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DisrupTV Episode 120 - 3 x 3 Key Takeaways on Engagement, Learning and Enterprise Acceleration

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Last Friday we had the opportunity to record the 120th episode of DisrupTV, and with we I mean usual host Vala Afshar, and yours truly stepping in for the always on the move Ray R Wang. The show focus was on the Future of Work / HCM research area, so I doubled as moderator and as guest.
Here are the top 3 takeaways from the guests of episode #120 (it can be found here).
 

Radical Transparency fosters Engagement with David Ossip

Ceridian Chairman and CEO David Ossip shared the transformation journey that the vendor has undergone – from a managed payroll provider using mainframe technology to a cloud-based SaaS vendor. Here are the top 3 takeaways:

Culture needs a Purpose. Ossip shared that culture cannot be an empty shell, needs to be tangible, needs to be lived. He shared two examples on how obviously wrong and suboptimal processes got changed, as part of a regular location visit schedule. The purpose is key to galvanize a cross-generational workforce on what ultimately matters, customer success. 

DisrupTV Constellation Research Vala Afshar Holger Mueller Ceridian David Ossip
David Ossip talks transformation on DisruptTV


Engagement Surveys are key. The tool of choice to understand where an enterprise stands are engagement surveys. Ceridian runs them twice a year and shares the top results openly across the employee base. Each topic in the Top 5 gets worked on with an action plan, often a project and more to drive to closure… sharing results as they are, with no sugar coating is what 21st century employees (who provided the data in the first place) deserve.

Radical Transparency and Honest Action are nonnegotiable. Ceridian shares the engagement scores openly across managers. It is better for people and the enterprise to understand if a manager is better an individual contributor – sooner than later. But work and improvement need to happen constantly to keep employs engaged and make the trust their leadership.


Learning goes Micro with Carol Leaman


Next up was Carol Leaman, CEO of Axonify, a Learning vendor that focusses on micro-learning. Carol shared her startup’s days and how she turned down a lucrative offer from Google and why (watch the recording for that).

Learning needs to be engaging. Learning systems have way too long lived in the past, often with the same handbooks handed out to existing and new employees for multiple decades. Smartphones are the new platform to provided engaging learning experiences, with substantial successes – both from a pure learning as well as a commercial perspective.

 
DisrupTV Constellation Research Vala Afshar Holger Mueller Axonify Carol Leaman
Laughs all around with Carol, Vala & Holger


Micro Learning suites all generations in the workforce. All generations in the workforce are tired to attend even more tired classroom-based trainings. Content needs to be diced and sliced based on relevance and interest. Small learning content portions need to be able to be consumed at a minute’s notice, when time and / or relevance present themselves. Micro Learning is the key approach to slice, dice and serve learning content to the workforce.

Gamification remains a powerful motivator. While the heydays of gamification are certainly over, gamification still remains a powerful tool to motivate people to do work, including taking training course and consume training content. What makes gamification so powerful is that it works across the generational boundaries – from iGen to the Baby Boomers.
 

CxOs need to understand Enterprise Acceleration with Holger Mueller

Last but not least it was yours truly turn to talk about recent research, Enterprise Acceleration. Here are the key takeaways:

Financial Indices prove Acceleration. The financial indices are a neutral measurement on how fast a public market in a country move. It is highly representative for the state of an economy since almost all large companies are publicly traded. For instance, the age of a company becoming part of the S&P 500 in 2004 was 25 years… in 2013 it was... 10 years. Indices in London, Frankfurt, Paris and Tokyo show a same picture, in distinct colors. So, enterprises need to find ways to accelerate, and that’s what Enterprise Acceleration is all about. 

DisrupTV Constellation Research Vala Afshar Holger Mueller
If you wonder why Vala looks sceptical - watch the show!


Compliance, Payroll and 9 Acceleration Strategies. Before CxOs can tackle the 9 enterprise acceleration strategies (watch the show for all of them), they need to take care of the basics – being compliance and a well working payroll. These are key preparatory steps, as any enterprise transformation project stops when compliance penalties come in or people are not being paid correctly.
Let’s highlight one of the nine strategies here, Transboarding. Created as a combination of Transferring and Onboarding it asks CxOs to pay more attention to the productivity of employees that are transferring and to use modern learning tools across the whole transfer, starting quarters before the transfer happens, and ending only quarters later.

People Leader need to be technology savvy. Gone are the days when technology decisions affecting people were able to be delegated to the CIO and other technical roles, and excellent question from Vala. This does not mean that CHROs have to become technologists, surrounding themselves with the right team is more important than ever… and basic technology concepts like BigData and Machine Learning / AI need to be understood well enough to grasp their implication on the enterprise and / or on people.


Curious who is next on DisrupTV every Friday at 11 AM PST? Check here.

News Analysis - Adobe, Microsoft and SAP announce the Open Data Initiative to empower a new generation of customer experiences - Good idea, good start...

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Today at Microsoft’s Ignite conference in Orlando, Microsoft CEO Satya Nadella was joined by Adobe CEO Shantanu Narayan and SAP CEO Bill McDermott to announce the Open Data Initiative across the three vendors. Important enough to merit a traditional commented press release – you can find the original here. As this was a well concerted launch with three CEOs present – each vendor has put up their microsite for this, I recommend to visit them to catch the slightly different POVs of the vendors…- Adobe is here, Microsoft is here and SAP is here.



ORLANDO, Fla. — Sept. 24, 2018 — On Monday, the CEOs of Adobe (Nasdaq: ADBE), Microsoft (Nasdaq: MSFT) and SAP (NYSE: SAP) introduced the Open Data Initiative at the Microsoft Ignite conference. Together, the three longstanding partners are reimagining customer experience management (CXM) by empowering companies to derive more value from their data and deliver world-class customer experiences in real-time.
MyPOV – Good intro – but why limit to customer experience management – why not even call this CRM? Yes, Adobe has most assets here and SAP is lost on naming its C4/HANA product a bit. but make no mistake – this is about single truth of the customer – for B2B and B2C enterprises… the vendors will come around and fix this to CRM… and of course no coincidence this was announced 24 or so hours before Salesforce’s Dreamforce kicks off in San Francisco.


In today’s world, data is a company’s most valuable asset. However, many businesses struggle to attain a complete view of their customer interactions and operations, because they are unable to connect information trapped in internal silos. At the same time, important customer information also resides in external silos with intermediary services and third-party providers, limiting a company’s ability to create the right connections, garner intelligence and ultimately extract more value from its own data in real time to better serve customers.
MyPOV – This has been the 20+ year promise of every CRM vendor – always desired – seldom achieved. But vendors traditionally only have taken an exclusive to their offering’s stance – which of course does not reflect enterprise reality, which spans multiple vendors… and left it to the enterprise to implement this use case.


The Adobe, Microsoft and SAP CEOs on stage at Microsoft Ignite Source: Microsoft Ignite Webcast Holger Mueller
The Adobe, Microsoft and SAP CEOs on stage at Microsoft Ignite
Source: Microsoft Ignite Webcast


Companies around the world use software and services from Adobe, Microsoft and SAP to run product development, operations, finances, marketing, sales, human resources and more. Today, Adobe, Microsoft and SAP are joining forces to empower their mutual customers with the Open Data Initiative, which is a common approach and set of resources for customers based on three guiding principles:
MyPOV – So why limit it to customer data? Ok to start there…


  • Every organization owns and maintains complete, direct control of all their data.
  • Customers can enable AI-driven business processes to derive insights and intelligence from unified behavioral and operational data.
  • A broad partner ecosystem should be able to easily leverage an open and extensible data model to extend the solution.
MyPOV – Good principles. Of course, #1 works good for intra-enterprise – but less good for inter-enterprise when delivering complex customer value scenarios…  especially in the era of DaaS the three partners need to spend a little more thought cycles on this. #2 is likely going to become an Azure money machine… as Microsoft is the hosting IaaS – Azure Data Lake likely going to be the repository…  subscriptions will go there… And #3 will work when the three can show traction… The data pool alone will be attraction enough for 3rd party ISVs. The latter is good news for enterprises.


Based on these principles, the core focus of the Open Data Initiative is to eliminate data silos and enable a single view of the customer, helping companies to better govern their data and support privacy and security initiatives. With the ability to better connect data across an organization, companies can more easily use AI and advanced analytics for real-time insights, “hydrate” business applications with critical data to make them more effective and deliver a new category of AI-powered services for customers.
MyPOV – Enterprises need a central repository for customer data… used to be called the Customer Data Hub, the single source of truth etc… let’s see if the three can pull this off.


“Adobe, Microsoft and SAP are partnering to reimagine the customer experience management category,” said Shantanu Narayen, CEO, Adobe. “Together we will give enterprises the ability to harness and action massive volumes of customer data to deliver personalized, real-time customer experiences at scale.”
MyPOV – Well said -for Adobe’s perspective – which is mostly B2C.


“Together with Adobe and SAP we are taking a first, critical step to helping companies achieve a level of customer and business understanding that has never before been possible,” said Satya Nadella, CEO of Microsoft. “Organizations everywhere have a massive opportunity to build AI-powered digital feedback loops for predictive power, automated workflows and, ultimately, improved business outcomes.”
MyPOV – Well said as well – but more future oriented… very little business insight can be derived from looping customer data together – business data needs to follow – and that’s where the announcement has stopped… but also things get very hard.


“Microsoft, Adobe and SAP understand the customer experience is no longer a sales management conversation,” said Bill McDermott, CEO of SAP. “CEOs are breaking down the silos of the status quo, so they can get all people inside their companies focused on serving people outside their companies. With the Open Data Initiative, we will help businesses run with a true single view of the customer.”
MyPOV – Good job by McDermott – with a partner encompassing quite… nice to see the people perspective… and good to see customer (and not consumer!).


To deliver on the Open Data Initiative, the three partners are enhancing interoperability and data exchange between their applications and platforms — Adobe Experience Cloud and Adobe Experience Platform, Microsoft Dynamics 365, SAP C/4HANA and S/4HANA — through a common data model. The data model will provide for the use of a common data lake service on Microsoft Azure. This unified data store will allow customers their choice of development tools and applications to build and deploy services.
MyPOV – This clarifies some of the key platform… Azure and Azure Data Lake. No surprise – toolset remains open – may it be Adobe’s (likely the weakest for developers, strongest for no coders), and Microsoft Dev Tools and SAP Cloud Platform.


Open Data Initiative Adobe Microsoft SAP Holger Mueller
A first Marketecture of the Open Data Initiative
Source: Microsoft Ignite Webcast


With the Open Data Initiative, companies will be able to:
  • Unlock and harmonize siloed data to create new value
  • Bi-directionally move transactional, operational, customer or IoT data to and from the common data lake based on their preference or needs
  • Create data-powered digital feedback loops for greater business impact, while also helping to enable their security and privacy compliance initiatives
  • Build and adopt intelligent applications that natively understand data, relationships and metadata spanning multiple services from Adobe, SAP, Microsoft and their partners
MyPOV – Kudos to define the use cases. Channels the thinking and gives a sense of direction to this broad initiative.


Technology leaders at top retail and consumer products companies, such as The Coca-Cola Company, Unilever and Walmart, have expressed support and excitement about the Open Data Initiative.“This initiative from Adobe, Microsoft and SAP is an important and strategic development for the Coca-Cola System,” said Barry Simpson, chief information officer at the Coca-Cola Company. “Our digital growth plans centered around our customers are fueled by these platforms and open standards. A more unified approach to the management and control of our data strengthens our ability to support our growth agenda and our ability to satisfy security, privacy and GDPR-compliance requirements. The industry needs to follow these leaders.”“Every day, 2.5 billion people use a Unilever product in over 190 countries around the world,” said Jane Moran, CIO, Unilever. “The Open Data Initiative from Adobe, Microsoft and SAP is an important undertaking that will help us reimagine customer experience management by bringing together data across our entire organization to build more direct, meaningful relationships with consumers in real time.”“We’re excited about the Open Data Initiative and the value it will unlock for Walmart,” said Clay Johnson, executive vice president and enterprise chief information officer, Walmart Inc. “With greater ability to connect and harness the power of our data, we can enhance the associate experience and create entirely new ways to serve our customers online and in our stores.”
MyPOV – Always good to back up an announcement with customer quotes, and these are all large and respected enterprises.


Overall MyPOV

So why only now? Certainly, the Salesforce success has gone noticed and competitors have noticed they need to partner more and better to make up for this. More importantly solving the heterogeneous customer system landscape is something that can be tackled by multiple vendors only – and is a massive pain point for enterprises.


What is different now? Three things have changed:
  • The  cloud is a better platform: Customer processes are dynamic, and the cloud offers the flexible platform… and customer processes need automation (AI, Chatbots etc.) and that is better (or only) provided effectively in the cloud.
     
  • SaaS vendors with no IaaS: Adobe and SAP have no longer a horse in the IaaS race – and partner with IaaS providers – this allows in this case Microsoft to become the underlying platform for this new offering… and Adobe and SAP are partners already.
     
  • Multi-vendor interfaces become real: The cloud / PaaS and DaaS (LinkedIn wasn’t mentioned – but I am sure is part of the conversation) makes n:m vendor interfaces possible… replacing the 1:1 partnerships of the past. Those 1:1 partnerships still left customers with the dreaded spaghetti integration scenario….

So now it comes back to the three vendors to make this announcement tangible beyond the three CEOs presenting it: Technical details, commercial details and roadmap need to be defined – sooner than later. Enterprises need to make customer value chain decisions every day in order to stay competitive – the sooner they know what a vendor – or here a vendor group – can do – the better they can make decisions. So much potential is there that has not been mention… the tools that can built next gen Apps on the data. The scope expansion to beyond customer. The upside of LinkedIn in the mix. Etc. etc.


But for now, congrats to Adobe, Microsoft and SAP to team up on a difficult topic in an innovative way – now they “only” have to make it work …




See below a collection of key tweets from the announcing keynote from September 24th 2018. 


More recent Microsoft blogs:
  • Musings - Why splitting Windows is Nadella's first major mistake - read here
  • Progress Report - Microsoft wants to enable the digital feedback loop with its Biz Apps and more - read here
  • News Analysis - Microsoft and SAP join forces to give customers a trusted path to digital transformation in the cloud - read here
  • Top Event Questions [Anwered] - Microsoft Ignite and Envision 2017 - read here
  • Event Report - Microsoft Ignite / Envision 2017 - Broad push - few highlights - read here
  • Event Report - July 2017 Microsoft London AI Event - read here

And some recent SAP blogs:
  • Event Report - SAP Ariba Live 2018 - Las Vegas - Sustainability and UX - read here
  • Event Takeaways - SAP at MWC 2018 - read here
  • Market Move - SAP acquires Callidus - More Sales Effectiveness in the Back Office of the Front Office - read here
  • News Analysis - SAP HCM On-Premise Option for SAP S/4HANA - or is this S/4HCM? - read here
  • News Analysis - Microsoft and SAP join forces to give customers a trusted path to digital transformation in the cloud - read here
  • Event Report - SAP Hybris Live 2017 Barcelona - YaaS morphs and more agility ahead - read here
  • News Analyses Roundup - SAP's September Tech Announcements - SAP doubles down on technology - read here
  • Event Report - SAP SuccessFactors SuccessConnect - New Leadership - Old Challenges - read here

Progress Report - ADP Analyst Day 2018 - Things are looking up

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We had the opportunity to attend ADP’s yearly analyst summit, held on September 20th 2018 at its innovation lab in Chelsea / New York City. With over 20 analysts, the event was well attended.



Prefer to watch – here is my event video … (if the video doesn’t’ show up – check here)




Here is the 1 slide condensation (if the slide doesn’t show up, check here):


Want to read on? Here you go:

ADP is in an improving position when it comes to breadth, depth and strength of its products. And the analyst meeting reflected this well, too, with a clear structure of five evolutionary trends for the future of work, and then following up with ADP products and software demos. That’s a great format for an analyst meeting.



Liffion Screen The AI powered assistant that leads users to insights in ADP Data Cloud - Holger Mueller Constellation Research ADP
A HR Core / Liffion Screen


PI and Liffion on track. ADP is at the very end of the development process of its new HR Core solution (Liffion) and Payroll (Pi). This means validation with the first customers in regards of applicabilty to day to day use, validation of best practices and payroll accuracy. The DNA of both products I s exciting and healthy, a team oriented approach to HR Core and a rule based approach to payroll.



The AI powered assistant that leads users to insights in ADP Data Cloud - Holger Mueller Constellation Research ADP
The AI powered assistant that leads users to insights in ADP Data Cloud


MiniApps and Data Cloud AI Assistant. One of the most exciting products in the industry from my point of view are the Mini Apps. Enterprise software has been plagued from the shortcomings of its traditional monolithic DNA, rooted in technical shortcomings, that are by now historic. Good to see ADP tackling the need for differentiation and better fit with the MiniApps, allowing them to be created in a low code production mode. If successful this can change the way how people are being managed and served in enterprises. Equally good to see is the AI Assistant that ADP plans to provide to ADP Data Cloud. Now that there is a lot of data in ADP Data Cloud, users want to find more efficient access and an AI powered assistant can uncover that. Both MiniApps and the AI assistant are in early phases and need real world customer validation.


Celergo strengthens BPaaS. With Celergo acquired, ADP can now server 140+ countries for its global customers. But spokespeople re-assured the influencers present that it was less about country coverage, but about gaining access to the know-how of Celergo on how to manage customer services and how to partner successfully with the relevant partners to run global payroll operations successfully.




MyPOV

ADP product portfolio gets stronger and stronger, now it has to prove itself in practice. Following the roll out waves in 2019 will be key for prospects and customers. The ability to have payroll managers configure, change and operate a payroll are innovative, at least of the scale that ADP needs to support. The team approach of Liffion is equally key, as teams are the org units that make and break enterprise success. And for that, very little has been done in the past to support teams and their leaders.


On the concern side, ADP cannot rest on its laurels… It showed conversational UI prototypes in the last two year, but not this year. The global cloud connect product was missing in action as well, though I was re-assured it is continued and on track. And ADP will have to show more of its innovation work, that ironically is happening at the labs where the analyst meeting took place.


This was the best ADP analyst summit I had the opportunity to attend (total of 5). The product focus, first introduced in 2017 remained, and the gestalt of the presentation was consistent and backed up with proofs in software. Customer proof points would be the icing on the cake. Always room for improvement.



Want to learn more? Checkout the Twitter Moment below  (if it doesn’t show up – check here).




More on ADP:
  • Event Report - ADP Meeting of the Minds 2018 - Stay the course - read here
  • Event Report - ADP ReThink - Great event and a lot in the making  - read here
  • Market Move - ADP Acquires WorkMarket to Further Extend Human Capital Management to Contingent Workers [...] - The Gig Economy looms on the Future of Work- read here
  • Progress Report - ADP pushes on - 2018 will be BIG - read here
  • Event Report - ADP MOTM - Time get customers on board!? Read here
  • Event Report – ADP ReThink – Great event and great value coming for customers  - read here
  • News Analysis - ADP Acquires The Marcus Buckingham Company to Expand Talent Portfolio - read here
  • Progress Report - ADP Analyst Day 2016 - ADP has turned around Vantage HCM - read here
  • Event Report - Event Report - ADP MOTM - ADP delivers: New UI, Benchmarks, Market Place & More - read here
  • News Analysis - Workday and ADP partner to Deliver a Seamless Customer Experience for Global Payroll - read here
  • Progress Report - ADP Analyst Day - ADP executes, kills (most) ghosts from the past - read here
  • Event Report - ADP Meeting of the Minds - It’s all coming together for ADP in 2015 - product wise - read here
  • First Take - ADP Meeting of the Minds - Day #1 Keynote - read here
  • Progress Report - ADP shows great vision, delivers product innovation - now it needs adoption - read here
  • Site Visit - ADP's new innovation lab in Chelsea - read here
  • News Analysis - ADP announces Spin-Off plans for Dealer Services, sharpens ADP's focus on HCM - read here.
  • Event Report - ADP's Meeting of the Minds - ADP has made up its mind (almost) - customers not yet - read here.
  • First take - 3 Key Takeaways from ADP's Meeting of the Minds Conference Day 1 Keynote - read here.
  • ADP innovates with with verve and good timing – read here.

Find more coverage on the Constellation Research website here and checkout my magazine on Flipboard and my YouTube channel here.



Event Report - Salesforce Dreamforce 2018 - AI, Apple & Customer 360 - but where is the CRM thought leadership?

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We had the opportunity to attend Salesforce’s Dreamforce conference, held from September 25th till 28th in San Francisco. It was the usual ‘zoo’ of marketing spend and attendees all over San Francisco. Salesforce claimed over 170k in person attendees, at least on Tuesday it did not feel like that. But certainly, this is the yearly come together of the Salesforce ecosystem. 


Prefer to watch – here is my event video … (if the video doesn’t’ show up – check here)



Here is the 1 slide condensation (if the slide doesn’t show up, check here):




Want to read on? Here you go:

Salesforce and Apple partner. At first glance, enterprises love it when market leaders’ partner, especially when they are joint customers. With Salesforce committing to build iOS specific apps, taking advantage of iPhone features, moving closer to Swift – is a big favor to Apple. The concern for CIOs is – Salesforce is creating two classes of mobile users. The concern for developer is that Salesforce has sacrificed a key benefit of its Lightning platform – the develop once, deploy everywhere value proposition. That weighs hard on admins, single developers and small development shops. All for the value of a ritzy partnership announcement? Let’s hope that a similar announcement for the #1 OS – Android – is coming soon, supporting both mobile OS in an equal way. Let’s not forget the world runs on Android and that’s where Salesforce has the most growth potential. 



Apple and Salesforce partnership - Constellation Research Holger Mueller
Apple and Salesforce partnership


Customer 360 – never gets old. Quite a surprise, as Customer360 is a 20+ year old CRM promise, to enable CRM users to see all that matters to be successful. To some point gutsy by Salesforce, as the long-time customers in attendance at DreamForce rightfully may expect this to be their real modus operandi today. But Salesforce had to acquire MuleSoft for that… and we will see how much of a difference it will make. If Salesforce can make Customer 360 real – that will be a huge value for its install base. To do so, Salesforce needs to address some DNA changes in MuleSoft, which primarily served coders, but Salesforce needs support for the admins, which means low-code if not no-code. 



Salesforce Customer 360 - Holger Mueller Constellation Research
Salesforce Customer 360



Einstein AI. A cross platform (good – much better than the Apple announcement) conversational assistant is coming in 2019. Cross platform (Alexa, Google Assistant and Siri mentioned – Cortana notably but not surprisingly absent) support is important, the challenges to get the voice corpus for the dynamic customer and contact name space right – are massive. Will be interesting to see how this will work – the benefits to CRM users will be substantial. It also means that neural networks are the tool of choice, the analyst track talk by Robert Socher was all about neural networks (in contrast to last year, where neural networks where just one of many analytical algorithms…). But deployment, runtime, platforms and deep learning questions were all skirted in a Q&A. 



Einstein Voice - The most prominent member of the Einstein family at Dreamforce Holger Mueller Constellaton Rsearch
Einstein Voice - The most prominent member of the Einstein family at Dreamforce


AWS and Salesforce partner. 2 years ago, the key IaaS partner was AWS, now it was Google, now it’s back to show progress with AWS – making connections safe, using e.g. the AWS Call Center product (begs for questions) and more. This is where the real work is happening, as Salesforce is trying (still) to move of its old, Oracle based infrastructure, towards the public cloud for its core SalesCloud, ServiceCloud and all Apex based offerings.



AWS and Salesforce partnership - Holger Mueller Constellation Research
AWS and Salesforce partnership
Source: Salesforce Keynote


MyPOV

It was the usual mega event for Salesforce, it’s partners and its users. Attendees were optimistic and looking forward on innovation to come in 2019. Good to see the shift towards more neural network-based AI, which at the moment is clearly the AI technology of choice. Good to keep Einstein’s voice efforts cross platform. But details were not shared – where does Salesforce plan to build all these models, where does the data have to be, etc. Good to see what MuleSoft is ultimately about, pulling off Customer 360 – if Salesforce managed to implement this architecture (and get customer to pay for it) – it may justify the princely cost of MuleSoft. To be fair – that is little of concern for Salesforce users, who they want to see value coming form their vendor overall, across the product suite.

On the concern side, the logistical challenges for a conference are massive and Moscone being under construction does not help. The problem is, that the conference is getting too big and the format needs a refresh. That may also be the whole Trailhead concept from an exhibition theme, I am sure it was not left unnoticed by Salesforce marketeers. The Apple partnership is not balanced – Apple is the big winner, Salesforce a little and CIOs and developers loose, as mentioned above. It’s high time for Benioff and his team to show some customer empathy and use Salesforce on an Android device – for a few weeks. That will make sure Salesforce has eyes and ears on record for where likely the majority of its mobile users are. And no word on Salesforce re-platform efforts towards AWS (hence a lot of partner announcements) and Google (zilch…) – which is the real story on what keeps Salesforce developers busy. This was the opportunity to share an update, some kind of roadmap, but it did not happen…

But overall Dreamforce is an impressive event, customers are happy, partners a little less, as they keep draining their marketing budgets for the event – and seem to get less of a return year after year. Salesforce is better advised for partners to spend their precious marketing $s at their and other events – than at Dreamforce. The selected showcase customer concept in keynotes is very well executed, Salesforce leads with it across all events this year, beyond the keynotes, e.g. with bill boards all over San Francisco. The celebration of end users and admins as Trailblazer coupled with the Trailblazer Learning (kudos to Salesforce for calling it now what it is) community is one of the efforts in the industry. Salesforce now needs some compelling CRM thought leadership in the 21st century CRM best practices ensure its lead not only from a market share, but also a thought leadership perspective.


Want to learn more? Checkout the Twitter Moment below (if it doesn’t show up – check here).


More on Salesforce:

  • Event Report - Salesforce Dreamforce 2017 - My oh my - and serious platform news - read here
  • Event Report - Salesforce TrailheaDX - AI, Events and more - read here
  • Progress Report - Salesforce has a platform vision - 2017 it has to get real - read here
  • Event Report - Salesforce Dreamforce - It's not about Einstein - but the platform - read here
  • News Analysis - Salesforce selects AWS as preferred Public Cloud Infrastructure Provider - Good move - read here
  • Event Report - Salesforce Connections - Bringing together Builders and Studios for Marketing Success - read here
  • Event Scorecard - Salesforce Dreamforce 2015 - App, Analytics, IoT... - pre event thoughts assessment - read here
  • Event Report - Salesforce Dreamforce - Value for customers - but some concerns on direction - read here
  • News Analysis - Microsoft and Salesforce Strengthen Strategic Partnership at Dreamforce 2015 - Good for joint customers - read here
  • News Analysis - Salesforce Unveils Breakthrough Salesforce IoT Cloud, Powered by Salesforce Thunder - First dips into IoT - read here
  • News Analysis - Salesforce Unveils the Next Wave of Salesforce Analytics Cloud—Delivering Actionable Insights Across the Customer Success Platform - Glass half full - and half empty! Read / watch here
  • Event Preview - What I would like Salesforce to address this Dreamforce 2015 - read / watch here
  • News Analysis - Salesforce Announces Salesforce App Cloud - A Unified Platform for Building Connected  Apps, Fast - It’s all coming together, across the clouds - read here
  • News Analysis - alesforce Delivers Salesforce1 Lightning Components and App Builder […] - More productivity for Admins and Developers - read here
  • News Analysis - News Analysis - Salesforce Launches Salesforce Shield - More PaaS capabilities coming to Salesforce1 Platform - read here
  • News Analysis - Salesforce Transforms Big Data Into Customer Success with the Salesforce Analytics Cloud - Read here
  • News Analysis - Market Move - Salesforce (re) enters HCM - will it rypple the market this time? - Read here
  • Event Report - Salesforce Dreamforce - A Customer Succes Platform, Analytics and Lightning - but really Salesforce is re-platforming - read here
  • Constellation Research Summary of Salesforce Dreamforce 2014 - read here
  • Research Summary - An in depth look at Salesforce1 - Better packaging or new offerng? Read here.
  • Dreamforce 2013 Platform Takeaways - All about the mobile platform - or more? Read here
  • Platform ecosystems are hard - Salesforce grows it - FinancialForce shrinks it - read here.
  • Our take on Salesforce.com Identity Connect - from three angles - Identity, CRM and PaaS - read here.
  • Takeaways from the Salesforce and Workday Strategic Partnership - read here.
  • Act II - The Cloud changes everything - Oracle and Salesforce.com - read here.
  • How many Pivots make a Pirouette? Salesforce's last Pivot - read here.

Find more coverage on the Constellation Research website here and checkout my magazine on Flipboard and my YouTube channel here.



Event Report - SAP TechEd 2018 - Las Vegas -

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We had the opportunity to attend SAP’s developer conference TechED in Las Vegas, held from October 8th till 12th 2018 at the Venetian Conference center. Attendance was not officially disclosed, but from other events held at the same location I’d peg it at 3k+. 



Prefer to watch – here is my event video … (if the video doesn’t’ show up – check here




Here is the 1 slide condensation (if the slide doesn’t show up, check here): 





Want to read on? Here you go:

ABAP GA in SAP CP– For the longest time SAP has not supported its largest developer community, the ABAP developers. SAP started to correct course a year ago and has now delivered the first support for ABAP in CP. Spontaneous applause from the audience, as this is clearly a win for developers, CxOs and SAP. The most important thing now is to get code assets built in ABAP available on SAP CP, on the supported public IaaS, as enterprises have built millions of lines of code in ABAP. The good news to give CxOs some confidence – SAP has built even more ABAP internally and it looking as well at this re-use and migration challenge.

SAP enters FaaS – With the SAP ambition to fully support ‘Build’ scenarios with SAP CP, it has to support as well platform innovations like Function as a Service (FaaS). Beyond that, SAP needs that for its own SaaS ambitions as well. NextGen Apps in the IoT space are unthinkable without FaaS support. SAP will have to figure out its cross-IaaS support for the new offering, stay tuned. For enterprises this is a welcome development and its key to keep an eye on the topic. Enterprises requiring FaaS for their next gen apps in the SAP ecosystem should validate in test cases / in the lab.

Gardener is a double proof point – Open Source and Containers – Similar to its younger sibling FaaS, containers are how next gen apps are being built. Crucial to build modern next gen Apps, both from a Build and an Extension perspective. And given containers are a little longer around, SAP has already solved the multi-cloud / multi-IaaS challenge that it has with its cloud deployments… enters Gardener, an open source project for cross cloud management of Kubernetes…. SAP doing open source was very new 3-4 years ago, now almost a normalcy, but key for SAP to remain competitive and another proof point how open source has won. For CxOs this means that SAP CP cross IaaS next gen apps are becoming tangible and something to try in the labs to validate.

MyPOV

SAP is making substantial progress with SAP CP. With the commitment of getting the “5 sisters” (Ariba, Concur, Fieldglass, Hybris and SuccessFactors) platformed on SAP CP there is a much clearer platform strategy going forward. SAP has bet on CloudFoundry and CloudFoundry has won the PaaS market (for now). At the same time Kubernetes is for the first time giving CxOs cross IaaS portability and it’s good to see SAP supporting that with Gardener. FaaS is early days in general, especially for cross IaaS FaaS, where the IaaS vendors all try to create lock-in. But CxOs don’t want lock-in – neither does SAP – so SAP has an important role to play and may have to use its muscle to build a cross IaaS FaaS standard (dangling all the on-premise load that SAP commands will make all top 3 IaaS vendors pay attention). For CxOs this means SAP CP has delivered another proof point to be the PaaS of choice when building net gen Apps in the SAP ecosystem.

On the concern side, SAP needs to deliver more proof points of customers building their next gen Apps. European IoT startup Kaiserwetter is a great story but getting over-used. It’s a chicken and egg problem – SAP needs to build the capabilities, enterprises need to validate them and build on them. Progress and roadmaps by the “5 Sisters” as well as S/4HANA on using SAP CP will be key to be published soon, giving CxOs the confidence to be able to steer their enterprise in the keel water of the SAP super tanker… always a good place to be for an enterprise: Use products, especially platforms – the same way as the platform vendor does. And then there is the long-term lack of native support for BigData / Hadoop in SAP CP / SAP overall. With the Cloudera / Hortonworks merger, this convo is getting even easier, as effectively there are only two vendors left (MapR is the other one). SAP needs to overcome the in memory / HANA credo by its prominent founder for the sake of customer easy to build next gen Applications.

Overall good progress by SAP. Observers need to keep in mind this was the first of three SAP TechEds happening in short succession. Both board member Bernd Leukert and SAP CTO Bjoern Goehrke re-assured me that SAP has more platforms news in store… so expectations for Barcelona (next week, October 22nd to 25th) are up. Expect platform news there. Bangalore usually has developer news being unveiled…


Checkout some more SAP PaaS releated assets:
  • Find the Constellation Shortlist for PaaS here
  • Recording of a conversation I had with SAP CTO Bjoern Goehrke see here
  • Offering Overview - SAP Cloud Platform - A new standard for a SaaS vendor's PaaS - see here


And some recent SAP blogs:

  • News Analysis - Adobe, Microsoft and SAP announce the Open Data Initiative to empower a new generation of customer experiences - Good idea, good start...  - read here
  • Event Report - SAP Ariba Live 2018 - Las Vegas - Sustainability and UX - read here
  • Event Takeaways - SAP at MWC 2018 - read here
  • Market Move - SAP acquires Callidus - More Sales Effectiveness in the Back Office of the Front Office - read here
  • News Analysis - SAP HCM On-Premise Option for SAP S/4HANA - or is this S/4HCM? - read here
  • News Analysis - Microsoft and SAP join forces to give customers a trusted path to digital transformation in the cloud - read here
  • Event Report - SAP Hybris Live 2017 Barcelona - YaaS morphs and more agility ahead - read here
  • News Analyses Roundup - SAP's September Tech Announcements - SAP doubles down on technology - read here
  • Event Report - SAP SuccessFactors SuccessConnect - New Leadership - Old Challenges - read here


Want to learn more? Checkout the Twitter Moment below (if it doesn’t show up – check here).

Find more coverage on the Constellation Research website here and checkout my magazine on Flipboard and my YouTube channel here.

Market Move - IBM buys RedHat - A bold move for hybrid cloud and PaaS

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On Sunday afternoon, October 28th 2018, IBM reported that it has reached a definitive agreement to buy all issued and outstanding common shares of Red Hat for $190.00 per share, which values the acquisition at roughly $34B. That will make it the 4th largest technology acquisition in history (trailing Dell buying EMC by an order of magnitude and close to the Qualcomm acquisition of NXP ($38B) and Avago’s acquisition of Broadcom ($37B). It’s the largest software only acquisition in software history.  
The press release can be found here, it is too long to dissect completely in our customary style, so let’s look at the key news bits:
- Most significant tech acquisition of 2018 will unlock true value of cloud for business

MyPOV – Agreed, easily so far the largest acquisition of the year.

- IBM and Red Hat to provide open approach to cloud, featuring unprecedented security and portability across multiple clouds

MyPOV – Can anyone spell Kubernetes? That’s the main platform for portability and both vendors know it and have their respective offerings between IBM Cloud Private and Red Hat Cloud Platform supporting Kubernetes. Both vendors also have OpenStack assets, but that’s a market segment that is not doing well for all parties involved (vendors and enterprises) from an original promise and potential perspective..

- Deal accelerates IBM's high-value business model, making IBM the #1 hybrid cloud provider in an emerging $1 trillion growth market

MyPOV – Certainly hybrid cloud is the next generation computing platform. But counting Linux related revenues is a stretch -so we need to look into more details (that IBM may not offer, at least has not offered them yet).

- Acquisition will be free cash flow and gross margin accreditive within 12 months, accelerate revenue growth and support a solid and growing dividend

MyPOV – Well, now we know why IBM has been unusually non-acquisitive for the last few years. It’s a much larger acquisition, actually the largest IBM has ever made and good to see that it will be not only cash flow, but also gross margin accreditive (as an aspiration).

- IBM to maintain Red Hat's open source innovation legacy, scaling its vast technology portfolio and empowering its widespread developer community

MyPOV – This is key for IBM to even come close at recovering the acquisition price. Given IBM’s positive track record with open source, this is a not an unrealistic outcome for IBM to achieve

- Red Hat to operate as a distinct unit within IBM's Hybrid Cloud team

MyPOV – Probably the most important immediate news fact. IBM will do good at not ‘breaking’ Red Hat, and starting as a separate unit is a good start. With Whitehurst reporting directly to Rometty, Red Hat will have a voice at the executive table. The challenge for Whitehurst will be to keep employees motivated, deliver on roadmap and try to keep negative “IBMization” effects away from Red Hat as much as possible. Keeping partners will be a key challenge in the first weeks.


Here is the 1 Slide summary:


Implications, Implications …

Let’s look at the implications that this acquisition has for the different constituents of the cloud market:

Implications for IBM customers

Likely no immediate impact for IBM customer and no immediate action items. IBM customers should start the conversation on what the largest acquisition in software history brings to them. What Red Hat assets and services can make IBM’s cloud offerings better? Actively plan for a ‘blue sky’ session with your team on what it maybe worth to influence on, what to do first and what later. CxOs should find Red Hat know-how in house, and if not available, through their peers and their executive team’s network, to establish potential benefits that are coming from the acquisition - always from their enterprises’ perspective.

Implications for Red Hat customers

While IBM is saying clearly that Red Hat will operate separately – as an IBM division, Red Hat customers need to make sure their enterprise can remain successful on Red Hat. As always with acquisitions the customers of the acquired party need to seek immediate re-assurance on important roadmap items, not only from Red Hat, but more importantly with IBM. Only when an acquirer knows where the porcelain is in the shelves, they can make a desired planned effort not to brake it. In the longer run, CxOs need to think of what benefits can be derived from the IBM ownership – think financial stability, reach, support and services. It’s different to be the 3B or so small battleship, then dealing with the same battleship as part of a large fleet of vessels. Understand the course, investment plans and new roadmaps asap.

Implications for partners

For software partners there is likely no immediate impact. For Red Hat services partners it will be key to seek reassurances that Red Hat will keep them around… the IBM consulting bench that can work in the Red Hat space is (with expected training) potentially 2-3 times larger than all the consultants in the RedHat ecosystem… For IBM service partners, consider the opportunity to add a Red Hat practice, before the joint offering brings in another services firm.

But the really tricky question is on the platform partner side. Red Hat has built a ‘Switzerland’ position vis a vis what are (or were?) IBM’s competitors, starting with AWS (see here) as well as Microsoft (see here) and Google (see here). If these vendors assume IBM is making the right bets – they will look for repeating similar acquisitions (e.g. Suse, Canonical etc.). Once that happens, we will see a resurgence of on premise server OS war. Not to forget that hardware partners like Cisco, Dell, HPE, Intel and Lenovo now have to factor in that the new Red Hat is also selling hardware (Power). This will mean a lot of lunches, dinners and events for partner managers to chart the strategies for their respective enterprises, and CxOs need to pay attention to how this unfolds.

Implications for competitors

On premise computing is seeing a resurgence, in short due to cloud skepticism, security, data residency and performance concerns. When even cloud ‘native’ vendors like AWS and Google are bolstering their on premises capabilities, then there is something going on. In fact, Constellation research shows that the next generation computing platform is a continuous computing platform that allows seamless workload portability for enterprises. It now comes back how much IBM competitors are willing to compete for the OS on-premises enterprise servers – or see IBM as the new ‘Switzerland’ of on premise OS. Key to watch for CxOs in the next months.

MyPOV

Just when the short uptake at IBM in terms of revenue growth started to stall again, IBM pulls out the largest acquisition of the year, and the largest in software history. If IBM manages to handle this right, it will spark investor confidence in the vendor, and longer term gives IBM the opportunity to give the vendor what it set our 30+ years ago: Own the on-premises server operating system – remember OS/2? Sometimes history gives you another chance.

On the concern side, Red Hat’s problem was that on-premises servers were shrinking. This is why the vendor made new bet, in the container platform and PaaS (with OpenShift). Some investments fizzled for a number of reasons that are not in Red Hat’s control (like e.g. OpenStack). But Red Hat executives were very clear that they have understood the underlying shrink / growth mechanics: The new bets need to make up and do more than what Red Hat loose in on premise revenues. Not an easy feat. With IBM as an owner, Red Hat gets more scale and a huge sales force (and services bench). Maybe funds for more bets. But for now, IBM first needs to clarify what is right for customer in the not so few areas of overlap between what IBM offers and what Red Hat offers. That this isn’t easy and does not have to go well – just look at the IBM CMS vs IBM’s acquisition of SoftLayer.

But overall congrats to Rometty and her team, a bold move for hybrid cloud and maybe even for PaaS. If IBM manages to keep the partnerships in place and let potential AWS / Microsoft / Google ambitions on owning the on-premises OS ease – this can be a very good move. If IBM can ever make the $34B back – is something I doubt at the moment. But it’s only a few hours – more coming in the next days- stay tuned.


More on Red Hat

  • Market Move - Red Hat snaps up CoreOS - The Kubernetes ecosystem heats up - read here
  • Event Report - Red Hat Summit 2017 - The New Kids on the Block are thriving
  • Red Hat makes multi-cloud real, Google makes multi-PaaS real - read here

More on IBM:
  • Event Report - IBM Think 2018 - IBM is back... - read here
  • Event Report - IBM World of Watson - IBM's bets its future on Watson - read here
  • Progress Report - IBM Alliances Insights - Deep Plans, now it is execution time - read here - read here
  • News Analysis - Workday, IBM Form Strategic Partnership on the IBM Cloud - The IaaS vendor race for SaaS load is on - read here
  • News Analysis - IBM Boosts Support to OpenStack's RefStack... first serious attempt to make OpenStack interoperability real - read here
  • Event Report - IBM Interconnect - IBM innovates and partners into the hybrid cloud era - read here
  • News Analysis - IBM and VMware announce partnership to accelerate enterprise hybrid cloud adoption >> Looking promising - read here
  • Event Preview - IBM Interconnect 2016 - read here
  • Site Visit - IBM Design Studio Austin - read here
  • MarketMoves - IBM strikes 3x in Fall - Cleversafe, The Weather Company and Gravitant - read here
  • News Analysis - IBM launches Industry's First Consulting Practice Dedicated to Cognitive Business - a good move it's early times - read more
  • News Analysis - IBM plans to acquire Cleversafe to propel Object Storage into the Hybrid Cloud >> a good move. Read here
    Market Move - IBM acquires StrongLoop - nodejs comes to BlueMix - read here
  • News Analysis - IBM and ARM Collaborate to Accelerate Delivery of Internet of Things - The IBM NextGenApps Stack emerges - read here
  • Progress Report - IBM Cloud makes good progress - but needs to attract more load - read here
  • Market Move - IBM gets into private cloud (services) with Blue Box acqusition - read here
  • Event Report - IBM InterConnect - IBM makes bets for the hybrid cloud - read here
  • First Take - IBM InterConnect Day #1 Keynote - BlueMix, SoftLayer and Watson - read here
  • News Analysis - IBM had a very good year in the cloud - 2015 will be key - read here
  • Event Report - IBM Insight 2014 - Is it all coming together for IBM in 2015? Or not? 
  • First Take - Top 3 Takeaways from IBM Insight Day 1 Keynote - read here
  • IBM and SAP partner for cloud - good move - read here
  • Event Report - IBM Enterprise - A lot of value for existing customers, but can IBM attract net new customers? Read here
  • Progress Report - The Mainframe is alive and kicking - but there is more in IBM STG - read here
  • News Analysis - IBM and Intel partner to make the cloud more secure - read here
  • Progress Report - IBM BigData an Analytics have a lot of potential - time to show it - read here
  • Event Report - What a difference a year makes - and off to a good start - read here
  • First Take - 3 Key Takeaways from IBM's Impact Conference - Day 1 Keynote - read here
  • Another week and another Billion - this week it's a BlueMix Paas - read here
  • First take - IBM makes Connection - introduces the TalentSuite at IBM Connect - read here
  • IBM kicks of cloud data center race in 2014 - read here
  • First Take - IBM Software Group's Analyst Insights - read here
  • Are we witnessing one of the largest cloud moves - so far? Read here
  • Why IBM acquired Softlayer - read here

More Market Move Blog posts:

  • Market Move - SAP acquires Callidus - More Sales Effectiveness in the Back Office of the Front Office - read here
  • Market Move - Red Hat snaps up CoreOS - The Kubernetes ecosystem heats up - read here
  • Market Move - ADP Acquires WorkMarket to Further Extend Human Capital Management to Contingent Workers [...] - The Gig Economy looms on the Future of Work - read here
  • Market Move - Saba completes acquisition of Halogen - Consolidation in the Talent Management market in North America - read here
  • Market Move - Dell Technologies is here - 3 scenarios and a bonus perspective - read here.
  • Market Move - Randstad to acquire Monster Worldwide - Bridges a moat, now it has to work - read here
  • Market Move - Oracle acquires NetSuite - Oddly consolidation means more options for customers - read here
  • Market Move - Microsoft acquired Linked - Tons of synergies, start with Cortana, maybe too many - read here
  • Market Move - Oracle acquires Ravello Systems - makes good on nested hypervisor roadmap - read here
  • Market Move - Atos completes acquisition of Unify - gets more into IP - read here
  • Market Move - Dell plans to acquire EMC, VMware, Virtustream, Pivotal and more - read here
  • Market Move - IBM acquires StrongLoop - nodejs comes to BlueMix - read here

Find more coverage on the Constellation Research website here and checkout my magazine on Flipboard and my YouTube channel here.

News Analysis - SAP intends to buy Qualtrics - Pairing operational and experience data – And it’s 6 sisters

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SAP is back on the acquisition trail with the acquisition of 16-year-old Qualtrics, the Provo, Utah, based survey vendor. But surveys are such a 20th century category, so survey vendors are becoming experience vendors – measuring – customer, product, employee and more experiences in the form of surveys. SAP now brings together it’s operational data (that sounds so 20th century as well, so SAP calls it O-Data) with the experience data (X-Data) to help CXOs make better decisions in the digital economy. SAP is picking up Qualtrics while the vendor was on a roadshow for its IPO, which always requires some premium.
 



But let’s dissect the press release in our traditional style (it can be found here):

WALLDORF, Germany, PROVO, Utah, SEATTLE, Wash. — SAP SE (NYSE: SAP) and Qualtrics International Inc. (Qualtrics) today announced they have entered into a definitive agreement under which SAP SE intends to acquire Qualtrics, the global pioneer of the experience management (XM) software category that enables organizations to thrive in today’s experience economy.

MyPOV – Nice summary of what is happening.


Together, SAP and Qualtrics to accelerate the new XM category by combining experience data and operational data to power the experience economy

MyPOV – SAP argues the high multiple for Qualtrics is justified, as it acquires a new category leader, that traditional enterprise software vendors (like SAP) have not been part of.


Creates a highly differentiated offering for businesses to deliver superior customer, employee, product, and brand experiences

MyPOV – These are the four key applications areas for Qualtrics.


Ryan Smith to continue to lead Qualtrics; Qualtrics to maintain dual headquarters in Provo, Utah, and Seattle, Wash.

MyPOV – An important organizational update. Good to keep existing leadership and operating locations in place… but Smith will report to Robert Enslin, the leader of the SAP cloud business (and now leader of the 5+1 = 6 sisters – SAP Ariba, Concur, Fieldglass, Hybris, SuccessFactors and now Qualtrics).


Under the terms of the agreement, SAP will acquire all outstanding shares of Qualtrics for US$8 billion in cash. SAP has secured financing in the amount of €7 billion to cover purchase price and acquisition-related costs. The purchase price includes unvested employee incentive compensation and cash on the balance sheet at close. Subject to customary closing conditions and attainment of regulatory clearances, the acquisition is expected to close in the first half of 2019. The Boards of Directors of SAP and Qualtrics have approved the transaction. Qualtrics’ shareholders have also approved the transaction.

MyPOV – Interesting SAP goes for an all cash purchase but leaving this to the financial analysts to comment.


SAP CEO Bill McDermott said: “We continually seek out transformational opportunities – today’s announcement is exactly that. Together, SAP and Qualtrics represent a new paradigm, similar to market-making shifts in personal operating systems, smart devices and social networks. SAP already touches 77 percent of the world’s transactions. When you combine our operational data with Qualtrics’ experience data, we will accelerate the XM category with an end-to-end solution with immediate global scale. For Qualtrics, this introduces a dynamic new partner with the belief, passion and scale to bring experience management to millions of customers around the world.”

MyPOV – Good description of the opportunity. Use Qualtrics to create synergies with the rest of the SAP portfolio. McDermott predicts that Experience Management will be bigger than CRM. Agreed there are many synergies for SAP of combining the portfolios and scaling Qualtrics on a vertical level.


McDermott added: “The combination of Qualtrics and SAP reaffirms experience management as the groundbreaking new frontier for the technology industry. SAP and Qualtrics are seizing this opportunity as like-minded innovators, united in mission, strategy and culture. We share the belief that every human voice holds value, every experience matters and that the best-run businesses can make the world run better. We can’t wait to stand beside Ryan and his amazing colleagues for the next chapters in the experience management story. The best for Qualtrics and SAP is yet to come!”

MyPOV – Good quote by McDermott, in the usual optimistic and transformational tone and sprit.


Ryan Smith, CEO of Qualtrics, said: “Our mission is to help organizations deliver the experiences that turn their customers into fanatics, employees into ambassadors, products into obsessions and brands into religions. Supported by a global team of over 95,000, SAP will help us scale faster and achieve our mission on a broader stage. This will put the XM Platform everywhere overnight. We could not be more excited to join forces with Bill and the SP team in this once-in-a-generation opportunity to power the experience economy.”

MyPOV – Good quote by Smith, basically sharing the game plan. Qualtrics software is ready, but its business model is not global (yet) and SAP will take it global. McDermott said on the call that Leonardo and HANA will become part of Qualtrics (that confirms the same strategy currently applied to the architecture of the other 5 sisters).



SAP and Qualtrics Will Together Deliver the Transformative Potential of Experience Data (X-Data) Combined with Operational Data (O-Data)

XM focuses on obtaining and tapping the value of outside-in customer, employee, product and brand feedback. Combining Qualtrics’ experience data and insights with SAP’s unparalleled operational data will enable customers to better manage supply chains, networks, employees and core processes. Together, SAP and Qualtrics will deliver a unique end-to-end experience and operational management system to power organizations.

MyPOV – Another intentional / aspirational statement, that repeat what was already said.


SAP Will Accelerate Qualtrics’ Growth and Further Its Mission by Offering Global Scale, Reach and Resources

Leveraging SAP’s more than 413,000 customers and global salesforce of around 15,000, Qualtrics will be able to scale rapidly around the world. SAP has a strong track record of accelerating growth for the innovative companies it acquires, as exemplified by the rapid success of SAP’s recent acquisitions.

MyPOV – Good focus on what SAP will bring to Qualtrics. Global scale. Qualtrics goes global. SAP combines data for better success in the digital transformed economy.


Qualtrics expects full-year 2018 revenue to exceed US$400 million and projects a forward growth rate of greater than 40 percent, not including potential synergies of being part of SAP.

MyPOV – One of the key attractions of SAP for Qualtrics – acquire a pure cloud business that is growing fast. Putting a growth engine into SAP cloud revenues.


Following the closing of the transaction, Qualtrics is expected to maintain its leadership, personnel, branding and culture, operating as an entity within SAP’s Cloud Business Group. Ryan Smith will continue to lead Qualtrics, and Qualtrics is expected to continue to maintain dual headquarters in Provo, Utah, and Seattle, Washington.

MyPOV – Here is the key statement of Qualtrics / Smith reporting to Rob Enslin…. Effectively creating (as above explained) the 6th sister.  


Implications, Implications…

Implications for SAP customers

Likely no immediate impact for SAP customer and no immediate action items. SAP customers should start the conversation with the vendor on roadmap and future benefits. Depending on the answers and timelines, alternate survey tool implementations may be considered to go on hold. But a hold in this early phase can prove to be costly, when weighed against the overall project benefits. Actively plan for a ‘blue sky’ session with your team on what it may be worth to influence on, what to do first and what later.

Implications for Qualtrics customers

While SAP is saying clearly that Qualtrics will operate separately – as one of the now 6 cloud business reporting into Enslin, Qualtrics customers need to make sure their enterprise can remain successful on Qualtrics. As always with acquisitions the customers of the acquired party need to seek immediate re-assurance on important roadmap items, not only from Qualtrics, but more importantly from SAP. Only when an acquirer knows where the porcelain is in the shelves, they can make a desired planned effort not to brake it. In the longer run, CxOs need to think of what benefits can be derived from the SAP ownership – think financial stability, reach, support and services. It’s different to be the 3B or so small battleship, then dealing with the same battleship as part of a large fleet of vessels. Understand the course, investment plans and new roadmaps asap. The potential delay on future capabilities due to re-platforming on SAP CP and SAP HANA also has to be considered, as well as the readiness to run these technologies in house.

Implications for partners


For SAP partners there is a new expansion of services revenues. For Qualtrics partners it is key to understand the SAP partner landscape asap and make a all if they want to double down and go all in for SAP or retreat out of the larger SAP ecosystem.



Implications for competitors

For SAP competitors this is an area to watch and understand their own roadmaps on how to bring together survey and ERP Data. There are plenty of innovative survey companies out there, whose valuations have now likely jumped a bit. Make vs Buy decisions will also be key, as survey software is not a super substantial and long running platform, architecture and product investment.

For Qualtrics competitors it’s good news – as there is a high chance there will be potentially more acquisitions in the space… but it needs to be a healthy business, with a working platform. With SAP owning Qualtrics, they survey business had become more global. On the good news side, Qualtrics product development speed is likely to slow down, as the product will change to the SAP Cloud Platform, SAP HANA etc. nothing that eve accelerates functional delivery speed.


MyPOV

SAP CEO Bill McDermott always like to talk about bold moves, and this is certainly a bold move by SAP. The earnings multiple is high, but likely the price one has to pay to snag of a soon to be IPO. Bringing survey and ERP today has been always a manual, 3rd party application process for enterprises. Owning more of that and delivering more value for CXOs is a good ambition for SAP. Qualtrics brings synergies to many of the SAP cloud business, with brand, customer surveys aiding C/4HANA, employee surveys SAP SuccessFactors and product surveys helping ERP and PLM users. The concept of the digital open door that Qualtrics has championed is powerful and deserves to be maintained in SAP’s go to market.

On the concern side, SAP cannot forget that a lot of experience and real-world digital exhaust happens outside of surveys. Survey bias is real and for truly being an experience management leader, SAP needs to get much better at capturing this information and making sense of t. SAP’s long-standing aversion to all things Hadoop / Big Data does not help in this respect. SAP / Qualtrics customers will also have to take a critical eye what the re-platform to SAP will cost in terms of speed of functional delivery.

But overall, a bold move by SAP. Prepping its cloud revenue stream and potentially being able to create a new software category for the enterprise with Experience  Management.
More Market Move Blog posts:
  • Market Move - IBM acquires Red Hat -A bold move for hybrid cloud and PaaS - read here
  • Market Move - SAP acquires Callidus - More Sales Effectiveness in the Back Office of the Front Office - read here
  • Market Move - Red Hat snaps up CoreOS - The Kubernetes ecosystem heats up - read here
  • Market Move - ADP Acquires WorkMarket to Further Extend Human Capital Management to Contingent Workers [...] - The Gig Economy looms on the Future of Work - read here
  • Market Move - Saba completes acquisition of Halogen - Consolidation in the Talent Management market in North America - read here
  • Market Move - Dell Technologies is here - 3 scenarios and a bonus perspective - read here.
  • Market Move - Randstad to acquire Monster Worldwide - Bridges a moat, now it has to work - read here
  • Market Move - Oracle acquires NetSuite - Oddly consolidation means more options for customers - read here
  • Market Move - Microsoft acquired Linked - Tons of synergies, start with Cortana, maybe too many - read here
  • Market Move - Oracle acquires Ravello Systems - makes good on nested hypervisor roadmap - read here
  • Market Move - Atos completes acquisition of Unify - gets more into IP - read here
  • Market Move - Dell plans to acquire EMC, VMware, Virtustream, Pivotal and more - read here
  • Market Move - IBM acquires StrongLoop - nodejs comes to BlueMix - read her

And some recent SAP blogs:

  • News Analysis - Adobe, Microsoft and SAP announce the Open Data Initiative to empower a new generation of customer experiences - Good idea, good start...  - read here
  • Event Report - SAP Ariba Live 2018 - Las Vegas - Sustainability and UX - read here
  • Event Takeaways - SAP at MWC 2018 - read here
  • Market Move - SAP acquires Callidus - More Sales Effectiveness in the Back Office of the Front Office - read here
  • News Analysis - SAP HCM On-Premise Option for SAP S/4HANA - or is this S/4HCM? - read here
  • News Analysis - Microsoft and SAP join forces to give customers a trusted path to digital transformation in the cloud - read here
  • Event Report - SAP Hybris Live 2017 Barcelona - YaaS morphs and more agility ahead - read here
  • News Analyses Roundup - SAP's September Tech Announcements - SAP doubles down on technology - read here
  • Event Report - SAP SuccessFactors SuccessConnect - New Leadership - Old Challenges - read here

Find more coverage on the Constellation Research website here and checkout my magazine on Flipboard and my YouTube channel here.

Event Report - Workday Rising 2018 - The analytics love story continues - will this be the final chapter?

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We had the opportunity to attend Workday’s Rising conference, held from September 30th till October 3rd, 2018, held at the Mandalay Bay resort in Las Vegas. The event had record breaking attendance, in every dimension: Attendees, hotel, partners, expos, conference program etc. always a sign of a growing vendor.

 


Prefer to watch – here is my event video … (if the video doesn’t’ show up – check here




Here is the 1 slide condensation (if the slide doesn’t show up, check here):


Want to read on? Here you go:

One more analytics push – Reporting, BigData, Analytics, Machine Learning are all topic that Workday has been addressing continuously across the 6 Workday Risings I have covered. No surprise, this year – given the recent acquisition of Adaptive Insights, the topic was given substantial keynote time. Question remain on integration, UI harmonization and it’s too early to declare that Workday has solved the overall analytics challenge, but it is closer than ever to close this 6+ year journey.

Workforce Planning and Skills Cloud – A long term desire from HR practitioners is to solve the planning problem, that across the board has not been addressed well by the vendors in the market, leaving enterprises to use with 3rd party platforms and tools. Given the importance not a good solution, so good to see that Workday is trying to tackle this important area. The other key functional announcement was around the Skills Cloud – an area that as well has eluded practitioners in the past from a standpoint of out-of-the-box automation by all vendors. Skills have been a long-term ambition by Workday as well, trying to solve tricky ontology question with acquisitions and inhouse.

PaaS for Build gets Real – The move into PaaS is key for Workday customers, as for all SaaS vendors. In the era of business process uncertainty, a PaaS gives customers the confidence to use a SaaS vendor – as when automation does not fit, they can build what the need. In 2018 it requires also to build standalone apps, a capability that Workday promised at Rising in 2017, and delivered this year. Always good to see vendors keeping their roadmap promises.

Update from Rising 2018 – Vienna

Being uncharacteristically late with this job post, opened it to be overtaken news wise by Workday Rising Europe, held in Vienna, November 13th – 15th 2018. Largest user conference for Workday in Europe as well. The big news was Workday disclosing its progress moving its offering to AWS. First customers in North America are live, so no it comes to rollout. After Canada, USA is next, and Germany has been announced to come first half of 2019. The latter is key to allow customer to comply with GDPR and ease Patriot Act related concerns of running their servers in North America. Good to see Workday deliver on its announcement from AWS reinvent conference a year ago.

MyPOV

Good progress by Workday, pushing functionality across the board and (hopefully) solving the Analytics challenge now with Adaptive Insights, it’s largest acquisition ever. Good to see the PaaS progress and interesting innovation with the Skills Cloud.

On the concern side, Workday for a long time claimed the thought leadership for HCM, but to keep that lead it needs thought leading functionality and innovation in the core business applications. This was missing (at both) Workday Risings, and it possibly caused by the re-platform efforts that are happening in the background. For 2019 Workday will have to deliver some big thought leadership functionality to keep that lead. That the competition is idling in this key department is a frustration for HR practitioners all across the world

But overall an impressive, well-choreographed event, as usual at Risings. Good news on customer traction, partner interest and platform /analytics innovation. Now it comes to see how customers and prospects will update the new capabilities.


More on Workday
  • Event Report - Workday Rising 2017 - Workday opens and advances the platform - but its early days - read here
  • Summer 2017 News Analysis - Workday announces its PaaS - read here
  • News Analysis - Workday, IBM Form Strategic Partnership on the IBM Cloud - The IaaS vendor race for SaaS load is on - read here
  • News Analysis - Workday Delivers Payroll for France Customers - read here
  • Progress Report - Workday Tech Summit - Good Progress, More Insights, Less Concerns - read here
  • News Analysis - Workday and ADP partner to Deliver a Seamless Customer Experience for Global Payroll - read here
  • Event Report - Workday Rising - Learning is there and good housekeeping - read here
  • News Analysis - Workday completes Talent Management with Learning - Finally - or too late? Read here.
  • Event Preview - What I would like Workday to address this Rising read here
  • News Analysis – Workday to Expand Suite of Applications for Healthcare Industry - with a SCM twist - read here
  • News Analysis - Workday supports UK Payroll - now speaks (British English) Payroll  - read here
  • Workday 24 - 'True' Analytics, a Vertical and more - now needs customer proof points - read here
  • First Take - Top 3 Takeaways from of Workday Rising Day 1 Keynote - The dawn of the analytics era - time to deliver Insight Apps - read here
  • Progress Report - Workday supports more cloud standard - but work remains - read here



Want to learn more? Checkout the Twitter Moment below (if it doesn’t show up – check here).

Find more coverage on the Constellation Research website here and checkout my magazine on Flipboard and my YouTube channel here.

Event Report - Ceridian Insights 2018 - Ceridian is on a roll

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We had the opportunity to attend Ceridian’s yearly user conference Insights 2018, held from October 15th till October 19th at Cesar’s Palace Hotel in Las Vegas. Attendance was over 3.5k, a new record for Ceridian, which has outgrown the Aria, the location of previous Insights conferences. 


Prefer to watch – here is my event video … (if the video doesn’t’ show up – check here




Here is the 1 slide condensation (if the slide doesn’t show up, check here): 




Want to read on? Here you go:

Good customer and prospect traction. When vendors do well, good things come to them, in form of more market traction. And Ceridian is doing well, signing up more customers, getting more interest of prospects and gaining in the partner ecosystem. It’s frequent that I meet passengers on a plane ride to the event town, but I have had not had conversation with three prospects and one client - across seat rows - on the 50-minute short flight from San Diego to Las Vegas. Take it as an indicator for Ceridian traction. Moreover, Ceridian keeps up the impressive performance of actively converting its legacy payroll customers to its new platform, something I am not aware of anyone else doing in the industry at this scale… all signs of product strength resulting in customer traction.

On demand pay debuts, key for underfunded employees. Cash flow remains an issue for many employees in today’s economy… it’s the fall of ‘on demand pay’ – as pretty much all vendors in the payroll business are delivering instant pay options to employees / workers. The winner is the employee / worker who can request effectively a cash advance on delivered work – before the pay day. It’s an important contribution of the industry to get employees / workers out of the claws of the sometimes-shady paycheck advance industry. Behind the scenes the capability first and foremost requires an ‘always on’ payroll, meaning a payroll that is always ready to show employees / workers what their current and up to date earnings are. To be efficient, the functionality requires a payroll that is ‘always on’ – continuously updating earnings positions as payroll relevant events happen. This is what Ceridian has since a while, so the technology behind this new capability is already available.

Ceridian goes deeper into Talent with Succession Planning. Ceridian has been on the long-term quest of completing its Talent Management suite capabilities, and with Succession Planning that journey is concluded. Succession Management remains an important, albeit not critical component of Talent Management, so customers and prospects took note, but were not overly excited about the new capability. Nonetheless, good to see Ceridian finishing up the Talent Management Suite capability now having capability for Recruiting, Onboarding, Performance Management, Learning (own and partners), Compensation Management and Succession Management.

MyPOV


Good to see the market traction for Ceridian, who is a vendor that needs to be shortlisted for any workforce management intensive industry (see the Constellation Shortlist here and here). The in-build combination of workforce management, an always on payroll and now a full Talent Management suite, makes Ceridian a very attractive player for enterprises in the industry. Good to see the vendor also getting the user experience in good shape, historically a challenging area of Ceridian.

On the concern side, Ceridian needs to push the envelope in the direction of Machine Learning / AI in general and voice as the new UI more. Last year at the user conference the vendor showed the most impressive voice demos of all HCM vendors in 2017 – a worker talking to Alexa (?) for an understanding of their shift situation and executing a shift swap. No demo this year, the vendor citing keynote time reasons… Behind an effective Machine Learning / AI strategy is the move to public cloud, to be able to leverage cheaper compute, spare capacity, low cost storage and overall compute elasticity. And Ceridian says the Dayforce suite runs on public cloud IaaS (I think Azure) but needs to move there for good. When the whole industry is moving to IaaS, it’s time for all vendors to move there to level the field.

But overall an impressive event, Ceridian is doing well and for now the technology concerns mentioned do not concern customers and prospects, so Ceridian is … on a roll and critical to do what enterprises need to do move - be ready to accelerate and effectively accelerate in order to survive and / or thrive.


Learn more about Enterprise Acceleration here.


Also on Ceridian
  • Event Report - Ceridian Insights 2017 - Ceridian widens and deepens the Dayforce Suite - read here
  • Progress Report - Progress Report - Ceridian pushes onward across the board - read here
  • Progress Report – Ceridian executes on product, next challenge – implementation capacity, then sales …read here
  • Event Report - CeridianINSIGHTS 2014 - Ceridian innovates and adds key functionality - read here
  • First Take - Ceridian INSIGHTS Day 1 Keynote - Top 3 Takeaways - read here
  • Progress Report - Ceridian makes a lot of progress - but the road(map) is long - read here
  • Ceridian transforming itself and with that the game – read here

And unrelated to Ceridian - but how important payroll can be for HCM innovation:
  • Could the paycheck reinvent HCM - yes it can - read here
  • And suddenly... payroll matters again - read here
  • Musings - How Technology Innovation fuels Recruiting and disrupts the Laggards - read here
  • Musings - What is the future of recruiting? Read here
  • Why all the attention to recruiting? Read here.
  • Musings - Is Transboarding the future of People Talent Management? Read here


Want to learn more? Checkout the Twitter Moment below (if it doesn’t show up – check here). And you can find a Twitter Moment on the Day #2, #3 and analyst event here.


Find more coverage on the Constellation Research website here and checkout my magazine on Flipboard and my YouTube channel here


Event Report - AWS reInvent 2017 - AWS grows and grows...

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We had the chance to attend AWS reInvent in Las Vegas. The conference has grown beyond the original limits of the Sands Convention Center and has now sprawled all over Las Vegas - from the Mandalay Bay all the way to the Encore. reInvent has become the get together of the IT industry, effectively wrestling that crown from VMware's VMWorld.


Prefer to watch – here is my event video … (if the video doesn’t’ show up – check here)




Here is the 1 slide condensation (if the slide doesn’t show up, check here):


4 Key Product Developments People Leaders need to track

Global Cloud Connect – Simplify Payroll Integration

AWS has used re:Invent conference as platform to launch new instance types – and 2017 was no exception: There is a new, general purpose instance with the new EC2 M5, that uses the new Nitro Hypervisor, giving customers more compute and memory than the older machines (see Fig #1). Bowing to the storage trends, AWS started a new instance line with EC2 H1, optimized for high disk throughput and high sequential disk I/O for very large data sets. And in preview, AWS is providing EC2 Bare Metal instances, something previously not expected, but likely a by product of the VMware partnership, and of course a great way to access hardware features (like all bare metal services). On the pricing side, AWS unveiled a new spot pricing model and is now offering hibernation for spot instances.


Figure 1 – Andy Jessy and all AWS instance types





Source: Twitter, @holgermu


Constellation POV:Necessary new instance innovation by AWS, but less than usual. Likely instance development cycles and the re:Invent schedule may not have aligned. But an era to watch. On the flipside CxOs will be happy if they number of instance types will reach a stable level, and with that make the choice, selection and operation of instance types a more stable business. In the past each instance type would cause a little bit of a ‘head stir’ to CxOs responsible for AWS deployments in regards of optimal allocation of budget vs. compute. Less new instance types and more learning will create a higher comfort level for CxOs to operate on the right instance mix in AWS. AWS did also not address the general instance refresh it promised in spring of 2017 around the S3 caused downtime[i]. An opportunity to address this important housekeeping item that all IaaS vendors need to address – has been missed. And with that the opportunity to set the standard in the hardware replacement / refreshment debate that is going to happen soon given the general maturation of the industry.



Kubernetes becomes a 1st class citizen for AWS

At the core of IaaS providers are their methods to virtualize instances, achieved with hypervisors. Beyond hypervisors the questions are how can containers be managed efficiently at scale. And as IaaS load moves to microservices, the AWS answer was Amazon Elastic Container Service (ECS), but Amazon had to pay tribute to the rising popularity of Kubernetes, and announced Amazon Elastic Container Service for Kubernetes (EKS) (see Fig. #2). Amazon ECS for itself has done well with user growth up over 450% since 2016 and over 100k active clusters managed by the service and customers launched hundreds of millions of containers each week. Nonetheless Amazon had to pay tribute to the popularity of Kubernetes, not being tired of mentioning that AWS runs more Kubernetes load than anybody else in the cloud. Amazon EKS provides a Kubernetes control plane that is highly available (HA) with three masters across three availability zones (AZs).

And with more container options, AWS also announced AWS Fargate, taking care of the often-arduous infrastructure management under a control plane for containers. Fargate supports ECS today, and support for EKS is planned in 2018.


Figure 2 – Andy Jassy announces AWS Fargate




Source: Twitter @holgermu


Constellation POV:At the end of the day, IaaS providers, like AWS, need to scale and scale comes from load that enterprise can / want to run on the respective IaaS. When certain forms of load, in this case Kubernetes container load become critically popular, IaaS providers – no matter how large – need to adopt the new form of load in order to participate in the potential growth. And even very large, even market leading IaaS providers like AWS need to acknowledge the popularity with EKS. Good for enterprises, that have compatible container support for Kubernetes across the popular IaaS infrastructures. Apart from cost, the competition now moves to ease of use of running these container loads, and there AWS has a made a good start with Amazon Fargate. Not surprisingly Amazon Fargate starts with ECS, pointing to the more recent addition of EKS, but with EKS support coming in 2018, this is history.

Databases remain key

One functional area that anchors enterprise load are databases, and Amazon knows that well, offering a large variety of database options on AWS. The one that recently had gotten the most attention has been Aurora, launched a few years ago. Every year Aurora sees new enterprises grade features being added and re:Invent 2017 was no difference, with Andy Jassy unveiling Aurora Multi-Master capabilities, that allows to run Aurora across multiple AWS AZs. And AWS also leverages benefits of a distributed system beyond the HA benefits, which are faster write performance across the instances. Moreover, Amazon wants to make Aurora adoption and rollout easier, making Aurora available serverless, in container, with by the second pricing. Both capabilities are projecting Aurora past market leader Oracle (Jassy mentioned RAC), for the first time – so the RDBMS replacement game that AWS is trying to play will get a little more intense in 2018. For now, both capabilities are in preview, which is AWS way of a controlled beta.

On the Amazon DynamoDB front, AWS caters to the enterprise demand of having to run more and more global systems, adding the ability of global tables. This is the ability of tables being replicated across global dispersed availability zones, taking care of mutual updates. And as enterprises put global applications on Amazon DynamoDB, they also want more efficient ways to backup data (and with a feature like Global Tables, that gets a magnitude more tricky) so Amazon announcing an on-demand backup for DynamoDB is a key and welcome new feature for Amazon DynamoDB.


Not enough with Aurora, Amazon also launched Neptune (see Fig. 3), its native graph database at re:Invent. Graph databases are seeing a recent renaissance, after being largely replaced by relational systems in the last 40 years. The reason for the rise in popularity of graph databases lies in their inherent capability to model relationship – and relationships matter when capturing complex social relations and IoT things relations. Traversing graphs turns out to be faster, more efficient and intuitive and it’s clear that AWS wants to have a slice of the use case, announcing Neptune, AWS own native graph database offering. Neptune supports all the popular open source standard for graph database (Apache TinkerPop Gremlin and W3Cs SPARQL, making adoption easier. For now Amazon Neptune is in preview.


Figure 3 – Andy Jassy announces Amazon Neptune



Source: Twitter @holgermu


Constellation POV:Database are critical load anchors for enterprises. When considering moving an enterprise application to the cloud, the question of database portability, migration and replacement always comes up. Amazon has been playing the long game for databases, understanding the demand and continuing to innovate with its native database offerings, Aurora being the most prominent recent example. Good to see the innovation with Amazon Neptune as well, the graph database use case for next generation applications must have bene substantial and too hard to ignore for AWS not to have a native offering in place… we expect good uptake for Amazon Neptune for several next generation application use cases, most prominently IoT. Good to see the innovation on the DynamoDB side, the need for more global support and out of the box replication is very high on the list when CxOs select platforms and / or databases for next generation applications.

The question remains, when will it be enough of capabilities and AWS will be able to entice enterprises to move to e.g. Aurora with larger workloads. It’s clear in the long run there need to be more migrations for AWS database bets to turn off – otherwise a lot on premise load will just go to the respective database vendor’s cloud. But too early to tell and CxOs like that AWS keeps trying and keeps giving them options.

Machine Learning - Lots of new offerings - Sagemaker and Deeplens stand out

Machine Learning is the new crown jewel for IaaS providers to attract enterprise load, as enterprises need cheap compute and storage to feed their machine learning models. AWS had to reset its Machine Learning approach and strategy in 2016 when it re-positioned to MXNet. But at re:Invent MXNet did not feature very prominently either anymore. Instead, AWS was proud to mention multiple times that it runs the most TensorFlow models in the industry. More specifically, AWS focused on making it easier for enterprise and developers to become builders of machine learning modes, a general trend amongst IaaS providers. To that purpose, AWS made available Amazon SageMaker (see Fig. 4), its product to help both developers and data scientists to build, train and deploy machine learning models. We had time get a detailed demo and presentations and SageMaker is a sold V1 for the product category.



To help customers come up to speed with Machine Learning, AWS announced the Amazon ML Solutions Lab. Amazon machine learning experts will help customers come up to speed with AWS machine learning offerings and help to foster first solutions. Good to see AWS helping its install base get their heads and arms around a modern technology that has a lot of promise for much of software. Along the same intentions Amazon also announced the AWS DeepLens, a camera device that helps developers to build machine learning applications around image (and video?) recognition use cases. In true developer ecosystem seed mode, AWS also offered a free AWS DeepLens to any participant of re:Invent who would pass many Machine Learning sessions.


Figure 4 – Amazon SageMaker and functionaloty it provides



Source: Twitter (@holgermu)



Constellation POV: Good to see AWS making Machine Learning a priority, one of the key areas of automation that is in high demand by enterprises, as it traverses all next generation application use cases. It’s also important, as if one had to pick an area of relative weakness towards other IaaS competitors, then it is Machine Learning. Partnerships with other players around Gluon are the right direction to create value for customers. On the tool side Amazon SageMaker is a good start, first version to convert developers into AI developers. A long path, but definitively worth to try. AWS should and could have aimed higher at also targeting the (technically savvy) business users, who in Constellation view is the ultimate prize in  many dimensions: Propel their own business needs, help enterprises to accelerate with AI and give IaaS vendors the massive load from these applications.


Alexa comes to Business

Amazon has seen tremendous success with its Alexa platform. Not only from a design, technology and architecture approach, but also (and remarkably) from a go to market and partner perspective. Alexa stole the show at CES and MWC in 2017, remarkable for a vendor like AWS, who is not used to play big at these events. Partner enablement has also been a very strong point for Alexa.

But so far Alexa was a consumer, focused home appliance. At re:Invent AWS unveiled its more business-related plans with the voice assistant, starting with hospitality industry and business room use cases. Both are compelling usage of voice assistants, getting a hotel room or conference room to do what guests / users want to do is a substantial challenge, as many have experienced firsthand. Amazon has partnered with the Wynn in Las Vegas (see Fig. 5), and took groups of influencers over to the Encore resort, showing how Alex can automate a hotel room: Lights, drapes, TV, media, customer service and  more are working use cases and the roll out at Wynn resorts and other properties are on the way. Of course, Amazon had to provide some enterprise tweaks to the consumer device, such as mass management, updates and user drive resets, just to name a few.


Unfortunately, not shown (or I missed it) was the meeting room automation. Hours of productivity can be missed (multiplied by the number of participants) in meeting settings while participants are trying to figure out conference call and video conference equipment, display and projector management, AV settings and many more. Overall a very powerful use case for voice assistants.


Figure 5 – The announcement of Google as a IaaS and early adopter of Workforce 


Source: Twitter (@holgermu)

Constellation POV: A good move by Amazon, keeping its lead with Alexa over the competition. And what was shared wasn’t future, but ongoing projects. Once a vendor has technology that is successful, it only makes sense to apply to more use cases and distribute it widely. Especially when a vendor has done so many things right as Amazon with taking Alexa to market, especially with partners. Will be interesting to learn about more use cases and to follow adoption and rollout through 2018. Very much looking forward to sitting in the first voice assisted conference room.




A key AWS mover- an IDE

In summer 2016 AWS acquired San Francisco based startup Cloud9, who had created a cloud (that is browser) based IDE (Integrated Development Environment). AWS now used re:Invent to properly launch the IDE as an integrated offering with the rest of AWS (see Fig. 6).

A cloud based IDE is a powerful tool for developers, as traditionally all software development happened local to a machine. Moving the development artefacts to the cloud allows more points of access and faster sharing of development work. Collaborative aspects are easier to support, and AWS showed those successfully in the keynote at re:Invent. Cloud9 is well integrated into AWS. It supports all the latest FaaS (Function as a Service) development options and it gives direct terminal access to AWS. Finally, AWS has done well to allow developers to come up to speed quickly, as Cloud9 comes with tooling for over 40 programming languages. Provision, wait for servers etc. is not necessary with Cloud9.


Figure 6 – Vogels unveils Cloud9



Source: Twitter (@holgermu)


Constellation POV: A good move by AWS. Developers tend to stick with their IDEs for a long time, and not having an IDE was a gap for traditionally very developer friendly AWS. But IDEs are like living rooms or sofas – once you have moved in, it takes a lot of effort and motivation to move out. AWS provided all the enticements needed: Starting with programming language support and related tooling, it’s easier for developers to try new things. Integration into AWS is another strong argument for Cloud9. Last but not least FaaS needs a hook / starting point and that’s the IDE. AWS could simply not afford for developers to live in a living room (that is the IDE) from competitors. Future will have to tell how well Cloud9 gets adopted, but for now it is off to a strong start.



The Bottom Line: AWS executes on all fronts, few but key questions remain

Another record re:Invent, that has literally busted out of the seems of the original Sands Convention Center. It is now sprawling all over the Las Vegas strip. With over 60 product announcements, AWS has certainly not slowed down on the innovation side. With over 40000 attendees, re:Invent has overtaken VMworld and is becoming quickly the yearly get together of the IT industry, an advantageous position for AWS and testament to its relevance for enterprises and vendors.



Effectively, AWS is pushing forward on all fronts, instances, databases, serverless and microservices, machine learning, IoT (no space to cover here) and many more. Notable absent was the traditional new product going after the “old guard” vendors (as AWS likes to call them) as we had seen in past years, with AWS launching email, VDI,  center and BI capabilities. The verdict is out if AWS management does not see the 1x% profitable software categories to go after, or if product development timelines and re:Invent collided. 

We will see at the many AWS Summits coming in the next months. [ii]

On the concern side, AWS needs to keep working on simplification / packaging of the portfolio. The good news is that both Jassy and Vogels picked up on the need for better management and bundling, but that strategy has not reflected itself. The challenge for AWS is to transform itself from a developer’s paradise into an enterprise platform that can deliver repetitive results to build next generation applications and puts CxO concerns in regards of replicability at ease. That does not mean the end of innovation, but an easier way for CxOs to choose AWS as a platform as it gives / shows repeatable paths to they desired solution. 

One of the emerging concerns is around Machine Learning. Expectations that AWS may announces its own neural network and compete with Google’s TensorFlow seem unlikely to happen at this point. Who would have thought that AWS would enter multiple partnerships with Seattle neighbor Microsoft on Machine Learning? The risks for AWS are tangible, if any other IaaS vendor can show faster, cheaper and better Machine Learning performance, it will create a magnetic effect on data. And with data goes load, not to mention that Machine Learning itself creates a lot of load. And load is the mother milk of IaaS vendors success.


Overall CxOs who are charged to build next generation applications for their enterprises, have few things not to like when considering AWS. AWS is doing well, often leading in regards of instance and location build out. If offers the largest number of instance types to match to specific load profiles. Its database offerings are maturing fast and becoming quickly a valid alternative to the traditional databases (that AWS is also more than happy to operate). AWS IoT offerings are doing well, combined with its Snowball appliance, that effectively is becoming more and more an application server. Lock-in concerns can be mitigated to a certain point with EKS, given the broad adoption of Kubernetes. AWS has a strong position on serverless and microservices with lambda and Kinesis, key ingredients for next generation applications. AWS and CxOs care for developer productivity, another key alignment and attraction point. The main concern for CxOs remains around their inhouse developer talent, if their team can find the path to a successful enterprise application – relying on their talent and intuition given the innovation maelstrom AWS presents itself as.


But for now, all things look up for AWS. Cloud9 is a strategic move that must pan out more before it can be fully assessed in regards of potential. Keeping developers happy is vital for AWS success. And Alexa’s new use cases show with what laser like focus and industrial strength precision Amazon / AWS can execute. If the competition has not been on notice, it is now.





[i] For more details see this blog post: Down Report - Human error takes AWS S3 down in US-EAST-1 - and it is felt - 3.8 Cloud Load Toads by Holger Mueller, March 13th2017 - https://www.constellationr.com/blog-news/down-report-human-error-takes-aws-s3-down-us-east-1-and-it-felt-38-cloud-load-toads

[ii] For more analysis check out also my colleague Dough Henschen’s event report: Amazon Web Services Adds Yet More Data and ML Services, But When is Enough Enough? Published Dec. 4th 2017 here: https://www.constellationr.com/blog-news/amazon-web-services-adds-yet-more-data-and-ml-services-when-enough-enough


More on AWS:
  • Down Report - Human error takes AWS S3 down in US-EAST-1 - and it is felt - 3.8 Cloud Load Toads - read here
  • New Analysis - AWS has now data centers in Canada. Or is it data centres? Speaks "Canadian" now. - Read here
  • Event Report - AWS reInvent 2016 - Growth at full speed - read here
  • First Take - AWS reInvent - 1st Keynote - AWS enters the hardware business - and much more - read here
  • News Analysis - VMware has found AWS as its public cloud IaaS  - read here
  • First Take - SAP BW/4HANA - Data Gravity and Cloud win - read here
  • Event report - AWS Enterprise Summit 2016 Frankfurt - The German Road to Cloud adoption is ... long - read here
  • News Analysis - Amazon Web Services Cloud now speaks… Hindi - Indian AWS Data Centers available - read here
  • News Analysis - Salesforce selects AWS as preferred Public Cloud Infrastructure Provider - Good move - read here
  • Event Report - AWS re-Invent - AWS lobbies for the enterprise - DB and IoT are the cheese - read here
  • First Take - AWS reInvent Wednesday Keynote - Good start & AWS is going for the enterprise read here
  • Event Preview - AWS re-Invent 2015 - watch / read here
  • Event Report - AWS Summit Berlin - AWS spricht Deutsch - but when will the Germans speak cloud? Read here
  • News Analysis - AWS learns Hindi - Amazon Web Services announces 2016 India Expansion - read here
  • Event Report - AWS Summit San Francisco - AWS pushes the platform with Analytics and Storage [From the Fences] read here
  • Event Report - AWS re:invent - AWS becomes more about PaaS on inhouse IP - read here
  • AWS gives infrastructure insights - and it is very passionate about it - read here
  • News Analysis - AWS spricht Deutsch - the cloud wars reach Germany - read here
  • Market Move - Infor runs CloudSuite on AWS - Inflection Point or hot air balloon? Read here
  • Event Report - AWS Summit in SFO - AWS keeps doing what has been working in the last 8 years - read here
  • AWS  moves the yardstick - Day 2 reinvent takeaways - read here.
  • AWS powers on, into new markets - Day 1 reinvent takeaways - read here.
  • The Cloud is growing up - three signs in the News - read here.
  • Amazon AWS powers on - read here.
Find more coverage on the Constellation Research website here and checkout my magazine on Flipboard and my YouTube channel here. 


Event Report - Kronos KronosWorks 2018 - Kronos is firing on all cylinders...

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We had the opportunity to attend Kronos’ yearly user conference, Kronos Works, held from November 4th till 7th 2018 in Las Vegas at the Aria Resort. Attendance was similar like the year before with 3k+, usual influencer presence. 



Prefer to watch – here is my event video … (if the video doesn’t’ show up – check here)







Here is the 1 slide condensation (if the slide doesn’t show up, check here): 




Want to read on? Here you go:

Kronos is doing really well – The vendor has record results and is doing well. That is remarkable, as it just has created a new product on a new platform and is moving customers towards it… while making the bulk of revenue on the old platform, that the vendor still supports. A ‘dance’ few vendors manage to dance without a revenue dip, so remarkable and kudos to the Kronos team.

Kronos is in HCM – For the longest time, Kronos has played the role of ‘Switzerland’ when it came to HCM vendors, providing them with Time and Attendance as well as Workforce Management capabilities. That has worked well for Kronos, who has become the proverbial “800-pound gorilla” in Workforce Management. With Kronos now competing, it will be interesting how the HCM vendors will react. Lack of good workforce management solutions that are standalone and customer install base are all key factors helping Kronos at the moment.

Aimee is Kronos’ AI assistant – Somewhat late, but better late than never, Kronos unveiled Aimee, it’s AI assistant. She will debut in 2019 and help people with 4 AI uses cases, that are the typical initial load of vendors getting started.

Workforce Dimensions has good traction – Launched last year, Kronos new flagship product suite, Workforce Dimensions is doing well, and has now 220 customers, fewer live, more implementing… for the count being at 10 implementing 12 months ago – that’s very good progress.

Maintenance ROI – The key for Kronos doing well overall is that it keeps creating value for the customers on Workforce Central and Workforce Now. Taking a cue from the Oracle Apps Unlimited strategy (former Oracle executive Ron Wohl is an advisor) – Kronos is providing a rich roadmap for Kronos customers on the existing, older products. This takes the typical upgrade pressure out of the process and allows customer to upgrade at their own schedule, while not being ‘stranded’ on an old solution that see no longer advancement (as often the case in the enterprise software industry.

MyPOV

Kronos is doing well and is on a roll. The verdict on the HCM move is still out, but it was a logical step that Kronos had to take – to keep growing. CEO Ain negated the intention long enough, but now more than the writing is on the wall. Kronos customers like the move in general… they know that workforce management is key and usually most complex piece in their HCM automation puzzle… so it is relatively easy to expand into HR Core and Payroll… Roadmaps are rich, and customers are excited on what is to come… always an advantageous position for any vendor to be in.

On the concern side, Kronos needs to accelerate on the AI side, it is relatively late with Aimee and it needs to come up with a voice driven UI, which is key for end users. That is all not too far away for Kronos, but it needs to happen. Moving from Workforce Management to HCM means that vendors cannot hide under the complexity and compliance blanket but must show some style and appeal to motivate users… and we are not even talking Talent Management here. Kronos also needs to get their buying center to step up inside the HR buying center, quite a change for the current Kronos supporters.

But overall an impressive event, Kronos is on a roll, partners are interested, users energized. Interesting 12 months to come. Stay tuned.

More on Kronos:
  • Event Report - Kronos KronosWorks - Kronos unleashes the Falcon - launches Workforce Dimensions - read here
  • Progress Report - Kronos grows and grows - read here
  • Event Report - Kronos KronosWorks - Solid progress and big things loom - read here
  • Event Report - Kronos KronosWorks - New Versions, new UX, more mobile - faster implementations - read here
  • First Take - KronosWorks - Day 1 Keynote - R&D Investment, Customer Success and Analyticss - read here
  • Kronos executes - 2014 will be key - read here
  • Tweeting and feeling good about it - read here

Want to learn more? Checkout the Twitter Moment below (if it doesn’t show up – check here).


Progress Report - Ultimate HCM Analyst Summit 2018 - AI, Europe & HR Services are the growth engine

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We had the opportunity to attend Ultimate Software’s yearly analyst summit, held November 13th and 14th 2018 at the vendor’s headquarters in Weston, Florida. Good attendance from the key influencers and a great evening program with a cooking demonstration. 

Prefer to watch – here is my event video … (if the video doesn’t’ show up – check here)


Here is the 1 slide condensation (if the slide doesn’t show up, check here): 




Want to read on? Here you go:

Ultimate keeps executing on growth– Practically most HCM vendors are doing well these days, fueled by the move of HCM to the cloud and the need to replace aging technology that is no longer in synch with the best practices that people expect in 2018. Ultimate is not only growing on the revenue front, but also on the product side, innovating with AI (Zander) and pushing forward the overall functionality of the UltiPro Suite.

HR Services is next – For a long time I have been asking Ultimate CEO Scherr on how the vendor wants to keep growing on a longer-term perspective. Until now he has always been confident that the focus on North America and HCM SaaS is enough to fuel Ultimate Software growth. And performance has proven Scherr right. Internationalization was more lukewarm effort so far, but it has not hurt the vendor. It all changed with the acquisition of PeopleDoc, unveiled July 18th, 2018. With PeopleDoc Ultimate becomes a player in HR Services and gets a lot of exposure in Europe, particularly France ang Germany. Now it will be key to see if Ultimate can leverage PeopleDoc assets and expertise beyond the upsell in North America, making it the growth engine beyond North America. End users care for growth of their software suppliers, as it reduces the cost of R&D across them and allows the vendors to deliver more functionality.

Momentum in AI / Zander remains strong – The acquisition of Kanoya by Ultimate Software a little more than two years ago, on September 3oth, was Ultimate’s entry into AI / Machine Learning… specifically leveraging the NLP assets of Kanoya. The acquisition has been a success, with assets and people talent having made a substantial difference for Ultimate. What is impressive is the wide adoption of AI services / Zander in the Ultimate install base and how Ultimate is moving innovation into the core of its install base. In contrast to that, many competitors see delays and hesitation in using AI technologies on a wider scale.

People first culture. Ultimate prides itself in people centricity and live these values. The core tenet of the philosophy is to treat your people right and good things will follow, most importantly, they will treat customers right. Examples for the people centricity is the inclusion of the families of employees are the fully funded healthcare. Many HCM vendors do much in this area – but none I am aware takes it to this point. The question for customers is of course, how much that matters, but most of them admire the philosophy and culture, and though not reachable for them, see it at least as an example and inspiration.


MyPOV

Overall it is impressive progress that Ultimate is showing on all fronts, from business overall people to technology. What matters most for customers is product and technology progress and Ultimate is innovating across the suite, with a strong push on AI / Machine Learning with Zander. The PeopleDoc acquisition is opening new potential, but also a new category software wise, as Ultimate is on the BPaaS game now and needs not only to make its customers employees, managers and HR professionals more productive, but is adding the call center reps to the equation.

On the concern side, Ultimate has added more moving pieces to an already big puzzle of moving pieces. It needs to reach the critical escape velocity in its development processes to finish the application work on an ever-evolving technology stack, without adding more technology pieces to the puzzle, that can quickly become the great idea from yesteryear. A challenge for all established and successful vendors, and it’s time for Ultimate to master it.

But overall very good progress by Ultimate, the next 12 months will be key to watch. Stay tuned.



More on Ultimate Software:
  • Event Report - Ultmate Connections 2018 - More HCM, more WfM and more Xander - read here
  • Progress Report - Ultimate Software Analyst Day 2017 - Keeping the momentum - read here
  • Event Report - Ultimate Software Connections 2017 - Broadest product push (ever?)! - read here
  • Event Report - Ultimate UltiConnect - Product, Platform and Services Innovations - read here
  • First Take - First Take - Top 3 Takeaways from Ultimate’s UltiConnect Day #1 Keynote - read here
  • Event Report - Ultimate Software Connection - People first and an exciting roadmap ahead - read here
  • First Take - Ultimate Software UltiConnect Day #1 Keynote - read here
  • Event Report - Ultimate's UltiConnect - Off to a great start, but the road(map) is long - read here.
  • First Take – 3 Key Takeaways from Ultimate’s UltiConnect Conference Day 1 keynote – read here.
Find more coverage on the Constellation Research website here and checkout my magazine on Flipboard and my YouTube channel here.

Event Report - AWS reinvent 2018 - Push, push - AI and hardware

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We had the opportunity to attend Amazon AWS reinvent user conference, held from November 26th till 30th 2018, across Las Vegas. With over 50k attendees, reinvent has become the yearly come and get together of the IT industry, a unique position that AWS first achieved in 2017 and has more than well defended in 2018. 

Prefer to watch – here is my event video … (if the video doesn’t’ show up – check here



Here is the 1 slide condensation (if the slide doesn’t show up, check here):





Want to read on? Here you go:

AWS announces Outposts– An area where AWS risked falling behind against the rest of the IaaS competition was the area of workload portability from cloud to on-premises. The next generation computing platform as I call it has been described in the Market Overview that can be found here… And AWS was holding out likely the longest being the public cloud market leader. With the Outposts announcements, together with VMware, AWS will now bring key services to on premises, giving customer a choice between an AWS of VMware control plane. It will be available in the 2nd half of 2019 – so still a little time out. But probably the most impactful announcement from AWS – ever. It catapults AWS into the hardware maker and tech stack maker market… something you could not see coming a little back.

AWS takes AI to hardware – An area where AWS was behind as well, was in custom hardware for AI loads. It has partnered with Nvidia as many others – but not brought forward a custom design… that changes with the new P3dn instances, that run a custom / optimized version of Tensorflow that increased efficiency from, 65 to 95%. Not enough, AWS announced a custom chip, Inferentia, that will become an alternative to GPUs, and will be optimized for high throughput and low latency. All three announcements are key make AWS more competitive vs Google, that still has a 2-3-year lead in custom AI hardware. But it is good to see AWS (finally) engaging here, more competition is good for enterprises and fosters innovation as well as price competition… all good trends for enterprises.

AWS launches AI apps – Making it easier for business users to use AI apps is key these days and the strategy for vendors is to help them with specific, targeted apps. With Amazon Personalize, Amazon Forecast (both re-using and building Amazons e-commerce expertise), Amazon Textract (an OCR replacement)-and Amazon Comprehend Medical (Healthcare use case with NLP) there has been a broad push into AI apps. We will have to see how well practical adoption will pan out, but interests were big at reinvent.

Database Innovation is alive and well – Amazon execs know how important databases are and how much critical enterprise load is in relational databases. The strategy of AWS is to combat the generic, all-purpose databases with more dedicated databases, all in a suite of database products. Last year Amazon unveiled Neptune, it’s graph database, this year it unveiled Quantum (a distributed ledger database, what a confusing name) and Timeseries (a time series database). A good strategy that seems to get more traction in enterprises. But AWS knows that entrenched vendors are the challenge, and Oracle specifically has almost become an obsession. Multiple references in Jassy’s and Vogels’ keynote as well as almost 30 minutes on the topic in Vogels’ keynote are almost too much attention.

AWS open sources Firecracker– Influencing industry standards via open source has been the trend of the last two three years. Google has shown the way with Kubernetes and TensorFlow… so AWS did not want to stand back and open sources its serverless framework Firecracker… with Google focusing a level higher currently at the service mesh level, with Istio, this is an open space for anyone. And AWS has good chances given that Firecracker runs lamba at AWS, and lambda is the leading serverless platform in the cloud (from a load / uptake perspective). Now we must see if other IaaS vendors will support Firecracker and how successful AWS is at stewarding a strategic open source project. CxOs have accepted open source by now, so it really comes back to show traction in the offering from a roadmap and consumption perspective.

Amazon QuickSight Renaissance – Two years ago Amazon debuted QuickSight a product that targets to replace the usual BI tools (remember Business Objects, Cognos, MicroStrategy?). The most promising capability was its automatic capability to visualize data. A key vision and step towards user free software, ahead of its time back then. Then it got quiet around QuickSight… but AWS does not give up easy and came back with a new attempt to win this market, and the value proposition remains strong. Time to look and evaluate this product for CxOs. True to cloud DNA, the pricing is now no longer per seat, but per session (with a maximum of $5 per reader user per month) – an innovation on the licensing side.

AWS Tooling everywhere – Last year Amazon announced its own IDE, a key strategy to get closer to developers. But switching IDEs is not easy, so this year AWS is bringing the AWS Toolkit to PyCharm, IntelliJ (Preview), and Visual Studio Code (Preview). It’s important to help developers build apps fast and bringing the toolkit to the ‘living room’ (aka IDE) is the right strategic move.


MyPOV

Another monster reInvent with progress across the board. If there are areas where AWS was weaker, or even behind (on premise support, AI hardware), AWS has reacted and is making product available. The AWS Outpost announcement is changing the market for hardware fundamentally. Given AWS readiness to commit to aggressive pricing and ability to manage tight margins successfully, it is bad news for the Dell, HPs et al… and good news for CxOs. It’s a great reward for long term AWS customers, who now can move loads from the AWS cloud to on premise – should they need or wish. On the hardware front AWS is correcting its miscalculation from a few years ago when it thought Machine Learning is all about… linear regression. With the adoption of Tensorflow across the board AWS acknowledges that MxNet has not won, but is also not giving up on the toolset yet. Both are important course corrections and innovations that are key to keep AWS in the overall IaaS market leadership position.

In general AWS is impressive when it comes to deliver innovation across the board, across the product set. An astonishing feat that the AWS product teams manage to repeat year over year. And that raises the bar for innovation for the overall industry to keep up with.

On the concern side, the AWS portfolio is broader and deeper than ever before. AWS keeps staying with the Chinese menu philosophy, and it means massive choice… but staying with the analogy, when a Chinese restaurant adds a full menu every year, even the most loyal customers will have a hard time to keep an overview of the menu – and manage to repeat-order the same dishes (aka products) at the next visit (aka implementation project). I was not around to ask Andy Jassy my traditional question (Is AWS getting too complex?) but he came prepared (very Amazons style) and negated the question (no surprise). Customers though are struggling to find repeatable success across the vast AWS services portfolio. And cross portfolio QA and testing is getting close to impossible. So, simplification by grouping services, testing them together, aligning roadmaps, versioning and more … must be in AWS future – at some point.

But overall respect to AWS to a massive, well organized and amazing event, sharing the breadth and depth of the AWS services portfolio and innovation. Here is to another year taming the dragon.


More on AWS:

  • Event Report - AWS reInvent 2017 - AWS grows and grows... - read here
  • Down Report - Human error takes AWS S3 down in US-EAST-1 - and it is felt - 3.8 Cloud Load Toads - read here
  • New Analysis - AWS has now data centers in Canada. Or is it data centres? Speaks "Canadian" now. - Read here
  • Event Report - AWS reInvent 2016 - Growth at full speed - read here
  • First Take - AWS reInvent - 1st Keynote - AWS enters the hardware business - and much more - read here
  • News Analysis - VMware has found AWS as its public cloud IaaS  - read here
  • First Take - SAP BW/4HANA - Data Gravity and Cloud win - read here
  • Event report - AWS Enterprise Summit 2016 Frankfurt - The German Road to Cloud adoption is ... long - read here
  • News Analysis - Amazon Web Services Cloud now speaks… Hindi - Indian AWS Data Centers available - read here
  • News Analysis - Salesforce selects AWS as preferred Public Cloud Infrastructure Provider - Good move - read here
  • Event Report - AWS re-Invent - AWS lobbies for the enterprise - DB and IoT are the cheese - read here
  • First Take - AWS reInvent Wednesday Keynote - Good start & AWS is going for the enterprise read here
  • Event Preview - AWS re-Invent 2015 - watch / read here
  • Event Report - AWS Summit Berlin - AWS spricht Deutsch - but when will the Germans speak cloud? Read here
  • News Analysis - AWS learns Hindi - Amazon Web Services announces 2016 India Expansion - read here
  • Event Report - AWS Summit San Francisco - AWS pushes the platform with Analytics and Storage [From the Fences] read here
  • Event Report - AWS re:invent - AWS becomes more about PaaS on inhouse IP - read here
  • AWS gives infrastructure insights - and it is very passionate about it - read here
  • News Analysis - AWS spricht Deutsch - the cloud wars reach Germany - read here
  • Market Move - Infor runs CloudSuite on AWS - Inflection Point or hot air balloon? Read here
  • Event Report - AWS Summit in SFO - AWS keeps doing what has been working in the last 8 years - read here
  • AWS  moves the yardstick - Day 2 reinvent takeaways - read here.
  • AWS powers on, into new markets - Day 1 reinvent takeaways - read here.
  • The Cloud is growing up - three signs in the News - read here.
  • Amazon AWS powers on - read here.

Want to learn more? Checkout the Twitter Moment about Andy Jassy's keynote below (if it doesn’t show up – check here). And check here for Werner Vogels' keynote.

Find more coverage on the Constellation Research website here and checkout my magazine on Flipboard and my YouTube channel here.


Musings - Why Open Source has won and will keep... winning

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Yes, Open Source has won for platform software and possibly even more. Time to look how it all happened, and what the trends going forward are going to be.


My 2 eyeopeners…

Somewhere in the early 2000, Oracle dropped its multi-year, 1000+ FTE effort of an application server to use Apache going forward. That was my first eyeopener, and I was a product developer. The next one came in 2013, in my analyst role, when IBM’s Danny Sabbah shared that IBM was basing its next generation PaaS – BlueMix, on CloudFoundry. When enterprise software giants cannot afford to out-innovate opensource platforms, it was clear that open source was winning. As of today, there is no 1000+ people engineering effort for platform software that has started (and made public), built inhouse and proprietary, by any vendor. The largest inhouse projects that are happening now in enterprises, the NFV projects at the Telcos, are all based on Open Source. 

And there certainly is commercial success. IBM bought RedHat for US% 32B. Early innovators -- (one can argue Open Source started with Hadoop) Cloudera and Hortonworks have just joined forces, and other players are seeing record market valuations (e.g. MongoDB at US$ 4B+) or exits (e.g. MuleSoft by Salesforce for US$ 6B). And the next cohort of successful Open Source vendors are in the making – look at Confluent, Hashicorp, Kong to just name a few.
 

Why has Open Source won?

The most prominent reasons for this win of Open Source (and with that a community-based approach) over enterprise-based ones are the following:
 

Software Development in the 21st century

Marc Andreesen’s prediction that “software eats the world” is more relevant than ever before. But for software to turn into this omnivore, a lot of software has to be built. And it can’t be built in the traditional way, when enterprises license technology platforms, get trained, and certified, for a few quarters and then try to build their strategic software on them. An enterprise following this 20th century best practice would be hopelessly lost against the competition of the 21st century, being way too slow to build new, strategic, differentiating and disrupting software. But software has to work, and uncertainty in regards of capabilities and quality of underlying platform software slows the next generation application projects down. Enters Open Source, where code is transparent, the better solutions become ‘standards’ faster, and developers can repeat experiences across projects (and employers).
 

The Internet is the enabler

We often forget what fundamental change the rise of the internet has on best practices, and software development is no exception. Without the internet, Open Source would not be around today. The easy, cheap access to code repositories, the ability to download large code libraries fast, safely, and on demand are the key enablers of Open Source success. On the concern side, a fast, cheap, and tamper free internet is key for Open Source success. Today we can see that Open Source success is limited where internet access is rate / slow (e.g. large parts of Africa) and internet access is monitored / limited content wise (e.g. authoritarian regimes). When your Open Source contribution could be regarded as cooperation with international communities and as such treason, developers will stay away from it. On the flipside, these regimes may be tempted to instill malicious code into Open Source… something the Open Source community needs to be vigilant about.

More hands have never hurt software

At the end of the day, more developers make better software. The remarkable part of Open Source is that it was able to expand beyond the typical boundaries in regards of developers of traditional software projects, which run into issues beyond a few hundred developers typically. Open Source had to solve the distributed development challenge, which it did successfully. Building on the engineering ethos (and in some cases also some ego), Open Source has taped successfully in the desire of many developers and engineers to be part of something bigger, to improve something, and to work on something that is near to their minds and dear to their hearts. Most importantly, Open Source has figured out how to scale to 1000s of developers / contributors – all working remotely. This has always been a key challenge for traditional vendor-based development forces.

More eyes have never hurt software

Similar to the mantra that more hands have never hurt software, more eyes have not hurt software either. Intrinsically, software is prone to defects at any level. Finding and fixing these is a tedious process. But more people seeing code, being able to fix code will help make software better. Especially when these people work ‘for free’. The limit of QA, even in the most quality oriented development forces, has always been commercial acumen -- at some point it does not make commercial sense to hire one more QA professional / code reviewer and / or run another test cycle. But when people volunteer for this, and the cost is ‘zero’, that equation can be moved way beyond commercially viable realms. That does not mean that developers testing Open Source are not commercially astute, but the community dynamics work in their favor: Finding a major defect – even late – gives a developer stature and chops in the developer / Open Source community. Providing the fix, potentially, to millions of users, is a major motivator to spend one’s free time (in most cases) on software quality.

Layered software needs transparency
With more software needed, more software needs to leverage the layer on top of more / other software. That process requires trust in underlying layers of the software. A black box will have a hard time gaining the trust of both – developers and CxOs. Open Source, with visible source code, is in a better position here. If someone wants / needs to inspect Open Source code, they are taken a dependency – on – feel free to look as long as you like. That openness and access is key for the success of Open Source, but seldom mentioned.
 

“Free” is always a draw

Platform software has always been expensive – and tricky to price. It needed to be expensive enough to allow the vendor who created it to make a living (not e.g. fail like Borland, ultimately) but at the same time could not charge a premium, as the software built on it needed to be built as well. That traditional equation gets blown out of the window when it comes to Open Source… where ‘free’ is a major distortion to this equation. CxOs and architects are willing (or forced) to make compromises for a ‘free’ platform in terms of capabilities and scalability, and few other aspects. On the flipside, the ‘free’ model of Open Source has hurt some of the innovators who try to make a living on it, and pretty much only service models have shown traction / success. So ‘free’ does not translate in free for the enterprise, but CxOs are ok to pay for the services that are needed, and they have been doing that all along.

Why Open Source has won Holger Mueller Constellation Research HMCC
Why Open Source has won


Why will Open Source keep winning?

Now that we know Open Source has won, the question is… what is next? Will the next big thing come and replace Open Source? Or is Open Source here to stay? I tend to go with the latter. Here are the main drivers, why I see Open Source winning in the near and medium future (at least):

Software needs to be built faster

We already mentioned the need for more software to be built, and be built faster than ever before. There are three dimensions to build better software faster: People, process and tools. Given the talent challenge, little can be done on the people side. Software development processes have been chewed over and analyzed / designed all over. No matter if agile or water fall – there is little room for code acceleration once a methodology is established and tuned. Which leads us to the remaining variable, that is tools. As Open Source has largely taken out the tool market, it comes back to Open Source to innovate on the tooling. The beauty here is again the inherent nature of Open Source: If a developer sees an upside to improve tooling, they can start an Open Source Project… and other developers will join if the idea and progress seem to be in the right direction. The result is better tooling, that helps build faster, and more, on Open Source.

Cloud platforms need software fast

We are living in the era of the cloud computing landgrab… a handful or so IaaS players are fighting for market share and to power the compute loads of the enterprise. If there are vendors who ever were under pressure to build platform software fast, it is these IaaS players today. And there is no faster way than building software than using Open Source, especially when you operate on tight margins. So, it is no surprise that pretty much all IaaS players have standardized on one version of Open Source or another. Only close to their respective infrastructure, they have gone proprietary (still, often based on Open Source). As one of the ironies of the last years, we even see IaaS vendors launching their inhouse frameworks as Open Source projects and successfully establishing them in the market. Google is a master at this game, as we see the success of Kubernetes and TensorFlow.

Cloud platforms vendors need ‘standards’

The other key part of a successful IaaS business is to down play the aspect of lock-in. Enterprises don’t want to get locked-in any infrastructure, so they prefer standards that they expect can insulate them from lock-in. The definition of standard is, of course, flexible. But adopting a successful Open Source API as a standard is a commonly accepted practice. The consequence of this market reality is: IaaS players realize that Open Source, that is successful, is the door to standards. Therefore, we can see substantial competition on the timing of new Open Source initiatives and a reluctance to endorse a competitor’s initiative early, albeit promising. Historically, that behavior has hurt enterprises, see e.g. the fragmentation of ‘standard’ Unix, and even more recently Linux. But the speed and need for adoption does not allow for this fragmentation, something that can be seen with across-the-board adoption of Kubernetes. For enterprises, standards are good, and that Open Source allows to create these standard faster and across the platforms, is even better news.

Enterprise SaaS is built on it

In the past, enterprise software focusing on the application tier, had the luxury to create own application technology stacks. Pressure to deliver software faster, and the adoption of public cloud for enterprise SaaS, have led to the adoption of IaaS platforms in SaaS products. And with IaaS platforms embracing Open Source, we can see more enterprise application software running on Open Source than ever. Enterprise software is the largest load out there, the one the IaaS vendors are after in the move to the cloud, and the load that the SaaS vendors need to move, to remain competitive. The result of massive load means that a technology stack will become more adopted, and with that, more relevant going forward as every SaaS vendor moving to IaaS is brining load to Open Source. And with load comes more commercial interest, more interest by developers and so on. Load is the fuel of the Open Source (and cloud) flywheel.

Enterprises want standards

CxOs want to build software and operate it on as much standard as possible. As standards given them the chance / opportunity to transport load across computing platforms – albeit often in theory and on paper only. But the desire for standard is well understood by the IaaS vendors, who are more than happy to show the usage of Open Source, and with it, its substantial adoption numbers, and adoption makes standards. The good news is that standards are winning faster than ever, so the ‘standard wars’ of the 90s of the last century are not happening (at least now). In contrast, standards are winning faster than ever. It took S3 about 5 years to become the default ‘standard’ storage interface. It took Kubernetes less than 3 years… and it took Tensorflow (some may debate if it has won yet) about 2 years to become the leading / de-factor standard everybody needs to support.

The community aspect is the genie that can’t be put back in the bottle

Group dynamic processes have a life and dynamics of their own. Open Source succeeds with the community dynamics, that make it an innovative and unique process to create software. The power of the community in regards of elasticity of resources, worldwide capacity, seamless contribution, additional quality processes has made Open Source pretty much unbeatable. If there will be a better way to create and propagate software, it will very likely have to include the same community dynamics that have helped Open Source put the traditional, enterprise-based development team approach to rest.

Why Open Source Will keep Winning Holger Mueller Constellation Research HMCC
Why Open Source Will keep Winning


MyPOV


Software is eating the world. But it would not happen without Open Source. It’s practically impossible today to operate any technology product without using Open Source software. Should we be concerned? Possibly, but as long as the repositories of Open Source software source code are open, can be accessed and are shared… the (software) world is in a good place. 
 

If you liked this post... here are more Musings posts:
  • Musings - Enterprise Acceleration - and what every HR Leader should know about it - read here
  • Musings - Why splitting Windows is Nadella's first major mistake - read here
  • Musings - Time to bring back the software user conference - read here
  • Musings - Does Oracle and Accenture make sense - or never ever! - read here
  • Musings -  Happy 10th Brthday iPhone - afraid the next 10 years will be harder - read here
  • Musings - The Privacy Shield is real - what are the CxO repercussions? Read here
  • Musings - The Bots are coming to your conversation - what are the implications? - read here
  • Musings - We are entering the age of the Über Super Computer - read here
  • Musings - Retail is the breeding ground for NextGen Apps - read here
  • Musings - Time to re-invent email – for real! Read here
  • Musings - The Dilemma with Cloud Infrastructure updates - read here
  • Musings - Are we witnessing the Rise of the Enterprise Cloud? Read here
  • Musings - What are true Analytics - a Manifesto. Read here
  • Musings - Microsoft does not need one CEO - but six - read here

Find more coverage on the Constellation Research website here and checkout my magazine on Flipboard and my YouTube channel here.

Event Report - ADP ReThink 2019 - Global Customer Success, TMBC and a great event

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We had the opportunity to attend ADP’s ReThink conference, held from January 29th till 31st 2019 in Berlin. Attendance was over 250 attendees, it is a pretty exclusive event. ADP always does an interesting statistic., it aggregates the payrolls spend through its systems for these customer and the mark was at over 7B+. Impressive. 



Prefer to watch – here is my event video … (if the video doesn’t’ show up – check here




Here is the 1 slide condensation (if the slide doesn’t show up, check here): 





Want to read on? Here you go:

A great event – ReThink is one of the top, if not the top event I have the privilege to attend. Everything about this event is very, very well done. Starting with an easy registration, well organized travel, great locations, very senior attendees, high caliber speakers (this edition as CNN’s Fareed Zakaria, fresh from Davos, David Miliband (now CEO of the International Rescue Committee) and Peter Gabriel (not just as musician, but mostly as human rights activist). In between ADP customers share their stories, remarkably in a consistent format. ADP messaging was at a minimal with Don Weinstein sharing product vision and Marcus Buckingham the latest ADP Research Institute findings. An event I always look forward to.

Customer Success – ADP customers are successful on the ADP products for global payroll, mostly GlobalView. In the formal presentation as well as informal side conversation, it is clear that ADP customers are doing well with this complex automation challenge. New capabilities like Celergo are something they look forward to explore and use. The ‘star’ of the presentations was certainly Microsoft which is almost done consolidating its payrolls on ADP. ADP made clear that its global payroll offerings work for small enterprises (smallest was about 3k employees) to the largest ones (in the 6-digit figures).

Last year WorkMarket, this year back to TMBC – In the past two years ADP acquired the two aforementioned vendors right before ReThink and the vendors were an integral part of the presentations and demos. The last acquisition was Celergo, and it deems itself less to present than the other two, but Celergo founder Michele Honemichl was on stage and is the new head of payroll strategy at ADP. So, it was back to one of the best presenters in the industry, Marcus Buckingham, to share the newest findings of the ADP Research Institute… Not surprisingly, embedded into this message is to use TMBC and the overall benefits were re-enforced by a presentation by Cisco, a long time TMBC customer.

Experience exchanges matter to customers – Talking to attendees the single most consistent feedback was that they learnt a lot from each other. As it should be, but it also points to an area where ADP can improve, helping its global customers to connect better. They also could take the initiative and form a user group.

MyPOV

An excellent event to attend to get the pulse on where enterprises are with their global HR / payroll projects, one of the most challenging enterprise automation topics. Not just because being global, but also because of the massive responsibility in regards of employee financial wellbeing, the constant changes in legislation and lastly the challenging exercise to make software work for some very small employee populations around the globe. ADP now must show how Celergo will help customers, it became clear that what originally was positioned as a talent “acquihire” has also some software assets under the hood. All the better for ADP customers, but they want to see the new value – as soon as possible.

ADP deliberately tunes the product message down, and while there are demo stations to see the products, it certainly will be good to see what further innovation is coming from ADP soon, what tangible capabilities customers can count on later in 2019 / the not too distant future. ADP did this in past editions of ReThink, it will be good to revive this in 2020.

The real downside is only… it’s 51 or so weeks to ADP ReThink 2020.


More on ADP:
  • Progress Report - ADP Analyst Day 2018 - Things are looking up - read here
  • Event Report - ADP Meeting of the Minds 2018 - Stay the course - read here
  • Event Report - ADP ReThink - Great event and a lot in the making  - read here
  • Market Move - ADP Acquires WorkMarket to Further Extend Human Capital Management to Contingent Workers [...] - The Gig Economy looms on the Future of Work- read here
  • Progress Report - ADP pushes on - 2018 will be BIG - read here
  • Event Report - ADP MOTM - Time get customers on board!? Read here
  • Event Report – ADP ReThink – Great event and great value coming for customers  - read here
  • News Analysis - ADP Acquires The Marcus Buckingham Company to Expand Talent Portfolio - read here
  • Progress Report - ADP Analyst Day 2016 - ADP has turned around Vantage HCM - read here
  • Event Report - Event Report - ADP MOTM - ADP delivers: New UI, Benchmarks, Market Place & More - read here
  • News Analysis - Workday and ADP partner to Deliver a Seamless Customer Experience for Global Payroll - read here
  • Progress Report - ADP Analyst Day - ADP executes, kills (most) ghosts from the past - read here
  • Event Report - ADP Meeting of the Minds - It’s all coming together for ADP in 2015 - product wise - read here
  • First Take - ADP Meeting of the Minds - Day #1 Keynote - read here
  • Progress Report - ADP shows great vision, delivers product innovation - now it needs adoption - read here
  • Site Visit - ADP's new innovation lab in Chelsea - read here
  • News Analysis - ADP announces Spin-Off plans for Dealer Services, sharpens ADP's focus on HCM - read here.
  • Event Report - ADP's Meeting of the Minds - ADP has made up its mind (almost) - customers not yet - read here.
  • First take - 3 Key Takeaways from ADP's Meeting of the Minds Conference Day 1 Keynote - read here.
  • ADP innovates with with verve and good timing – read here.

Want to learn more? Checkout the Twitter Moment below (if it doesn’t show up – check here).

Find more coverage on the Constellation Research website here and checkout my magazine on Flipboard and my YouTube channel here.

News Analysis - IBM Unveils New Offerings for Faster and More Secured Path to Hybrid Cloud

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Since about a year IBM is pushing the pedal again on cloud, hybrid cloud more specifically. Adding the RedHat acquisition, IBM now has several products and services to position. Having consolidated all its event with Think 2019, happening in San Francisco February 12th to 14th 2019 – it was a good opportunity to check-in what IBM is announced with a news analysis. 


The press release can be found here– and I am dissecting it in my customary news analysis style:

SAN FRANCISCO, Feb. 12, 2019 /PRNewswire/ -- IBM Think -- IBM (NYSE: IBM) today announced new hybrid cloud offerings to help businesses migrate, integrate and manage applications and workloads seamlessly and with security across any public or private cloud and on-premises IT environment.
MyPOV – Good summary, always good to have at the start of a press analysis. In the recent PR past of IBM, this would have been three to four separate press releases.
How IBM Hybrid Clouds Drive Innovation While Managing Complexity

The IBM Institute for Business Value estimates that by 2021, 98 percent of organizations surveyed plan to adopt hybrid architectures, but just 38 percent will have the procedures and tools they need to operate that environment1. The process today is challenging because it is largely manual with major security implications and a lack of consistent management and integration tools.
MyPOV – One of the differentiators IBM can use and is using here is its substantial business research capacity. Good to see it here and look forward to seeing it more often.


As part of today's news, IBM is launching new hybrid cloud tools and services designed to help enterprises navigate the complexities of this new landscape:

New IBM Cloud Integration Platform designed to reduce time and complexity to launch new services and applications across cloud environments in a consistent and secure manner.

New IBM Services designed to advise on holistic cloud strategies.

New IBM Services designed to simplify the management of resources across cloud environments.

New services designed to provide industry-leading security for data and applications in the public cloud.
 
  MyPOV – Another great summary, but time to get into the specifics. 

"At Aetna, a CVS Health business, we see hybrid cloud as an integral part of our transformation journey," said Claus Torp Jensen, Chief Technology Officer, Aetna. "We want to use the best services from various cloud providers to create a seamless consumer experience and digitalize underlying business processes. For that, we are taking an API-centric approach to integration and making sure that all of our APIs are easily accessible across our hybrid cloud ecosystem."
MyPOV – Great to have a customer quote right at the beginning… would have been more valuable if the CTO of Aetna would refer to the specific services here. And for the PR aficionados: IBM definitively has a new chief press release editor – customer quotes would always come towards the end in the past – with IBM executive and industry analyst quotes. Good to see the change, all that matters are… customers.

New Cloud Integration Platform Designed to Dramatically Reduce Coding Time, Complexity

The IBM Cloud Integration Platform is designed to securely connect applications, software and services from any vendor regardless of whether those systems are on-premises, in a public cloud or a private cloud. The platform brings together a comprehensive set of integration tools in a single development environment. It can help improve productivity because integration specialists can write, test and secure code once, store it in the platform and reuse it – an arduous task that once monopolized their time. This can help companies cut the time and cost of integration by 1/3, while staying within their unique requirements for security and compliance.

MyPOV – This is a ‘boil the ocean’ platform – connect anything with everything from anywhere and everywhere. But fair enough that is what enterprises want and need. Reducing integration times by 1/3 is very impressive. Love to see a proof point. And key for enterprise acceleration – as integration typically slows enterprises down.

Integration is critical as enterprises optimize business processes and create more personalized customer experiences. However, integration is becoming increasingly complex because many enterprises surveyed are already using between two to 15 different clouds and want to deploy new cloud services such as AI, analytics and blockchain to stay ahead of the competition3.

MyPOV – Correct – could / should have been the intro to the section.

With the IBM Cloud Integration Platform, companies can quickly bring to market new capabilities while freeing up integration specialists to focus on the more complex, system-level integrations.

MyPOV – Indeed – that’s the benefit. Content hops back to product (or could have been with the first paragraph here).

"Most large organizations have data and workloads spread across multiple public and private clouds, SaaS and on-premises environments – sometimes as a result of their business process infrastructure, but also for compliance, regulatory and data privacy reasons," said Denis Kennelly, general manager, cloud integration, IBM. "The challenge in this environment is to overcome data and technology siloes to quickly deploy new business services and applications with security. Today, we are launching new capabilities designed to help unleash the full power of the hybrid cloud."

MyPOV – Good quote by Kennelly, stating the problem and what is being announced.


[…]

New End-To-End IBM Hybrid Cloud Services

IBM is launching new IBM Services for Cloud Strategy and Design, a comprehensive set of services designed to advise clients on how to architect the right holistic cloud strategy from design, migration, integration, road mapping and architectural services to navigating their journey to cloud. IBM Services is establishing dedicated teams of consultants who are certified experts in the latest services and technologies across multiple cloud platforms. Teams will use open and secure multi-cloud strategies, drawing upon IBM's experience in IT transformation and collaboration with an ecosystem of cloud partners. The new services leverage IBM's industry-leading Cloud Innovate method, automated decision accelerators and IBM Cloud Garage approach to support clients with co-creation and scaled innovation in application development, migration, modernization and management.

MyPOV – And we are off to the 2nd announcement, its services offered by IBM’s consultants. 


Building off a recent partnership expansion announcement with ServiceNow, IBM is also introducing new IBM Services for Multicloud Management to provide a single system to help enterprises simplify the management of their IT resources across multiple cloud providers, on-premises environments and private clouds.

MyPOV – Good to see the partnership with ServiceNow mentioned, which seems to be crucial for the delivery of these services…



The delivery of IBM Services for Multicloud Management includes three layers designed to provide a single management and operations system:

Business management – applications that provide digital service ordering, modern service management, and cost governance to help manage spend;

Orchestration – an automation layer that helps enable services of different types, from different vendors to be integrated easily and made available to consumers;

Operations - a layer that helps enable infrastructure and operations administrators to monitor and maintain systems, including legacy infrastructure, private cloud, public cloud and container environments.
MyPOV – When I read ‘layers’ I think software layers, but here we are talking services layers – which at least confuses me… but as long as enterprises catch this – key to know.
In addition, it includes a unified, self-service experience to users to facilitate faster and easier access to cloud services via an environment integrated with the ServiceNow Portal to configure and buy cloud services and solutions from multiple cloud providers. It also provides performance management services and offers the means to monitor and manage the health of the cloud.

MyPOV – Now this is a positive difference for a services announcement. All too often services projects transform in many years of support and maintenance revenue for the service provider. So, it’s good to see that IBM offers the self-services for customers… we now have to see how popular that is... and what do customers who do not have ServiceNow do?
"As we grow our digital business, moving our applications to the cloud is critical to help modernize our processes and deliver even better experiences for our customers. Adopting the right strategy and migration approach to cloud needs to be seamless and requires an understanding of our IT landscape," said Sarp Uzkan, vice president, IT, Tribune Publishing. "IBM cloud advisory services and tools provided a detailed assessment that determined not only which applications would be best to move to the cloud but a strong business case that would meet our needs and enabling us to explore the best approach for moving to the cloud."

MyPOV – Good quote by a customer… we now have covered healthcare and media.

[…]

Industry-Leading Security for Data and Applications in the Public Cloud

Security remains a top concern across all industries and markets when deploying apps and data in hybrid cloud environments. In order to minimize threats, enterprises need to the ability to protect data at every stage of its journey, easily manage access and identity and gain visibility into the security posture for all their applications.

MyPOV – And we are off to the third announcement, another services announcement. I like the structure better… first the problem for enterprises, then the solution.

IBM is launching the IBM Cloud Hyper Protect Crypto Service, which is designed to provide industry-leading security on the public cloud and is made possible by bringing IBM LinuxONE into IBM's global cloud data centers. This service will provide encryption key management with a dedicated cloud hardware security module (HSM) built on the only FIPS 140-2 level 4-based technology offered by a public cloud provider.

MyPOV – Always good to see security made more reliable by hardware-based security. But its only LinuxONE, so this is really an announcement that is a little bit if an oversell… but ok. Seems like there had to be three.

This is part of the IBM Cloud Hyper Protect family of services, which is already providing enterprises like DACS and Solitaire Interglobal with industry-leading security and resiliency for their applications. To provide high levels of security across both public and private clouds, IBM is also announcing significant enhancements to IBM Cloud Private on Z.

MyPOV – Ok fair enough, it’s a suite of products… maybe this should have become as the 2nd paragraph.

Learn more about IBM's new capabilities in cloud security by visiting: https://ibm.com/blogs/bluemix/2019/02/cloud-security-right/
MyPOV – Good to see all announcements having additional URLs included (I took them out above) – but this one I wanted to keep, because… it was nice the see BlueMix in the mix – at least URL wise (for those who don’t know -this was IBM’s PaaS platform).



Overall MyPOV

Given Think is bringing together what used to be 5-7 separate IBM events till 2016 / 17 – this is not much. But then – sometimes less is more. But given hybrid cloud is the major investment for IBM, Ginny Rometty mentions Kubernetes 3x on CNBC live – it’s overall a little thin. THINK is not over – and more may come. And IBM / RedHat may need time to firm this up more.

What is clear is that IBM sees a big, big services opportunity in the multi-cloud business. And IBM is right, enterprises need more help here. But IBM has and will have to compete with all the Sis in that space and it’s mixed positioning of hardware / software and services will be great for existing and future customers of the overall IBM multi-cloud offerings, but for a more service provider hybrid world, it’s more of a challenge for IBM to win the business. To truly compete with the hardware agnostic Sis, IBM will have to extend partnerships to the relevant hardware vendors that are popular in enterprises’ data centers. But those vendors are discovering services as well.

For CxOs who use IBM, or want to use IBM, this is all good news. They need to make sure pricing and quality is competitive though. For CxOs who are partially in the IBM camp, they need to make sure they do not create hardware induced services stovepipes. That will likely only end up with a big bill and integration is still owned by the enterprise. For CxOs not on IBM and not interested in IBM – this is no news… unless they want to use it to entice their vendors to … offer the same. And that very last argument shows that IBM is off to something compelling and good for enterprise to operate their next generation applications and help their enterprise accelerate in the cloud era.


More on IBM:

  • Market Move - IBM buys RedHat - A bold move for hybrid cloud and PaaS - read here
  • Event Report - IBM Think 2018 - IBM is back... - read here
  • Market Move - IBM buys RedHat - A bold move for hybrid cloud and PaaS Event Report - IBM World of Watson - IBM's bets its future on Watson - read here
  • Progress Report - IBM Alliances Insights - Deep Plans, now it is execution time - read here - read here
  • News Analysis - Workday, IBM Form Strategic Partnership on the IBM Cloud - The IaaS vendor race for SaaS load is on - read here
  • News Analysis - IBM Boosts Support to OpenStack's RefStack... first serious attempt to make OpenStack interoperability real - read here
  • Event Report - IBM Interconnect - IBM innovates and partners into the hybrid cloud era - read here
  • News Analysis - IBM and VMware announce partnership to accelerate enterprise hybrid cloud adoption >> Looking promising - read here
  • Event Preview - IBM Interconnect 2016 - read here
  • Site Visit - IBM Design Studio Austin - read here
  • MarketMoves - IBM strikes 3x in Fall - Cleversafe, The Weather Company and Gravitant - read here
  • News Analysis - IBM launches Industry's First Consulting Practice Dedicated to Cognitive Business - a good move it's early times - read more
  • News Analysis - IBM plans to acquire Cleversafe to propel Object Storage into the Hybrid Cloud >> a good move. Read here
    Market Move - IBM acquires StrongLoop - nodejs comes to BlueMix - read here
  • News Analysis - IBM and ARM Collaborate to Accelerate Delivery of Internet of Things - The IBM NextGenApps Stack emerges - read here
  • Progress Report - IBM Cloud makes good progress - but needs to attract more load - read here
  • Market Move - IBM gets into private cloud (services) with Blue Box acqusition - read here
  • Event Report - IBM InterConnect - IBM makes bets for the hybrid cloud - read here
  • First Take - IBM InterConnect Day #1 Keynote - BlueMix, SoftLayer and Watson - read here
  • News Analysis - IBM had a very good year in the cloud - 2015 will be key - read here
  • Event Report - IBM Insight 2014 - Is it all coming together for IBM in 2015? Or not? 
  • First Take - Top 3 Takeaways from IBM Insight Day 1 Keynote - read here
  • IBM and SAP partner for cloud - good move - read here
  • Event Report - IBM Enterprise - A lot of value for existing customers, but can IBM attract net new customers? Read here
  • Progress Report - The Mainframe is alive and kicking - but there is more in IBM STG - read here
  • News Analysis - IBM and Intel partner to make the cloud more secure - read here
  • Progress Report - IBM BigData an Analytics have a lot of potential - time to show it - read here
  • Event Report - What a difference a year makes - and off to a good start - read here
  • First Take - 3 Key Takeaways from IBM's Impact Conference - Day 1 Keynote - read here
  • Another week and another Billion - this week it's a BlueMix Paas - read here
  • First take - IBM makes Connection - introduces the TalentSuite at IBM Connect - read here
  • IBM kicks of cloud data center race in 2014 - read here
  • First Take - IBM Software Group's Analyst Insights - read here
  • Are we witnessing one of the largest cloud moves - so far? Read here
  • Why IBM acquired Softlayer - read here
Find more coverage on the Constellation Research website here and checkout my magazine on Flipboard and my YouTube channel here.

Musings - SAP democratizes Product Development - what does it mean for Customers?

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This is an overdue post, which I should really have written back when it was announced that Bernd Leukert was changing roles starting in 2019… now reality has caught up, and Leukert is leaving not only the executive board – but also the company. 


In the course of five years SAP has moved from having a single leader for product with then CTO Sikka, who handed over things to Leukert. Single product leaders – who can get it done – work well for enterprise software vendors – as Oracle has shown with Kurian (but also departed, for Google, that’s another overdue post). 

Some SAP product logos (source www)

Meet the Product Leaders at Board Level

Well on the board it’s three members… and what are their responsibilities?
 
Christian Klein (source: www.sap.com)

  • Christian Klein, COO - Intelligent Enterprise (which is S/4HANA and SAP Digital Supply Chain. Klein joined SAP in 1999 and is not even 40 yet. Germany’s system of dual study for cooperative education makes it possible. SAP never had such a young leader for all its core products. Remarkably Klein’s background at SAP is not in product development, but finance and support.

Juergen Mueller (source: www.sap.com)

  • Juergen Mueller, CTO – SAP Cloud Platform, SAN HANA, SAP Analytics and SAP Leonardo. He joined SAP little more than 5 years ago, in 2013. Previously he was SAP’s Chief Innovation Office driving research agenda and increasingly SAP Leonardo. He isn’t 40 either, even younger than Klein.
 
Robert Enslin (source: www.sap.com)

  • Rob Enslin, President (Cloud Business Group)– SAP Ariba, SAP Concur, SAP Fieldglass, SAP hybris, SAP SuccessFactors and now also Qualtrics. The group I call 5 sisters that are now… six sisters. It’s a marvel by itself, with six presidents and at least 6 heads of product reporting to them. Six different (and more) product architectures underneath them. Enslin has to balance revenue and product needs for all six sisters. Enslin joined SAP in 1992, when Klein and Mueller were barely in high school. He even worked 11 years somewhere else before joining SAP. We won’t reveal his age, but he could well be a father to Klein and Mueller.

When SAP announced the Qualtrics acquisition I joked with McDermott on a briefings call, how he felt as head of product. He hesitated a moment, then laughed it off…. But the new reality at SAP is now that falls into three large product development areas – something that has not happened in over 20 years.

For the SAP history buffs: Back in the 1990ies, SAP was a true matrix organization, with each of the then board members (Hopp / Kagermann, Plattner, Zencke, Heinrich, Tschira) having product development and go to market responsibilities (except for Tschira, if memory does not fool me). That ended up badly when SAP missed earnings and SAP moved to a functional organization. Kagermann regretted to have to give up product development and move on to… worldwide sales.

In 2019 SAP is back to a matrix – across three products and two sales leaders. This is a complex structure and needs a lot of goodwill and potential hands on management by the CEO.

To understand the task – lets look at the key challenges for each of the product leaders:
  • Klein – He has to make the Intelligent Enterprise real, SAP’s big news from Sapphire 2018. No easy task, since I largely contribute the departure of Leukert to the lack of resources dedicated to S/4HANA. SAP realized in spring of last year that it cannot deliver on the SAP S/4 value proposition – which was R/3: The integrated end to end ERP+ suite. It was taking Leukert and team too long, Salesforce was gaining, C/4HANA was created. All this is history – but it does not make Klein’s job easier. S/4HANA will likely be the SAP Finance system, everything more is on the test stand.
  • Mueller – He has to make sure that Klein and Enslin’s teams can build modern software. With the SAP Cloud Platform he needs to make the SAP PaaS competitive, beyond the SAP internal use case. He also has to keep AWS, Google and Microsoft (and likely more IaaS vendors) happy with SAP’s multi-cloud strategy. Kubernetes offerings are well portable – but much more needs to happen to make HANA run on the popular IaaS platforms. And then he has to get the intelligence into the intelligence suite… via Machine Learning / AI.
  • Enslin – He is leading (as predicted here) the ‘death marsh’ of the five sisters to the common SAP platform – with SAP HANA / Cloud Platform and Analytics. Basically, he is putting the 5 sisters on SAP technology. I call it a ‘death marsh’ because platform work always slows down functionality – and the degree of innovation that is coming out on the functional side of Ariba, Concur, Fieldglass, Hybris and SuccessFactors – has taken a break. SAP will deny this, but every technology knows this: When the platform changes, functionality enhancements takes a breather as all hands are on deck to get the product on the new platform live.

SAP Product Leaders, responsibilities and challenges 


So what does it mean for SAP Customers?

As usual, when you can live with standard functionality – you are in good shape. But if you need anything new / strategic / co-development wise from SAP – you have to navigate the complexity.

Say for example you want something strategic from SAP Ariba. So you want to get the buy-in from Darren Koch (Chief Product Officer at Ariba). Better get his bosses’ buy in as well, that’s Barry Padgett, who works for Rob Enslin. Assume the new functionality is innovative and needs something from machine learning, and it runs on e.g. Azure. In comes Juergen Mueller with his team. And say it needs to feed back into your SAP Finance system – in come Christian Klein (and Thomas Saueressig, who is in charge of S/4HANA and more). You quickly run out of seats in the minibus or conference call lines. Customers who want to cut the chase and look for Bill McDermott’s commitment, may well try to (and likely get it). But let’s not forget that for McDermott to get this done, he needs to coordinate at least three, if not 7 executives (his three board members, the Ariba executives, and for making it easy – just one additional one from Klein and Mueller. For instance, SAP SuccessFactors has two product leaders – Amy Wilson and James Harvey. That makes it 8 executives. Add to that the usual strategic deals that Adair Fox-Martin and Jennifer Morgan will throw in, especially in Q4. I can see 50% of board meetings being about product ad product development coordination. How often do you have all these executives in the room (or the video conference) to make real time trade-offs between road maps, headcount and customer demands.

On the flipside, customers used to commitments made and delivered for instance by the presidents of the 5 sisters (or also Qualtrics) – need to double check that the rest of the SAP development organization is on board.

The recommendation for customers can only be to take the road maps for granted, hold SAP to it and to take any executive commitments… with a grain of salt. The only way SAP can make this happen is with … vetoing any special projects and commitments. Road map is the new religion. That has never happened, now might be the time to get this installed and live by it.


MyPOV

SAP will have to find a very efficient way to manage this, otherwise there is a high chance it may not be able to deliver. Not planning succession for Leukert (as SAP has almost a tradition – see succession og Agassi, Sikka) is a repeated mistake. To be fair – that is never easy. The board (and owner / operator Plattner) may think that they have the right mix in place between experience and “Sturm und Drang” but it now has all to work. Trips to Potsdam (where Plattner usually is, when in Germany) will be common. SAP has also a tradition to put “x in the box” as we saw with McDermott / Hagemann Snabe – or just last year with Enslin / Leukert. Will we see “three in the box” with Enslin, Klein and Mueller? I am pretty sure, watch the Sapphire keynote?

If it all works, the good news is that Enslin is the succession plan / insurance for McDermott, and we will see how things will get split up between Klein and Mueller. Klein was CFO at SuccessFactors, so he maybe the succession for Mucic, his role as a caretaker of S/4HANA may give him also the exposure to become the next CEO of SAP. Mueller is the executive with the most product DNA, so he may well get the job that Agassi, Sikka, Leukert had before him. But that will be not before 2-3 years from now.

But for now – it’s going to be interesting to see if SAP can deliver all the product it promised to deliver, faster. The competition certainly has simpler product organization operating models. But then… never discount SAP, there is a lot of talent and major investment at play... and a lot of German corporate DNA and rigor to deliver to a committed roadmap. On the other side it’s the biggest challenge SAP’s product organization is in since… building R/3 in the first half of the 1990ies. Exciting times ahead. 


[For additional reference checkout my analysis of SAP's last major board reorg, in April 2017, which created the cloud business group - here.]


Some recent SAP blogs:
  • News Analysis - SAP intends to buy Qualtrics - Pairing operational and experience data – And it’s 6 sisters - read here
  • News Analysis - Adobe, Microsoft and SAP announce the Open Data Initiative to empower a new generation of customer experiences - Good idea, good start...  - read here
  • Event Report - SAP Ariba Live 2018 - Las Vegas - Sustainability and UX - read here
  • Event Takeaways - SAP at MWC 2018 - read here
  • Market Move - SAP acquires Callidus - More Sales Effectiveness in the Back Office of the Front Office - read here
  • News Analysis - SAP HCM On-Premise Option for SAP S/4HANA - or is this S/4HCM? - read here
  • News Analysis - Microsoft and SAP join forces to give customers a trusted path to digital transformation in the cloud - read here
  • Event Report - SAP Hybris Live 2017 Barcelona - YaaS morphs and more agility ahead - read here
  • News Analyses Roundup - SAP's September Tech Announcements - SAP doubles down on technology - read here
  • Event Report - SAP SuccessFactors SuccessConnect - New Leadership - Old Challenges - read here

And some Constellation Research reports on SAP:
  • Constellation ShortList™ PaaS Suites for Next Gen Apps, By Holger Mueller, February 27th 2019 - see here
  • Constellation ShortList™ Global HCM Suites, By Holger Mueller, February 20th 2019 - see here
  • Experience Management Drives SAP’s Acquisition of Qualtrics, By Nicole France, Holger Mueller, R "Ray" Wang, November 28th 2018 - see here
  • SAP Hybris advances its Platform, By Holger Mueller, November 20th 2017, see here
  • SAP Cloud Platform: A New Standard for a SaaS Vendor’s PaaS, by Holger Mueller, June 13th 2017, see here
  • SAP HANA 2 Ushers in the Next Era of Pure In-Memory Applications, by Holger Mueller, December 27th 2016 - see here
  • SAP UXaaS Democratizes Usability, Starts Next Wave of User Experience, By Holger Mueller and R 'Ray" Wang, April 7th 2016 - see here
Find more coverage on the Constellation Research website here and checkout my magazine on Flipboard and my YouTube channel here.

Musings - Apple Services Event 2019

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Apple had its long anticipated services event in Cupertino on the 25th of March. Not surprisingly, Apple announced a news, TV service. The gaming service was expected somewhat. The real surprise was the card. 




I collected my notes and thoughts in a Twitter Moment (if it doesn't render - you can find it here):






MyPOV


Tech companies do not get media, so I am sceptical that Apple can pull of anything of real substance around News and TV. Most people get these services already and often for free (as bundled with other services). Granted - Apple can throw billions at this - and showed the star power at the event. But the stars will take the money, but not guarantee success. It all reminded me of Yahoo! signing Katie Couric to go into news. Why will it work today for Apple? The challenge is also to convert a free offering (Apple News) to a paid one - never easy.

The gaming offering is interesting, as it offers a syndicated view on the Apps Store for gamers. Apple may be able to charge for placement etc. but then - it makes money already and game vendors don't like it (see Fortnite bypassing the paywall). And gamers are fiercely independent - yes they may have an iPhone - but they will side load it / jailbreak it with not a moment of hesitation for the newest game. 

The most interesting offering is certainly the card. Technology with NFC payments and the smartphone capabilities can certainly disrupt payments and credit cards. It's an antiquated industry, charging premiums and waiting for disruption. Apple may be able to pull this one off - though margins will be lower than selling shiny glitzy objects. If Apple (and investors) can stomach this - great opportunity.

But overall I remain sceptical. The Apple install base has stopped growing. No smartphone / phone maker has been able to revert it. When the moment is passed, the moment is passed. Services on a shrinking platform cannot right the overall enterprise. Assuming iPhone replacements will happen every 3 years, Apple needs to extract about 500$ in services soon to smoothen the bump and then over the life of a headset. A tall order. Only subscribe (and forget) can get Apple there. And there are enough Apple fans out there to do so...  going platform independent is the only way. And that's easy for the card. Future will tell if and how much services can save Apple from fading.

P.S. We often talk about product companies needing to become service companies. This is a very hard transition. If one of the richest, in talent on board and acquirable as well as financial resources, company struggles so much here... what is an ordinary / regular company going to do? Certainly place frugal bets more carefully. 


More on Apple
  • Happy 10th anniversary iPhone - afraid the next 10 years will be harder - read here
  • News Analysis - Apple & SAP Partner to Revolutionize Work on iPhone & iPad - read here
  • First Take - Apple wants to change the Future of Work. Works with cloud apps vendors and Workato - read here
  • 5 Questions for Apple - Or how good product development practices matters - read here
  • Musings - Implications for CxOs from the DoJ vs Apple tussle - read here
  • An evening with Gil Amelio - read here

Progress Report - SAP Cloud Analyst Summit 2019 - Intelligent Suite and Moving to SAP Tech Stack

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We had the opportunity to attend the yearly SAP Cloud analyst meeting, held from March 6th till 7th in Salt Lake City. It was co-located with Qualtrics X4 Summit user conference, a good move to get the analysts up to speed on the newest ‘sister’ (as I call the SAP cloud businesses). Much of the summit was under NDA and we had to go through a reverse factual review – sharing with SAP before we published… then more work happened, and I am belated with this post… but better late … than never. 



Here is the 1 slide condensation (if the slide doesn’t show up, check here):






Want to read on? Here you go:

The big SAP cloud business re-platform is under way. With this I refer to the effort of moving the ‘sisters’ to the SAP technology stack, meaning SAP HANA, SAP Cloud Platform, SAP Analytics and Leonardo. That effort is under way and seems to be going well. Fieldglass – the smallest sister – is already on HANA. Work at SuccessFactors and hybris is under way. Not sure where the Ariba efforts stand. As I learnt a week later at Concur’s Fusion – the Concur efforts are excused from the effort, going “all in” with Amazon’s AWS Cloud. Customers want to know where the effort stands – so SAP is well advised at giving some updates and timelines at some point in the near future.

Concur and Qualtrics - clarity and questions. The Concur decision makes a lot of sense, as likely HANA is punitively high for products like Tripit. And to be fair – HANA was never designed to be a travel expense / travel management database with millions of users. The big question is now what SAP will do with Qualtrics. Let the new experience management acquisition “daughter” run by itself for a while, move it to the SAP stack or maybe also to AWS (where it largely is already)? It was too early to get firm answers of this. But the question is pertinent to make the SAP desire of a new software category with “Experience Management” going – as customers and prospects will want to know what this new software will run on. Personally, I am sceptic HANA can be the database for capturing and continuously querying digital exhaust to predict and create superior experiences. That’s more of a Hadoop job. Future will tell.

Reduced functional progress is the price. As with any re-platform – this must be an all hands effort at all the daughters. They almost all picked Oracle and have heavily optimized on that platform. When you do that on Oracle, you write a lot of stored procedures, and those cannot be migrated to another database – also if its HANA. This means that a decade + of code that has been built e.g. at SuccessFactors and Ariba will have to be re-written and tested. If SAP shares the effort publicly it will likely make customers a little nervous and open the install base up for FUD from the competitors. So likely SAP will have to undertake the effort behind closed doors. The consequence is less functional progress for the ‘daughter’ as developer across the product are busy re-coding and testing functionality. I am not covering Ariba in depth, but SuccessFactors and we can see that slow down on the SuccessFactors side. Pretty much since Spring of 2018 the major piece of innovation coming from SuccessFactors is … a mobile version. Building mobile versions while re-platforming the core offering is a proven strategy for vendors in that phase – mobile is separate technology (especially when you move to HANA) and there are well defined interfaces to the rest of the product. So, it was not a surprise the demo of SuccessFactor’s Amy Wilson in Salt Lake City was about – mobile, with SAP Cockpit and the future what Qualtrics can be doing in combination with SuccessFactors for the employee experience. We will see what SAP will share soon.

A new role for SAP technology. SAP has long invested into HANA, SAP Cloud Platform and more. Executives have adamantly insisted that both are strong products, that stand alone and compete with e.g. the Oracle database. That seems to be history now, though SAP has not officially stated it is changing the role of its technology products to focus less on independent, best of breed competition, but making its technology support its application products and ambitions. Certainly, a valid approach, but a lot of investment that will not capitalize. The litmus test question: What is SAP had banked on Oracle only its database – how much SaaS product could have been built? Certainly, more than SAP has been able to build so far. It would have been the reverse takeover of the sisters’ decision to standardize on that database. In the past SAP always mentioned the license payments that had to go to Oracle – but SAP does not have a principal issue with it – as we see with its multi-cloud strategy: Here SAP uses the IaaS partners the same way as it uses / used to use its database partners.

But What Ifs are nice scenario plays – it is what it is – and SAP seems to have made that decision. Data points into that direction. It would be good for SAP to make it public.


MyPOV

Let’s focus on the good news first: The SAP Intelligent Suite messaging, unveiled at the very first meeting of this group one year ago – is still the true north for S/4HANA, C/4HANA and the sisters. It takes time to build product and keeping the vision and strategy the same is vital for delivering successful enterprise products. I may have missed the plans on the integration side. SAP is creating a distributed system landscape and this time owns the integration between these automation islands. At Sapphire 2018 executives were aware of owning this and committed to it. By now its time to see more specifics on how SAP wants to enable that integration for its customers.

On the concern side, every re-platform is risky business. It must work, must happen likely behind the scenes (as it happens in the cloud world - to not make customers nervous) and means a functional pause for the products undertaking the effort… But the train has left the station, certainly for SuccessFactors, maybe for Ariba, maybe for hybris. The big question now is what the plan for Qualtrics will be. Given SAP’s complex development organization (see here) – customers need to plead for transparency by SAP in the form of roadmaps.

But overall kudos for SAP to give insights on its overall state of the cloud products. It was good to see three board members (Enslin, Klein and Mueller) as well as their key lieutenants (e.g. Faerber, Saueressig, Wilson) coming to Salt Lake City to speak with the analysts present there. Now all eyes are on Sapphire.

More on SAP



Some recent SAP blogs:
  •  Musings - SAP democratizes Product Development - what does it mean for Customers? Read here.
  • News Analysis - SAP intends to buy Qualtrics - Pairing operational and experience data – And it’s 6 sisters - read here
  • News Analysis - Adobe, Microsoft and SAP announce the Open Data Initiative to empower a new generation of customer experiences - Good idea, good start...  - read here
  • Event Report - SAP Ariba Live 2018 - Las Vegas - Sustainability and UX - read here
  • Event Takeaways - SAP at MWC 2018 - read here
  • Market Move - SAP acquires Callidus - More Sales Effectiveness in the Back Office of the Front Office - read here
  • News Analysis - SAP HCM On-Premise Option for SAP S/4HANA - or is this S/4HCM? - read here
  • News Analysis - Microsoft and SAP join forces to give customers a trusted path to digital transformation in the cloud - read here
  • Event Report - SAP Hybris Live 2017 Barcelona - YaaS morphs and more agility ahead - read here
  • News Analyses Roundup - SAP's September Tech Announcements - SAP doubles down on technology - read here
  • Event Report - SAP SuccessFactors SuccessConnect - New Leadership - Old Challenges - read here

And some Constellation Research reports on SAP:
  • Constellation ShortList™ PaaS Suites for Next Gen Apps, By Holger Mueller, February 27th 2019 - see here
  • Constellation ShortList™ Global HCM Suites, By Holger Mueller, February 20th 2019 - see here
  • Experience Management Drives SAP’s Acquisition of Qualtrics, By Nicole France, Holger Mueller, R "Ray" Wang, November 28th 2018 - see here
  • SAP Hybris advances its Platform, By Holger Mueller, November 20th 2017, see here
  • SAP Cloud Platform: A New Standard for a SaaS Vendor’s PaaS, by Holger Mueller, June 13th 2017, see here
  • SAP HANA 2 Ushers in the Next Era of Pure In-Memory Applications, by Holger Mueller, December 27th 2016 - see here
  • SAP UXaaS Democratizes Usability, Starts Next Wave of User Experience, By Holger Mueller and R 'Ray" Wang, April 7th 2016 - see here

Find more coverage on the Constellation Research website here and checkout my magazine on Flipboard and my YouTube channel here.

News Analysis - SAP keeps - re-organizing - Fox-Martin in charge of world-wide sales, Enslin out, replaced by Morgan

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Late on a Friday night in Germany SAP issued a press release that Robert Enslin is leaving the company. The organizational consequence was that of Jennifer Morgan taking over the Cloud Business Group, Enslin’s previous responsibility. Morgan's existing responsibility on the go to market side are now completely with Adaire Fox-Martin – who now solely owns go to market for SAP.


The late Friday night release always implies that SAP tried to ‘hide’ the new around the departure and re-organization ad the board level, especially since it is the second one this year (read about Leukert’s departure here). So let’s start with dissecting the press release in our customary fashion, it can be found here.


WALLDORF — SAP SE (NYSE: SAP) today announced that Executive Board Member and President of the Cloud Business Group Robert Enslin has elected to resign from the company to pursue an external opportunity.

MyPOV - Short and sweet – Enslin looking for an external opportunity. The remarkable part is that he does that after a 27-year career with SAP. Usually that long tenured board members and SAP employees get the chance to retire (contrast and compare with for instance Kleinemeier). The Cloud Business group is in the midst of a transformation to move to the SAP technology stack (and in most cases off an Oracle database), but that effort seems well under way. Enslin got more responsibility during the tenure with the addition of Callidus Cloud in 2018 and recently Qualtrics. So, it needs to be something that has happened more recently to prompt him to look for external opportunities.


SAP Executive Board Member Jennifer Morgan will succeed Enslin as president of the Cloud Business Group (CBG). SAP Executive Board Member Adaire Fox-Martin will take sole responsibility of Global Customer Operations (GCO) as president. These leadership changes are effective immediately.

MyPOV - So Morgan is the ‘new’ Enslin – leaving sole revenue responsibility to Fox-Martin. Well not completely as all six ‘sisters’ of the Cloud Business Unit have a salesforce and revenue targets. This is taking it to the next level challenge wise for both executives. Fox-Martin must deliver the bulk of SAP’s revenue, ironically a job that Enslin had for a long time. And Morgan needs to show she can deliver products to market, as she has not held product development responsibility in her career. Both executives have their work cut out in the next years.


Enslin, who first joined SAP in 1992, departs following a long and successful career at the company. He was named to the Executive Board in 2014, initially as president of Global Customer Operations. A respected technology leader with a unique global perspective on business and economic trends, he earned a highly favorable reputation with customers and industry analysts. His two-year stint as president of the company’s Cloud Business Group resulted in an aggressive build-out of SAP’s cloud portfolio, including the recently closed acquisition of Experience Management leader Qualtrics.

MyPOV - Sad to see such an SAP veteran go – but I guess it was time for the next level. Enslin has delivered sales results during challenging times for SAP, and more recently made sure that 4 of the 6 sisters (Ariba, Fieldglass, hybris and SuccessFactors) are moving to SAP’s technology stack – most prominently SAP HANA, SAP Cloud platform and SAP analytics. Interesting that his 27-year retrospective of his SAP career speaks little about the sales success. Enslin emerged as the best sales person for SAP in North America, delivering regular performance and results, culminating in the world-wide sales responsibility. Most recently Enslin’s impact is going to be to have moved Fieldglass and most likely SuccessFactors over to SAP’s tech stack. Insight on Ariba is still out. Plans for Qualtrics are tbd, given the recent acquisition. Concur is free to leverage 100% AWS (HANA is out  of the picture there).


Comments from Professor Hasso Plattner, Chairman of the Supervisory Board of SAP

“We are very grateful for the many significant contributions Robert Enslin has made to SAP. The Supervisory Board has immense confidence in Jennifer Morgan and Adaire Fox-Martin as they assume broader responsibilities on our Executive Board.”

MyPOV - Good quote by Plattner, but what alternatives did SAP have? The alternatives would have been presidents inside of the cloud business unit. But they are all busy at delivering results while their product teams are re-platforming. At the same time, with Enslin leaving, the designate backup for McDermott is out of SAP as well. Time to groom a potential successor. And leading SAP you always need to have some product development responsibility (McDermott is the rare exception, so was Apoteker). So, its timely for Morgan to get development responsibility. I wrote the same for new board member Klein earlier this year. Klein and Mueller would have been the other two alternatives, but they just got on the board, and need to show they can deliver first. And maybe mistakenly, SAP always had a business leaders on top of the SAP cloud business unit and each off the six sisters. That the technology transformation to SAP’s technology, despite being postulated by Plattner on a yearly level – is not a surprise by now. But hindsight is always easy.


Comments from Bill McDermott, CEO of SAP

“Let me first congratulate Rob Enslin for everything he’s done in his distinguished SAP career. He’ll be a great champion for SAP in his new opportunity and a lifelong friend to me personally. With Jennifer Morgan and Adaire Fox-Martin moving up, we have two dynamic leaders who will help us take SAP to the next level. Our market-leading core ERP and high-growth cloud application portfolio make SAP a rarity in the enterprise software industry. This transition gives us a clear path to continue simplifying the company. SAP’s leadership team will drive greater operational efficiency, faster time to market, higher product quality and superior market fit, all while significantly improving margins. ‘The Best Run SAP’ is our motto, our maxim and our strategy to run the company with greater discipline and focus. I could not be more optimistic about SAP’s road map to create value for our customers, employees and shareholders – a true Best-Run SAP.”

MyPOV – A long quote by McDermott. Nice to see him thank Enslin and sparking the curiosity where Enslin maybe going. SAP has a lot of partners – so the field is wide open. And agreed that with Fox-Martin solely in charge of almost all sales (the cloud business units sales leaders have a dotted line into her) – SAP certainly simplifies the sales organization and responsibility. Not so much though from a product development side, as the Morgan for Enslin replacement doesn’t solve the challenges of a product development troika now between Klein, Morgan and Mueller. It changes the dynamics in the troika as Morgan is less senior than Enslin (who I joked, could have been a father age gap wise to Klein / Mueller). And certainly, the board has gotten much younger, it maybe (math pending) on record low average age – even before Kleinemeier retires.


Comments from Robert Enslin

“I am truly grateful to Hasso Plattner, Bill McDermott and all my SAP colleagues for the opportunity to be part of such a special company. As I leave SAP for a new journey, I do so with unrivaled respect for the company and its amazing customers around the world.”

MyPOV – Nice quote. Always good to leave on a high note.


Comments from Jennifer Morgan

“I am very honored by this opportunity to work with the outstanding team in SAP’s Cloud Business Group. I have never been stronger in my belief that SAP’s best days are yet to come.”

MyPOV – Good quote. Would have loved to see some of the Cloud Business group goals in here. 


Comments from Adaire Fox-Martin

“For the entirety of my career at SAP I have focused on our customers and their success. I could not be more energized to continue this exciting journey as president of Global Customer Operations.”

MyPOV – Good quote – focus on the customer. Strange though Fox-Martin trails Morgan in sequence. Alphabet can’t be used as explanation. At least form an outside perspective and revenue responsibility (not functional diversity) her job eclipses Morgan’s.



Overall MyPOV

SAP’s board organization doesn’t come to peace, and with that the stability that matters for execution is not materializing. Except for Finance, HR and Services – every board area has been changed and / or re-organized in the course of the last 6 months. I can’t think of such a broad level change in the board happening at SAP … ever. And the next change is already announced, as Kleinemeier stayed an extra year to keep doing the work that Leukert was supposed to take over. Organizations need stability on the top, and changes on the top have repercussions many levels down the organization, all the way to middle management changes. In a traditionally stable culture like SAP these changes are especially challenging, as networks have operated over decades, that are now dismantling and have to be rebuilt. But change can be for the better, so we will have to see what happens.


The other aspect is of course SAP’s questionable job of succession management. This is not an easy task at board level, and one only needs to think the issues e.g. Apple has had. But SAP needs to benchmark itself with the competition, and there the parallels of loosing Leukert are similar to Oracle losing Kurian, but Oracle absorbed that change much better (for now, blog post coming). If SAP did not have the double leadership in sales, a luxury and complexity, Morgan would not even have been available as a board member to suceed Enslin. The other potential successor(s) for Enslin had to come from the presidents of the cloud subsidiaries. But none of them made it, and not sure if any was ready for running all 6 sisters at this moment. As a side note: A mini consolidation occurred with moving Fieldglass under Barry Padgett who now runs Ariba and Fieldglass. And apparently no external candidates have been considered. But then SAP has a questionable record of bringing in outside board members, it has tried and failed twice for its people leader before Ries was installed. Board members from acqusitions never lasted long (Schwartz, Chen, Dalgaard) .



So, except for Mucic, Kleinemeier and Ries, everybody has a new job on the SAP board – or is new to the board. The good news is, this board has worked together before. And SAP has reduced sales complexity with handing the sales keys for (almost) all of SAP sales to Fox-Martin. One can argue McDermott’s job hasn’t changed, but I’d argue that he is the product developer in chief (see here), a new role for him.


For customers these changes simplify things on the sales side, where Fox-Martin has the last word – before reaching out to McDermott. Things remain as complex on the product side as before, with new relationships with Morgan having to be developed. Her background in sales is likely going to make the first phase of customer interaction easier, the potential challenge will be not to over extend product development commitments.


But at the end of the day, it is what it is: SAP’s executive board is younger than ever before (for a very long time), and needs to get going asap as the challenges are massive and not getting smaller because SAP is reorganizing: Making the value proposition of the digital core real, getting S/4HANA right, adding new technologies across the products, operating on the new reality of SAP owned integration between its products and moving the six sisters to the SAP technology stack. All while delivering results to shareholder expectations. Time to roll up the sleeves for the SAP board.


[For additional reference checkout my analysis of SAP's last major board reorg, in April 2017, which created the cloud business group - here.]


Some recent SAP blogs:
  •  Musings - SAP democratizes Product Development - what does it mean for Customers? read here
  • News Analysis - SAP intends to buy Qualtrics - Pairing operational and experience data – And it’s 6 sisters - read here
  • News Analysis - Adobe, Microsoft and SAP announce the Open Data Initiative to empower a new generation of customer experiences - Good idea, good start...  - read here
  • Event Report - SAP Ariba Live 2018 - Las Vegas - Sustainability and UX - read here
  • Event Takeaways - SAP at MWC 2018 - read here
  • Market Move - SAP acquires Callidus - More Sales Effectiveness in the Back Office of the Front Office - read here
  • News Analysis - SAP HCM On-Premise Option for SAP S/4HANA - or is this S/4HCM? - read here
  • News Analysis - Microsoft and SAP join forces to give customers a trusted path to digital transformation in the cloud - read here
  • Event Report - SAP Hybris Live 2017 Barcelona - YaaS morphs and more agility ahead - read here
  • News Analyses Roundup - SAP's September Tech Announcements - SAP doubles down on technology - read here
  • Event Report - SAP SuccessFactors SuccessConnect - New Leadership - Old Challenges - read here

And some Constellation Research reports on SAP:
  • Constellation ShortList™ PaaS Suites for Next Gen Apps, By Holger Mueller, February 27th 2019 - see here
  • Constellation ShortList™ Global HCM Suites, By Holger Mueller, February 20th 2019 - see here
  • Experience Management Drives SAP’s Acquisition of Qualtrics, By Nicole France, Holger Mueller, R "Ray" Wang, November 28th 2018 - see here
  • SAP Hybris advances its Platform, By Holger Mueller, November 20th 2017, see here
  • SAP Cloud Platform: A New Standard for a SaaS Vendor’s PaaS, by Holger Mueller, June 13th 2017, see here
  • SAP HANA 2 Ushers in the Next Era of Pure In-Memory Applications, by Holger Mueller, December 27th 2016 - see here
  • SAP UXaaS Democratizes Usability, Starts Next Wave of User Experience, By Holger Mueller and R 'Ray" Wang, April 7th 2016 - see here
Find more coverage on the Constellation Research website here and checkout my magazine on Flipboard and my YouTube channel here.

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