - ironically in an area where a dozen years ago SAP held both a technical and analytical leadership position. But investment priorities in other areas of the portfolio have both lead to an understaffed and potentially under talented SAP SCM product development team.
Finally great algorithms lead to great analytics, but great analytics need the tie in into execution. And while SAP claims that the Business Suite runs on Hana - very few details on the technicalities have come out so far. The new offering needs to be tied into the operative SAP SCM installations - and if these will be on Hana by the time SAP wants to sell the new SAP Smartops based Demand Sensing rests to be seen. It certainly provides a compelling argument for moving a Business Suite installation to Hana. So SAP will have to choose wether they want to wait for their customers to move their transactional SCM products to Hana - or live with a hybrid approach of a new Hana offering (in memory) and transaction products (on spinning rost a.k.a. HDD). This will be overall an interesting situation to watch as SAP tries to move customers to Hana as the underlying database platform.
MyPOV:SAP's acquisition of SmartOps is a first step in the right direction for SAP - adding business applications to Hana and strengthening it's analytical depth. More acquisitions will have to follow for longer term success in general and in SCM in particular. For truly leveraging in memory, SAP will have to convince their customers to move to Business Suite on Hana - certainly not an easy task.
Following the attention my posts around Oracle's Application Unlimited program have gotten, it was interesting to see how SAP's David Ludlow (@dHRLudlow) solved the challenge of new and old products next to each other in his keynote of HR2013 today. Interesting live tweets are in Storify.
SAP HCM - Now Unlimited?
|Screenshot taken from Ludlow's presentation, from Twitter.|
How attractive is the cloud?
Innovation for SAP HCM
|SAP's new ESS / MSS from @JeremyMasters Tweet.|
|Screenshot from HR2013 Keynote.|
When user interfaces break down
In the meantime - integration
|Screenshot from Ludlow's presentation, from Twitter|
Earlier this week salesforce unveiled a new marketing tagline to the public. The message was carefully planted, shared with media and advisers earlier, then employees, and now a selected and small group of customers and partners at an event at the Walldorf Astoria in New York. And as usual with salesforce, the company will align (or has already aligned before the event) with the new message.
Customer CompanyBenioff credited his summer reading habit with finding an IBM report, which got the synapses going in regards of realizing that enterprises really need to become a 'customer's company'. For that they need to listen, be able to interact with customers on all channels, 24x7, consistently and efficiently.
What makes the Customer Company click?In order to listen more and better to your customers, you need to connect with them. These connections are critical and need to go across channels. Maybe Benioff did not only read publications from IBM, but also listened to Cisco's plans (he is a board member there). Not surprisingly connections matter to Cisco greatly:
|From Cisco Company Presentation for Investor|
|Screenshot from salesforce's event webcast.|
|Screenshot from Larry Dignan's report on ZDNet.|
|Screenshot from salesforce's event webcast.|
The best informercial since ... a long timeNo keynote without an infomercial to pitch the vendors, products these days. But Benioff and team did a superb job here - consistent message to keynote and sublime pitch, I am truly impressed me - have a look:
Will salesforce be at CES next year? Benioff was this year.Benioff made numerous references to his visit to this years CES conference, telling how amazing it was and how he basically field tested his new positioning. Dropping Canon (a salesforce customer) as a name, he told about visiting the Canon CES booth and how there was a cool innovation to control pictures from a smartphone - but how customer service support was completely missing. He provided more examples of connected devices from Samsung's fridge to LG's dishwasher - all missing the enterprise software needed to support them.
If salesforce is serious and sticking to the customer company strategy - expect a large salesforce booth at CES 2014. If the company follows up on the vision, then salesforce will have the complementing services on everything connected and touch that CES 2014 will present. And Benioff deserves free attendance for life for dropping CES a few times to often for my taste (heck, MWC was happening in parallel).
Remember - Social EnterpriseIt's less than 6 months ago when Benioff positioned salesforce as the social enterprise company, as all business is social. Ironically Benioff also then credited an IBM report, that turned the light on. He also unveiled that message in New York in November 2011. The strategy was to follow on the increased marketing spend and leverage the CMO is supposed to have according to recent analyst reports. Who else than Mark Benioff was perfect to lead that transformation, from marketeer to marketeer?
But keeping up with a 30% growth rate on the social message is a challenge. It's not the first time the hype around marketing automation has let vendors down - thinking of the first wave of marketing automation vendors, who all got swallowed up by larger CRM vendors living in the sales field. Some financial analysts had already started to worry in regards of salesforce falling short on growth (Cowen & Cos Peter Goldmacher for instance). And salesforce's old foe Oracle did not stand still and acquired eloqua that complemented the overall already impressive Oracle Social Relationship management suite. As salesforce appetite for acquisitions has been dampered after the (costly) acquisition of Buddy Media, it left salesforce with a long product development roadmap. Not a scenario close to a marketeer's heart - so a change in tagline and direction was due. Or in Siliconvalleynese - a pivot.
Mobile and ServiceThe focus on mobile is certainly reasonable and should be helping salesforce. It remains to be seen if salesforce can pull off the cross HTML5 based cross device strategy - which is highly desirable - but was proven to steep for Facebook in the recent past (Facebook created native apps for their users, due to performance problems). It's somewhat disappointing that the co-browsing feature will only come later in the year - given that GoInstant was acquired about 8 months ago. Maybe there is extensive retooling happening for the mobile architecture? My money is on that.
The focus on the Service automation side is consequential, given the focus of Customer Company. It also makes sense, because salesforce has under penetrated the service market in comparison to sales. But the announcements made around Service Cloud are basically the uptakes of the work done for the Touch interface and social integration (chat) -solid engineering and re-use, but not a breakthrough.
On the other side salesforce must be careful not to focus too much on service, as the service focus of Clarify, Scopus and Vantive ultimately lead to their demise - a few generations of CRM products ago.
Major Infrastructure Work in progressSalesforce finds themselves still in a massive retooling and architecture effort. Though the company does not elaborate, it has made more than clear, already back at Dreamforce 2011 - that it will not be able to move forward with the Apex architecture. Too much first cloud generation and getting old and too prorietary. Hence the Heruko acquisition, which should form the base of salesforce's going forward. Understandably the company is pretty mumm on the topic. It 's also not clear where that project stands, but it will have a major ripple effect through the core salesforce business functionality. And then you could be concerned to run all of salesforce on Amazon AWS - but as Netflix has shown, even close competitors can work well together in the cloud.
The good news for salesforce is, that the architecture required for running a customer's company is much more similar to what salesforce has been building for in past:
|Screenshot from salesforce's event webcast.|
The risks of pivoting too often, too fastWhen you pivot - turning something around the point of rotation in a lever system - you may end up doing a pirouette. Something young ballet dancers are learning to perfect over years. But pirouette too fast and you get dizzy and fall.
Turning too fast is not good for enterprise software vendors, as it takes time to build (good) software, make it work, train sales and partner and make customers successful on it. Marketing positioning can switch fast, bits and bytes are stubborn and take their time.
Benioff is one of the best high tech marketeers around. You can debate the Oprah-style walking delivery of the presentation, but he is on record to be very good at sniffing out marketing trends early and then amplify them to salesforce's advantage with no holding back. The customer positioning is much better suited to lead salesforce to continued success than the CMO / social combo - as it plays more to the company's product's strengths - as they are a CRM company. It was already all about the customer, before Benioff started salesforce, marketed the cloud, the social enterprise and is now back to the roots of CRM, the customer and customer centric strategies.
By all means Workday has been a picture book success story. A charismatic and iconic leader of the enterprise software industry with Dave Duffield, a talented day to day CEO with Aneel Bushri, an excellent management team, pretty much no critical reviews from the analyst firms, a partner ecosystem eager to partner with Workday (as I have only seen with Siebel earlier) and happy customers.
So why be worried about Workday? It's simply too good everywhere and as Andy Groove wrote, Only the paranoid survive - so let's look at where the risks and challenges for Workday are going ahead - and why frankly, I am worried about Workday:
Not profitableDespite a successful IPO, Workday does not seem to be able to turn the corner here. Granted - they are investing heavily in the Financial product, need to extend the HCM product etc. all while building out the sales force, pushing for a more global presence etc. All this costs money. But with all other indicators on green - it begs the question if the company is managing the bottom line as planned - or may have developed the Silicon Valley start up addiction of profits later.
Competition revving upWorkday has been off to a very good start, and basically caught the two install base titans, Oracle and SAP flat footed. They first denied Workday's success (SAP) or thought their new products may be strong enough (Fusion, Oracle) to compete - but ultimately both had to cave and put down big money for the respective acquisitions of Successfactors (SAP) and Taleo (Oracle). Apart from Oracle and SAP now having an answer for talent management in the cloud, Oracle also took away a vendor that solved a key functional gap for Workday, recruitment, for which Workday partnered with Taleo. Workday now not only needs to differentiate harder - but also needs to build recruitment functionality that is expected in 2014 - far out for software.
To be fair both SAP and Oracle have their own challenges in moving to the cloud - read more about them here and here.
In the cloud - but not viralGiven the initial weakness of the competition, I was really surprised how relatively slow Workday signed up customers. Once a cloud based vendor has a proven product, the vendor needs to strive to gain market share as fast as possible. Making the solution go viral is the strategy to follow. And HCM systems - at least for some part - are easy targets for viral adoption. LinkedIn has provided a good example with their skills mini feature. So a viral spreading of a skills application, a performance management application and even an e-learning application is very well achievable.
There are three possible limitations that prevent a cloud vendor from going viral:
Groupthink amongst Friends
An(other) acquisition from the ecosystem
Policy & Products functionality meets ... Mobile
Policy & Products functionality meets ... Hana
Policy & Products functionality meets ... R/3
|Diagram, of the SAP Super Suite from Camillion's website.|