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NetSuite runs SAP!

Zach Nelson, CEO of NetSuite, in his keynote this morning at SuiteWorld welcomed SAP as a customer. SuccessFactors is a NetSuite customer, ergo with the SAP acquisition, he is right.

Meanwhile, 2444 miles away (actually 2521 on my Virgin America flight last night), at SapphireNow in Orlando, SAP was saying “Wasting no time, SuccessFactors implemented several key SAP Cloud solutions internally in only six weeks.”

So, in a press conference after the keynote I humorously asked Zach to send me an image of the wire transfer of the renewal payment of almost $ 1 million SuccessFactors made earlier this year. 

To their credit, NetSuite did not share with me that proprietary record.

They did show a customer the transaction detail, and he confirmed that to a few of us analysts and bloggers. Additionally, NetSuite says there were 2.3 million page views from SAP locations in a month and the number is trending up.

Of course, SuccessFactors could have paid the renewal and is still migrating away from NetSuite. That would only confirm that shelfware, a common problem in companies which run SAP (sorry which SAP runs), is seeping over to SaaS world.

The “Static” Outsourcing Market

“Is it just us, or does the outsourcing sector evolve much slower than other tech sectors?” asked a client recently.

“Yes and No” I replied.

“Many companies sign multi-year contracts, then renew with incumbents so there is a definite feel of status quo. But I have worked with several clients over the last decade and we have looked at over a hundred infrastructure, application management, IT strategy and other services vendors. And my books have plenty of ink on Accelerance, Appirio, Amazon Web Services, Baker Tilly, Best Buy’s Geek Squad, Cognizant, Epam, Foxconn, HCL’s Product Engineering Group, Rural Sourcing Inc….

“Gosh, I have never heard of most of them” said he.

“Don’t worry. Neither have the outsourcers. Foxconn has over a million employees in China and most services firms have not heard of them. Geek Squad does almost $ 2 billion a year in desktop and device support and most outosurcers don’t consider them competition. When you talk to Indian firms about rural sourcing they start talking about second-tier cities in India”

“So, what should we be doing differently?”

“ Start with three things:

• Tear up any preferred vendor list you may have for outsourcing. Ignore Magic Quadrants. Encourage your teams to include new, qualified firms for each opportunity
• Review every incumbent contract to see what the early termination clause says
• Delete any auto-renew clauses you may have in your contracts”

He responded “that’s easy for you to say :)”

But I also think I detected the look of a frog who realizes the water around him is starting to boil.

Van Halen will have some good advice for him at Sapphire

“Might as well, Jump!”

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What color is your conference badge?

Gavin Davidson of NetSuite summarizes a major contrast I will see between SapphireNow in Orlando on Monday and SuiteWorld in San Francisco on Tuesday.

"Normally when you attend a user conference hosted by a major ERP vendor, it’s quite a daunting task. Users, employees and partners are encouraged to wear numerous colored ribbons as an adornment to their conference badge to identify not only the industry vertical within which they operate but which solution(s) they might use or support….With NetSuite, every single user (and we are talking thousands) who attends SuiteWorld will be on the same base version..."

The other big difference is in the show floor and partner flavor. Sapphire is about high-falutin’ concepts and massive SI booths. SuiteWorld is much more grounded with a focus on customer projects and practitioners.  

Another big difference is in the customer base. Sapphire is usually dominated by big multinationals. SuiteWorld is about their subs.  NetSuite has also become the choice of some of the fastest growing and recently public companies like CornerstoneOnDemand, Eloqua, FinancialEngines, Groupon, Jive, Solarwinds,  Splunk and others.

Finally my friends at NetSuite, Mei Li and Mini Peiris, are lethal about feeding us all kinds of rich food. I see a French bistro and a Brazilian Churrascaria on the agenda. Thankfully I am hungrier in the mornings when I go West, so the big difference should be in the Florida and California greens I devour.

BTW – The Dictator comes out Thursday. By then, I should have enough conference ribbons to be at 2% of what his costume boasts in photo above!

The Other Renaissance

I scour plenty of reading material as I look for 500+ innovation posts a year for the New Florence blog.  This week, I was struck by the technology richness in two unexpected sources – Fortune and The New Yorker.

Ok, you could argue these are special, once a year issues – the Fortune 500 issue and the New Yorker Innovators issue. But then explain the 700+ citations in my two books (extracted below for those interested) – numerous blogs, predictable publications like  InformationWeek and Wired, but countless others from the BBC, BusinessWeek, The Christian Science Monitor, USA Today to other mainstream and trade media.

Part of the explanation is technology has seeped into so much of our every day lives that we expect to see more of it in our daily news.  But the other trend for all of us to celebrate is that in all the supposed doom and gloom of media dying a slow death, it is being reborn in many old and new places.

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Double-Talk Accounting

A journalist called me a few weeks ago about a vendor we all know. He was puzzled why this vendor's marketing kept talking about their cool new projects – when his research showed him it was a small part of their total revenues. So I helped him estimate the revenues from legacy products, and we quit counting at 70%. Clearly, the new solutions are only a small part of their revenues, but it suited them to paint the company as totally new and innovative.

I was talking to another vendor's executive a few weeks ago, and his brutally honest comment went something on the lines of “we have to talk about cloud, social, mobile to make you analysts feel good”

Both vendors are poster children for why the SEC should require more detailed product reporting, so we can compare Apple's 60+% of revenues from new products to those of other tech vendors who mostly talk about new products.

As I get ready to go to Sapphire next week, I stumbled across this interview David Vellante did with me at last year’s event. The first 20 minutes are about my books (BTW the book was originally titled The Technology Switchhitter, as I describe in the interview. The publisher eventually changed it to The New Technology Elite), then the conversation switches to SAP.

In the SAP section, I comment that I wished SAP would talk more about the realities of today, not just the cloud, mobile, social stuff. That is 90% of their current revenue reality. It will be so also next week, so I hope we hear more than HANA, ByD, Sybase and SuccessFactors.

 

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Open Season on China

I picked up Time and BusinessWeek in the mailbox yesterday and they both had unflattering China covers with words like lies and corruption. With our elections and their leadership transition coming up, Chen Guangcheng and Bo Xilai will be household names on both sides of the Pacific this summer. There are some entities – companies like Monsanto, and countries like China - that even the best PR firms cannot help much.

In all that negative talk, I was struck by this comment in the Fareed Zakaria column in Time:   

A party whose history is tied to peasants, workers and soldiers is now the most elitist operation in the world. Its system of promotion favors engineers, economists and management experts over anyone with grassroots political skills. For two decades, China has been run like a company, not a country.

Blame the Chinese leadership for many things, but give them credit for the amazing technocracy that I researched for many parts of my new book

a) Why has Apple, so smart and ruthless in so many ways, put so many of its eggs in the China assembly basket (most components come from Japan, Korea, US etc) ? Largely because its contract manufacturer, Foxconn has delivered time and time, product after product, revised demand forecast after another. If any other outsourcer – IBM, Jabil, Accenture, Indian - is salivating about China’s image problems, this is an opportunity to step up and deliver to those cost, quality, time to market metrics. I highly doubt any of them can come anywhere close.

b) It goes beyond labor these days. BusinessWeek had a column on the growing SUV market in China. As Tony Prophet of HP is quoted in the book:

“We have been in China over two decades, and like other Western companies we could see the spiraling real estate costs, employee absenteeism, stretched infrastructure in the developed East and South.  Starting in 2007 we started to evaluate alternatives like Vietnam and Malaysia. But the more we looked at Western China, the more we also saw the opportunity for the domestic market. If you draw
a circle out 750 miles from Chongqing, you are looking at about 300 million people—which by itself makes it one of the largest PC and other gadget markets in the world. So that is our first focus here in the west of the country—made in China, for China.”

c) It goes way beyond Apple and HP – way beyond them. The country’s regional niches described in my book show its breadth and the global business it has attracted: 

“It could be to Juijang on the southern shores of the Yangtze River with visits to the solar photovoltaic manufacturer Sornid and the helicopter manufacturer Red Eagle. Another trip could be to Qingdao (better known to many in the West as Tsingtao—as in the beer), host to Haier Group, one of  the world’s largest home appliance manufacturers, and GERB, which focuses on vibration control in heavy machinery, equipment, structures, and trackbeds. Perhaps it could be to Xiamen on the southeastern Chinese coast where Dell has a factory for the booming local China market as does Philips Lighting Electronics, which is focused on next gen LED and other lighting. Or it could be to Chengdu in western China, home to Intel assembly and testing facilities, and to Giant, the
largest bicycle manufacturer in the world.”

Time, BusinessWeek and plenty of others are right to point a bunch of challenges for China, but let’s not forget the manufacturing dynamo and massive market the Chinese leadership has built. It ain’t going away no matter what names we call the country.

Wasted PR bullets

My friend and fellow EI Ross Mayfield has had a week which calls for multiple press releases. The company he co-founded, Socialtext has gained a strategic investment by Bedford Funding ($1.4B PE firm) and will integrate with Peoplefluent.  The company he has been guiding for the last year, SlideShare is being acquired by LinkedIn.

In an email exchange I had with him earlier this week, I asked him how SlideShare was going ( I have posted a few of my book presentations on the site) and he replied “watch this space”. I chuckled because I would have respected any embargo he put me under.

In contrast, I know a PR professional who constantly offers me fairly innocuous news under embargo, that I always decline. Recently this person offered me an Infographic. Under embargo. Seriously.

The New Florence blog is running 65% more posts than last year, and has more variety in technology categories and sources than ever before. But…. blog ideas from press releases and PR posts are at an all-time (as a percentage) low.

What gives?

Here’s more disappointing quality of PR I have been getting:

a) quarterly press releases when results are good, but which disappear in disappointing quarters. And where is the innovation in a quarterly earnings announcement?

b) funding announcements with little detail on how the money will be spent. Not that their VCs want them to be that transparent or that there is much innovation in the funding terms or how the money will be used.

c) Product announcements with little detail on customers who have implemented.

d) Announcements of startups which plan to intersect social, mobile, green, Big Data, cloud and other market segments. Jargon compliant!

Here’s what gets my attention

If an enterprise product, a list of at least 10 customers who have implemented it that I can call and talk to. Of course, that means live customers not just beta releases.

If a consumer product, an impressive number (in hundreds of thousands) of early adopters.

Actually, it does not even need to be a brand new product or service. I am always on the lookout for examples of the 12 attributes I catalog in my new book.  If you are innovating on business model, ecosystem, physical presence and channel, global supply chain etc. I would love to hear. Just don’t bury it in a quarterly earnings press release:)

Big Data: of You, You and Me

I read a fascinating article in New Scientist (sub required) which cites several academic projects to profile us based on social network data. These include:

a) Work by Lars Backstrom, a researcher at Facebook, showed he could locate 2/3rd of the site user’s to within 25 miles by identifying where their friends live

b) Adam Sadilek at U. of Rochester has shown that if just nine of a person’s friend’s attach GPS tags to their Tweets, you can pinpoint half of those people to within a 100 meter radius

c) Jennifer Golbeck of U. of Maryland has scored people on psychological traits based on their Tweet language

d) Daniel Garcia=Perez at the Idiap Research Institute in Switzerland has studied personality traits based on mobile call analysis

e) Salvatore Scellato and colleagues at U. of Cambridge have studied social patterns of 300,000 people using Gowalla, a location tracking service

Now, extrapolate this to Big Data sophistication increasingly available to corporate marketers. And add to that the commercial interests of Facebook  and others as they go public to sell personal data they may not have done so far.

And wait – this is just social data.

Prof Mary Cronin, in a guest column in my new book, The New Technology Elite highlights the coming privacy issues with all the smart cars, appliances, medical devices etc. increasingly part of my lives. The book describes smart products and services from over 75 industries.

The major new privacy challenge for this decade is the continuous, automatic, and invisible tracking of individuals by multiple smart devices. In the aggregate, consumer-owned smart products collect and report data at a level of precision and frequency that vastly outstrips the consumer information collected online.

Her recommendation

Rather than waiting for the government to mandate smart product policies, companies would be well served in adopting and disclosing consistent and verifiable guidelines for the permissible use, duration of storage, and data security protection measures taken to protect all of the consumer information that is collected by their connected products.Smartphone, automotive, home entertainment, and other smart product vendors should also disclose the privacy practices of their ecosystem partners who develop applications and peripherals for their products.

And us consumers need to push both companies and lawmakers for stronger privacy and profiling laws and corporate disclosures. If you think email spam and fraud and telemarketing of the last decade were a huge nuisance, you have not seen anything yet.

Next-gen data misuse will affect our home security, pacemakers, cooking and plenty more.

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“Consumer Grade is the new Industrial Grade”

so said Charles Phillips, CEO of Infor in one of his talks at his company event last week. Darn, I should have had the quote in my new book. I describe the trend as “the enterprising of consumer tech”.

The book describes the amazing efficiency of Apple’s retail operations and its business model innovations , Google’s cleantech investments, Apple and Google’s huge ecosystems, Facebook’s hyperefficient data center, Amazon’s logistics, PayPal’s financial engine, Zynga’s blend of public and private clouds, HP’s global supply chain, Lexmark’s social savvy, Dell’s packaging innovations and and…

Three things that stood out in my research

a) How little even business pubs write about these operational details. The Swishers and the Mossbergs and the Pogues write plenty about new iPad features and gossip about their executives, but given the likely interest of their executive readerships, surprisingly little about the sausage factories. I was pleased to see Adam Lashinsky of Fortune touch on at least some operational detail in his book Inside Apple.

b) Lots of enterprise vendors whisper about what they are doing with Apple or Amazon, but then clamp up citing non-disclosures. Truth is often they are doing surprisingly trivial stuff in consumer tech companies.

c) Few enterprises are acknowledging consumer tech provides the new benchmarks for their industries. Amazon and Google data centers are more best practice than those of IBM and Accenture. Foxconn’s contract manufacturing of many consumer products is redefining economics, quality and time to market expectations for outsourcing. PayPal’s micro-payment capabilities are better than those of much larger banks. It takes a brave board like J.C, Penney’s to hire as its CEO the head of Apple Retail.

In  a joke, when asked what he had learned at Oracle, Phillips joked “not to announce a product (Fusion) seven years before it was ready”. Last week in  a call with SAP I told them that years after talking about HANA I would have expected it to have atleast 20,000 customers with some level of adoption.

That’s another lesson from consumer tech. Have your channel, your ecosystem ready to roll it out months before a formal product announcement.

Marc Benioff of salesforce.com is one of the few enterprise executives who has long admired consumer tech.  In my 2010 book, I quoted him

“ We stand on the shoulders of giants like JerryYang [founder of Yahoo!], Pierre Omidyar [of eBay], Jeff Bezos [of Amazon],
and Biz Stone [of Twitter]. ”

Marc is so right - it behooves us all as writers, and enterprise vendors and IT to learn more about what makes consumer tech go. This is the new industrial grade.

It’s going to be a great year for preserves!

…Or fresh treats…

The New Florence blog is benefitting from such a crop of innovation, it is already up to  205 posts this year. At that rate, it will have more posts for the year than all the posts in its first 3 years. Thanks to John Hagel, Jarret Pazahanick and many others for post ideas. 

Photo Credit

The Norman Rockwell airline

I have been increasingly exasperated by the lack of wi-fi on most Southwest flights – either equipment not installed or their satellite based service (as different from the GoGo air-to-ground on other airlines) is spotty. To make up for that though, I love their non-stops to so many cities, their on-time performance (3 ouf of 5 flights in last two weeks were 15 minutes early)…and the many wonderful people you meet on their flights.

People like Martie Bowlsby from Eagle Valley in Oregon. She had driven to Boise, Idaho and taken a Southwest flight from there, and sat next to me on the Denver Tampa flight last week. She described her idyllic home. As this article says 

“A temporary resident is known as an Outsider.  If he buys land or marries into an established family he has his foot in the door and becomes known as a Newcomer.  After seven years of right living he makes a step up the social ladder and becomes known as a Johnny-come-lately.  Eighteen years later he is promoted to the comfortable status of Home Folks.  But, it is added, he can never achieve the ultimate rank of Oldtimer because he didn’t have sense enough to be born to valley parents in the first place.”

But even more interesting was her description of her baking skills. They are lost on me, but I convinced her to share her prize-winning Apple Pie recipe. We borrowed a drink chart page from the Southwest attendant and she graciously wrote it down – from memory. Readers, if you try it, save me a slice!

I certainly did not miss wi-fi much on that flight.

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Consumerization of IT – the really big opportunity

Both in the panel I was part of at Inforum this week in Denver and in this guest column for InformationWeek, I highlight that consumerization is actually a major revenue opportunity for most companies. But to get there will need new skill sets few enterprises have in place today.

Inforum: The Enterprise Climbers

Bill Starke’s sculpture in the lobby of the Hyatt in Denver I stayed at this week is a good metaphor for the changing enterprise software industry.

In general, everyone treats SAP and Oracle as the pursued, and SaaS vendors as the pursuers. Infor is generally talked about as a list of 70,000 customers on every one’s bullseye. This week at their event, Inforum, new CEO Charles Phillips took pains to show Infor is also a viable pursuer, both to retain his own customers and for new competitive opportunities.

Besides showing off its own investments (including 600 new developers hired in the last year) there were plenty of associations with the future of the industry. In a fireside chat in the Executive track, Phillips hosted Marc Benioff, CEO of Salesforce.com, and they discussed the past - Benioff took a shot at Siebel and Phillips just smiled when he would have pushed back – both are Oracle alums)  and the future - Benioff pointed out Facebook is “younger than our two companies, and already bigger in revenues” and the management cultures the two leaders are shaping at their respective companies.

Backstage (I was on a panel on Consumerization of IT which followed that fireside talk), I spent some time with Phillips, got a quick demo, and got his always incisive view of the industry (I have known him since his analyst days at Kidder Peabody). During the course of the day, I had a chance to mingle with several Infor customers and its executives.

Phillips and much of the fresh blood he has brought into Infor (many from Oracle), and the Lawson acquisition have given Infor a noticeable burst of energy. While much of the conference focused on the mandatory homage to social, mobile, cloud jargon and the “speed” theme via ION (Intelligent Open Network) middleware and a collection of common services I was struck by the vertical niches Infor has presence in.

They include Lawson’s healthcare and government, Intentia Fashion, Baan Manufacturing (including Ferrari whose CIO spoke at the conference) and plenty more from the countless acquisitions it has made in the past. While most of the pursuers are going after horizontal financial, HR, CRM areas, Infor has the opportunity to focus on vertical and geographic niches across its wide empire.  The management team Phillips gave plenty of time to in the day include a Canadian and an Englishman and my panel was moderated by Peter Quinn, a well traveled Scotsman.

And most customers don’t expect Infor to stray too far from its core strengths. I asked several healthcare customers if they would like Infor to get into clinical areas, and the answer was they should keep focusing and enhancing validated inventory management, profitability analysis, unique labor/contracting related HRM issues for their industry.

Sculptor Starke has been quoted as saying “My observations on the human condition are meant to be both humorous and thought-provoking.” Inforum also turned out to be both.

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Book promotion for blog readers

Offer for my blog readers - buy a copy of my new book, The New Technology Elite, and I will mail you copy of my last book, The New Polymath, a $ 39 list value. Email your proof of purchase and mailing address to thenewtechnologyelite AT gmail DOT com.

Offer valid till May 15 or till my stash of Polymath runs out. Readers outside US - due to customs restrictions, this offer is only for US addresses, so you are welcome to participate with a US mailing address for a friend or colleague.

Lady Serendipity

Dean Homer Erekson at my alma mater, The Neeley Business School, asked several alums to contribute to a collection titled Major Moments for its 75th anniversary. I was honored to be invited and contributed below – I wrote it last year before my new book was out.

“I have had several mentors and major moments in my career, but the one I give most credit to is “Lady Serendipity” for what happened in October 1983.

I graduated with an MBA from Neeley in the summer of 1980, and went to work in the Fort Worth office of Price Waterhouse. Three years later, I had just received my first promotion, but I was restless.

I did not really enjoy being a CPA, and noticed an opening published in the firm’s newsletter. They were looking for staff in the Riyadh, Saudi Arabia office. Not a plum expatriate assignment by any definition…and the region was about to get very dangerous.

As I was getting to Saudi, the U.S. Marines’ barrack was bombed in Lebanon, and the Iran-Iraq war started soon after. Because the assignment was considered a “hardship,” we were allowed to leave the country every three months. It gave me a chance to see the world, and I have been to 40 countries.

Going to Saudi in 1983 was a major moment, because it honed my curiosity “antennae”.

Building on experience

My two-and-a-half years in Saudi Arabia allowed me to diversify my skill sets in a small office. I was allowed to work on technology projects I would never have done in a U.S. office.

I came back to the Dallas office, but jumped at the opportunity to go back to another assignment in Saudi. From there I spent two years in London (where I also met my Irish wife, who in turn had been to 30 countries on her own) and the Netherlands. My passport kept filling up.

From Price Waterhouse, I moved on to Gartner, an IT research firm, and then was an entrepreneur in a dot.com that failed.

The last five years I have been a technology strategy consultant. I also write two technology blogs, which has allowed me to write a well-received book on technology- enabled innovation, The New Polymath.

While the career has meandered, and the start-up challenged the family’s financial foundations during the technology meltdown of 2001-2003, each of these moves has brought a new set of industry contacts.

People are amazed when they hear I wrote my book -- which has interviews and profiles of over 150 innovators -- in just four months. My wide network allowed me to do so.

Advice

-- Take every opportunity to go out and shake as many hands as you can. I am part of every social network you can name -- Facebook, Twitter, Flickr etc. -- but there is nothing like breaking bread with people around the world.

-- Be curious about a wide range of subjects. Polymath, in my book’s title, is Greek for a Renaissance person like Leonardo daVinci or Ben Franklin, who were good at so many things.

-- In today’s society and workplaces, we are encouraged to be specialists. You need to specialize and be very good at what you are doing at that particular time. But…there is no law that says you have to do the same specialty over and over again, in the same exact location.”

The Enterprise Cup

Ian “Fresh” Burns of the Oracle Racing Design team did an exhilarating talk over dinner at the Oracle analyst event this week. It was about the long, storied history of America’s Cup going back to Queen Victoria (with slides on the Deed of Gift from 1852), the technology in modern races (think of the Big Data from 250 sensors constantly feeding parameters), the evolution of craft composites and construction and the stamina of the athletes on the teams as they combat everything nature throws at them.

In many ways, his talk was a metaphor for the event, and the company Oracle has become. Larry Ellison and Mark Hurd should be justifiably proud of the many components that makes up the Oracle vessel, and the many athletes they have assembled. 60 Oracle execs presented 40 sessions spread across 6 tracks that covered the gambit of today’s technology spectrum (see extract below)

Anthony Lye can authoritatively talk about customer experience and filtering of social data. Roger Turnham knows more than outsourcing analysts as he deals with 69 Oracle BPO partners. John Fowler is equally comfortable about processors and government regs for data centers around the world. Thomas Kurian can talk middleware and vertical industry trends.

Customers were comfortable naming Oracle names – Steve Miranda, Endeca came up often.  Most attendees I talked to marveled at the quality of the CIO panel at the event. They were balanced in their description of Oracle – but in my short one-on-ones with several of them they came across as demanding, sophisticated customers and Oracle is delivering to them on many fronts. 

The other vibe from the event – one of subdued Oracle confidence. Those of us who have dealt with Oracle for years know it has a hard charging side (and as a reminder the court proceeedings against Google were happening in parallel). I complimented Carol Sato of Oracle Marketing for bringing out the softer side of Oracle over the last few months.  

In the 90s I used to be impressed every trip I made to SAP Walldorf. Every product manager was competent in his/her domain and product. It was a joy to see. I felt the same vibe this week in Redwood Shores. With one big difference – Oracle has a much, much broader and much more contemporary footprint. As my readers know, I am big on Polymaths, and Oracle is getting there as it mixes and matches a variety of competencies in its engineered systems and cloud plans. 

As Burns would say - it is building an awesome AC72 class enterprise.

Photo Credits - above Carol Sato, below Oracle

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La Tricoteuse

Thanks to Charles Dickens, one of the enduring images of the French Revolution is that of the ladies who sat around knitting between the public executions at the Guillotine. 

Over the last few years, I have been struck by how much “knitting” I see about our corporations these days - how quickly we write them off, pass judgment when they hit a speed bump.

The New Polymath had a case study on an innovation group at BP - a small group of 12 executives which have a remarkable track record of innovation for over a decade.  As soon as the Gulf spill hit the newswires, I started hearing I should drop them from the book. In the various speeches I gave on the book in 2010, I could see audiences expect me to call BP evil – instead I praised this group often to raised eyebrows.

The New Technology Elite has a case study on HP’s PSG supply chain. When HP briefly considered spinning the unit off last summer, I felt similar pressure to drop it from the book manuscript. I refused – the operation is impressive no matter where it might have ended up.

Both books have profiles on Best Buy – on its customer analytics, its Geek Squad, its social networking efforts. With its recent problems, many a market observer has written them off. Not me – not yet. I feel they have too many assets to evaporate quickly.

My readers know I take unpopular stands and criticize certain vendors. It’s only fair I defend others, especially when they are going through an unpopular phase. I suspect I would not have lasted long with Madame Defarge and her friends in Paris.

Why SAP needs a chiropractor

It was early in 2010. I was finishing up research for The New Polymath. I had a generous page in the manuscript on Hasso Plattner’s in-memory vision. An SAP employee reviewed an early draft and encouraged me to reach out to someone in development who could share much more on what was going to become HANA. I declined – I had a page count conflict, and the conversation would have been too “off the record”.

Since then SAP has had a series of conflicting HANA updates. A “great quarter” it announced in late 2011, “we will be second largest database vendor by 2015” it announced last week. Yet, they announced they have just 80 live HANA customers. And my friend Ray Wang reports if you remove the Proof of Concept projects, the number drops to just 18.

In two years?

Contrast this to what FastCompany says about an episode at roughly the same time in 2010:

“Apple called Bob Bowman with an invitation shrouded in even more mystery than usual: If you want in on our next project, send us your two best people. That's all Bowman, president and CEO of Major League Baseball Advanced Media, or BAM, had to go on. Losing two tech leads during the hectic months before Opening Day was risky. Worse, Apple wouldn't be able to tell him what the techies were building, when its project would come out, or how long they'd be gone. But making the decision took Bowman "under 10 seconds." Two years earlier, Apple had made a similar offer and MLB had struck gold with AtBat, its iPhone app. Bowman sent mobile developer Chad Evans and another engineer to Cupertino, California, the next day.

Bowman didn't see Evans until three weeks later--standing onstage, during the launch of the iPad, when Evans introduced MLB's new app to the world. It would be able to play gorgeous video of live major-league games while simultaneously displaying the latest stats.”

Before you dismiss this by saying “oh, but that is consumer tech” read the article for the organizational and technological complexities BAM had to overcome in becoming one of the top grossing brands in iTunes.

There is an intensity which pervades all aspects of Apple, and its key partners. SAP, on the other hand, often seems out of synch with itself.

Not just picking on HANA. Couple of years ago, when SAP was talking about accelerating its SaaS BYD rollout, I asked about how it was scaling the data center infrastructure and how much more capex it would be investing. Did not get a coherent answer.  As Dennis Howlett points out here, SAP’s legal infrastructure often acts as a roadblock to its ambitions. For years now I have heard and re-heard and re-heard plans for better management of their systems integrators. Interestingly, to use an Apple acronym, have never heard who is the DRI for that - Directly Responsible Individual.

Their poor CTO, Vishal Sikka often comes across defensive. He should not be. SAP development is usually not the problem. Legal, business development, product rollout, field groups always seem to be unwilling or unable to keep up.

I am always amazed when I go to my chiropractor how he works on body parts far removed for the area I tell him needs work. It’s all interconnected he says as he works his magic.

SAP needs similar intensity therapy. They need to accelerate the clock speed of many parts of their entity. Otherwise they will keep promising way more and way ahead of their own and their partner ability to deliver.   

More New Florence

on the innovation blog

Consumer Reports Top Auto Picks 2012

What would you do with the 1 GBPS web?

CNN Audio Tech

The Richat structure from the ISS

Over a century of tech according to GE annual reports

Looking forward to Oracle event

We all go to way too many industry events that are product centric – launches, demos, speeds and feeds etc. So it is nice to go to events that focus on trends, strategies etc. It’s one reason I look forward to the Cognizant Community event.

Next week I have been invited to an Oracle Analyst World event which, based on the initial agenda, looks to be fairly strategic. The presenters are Oracle and customer executives and outside speakers.

I am looking forward to various vertical and geographic perspectives, and yes, a wide range of technology updates given Oracle’s continually expanding portfolio.

Governments and Business Model Innovation

The DOJ is suing Apple and several book publishers over e-Book pricing. In a word, I am ambivalent.

In my new book, I have a whole chapter on business model innovation facilitated by technology. Here is an extract:

It was fascinating to watch, in contrast, when the iPad was introduced, Apple actually managed to convince book publishers to increase e-book pricing beyond the market standard being set by Amazon.

In technology circles, we look for competitive advantage via
form/factor and feature/function. Mark Johnson of the consulting firm Innosight (which he co-founded with Clayton Christensen, well known for his work on disruptive technologies) says, “It’s far harder for an incumbent to fight back against a business model innovation than it is for
them to match and raise the stakes on a technology innovation”

Repeatedly, Apple has shown a willingness and ability to compete on “business model innovation.” Amazon does the same—it lost money on many e-books at $9.99 as it tried to build customer loyalty around a new way of reading books on Kindles. It has long subsidized shipping of physical books and other items and it offers customers Prime membership, which for $79 a year (in the United States; prices vary in other countries) includes two-day shipping. This is a great deal for frequent customers.

We need much more BMI in technology. Lord knows there are so many ossified business models across technology sectors. I would rather regulators encourage more BMI, not scare it away.

Having said that here’s why I am ambivalent. As an author, I have watched the yo-yo pricing around the e—Book version of The New Technology Elite in the month it has been out. Kindle, iPad and Nook pricing has ranged between $28 and 32. That’s about the same as Amazon hardback pricing even with no printing or shipping costs involved. And it costs more than the Kindle versions of both Isaacson’s Steve Jobs biography and Lashinsky’s Inside Apple put together – far more popular books than mine. I have no influence on the pricing.

My next book will get its own BMI – the author will set the pricing. And it will be fair to his readers.    

SAP at the crossroads

The contrast is striking. In a week, when Facebook’s $ 1 billion acquisition of Instagram showed mobile  apps are the new path to get closer to the consumer/enduser, SAP announced it wanted to go the other direction - deeper into the bowels of the enterprise. It wants to be the 2nd largest database vendor by 2015.

In fairness, SAP also has a broad mobile strategy. It believes it is all set to also harness “millions” of mobile developers.

Three questions do come to mind:

• What kind of licensing will its attorneys free up for such individual developers?
• If I was a developer, why would I not expect SAP to keep playing favorites with Deloitte, Accenture, IBM and its traditional go-to partners?
• Culturally, can SAP keep focusing on Oracle, and also Facebook, Apple, and Google as its competition?

More Innovation

on the New Florence blog

Ikea’s Flat-Pack Home

The Science behind March Madness

The Girl with the Nokia Tattoo

Arctic Fiber Optic

The Origami baby stroller

Quit sniping – keep writing

I groan at articles like this one – journalists writing about bloggers who write about each other. I should have stopped at the title which describes it well - “The Tech Blog Circle Jerk”.

Having said that there is an incredible amount of good tech writing still being done in magazines, newspapers and blogs. My book publisher likes me to continue with an old-fashioned practice of endnotes, and as you can see in extracts below, I have close to 1,000 articles/blogs cited in my last two books. They are a huge source of validation for my own research, and often provide me fresh inspiration.

So, here’s my plea. Keep writing substantive materials – and quit bitching about each other.

And don’t just tweet or Paper.Li other’s work.

Write yourself – please!

Download Notes The NewTechnology Elite

Download Notes The New Polymath

Apple’s real “Team FDA”

There is a hilarious (especially if you don’t mind R rated language) anecdote in Walter Isaacson’s book about Steve Jobs. It deals with the acronym FDA. You can get a gist here if you don’t want to read the book, but the book is much more colorful.

Walter does not go much into what must have been a tempestuous relationship with AT&T (and other carriers) around the iPhone. but I bet it drove the perfectionist Jobs berserk to get customer complaints like this one CEO Tim Cook recently dealt with.

I have to believe this conversation dreamed up by the Fake Steve Jobs actually happened a few times. And not just with AT&T.

If the carriers have a sense of humor, and a commitment to continuous improvement, they should give the VLSI team a call and find out where they can order the Team FDA jackets for their own teams.

Not your Pa’s Platform

I blogged last week about “The feature that launched a thousand projects”. I was describing the flurry of activity the iPad retina display has unleashed particularly in its ecosystem of over 200,000 apps.

Brian Sommer is running a series on platform-as-a-service and he describes a conversation with Phil Simon, author of  The Age of the Platform.

As with Brian, the term platform evokes for me memories from the 80s and 90s. McCormack & Dodge’s Millennium and PeopleSoft’s PeopleTools come to mind. So do CTOs like John Landry and Rick Bergquist.

Things have certainly evolved. As I told Phil for his book:

Every successful technology platform has had a thick application catalog around it. You can even go back to the 1980s when IBM introduced minicomputers such as the AS/400. In the end, though, customers always buy applications, not base technology. This hasn’t changed. Compared to thirty years ago, the difference today is twofold. First, AppStores and ecosystems are being fueled by entire communities consisting of hundreds of thousands of mom and pop stores and entrepreneurs. Second, apps today are priced to sell billions of copies via high-speed downloads. The sheer scale is unprecedented.

My new book has two faces of the new platforms – Gerlinde Gniewosz in the Apple ecosystem and Charlie Wood in the Google ecosystem.

Gniewosz has experience at Yahoo! (the web company), Orange (the telecommunications company), and McKinsey & Co. (the strategy firm). She has an MBA from Harvard Business School. She was born and educated in Australia, went to business school in the United States,has worked in Germany and the United Kingdom, and has traveled the world. She’s what you might call cerebral—like the portfolio of over 70 Zuztertu mobile apps, aimed at a wide set of markets from apps for small children to education for adults.

Charlie Wood of Spanning: “We built our product on a stack of free software: LAMP on the servers, and Apple’s free developer tools and an open-source framework called Cappuccino for the client. We built a mailing list of people interested in our product with Google’s free FeedBurner system, and tracked
visitors using Google Analytics. Once we started selling our product, we used PayPal to handle the transactions so we did not need to open a merchant account at a bank. None of the systems we used required more than $100 to get started.”

When Brian and I were younger, our big opportunities were with our respective employers, Accenture and Price Waterhouse. Today’s platforms are more associated with smaller firms like Appirio and even smaller firms like Zuztertu and Spanning.

That’s a seismic change in the industry – one that SaaS vendors like salesforce.com and Workday and cloud platforms like Microsoft Azure are having to factor in their partnering strategies

More New Renaissance

on the innovation blog

Top Cruise Ships

Dude, you are getting the new iPad

A picture is worth a thousand calories

Trailfinders – a brick and mortar survivor

Generation Flux

Fine Print

We have all seen pharmaceutical commercials with all kinds of nauseating side effects listed. I think technology ads need some similar caveats.

Here are some examples

1. AT&T

The first vignette in the commercial should say “Apple says the iPhone Siri will support Italian in 2012. The young man is shown using the Telecom Italia network. AT&T’s prime technology in this example is its billing system which would charge the young man at our roaming rates of $ 1.39 a minute from Italy, 50c a text message and 2c a KB of data. Plus plenty of taxes.”

2. Verizon

It should say “If 4G deployment repeats the 3G rollout schedule, this remote lake will likely have 4G coverage in 2018.”

3. IBM

“We apologize for the lack of ladies anywhere in sight. Blame the Masters for that.  The basic message remains true. You can do anything yourself. You don’t need to outsource so much”

Finally, my fine print “The wording was developed late on Saturday night with more of focus on a baseball game and related commercials. The respective companies and their advertising companies have not vetted the blurbs”

Is Best Buy Amazon’s showroom?

I have heard the question many times in the last couple of weeks since Best Buy had a disappointing quarter. Actually I have heard it for the last decade, and while CompUSA, Circuit City, Curry’s have dwindled, Best Buy continues to morph and survive.

Retail, particularly technology retail, has always been brutally competitive, but few people seem to recognize how much Best Buy has been innovating under the covers.  I was impressed enough to devote 4 pages in my new book to the company – see extract below.

Download BestBuy extract

CIO “Do over” wishlist

Chris Murphy at InformationWeek is one of my favorite technology editors ( He also kindly wrote a blurb for the back cover of my new book.)

He has a nice gallery of CIOs each expressing something in their career they would like to do over like Tim Theriault at Walgreens who would rethink his global travel schedule.

There’s pearls of wisdom for everyone in the industry in that gallery.

Burning Question: What should Ginni Rometty do?

As she enters her second quarter as IBM’s CEO, Ginni faces a tricky scenario which frankly could qualify her for Veep consideration this summer.

What to do about Augusta?

Readers?