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... blogging on what is happening in enterprise software, with a focus on Future of Work and Next Generation Applications, sparkled with occasional musings on the the state of the industry and outlooks where we are heading.

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    We had the opportunity to attend the Infosys Analyst Summit held in Orlando with close to 100 analyst colleagues. It was a key opportunity to check-in with the vendor given we are reaching the 100 day mark of tenure for Infosys’ new CEO, Vishal Sikka.

    Here are my top 3 takeaways from the analyst meeting:

    • The new Infosys is here - Infosys has been focused on product IP before, but there can be no doubt that the product focus has been renewed and re-enforced with the appointment of SAP veteran Vishal Sikka as CEO. Sikka walked us through 5 areas what the new Infosys is doing - and they were a (new) Infosys platform (leveraging Opensource as much as possible and with deployment options on Amazon AWS and Microsoft Azure), Artificial Intelligence (AI) led Business Process Innovation (btw Sikka has a PhD in AI), Innovation Services for clients, Data and Analytics offerings (including ‘real’ analytics more here) and finally aid for and investment into startups. And Infosys is training thousands of employees in design thinking to harmonize approach to product development and speak a common language and share a common approach to the new initiatives at hand.

      One colleague asked Sikka if he saw any impact on the overall Infosys numbers due to the investment activities, but he did not see any change for the current financial year. But Sikka left open that for the coming financial year (starting in April 2015) Infosys may share and track towards different financial goals given its investment plans.

    • Transformation at work - Later in the day Sandeep Dadlani, Head of North America, shared the five pillars on which Infosys is transforming itself. The five pillars are “Value Ninjas” - specialists who can solve the very hard business problems enterprises face, “Accelerate Edge” - the creation of leading business platforms that create value for enterprises, “Startups” - where Infosys is helping startups to reach scale and speed, “Living Labs” - where Infosys draws together talent for rapid innovation and finally “Next Gen Innovators” - where Infosys helps and trains employee to become creative and enable them to co-innovate with their clients. Certainly 5 promising areas – we will have to check on customer success in the next quarters.
    • Product showcase EdgeVerve - We sat down with the Head of EdgeVerve, Sanjay Purohit and learnt of the six areas of scope that EdgeVerve covers. The six scope areas are Digital Marketing, Commerce, Customer Service, Distribution (with TradeEdge), Ecosystem Management and Procurement. These form a remarkable investment into product, as they are built exclusively by Infosys (except for a collaboration product) and operate on the same platform. More importantly Purohit was pretty clear this is a real product offering, with the source code only available to his team. Good to see and now Infosys has to sign up more customers and upsell the offering. But a remarkable example of the creation of significant product IP by what was a traditional system integrator not long back.



    Good to check in with a major player in the technology field right around the 100 day mark of a new CEO taking tenure. Sikka is visibly enjoying its new task and hard at work to transform Infosys into a more product centric vendor. If Infosys will hit challenges in the transformation - they will show up 300+ days into the effort - we will be checking in for that. And doing this while customers are also transforming into more digital enterprises is certainly a formidable challenge, but the short glimpse of an analyst days leaves the first impression that the management team is up to the task. In the meantime a new Infosys is forming, with a lot of potential to transform itself into a player with significant more product IP than ever before.

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    Here is my weekly recap of the week of November 7th:

    • Top 3 Takeaways from the Workday Rising Keynote - read here
    • Progress Report - Infosys Analyst Meeting - Can you transform customers while you transform yourself - read here

    Worthy news / events I missed this week
    • OpenStack Summit Paris - see here 
    • Google Cloud Platform Live Event - see here
    • IBM Unveils Intelligent Cloud Security Portfolio - see here
    • Quentin Clark Joins SAP as CTO - see here

    Press quotes this week
    • Wall Street Journal - Workday to make Netflix like recommendations - see here
    • International Business Times - 100 Days of Vishal Sikka [...] - see here

    Fashion Observation of the Week

    • Caught Brian Sommer - again in jeans and with no tie!
    Catch me next week at KronosWorks, Amazon AWS re:Invent and IBM SWGAI.  

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    Kronos started its yearly KronosWorks user conference at the beautiful Aria Hotel in Las Vegas with 2500+ attendees.

    Here are my Top 3 takeaways from the keynote:

    • Kronos invests in R&D - Kronos keeps investing into R&D - a good sign but also a table stake in the fast growing and hyper competitive HCM market. And it’s good to see the priority is both on good housekeeping and differentiating new functionality. On the housekeeping side it looks that Kronos will be able to put away the issues experienced with Java on desktop for good in spring 2015 (largest applause by the customer audience), equally a new user interface is being well received by customers. On the differentiating capability side, Kronos is looking at (true) analytics, starting with the common scheduling problem, that schedules get changed right away after being published. Being able to advise a scheduler to make better scheduling decisions is going to be key for Kronos’ customers. Another area is the addition of gamification elements, first shown in leaderboard functionality (more here). A good fill run down of all innovations areas can be found in this press release. 
    Aron Ain opens KronosWorks, key brands in the Kronos Cloud

    • Customer Success matters - During the keynote Kronos CEO Aron Ain re-iterated the vendor’s commitment to customer success, motivating customers to fill out surveys and sharing that he is looking at all of the surveys, particularly the voice notes, so time for Kronos customers to share their experiences. Though not stated explicitly, something maybe amiss here at Kronos, as Ain shared that the variable compensation of the Kronos professional services teams is now up to 50% based on customer feedback / satisfaction. A move other vendors have done already, but on the flipside may create conflicts between implementation budgets and consultants who want to please clients - an area to watch. Along the same lines, focused on customer success, Kronos will offer blue prints to help customers with going into other countries, helping with documentation of local regulations. 
    Gamification powered Leaderboards are coming
    • Analytics make the difference - As mentioned before above, analytics are key on the Kronos’ roadmap. Using Apache Spark is a good technology decision and it will be interesting to see what Kronos will do beyond scheduling quality. Overtime analysis was mentioned later during meetings with Bill Bartow. At the same time Kronos is ramping up professional services capabilities for both BigData and analytics products (more here). 
    The new Kronos User Interface for Workforce Central


    A good start to KronosWorks, a lot of more analyst work needs to be done in the upcoming briefings and 1 to 1 meetings that are scheduled. So far a positive pulse check with a large Kronos customer who has over 40k employees on Kronos at breakfast this morning.


    More on Kronos

    • Kronos executes - 2014 will be key - read here
    • Tweeting and feeling good about it - read here

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    One of the highlights of last year’s re:invent was James Hamilton talk about the inner workings of AWS, so when it was James time to talk at the analyst summit here at AWS re:invent 2014 it was for sure a session not to miss (and I strongly recommend to attend his regular track session, too).

    Apart from being an entertaining presenter with deep industry insight – Hamilton has no ‘filter’ which makes his presentations a nightmare for PR and AR, but a suspenseful presentation for the rest of the audience. Here are my key takeaways from Hamilton’s talk the other day:

    • AWS sees the pace of adoption picking up – We may see this more today as the keynotes start, but Hamilton shared the above slide – showing the expectation that the latest industry generational change is happening faster than previous one, the move of x86 servers into the cloud. And he is certainly right that the pace of this change is faster than in the past where these transitions (e.g. mainframe to UNIX servers) have taken more than a decade.

    • The network is the critical path– Not surprisingly Hamilton shared that networking is the critical path for cloud, but it was interesting to see with what consequence AWS tackles the issue with a simple but compelling logic behind it: With networking being expensive, but only being less than 10% of cloud infrastructure cost, networking should not limit access and utilization of the most expensive resource in the cloud infrastructure, which are at more than 50%. Every loss of server utilization due to networking shortage costs even more as more servers need to be procured. Hamilton e.g. shared that the loss of a single IP packet equates to 0.2s loss of compute capacity…. So AWS builds its own network hardware, has its own protocol stack and runs its own private long haul links. With that the AWS team has been able to reduce network jitter significantly (and impressively).

    • Massive scale– Hamilton also shared insights into a single data center (DC), Amazon runs multiple DCs per Availability Zone (AZ), and a single DC is typically over 50k servers, often up to 80k. Making a back of a napkin calculation that makes AWS a 4+ million server cloud. And that would mean that AWS runs a teenage market share number for worldwide virtualized systems (40M+) – so there is room to grow. AWS doesn’t want DCs larger because of blast radius concerns, but like them not more than a quarter mile apart.

    • AWS is positively positively ‘obsessed’– And the obsession is a good one, listen to customers and then squeeze everything out of the infrastructure and go all the extra miles to make the infrastructure better, more resilient. E.g. Hamilton shared that he has seen the very rare event of a data center outage due to a failure in switchgear equipment three times in his career, so AWS now re-writes the firmware of the switchgear in its data centers. AWS also runs custom sub power station because local utilities can’t provide fast enough reliable power infrastructure. Too many other examples to share, but this was a clear red thread through Hamilton’s presentation.


    Kudos to the AWS team to give more insight into the internal making of its cloud infrastructure, something overdue given the ‘blackbox’ approach AWS has taken in the past. It’s good to see the opening and with that understand design principles, value and scale much better. No surprises, they are all good and make the scale and performance of AWS more tangible, something (especially enterprise) customers want to see and will appreciate. Much, much more today at re:invent. 

    More on AWS
    • News Analysis - AWS spricht Deutsch - the cloud wars reach Germany - read here
    • Market Move - Infor runs CloudSuite on AWS - Inflection Point or hot air balloon? Read here
    • Event Report - AWS Summit in SFO - AWS keeps doing what has been working in the last 8 years - read here
    • AWS  moves the yardstick - Day 2 reinvent takeaways - read here.
    • AWS powers on, into new markets - Day 1 reinvent takeaways - read here.
    • The Cloud is growing up - three signs in the News - read here.
    • Amazon AWS powers on - read here.
    Other cloud related:
    • Musings - Are we witnessing the rise of the enterprise cloud? Read here
    Find more coverage on the Constellation Research website here.

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    On November 10th SAP announced the hiring of a new CTO, Quentin Clark, joining the product team working for Bernd Leukert immediately.


    So let’s dissect the press release our usual news analysis style:

    WALLDORF — SAP SE today announced that Quentin Clark will join the company as Chief Technology Officer, effective November 10, 2014.

    As SAP’s technology ambassador, he will drive direction and vision of SAP’s future technology and shape SAP’s brand as the technology leader. Clark will report to Bernd Leukert, Member of the Executive Board of SAP SE, Products & Innovation, and will be based in Palo Alto.

    MyPOV – Back when Vishal Sikka decided to leave SAP, we speculated about a new CTO joining SAP. We expected a similar position to report to CEO Bill McDermott, but now we see Clark joining SAP working for the head of product, Leukert. Clark(see his LinkedIn profile here) has spent almost 20 years at Microsoft, with a long term tenure around MS SQL Server and the BI products. He reported to Satya Nadella before his recent appointment to CEO and now made a move (Microsoft has not clarified who will succeed him to my knowledge). Interesting is also the addition of ‘shape SAP’s brand as the technology leader’ – brand shaping is usually marketing’s job – so we will have to learn from SAP more about this more unusual addition of responsibilities for a CTO.

    Clark joins SAP from Microsoft. In his role as corporate vice president of Microsoft’s Data Platform Group, he was responsible for design and delivery of Microsoft’s data platform products. He also led the development of the transformation of the data platform to the cloud, delivering the first wave of Microsoft Azure’s Data Platform products. Prior to becoming corporate vice president, he held various roles in Microsoft’s development since 1994.
    MyPOV – So SAP hired a proven RDBMS veteran. Interesting as with HANA it has a quite unique approach to RDBMS, so hiring an executive coming from the co-existence world of on disk and in memory capabilities is an interesting move. But then the press release is void of any mention of HANA, did the SAP board and Leukert maybe look for an experienced executive to run the former Sybase and Business Objects portfolios? The coming weeks will show.

    But it’s also clear that SAP has not looked for an enterprise applications veteran, but a technology veteran – more about that below.

    “I am very pleased to have Quentin join SAP,” said Leukert. “He is not only an impressive technologist who thrives on pursuing a meaningful vision but at the same time a passionate leader. He enjoys taking a full view of business, technology, product, team and customers. I am sure that Quentin will significantly contribute to shaping and executing our technology strategy and turning opportunities into innovation — and help our customers to Run Simple.”
    MyPOV – My guess is that Clark was handpicked by Leukert and should help him deal with US development activities as well as customers, as such he must have his trust to be his ‘voice’ in the North American market – that is both key for SAP in technology and enterprise aspects. There is a recruiting aspect in one article coveing the news here, according to Personnel Chief Stefan Ries, but I give that little impact, unless we see an exodus of former Microsoft employees follow Clark. I would be surprised if SAP and Microsoft executives did not swap courtesy calls around this Clark’s move.

    Overall MyPOV

    There is a few takeaways that can derived beyond a dose of speculation:
    • McDermott trusts Leukert as the product leader. A CTO hire reporting to him would put McDermott in the decision making field around any (positive and necessary) tension between a forward looking CTO and Product Leader.

    • Leukert needed a trusted manager in North America, both as a face to customers, prospects, and SAP employees. With Leukert’s enterprise software background, Clark brings on a technology perspective that wasn’t there before – at least not exposed at senior management level in a CTO position.

    • SAP becomes more about applications (as we predicted here) – as the CTO role is now less exposed and report to a more enterprise application minded executive. And the de-facto CTO role (though not nominally called like this) falls anyway to Bjoern Gerke as the executive in charge of the SAP PaaS and SaaS platforms.

    • Clark’s relative novelty to the world of enterprise applications will avoid or at least delay any potential directional discussions on technology strategy, which is good short term for SAP as the HANA strategy is set – but long term has the risk that SAP is heading to a ‘unique’ path to the cloud (as blogged here). And a unique path that SAP has taken before when moving to a client server architecture has its risks but also rewards. 
    Probably (and hopefully) a good move for SAP, that has not been able to retain senior experienced executives from acquired entities in the past (Schwartz, Chen, Couturier – only former Sybase CTO Irfan Khan is still with SAP, albeit not in a product organizaton role) [corrected, thanks to SAP AR for pointing out, Nov. 13th 1:14 AM PST], so now it is time to recruit from the outside. The next quarters will tell – really curious on the brand aspect of Clark’s role.

    Footnote: On the Microsoft side the question is of course, why did Clark leave (we may never know) and how his responsibilities will be organized. It is noticeable how briefly Clark is featured in the News Center (see here), last entry in November 2012. Running database and application platform is short tenured position – measured in the otherwise long tenures of the company – with former head of the group Ted Kummer leaving in early 2013. But let’s hear more from Microsoft.

    And more on overall SAP strategy and products:

    And more on overall SAP strategy and products:

    • Event Report - SAP's SAPtd - (Finally) more talk on PaaS, good progress and aligning with IBM and Oracle - read here
    • News Analysis - SAP and IBM partner for cloud success - good news - read here
    • Market Move - SAP strikes again - this time it is Concur and the spend into spend management - read here
    • Event Report - SAP SuccessFactors picks up speed - but there remains work to be done - read here
    • First Take - SAP SuccessFactors SuccessConnect - Top 3 Takeaways Day 1 Keynote - read here.
    • Event Report - Sapphire - SAP finds its (unique) path to cloud - read here
    • What I would like SAP to address this Sapphire - read here
    • News Analysis - SAP becomes more about applications - again - read here
    • Market Move - SAP acquires Fieldglass - off to the contingent workforce - early move or reaction? Read here.
    • SAP's startup program keep rolling – read here.
    • Why SAP acquired KXEN? Getting serious about Analytics – read here.
    • SAP steamlines organization further – the Danes are leaving – read here.
    • Reading between the lines… SAP Q2 Earnings – cloudy with potential structural changes – read here.
    • SAP wants to be a technology company, really – read here
    • Why SAP acquired hybris software – read here.
    • SAP gets serious about the cloud – organizationally – read here.
    • Taking stock – what SAP answered and it didn’t answer this Sapphire [2013] – read here.
    • Act III & Final Day – A tale of two conference – Sapphire & SuiteWorld13 – read here.
    • The middle day – 2 keynotes and press releases – Sapphire & SuiteWorld – read here.
    • A tale of 2 keynotes and press releases – Sapphire & SuiteWorld – read here.
    • What I would like SAP to address this Sapphire – read here.
    • Why 3rd party maintenance is key to SAP’s and Oracle’s success – read here.
    • Why SAP acquired Camillion – read here.
    • Why SAP acquired SmartOps – read here.
    • Next in your mall – SAP and Oracle? Read here.

    And more about SAP technology:
    • HANA Cloud Platform - Revisited - Improvements ahead and turning into a real PaaS - read here
    • News Analysis - SAP commits to CloudFoundry and OpenSource - key steps - but what is the direction? - Read here.
    • News Analysis - SAP moves Ariba Spend Visibility to HANA - Interesting first step in a long journey - read here
    • Launch Report - When BW 7.4 meets HANA it is like 2 + 2 = 5 - but is 5 enough - read here
    • Event Report - BI 2014 and HANA 2014 takeaways - it is all about HANA and Lumira - but is that enough? Read here.
    • News Analysis – SAP slices and dices into more Cloud, and of course more HANA – read here.
    • SAP gets serious about open source and courts developers – about time – read here.
    • My top 3 takeaways from the SAP TechEd keynote – read here.
    • SAP discovers elasticity for HANA – kind of – read here.
    • Can HANA Cloud be elastic? Tough – read here.
    • SAP’s Cloud plans get more cloudy – read here.
    • HANA Enterprise Cloud helps SAP discover the cloud (benefits) – read here.

    Find more coverage on the Constellation Research website here.

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    Amazon’s yearly user conference re:invent winds down, and it was an announcement filled and action packed week in Las Vegas. The conference had over 13k+ attendees, with a huge global contingent, I probably heard more foreign languages than at any other event I attended recently (and even in the same settings at the Venetian, which makes for easy comparisons).  

    So here are my top 3 takeaways from the conference:

    • Lambda pushes the envelope – The Lambda announcements tops the top 3 pretty easily in my view. Anyone who has ever tried to do anything automated on large volumes of data, while streaming at the same time and not knowing when and how often an action will have to be taken, will be intrigued by Lambda. In the past only database triggers combined with nifty CEP capabilities would come close to what Amazon has announced with Lambda. Would love to understand the architecture behind it – not sure if Amazon will (ever) share, but basically it must have added a layer to its servers and have a superfast code propagation library for the Lambda code. With Lambda Amazon solves a fundamental challenge and problem of 21st century, next generation applications and uptake will be interesting to see.

      But the capability comes with a price, it is AWS proprietary, so lock in considerations will be a factor. But in the meantime the capability is pretty unique in the cloud and with that, pure lack of options, don’t raise the proprietary question (yet). To be fair, anything of the scope of Lambda will have to be very much embedded in the cloud architecture of every provider and with that likely becomes proprietary. Notwithstanding the desire of vendors to be proprietary to experience lock in benefits. It will be interesting to see how Google, IBM, Microsoft, Oracle et al respond (alphabetical order, don’t read anything into it, please). And then maybe the OpenStack community will come up with a new project? It will have to do so very quickly.

    • Aurora a sweet spot move – Already a day earlier AWS announced Aurora, bringing HA capabilities to MySQL. I call it the sweet spot as the ‘owner’ of MySQL, Oracle left a void between what MySQL can do and where the Oracle RDBMS comes in. Amazon now smartly goes after that gap, there are probably a 5 digit number of MySQL based deployments out there that can use this capability (purely my best educated guess). The performance numbers of 5 (or was it 6) million writes a minute and 30 million reads a minute are very, very good for a version 1 product. Adoption of Aurora will be interesting to see in the next quarters. And even more the reaction of entrenched HA RDBMS vendors, let’s start with Oracle and IBM. Amazon pointed out that Aurora is engineered to work at 10% of the cost of established HA systems, definitively an attention grabbing fact, but the established vendors can reduce prices, too. And then let’s not forget, RDBMS R&D is not trivial work, as Amazon knows and shared, as it took 3 years to get here. More on Aurora here

    • More AWS DevOps Capabilities – Largely on Day 1 unveiled already, AWS now gets a leg up on DevOps automation with the productization of the – so far – internal Apollo tool and more. An important move by Amazon to increase developer productivity. But also a challenge for the DevOps vendors, as Amazon largely stayed out of that business, till now. Similarly like Lambda it closes AWS a little more. But then it’s probably a logical choice, as Amazon probably did not want to share the internal workings of many of its products. The consequence is to provide tools to ease code deployment complexities, offer better automation (like some competitors already do) and on the flipside become a little more a black box. But if one takes into account what AWS has become – probably a better choice by Amazon. At the end of the day enterprises want to build, run and maintain applications on AWS, the inner working becomes secondary, as interesting it is for the techies, geeks and pundits. While I give kudos to Amazon for sharing more about the basic inner working (read here) – I cannot imagine a CIO, CTO really caring about how e.g. Lambda code is executed and definitively not how to deploy it. More on all the ALM tools here.


    • Container, Docker of course – No cloud conference without containers, and most likely Docker. No difference here, Docker CEO Gollup on stage, and Amazon announced the EC2 Container Service, shown in a pretty long demo, as if the audience needed re-assuring that AWS is serious about containers. More here.
    • Engineered systems– For the first time Amazon has gotten a hardware maker (in this case Intel) to customize key components, in this case the Haswell processor for the new AWS machines. A sign of the sway that Amazon has with the hardware suppliers, but then also a necessity for Amazon to do, as some of its competitors build their own chips (e.g. IBM and Oracle). In my view a validation point that engineered systems are proving their point all the way to even otherwise very much commodity hardware oriented providers like Amazon. And then some people will point out that AWS was in that business already – see the massive HDD server AWS designed and shared in James Hamilton’s presentations. 
    • Service catalogue more control – Long awaited, finally here – the tool for CIOs to enable certain services, on certain resources to control a finite cost budget and satisfy security needs. Both key steps for AWS to become more attractive (and viable) for enterprises to use. More here
    • Security remains paramount– As the market leader for public cloud, AWS keeps also carrying the security torch. The new AWS Key Management Service was one of the most interesting announcements for security minded (European) customers. With AZs in Frankfurt and AWS Key Management a European CIO / CTO can convince an executive board concerned about security and NSA activities to consider AWS. More on Key Management here.

      And as a logical next step AWS Config (in preview) will help to give a certain level of confidence to control the ‘human factor’ on the security side. Even though Amazon does not announce roadmaps, it’s good to see the steps it’s taking to become more viable in the enterprise. And then classic ISV, startups and other users will approach the better monitoring, too. 
    • Wait – no price cuts? – This marks probably the first re:invent conference with no announced price cuts. AWS loyalists were quick to point out that there are reasonable cost reductions in many of the new available and announced products – but it’s different than saying we are reducing service x by y%. And if memory doesn’t fool me we also did not hear about this is the xth price cut in AWS history. In my view it means two things: Price cuts are no longer event, but competition driven and AWS is becoming more a value than a cost play. Both are good for the market and cloud customers. 


    Amazon has certainly moved the yardstick, good move of adding more transparency. And while last year I was surprised that AWS was moving into more higher level services (e.g. Workspace, Zocalo) it is now clear that behind the scenes it was working hard on building capabilities now shared like Aurora and Lambda. It’s the opposite nature of SaaS vs PaaS apps, that SaaS apps can be built faster than key PaaS capabilities, but then SaaS adoption takes longer than PaaS adoption (once there). We see the same in the industry at Oracle (typed on Wifi free plane so check my OOW14 MyPOV here).

    And a good moment to remind ourselves that Amazon is also the retailer, even though the AWS folks are likely to deny it – Lambda is huge for So always good to spend a moment to think what technological capabilities needs and overlay its AWS product roadmap with that.

    Moreover, it’s clear that AWS is more and more becoming a PaaS. In the past AWS was a ‘Welcome everybody’ place and while the Welcome sign has not been taken down, previous products that were and are running on AWS are likely to run in other clouds at some point in the future. Enterprise customers know that likely it will be better to run Microsoft products on Azure, Oracle products on the Oracle cloud, IBM product on the IBM cloud etc. In that sense Aurora is a necessity for AWS, as with no RDBMS offering it’s tough to get enterprise apps load, the NoSQL movement non with standing. Aurora is actually a great proof point that the RDBMS as we know it isn’t dead for quite a while.

    And PaaS vendors attract developers and load by unique features, Lambda being the prominent example of re:invent 2014. And in most cases these unique features come with lock-in and the longer the absence of standards to provide the same persists, the more likely market success and no other alternative to do the same. The next quarters will show what the competition will do to respond to Lambda, my best guess is Google being the ‘first responder’ – both from an architecture and mindset perspective.

    And lastly – when you have unique feature – you need to be less transparent to enable it – both to protect IP and hide complexity. A tradeoff I expect to be accepted by AWS customers, the more the longer the vendors who are playing catchup in the cloud game take to respond with attractive and viable alternatives.

    So in the last consequence Amazon must build its own technology stack – it has its own unique demands as e-tailer, most of today’s large technology vendors running on AWS will move to their own clouds, all serious AWS competitors have their own technology stack anyway – so from that perspective Aurora, Lambda (and more) are logical steps. What could come next? 21st century BPM, ‘liquid’ RDBMS / NoSQL capabilities, AWS ‘universal apps’, mobile development kits, electronic ad capabilities, credits and payment, development tools etc. are all areas where AWS can (and likely) will go. But don’t expect a confirmation or a roadmap on this.

    In the meantime congrats to AWS for having moved the yardstick once more, and being the vendor enterprises simply must evaluate for public cloud projects and benchmark against for any private cloud plans.

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    Here is my weekly recap of the week of November 7th:

    Here are the blog posts of the week:

    • First Take - Kronos KronosWorks - Day 1 Keynote - R&D Investment, Customer Success and Analytics - read here
    • AWS gives infrastructure insights - and it is passionate about it - read here
    • News Analysis - SAP appoints a CTO - some musings - read here
    • Event Report - Amazon re:invent - AWS becomes more about PaaS on in-house IP - read here

    Press quotes
    • Times of India - Infosys CEO Sikka renews product focus with cultural mindshift - read here
    • Destination CRM - Yahoo! acquires video advertising platform BrightRoll for 640M$ - read here

    Fashion Observation of the week: Alan Lepovsky beats me in a sock war at IBM SWGAI.

    Catch me next week at IDG Roadmap in Dallas / Ft. Worth, GigaOm Roadmap in San Francisco or Toronto (client advisory).

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    The recent outage that occurred for Microsoft Azure prompted me to collect some thoughts on the challenges of upgrading cloud infrastructure. 

    The inherent challenge of cloud infrastructures is also their biggest advantage – a consistent landscape of compute, storage and networking resources that are elastic for its subscribers. The more common the infrastructure is, the better the economies of scale for the subscribers and the provider. The challenge is when pieces of the infrastructure are supposed to be or need to (think the recent security risk in VMs) upgraded. So it makes sense to differ between planned upgrades and emergency upgrades in the further considerations.

    • Testing – Needless to say, upgrades should be tested before exposed at all, to a limited or to the overall subscriber community. But anyone who has ever build software knows, that you can never test for the real thing, the go-live to 100%. That is not a cop out though and every serious cloud provider needs to test infrastructure upgrades before rolling them out. Labs, test instances and test data centers are a good vehicle to do so. The next phase needs to be a pilot phase – with the awareness of customers. Works great when it is a new piece being rolled out that is optional. Things change when the upgrade is related to a core piece of the architecture and de-facto must be used by all subscribers (e.g. security, networking etc.). Of course all these testing questions pretty much fly out of the window in emergency situations, triggered by threats – or bad upgrades. Rollbacks on infrastructure are a must, but have limitations in the real world. 
    • Redundancy– Having enough redundancy in the infrastructure is key, e.g. being able to operate a cloud data center on two sets of switches / switch software releases. At least for the test data centers. But that all costs money and drives up the subscription prices, something cloud providers don’t want. But it can’t be done for all upgrades, note the noise in the cloud space when e.g. Amazon AWS was not able to provide enough ‘safely patched’ VMs to transfer the load from the ones that had to be patched. The same must have happened (so observers were less vocal) at all other cloud providers, as there was simply not enough compute around to have enough freshly patched servers available. Finally redundancy considerations are irrelevant in emergency situations. 
    • Isolation– A good public cloud infrastructure should work like the human organism. When bad things happen the rest of the infrastructure steps up to carry the load while isolating and insulating the part (aka servers, network infrastructure, data centers, backup sites etc.). Whenever isolation fails – see this week’s Azure problem – challenges to service levels get out of hand. But then to be fair, there are upgrades where you cannot afford isolation, e.g. in the Day 1 exploit remedy. 
    • Recovery vs Upgrade Speed – At the end of the day it all comes back to 2 speeds in which IT resources can be transformed. With upgrade speed I refer to the speed a provider can rollout out an upgrade across its infrastructure – with recovery speed I refer to the speed a provider can undo the latest change in case there was an issue. If recovery speed exceeds upgrade speeds by magnitudes, the provider is usually on the good side. If the two speeds become similar, it gets increasingly risky as e.g. a 2 hour planned downtime requires another 2 hour unplanned downtime to recover. When recovery speed is slower than upgrade speed (as in Azure’s case this week, though the details are not fully public – maybe even understood) then a provider is in trouble. When recovery time takes much, much longer than upgrade time, then it’s a pretty risky upgrade. 

    The cloud GAU

    I am lacking internet access while typing this – so using the German term from nuclear engineering – Groesster Anzunehmender Unfall – the largest thinkable accident. The good news is, that for compute and network upgrades, downtime solves the issue. Restart the server, give it the right software and all should be fine. Take the network down, roll it back and all should be fine. Ugly, downtimes, bad press, SLAs out of the window – but a remedy that is well understood. Same works for basic storage issues.

    But for late discovered storage issues at high cost – it maybe game over for a cloud infrastructure. Anyone in traditional on premise enterprise software knows the scenario. A customer upgrades, incl. data conversion with non back ward compatible schema changes, and a major issue is only uncovered months in the usage of the upgraded system. So all and a lot of storage needs to be rolled back, while keeping the lights on and while fixing the issue. And because it’s data that clients cannot afford to loose, the provider needs to make a lot of copies of it. If you simply don’t have the storage capacity for it – it’s game over. I doubt any cloud provider has the same amount of strorage available just for that case. The above isn't purely theoretical, I have seen this twice in my 25 year enterprise software career, and if it can happen on premise, it can happen in the cloud – at least theoretically – too.

    Questions cloud customers should ask

    So here are a few questions customers should ask their cloud providers:
    • How do you test infrastructure upgrades?
    • How do you isolate data centers (and us as a customer) from upgrades
    • What is the level of redundancy on a compute, storage and network level that you have to test and isolate upgrades
    • What is your approach and philosophy in regards of upgrade vs recovery speed
    • How fast can I get my vital data out of your infrastructure?
    • ...


    It’s the early days of the cloud and both customers and vendors need to learn and grow up. That includes the industry observers, as I was appalled to find nothing on the topic of cloud upgrades. Not sure if they vendors will tell the public, but it’s overdue that influencers on the media and analyst side start asking the questions. I will. 


    More recent posts on cloud:
    • Event Report - AWS re:Invent - AWS becomes more PaaS on own IP - read here
    • Musings - Are we wittnessing the birth of the enterprise cloud? Read here
    • News Analysis - SAP and IBM partner for cloud success - a good move - read here
    • Event Report - Oracle OpenWorld - Oracle's vision and remaining work become clear - and both are big - read here
    • Market Move - Cisco wants to acquire MetaCloud - getting more in the cloud game - read here
    • News Analysis - HP acquires Eucalypus - Genius or panic at Page Mill Road? Read here
    • news Analysis - IBM and Intel partner for cloud security - Read here
    • Event Report - VMWare makes a lot of progress - but the holy grail is still missing - read here
    • News Analysis - SAP committs to OpenStack and CloudFoundry - Key Steps - but what's the direction? Read here
    • Event Report - Microsoft TechEd - Day 1 Keynote takeaways - read here

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    Here are my notes for the week ending November 24th:


    What happened this week... 
    • A nightime / early morning ride from Houston to Dallas / Ft. Worth
    • Presented on Cloud & Security at IDG Roadmap in Dallas / Ft. Worth
    • Moderated a panel on 'Invisible' Design at GigaOm Roadmap in San Francisco, fellow panelists were Maeve O'Meara from Castlight Health, Christine Evans from FitBit, Zia Yusuf from Streetline and Tom Foremsky from Silicon Valley Watcher (his very good takeaways here)
    • Client Advisory in snowy Toronto
    • Another United forced layover due to their incompetence in SF

    Briefings this week with 
    • Klipfolio, 
    • RiverMeadow and 
    • Snaplogic.

    Press quotes

    • Destination CRM - SAP expands BusinessOne [...] read here

    Fashion Observation of the week: Bummed - none!

    Catch me next week in Palm Desert and San Diego. 

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    The recent weeks and days have shown a lot of movement in the email space – with IBM announcing Verse and Microsoft buying accompli recently.

    It’s simply fascinating to me that the piece of software being used most by users, spend most time on is still… fundamentally broken. Yes email gets the usage and adoption, but that is largely because we have to use it. Ask anyone if 20, 30, 60 minutes of email have been a joyful experience? Could we come to the point were doing more email makes users happier?

    So some musings on it:

    One size fits all dilemma – The same user interface and interaction paradigm has to work for all users, across all generations of digital proficiency, across all usage expertise and even email volumes. Couldn’t – or even shouldn’t – my email look different when I have to look at 3, 100 or 1000 new emails? Or answer my business vs. my private email? For the amount of time we spend doing email, the user interfaces are remarkably rugged, inflexible and standardized. And while it certainly helps that actions like reply, reply all, forward, etc. are common across all emails systems, it also makes them equally dull to use. It looks like email providers are stuck in the list, detail and common action paradigm. Innovations we saw in the multichannel hype in the early 2000s – like make an email from a selected user a vmail or call to my cell phone – have come and gone.

    UIs are only driven by technology, not user need– The main UI design challenge seems to be how many emails can be listed in the most efficient way. And efficiency (doing things right?) is paramount in email system design. Fair enough as no one has the time to work with an inefficient email system… but the vendors need to ask themselves the question – how is email handled effectively (are we doing the right thing?). If you look at the UI evolution of email clients, it can easily be connected by the advent of larger screen sizes and resolution for workers. The old list to pop-up paradigm is gone and we mostly see the folder / list / one detail email view across the board. Hardly the result of good UI work, but the fruit of cheaper LCD displays…

    Simple things, don’t see much adoption
    – Even simple innovations do not see much adoption. I am sure each / many email systems have tried some innovation, but one of the reasons I use a Blackberry as my smartphone (yes – be shocked) is, that it is more productive to do email on it. And I don’t refer to the keyboard (it’s better – but that’s another post) – the Blackberry email system suggests likely recipients to – me so I don’t have to search for every entry. It also remembers that I file emails from certain recipients, topics always in the same folder and suggests the folder when I want to file the email (Yes I am a ‘filer’ that’s another blog post, too). I am faster filing emails on my Blackberry than in Outlook and Yahoo! – the other two email clients I labor in these days.
    And simple thinks like inviting all recipients of an email to a calendar invite – have all not found themselves in other smartphones (yet). And they may well have – but that e.g. my desktop mail in Outlook doesn’t remember / suggest folders is something that baffles me. How can that be done on a smartphone and not a desktop – baffles baffles me.

    Analytics haven’t proven themselves (yet)– Innovative vendors trying to help us winning the battle with exponentially growing email have come and gone. Remember the ideas and good functionality of XOBNI (Inbox spelled backwards). Not much adoption. And there is some low hanging fruit. Like filtering out the time consuming ‘Yeah’ / ‘Good job’ / ‘Let’s go’ and ‘Thanks’ emails that clutter our inboxes. So that’s not rocket science… Time for vendors to do something…

    Interaction channel silos – There is more communication than email. We meet in person, over video conference, collaborate on shared screens, talk to each other one to one or many etc. etc. But these channels are highly silofied – there is little information salvaged across them. And many / most are initiated by email. Ever witnessed the issue of getting a 10 digit conference call ID typed in when walking through an airport? Mission impossible. Thanks to whoever invented the link to launch something else, but without it – we are back to the stone age of human interaction enablement. And Microsoft has acquired Skype how many years ago? May 2011 it was. And we still can’t smoothly start a video conference from an email with contacts.


    So why is there so little innovation in email? Measured by the amount of time and eyeballs it gets everyday – email is probably the most neglected application we use, in regards of usability improvements of the last 10+ years. Good to see IBM trying something with Verse – but if it will start an all out email innovation war – I remain skeptical. What’s your view why there is so little innovation in email? Please share…. (and you don’t have to email it!)

    More Musings
    • The Dilemma with Cloud Infrrastrcture updates - read here
    • Are we witnessing the Rise of the Enterprise Cloud? Read here
    • What are true Analytics - a Manifesto. Read here
    • Is TransBoarding the Future of Talent Management? Read here
    • How Technology Innovation fuels Recruiting and dsrupts the Laggards - read here
    Find more coverage on the Constellation Research website here.

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    Here are my takeaways of the two weeks:

    And here is the content:
    • IBM Datapower - now embedded in the BlueMix PaaS
    • Continuent (now VMware) - good integration process, now looking at adding BigData capabilities
    • BetterWorks - New approach to Performance Management
    • Paycor - SMB focused HCM, Talent Management and Payroll provider
    • HR Acuity - Looks at when things go back in an enterprise - what does HR need to do track, record  monitor and ultimately avoid.
    • Ralllyteam - Addressing the challenge to find the right talent, a mix of Learning, Performance Management and Career Planning / Succession Planning.
    • HashiCorp - Then under NDA - just releases now - Project Atlas - DevOps using 4 open source projects, the founders have launched in the last 3 years 
    • KeyNexus - Key Management Service when working with Amazon AWS
    • Sphere3D - MicroVisory VDI vendor, closed the storage vendor acquisition with Overland
    • BigPanda - Applying BigData and Analytics to IT Ticket Management in the age of IoT - interesting approach.
    • Progress Software - A UI briefing, good progress and bridging the both the Admin UI and the ultimately created product.
    • Message Systems - Moving their systems to the cloud, new email automation product with SparkPost, using cloud, BigData and analytics.
    • Informatica - Caught up on the Cloud Analytics product, interesting value add on top of the transformation capabilities
    • IBM STG - Quarterly update with Tom Rosamilia, 2015 will be key with a mainframe refresh cycle and the dynamics around Power8
    • Raet - Originally Dutch HR vendor, going more global starting with Europe and Latin America. 
    • IDG Roadmap in Washington D.C. - I spoke about cloud and next generation applications.
    • Jibe - Delivered what they had on the roadmap for 2014 - nice visualization of recruiting performance. 
    • Infor - Attended the CIO Summit, was on a panel on IT trends and presented about People Science (or HCM) trends.
    Fashion Observation of the week - Wear brown shoes in New York, no matter what the color of yourr suite is.

    Next week:
    • Webinar with Cornerstone - Unified vs. integrated Talent Management 
    • Webinar with TideMark / Proformative - New trends for FP&A and ABB 
    • Webinar with Intellicorp - How to lower the cost testing SAP 

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    This morning IBM summed up its achievements of its IBM cloud business and it was worth a new analysis. 

    So we dissect the press release (can be found here) in our usual style:

    ARMONK, N.Y. - 17 December 2014: IBM (NYSE: IBM) today announced a broad expansion of its global cloudcomputing network to 40 cloud centers with 12 new locations serving a growing roster of enterprise clients looking to move to hybrid cloud computing.

    MyPOV – This is a significant expansion to IBM’s original plans of moving to 40 locations as announced in January of 2014 – my analysis is here. And it’s a sign of something working for IBM here – as IBM communicates locations and signs up deals with customers, more locations than the 40 will be in demand. What works well for IBM here is that it has one of the smallest pod footprints in the industry, among the large players. We estimate Amazon AWS being 4-5 times and Microsoft Azure 2-3 times larger than the smallest IBM Cloud / SoftLayer footprint. That certainly helps when putting your flag around locations in the world, as less business needs to be acquired to reach economies of scale for a location.  

    IBM will reach customers in 12 new locations including IBM Cloud centers in Frankfurt, Mexico City and Tokyo, and nine more centers through a strategic partnership with Equinix in Australia, France, Japan, Singapore, The Netherlands and the US.  

    MyPOV – Germany is a key market in Europe and given Amazon AWS is now open for business here (read my analysis here) it is important for its competitors to be open for business there. Equally it is good to see that IBM (like almost all other players) partner with Equinix or use Equinix facilities.

    IBM's agreement with Equinix provides direct access to the full portfolio of SoftLayer cloud services via the
    Equinix Cloud Exchange™ in nine markets worldwide spanning the Americas, Europe and Asia Pacific, including Amsterdam, Dallas, Chicago, Paris, Silicon Valley, Singapore, Sydney, Tokyo and Washington, D.C.  Through this partnership, SoftLayer provides customers with the ability to easily move production workloads in and out of the cloud, thus better enabling them to fully realize their hybrid cloud strategies.

    MyPOV – An important partnership – the question (that likely will never be answered publicly) is what took IBM and Equinix so long to partner.

    Hybrid Cloud Growth in Enterprises

    Enterprise cloud deployments, specifically hybrid cloud, are growing at a significant rate.  According to leading technology research firm, Gartner, Inc., nearly half of all enterprises will have a hybrid cloud deployed by 2017.  Chief among the driving forces behind the adoption of cloud computing worldwide including hybrid cloud, are requirements for businesses and governments to store certain data locally to comply with data residency regulations, as well as a growing desire for startups to expand their businesses globally.  IBM estimates about 100 nations and territories have adopted laws that dictate how governments and private enterprises handle personal data.

    MyPOV – No surprise that IBM caters to the localization / statutory demands that today in most international cloud deployments are violated. We expect that in 2015 the ‘time bomb’ in this regards will likely burst, most likely in a highly PII sensitized market like e.g. Germany or France. We expect legislators giving vendors and enterprises 2-3 years to comply, so an early land grab by any IaaS vendor will draw SaaS vendor attention with IBM. And with that comes load, which is the most important cloud success ingredient that IBM needs to acquire.

    The new IBM Cloud centers in Frankfurt, Mexico City and Tokyo are part of IBM's $1.2 billion commitment to grow IBM's Cloud presence around the world to meet these local mandates with performance, security and data controls built in. These centers further expand IBM’s global cloud footprint which includes facilities in
    Mumbai, London, Amsterdam, Beijing, Hong Kong, Singapore, Melbourne, Toronto, Dallas and Raleigh, N.C., opened this year. This effort includes IBM's business consulting division, which features thousands of cloud experts with deep industry knowledge who are located around the globe to help clients to move to cloud.   IBM consultants are dedicated to working face-to-face with clients to address all of their industry specific needs as they transform to the cloud era.

    MyPOV –Again no surprise – IBM using its strong services arm to cater to the local enterprises and their services needs. Similar to the recent deals announced with ABN Amro and Lufthansa, we expect comparable deals being in the pipeline for IBM in the above mentioned locations.

    Open 24 hours a day, seven days a week, the new facilities offer an array of solutions including proven cloud resiliency services. These services guarantee customers up times of 99.99 percent across any IT environment, including traditional IT, public, private, or hybrid cloud deployments. In the event of an outage, the centers’ support team can recover data in minutes to ensure that is has little to no impact on business operations while going virtually unseen by customers.

    MyPOV – Achieving 4 9s is certainly good enough to local IT leaders to consider the IBM offering. Not mentioned here are the bare metal capabilities of SoftLayer which we know are highly valued by IBM prospects and customers. We expect bare metal capabilities and the ability to ‘touch and see my hardware’ remaining a key trust factor for CIOs to move load to the public cloud for the next 2-3 years to come.

    Clients around the world are using IBM cloud centers spread across every major market to help them adopt cloud for growth and innovation.  Since the start of November, IBM has announced more than $4 billion worth of cloud agreements with major enterprises around the world including
    Lufthansain Germany, ABN AMROin the Netherlands, WPPin the UK, Woox Innovations in Hong Kong, Dow Water and Thomson Reuters.

    MyPOV – As mentioned above, all the data center locations have a good looking pipeline at the moment. Let’s keep in mind that IBM is combining its existing legacy pipeline with the SoftLayer pipeline for data center location expansion.

    IBM today announced that  global transport operator National Express Group PLC is delivering a data-driven railway to improve both operational performance and customer experience on the IBM Cloud to provide up-to-the-minute train information and allow postcode-to-postcode journey planning – a first in UK rail.

    In addition, born-on-the-web innovators are increasingly choosing to build their business on the IBM Cloud. In just the last month, IBM has announced wins with Diabetizer and Preveniomed in Germany,Hancom in South Korea,
    Musimundoin Argentina and Nubity Inc.
    in Mexico. Collectively these wins reflect IBM's unique ability to deliver a full range of services through the cloud in ways that other cloud providers cannot match.

    MyPOV – Given the enterprise strengths of IBM these clients are often overseen, so good to see that IBM mentioned them here. And startups with high data residency requirements in sensitive countries like e.g. Diabetizer and Preveniomed are great showcases for the location strategy by IBM.

    “IBM recognizes that businesses and governments need the cloud to help them innovate, grow and operate more efficiently in concert with their existing IT investments," said Jim Comfort, General Manager, IBM Cloud Services.   "Everything IBM does is designed to help companies transition to the cloud in a responsible way at a pace that best fits their business model and industry.   Just as we helped major organizations transform in each preceding era of IT, IBM now serves as the cloud platform for the enterprise.”

    MyPOV – Always smart for veteran vendors to remind customers and prospects how they have helped them to migrate across previous platform changes in the past. What is not mentioned, but plays an equal important view in my experience is that being closer to the data center location plays a key day to day role in performance. And for the provider in networking cost.

    IBM has announced key cloud investments throughout 2014.   In addition to expanding its global cloud footprint and the establishment of the Bluemix PaaS to bring enterprise developers into the hybrid cloud era, IBM also launched a new Cloud marketplace that brings together IBM’s vast portfolio of cloud capabilities and new third-party services in a way that delivers a simple and easy experience for the enterprise. The IBM Cloud marketplace serves as a single online destination serves as the digital front door to cloud innovation bringing together IBM’s capabilities-as-a-service and those of partners and third party vendors with the security and resiliency enterprises expect.

    MyPOV – Bluemix is critical for IBM’s success in the cloud, as we see forward looking enterprise that embrace the cloud today also having a need for next generation applications that need to build on the cloud, for the cloud in a PaaS. We lookedat Bluemix earlier this year when it was announced and covered the marketplace announcement here.

    IBM Cloud Growth through Strategic Partnerships

    Today's announcement with Equinix further extend the reach IBM has achieved through its own cloud portfolio and well as a string of recent cloud partnerships with other notable companies including:

    • SAP selected IBM as a premier strategic provider of Cloud infrastructure services for its business critical applications to accelerate customers’ ability to run core business in the cloud. SAP applications are now available through IBM’s highly scalable, open and secure cloud and enables SAP HANA Enterprise Cloud to major markets with the addition of the IBM cloud data centers.

    • IBM and Microsoft are working together to provide their respective enterprise software on Microsoft Azure and IBM Cloud. This relationship will give clients, partners and developers more choice in the cloud, helping them drive new business opportunities, spur innovation and reduce costs.

    • IBM and Tencent Cloud recently signed a business cooperation memorandum to collaborate on providing public cloud with Software-as-a-Service solutions for industries. The companies will focus on emerging small and medium enterprises in the smarter cities, healthcare industries and other fields to enable these industries to utilize mobile, cloud computing and big data tools to transform internal processes and operations, thus achieving cloud transformation in the era of mobility.

    • AT&T and IBM are collaborating to speed business adoption of cloud services by extending AT&T NetBondSM services to the SoftLayer platform for stronger security and performance. This extension of the IBM and AT&T alliance will allow businesses to easily create hybrid-computing solutions.

    • IBM and Intel worked together to make SoftLayer the first cloud platform to offer its customers bare metal servers powered by Intel® Cloud Technology that provides monitoring and security down to the microchip level. Through this agreement, the Intel® Trusted Execution Technology provides hardware monitoring and security controls that help assure businesses that a workload from a known location on SoftLayer infrastructure is running on trusted hardware.

    MyPOV – As mentioned earlier IBM needs to bring load to its cloud to achieve economies of scale. The partnerships with SAP (my take on the partnership here), Microsoft and Tencent go into that direction, though it remains to be seen how much load they will really bring, but certainly a good start. Equally it’s good to see how IBM can forge relationships with key providers for the cloud space with AT&T and IBM (the security announcement analysis is here).

    In addition to these partnerships, IBM is also contributing Private Computing services from IBM Cloud OpenStack Services platform to the OpenStack and Cloud Foundry Foundations.  The initial usage of these services will offer expanded capabilities to enable automated integration, reduced cycle time and increased quality for software distribution. This will accelerate time to market for all uses of OpenStack based infrastructure.

    MyPOV – IBM made a big decision with moving its PaaS product Bluemix on the CloudFoundry stack, but that seems to be paying off given the traction CloudFoundry and the CloudFoundry Foundation enjoy these days both in then enterprise and the open source community.

    By better enabling the open community, partnering with key companies that provide even greater value to the IBM Cloud portfolio and continuing to make financial and technological investments that has helped IBM achieve significant growth in its cloud business:

    • IBM reported cloud revenue of $4.4 billion for 2013 – up 69 percent year-to-year

    • IBM cloud revenue has increased 50 percent through the third quarter 2014 with a $3.1 billion run rate in as-a-service revenue.

    • IBM Cloud supports 47 of the top 50 Fortune 500 companies

    • For two years in a row, IBM has been named a leader in the IDC MarketScape on Cloud Professional Services.  (IDC MarketScape: Worldwide Cloud Professional Services 2014 Vendor Analysis, doc #250238, August 2014)

    • Businesses across the U.S. recently ranked IBM the as the number one cloud computing provider, according to an IDC survey of US market preferences for infrastructure-as-a-service (IaaS). *Source: IDC's U.S Outsourced Cloud Services Survey, 4Q13

    • In addition to overall top ranking, IBM was also rated the leader in six of eight major industries covered in the study including Financial Services, Manufacturing, Healthcare, Professional Services, Wholesale and Retail and Public Sector (government). *Source: IDC's U.S Outsourced Cloud Services Survey, 4Q13

    • IBM also finished in the top three in Transportation and Telecommunications, the only vendor to lead in as many industries and rank no lower than third in any industry. *Source: IDC's U.S Outsourced Cloud Services Survey, 4Q13

    • Synergy Research Group recently ranked IBM among the top three cloud providers and the leader in hybrid and private cloud engagement in a market analysis of public, private and hybrid IaaS and PaaS.

    MyPOV – A lot of accolades and achievement and certainly a good start in the first full year that IBM has SoftLayer as an asset inside the company.

    Overall MyPOV

    A key press release for IBM and its cloud effort summing up well what the vendor has achieved – here are my key takeaways of the press release and the year overall:

    • IBM certainly knows when it needs to invest into something that works. The race to the announced 40 locations of January 2014 – that was not responded for by the usual competitors – has even more accelerated with IBM tracking to 48 locations now.
    • IBM’s reputation to help enterprises in technology transformation times is a well working and resonating messaging with customer and prospects.
    • Bluemix is, remains and will be a critical component of IBM’s cloud success. How well IBM can not only attract the new ‘cloud developer’ but also the existing (Rational) IBM developer will be a key area to watch in 2015 and beyond.
    • The service capabilities of IBM work to its favor with the enterprise need to be advised and often literally ‘taken by the hand’ to move to the public cloud.
    • IBM knows how to partner and will have more partnerships in stock for us to see in 2015.

    What remains critical for IBM (as well as all its competitors – except AWS) is to attract load to reach economies of scale for its cloud effort. With an esteemed analyst company estimating that AWS is 4-5 larger than all major competitors combined – every IT executive knows that all competitors cannot get the same attractive conditions from all relevant suppliers like AWS does. IBM (and competitors) know that and are desperately looking for load, across the field IBM has done the best in 2014, but must continue to do so to reach similar cloud load levels Microsoft / Google.

    2015 will be critical for IBM, and if we see a similar press release by end of 2015 we know it will have done well. We will be watching throughout the year. 


    More on IBM :
    • Event Report - IBM Insight 2014 - Is it all coming together for IBM in 2015? Or not? 
    • First Take - Top 3 Takeaways from IBM Insight Day 1 Keynote - read here
    • IBM and SAP partner for cloud - good move - read here
    • Event Report - IBM Enterprise - A lot of value for existing customers, but can IBM attract net new customers? Read here
    • Progress Report - The Mainframe is alive and kicking - but there is more in IBM STG - read here
    • News Analysis - IBM and Intel partner to make the cloud more secure - read here
    • Progress Report - IBM BigData an Analytics have a lot of potential - time to show it - read here
    • Event Report - What a difference a year makes - and off to a good start - read here
    • First Take - 3 Key Takeaways from IBM's Impact Conference - Day 1 Keynote - read here
    • Another week and another Billion - this week it's a BlueMix Paas - read here
    • First take - IBM makes Connection - introduces the TalentSuite at IBM Connect - read here
    • IBM kicks of cloud data center race in 2014 - read here
    • First Take - IBM Software Group's Analyst Insights - read here
    • Are we witnessing one of the largest cloud moves - so far? Read here
    • Why IBM acquired Softlayer - read here

    Find more coverage on the Constellation Research website here.

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    Another week - another recap done (late, soory).

    So here is the content:
    • Webinar with Cornerstone - Unified vs. integrated Talent Management 
    • Webinar with TideMark / Proformative - New trends for FP&A and ABB 
    • Webinar with Intellicorp - How to lower the cost testing SAP 
    • Briefing with SAP / Ariba - Insights on Spend Management
    • Briefing with Retarus - Message Systems with innovative approach

    Blog posts
    • Time to reinvent email

    Next week
    • Webinar with Dell Boomi - register here
    • A lot of briefings

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    This morning we learned that Oracle has signed an agreement to acquire Datalogix, the provider of consumer data that fuels marketing campaigns.

    Instead of dissecting the press release in the usual ‘myPOV’ fashion, let’s take a step back and see what this means for the Oracle acquisition strategy, the evolution of enterprise software and next generation applications.

    Here are some key data points to consider going forward:

    • We are seeing the end of transactional applications - At this point large serial acquirers of enterprise software vendors like Oracle have no further attractive targets. Either from a valuation perspective (e.g., from a built in house and now good enough perspective (e.g. Workday) or a regulatory perspective – there are no more traditional enterprise software targets to acquire. So data service companies are a worthy target.

    • There is more than software to subscribe to– Oracle, probably better than its key competitors, understands that future revenue streams do not have to come from software subscription revenues alone, but can come also from data service royalties. 

    • Oracle is the only enterprise vendor serious on DaaS (so far) – Frankly I was surprised when Thomas Kurian positioned DaaS (Data as a Service) on equal footing with the usual three musketeers of the on demand world – IaaS, PaaS and SaaS. Back in spring 2014, more here. Datalogix is probably the largest acquisition that Oracle has made in the DaaS space.

    • When DaaS meets SaaS $s are made– From the press release it is also clear, that Oracle really understands that a winning combination of DaaS and SaaS is what secures long lasting revenue screens, creates software users like and need (aka becomes ‘sticky’) and excludes the competition very effectively. 

    • Oracle needs a BigData platform – The acquisitions of Micros and now Datalogix will stretch Oracle’s database capability in the BigData realm, but the vendor has the expertise and capital to address this. Let’s keep in mind we are talking about e.g. moving Datalogix data across many data center and possible even on premise installations (let’s not forget Oracle give the on premise install option for Fusion Applications).


    A good move by Oracle, it now has added probably enough growth from acquisitions to make 2015 YoY comparisons favorable, even if it experience little organic growth. With financial analysts seldom making the ceteris paribus argument of how large both companies would be without an acquisition event, this is good news for Oracle. 

    But the really exciting part will be to combine a network of POS data (from Micros), combined with Datalogix and Oracle Marketing applications. We know the main thrust for Digital Transformation is being executed in the marketing department, Oracle now has more offerings to open the heart (and wallets) for CMOs in 2015.


    Also worth a look for the full picture
    • Event Report - Oracle Openworld - Oracle's vision and remaining work become clear - they are both big - read here
    • Constellation Research Video Takeaways of Oracle Openworld 2014 - watch here
    • Is it all coming together for Oracle in 2014? Read here
    • From the fences - Oracle AR Meeting takeaways - read here (this was the last analyst meeting in spring 2013)
    • Takeaways from Oracle CloudWorld LA - read here (this was one of the first cloud world events overall, in January 2013)
    And if you want to read more of my findings on Oracle technology - I suggest:
    • Progress Report - Good cloud progress at Oracle and a two step program - read here.
    • Oracle integrates products to create its Foundation for Cloud Applications - read here.
    • Java grows up to the enterprise - read here.
    • 1st take - Oracle in memory option for its database - very organic - read here.
    • Oracle 12c makes the database elastic - read here.
    • How the cloud can make the unlikeliest bedfellows - read here.
    • Act I - Oracle and Microsoft partner for the cloud - read here.
    • Act II - The cloud changes everything - Oracle and - read here.
    • Act III - The cloud changes everything - Oracle and Netsuite with a touch of Deloitte - read here
    Lastly - paying tribute to my Future of Work / HCM / SaaS research area:
    • Progress Report - Oracle HCM gathers momentum - now it needs to build on that - read here
    • Oracle pushes modern HR - there is more than technology - read here. (Takeaways from the recent HCMWorld conference).
    • Why Applications Unlimited is good a good strategy for Oracle customers and Oracle - read here.
    Find more coverage on the Constellation Research website here.

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    Every year we try to make a recommendation of what should be top of mind for CxO for the coming year - and were asked to re-post on our personal blogs - so here you go:

    9 Actions to Consider Before 2015

    This year end checklist offers suggestions designed to enable you to take control of your digital strategy in 2015. Consider these actions to ensure you dominate digital disruption in the new year. 

    1. Matrix Commerce: Scrub your data

    Guy Courtin Headshot Constellation Research
    When it comes to Matrix Commerce, companies need to focus on the basics first. What are the basics? Cleaning up and getting your data in order. Much is discussed about the evolution of supply chains and the surrounding technologies. However these solutions are only as useful as the data that feeds them. Many CxOs that we have spoken to have discussed the need to focus on cleaning up their data. First work on a data audit to identify the most important sources of data for your efforts in Matrix Commerce. Second, focus on the systems that can process and make sense of this data. Finally, determine the systems and business processes that will be optimized with these improvements. Matrix Commerce starts with the right data. The systems and business processes that layer on top of this data are only as useful as the data. CxOs must continue to organize and clean their data house.

    2. Safety and Privacy - Create your Enterprise Information Asset Inventory

    Steve Wilson Headshot Constellation Research
    In 2015, get on top of your information assets.  When information is the lifeblood of your business, make sure you understand what really makes it valuable.  Create (or refresh) your Enterprise Information Asset Inventory, and then think beyond the standard security dimensions of Confidentiality, Integrity and Availability.  What sets your information apart from your competitors?  Is it more complete, more up-to-date, more original or harder to acquire? To maximise the value of information, innovative organisations are gauging it in terms of utility, currency, jurisdictional certainty, privacy compliance and whatever other facets matter the most in their business environment. These innovative organizations structure their information technology and security functions to not merely protect the enterprise against threats, but to deliver the right data when and where it's needed most.  Shifting from defensive security to strategic informatics is the key to success in the digital economy. Learn more about creating an information asset inventory. 

    3. Data to Decisions - Create your Big Data Plan of Action 

    Andy Mulholland Headshot
    Big Data is arriving at the end of the hype cycle. In 2015, real-time decision support using ‘smart data’ extracted from Big Data will manifest as a requirement for competitiveness. Digital Business, or even just online sellers, are all reducing reaction and response times. Enterprises have huge business and technology investments in data that need to support their daily activities better, so its time to pivot from using Big Data for analysis and start examining how to deliver Smart Data to users and automated online systems. What is Smart Data? Well, let's say creating your organization's definition of Smart Data is priority number one in your Big Data strategy.  Transformation in Digital markets requires a transformation in the competitive use of Big Data. Request a meeting with Constellation's CTO in residence, Andy Mulholland. 

    4. Next Gen CXP - Make Customer Experience Instinctual  

    Natalie Petouhoff Headshot
    STOP thinking of Customer Experience as a functional or departmental initiative and start thinking about experience from the customer’s point of view. 
    Customers don’t distinguish between departments when they require service from your organization. Customer Experience is a responsibility shared amongst all employees. However, the division of companies into functional departments with separate goals means that customer experience is often fractured. Rid your company of this ethos in 2015 by using design thinking to create a culture of cohesive customer experience. 
    Ensure all employees live your company mythology, employ the right customer and internal-facing technologies, collect the right data, and make changes to your strategy and products as soon as possible.  Read "Five Approaches to Drive Customer Loyalty in a Digital World".

    5. Future of Work - Take Advantage of Collaboration

    Alan Lepofsky Headshot
    Over the last few years, there has been a growing movement in the way people communicate and collaborate with their colleagues and customers, shifting from closed systems like email and chat, to more transparent tools like social networks and communities. That trend will continue in 2015 as people become more comfortable with sharing and as collaboration tools become more integrated with the business software they use to get their jobs done. Employees should familiarize themselves with the tools available to them, and learn how to pick the right tool for each of the various scenarios that make up their work day.  Read "Enterprise Collaboration: From Simple Sharing to Getting Work Done".

    6. Future of Work - Prepare for Demographic Shifts

    Holger Mueller Headshot
    In the next ten years 10% to 20% of the North American and European workforce will retire. Leaders need to understand and prepare for this tremendous shift so performance remains steady as many of the workforce's highly skilled workers retire.
    To ensure smooth a smooth transition, ensure your HCM software systems can accommodate a massive number of retirements, successions and career path developments, and new hires from external recruiting. 
    Constellation fully expects employment to be a sellers market going forward. People leaders should ensure their HCM systems facilitate employee motivation, engagement and retention, lest they lose their best employees to competitors. Read "Globalization, HR, and Business Model Success". Additional cloud HR case studies here and here

    7. Digital Marketing Transformation - Brand Priorities Must Convey Authenticity

    R Ray Wang Constellation Research Headshot
    Brand authenticity must dominate digital and analog channels in 2015. Digital personas must not only reflect the brand, but also expand upon the analog experience. Customers love the analog experience, so deliver the same experience digitally. Brand conscious leaders must invest in the digital experience with an eye towards mass personalization at scale.  While advertising plays a key role in distributing the brand message, investment in the design of digital experiences presents itself as a key area of investment for 2015. Download free executive brief: Can Brands Keep Their Promise?

    8. Consumerization of IT: Use Mobile as the Gateway to Digital Transformation Projects

    Constellation believes that mobile is more than just the device. While smartphones and other devices are key enablers of 'mobile', design in digital transformation should take into account how these technologies address the business value and business model transformation required to deliver on breakthrough innovation. If you have not yet started your digital transformation or are considering using mobile as an additional digital transformation point, Constellation recommends that clients assess how a new generation of enterprise mobile apps can change the business by identifying a cross-functional business problem that cannot be solved with linear thinking, articulating the business problem and benefit, showing how the solution orchestrates new experiences, identifying how analytics and insights can fuel the business model shift, exploiting full native device features, and seeking frictionless experiences. You'll be digital before you know it. Read "Why the Third Generation of Enterprise Mobile is Designed for Digital Transformation"

    9. Technology Optimization & Innovation - Prepare Your Public Cloud Strategy

    Holger Mueller Constellation Research
    In 2015 technology leaders will need to create, adjust and implement their public cloud strategy. Considering estimates pegging Amazon AWS at 15-20% of virtualized servers worldwide, CIOs and CTOs need to actively plan and execute their enterprise’s strategy vis-à-vis the public cloud. Reducing technical debt and establishing next generation best practices to leverage the new ‘on demand’ IT paradigm should be a top priority for CIOs and CTOs seeking organizational competitiveness, greater job security and fewer budget restrictions. 

    Dominate digital disruption in 2015. Join Constellation Executive Network for exclusive research, advisory, and events. 

    Find more coverage on the Constellation Research website here.

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    End of the year is a good time to review on what happened through the last 12 months – so I took a look at what made me blog about vendor events. Of course there are many other ways to look at this, but I guess the marketer in my brain looks at the timing and sequence of messages, where the calendar months play a role… there is only so much time in a year, for news, events and briefings. Layer that with acquisitions, which are not so well plannable like other events and it makes a busy year.

    So here you go:


    An easy choice, also because not much happens in January, but it is certainly Workday’s Release 21. Workday did a remarkable job on the new user interface, and moving the complete application must be a Herculean task – even though the vendor downplayed it. And as market leaders should, it started a year of UI renovation and innovation. Later in the year – just from the major vendors – we saw (in alphabetical order) remarkable UI progress with ADP, Infor, Oracle, SAP / SuccessFactors and Ultimate. The winner has been the HCM user that probably has the best user interface experience at its disposal – when you compare with the large ‘tectonic plates’ of enterprise software – Financials, CRM, Manufacturing, Purchasing. The consequence for vendors is that UIs stale faster than ever – once you had a 2-3 year break when you moved an application to a new UI, now 12 months makes a UI already look old and staled in some areas. The blog post on the Workday release can be found here.


    Not so easy, as already a busier month – but at the end Oracle with its first HCM World conference wins. First of all remarkable as the vendor broke off a subset of enterprise software in a separate event. And Oracle showed commitment with both Mark Hurd and Larry Ellison speaking, and showing they understand HCM. And Oracle at the point had made enough progress with Fusion HCM to get attention. Kudos also to Oracle for being the first (and only) vendor in 2014 to let us – the analysts – play with their software: 20 or so analysts played with the simplified UI and got a better and more user centric insight than with any other vendor in 2014. Read my blog post here.


    A pretty tough month to call on – but Ceridian make the cut of the most remarkable HCM event in March. Kudos goes to David Ossip and team to acknowledge what Ceridian was missing (mainly in the Talent Management space) and laying out a product development agenda for the next 48 months, reaching all the way into 2016. And with that Ceridian certainly contributed in Ultimate doing the same a month later, Oracle and SAP expanding their planning horizon, even ADP extending insight into the functional road way more ahead than usual. But only Ultimate matched the complete and detailed vision, something HCM buyers and users deserve and need to know to plan out their HCM roadmaps for the years to come. Vendors tend to forget how important the 2-3 year view for their clients is, so a great step in the right direction by Ceridian. Read my blog post here.


    Again a pretty busy month, Ultimate’s user conference and the takeaways make my April cut as the key HCM event in April 2014. Ultimate matched insight till ‘roadmap’ complete to what Ceridian did in March, a move their user base very much welcomed. At this point UI innovation was no longer a surprise, but a necessity, given the success of Workday’s Release 21 from January (see above). But Ultimate also built and gained the important trust of customers and prospects to deliver to the roadmap with a new Onboarding module and Succession and Performance management being demoed. Last but not least Ultimate broke a first with (real) analytics (more hereon ‘real’ analytics) having shipped a retention predictor (anyone remember the 2011 HCM buzzword ‘flight risk’) and announcing a performance predictor. Read my blog post here.


    One of the busiest months of the year, easily. Cornerstone makes the cut with its vision of unified Talent Management. With the vendor making clear that the ‘world does not need another core HR system’ and with that focus on purely Talent Management and doubling efforts in that area. No surprise, a new UI got traction and again ‘real’ analytics were hinted at, maybe already hinting at the later in the year acquisition of Evolv (mentioned in my weekly recap here) – showing how important analytics have become for HCM. And Cornerstone launched their Marketplace, one of the first (if not the first) HCM vendor to do so. Read the blog post here. Honorable mention and key as the reverse trend in the industry – Workday launches the long awaited Recruiting functionality – read here.


    In a still very busy month – I was told June was when things slow down by industry veterans – but slower on HCM events – NGA HR makes the cut as the main event in June 2014. New focus under its new CEO Adel Al-Saleh is taking shape and if the vendor can deliver the majority of what it outlined as its ambition for 2015, then enterprises will have a very attractive BPO offering coming from NGA HR in 2015. The bigger questions in the market is – when will BPO pick up (again) – after the first wave of BPO euphoria 10+ years ago has fizzled and largely disappointed. But the value proposition of BPO with major trends like Globalization and aging workforce looming, remains very attractive to enterprises so it will be interesting to see what will happen in 2015. Read the blog post here.


    Finally a more quiet month, and the prize goes easily to Hirevue announcing (and later in 2014) delivering its Insights analytical capability. And Hirevue did everything right – it is ‘real’ analytics, so it takes and action or makes recommendations. It is trained by the business user, creating buy in ownership and personalization to get off the ground. It also creates instant value by shipping with a global model, then refined to an industry, enterprise and potentially even to a specific position. And Insights learns and improves all the way during its usage. There is very little more an analyst can ask a vendor for building an analytical product in 2014 and Hirevue pretty much nailed it. Read my blog post here.


    Also very quiet – but ended with a bang, Skillsoft acquiring SumTotal. It shows that though Cornerstone may succeed with a Talent Management only strategy, but for a Learning giant like Skillsoft, Learning was getting too small. Or at least for the new private equity owners. Not much has happened news wise since then – but than this can be a good sign - as it can be a sign of concern. 2015 will show how quickly the new vendor can go beyond Learning, the first (and maybe too soon) check-in at HR Tech in Las Vegas still showed slides of Learning and Talent Management vis a vis. Read my blog post here.


    A very busy month – and the only one I could not find a clear winner, so the prize gets split between (alphabetical orders – as the avid reader knows) to ADP and SAP / SuccessFactors. 

    Let’s start with ADP that faced the challenge to have 30 or so analysts in town for a yearly briefing and having to announce that long tome Product leader Michael Capone was leading. The way how ADP and all executives communicated this, was certainly school book A+ grade. But also on the product front ADP shows a lot of progress, rolling out its new benefits enrollment to mid-market clients and sharing a roadmap for 2015. There is a lot of new ideas and innovation at ADP, that most importantly are now followed up with first products in the market, not with 100s but Millions of customers. Read my blog post here.

    And SAP / SuccessFactors had their user conference in Las Vegas, for the first time with the new leadership of Mike Ettling in place. A good passing the baton symbolic message with Lars Dalgaard, but SAP did not muster the same presence like e.g. Oracle did in February (e.g. Bill McDermott attended a pre event, and Robert Enslin opened for Ettling). But SAP had some key announcements in store – better roadmap sharing, services improvements and a renewed focus on Learning. Integrated Learning is a smart move by SAP, as it positions itself as the organic (or ‘unified’) learning provider vs. market foes like Oracle and Workday. But maybe I have missed it – the more detailed roadmap that was announced in Las Vegas, is not out yet. As I blogged – work remains to be done – read here.    


    A super busy October had a number of HCM announcements – but the key happening was HR Tech in Las Vegas, under new leadership of Steve Boese, a great first event. True to what Constellation advises our customers, be disruptors, I decided not to keep my 30+ briefings with vendors quiet and a little bit to Twitter – but shared my takeaways of the briefings in the form of a short video. And it was widely and positively accepted – so I guess I need to repeat the same going forward – but for now checkout the takeaways of 30+ vendor briefings here. Needless to say, there is a lot of investment happening in the HCM space. Better stay on top of it as otherwise your enterprise may use sub optimal software.


    Another busy November, as expected. The most important November 2014 announcement goes to Workday, making (real) analytics the main focus of the keynote at the Rising user conference. No enterprise vendor in the past has given even close that space for analytics, so definitively a pioneering act by Workday. And all vendors know that analytics has a lot of promise in the future – but kudos goes to Workday for being the first to give analytics that much space. But with that comes a lot of expectations for 2015, so it will be key to see how Workday will put the six announced analytical applications in action, both product and revenue wise.


    As expected – a slow month – so I share my 2015 predictions and advice from the Constellation team post:

    In the next ten years 10% to 20% of the North American and European workforce will retire. Leaders need to understand and prepare for this tremendous shift so performance remains steady as many of the workforce's highly skilled workers retire.

    To ensure smooth a smooth transition, ensure your HCM software systems can accommodate a massive number of retirements, successions and career path developments, and new hires from external recruiting.

    Constellation fully expects employment to be a sellers’ market going forward. People leaders should ensure their HCM systems facilitate employee motivation, engagement and retention, lest they lose their best employees to competitors. Read "Globalization, HR, and Business Model Success". Additional cloud HR case studies here and here.


    So a really busy year in 2014 – but don’t count on 2015 being any slower. There are too many very talented startups that are likely going to get a chunk out of the established vendor’s revenue streams. The existing vendors are not idling either but have major functional pieces coming in the next quarters. And I expect new HCM software categories to emerge… but now I get carried away into predictions… this was all about a review of 2014.

    What were your key activities of 2014 – please share them!

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    After using the format for the HCM 2014 highlights, I will re-use the same for the cloud and next generation Applications in this post: So basically I revisited my blog posts of 2014 and determined which event in each month had the most impact, was the most important event one. One thing that became clear is that some months – January, February, July, August and December are slower months – so less to choose from – and March, April, May, September, October and November are more on the busy side. And of course it is to a certain point biased as I can only cover so much in a year.

    So here we go:

    January - IBM

     Until January the major cloud competitors moved more or less in lockstep mode, European data center, Australian data center, China data center etc. were all milestones that across AWS, Google, Microsoft and IBM were achieving only a few months apart. But when IBM announced in January that it planned to roll out its cloud infrastructure to 40 locations in the next 24 months – that move remained un countered. And as we know throughout 2014 IBM rolled out a number of locations, and even raised the location target to 48 by end of 2014. Locations matter for cloud for two main reasons – one being compliance with legal and statutory requirements and the other for pure performance reasons. Anyone who has tried to access a server in the northern hemisphere from the southern hemisphere knows about this. So a good move by IBM as it gives the vendor a lead over other cloud vendors in some of the markets, key time for IBM to use its good ties to the enterprise and secure load to the IBM cloud. Load is the key that IBM needs when compared with AWS, Google, Microsoft who have considerate consumer load, and Oracle, SAP and who have considerate B2B load either as real or potential load they need to tackle. It will be interesting to see in 2015 how IBM can capitalize on that lead. My blog post can be found here

    February - IBM

     February was a relatively slow month and at the risk of being boring, the most important event went to IBM again, with the launch of its PaaS platform, BlueMix. A key event for the creation of next generation applications, where there is now a well-known vendor in the enterprise to rely on. Remarkable is also that IBM, contrary to tradition, is leveraging / OEMing Pivotal’s CloudFoundry as the platform for BlueMix. When a proven technology vendor like IBM uses an open source based platform it shows the complete turnaround we have seen in software platform development, starting from proprietary platforms and today arriving at large, community driven open source projects. But IBM did not rest here but put significant investment into the platform that stands and falls in the enterprise by providing attractive services while maintaining the IBM commitment to safety and reliability. And IBM also realized that BlueMix, next to its SaaS portfolio and Watson, is the largest driver it has under control to get critical load onto the SoftLayer powered IBM cloud. At the end of 2014 it is safe to say that this was a bold move by IBM that is starting to pay off both in mindshare with traditional enterprise customers as well as more dynamic startups and developer communities focusing the enterprise. How well IBM Cloud can still attract born on the web startups, like e.g. their banner reference WhatsApp, will be an area to watch in 2015.

    March - Google & Oracle

    And in March things got busier, and it was a tie for the most important news coming from Google and Oracle:

     Google’s cloud event was a key event in March and probably for all of 2014... While there was some speculation back in 2013 that there may be a two tier pricing in the cloud, a basic consumer one (dominated by AWS) and higher end enterprise one (still up for grabs) and the money was on Google to use its very high end infrastructure for the latter. Well that thought is now history, as with this Clear busy by Google in the race referred to as the ‘race to nothing’ in cloud, by basically giving away the Moore’s Law cost savings early in the year, and not at the end of the year or 12 month period. This mixed calculation created havoc for many cloud providers, but was also the death nail for most private cloud (or at least a temporary hold from which the projects have not recovered). And so far price leader AWS did not respond, at least right away. And Microsoft changed their price guarantee from the AWS price match to lowest major provider price match. So kudos goes to Google for boldly going after more enterprise load and resetting the cloud cost curve, effectively giving the IT world a one (or so) year fast forward on the cost curve. If Google will repeat this in 2015 – which is widely expected – and key competitors will more or less match that move, then we will see much, much more public cloud adoption in 2015. Barring more security fiascos and NSA type concerns. Investing into private cloud will be very, very hard. But let’s wait and see. Read the blog post here.

    For the first time Oracle gave a more detailed insight into its cloud plans to a select group of analysts in March. And while much of the briefings where under NDA, it’s clear that Oracle in 2014 really ‘gets’ cloud and is massively investing into its cloud capabilities. What was new was the positioning of a forth service dimension, Data as a Service (DaaS), next to the traditional IaaS, PaaS and SaaS. With the recent acquisition of Datalogix (more here) it is clear that Oracle does not see DaaS as a pure platform capability, but as synergetic play between DaaS and SaaS, which gives more flexibility to licensing models as well as creates a new level of stickiness for enterprise applications. The Oracle vision of the integrated technology stack, from the chip all the way to the end user application remains very compelling, 2015 will be a key year where Oracle will have to show similar success in IaaS and PaaS as it has shown in SaaS. How much re-platforming of the older SaaS products on the newer IaaS and PaaS offerings will require, is a key development to watch closely in 2015. Read my blog post here.

    Honorable mention: Cisco launches its Intercloud. It was about time for the networking giant to go public on its cloud plans, and a network centric, collaboration focused cloud (using Cisco’s WebEx assets) certainly has compelling value for the enterprise. On the flipside a partner approach (see e.g. also HP) always faces challenges on the SLA, build out and consistency side. And overall Cisco’s efforts – aside from the acquisition of MetaCloud (read here) has gone more or less quiet. Cisco will have to redouble its efforts in 2015 if it want to play in the cloud game, and e.g. address how developers can build next generation (and e.g. network centric) applications in 2015. Read my blog post here.

    April - Microsoft 

    The most important event for me in April was Microsoft’s Build conference and the related developments both for cloud and next generation apps. Azure made massive progress, on the location and services side, but most of the key news were on the next gen apps side. In a surprise move Microsoft said it will create an open source style community for .NET and open source the .NET Compiler Platform "Rosslyn". The Universal Apps are a key tool for developers on Microsoft platforms. Opening of Office APIs enables a whole set of new, next generation applications. And advances to Windows Mobile as well as commitments to support iOS and Android were well received by the developer community. Read my blog post here.

    May - HP

    In May HP threw its hat into the cloud ring – announcing HP Helion. HP has key software assets that could make the building of next generation applications on Helion (very) attractive. And HP understand the enterprise well, its indemnification clause on the open source code side and the mature service levels will help putting some concerns on cloud and open source to rest – even in the most conservative enterprise. The later in the year addition of Eucalyptus and with that Marten Mickos as cloud leader make HP a cloud vendor to watch in 2015 (more here). HP’s challenge, even more drastic than IBM’s is that it does not have load available both from a real and potential load perspective like AWS, Google, Microsoft and Oracle. Read my blog post here.

    June - MongoDB

    In June things tend to slow down, but the key event for me was MongoDB’s user conference in New York City. We see most next generation apps project including key database and data storage components. The interest that MongoDB has garnered in the enterprise was impressive to see. What helps MongoDB is that some of these new software development projects need to leverage NoSQL and BigData and with that play into MongoDB’s hands. 2015 will be key to see if MongoDB can monetize the many promising partnerships it has setup back in 2014. Read my blog post here.

    July - SAP

    In the usual quiet month of July SAP surprised us with a clear endorsement of open source – both with CloudFoundry and OpenStack. And while it remains still a little bit hazy what SAP is doing with CloudFoundry (we hear that hybris is building its next generation platform on CloudFoundry) the usage of OpenStack is pretty straight forward. Few enterprise vendors have such a diverse SaaS stack to manage like SAP. With new acquisitions coming in, the latest being Concur (read more here) and more likely to come, SAP needs a flexible way to manage its diverse cloud infrastructure and that makes SAP a perfect showcase for OpenStack. But the overall general data point is that (even) SAP embraces open source (anyone remember the SAP JVM?), another testament of the power of community based development and at the same time its acceptance in the enterprise world in 201x. Read my blog post here.

    August - VMware

    As we saw Cisco and HP getting formally into the cloud game, there was the realistic expectation that VMware would do the same at VMWorld. And hybrid cloud was more prominent than ever at VMWorld, but VMware still seems not to be ready to enable its on premise customers to aggressively move to the cloud. By now it’s clear that it’s not short term revenue generation that hinders VMware, but the realization that VMware needs to offer more than bare metal to escape and stay above the commoditization game. The solution is an attractive PaaS platform for their customers to build next generation applications. But that PaaS offering still needs to be created, and VMware teams are working hard to make that real in 2015, that will be key to watch. VMware remains uniquely positioned for this as no vendor understand the on premise load of enterprises better than VMware. It is about to get time where VMware needs to put that knowledge into cloud revenue. Read my blog post here.

    September - SAP

    When it comes to next generation applications, it is clear that these will not exist in a vacuum only, but will have to ‘play ball’ nicely with the existing enterprise applications. Which brings us to SAP and its long and thorny path to a PaaS message. So the key event for September was that SAP got not only the messaging right around the HANA Cloud Platform (HCP) but also addressed a number of issues that were holding it back previously. With key changes to the purpose, improved platform capabilities and improved licensing, HCP becomes an attractive platform for next generation applications in the enterprise. But a good start does not even guarantee a good intermediate position during a race and SAP will have to keep stretching to keep HCP an attractive platform in 2015. Read my blog post here.

    October - Oracle 

    As if the situation of VMware was equally clear to Oracle executives, the main messaging at Oracle OpenWorld was… PaaS. Oracle understands very well that it needs a strong PaaS layer to stay away from the bare metal price game. And with the Oracle Database, Java and MySQL it has attractive products developers need to build next generation applications. Oracle also made key advancements on the database side, releasing Oracle Database In-Memory, which opens attractive hybrid next generation application scenarios for traditional database and in memory usage. With the co-existence with Hadoop style DBs, Oracle has achieved very good viability for its existing customers for next generation applications. How well Oracle can attract non Oracle shops in 2015 will be a key metric to watch. Equally on the Application Server side, Oracle has done a number of key additions that add to the attractiveness of the overall Oracle platform. The challenge for Oracle will be to get all things done in time, at a good quality and above the attractiveness gate keeper that is needed for new products. And while the team around Kurian is certain to pull this off in 2015 – it remains a herculean task. But there is no alternative for Oracle, the execution speed and quality will be key to monitor in 2015. Read my blog post here.

    Honorable mention: had its Dreamforce event in San Francisco, and its Salesforce1 platform is making good progress. And while the new ‘analytics’ with Wave are not ‘true’ analytics yet (read here for my definition), they address a long term reporting attractiveness issue. Mobile enhancements as well as PaaS enhancements were well received. Overall understands very well that its future cannot only be SaaS but has to have an attractive PaaS components. From the traditional enterprise vendors is doing probably the best job in developer outreach and engagement. And it will have to keep doing this, as its platform does not necessarily come to mind as the first option for building a next generation application, if outside of the enterprise space. But inside the enterprise space, extending applications or building database centric, enterprise scale applications, that’s where’s platform sweet spot is and it will be interesting to see how the market dynamics vs. other vendors with similar positioning (IBM, Oracle, SAP and maybe even Workday) will play out in 2015. Read my blog post here.

    November - AWS

    And November prove to be a busy months, the key event was the AWS re: Invent conference. AWS for the first time gave key insights into how it builds, operates and maintains its infrastructure, a key step for overcoming the black box image that AWS previously had. For enterprises to build the comfort level to put data into the public cloud they want more certainty that derives from tangibility and elimination of ‘magic’. Magic that is understood is great, magic that is uncertain created concerns. AWS has done a great job addressing this. On the product side both Aurora and lambda are key announcements for next generation applications. Aurora will mean the end of a lot of (bad) sharding code that is out there and not needed. And lambda is an intriguing capability to address BAM and CEP style applications, without having to rig up the infrastructure for it. And both are more PaaS like offerings that are key for AWS, as in the next 2-3 year it will have to compete with vendors that has platforms already – like IBM, Microsoft and Oracle. While 2013 was more on the SaaS side with Workspaces and 2014 added Amazon Zocalo – it is clear that AWS has realized that it needs to add attractive PaaS and productivity applications to its portfolio to generate load for its IaaS infrastructure. What moves AWS will be doing in this regard will be key to watch in 2015. Read my blog post here.

    December - Constellation

    A quiet month – and so I offer my 2015 prediction from our team post:

    In 2015 technology leaders will need to create, adjust and implement their public cloud strategy. Considering estimates pegging Amazon AWS at 15-20% of virtualized servers worldwide, CIOs and CTOs need to actively plan and execute their enterprise’s strategy vis-à-vis the public cloud. Reducing technical debt and establishing next generation best practices to leverage the new ‘on demand’ IT paradigm should be a top priority for CIOs and CTOs seeking organizational competitiveness, greater job security and fewer budget restrictions. 


    A lot of exciting progress in both cloud and next generation application offerings in 2014. With richer cloud offerings that de-emphasize IaaS and bring more PaaS in the forground we see good developments for enterprises to build modern applications in the cloud even more in 2015 than ever before. And it will become widely accepted best practice that next generation applications will be built in the cloud and no where else. And cloud is equally the enabler of key business trends as globalization and digital transformation. 

    What were your 2014 Cloud and Next Generation Application takeaways?

    Find more coverage on the Constellation Research website here.

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    In not really surprising lockstep social network giants Facebook and LinkedIn announced enterprise offerings. For Facebook it is ‘Facebook at Work’ – bringing all the social tools of feeds, posts, messages etc. to the world of the enterprise, limited to the employees of the same enterprise. For LinkedIn it is initially about allowing employees of the same enterprise to send InMails to each other, and then create enterprise level groups to foster content sharing.


    Implications, Implications…

    • Social in the enterprises goes in round 2– The first round and hype of social in the enterprise is over. The aftermath of the first round has left users and vendors exhausted. Good to see a new spark into this key area of productivity. The way how business users interact, share content, collaborate is ironically more fragmented and likely broken that in the world of a consumer. A Facebook user, a Skype user has likely better communication and collaboration options at their disposal than the enterprise user. Ironic and time to change that.

    • Consumerization of Enterprise software finds the next gear – If Facebook and LinkedIn are serious to put their muscle behind this, it will rev up the level of ease of use for enterprise users. Good news certainly, as despite all the talk, most enterprise solutions have not (yet) reached the same level of usability as consumer grade applications. 

    • Users may win – Especially the Facebook offering will be a big win for users. The 1B+ Facebook users are ‘suddenly’ familiar with their enterprise communication and collaboration tool. Adoption, comfort levels could reach a new height for enterprise users. 

    • Practitioners face challenges– For the HR practitioner this will be initial headaches, as another system will have to be maintained, updated and monitored. And the blur of private and professional – with all its pros – has some chunky cons, too. 

    • Established vendors need to step up – Assuming both Facebook and LinkedIn will not focus elsewhere soon – then ease of use and pricing of established vendors will be under pressure. While Facebook and LinkedIn ultimately need to find monetization alleys for this offering – they can take a more relaxed approach than the established vendors. 

    • Partnerships on the horizon– There should be no surprise of some smaller enterprise vendors and adjacent vendors (e.g. in Content Management) will gladly defer and partner with LinkedIn and Facebook as their core communication and collaboration vendor. This will help them to focus R&D investments and Facebook and LinkedIn get a step up into enterprise and open new revenue alleys. 


    The real question is – what took Facebook and LinkedIn so long? One can argue they had to solidify their leadership position with consumers, but that as not really anymore a contest for Facebook overall and for LinkedIn for business consumers. As I have blogged earlier, LinkedIn is de-facto probably the number #2 or #3 HCM vendor already – through its personal and recruiting subscription revenues – but did not act like a HCM vendor.

    Overall I see this as a good change for the Future of Work, as it will spark new life into both usability, adoption and the overall a little sleepy social market for enterprise. It also will start a new conversation on identity, something that the traditional enterprise vendors with the notable exception of (Identity Connect) have largely ignored. But in the short term it creates new headache for HCM practitioners, who have another network and user setup to manage. If Facebook and LinkedIn will leave it with the personal productivity, communication functions will remain to be seen. Exciting times ahead.

    What is your POV? Please share!

    Find more coverage on the Constellation Research website here.

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    Like many industry observers, I was also surprised when SAP started to prominently feature IoT as a key message by mid of 2014. Not that IoT is not an important trend and a key strategy to transform the way how enterprises and their customers deal with ‘things’ – so the revenue potential is there – the question is what can SAP really contribute to the immense technological challenges that encompass IoT. The questions started to pile up as conversation with customers almost never pointed to SAP as a solution in the space, so getting (finally) briefed by SAP on the IoT strategy was very welcome.

    First of all it is clear that SAP is committed to the space, announcing 500 (incremental?) developers to be dedicated to IoT, not a small change numbers. And it is also good to see that SAP will use the HANA Cloud Platform (HCP), its PaaS product for the effort (more here). So let’s take a look at the first three use cases that SAP wants to tackle:

    • SAP Predictive Maintenance and Service– SAP wants to help enterprises be better at maintenance and servicing ‘things’. Combined with the augmented reality (AR) capabilities for the service technician certainly a compelling scenario.
    • SAP Connected Logistics – In this use case SAP wants to connect logistical ‘things’ (e.g. trucks, containers, railcars etc.), combine them with 3rd party data (e.g. weather, traffic etc.) and tie them with its existing logistics and transportation management solutions. Again there is an AR angle with the support of smart glass devices for warehouse pickers.
    • SAP Connected Manufacturing – Here SAP uses its next version of Manufacturing Execution (15.0), puts it on HANA and with that allows for typical IoT data as from sensors, beacons and RFID chips to be part of the manufacturing execution puzzle.
    Next let’s look at the technologies SAP has at its disposal and SAP wants to use in these IoT use cases:

    • Hana Cloud Platform (HCP) Today’s IoT projects are inherently custom development projects built on top of components that are more or less tuned or built for the unique challenges of IoT. Modern software gets built with the help of a PaaS and SAP has a solid option with HCP. But HCP will have to add the capabilities to deploy HCP built applications easily to standard cloud platforms, AWS most prominently. Certainly an overall good feature for HCP.
    • HANA As with all things SAP these days, HANA features prominently. And HANA’s fast in memory analysis capabilities bring a certain level of attraction to IoT challenges, but fast in memory analysis is only a subset of all the ingredients needed for IoT projects. Unfortunately for SAP, for many IoT uses cases requiring fast in memory analysis capabilities are optional or nice to have. The ‘bread and butter’ of IoT are cheapest storage and unstructured retrieval databases – to cope with data volume as well as unforeseeable analysis questions.
    SAP Response - HANA has addressed this concern with Dynamic Tiering, using a columnar disk technology integrated with HANA that supports unstructured data storage and retrieval (and is integrated with the textual capabilities of HANA in-memory).  This address the cheaper storage and analysis of unstructured data and is in market with HANA SPS09. In addition, HANA has integrated the Sybase ESP streaming data analytics (CEP) engine into core HANA functionality (HANA Smart Data Streaming), so now lightweight analysis and correlations from streams like sensor data can be accomplished in HANA Smart Data Streaming, and additional data can be passed from Smart Data Streaming to HANA for deeper realtime analysis.  With Smart Data Streaming, streams of data (filtered or unfiltered) can be passed to multiple tiers of data for storage and analysis, including SAP  HANA, SAP IQ, and Hadoop.    

    My Response: Fair enough to raise that unstructured data analysis can be done on cheaper storage with dynamic tiering, certainly a key feature in HANA SPS 09. But the queries will run separate, not on the same data and need to be combined, which makes the engineering process more complex (something I am sure SAP will take care of) - but may ultimately exclude customers from some insights. Running two separate queries and combining the results may but must not lead to the same result as running one query on the combined data. Material for a separate blog post.
    And fair to point out the SAP has used the Sybase ESP / CEP capabilities and added them to the HANA core, always good and great to see re-use of working and proven software. CEP certainly has its space in IoT applications. 

    • SQL Anywhere The venerable and proven SQL Anywhere is a viable player for IoT. Not all ‘things’ will be connected to the internet, for a number of power, health and practical network coverage reasons. The ability to store vast amounts of data reliably, low cost on a HDD or SSD chip over prolonged times is a must have for a number of ‘things’. The Sybase built replication capabilities at a time of connection are an extra bonus.
    • Sybase Data Management With Sybase SAP has acquired also a sizeable number and decently capable number of data management tools. And shuffling data around is an inherent nature and characteristic of IoT projects. The Sybase tools are good for e.g. moving data from Hadoop or Amazon S3 storage into e.g. HANA or Sybase IQ. The question of course to be addressed – why not process data where the information occurs in the first place.
    • Business Applications There can be no question SAP has the relevant business applications in CRM, SCM and PLM that are essential for IoT. The key area to watch will be though, if the gravity of these applications can pull the IoT data ‘in’ or if it is more likely that a subset of that ERP data will be moved to the ‘rest of the IoT’ data for in situ analysis where most of the data is. Too early to see a trend but a key area to watch. 

    In summary SAP certainly brings some interesting and valuable scenarios for IoT in the first wave of offerings. On the technology side SAP also brings some interesting products to the table, but we will have to see how they all will play together and how they can enable the next set of customer use cases in the area of IoT.


    Learning more about a vendor’s offering is always valuable and creates a better understanding for the angle the vendor has. In SAP’s situation the angle is the one of the business application vendor with a very fast analytical in memory database. And there are certainly a number of challenging IoT scenarios that require real time capabilities, closely intertwined with business applications. Think off real time manufacturing, mass customization, individualized service and real world traffic situations. Not really SAP’s core competence (so far), but certainly scenarios that command a premium price in the IoT world, something SAP certainly wants (and has to) zero in on.

    But if this slice of the IoT market is large enough for SAP in the medium run, is something that remains to be seen. Entering the IoT market with none direct offering for Hadoop style BigData and HDD / SDD based cloud storage excludes SAP from the most common IoT projects we see with customers. But what isn’t possible today – can happen tomorrow. Rest assured we will be watching.

    And more on overall SAP strategy and products:

    • SAP appoints a CTO - some musings - read here
    • Event Report - SAP's SAPtd - (Finally) more talk on PaaS, good progress and aligning with IBM and Oracle - read here
    • News Analysis - SAP and IBM partner for cloud success - good news - read here
    • Market Move - SAP strikes again - this time it is Concur and the spend into spend management - read here
    • Event Report - SAP SuccessFactors picks up speed - but there remains work to be done - read here
    • First Take - SAP SuccessFactors SuccessConnect - Top 3 Takeaways Day 1 Keynote - read here.
    • Event Report - Sapphire - SAP finds its (unique) path to cloud - read here
    • What I would like SAP to address this Sapphire - read here
    • News Analysis - SAP becomes more about applications - again - read here
    • Market Move - SAP acquires Fieldglass - off to the contingent workforce - early move or reaction? Read here.
    • SAP's startup program keep rolling – read here.
    • Why SAP acquired KXEN? Getting serious about Analytics – read here.
    • SAP steamlines organization further – the Danes are leaving – read here.
    • Reading between the lines… SAP Q2 Earnings – cloudy with potential structural changes – read here.
    • SAP wants to be a technology company, really – read here
    • Why SAP acquired hybris software – read here.
    • SAP gets serious about the cloud – organizationally – read here.
    • Taking stock – what SAP answered and it didn’t answer this Sapphire [2013] – read here.
    • Act III & Final Day – A tale of two conference – Sapphire & SuiteWorld13 – read here.
    • The middle day – 2 keynotes and press releases – Sapphire & SuiteWorld – read here.
    • A tale of 2 keynotes and press releases – Sapphire & SuiteWorld – read here.
    • What I would like SAP to address this Sapphire – read here.
    • Why 3rd party maintenance is key to SAP’s and Oracle’s success – read here.
    • Why SAP acquired Camillion – read here.
    • Why SAP acquired SmartOps – read here.
    • Next in your mall – SAP and Oracle? Read here.

    And more about SAP technology:
    • HANA Cloud Platform - Revisited - Improvements ahead and turning into a real PaaS - read here
    • News Analysis - SAP commits to CloudFoundry and OpenSource - key steps - but what is the direction? - Read here.
    • News Analysis - SAP moves Ariba Spend Visibility to HANA - Interesting first step in a long journey - read here
    • Launch Report - When BW 7.4 meets HANA it is like 2 + 2 = 5 - but is 5 enough - read here
    • Event Report - BI 2014 and HANA 2014 takeaways - it is all about HANA and Lumira - but is that enough? Read here.
    • News Analysis – SAP slices and dices into more Cloud, and of course more HANA – read here.
    • SAP gets serious about open source and courts developers – about time – read here.
    • My top 3 takeaways from the SAP TechEd keynote – read here.
    • SAP discovers elasticity for HANA – kind of – read here.
    • Can HANA Cloud be elastic? Tough – read here.
    • SAP’s Cloud plans get more cloudy – read here.
    • HANA Enterprise Cloud helps SAP discover the cloud (benefits) – read here.

    Find more coverage on the Constellation Research website here.

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    Last week Oracle provided an update on its engineered systems – mainly the launch of the new X-5 line. When Chairman and CTO Larry Ellison took the stage – he had a surprise in the bag that few counted on – that Oracle would now start to compete in the space of two socket servers.

    So let’s look at the implications:

    It is worth to understand why this was a surprise – as in the past Oracle had focused on large, high end and high price engineered systems. The Exa line of products was a compilation of only the best that Oracle had in store after the acquisition of Sun. In numerous earnings calls Oracle’s executive team defended the strategy, while Oracle’s overall hardware revenue and profitability was suffering from lower end and cheaper servers that Oracle by now has gotten rid of.
    Oracle's new view of the datacenter - Core (2 socket systems)
    and Engineered Systems
    (Source - Webcast)
    For the first time Oracle and Ellison acknowledged, that next to the high end Exa machines, there are other needs in data center purchases, specifically around the two socket server aka low cost server demand. These machines are popular as they can handle any kind of load an enterprise may have, are cheap to procure, easy to operate etc. In contrast to that buying an Exa machine is significant CAPEX for even the largest enterprises – a decision that needs to be vetted, often employees need to get trained to operate the machines, sometimes application have to be re-written to take full advantage of them etc. Throughout this Oracle maintained that its Exa machines have always offered the best performance for the lowest cost. Turns out to get the machine was a pretty high hurdle price tag wise for enterprises.

    So not surprisingly Oracle now announced a new product line, a two socket server, but true to Oracle’s corporate DNA - at a lower TCO. It looked like Cisco’s servers are the prime target and market leader that Oracle wants to challenge. True to long time tradition Oracle was not shy to compare purchase costs of its new machines compared to the machines of competitors.
    Oracle compared VCA X5 with Cisco UCS and claimed
    significant TCO advantages
    (Source - Webcast)

    But what we really have seen for first time is Oracle flexing its muscle around its ability to own the complete stack. While main competitor target Cisco has to partner with EMC and more vendors to get their machine to the market, Oracle has all the necessary pieces available in house (Storage – SSD of course, Networking – Infiniband (even Ellison joked how often he said that, Processors (surprisingly little said about that), Oracle Linux, Database (of course) and more higher level software). Reshaping the design of an engineered system to a different load profile and price point is easy when you have all the pieces available in house. The value proposition remains the same – one integrated and tested system by Oracle – just at a very different usage and a much lower price point.

    Not surprisingly Oracle maintains that ultimately the large Exa machines are still better performance at a lower price. But the entry point for the new two socket server line is lower, and if customers ultimately may pay more to Oracle when buying a lot of two socket machines over time, nothing that Oracle has to complain about. Think renting vs buying a house. Plenty of people cannot afford a house, so they rent, but over time pay more for rent than for owning a house.

    The question really is – what took Oracle so long? We can only speculate on the reasons and motivation – but here are a few:

    • Oracle was still operating under the ‘big server for RDBMS, small machines for web tier’ paradigm of the 200x years. 
    • Oracle has listened to customers (and sales reps) that selling large machines only, will not give Oracle the growth it wants to see in data centers.
    • Oracle did not see it share of wallet on server / data center spending really growing.
    • Oracle had to finish commitments and work on the high end side of the Exa machines, e.g. finish the 4 series. 
    • Oracle had to get software components ready for the two socket market, 12c comes to mind as a candidate. 
    • Oracle is serious about cloud, but needs two socket servers for its own cloud build out and did not want to buy them from the competition – but buy and built by itself. Ellison stressing the same architecture and versions in a side note of his presentation made this pretty clear. 
    We will probably never know – but above seems to be plausible reasons to me.


    A good move by Oracle, which will expand its data center footprint. Oracle will have to overcome some positioning with customers, but if Oracle can deliver and prove the very attractive TCO numbers it shared at the launch event, then CIOs will quickly forget ‘old’ positioning and look at Oracle’s brand new two socket server line. And more competition for servers is a good thing for IT budgets that are under stress every year.

    But the real question remains – what took Oracle so long?


    Also worth a look for the full picture
    • Market Move - Oracle buys Datalogix - moves more into DaaS - read here
    • Event Report - Oracle Openworld - Oracle's vision and remaining work become clear - they are both big - read here
    • Constellation Research Video Takeaways of Oracle Openworld 2014 - watch here
    • Is it all coming together for Oracle in 2014? Read here
    • From the fences - Oracle AR Meeting takeaways - read here (this was the last analyst meeting in spring 2013)
    • Takeaways from Oracle CloudWorld LA - read here (this was one of the first cloud world events overall, in January 2013)
    And if you want to read more of my findings on Oracle technology - I suggest:
    • Progress Report - Good cloud progress at Oracle and a two step program - read here.
    • Oracle integrates products to create its Foundation for Cloud Applications - read here.
    • Java grows up to the enterprise - read here.
    • 1st take - Oracle in memory option for its database - very organic - read here.
    • Oracle 12c makes the database elastic - read here.
    • How the cloud can make the unlikeliest bedfellows - read here.
    • Act I - Oracle and Microsoft partner for the cloud - read here.
    • Act II - The cloud changes everything - Oracle and - read here.
    • Act III - The cloud changes everything - Oracle and Netsuite with a touch of Deloitte - read here
    Lastly - paying tribute to my Future of Work / HCM / SaaS research area:
    • Progress Report - Oracle HCM gathers momentum - now it needs to build on that - read here
    • Oracle pushes modern HR - there is more than technology - read here. (Takeaways from the recent HCMWorld conference).
    • Why Applications Unlimited is good a good strategy for Oracle customers and Oracle - read here.
    Find more coverage on the Constellation Research website here.

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