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- 03/08/13--10:08: _Time to ditch your ...
- 03/13/13--17:30: _Why Oracle bought N...
- 03/16/13--19:11: _Why Google acquired...
- 03/25/13--10:34: _Why Oracle is buyin...
- 03/27/13--17:25: _Why 3rd party maint...
- 04/10/13--10:42: _How Facebook Home m...
- 04/16/13--11:23: _About that HCM soft...
- 04/22/13--11:28: _Workday Update 19 -...
- 04/22/13--21:18: _Infor's bet on micr...
- 04/23/13--23:55: _Inforum 2013 - Take...
- 04/24/13--20:44: _Agility from the cl...
- 04/26/13--15:09: _From the fences: Or...
- 05/03/13--12:28: _What I would like S...
- 05/07/13--15:10: _And suddenly .. Pay...
- 05/08/13--11:19: _Hana Enterprise Clo...
- 05/11/13--10:53: _Mendix - the other ...
- 05/11/13--12:26: _SAP's cloud plans g...
- 05/13/13--17:37: _Can Hana Cloud be e...
- 05/14/13--19:20: _A tale of 2 keynote...
- 05/15/13--23:31: _The Middle Day - 2 ...
- 03/08/13--10:08: Time to ditch your Datawarehouse - and add you ERP content
- Storage Cost
Let's keep in mind the venerable relational database concept was also created to save disk space. For 98% of the life of computing, disk space has been the critical and expensive resource.
But that time is over - when you see that a smart start up like BackBlaze can offer unlimited backup for as little as $3.95 per month - with internal costs for one TB being around 50 cents. It will be hard to challenge any IT budget on disk cost these days.
The transactional systems were tuned to allow good insert record performance - not so much for the need of reporting, creating dimensions on the data (or facts). So information needed to be stored in a different way.
But that time seems to be getting over, too - when you see that, thanks to Hadoop et al we can search data at will - though not like with the performance that we would like, but that is getting better every few months.
- Go back to the wish list for dimensions that there was never time and / or money to build them.
- Go back to the reports that were not feasible or nice to have.
- Go back to insights the business was suspecting to have - but never go to because of... you know.
- Don't forget the requests made but postponed because that data mining software package was too expensive.
- Make your user community happy in regards of announcing that any query is now possible ... start with a hack a query workshop with your technical users and then an ask for any insight workshop with your business users and make sure there are no silly queries being excluded. Pretty sure you will run into some insights.
- Your customer master should include the website address of that business. In a batch job you can add the IP address (no need to confuse a business user displaying it). And web traffic starts making sense.
- Your contacts should have email addresses and more social identifiers - like twitter and Facebook IDs. And your social data can get tied into your transactional contents.
- Your employee records should have links to all user IDs you have in house - as well as all their social identifier you can get the employees to disclose. And your system usage gets meaningful.
- 03/13/13--17:30: Why Oracle bought Nimbula
- 03/16/13--19:11: Why Google acquired Talaria - efficency matters
- 03/25/13--10:34: Why Oracle is buying Tekelec
- 03/27/13--17:25: Why 3rd party maintenance is key to SAP's and Oracle's success
- 04/10/13--10:42: How Facebook Home matters to the enterprise and beyond
- If Facebook Home succeeds - it will change the mobile advertisement game... while in app advertising will work the same process wise, the smartphone OS provider will no longer know, which apps have been run on a device. Facebook will be able to prominently display featured apps and ads instead. The fact, that Facebook denies any intention to do so (for the time being) - implicitly confirms that they are well aware of this potential.
- Despite all the BYOD frenzy, there is a market for closed down smartphones. Just look at your parcel service delivery rep, your limo driver, your flight attendant etc - they all carry smartphones (or tablets) that have been locked down to specific applications for their work related tasks... Facebook only phones may emerge and make it harder to find a presence on them going forward. Or to ease to BYOD pressure - the Facebook Home app may become the step to open the device a little bit - but not completely.
- It's an opportunity for all the marketing automation vendors to provide Facebook Home style applets to allow their clients to create Home based apps to promote their business.
- It's likely that Facebook may start an application market place on their own, to control the Facebook Home experience... that will create even more fragmentation to the smartphone app market place and make it harder for the contenders of the #3 stop (Nokia, Blackberry etc) to e compete for development budgets.
- The biggest criticism of Android has been the cluttered, non cross platform consistent user experience. So far Google has let this go - even played it to Android's advantage. Facebook Home may spur Google into a clean up mode and even offer a similar app like Home - maybe expand the Google Now offering. Similarly I am sure Yahoo!'s Marissa Mayer maybe itching to provide a similar offering to Home - with Yahoo! services and products... maybe she is up to that with Apple already as you read this.
- If Facebook can do it - why can't you do that... granted an enterprise vendor may not have the messaging and calling apps that Facebook has rolled out in the last 6 months - but with a bit of imagination I can well see salesforce doing a similar move with Chatter. Maybe even SAP gets carried away and dreams up a Sapphire announcement to propel their mobile business.
- 04/16/13--11:23: About that HCM software company, that didn't want to be one...
- 04/22/13--11:28: Workday Update 19 - You need to slow down to hurry up
- Cross Application Enhancements
With this Workday refers to platform enhancements, that benefit both Financial and HCM applications. The most critical, though the least promoted from what I see, are additional 6 connectors of Workday to the rest of the world, like e.g. T&A Data, Check printing etc.
A lot of attention was spent by Workday on the capability to add custom fields and labels - see here. To my surprise this is not a system wide capability, but needs to be introduced object by object (e.g. cost center, supervisory org, region etc). I really would like to know why.
Like many other companies betting on HTML5 to work out for their mobile system needs, Workday has realized that the industry was too optimistic in the HTML5 capabilities (or too hopeful HTML5 would cut significant platform specific development investment). The most notable renegade to HTML5 is actually Facebook. So Workday introduced a native Android application for smartphones and extended functionality to the existing iOS platforms (enhancements to time entry, update contact information (surprised you weren't able to do this before) and job change management). Going forward customer will have to be aware of different levels of capability between the iOS, Android apps and the HTML5 support for other smartphone OS.
- HCM, Payroll Enhancements
This is a mixed bag of new reporting (Workday Trending is now GA), availability of time series data in modifiable reports, new headcount planning capability.
- 04/22/13--21:18: Infor's bet on microverticals - the good, the bad, the ugly
- The 1st example was the classic front office to back office demo: Sales rep realizes that product will be late for a key customer, he contacts the back office (granted, nicely done 21st century style a ming.le @production message), production manager finds out why, it's a planned maintenance, moves the planned maintenance and all users are heroes, the customer wins.
But: The plant maintenance should not have been scheduled in the 1st place - as it disrupts the ETA of a key customer's products. All what we have seen was a lot of messages and rescheduling (I may say dust) about something a 21st century business app should not have let happen in the 1st place).
[Ironically this will be a sales argument of Oracle and SAP against Infor, given they operate one one information set / schema - and Infor does not. Why show this demo at Inforum? No idea.]
- The 2nd example was another classic I have seen in many incarnations: The urgent search for a spare part, again powered by ming.le, the obligatory internal check if other locations have the spare part inhouse and you could transfer them internally, and then the purchasing manager buys from the 2nd highest bidder, because they can deliver the critical spare part today - not later. Then we see how the VP of purchasing gets a message that the lowest bidder standard process was violated, but after back and forward with the purchasing manager, approves the purchase. Heroes all over again.
But: A 21st century application should have allowed the purchasing manager to notify the VP why the lowest bid was not selected. Ironically it looks like the products could have done that, but the demo didn't. But even better the procurement rules should have allowed for exceptions to the lowers bidder rules, based on delivery speed, criticality, business impact etc .
- 04/23/13--23:55: Inforum 2013 - Takeaways from Keynote - Day 2
- 04/24/13--20:44: Agility from the cloud - not a no-brainer
- The cost of interfaces and security required by the cloud move, is not offset by the benefits.
- Though the cloud applications does not require capex, the total opex payments over e.g. a 5 year time frame exceed the cost of an on premise application.
- The enterprise cannot customize / modify the cloud application in a strategic aspect to make its enterprise run smoother.
- The enterprise looses differentiation in the market place, as many of its competitors use the same cloud vendor and have the same available functionality at their disposal. IT becomes a cost factor and is no longer an investment.
- Regular updates by the cloud vendor do not create value for the enterprise, but prove to be a distraction to users and IT who need to be re-trained and the application needs to be re-configured and validated.
- 04/26/13--15:09: From the fences: Oracle AR Meeting Takeaways
- Oracle has turned the corner on the Sun investment (ok see Q3 earnings call, too)
- There are only about 5000 engineered systems out worldwide, and over 800 sold in Q3 this FY.
- Looks like no date has been given for when a Sparc based appliance will feature the Oracle flagship RDBMS. My guess is Oracle is waiting for 12c to be mature enough to be put onto silicon.
- Not surprisingly the design team for the new engineered systems include DBMS, middleware and applications.
- It looks like Oracle was able to change the TCO of running Peoplesoft significantly, without changing a line of code, but only the underlying hardware. That sounds like a very cool proof point for the power of engineered systems and would give Oracle's Applicaton Unlimited customers a lot more runway.
- Softbank is the largest Exadata user in Japan, European Telcos have similar objective, but are more conservative and are lagging in adoption.
- Fowler claimed, that Oracle's engineered systems will be available in a matter of days instead of the month long testing to put a custom made system together today. And Oracle will roll up thousands of patches into a single patch - across all the components:
- While in the past Oracle created purpose built engineered systems (ExaData, ExaLogic etc), bringing the whole stack together in silicon will allow to build only one general purpose box. It would be very interesting to understand how elastic the different applications will be able to be run on that future general purpose system. So the appliances will stay around - but the generic loads will be shouldered by a general purpose appliance running on SPARC SuperClusters.
- The next slide describes the ambitious saving engineered system can garner in a heterogeneous system landscape - including SAP. Which is an interesting aspect that Oracle would just see SAP on Oracle RDBMS as just another application, similarly what they have done with Peoplesoft. That could be a lot of very compelling revenue for Oracle and very bad news for IBM and HP, given the server hungry SAP landscapes:
- 05/03/13--12:28: What I would like SAP to address this Sapphire...
- 05/07/13--15:10: And suddenly .. Payroll matters again!
- A Payroll 2.0 product should put away with the traditional pay-run While a sacrosanct ceremony for most payroll managers, there is no reason to keep this practice. Why not let business managers start, run and simulate a payroll? Or push it further and let the employee initiate it and see what his next paycheck will look like.
- A next generation payroll system should also allow micro payments and payouts. Why not allow an employee to be paid weekly vs bi-weekly vs monthly - or even more employee oriented -on demand? It will certainly make the compliance side more complex - but the architecture of a next generation payroll system should not be the limitation.
- And while there has been made a lot of noise around Total Compensation Management, it has only happened on a very high level for employee benefits - both monetary and non monetary. We are far away for an employee to e.g. determine when his take home pay will achieve a certain amount.
- Equally next generation payroll systems should support managers in process of scheduling workers. It will certainly help a shift manager to call in employees for extra weekend work if he can tell them how that extra work will affect the take home pay at the end of the month. Likewise payroll data is seldom used in shift planning and workforce planning applications, it usually stops with basic pay and over time pay
- And when moving payroll to the cloud, the whole electronic banking process should be enabled. The employees should be able to determine bank transfers, split paychecks if needed (think of legal reasons like alimony) and pool paychecks from multiple employers. Or just be able to send or produce the latest payslip for a credit event.
- Finally we should see 21st century compliance integrations, why move data to paper if you can communicate with a government cloud, e-file returns etc. Features like this will reduce compliance costs and with that make the new products more attractive to enterprises.
- 05/08/13--11:19: Hana Enterprise Cloud helps SAP discover the cloud (benefits)
- Instant availability
Multiple times the long procurement (8 weeks was mentioned) for Hana hardware came up. At one point Plattner said - that this delay disrupts the Hana projects. And with SAP making Hana available in the cloud - you can be using Hana much faster, you are now only constrained by data upload time.
Forget sizingAs with any new server technology - sizing appropriately is always a challenge. Plattner specifically mentioned that SAP with Hana Cloud now can re-size the RAM used by a subscriber. I assume SAP has seen some wide variations of the up to 5x compression factor, depending on the data to be compressed
Automatic UpdatesEqually Plattner hit home on the faster release cycle capability of a cloud system over an on premise system.
Complexity Masking / ReductionThe new Cloud Frame administration software will mask a lot of the complexity of running your own hardware in house - and customers will not need to come up to speed with the low level intricacies anymore
Try before BuyA few times the trial aspect came up -just upload your data and see what Hana can do - if you like it - keep Hana around and build more on it - if not disengage again. This is of course hampered by the SAP licensing model at this point - but see more on that below.
- Better performance & elasticityPerformance on the larger boxes that SAP has procured is superior to smaller boxes enterprise may purchase. And the usage can grow and be reduced as needed.
- While the deployment is now elastic - the licensing isn't. SAP requires customers to bring their own license - and has no way to scale up or scale down the licensing usage of Hana, based on the customer's needs. This is part of the overall challenges of a license vendor moving from license revenue to subscription revenue - not an easy nut to crack. So while SAP gets the disruption on the technology side - it needs to step up to make the business side, too.
- SAP rightfully made the elasticity claim - but with booking capacity on a monthly level - with industry best practices being on an hourly level with Amazon's AWS - the usage pricing model needs to be equally adjusted.
- As mentioned, Hana Cloud is more IaaS than PaaS and far from SaaS. SAP ultimately needs to be a SaaS vendor and equally rethink the licensing and release policy of its business applications. For SAP to lead a cloud initiative from the bottom up and not the top down - remains something that keeps puzzling. Should SAP even talk about technology - or instead talk about great enterprise applications?
- It remains unclear who will run the data centers - SAP themselves or SAP partners. Since cloud requires enterprises to do a significant leap of faith - SAP will need to provide more information on the deployment side. If SAP chooses the partners and avoids the capex hit - it will slow down speed to market and reduce SAP's control over the technology adoption - and ultimately its success.
- Cloud integration is one of the recent buzzwords in the market, but also a real world problem for companies moving to the cloud. Nothing addressed by SAP at the event, the challenge seems to be that Netweaver (or Hana) Cloud platform are not ready yet (again we will see next week at Sapphire).
- terra incognita - unknown land
- nubes incongnitae - unknown clouds
- 05/11/13--10:53: Mendix - the other path to build software
- End user programming - An employee gets tired of a certain problem, thinks there needs to be a better way, remembers what programming languages he / she learnt in college and goes to work. Often Excel and then a variety of programming languages depending on the employee age and the college curriculum are the tools of choice. Younger employees will use Java, Ruby, Phyton, older ones PHP, even older ones Pascal (ok in Europe), Fortran and Cobol (yes Microfocus still sells a PC compiler).
- Departmental projects - We all have seen these, a department head gets tired of something not working, and ask in his staff meeting who can program... an initially timid staffer will raise his / her hand and spend some nighttime and weekend hours creating a software solution to the problem. The staffer will become the hero of the department if all goes well. The tool of choice is mostly Microsoft Excel. If projects and schedules are involved - basecamp is often a popular choice.
- Plug in projects - From time to time enterprises embark into consulting projects that need to be realized in software. Examples are advertising management, shift planning, delivery routing etc. We are also seeing that virtually every analytic project (of the real analytics, the one that predict / recommend something) - need a software plug in to collect data, and return their analytic results.
- Enterprise stop gap / innovation / differentiation projects - Despite the enterprise using a standard enterprise software package, executives have decided they cannot wait for some automation to materialize on the vendor's road map, and don't think there are feasible / viable smaller vendors out there to fulfill that need. Projects may also start because the enterprise feels that it does need to differentiate vis-a-vis the competition. Examples are to mobilize an application to smartphones / tablets, creating / enabling employee self services, and other enterprise automation needs.
- Abstraction - You will need to abstract significantly on lower level programming needs, in order to make the developer of this platform more productive.
- Modelling - You will need to achieve a much higher level modelling approach than the general purpose programming platforms.
- Automation - You will want to automate many of the programming needs through automation, that avoids needing to code for most of the engineering needs.
- Packaging - You will want to make the move from coding to run time as easy and pain free as possible.
- Cross platform- You will want to provide rich cross platform support (databases, languages, browsers, mobile, social) to protect code and be able to re-use the code beyond a temporary delivery form.
- Cloud support - Though this is really a combination of automation and packaging, the ability to deploy the new automation to the cloud is a significant parameter to support.
- 05/11/13--12:26: SAP's cloud plans get less cloudy
- All the good Java / JVM work that was done for NCP is now part of HCP, including the Eclise based IDE
- Platform enablement services such as persistence (SAP is re-using the code for the Business Suite here, goo), identity management, document management, mail services, HTML 5 support
- The operations console - a key component for any cloud platform
- Application Services
Mobile, Portal, Security and integration - courtesy of NCP
Analytics - courtesy of Hana and BW
Collaboration - courtesy of Jam (not sure how though that will integrate)
- Enablement Services
Applications & Systems Management - courtesy of NCP)
Administration & Monitoriing - courtesy of NCP and Hana
- Database Services
Transactions, Analytics (again?), Streaming, Predictive, Spatial, Text Mining - all courtesy of Hana (and all the way back to fabled TRex for text mining
- 05/13/13--17:37: Can Hana Cloud be elastic? Tough.
For most of the life of enterprise software we have seen the classic separation between transactional and analytical applications. OLTP vs OLAP is as old as data warehouses have been around.
Why did we separate OLTP and OLAP?
|Taken from Indicee Webinar announcement here.|
Ditch the data warehouse...
... and add the enterprise OLTP data en route!
Crazy - could you do it? LinkedIn and Facebook will help...
Oracle always seems to be able to pull off a surprise and today announced the acquisition of privately held Nimbula. Nimbula has $20M of investment from Sequoia Capital and Accel Partners and was an interesting SA/SV (South Africa / Silicon Valley) based start up More interestingly it was founded by two former Amazon EC2 development honchos, Chris Pinkham and Willem van Biljon. Oracle did not even dedicate a press release to the topic - just a short statement.
Nimbula's meets ... OracleNimbula was founded in the hey day of private cloud euphoria that prevailed 2-3 years ago. Pretty much all private cloud vendors stumbled over the reaction of the entrenched enterprise players - who curtailed the success of the smaller startups with all actions at their disposal. And then enterprises remained conservative - and kept asking - can we just keep buying VMWare.
Nimbula had a great founding team with Pinkham and Biljon, who applied some of their lessons from building the Amazon's EC2 cloud into their private cloud offering called Nimbula Director. With a great focus on the power of self service, the product offers one of the fastest and easiest ways to get a private cloud going on x86 raw iron. Kudos to the Nimbula development (and marketing teams to expose this) to adopt a persona based development of the product, catering to the roles of cloud administrators, tenant administrators and end users.
After a short attempt to liase with Hadoop and a partnership with MapR - Nimbula went to support Openstack, opening their Director product to Openstack APIs.
Oracle in comparison had no similar offering, anything for orchestration across the private and public cloud. The work ahead will be to let Nimbula Director work and support Oracle's virtualization products. Moreover, once the ACME Packets acquisition will have happened - the IP will improve firewall throughput siginifcantly, which is critical for the performance of private / public cloud offerings.
Complimentary and / or Competitive Acquisition?As we have seen Oracle may really need some cloud functionality from Nimbula. At this point in the speed of the cloud market, it's probably cheaper for Oracle to buy then to build that functionality. And the statement stresses the complimentary nature of the acquisition and indeed Oracle does not offer anything in the area of private cloud orchestration like the Nimbula Director product does.
On the other side it does not hurt that Nimbula was a key RedHat partner (though RedHat put their chips down already, with the acquisition of ManageIQ, which left Nimbula in a somewhat weaker position. Likewise VMware was supported by nimbula - and VMware is closer as a competitor to Oracle given the focus of Oracle in the virtualization area.
OpenStack implicationsOracle was the last to join - via proxy of acquisition - the OpenStack party. Just two weeks ago IBM announced the support of OpenStack. Personally I don't think Oracle could stand out and wait longer. Nimbula now gives Oracle a board seat (with IBM, HP, Dell and VMWare - that will be a lot of fun meetings). This could be a bright future -- or the end of OpenStack. Remember UNIX - similar setup.
Strategic value for OracleOracle gets a very good private cloud product, with good orchestration capability across the public cloud. Through the OpenStack cloak, Oracle can even get visibility into machines and private clouds managed and run by their competitors. I am sure someone in the towers around Oracle Parkway is already building the Oracle Enterprise Manager extension to calculate the benefits of moving off other vendors hardware and one of Oracle's Exaxxx products. The low setup cost of Nimbula Director makes even a trial installation realistic.
Advice for BuyersThis is good news for Oracle shops. Wait though till Oracle has a date for support of Oracle virtualization products by Nimbula Director. For non Oracle shops it comes back to trusting, that Oracle will keep the product open and running on OpenStack. Oracle would be foolish to say anything else at this point. But watch this area.
MyPOVA very strategic acquisition of Oracle, possibly at very low cost, given the challenges private cloud startups are facing. Oracle gains some key cloud talent, we will see if it will stay on board. And it's clear that Oracle really means to be in the cloud game and Oracle is in it to win it.
I expect also less hyperbole around Oracle's False Cloud - as you would have to argue that an OpenStack compliant product isn't a cloud product. And that would make all OpenStack vendors False Cloud vendors. Ironically that's something that could happen, if the elephants at the table at the OpenStack board meetings play it out as it once happened to ... UNIX.
Late in the week we learnt that Google has acquired privately held Talaria, based in Palo Alto, a company with less than 20 employees. [Talaria, is Greek for sandal, a symbol for the Greek god Hermes - and with some fantasy you can see a sandal in the logo below].
Talaria meets... Google
The Talaria business case
Why does Google buy a company in private beta
This morning Oracleannounced, that it has entered into an agreement to acquireTekelec, a leading provider of network signaling, policy control, and subscriber data management solutions to communications companies. Terms where not disclosed, but Tekelec was taken private last year by a number of equity investors, under the lead of Siris Capital Group, then valued at 780M US$.
Who is Tekelec?
Oracle isn't wasting timeIt's less than 7 weeks ago that Oracle acquired ACME Packets and with that got involved in the whole signalling market. ACME packets provided session border protocol tools - and Tekelec provides the same - only for diameter signalling.
In modern IMS networks the SIP protocol is used for VoIP and video-conferencing, the diameter protocol is powering the triple A of Authentication, Authorization and Accounting, for mobile networks. Both protocols meet in modern mobile networks: When a smartphone is used for a Skype video call - while the load of that video is going over SIP, the administration of all the data is going through the diameter protocol.
Due to the chattiness of mobile devices, the expectation is that diameter protocol traffic will be 2-3 times higher than mobile data growth, which by itself is of course growing dramatically.
The engineered system is getting more powerful
The headline of this post may sound surprising at first, given the history of neither SAP nor Oracle really appreciating publicly, what the 3rd party maintenance providers are doing. But keep in mind, the only big tuzzle in the history of third party maintenance, has been between Oracle and SAP - and not so much for the service itself, but for the intellectual property violations committed by the SAP subsidiary TomorrowNow.
SaaS vendors get paid maintenance, too!The often forgotten fact in the discussion around support and maintenance rates is, that SaaS vendors do charge for support and maintenance, too. It's part of the monthly subscription fee, which funds the error corrections, compliance work etc. And pays for the support desk, hotline etc on the support side. SaaS vendors have not been scrutinized much in this regards (yet). Mostly they have been able to keep the value side of the equation up for their subscribers with the regular release of highly functional updates. But as less functional white space will be available to be covered, the functional richness of these releases will get reduced (compare Workday releases over time, for instance) and with that the question of the return of value for the monthly subscription will creep up, sooner than later in my view.
When it comes to maintenance, the only true difference between a SaaS vendor and a traditional enterprise vendor is, that they usually do not support back releases. And that is a sizable reduction in maintenance labor, as any defect detected needs to corrected and tested and released only in the production and latest code line. No need to do that for any of the older, but still supported releases, as Oracle and SAP obliged themselves to do in their maintenance contracts. This is a very size able chunk of workload.
Egalitarian SimplicityOracle and SAP want to keep the rates identical, for simplicity reasons. In reality, what they spend on support and maintenance for each of their products, varies significantly. But think what complexity would come up of maintenance and support rates would become variable, depending on functional footprint and age of release. Very difficult to explain and even more difficult to budget for. So it's better to keep the maintenance and support rate at their respective steady percentages of 17% etc vs 22% for all customers.
When on premise meets a SaaS value propositionThere is one more factor, that is often forgotten in the discussion around maintenance rates. And that is, that an active subscriber to maintenance, is always eligible to the latest release of the licensed software. This used to be a significant value proposition, until the enterprise vendors carved it out with more creative license changes, think of the SAP engine model for instance.
But in itself there is a contractually identical value proposition between the SaaS vendors and the traditional on premise vendors. If you keep paying your subscription / maintenance fee - you have access to the latest release of the software you have licensed, free of charge. Personally I would not be surprised of the SaaS vendors getting creative in this respect at some point of maturation of the SaaS model, too. It's just too tempting to go back and charge customers again.
The Arbitrage ModelFor the traditional enterprise vendors it comes back to a simple arbitrage: Keep the model simple (one rate) and as high as possible, to get the most revenue from their install base. A few defections do not matter, as they make the rest of the customer group more coherent, less noisy, less unhappy. I am sure, that some customer have not been wept after too much when they moved to the 3rd party maintenance vendors. Of course that would never be admitted publicly of course, but everybody knows a difficult customer.
Success of 3rd party maintenance?While the number of customers serviced by 3rd party maintenance vendors is certainly up, the business model is not a screaming success. How can you tell? Well, if customers were leaving the enterprise vendors in buses - then they would react. They would either increase the value of their services or lower the price for support and maintenance.
But the prices have not been reduced, au contraire SAP is ramping up prices year over year. To be fair, SAP has also unofficially increased services, e.g. with the announcement of lifetime support for the HCM functionality till 2020 at their recent HR2013 conference. But that was a proactive move by SAP - not a reaction to the 3rd party maintenance vendors carving out a significant chunk of their customer base.
MyPOVSo the Rimini Streets and companions do not seem to trouble SAP and Oracle too much. They extract the most vociferous and unhappy customers, making the remaining ones easier to deal with. It's a good option to have for the customers of the enterprise vendors, and agree with a colleague that it should be re-visited regularly. But more importantly they keep Oracle and SAP honest to provide good enough value for their service, and this is a key success factor for these vendors.
Last week saw the clarification of all the myths, hype and speculation of the Facebook phone... which turned out to be a software offering.. and a phone. The software offering is a application that can be installed on selected Android powered phones, the phone (the HTC First) will be shipped in a few days starting with AT&T.
|Facebook App Launcher from Facebook Home site|
A category crossoverIf you think of the high tech landscape as different categories of products, cross overs between categories are notoriously seldom happening... because they are very, very hard to achieve.
Think of Oracle getting a leg in the application business. Think of they many failed attempts by Cisco. Or HP buying Palm WebOS. And so on.
Facebook's move from the social software category to the mobile phone category is such a move. It certainly helps to be the social software market leader, nonetheless it's not an easy step. Remember how Mark Zuckerberg even admitted less than 12 months ago, that Facebook got mobile wrong. Or remember the ill fated cross application effort Facebook tried with a pure HTML5 application, that faltered and turned out to be a move back to native apps?
And while Facebook stopped short of building their own mobile phone OS - a move which makes a lot of sense - if Home succeeds, it will become what really matters in regards of monetization on the smartphone - the application that gets the most eyeballs.
Why not stop at the app level?As mentioned, Facebook had a rough start into the smartphone apps business with their ill fated gamble on HTML5. Facebook even missed the influence of mobile in regards of their business model - selling advertisement. And while the monetization is still not yet fully fleshed out, it is clear that a normal smartphone app only gives limited control of a user's eyeballs. A user may see notifications posted from a social network, but still needs to go through a OS dependent lock screen, often an app launcher - so plenty of chances to get 'distracted' with other advertisement options.
I also think it must irk to some point all the social vendors, that they basically need to reveal the content of the social interaction to the smartphone OS vendor, when latching into their proprietary notification system. It really comes back to the smartphone OS vendor to become more clever at exploiting the content of these messages for more directed, targeted marketing.
Moreover Facebook has been dabbling beyond the pure social feed model with the Instagram acquisition, with offering a messaging platform and even free phone calls for a number of countries. These additional apps - all driven by getting more information on the user's interaction and thus being able to pin point marketing messages better, require to tie in different applications and with that outgrow the capability and functionality of the typical app.
So Facebook creating an individual app launcher with Home and exposing the native Facebook communication services through Home, is the next logical step.
At the core... opennessFacebook Home was only possible due to the open standard nature of Google's Android smartphone OS. If Google would not expose lock screen, app launcher, dialer and message APIs, Facebook could not have pulled Home together. As Facebook managers and industry observers quickly noticed, good luck trying to do this on Apple's iOS. You can't as they all agree, as iOS is too closed, locked down.
But Facebook also deserves kudos for keeping Home open to a certain point - as you can put 3rd party apps in the launch center. This of course is not only a noble pledge to openness, but another mechanism to track more about the user's behavior and usage for the purpose of more marketing data.
It will be interesting to see what Google's reaction to Home will be - as Facebook is basically taking advantage of the openness of the Android OS. But so have HTC and Samsung with their value add apps - but that was how the ecosystem was supposed to work...
The trend - UES - User Experience SoftareA few weeks ago I blogged about the rise of a new software category, user experience software. The example was the small Swedish startup Dexplora creating getsalesdone a more usable front end to salesforce's backend. Granted - Dexplora did not provide underlying applications as Facebook does - but at the end of the day for Facebook it's all about putting a better user experience for all of their services in the hand of the users. So the motivation is the same, the benefit for the user similar, only that the Facebook offering is vertically deeper
But at the core - let's not forget that Facebook needed to do a very good job from a UIX perspective to make Home a success. And the early reviews confirm that - in every review I have read - the usage of Facebook went up.
Simple UIX mechanisms like adopting the Instagram double tab for a like action are very powerful. Likewise the adoption of two dimensional swipes to navigate the Home app, a mechanism only promoted by Blackberry in their recent BB10 launch, gives credit to good UIX design as well the speed of adoption of working UIX features in the mobile apps market.
But Facebook was also innovative - with the chatheads mechanism, which give the user a representation of themselves across the applications as well as a application control metaphor. Kudos for this powerful new UIX mechanism.
|From Facebook Home website.|
On the flip-side - Home acknowledges that despite all the effort Facebook has put into getting much improved apps out in the last 12 months - the effort was still sub optimal in tying their offerings together before Home.
The enterprise impactI see a few trends that will come up for enterprise vendors:
When LinkedIn released their Q4 and 2012 results about 2 months ago, not too much was noted about the impressive increase of HCM related revenue. This marks the first full financial year in which LinkedIn's HCM solutions have brought in more than 50% of overall revenue.
|From LinkedIn's Earnings call (Slideshare)|
Who is LinkedIn?So what kind of company is LinkedIn? We all know (and use it) as a professional social network. If you work in the high tech industry, it's almost impossible not to be present on LinkedIn. The network passed the 200M member milestone late in 2012 and now claims that its adding a member every 2 seconds, almost two thirds of them coming from outside the US.
LinkedIn makes money by selling advertisement (Marketing Solutions), Premium Subscriptions (which give a user more access to work the social network) and Talent Solutions (basically recruitment on the social network) .
So if you only take it narrowly with the Talent Solutions - LinkedIn is more a HCM company than anything else. If you take a more progressive view of HCM - where social is part of the fabric, then clearly the premium subscriber content should be part of a next generation HCM system, making LinkedIn a full and square HCM company - with 80% of revenue coming from HCM related data and processes. If you then think it through to the ultimate step - if a social network is part of the HCM fabric, then it needs to be externally available, making it a candidate for targeting, marketing, advertisement etc. So you could even argue the marketing revenue is related to LinkedIn's HCM business, but for the sake of this post I won't go there.
How big a HCM company is Linkedin?
If you compare LinkedIn to recent HCM stock market rockstar Workday, the comparison was a big surprise to me:
Metric (all inMUS$)
Q4 2012 RevenueLinkedIn: Excl. Marketing
Workday: Only Subscription
Last FY Revenue
LinkedIn: Excl. Marketing
Workday: Only Subscription
Effectively LinkedIn is running 1.5 years ahead of Workday in HCM revenue... and is profitable.
So why a media company?
The declared direction of LinkedIn has been over and over to become a media company. The recent acquisition of Pulse goes in that direction. But why try to be a media company, when you are effectively a HCM software company, potentially the market leader in next generation recruitment software?
I see two options:
(1) Media is the cheese in the social network mousetrap
To attract professionals to keep their resumes up to date and to come back to LinkedIn, content is key. LinkedIn has paid for some content creation recently, but makes it also easier and easier for members to publish their content. This drives page views, which the company still sees as a key metric.
(2) The executive DNA is not enterprise software
Check out the bios of the executive teams - they are all more media then software, not to mention even enterprise software. Especially where it matters - with the CEO, CTO and product heads. Not that they are not smart enough to figure enterprise software out - but it may not be the instinctive path they have travelled on before.
If you look for proof - checkout the reviews of the pretty much botched Skills & Expertise rollout. While a brilliant idea, have members attest capabilities of other members and build a skills profile - the implementation was a little bit to simplistic is the common verdict. LinkedIn may counter that with the crowd sourcing of the skills you still get a somewhat valid picture - but it remains questionable. Similar for the recommendation / endorsement functionality.Great idea, essential for a professional network - but a little bit too little to really work. Has anyone used the recommenders as references in a serious job interview?
Maybe Weiner is just smarter...But then there is another option: Maybe Jeff Weiner is just too smart to enter the enterprise software fray and start battling around with the SAPs., Oracle and newer entrants like Workday and Ultimate. Right now I am sure the budget for the payments for talent solutions are flying under the IT radar screen and are paid because it's Linkedin. And with close to half a billion in yearly revenue, that's a lot of money spend on software subscriptions. Why compete with the enterprise vendors when you can get this revenue anyway, with no competition?
But longer term...Longer term I see a challenge for LinkedIn, if they do not extend their HCM functionality. While their core - the professional social network, will remain intact, there will be simply no runway to sell more talent (aka recruitment) licenses. The audience will be saturated, too - you have your members, and your professional users - no growth for the marketing solutions, as no more eyeballs.
What would be low hanging fruits for LinkedIn? Performance Management, 360 degree reviews are a natural extension to what LinkedIn has already. eLearning would be an easy add on and plug in, too. Complement and upgrade your skills, get a LinkedIn accreditation, certification.
More risky, but also more rewarding would be forays in Compensation. Why not have members confidentially share salaries and benefits and return them to them (and their employer) in a benchmark? My hope would be also that LinkedIn would make a stab at the portable Employee Profile. With that I mean the capability to maintain a web identity of a professional's skills and abilities, and be able to plug that back into the transactional systems for the information that matters.
MyPOVWhen looking at LinkedIn, we need to realize, that we are looking at probably the 2nd largest HCM software vendor (after ADP). Luckily for the enterprise vendors, LinkedIn does not really seem to be interested to give them a run for the money - for now. But when growth potential and growth get more limited - this will be an option. An option where LinkedIn, not having the enterprise software DNA (and baggage) has serious change game potential for the HCM market place.
Last week was the time of the year again - the Workday spring Update was being made available on the companies servers. It's now the 19th time that Workday has made available an Update of their latest products - on a metronome like pace. That in itself is a fact worth congratulating the company for.
[For the rest of this post I will only focus on the HCM side of the Update.]
So what was in Workday Update 19?
Update 19 FunctionalityHere is an overview of Update 19 features, as presented on Workday's website:
The SaaS release conundrumOne of they key benefits that SaaS provides, is a regular release cycle, usually multiple releases per year. Workday for instance releases every 4 months. There are a lot of benefits of the regular release cycles, as customers can adjust their implementation and go live plans, it gives a cadence to the sales, training and partner efforts and last but not least imposes discipline on the vendor's developers.
When you compare it with the large internet properties though, it's significantly different, as e.g. Facebook releases Home when they are ready, it's basically release when ready vs. release on schedule.
Release on schedule has the disadvantage, that the vendor needs to release something, even when there may not be so many value creation features in the release than you would usually see. That problem gets acerbated, when vendors need to split their development teams because of development projects, that need more time than the regular release cycle and with that reduce their capacity for building features for the immediate next release.
The challenge for all SaaS vendors in a similar scenario is, that the regular releases create trust in their ability to release more functionality, and many - like Workday - have made this a key differentiator vs. the dinosaurs of the industry. But that makes them also a slave to the cadence.
Workday release richness trending downSo I did a small, quick and dirty assessment of how much Workday has packed into the last 5 updates functionality wise, with the yellow highlight marking a heavy hitter that required significant development capacity, but also provided significant new feature benefits to customers:
And - not surprisingly - the feature richness of Workday updates fizzles out a bit... as predicted in a recent post.
Financials, Recruitment and BigData weigh heavyAs mentioned above in the conundrum - keeping up with the regular release schedule is a challenge, when you need to work on other development projects, that take more than one release cycle. Always a challenge for any development organization (fork code, double error correction etc) - but Workday is undergoing three significant major investments.
Workday CTO Stan Sweete confirmed again, that development resources are split 50 / 50 between HCM and Financials. On the HCM side, the new recruitment module will keep large capacities of the HCM development team busy, and while the support for the Workday BigData offering will be most likely in the foundation / platform - it will need exposure and expertise from the applications, notably HCM.
It will be also key for Workday, to add all the custom fields they can now, so they will be part of the upcoming BigData update. Customer won't be too happy, if they realize that the just added capability of custom fields will not be part of the upcoming BigData update, so I am sure Workday will include these.
Does the headline make sense now?Very much hope so - if not, here is how it's meant: When you are bound to a regular release cycle as a SaaS vendor, you may have to endure some thinner than usual relases, as you developers are busy working on the other, longer running projects. The challenge for the vendor is to keep credibility and to have enough substance in the release to create value.
If Workday Update 19 passes that threshold - we will see from customer feedback in the next weeks and months. If Workday would be a traditional enterprise software vendor, I would expect most customers not taking this update and waiting out for Update 20 and 21 later this year.
If you think it through - you can even discover one of the (few) downsides of being a SaaS customer, you may not want any of the Workday Update 19 features, but still will be upgraded and may have to work through some training, maintenance and documentation needs.
MyPOVWorkday hat a thinner than usual release with Update 19 - but that was to be expected.
The real surprise to me was, that Workday has been able to hold off on standard enterprise software customization - or even personalization options for more than 6 years, and only now introduces these capabilities gradually. It speaks for the guts of the company to even herald this as a feature, and the weakness of the competition to not take advantage of this missing capability more successfully till now.
The losers on this situation have been Workday customers, who had to wait a long time to get some standard enterprise customization features for their Workday system, and even now only with a gradual, object by object introduction. Surprisingly this has not been discussed earlier and elsewhere.
On the flipside - congrats to Workday for keeping the trust in the 4 monthly update schedule and bundling up the most you can out of a release that was understandably and as expected thinner in functionality. And it looks like the big development projects around Recruitment and BigData are on track for the respective fall and winter releases, so the future Update functionality richness should increase again.
I have been looking forward to Infor's user conference, that has started today in Orlando, for a while. The company has been talking and hinting at their microvertical strategy a lot - but never in a public forum in combination with their new products. So today was going to be interesting, and it was:
[If not familiar with Infor - read today's well timed USA Today piece about Charles Philips here.]
The GoodIf you follow enterprise software as a customer, vendor, partner, analyst or blogger - you have to pull for Infor. The SAP and Oracle duopoly really needs a run for the money - for the better of the market and the industry. And Infor is doing a good job, labeling themselves as the greatest startup around, given the recent over 1 Billion investment, the impressive hiring of talent and the ambitious re-architecting of platform and applications.
|Inforum 2013 Keynote - Day 1|
To differentiate themselves, Infor has chosen not just a vertical strategy - but a microvertical strategy. Go beyond the 20+ or so industries all the way to 200+ microverticals. That's a very clever differentiation, driving business automation further than SAP and Oracle have done. Infor CEO Charles Philips drove this argument home with a slide of labeling enterprise application eras:
|Inforum 2013 Keynote - Day 1|
And Infor has done good work to understand the underpinning of such a strategy - with its Ion middleware. Not enough details on Ion were presented in the keynote to assess it [hope to be able to do that sometime soon] but it looks promising.
|Inforum 2013 Keynote - Day 1|
But not only do you need to make data flow and make APIs available (still a lot of questions how that works) - users need to be able to co-operate across their current application boundaries, which requires a interaction / social / collaboration platform, which Infor has unveiled earlier already with ming.le.
|Inforum 2013 Keynote - Day 1|
ming.le serves practically as an interactive communication tool, as the presenters made very clear, that key identifiers such as the customer ID, product ID etc are passed along with the ming.le interaction.
But then users may find themselves in enterprise applications, that they are not familiar with, so it's key to unify the user interaction across the many Infor products, and that job falls to project Soho, an HTML5 based set of UI tools, forms and standards, that achieves - at least at screenshot and demo level - a very high conformity of usability across the products.
|Order Screen after applying Soho - Inforum 2013 Keynote - Day 1|
|SkyVault - Inforum 2013 Keynote - Day 1|
So amidst all this enabling technlogy, Infor also upgraded and revamped the underlying applications from Infor 10 to Infor 10x. To make it into the 10x club, applications had to fulfill a number of conditions, namely to leverage the above investments, as the below slide sums up well:
|SkyVault - Inforum 2013 Keynote - Day 1|
Moreover Infor announced that a number of their applications will be available through IBM's Smartcloud services. A good move by Infor, as it again alleviates heavy capex investment (that should go to product development in this phase) and offers a large brand name to create trust into the cloud offering, that some of the 70000 Infor customers may not yet have. The other compelling feature of choosing IBM's cloud products is, that they fully support private, public and hybrid cloud as there is no way for Infor to foresee how their customers will migrate their applications to the cloud.
And finally Infor had an interesting investment around a (fittingly) (micro)vertical cloud for equipment vendors. Taking the M3 product, leveraging an investment that NTT Data has done together with Velocity Technology Solutions on IBM cloud services, there is a compelling cloud offering for companies that rely heavily on equipment. Fittingly the offer has been endorses by Caterpillar dealers around the world.
Unrelated to the architecture announcements, it was good to see the strong commitment to design thinking, with creating an in house design team with Hook&Loop. The impact is already seen in the new product releases and is encouraging. I was impressed by the example of the re-designed hotel check-in application. We will see over time how more continuous improvement can be instilled in the Infor applications. But it's a very promising start.
The BadEven if you invest around 1B in your enterprise company, and can show a significant shift forward, with the over-quoted massive investment in products (over 850 new developers) - you are still tying together old products - with modern tools.
Pretty much all the Infor products have their inception as a product, their basic design, data structure and capability to automate industry best practices from over 10+ years ago. That by itself doesn't have to be bad - but creates significant technical debt on Infor and Infor customers. The good news is, that some of them, like the customer reference proudly talking about their AS/400 solution - don't even mind. The bad news is, that you cannot build a next generation, best practices enterprise system.
Infor - unwillingly of course - even documented that in the two key note demos. Of course ming.le was used to tie different Infor acquired apps together- but what was missed, was that a business automation system in the 21st century, should have automated flows a little differently and better:
|Order Screen - Inforum 2013 Keynote - Day 1|
|Order Screen - Inforum 2013 Keynote - Day 1|
[Update April 23rd 23:58 PST:] Don't miss my takeaways of the Day 2 keynote here.
[Update April 25th 8:03 PST] - You can watch the replay of the keynotes here.
When watching the Day 2 keynote of Inforum 2013 today, I could not help but thinking that it was somehow of a let down in comparison to yesterday's Day 1 keynote. That's often the case at user conferences, but I have not experienced such a contrast in a while.
And I wonder why? The keynote started with LMS and then spend a lot of time on HCM, two topics I am quite passionate about. So hope it wasn't me... I am still a bit puzzled... let me know if you had the same impression and maybe can articulate it better.
Let's look at the takeaways of the keynote.
Hotel Demo revisitedDuncan Angove and Stephan Scholl came back to the hotel check-in demo - which obviously a lot of people and not only yours truly, liked a lot. Unfortunately, it looked a little different than the rich process UI with the extensive use of the flipcard UI metaphor we saw as part of the Hook&Loop section of yesterday's keynote:
|Screenshot form Inforum 2013 Day 2 Keynote|
And I will stick to my line from yesterday, that demos should be top notch and transport next generation capabilities... unfortunately this demo didn't (like yesterdays): A check-in agent has to ask for a maintenance fix in a suite, to give that suite to a late arriving loyal guest. Nice. Ming.le front and center, and if it was the purpose to demo Ming.le - it worked.
But: A 21st century enterprise application would have scheduled the fix to suite beforehand (make sure more valuable rooms are available) and alerted the check in agent to reserve the room for the tardy, but loyal guest.
The need and pitch for LMSPam Murphy did a good job explaining how Infor's large product set requires even more product training material and that Infor basically identified both a corporate and a product need for LMS. Certpoint (the former Vuepoint) seemed to be the best fit - and typical Infor style - was acquired on March 4th. A good review by Constellation's Yvette Cameron can be found here. The general education session by former Certpoint CEO Ara Ohanian (and only executive I know carrying the title of Chief Happiness Office before the CEO title) was informative, and I guess was to lay the groundwork for significant sales campaigns into the Infor installed base. On way or the other Infor customers will use Certpoint.
With a recent acquisition I was not expecting a Soho style user interface on top of Certpoint, but it would have been good to see LMS in action. To my surprise the later HCM demo then had one, see below:
|Screenshot form Inforum 2013 Day 2 Keynote|
There was some disappointment yesterday, that HCM wasn't part of the Day 1 keynote, but today it got more clear why, Day 2 was about pitching the truly horizontal products.
Off to HCM
Infor labels HCM modules a slightly different than other vendors, but the 5 main categories (Select, Develop, Deploy, Measure and Reward) make sense, though they take a moment to get used to:
|Screenshot form Inforum 2013 Day 2 Keynote|
The idea of the demo was that Dr. Soma would run through the requisition, hiring, onboarding of new nurses for a hospitals emergency room. Very good idea to give the horizontal HCM processes a vertical flavor, but I would have liked to see them go way deeper than the props with the ubiquitous stethoscopes. The ICU nurse identified the need for more nurses needed with the help of Labor analytics:
|Screenshot form Inforum 2013 Day 2 Keynote|
Again - I may annoy you here - but I would have expected the system to alert the chief nurse and management that there is a shortage of up to 4 nurses. That doesn't also happen overnight, so there are some other failures in the management of the hospital, that good enterprise software should uncover. It's important as one of the Ugly findings on Infor yesterday was, that the Infor enterprise applications already are a teenage age. Even more important for Infor to show in demos how 21st century ready they are.
The HR Services user interface looked very clean and is one of the better efforts in the industry to provide the HCM start screen for an employee:
|Screenshot form Inforum 2013 Day 2 Keynote|
|Screenshot form Inforum 2013 Day 2 Keynote|
|Screenshot form Inforum 2013 Day 2 Keynote|
|Screenshot form Inforum 2013 Day 2 Keynote|
|Screenshot form Inforum 2013 Day 2 Keynote|
I was impressed by the clear desgin of the onboarding screen:
|Screenshot form Inforum 2013 Day 2 Keynote|
It was good to see that Infor HCM will take even care of more secondary HCM automation areas like Benefits:
|Screenshot form Inforum 2013 Day 2 Keynote|
And no HCM demo from a leading provider without mentioning and showing total compensation:
|Screenshot form Inforum 2013 Day 2 Keynote|
|Screenshot form Inforum 2013 Day 2 Keynote|
Overall an impressive demo of the Infor HCM suite. It shows a consistent user interface and looks like covering all the bases of the HCM portfolio.
Thinking about this - it makes Infor HCM the most complete HCM suite out there. Oracle and SAP have to live with the respective Taleo and Successfactors dichotomy, Workday does not have recruitment (yet) and some other areas, same for Ultimate. This should be a window of opportunity for Infor to leverage, and with Stephan Scholl's Peoplesoft career roots, something I would expect Infor to make a run for.
Configurator - another central component?Next was an surprise to me, Duncan Angove presented the intent to acquire configurator partner TDCI, who then presented with their president and SVP of strategy on stage for 10 or so minutes. Again it felt to a certain point like an education session for the general audience, similar to what we saw with LMS earlier. And in contrast to Certpoint, the acquisition of TDCI hasn't happened yet. So I understand the vagueness.
|Screenshot form Inforum 2013 Day 2 Keynote|
The surprise was that Infor bought a configurator company, certainly a good one. But existing Infor customers using other Infor configurators maybe wondering about their investments. Obviously this could not be addressed pending the early stage of the acquisition. And there is certainly a competitive angle to this given TDCI's integration and partnerships with Oracle and Microsoft.
You can certainly make the point, that a configurator could be a similar central element to Infor's integration strategy like Ion and SkyVault (read more here). But it will require significantly more integration work. Could this be a hint that Infor will maybe sooner than later build a next generation enterprise application in the cloud as the go to future platform? The data is already there thanks to Ion.... we will see.
Finally EAMLast but not least a fortissimo in the Infor portfolio EAM. Presented by Soma Somasundaram it was again a (lenghty) education what EAM is and how it matters to pretty much all customers in the audience.
|Screenshot form Inforum 2013 Day 2 Keynote|
|Screenshot form Inforum 2013 Day 2 Keynote|
MyPOVA solid 2nd day at Inforum 2013 left me impressed with the breadth of the Infor HCM offering. More clarification around the pending TDCI acquisition is needed. It opens the speculation on the longer term Infor system landscape, with the company possibly reinventing itself on a modern cloud based platform beginning with the value creation chain for configurable products. On the long awaited EAM front, I have similar concerns as with the overall microvertical strategy: Infor may end up with not enough developers to create, maintain and support all that functionality.
Overall my view on The Good, the Bad, the Ugly from yesterday hasn't changed, don't miss reading the post here.
[Update April 25th 8:01 PST] - You can watch the replay of the keynotes here.
In a rapid quitter exchange with some esteemed influencers today, it struck me that agility was used as an argument for cloud applications in comparison to on premise enterprise applications.
And indeed - business agility is quite often used in conjunction, with cloud, indeed so often that a search on both terms leads to over 400000 results on Google:
So what does agility really mean? A look at Merriam Webster:
|Courtesy of Merriam Webster, from here|
Let's go for the above definition labelled as 1 - the ability to move with quick easy grace.
Obviously that depends on the perspective, so let's dissect this a little more below
For the end userAn end user does not really care how an enterprise application is delivered to him, on premise or via the cloud. What matters to the end user, is an intuitive user interface and that things can get done, meaning the system is available when needed, it's not too complex to use and leaves time for the real day job.
So it's very clear the more modern system will usually win achieve this, and as cloud applications are more recent and more modern, the end user will be more agile using a cloud application.
For the business unitBusiness units are often frustrated with the support they get from central functions, in this case IT. The applications are too rigid, do not support the business unit well, are cumbersome to use, standards are restrictive, procurement is a pain etc. By selecting a cloud application and running it for the business unit, the business unit can become more agile, as it will be easier to get things done. And they can pay for it out of their opex budget. But most enterprise applications aren't operating in information and process isolation, so usually the business unit will have to go back to the not so popular IT department for the plumbing work that is there in the aftermath of a business unit based decision to use a cloud application.
Short term the business unit will be more agile, the question is, how will that be after a few quarters, as the opex budget is more limited and the automated processes depend solely on the cloud vendors capabilities.
For the IT teamWhen IT teams are surprised by their business units uptake of cloud applications, it's never a pleasant surprise. Suddenly interfaces, APIs, user information, credentials etc need to be shared that weren't required before. This goes along with a loss in agility, the life of the IT team does not get easier.Unless there are applications that can be de-comissioned and turned off as part of the business unit's cloud decision. But I have seen that seldom be the case.
The story is different, when the IT team is the instigator on moving applications to the cloud, as the expectation should be, that they have done their homework before. By moving applications to the cloud, the net effect on IT resources should be positive in a way, that less resources need to go to application maintenance and support. In that case the IT team increases agility by moving applications to the cloud.
For the whole enterpriseWhen applications are moved to the cloud, the effect on the enterprise's agility is not so easily determined. Let's look at some scenario, when the enterprise will not benefit from moving to the cloud:
|Taken from http://www.agilityrightfromthestart.com/|
For two days this week Oracle gathered key industry analysts and bloggers for their yearly analyst relation summit. A good chance to checkout what has changed since the launch of the Cloudworld conference series, you find my takeaways from Cloudworld LA here:
Larry on tap and nothing new from the topSimilar as at Cloudworld events, Larry Ellison was there by video, which sparked some disappointment by the audience. But given the many faux cloud comments Oracle got from the analyst community in the last year - I think it may even have been a wise move by Oracle AR not to have Larry there in person, but on canned message. If it was a PR strategy it succeeded as there were no negative tweets on Oracle's strategy..
But at the end nothing really new from Ellison, he re-itereated that with cloud computing we are entering a new age of computing, kept comparing it to water and electrical utilities and that the disruption of the cloud brings a new set of competitors to Oracle. The hope hat Oracle may reveal something (publicly) about the storage plans (see Kurian at LA here), beyond the January webcast - did not materialize.
6 general themesA lengthy presentation by Bob Evans, that didn't receive too much love from the audience in Twittersphere, at least made clear the 6 major themes that Oracle is working on (and are new vs Cloudworld):
|Slide from Twitter|
It was good to see that Oracle offered clear differentiators to the competition with the below slide:
|Slide from Twitter|
And of course Oracle needs to offer all flavors of the cloud- public, private and hybrid - but so do Microsoft and IBM - equally including PaaS and IaaS. The end to end on the CX side is an ambition, I am sure a lot of vendors would argue Oracle is not yet end to end there. And Oracle would be fools if they didn't inject BI and Social everywhere they could. On the latter the absence of mobile is notable and remains an area where Oracle needs to improve and catch up.
And Oracle remains committed to R&D, Bob Evans mentioned that over $15B being spent on R&D in the last three years - impressive, but it will more matter what Oracle can show for it. In the interesting statement section was also the labeling of the Sun acquisition as the most strategic (ok) and most profitable (surprise) acquisition ever. Given the negative impact of the lower margin Sun sever business that Oracle needed to digest and dissolve, the additional R&D needed after Sun under-invested (see Oracle earnings call) - remains one I would like Oracle to back up. I am sure expectations go into that direction, when the whole engineered systems strategy and the software on silicon strategy will materialize successfully. But that's too early to call.
Engineered SystemsJohn Fowler's session was under NDA - so not much to comment... but a few tidbits leaked out:
|Slide from Twitter|
|Slide from Twitter|
Now to the software
|Slide from Twitter|
|Slide from Twitter|
|Slide from Twitter|
Mobile finds love
Even though one can validly argue that Oracle is so late to the mobile party that most food is gone already, Oracle seems to have decided to really show up now. And with the typical Oracle intensity...
|Slide from Twitter|
Oracle talks in memory now
|Slide from Twitter|
Kurian also gave a preview of planned in memory applications, some of the them - like next best action, which may be the older Siebel / Six Sigma offerings revamped on the new in memory platform. Certainly Oracle discovers in memory late, later than SAP - but the announced applications hit the right tone in terms of scope and content.
Big DataOne of the first times we have seen Thomas Kurian / Oracle speaking about BigData and it would be interesting. Kurian offered (a good) definition of BigData being characterized by 4 Vs - with volume, velocity, variety and value.
Not surprisingly Oracle sees BigData as holistic offering that spans across engineered systems, technology and applications, that acquire, store, process and analyze data. I was wondering what Oracle's relationship to Hadoop would be - coexistence or uptake - but it looks that the RDBMS DNA was stronger and Kurian described scale out processing on Hadoop clusters. But the RDBMS SQL engine is supposed to work seamlessly across traditional RDBMS storage and Hadoop - which would be a big win for existing applications and query productivity. Kurian thinks, that over time the efficiency of the SQL processing across hybrid clusters will be a key success factor in the BigData market.
Oracle's view on big data looks pretty complete, though I miss some business applications flavor on it - the BI applications are certainly there with Bi Foundation, Endeca, CEP - but no ETA mentioned:
|Slide from Twitter|
The Oracle BI application portfolio remains beyond comprehensive:
|Slide from Twitter|
Time for ApplicationsAnd then Kurian was off to applications. CX featured prominently, which he claims is the single biggest investment in applications at Oracle. It wasn't clear if this was ongoing, currently happening investment or cumulative investment in form of purchase prices for RightNow and eloqua being added up. Kurian offered a neat little customer management fact, that back in 1996 a disgruntled customer would only reach 8-12 people on average, today with Facebook even a recluse user reaches about 1750.
|Slide from Twitter|
Fusion Apps UpdateWhen it came to Fusion Oracle revealed that over 400 customers are now on Fusion, about 150 were added later and the majority is on the SaaS price list. Steve Miranda then clarified further, that of the 150 new there were about 60-65 in CRM, same numbers for HCM and the rest in ERP. Almost all existing customers moving to Fusion, no new logos.
Chris Leone presented the Fusion HCM apps, and I was impressive to see, that he demoed himsefl, a good sign of a hands-on executive. Of course he claimed that Oracle has the broadest suite of HR and Talent Management in the cloud. [I heard this before, ah,yes right at Inforum2013]. And not surprisingly, the claim of mobile first was the guideline to the new Oracle user interface. As Leone demoed from an iPad, that gave the whole claim significant substance. You can check the new UI out with TapMobile here. And of course, no HCM presentation post 2011 without mentioning flight risk - to be tamed with proper predictive analytics.
Also related to HCM - an interesting data point on Peoplesoft was, that has 15M users and pays 7.5M, more than I thought at this stage in the product life cycle. Paco Aubrejan even made the claim that Oracle's business with Peoplesoft is growing. The key investment areas for Peoplesoft HCM are mobile, in memory and lifecycle management.
That concluded Day 1 - and we got some interesting Twitter visualization of Day 1 - looks like @mkrigsman and @alanlepo were the busiest tweeters:
|Courtesy of @satyakr - Satya Krishnawasamy|
Day 2The second day started with ... customer experience... Oracle gives the topic a lot of room, very good. The topic was kicked off telling a nice story on how customers journey across channels.
|Slide from Twitter|
In typical Oracle fashion customer experience needs to permeate across the whole applications portfolio, as the following slide portrays:
Close with Acquisitions
Oracle keeps closing events like these with bringing Doug Kehring on stage, who runs the Oracle acquisition machine. His insights are always valuable, very few professionals have been involved in up to a 100 acquisitions in the last 10 years. Interesting was the insight, that employees of acquired companies, who stick around more than 12 months, are usually with Oracle for good. The great value of having Kehring present is, that the audience always leaves with the confidence that they speak to an executive running a very smooth, proven acquisition machine. Which results in practically none of the usual acquisition noise around retention, roadmaps, integration etc. that come up around acquisitions. Having a dedicated acquisition team has definitively paid off for Oracle.
This meeting hasn't changed my analysis from Cloudworld. We are witnessing the largest integrated engineering project across multiple product categories since a long time, maybe ever. Only IBM and Microsoft can attempt the same - but they - maybe wisely - aren't. The scope is tremendous, and with releasing a new product every workday for a year - a feat that Oracle has achieved - gives a sense of the complexity of the undertaking.
But Oracle has decided to shoulder this load and it will be very interesting to see the further progression of this mega project, that has the potential of transforming the enterprise IT industry on virtually every layer and every aspect. An update on the progress is always welcome, and the current status is promising. But Oracle still has a lot of road to cover - great high tech products just take... time.
[Disclosure: I did not attend the AR conference - but only followed public available sources, mainly Twitter - you can find the Twitter Stream here.]
SAP's Sapphire conference is coming up next week and while I realize the presentations are already done, the banners printed, the give aways ordered and the marketing message fine tuned - it's still worth to think what SAP should and in my view could address next week.
The FutureSAP has been very clear on the ambition to have one billion users in the near future (is it 2016 now?) - but has been not so clear how to get there. Given the tricks the company pulled in the past (remember the 100000 company challenge that was achieved with the Business Objects acquisition, counting small Crystal Reports customers) to achieve similar goals - it would be good to understand what SAP is really up to here. The past investments in Business Objects, Sybase, SuccessFactoris and Ariba will not get SAP to that user count. Maybe it's the micro banking app on Sybase 365? It can't be the FanApps. So it would be good to learn more - as it will direct significant development resources.
The Integration StoryIn contrast to Oracle (with now Fusion Middleware), SAP did not intend to do larger enterprise vendor acquisitions for a long time (till 2010?). So the focus of SAP's integration platform, NetWeaver was never really to integrate with heterogeneous products, that came in through acquisitions. Let's remember the focus was to integrate the internally created integration challenge of (my)SAPCRM, SCM, SRM, ERP etc. with MDM and XI. Unfortunately Netweaver failed pretty much at this, but that's a historic chapter for SAP. But now SAP has real integration problems at hand with SuccessFactors and Ariba. All of a sudden core automation pieces are no longer part of the monolithic suite, but running somewhere else. No easy integration, and the best practical answer has been file transfer. Let's hope that with NetWeaver PI et al we make a better story. If you look for a working integration story pitched recently, look no farer than Infor with Ion.
CloudSAP's story at embracing the cloud has not been written so far. Surprisingly Oracle took much more criticism than SAP on the topic, so sometimes it's better to have nothing than something. It would be very good to understand, how the new NetWeaver (or is it Hana?) Cloud will work and pan out. I don't expect for SAP to physically host any cloud offering - but to work with its partners. An OpenStack support would not be too much of a surprise. I would also like to hear that the R/3 AMI support in AWS gets made available loudly and proudly. Here is a massive chance to reduce operating cost for their customers and SAP has been very slow at promoting this - I guess the business deflation for the hardware partners have been the deterrent.
HanaMy hope is, that Hana will pass the hype stage and we will see much more on real uptake, usage with customers and across the application portfolio. At this point I think everybody gives SAP credit, that Hana works, what you do with it is the key question. Unfortunately SAP has been applying Hana mostly to all the well known performance problems of the past, which is a fair usage of new technology, but implies a lack of vision how a future in memory enterprise should operate. And this from the leader in business automation - quite an unfortunate pairing.
SAP will also have to address the delays for getting the Business Suite to run on Hana and why SAP won't rely an SD benchmark on Hana. The ecosystem deserves to know why the performance gold standard of the past is no longer applicable now. SAP may have good reasons, so explain and replace it with a newer, better benchmark. Fair, but do it.
MobileEver since SAP unleashed 100s of applications for mobile two year, it has gotten a little quiet. Quantity and quality are two different dimensions. Turns out the Sybase tools for mobile weren't as good as hoped at the time of acquisition. SAP has realized this and the new mobile capabilities of NetWeaver (or Hana?) cloud portal will be promising to address this. It will be good to see SAP go back to the traditional alleys of their famous product history - create the underling platform and then build great applications on top of it.
SAP will also need to address impedingly high list price of the mobile applications. And: Please don't say mobile first too often - best at all - as very few will buy that.
SocialThough I applaud SAP to hire an outsider with Sameer Patel to run social - it's clear SAP is either not funding social (at this time) and / or doesn't understand it. There is very little to compete with Oracle on social, who is ruthlessly building social into current and future platforms and is actively investing into customer experience management.
[Inserted - thanks for pointing out, how could I forget!] Big Data
Line of Business - No easy LOBs for Purchasing and HCMAll is quiet on the CRM, Finance and Manufacturing front. No disrupting acqusitions that need to be explained, roadmaps replanned etc.
Different story for Purchasing and HCM. Let's tackle the Purchasing side first, here the story of buying the clear category leader with Ariba is a good news for SAP customers, many have been using Ariba already. There is no confusion and uncertainty where the future automation will reside - it's with Ariba and SAP only needs to address the integration road map and technology.
What a messy situation on the HCM side in contrast - Successfactors was a leader, but not the leader in HCM in the cloud (that prize would go to Workday). To be fair - even if SAP had acquired Workday, questions would have remained, simply because even Workday is not as complete and multinational as SAP's HCM produc.
In hinsight, Oracle's acquisition of Taleo (the clear leader in recruitment) looks so much easier, similar to an Ariba-size problem. So on the HCM side SAP will need to address where the future core HCM automation will be. If EmployeeCentral remains the answer, than SAP needs a very clear roadmap and a resolution on how the cloud technology from Successfactors will morph and work along with the new Netweaver (or Hana?) Cloud platform. And while addressing this - please show the roadmap how the heterogenuous cloud archtiectures of the legacy Successfactors products will be harmonized on the architecture side, too.
The maintenance sagaNo user conference (remember - Sapphire and ASUG are taking place in parallel) without this sore subject. I would like SAP to address the value proposition of maintenance. At the HR2013 event earlier in the year SAP embarked into a very similar strategy like Oracle's Applications Unlimited. Don't worry too much customers, we will maintain what you have for a long, long, time, in the meantime stay with us as we figure out the future. Applications Unlimited has worked for Oracle customers and Oracle, so I see no reason why it should not work for SAP and SAP customers. With enough 3rd party support available for SAP, there is enough pressure to keep SAP honest on it's longer term roadmap and support commitments.
Vision & Thought LeadershipIn the 90ies SAP excelled at true thought leadership at Sapphire events. An integrated enterprise application as the platform to enable business re-engineering. SAP rode the wave of the management consultants to a modern client server system that encompasses all of the enterprise.
Much has changed now - and SAP needs to formulate its vision for the 21st century for business automation. You do not re-invent business automaton by putting an in-memory database under it. SAP would have rightly criticized Oracle if Larry Ellison would have claimed this. In an ironic twist of marketing positions, now SAP claims that new technology can upgrade old business application code. But technology is only half the equation, imagining and working with customers on how the 21st century enterprise will operate on that technology, is the other half, the key half, the half much closer to SAP's DNA than the technology half. I would love to see SAP making strides in this direction.
MyPOVHigh expectations are in store for this year's Sapphire - SAP knows the challenges it needs to address. If they will bring them on stage to Orlando - we will know in a week from now.
I would already praise SAP if they acknowledge the challenges and don't have a compelling solution yet - honesty can go a long, long way in the business of trust that enterprise applications ultimately are. SAP has not lost the trust of the ecosystem, but it's time to but more trust coins in the bank. As I said - in a short and fast week, we will know more.
If you asked me a few quarters ago - I would not thought I may be writing a post on payroll soon... but the recent events of SAP acquiring SuccessFactors, Oracle buying Taleo, Workday and Ultimate both working hard on their payrolls - got some thought cycles started...
Payroll - a negative business
Market ShiftsThe interesting dynamic, that we can see in the overall HCM market is, that the old dichotomy of the old ERP vendors (some call them the dinosaurs) versus the new Talent Management vendor does not work anymore. For the simple reason that the ERP vendors have bulked up with the Talent Manager acquisitions and now have to figure out how to integrate them... with their HRMS and payroll products.
So the new guys versus dinosaurs play does not work anymore and you can see how 'leftover' TalentManagement vendors of Workday and Ultimate are pushing payroll more. Workday has embraced payroll earlier than the Talent Management Vendors, but is now marketing their payroll offering more aggressively And Ultimate just reflected the push for payroll with their recently announced payroll partnership with Celergo.
As a sidenote - isn't it interesting that the acquired vendors (SuccessFactors, Taleo and Kenexa) did not have a payroll offering or any ambition in the area? Certainly they were more complimentary to their acquirers but it also shows the stickiness that results from payroll products.
Payroll and CloudPayroll is inherently a cloud application. In the (long distant) past you had to size your hardware to the size of your payroll run. Even today many payroll vendors make a very good living by running payroll for clients as an ASP, which shares hardware and runs the payrolls at slightly different times. These are not cloud solutions, but the conventional product with their conventional architectures, run in a shared, abstracted way to save hardware resources.
On the general perspective ConstellationRG's Yvette Cameron postulates 6 very valid principles for a cloud payroll, so no need to go there again. But the inherent elastic nature is something future payroll offerings should exploit more and better. It will be interesting to see if the new payroll offerings - e.g. SAP's new Hana / Cloud payroll - will take advantage of the cloud.
Payroll 2.0 - in the cloudAs with all new technologies, the risk, that the same business functionality will be re-implemented on the new platform is significant. The pressure to have the same functionality on a new platform, with lower cost, faster response time and other benefits is huge. It's also risky to rethink the business functionality in a new way - as it may not become the new business best practice.
But lets try anyway:
Architecture will matter - as always
Deep vertical aspects
Anyone building it?
[Update May 8th:] A lot of readers point me to ZenPayroll as a new investment into a payroll systems - and indeed the company has impressive backing and seems to make payroll easy and fun (!). I don't know more about the architecture, but it looks like the self services aspect of a next generation system was very well achieved. Potential concerns are on US only focus (the future of payroll is global) and around using Ruby as programming language - but that's another full blog post.
In a world wide press conference - open to the public - the recording is here - SAP's Supervisory Board Chairman Hasso Plattner, it's CTO Vishal Sikka (blog here) and its CMO Jonathan Becher - unveiled the SAP Hana Enterprise Cloud.
A Historic Event
Why all the talk on latency?Since a long time Hasso Plattner has SAP engineers work under the 1 second performance deadline (remember that myself...), that any enterprise application should return control back to the users under one second. For a long time Hasso (correcly) maintained that due to network latencies, the 1 second performance mandate could not be achieved if servers would not be on premise solution. But now both executives claimed that SAP has managed to keep latency to 120 ms round trip to any data center of SAP - leaving close to 800 ms to application compute time, enough time for the Hana architecture to return meaningful results.
PaaS or IaaS?
True next generation applications - we are (still) waiting
But I am still hoping for Sapphire bring up more though leadership in the area of in memory best practices. (see my Sapphire wish list here).
Still Terra Incognita - or better nubes incognitae for SAP*
Moreover, being successful with a IaaS product in the database area is a challenge, a challenge so big, even better marketing and sales driven organizations (aka salesforce) have not made a killing with their IaaS products (database.com). And SAP needs to pick up a lot of speed - as with all things in the cloud - Amazon AWS is the benchmark, redshift is the hurdle - and with Infor endorsing it - redshift is noticeably ahead of Hana at this point.
In the two latter examples - the choice of platform is not so obvious. Excel can't solve this anymore and the classic programming environments are a daunting endeavor to embark on. So how can you make enterprises be made more efficient while addressing such automation needs? There will be some parameters you will need to execute along:
Integrated Feedback Loop
Like with every visual tool, potential concerns arise when having to model very extensive, complex flows, but as you can embed flows into each other, Mendix offers the standard industry solution for complexity reduction. And if the functionality needs should exceed the capability of the model on the side of functional capability, then Mendix allows for Java extensions. This adds complexity to the deployment, but is a key outlet needed for a model based platform and with Java Mendix chose the right technical implementation to address this challenge.
Support for Agile Programming
While developers have been coding since a long time, the common understanding of best practices to create code nowadays is to support agile techniques, as postulated in the Agile Manifesto. And Mendix supports agile methodologies, with the administration of sprints, sharing the sprint objectives and tracking to sprint deliverables:
How does Mendix do?
It's amazing to me how much information is coming out of SAP before Sapphire on the cloud side - I cannot remember any Sapphire conference of my 20+ or so editions, that this much information about very key products for the company have leaked out before Sapphire so widely and publicly.
I hope its an indication for a more open, social and sharing SAP - which would be good for SAP and the whole ecosystem. On the flip side I feel for the marketing professionals at SAP, because this is not (at least the classic and proven path) how to build up and execute momentum before your key user conference.
So in the last 24 hours a blog post by @aiazkazi (you can find it here) and @bgoerke (you can find it here) did a lot of cloud busting before Sapphire. And since Aiaz and Bjoern work right under the executive board, and are kind of partners in crime for cloud matters, it is reliable enough to chart the way forward into the cloud, as we can expect it to materialize next week at Sapphire.
Hana Enterprise CloudThis week we saw the - again with surprising timing - the launch of the Hana Enterprise Cloud (HEC). I called it a promising start, since it was the first time I saw senior SAP executives, in this case Hasso Plattner and Vishal Sikka, use cloud unique benefits to pitch homegrown SAP product. This is different than e.g. Lars Dalgaard preaching about the cloud, his whole background is cloud, he sells his past Successfactors products, so that's an easy pitch. But to see Hasso Plattner associating easy ramp-up, making hardware provisioning obsolete for customers, staying on the latest code with a SAP product while claiming to satisfy the much postulated sub 1 second response time - is a first and shows a good turn in thinking and thus in SAP products.
From IaaS to PaaS - thanks to Hana Cloud Platform
My take was that HEC clearly was IaaS, which got confirmed with tweets with a few SAP mentors in the aftermath of my post. It was unclear earlier in the week what would make HEC to become a platform, a PaaS player and the foundation to build the game changing killer apps, that I am waiting for SAP to come up with - hopefully sooner than later. So Hana Cloud Platform (HCP) provides the platform support needed to create applications on HEC, so what are the features and products in HCP? Earlier this week the focus was only around the database with Hana - which was fine - but that didn't shed much light on how to build applications on HEC.
|The HCP as described here|
Behind Hana Cloud Platform stands Neo & more
Neo was the codename for the initiative of bringing NetWeaver to the cloud - re-inventing (or better re-writing) the infrastructure pieces, that in the past had weighted SAP products down, a key component being the Landscape Virtualization, which is SAP's attempt to make their products more elastic. Neo's product incarnation was NetWeaver cloud platform (NCP). It looks to me that NCP components find themselves again in HCP and the latest NetWeaver releases - NetWeaver 7.4. Here it's actually still quite cloudy and it would be good to know from SAP, which components go where (but anyone can make an educated guess).
So what has been taken / moved from NCP into HCP:
How to build HCP applications
NetWeaver 7.4 - confusion stopped
|The original NetWeaver RoadMap - from here|
Still looking for the killer apps
Equally there is no clarity (yet) on how productive a developer will be in building brand new applications, and hybrid applications that enhance the existing business suite applications.
It's ironic - the by design product stumbled over too many layers on a single system, HEC may stumble despite fewer application layers over too many systems in the landscape... I hope this is a concern about nothing...
What does this all mean?Let's play this through for the constituents of the SAP ecosystem...
For customers this should be good news, SAP embracing more cloud will ultimately lead to a more modern application architecture and infrastructure. And as the cloud is all about lowering TCO, this trend may als happen to the SAP cloud offerings. But in the neartime, make very sure that you now what it will cost you and that you can benefit from hopefully sooner than later coming cost reductions - both on the licensing as well as the operating cost side. You can influence SAP by keeping the pressure up to keep supporting the Business Suite AMI packages on Amazon - and push and shove for SAP to commit to support production instances on Amazon as well. This will keep SAP honest with cost and keep a focus on value.
For partners it means much more to play, more to learn and more to advise SAP customer on. It's also not clear what customization strategy you should pursue, I hope SAP will clarify this next week much more. It's also an opportunity to create value added applications, filling the void of the killer app that SAP has left so far. SAP is doing well at partnering and fostering an ecosystem for Hana partners, true to the spirit of let many flowers grow. But if you build applicatons on HEC - you need to be aware that for good or bad - you are tied to SAP's ecosystem.
For SAP this means the closure of many separate development streams - just think of the consolidation that this means for the NetWeaver platform. But it also means that a new programming model (pardon the SAP lingo) - that will need to be trained, digested and executed. Building edge applications is only a short to medium term strategy, so at some point SAP will have to start building core automation, hopefully with 21st business practices in mind, on the HCP for HEC. That would be (pardon the Oracle lingo) a Fusion type event. But ABAP will not run cost effectively forever in a multi core world.
While we learnt some things about Hana Enterprise Cloud (HEC) at its launch last week, and a little more this week at Sapphire - what dawned on me in the aftermath, is that elasticity is a fundamental challenge off HEC and any in memory offering.
Elasticity - revisitedLet's remind ourselves what elasticity in the cloud is all about. It's the dynamic ramp up (and ramp down) of computing resources for a cloud application. If we look at the market leader - Amazon's AWS - it's basically the process to get another AWS instance up and running based on an AMI file, that was somewhere stored, stored on a .... Hard Disk Drive (HDD). As that AMI gets loaded from hard disk to memory, capacity of the cloud application increases. When less capacity is requested, AWS will take instances down, adjusting capacity to demand. This shows elasticity ramping up and ramping down computing resources.
So that's elasticity of code - but what about elasticity for data? In contrast to code, data can never be just taken down like code instances, as it will / may have to be needed later again. So ultimately all data will have to become persistent, and that means it needs to be stored on HDD at some point. Of course, like many of the major Internet properties, you could use the faster and more expansive flash storage instead of HDD. But it will equally make the data persistent.
Obviously elasticity is the key influencer of TCO for any cloud, as you can manage load to your computing resources.
Hana's raison d'être is the core of the challengeHana was designed to be an in memory database - and with that it's core DNA of being in memory creates also its key challenge, creating Issues with any form of elasticity. With Hana's father, Hasso Plattner, being adamant to look at other options of data storage, Hana can only keep data in memory, expensive RAM memory and with that it doesn't offer any options where else to move data.
Hana can't be elastic for data - only staticFrom above it's clear - there is no place where to move the data from Hana. Used or not used - it stays in expensive RAM memory. Yes RAM prices are dropping, but so have Flash and HDD costs. Definitively there is more or in for prices decreases on the RAM side, but we will have to wait to see how fast they materialize.
Obviously SAP could create the mechanisms to make code elastic. Meaning to find a way to take code out of the Hana RAM and put it on a cheaper, persistent medium for storage, when not needed. And SAP has a lot of experience in this area, just look at the mechanisms SAP put into the memory management of its ABAP code. Gigabytes of ABAP code get moved, cached and parsed very well in the much more resource thrifty R/3 architecture. But the prize for that would be small - as memory used by code in the HEC should be dwarfed by memory used by data.
Take a page from Teradata?Maybe the Hana architects should look at the recent Terradata announcements of adding another category to their hot / cold storage algorithms for data... Which only puts the hottest data in memory, and the coldest on HDD, the remainder distributed between differently fast and expensive storage mediums. SAP could put in place a similar algorithm - are there actually faster and slower parts of RAM? Like writing data on the outside vs inside of a HDD.
Hana needs a bigger L1Sometimes SAP also touts their collaboration with their hardware partners around the improvements needed for in memory architectures. And you could make the case, that the speed with which RAM chips can feed data closer to the processor, the L1, L2 etc chips will make a difference. Or a much larger L1 cache. But that would slow down the processor as you want to feed the right bite sized portions to the processor. So maybe a bigger L3? We will see what SAP and partners will come up with - but it will certainly not be too much low hanging fruit.
MyPOVWhile Hana can certainly make the claim for speed, it also requires storing data in the most expensive and most limited storage medium we have today. RAM. Since SAP cannot make the data storage side elastic easily, with some of the motivation arbitrary though, it will make Hana solutions pricey. If SAP would consider strategies to make the data storage more elastic, it should help Hana, as it will make more cost benefit assessments of in memory applications favorable for Hana.
Side note: my 1st blog written in the air, 1st written on an iPad, 1st published in the air - thanks GoGo - and written about cloud - edited in the cloud (Google Drive and Blogger) - dreamt up above the clouds. Technology makes it happen.
Thanks to the power of the internet, one could sit in the first row today following the keynotes of both SAP and Netsuite for their respective user conferences, Sapphire and SuiteWorld. With a combined 26000 attendees, these are events that dwarf minor cities, with the bulk (20k) not surprisingly going to SAP.
Whats SAP newsSAP had to cram back to the event filled last week, namely the Hana Enterprise Cloud launch, so the press releases around the Hana Cloud Platform was a look back and around for anything cloud. And SAP claims now to have over 29 million users in the cloud... not sure how they came up with that number. The biggest lasting change from this press releases is the extensive renaming of products, adding more of the cloud tag to the product names... The re-organization around the 4 categories of People, Money, Customer and Supplier makes sense - but what do I make out of this, when I am a manufacturing company? (See Netsuite below - co-incidence?)
The other focus was around SAP's challenged mobile offering. SAP is partnering with Mocana and delivering a mobile device cloud for Afaria, the price seems right with one US$ per device and month. It's ironic, since one of the competitive stabs of McDermott was, that SAP kept investing in the acquired solutions, well these two partnerships show, that maybe SAP kept investment in Afaria (doubt it though) but certainly the development team missed the boat in regards of in app embedded security, as well as providing a cloud provisioned service. Ironically SAP is deploying the new cloud based MDM solution not on Hana Enterprise Cloud - but on Amazon's AWS. Maybe MDM data is too expensive to hold in memory? All a question of elasticity.
The press releases were rounded up with the most prominent of all verticals at this Sapphire so far - Sports & Entertainment - got a lot of airtime - and SAP event admits that luminaries of the sports world attended. Must be cool to have Justin Gimelstob show up in your Analytics presentation. But does this make SAP products better? My tweet that this is really a technology, not an applications pitch made the Top5 tweets of ASUG (many thanks!) - and that's what it's about. At least SAP is open and honest about it in the press release.
What's NetSuite NewsNicely timed NetSuite got the prize from Gartner as the fastest growing Financial Management software vendor globally. I guess it pays if you start and stick to your roots, remember NetSuite started as ... NetLedger.
NetSuite then made the day all about manufacturing. The new found love in heavy manufacturing functionality seems to be the next growth path NetSuite wants to take. Starting at the cradle of all manufacturing. design, with a partnership with Autodesk and re-telling the PLM story makes sense. But most of the functionality is a me-too for established vendors - though they have not delivered that all in the cloud yet.
NetSuite also announced a partnership to help the company on the procurement side, with CapGemini - using both services, the CG IBX procurement platform and supplier network. Not sure how much of a BPO play NetSuite has, but it was part of the announced services mix. A good move to address global services needs and complementing procurement automation. Also on the partner side NetSuite made a virtue of a necessity: A cloud vendor needs to ensure compatibility of partner offerings running on its cloud infrastructure - so why not certify them - so NetSuite announced the 'built for NetSuite' partner program.
The Nelson deliveryNelson and the NetSuite marketing opted for a classic software keynote - CEO on stage, running the whole keynote, some competitive jabs, some announcements, customers (Williams Sonoma) and partners, a software demo etc.
|Nelson on stage - thanks @LevineAaron|
The McDermott deliveryIf you ever want to see a spotless presentation, look at Bill McDermott's delivery. Even a notch better than last year, he had the ungrateful job to make the most of nothing - no product announcements, so he resorted to something he seems to really like, sports. And the idea to host the main part of the keynote in the CBS sports format, hosted by James Brown, was an excellent and entertaining idea. But it felt lengthy at times and for most in the audience, apart from the entertainment factor - what was the relevance to the average SAP user, buyer, partner in the audience?
|The CBS SportsDesk - thanks to @TimoElliott|
The Marketing BattleWell it's only day 1 for both conferences, that last three days - but here NetSuite clearly out did SAP. With SAP announcing only two new mobile offerings, a vertical press release for Sports and Entertainment industries and a deja-vu release for Hana Cloud Platform - clearly SAP has so far been announcing early, with Hana Enterprise Cloud, Lumira, NetWeaver 7.4 GA and SAPUI5. That would have been enough to power whole Sapphires of the past years. I am still mystified of the timing - see my partially humorous Top 10 tweets trying to make sense of it here...
I am sure on sheer mass SAP won this hands down - but in terms of relative audience, number of customers and marketing budget - the 1st day round goes to NetSuite on the marketing side.
MyPOVGood starts for both companies into their key user events. Classic format for NetSuite, good delivery by Nelson, happy customers. Impeccable delivery by McDermott - as usual - innovative idea with the CBS sports desk - but then Calderoni was literally left standing on stage and customers were walking out of keynote. Looking forward to day 2 of both conferences.
So today was day 2 of two key enterprises software conferences - SAP's Sapphire and Netsuite's Suiteworld. Happening across the north American continent it allows bloggers 'on the fences' like your struly to follow both events, thanks to the streaming offering.
What's NetSuite NewsAs expected today was calmer on the press front, with 5 more signifcant releases yesterday. The big release today was about filling NetSuite's gap in the HCM area - not with one or two partnership - but 8 partnerships with HCM enterprise software vendors. Of the 8 vendors 7 have achieved built on NetSuite partner status, the new certification program for NetSuite partners. These are like a little who is who in the HCM field - Ascentis, CloudPay, NOVAtime,Silkroad and TribeHR. Only the venerable Meta4 was missing, but pretty sure they will be certified before not too long. It looks like the integration burden falls on Dell's Boomi, which was also certified for built on NetSuite. Definitively NetSuite shows some weight in the enterprise software space with getting that many vendors on board in time for SuiteWorld.
And then there were four more press releases of successful customer adoption to NetSuite, impressive that they are all outside of the US, so the international expansion of NetSuite seems to be well under way. These are Rags2Riches from the Philippines a market place for women selling products and services. Guzman y Gomes from Australia, a dining chain. Hairhouse Warehouse, also from Australia a hair and beauty retailer. And lastly online game developer Zattika from the UK.
What's SAP NewsThe big news was the general availability of the Business Suite on Hana for the majority of core and industry extensions. No question this is a major engineering feat, for which SAP deserves credit. Unfortunately it was not totally clear what was still missing. It would be good to also understand what specifically the smarter business models are, that the press release refers to. One benefit mentioned is that with the move to the Hana Platform, applications get access to social media, namely SAP Jam. Needless to say this all runs on the new Hana Enterprise Cloud, already announced last week.
And then SAP announced that basically Hana Cloud Platform is the new unified platform for all businesses trying to leverage and extend existing investments to the cloud. This means you can use your business suite license and run it on Hana Enterprise Cloud, but you can also stay on premise and extend your Business Suite with the new (or old) cloud applications, that will or are running on Hana Cloud Platform (already). So for the cloud applications on the People side this is more global support for Employee Central, the new SuccessFactors Onboarding and Successfactors Learning. On the Customer side there was the claim that SAP has been doubling customers in this segment for the last 5 quarters - which gives another interesting aspect to the whole CRM market size controversy. Today the Money side wasn't absent - with additional country support and integration with 3rd party payment providers and banks. The Travel solution equally got extended as well as the expense solution. And even ByDesign, the product that was very quiet this Sapphire - was extended. And of course Ariba did not stood still, as didn't its Business Network.
And then there was also BusinessOne - with new functionality in version 9.0, country support and additional features for BusinessOne on Hana - remember this was the first product on Hana. Glad that SAP mentioned in the first lines of the press release, that this is a product on the Microsoft technology stack, running Microsoft SQL server.
The most significant release of real news was actually around SAP Fiori (Italian for Flowers). Its a set of mobile / tablet designed apps, delivered in HTML5 using SAPUI5 (just GA this weekend), SAP Gateway and add-ons to the Business Suite. Another attempt to address the combination of self service and mobile needs - much improved. Checkout the nice launch website here and Bjoern Gerke's blog.
The Hagemann-Snabe deliveryThe keynote delivery of Hagemann-Snabe was solid, a routine job well done by Jim. I felt the storytelling abilities have improved a lot - and were also challenged by the lengthy intro, talking about tigers, Darwin and IT evolution. McDermott just said - slow kills companies. Hagemann-Snabe called it in nature you are either at the table eating, or you are on the table. If you wondered on the multicultural differences between the US and Europe - here you have a prime time exhibit.
But a lot of time was burnt with the lecture on darwinism and then a lengthy but entertaining interview with the CEO of McLaren (sponsored by SAP). The oddity on Hana continued with Hagemann-Snabe asking, Dennis, what Hana meant for him... and sadly he even said at the end - here you hear it. I really would have liked to hear from Hagemann-Snabe what his view and vision is for Hana. And ok it came later... it's the one platform SAP plans to reinvent themselves on. Sadly with McLaren there was also only the only software demo of the whole keynote (!), nicely done by Fred Sansom, but the Hana UI's just look subpar to me. With 6.5B data pieces from a McLaren car during a race, I expect a much richer, interactive UI than a checklist... Glad to see an attempt to predictive was made:
Then the keynote went on to reveal that most of Business Suite and Verticals are now on Hana, with 100 beta customers - but why not see a demo and why not speak to any of them? Hagemann-Snabe made clear that Hana is the Innovation platform for SAP going forward, but again where were the customers? An impressive statement was made in regards of SAP reducing TCO by 30% by moving its CRM instance to Hana... I very much look forward to learn more about this.
And then we had a customer panel with Pepsi, Timken and Nestle - all choosing cloud solutions - with the former using Successfactors and the latter the Customer (former Sales on demand) products. Hagemann-Snabe then went over last weeks Hana Enterprise Cloud deployment options and rounded it up with yesterdays MDM cloud offering (on Amazon AWS).
The Goldberg delivery
Goldberg kicked off with giving a status update back to the audience on promises he made a year ago - nice way to close the loop and create trust - key stats were NetSuite customers made 73B in total revenue, total downtime for last year was 105 minutes, almost 20% of Netsuite revenue goes into R&D, approx. 50M, 54 countries are supported for tax and local compliance, 19 languages are supported. Impressive.
He then brought the CIO of Qualcomm on stage, talking about the international roll out of NetSuite for the company, and the customer was very positive about the product.
Goldberg also made a stab in regards of Workday and their recent announcements around customization. Said he can't understand how you could wait for 7 years with that. And that NetSuite was build form the ground up to support customization.
It was positive that Goldberg right away acknowledged the NetSuite UI challenges, starting with mobile, and there with the mandatory iPhone demo. And while the iPhone UI looked very good, I was surprised that it's only now that NetSuite users can enter data on mobile devices. And the iPhone is the start - you will have to wait - with no roadmap - for other popular platforms. Next was the intro of sticky notes - a good way to enhance collaboration with enterprise applications, as well as adding data. And I was surprised that NetSuite is now (2012!) introducing a drag and drop mechanism. And while these UI efforts are valiant, they cannot hide the fact, that the NetSuite UI has served its time and needs a redesign from ground up. I had not seen the product in years and was surprised it still looked... the same.
Next it was nice to see Goldberg demoing the NetSuite IDE, not many development leaders would be comfortable to demo that much down in the details. Breakpoints are certainly a very good addition to help troubleshoot NetSuite code.
And then it was partner time, with TribeHR showing HCM functionality, that was iFrame-like plugged into the NetSuite canvas. It worked well but mixing up the user interface of two enterprise applications does not make for the best user interaction. As part of the suite commerce product Goldberg showed capabilities acquired with LightCMS. It looked like the commerce product is on a more modern architecture than the NetSuite product.
The demo then concluded with a skid of Goldberg buying wine in Napa from a winery running a partner product, eVinery, with follow up purchases from at home. Looked to me like a demo on Microsoft's Metro UI. Then he ordered in for more wine from at home with his wife. Not sure why she was on stage, sure a nice lady, but what does it have to do with NetSuite. And Goldberg was brainstorming out the hilarious descriptions of wine. Entertaining, high involvment (wine!) - but not even mentioned the products involved. The end of the skid was the wine delivery by a familiar UPS guy, Zach Nelson in UPS uniform.
2 puzzling UI questionsWith both SAP and NetSuite struggling with older UIs and usability complains, I am at a loss on two keynote content decisions: Why did Goldberg only show the self service OpenAir UI at the end? He should have lead with that. And why did Hagemann-Snabe not say a word about Fiori? Why not demo the new HTML5 UI - even if it's only self service like scope? A lot of SAP and NetSuite users interact only through self service-ironic, that both vendors did not show their best UI improvement of the day loudly and proudly.
The marketing battleThis day went down as a tie. Moving the Suite to Hana is more heavy lifting unveiled than what we saw from NetSuite. But Goldberg showed existing product - Hagemann-Snabe only one demo. And while Goldberg's keynote was certainly more entertaining, it was also a little bit too quirky. More demos and customer will help NetSuite next time around.
MyPOVSolid performance by SAP, but not sure why so much educational content on tigers, elephants and even dinosaurs. Would have been good if Hagemann-Snabe had shown Fiori, I am sure the audience would have loved it. Very hands on session by Goldberg, should have lead with OpenAir UI and gained much more credibility on addressing the NetSuite UI challenges.
SAP announced great things and didn't show them in the keynote, NetSuite did good things and showed them. Look forward to Day 3.
|Storify from Day 2 Keynote - you can find it here|