deal architect

Good move at SAP

SAP is consolidating several cloud, analytical, mobile innovation developments under Vishal Sikka. That's a good move. For a while now, I have watched him focus a bit too much on HANA -  "his baby" as he calls it, while leadership for other innovation assets has been somewhat fragmented. Hopefully, other areas such as social analytics, Internet of Things etc will also be part of the brief, though consolidating disparate Ariba, SuccessFactors, BYD and other development teams will take some time.

Even more importantly, I see Gerhard Oswald is leading a Scale, Quality and Support board area which will scale the operations of SAP HANA Enterprise Cloud. Honestly I have been unimpressed with SAP's data center/infrastructure strategy around its BYD and SuccessFactors clouds. Be nice to see SAP build scale and economics which start to bring to the enterprise what larger consumer clouds have been offering for a while now. (see The Shock and Awe of the Public Cloud)

There's another move SAP should think about. Create a seperate field organization around these new products. The exisiting field has not done well with these new products (only 6.5% of 2012 revenues after years of product availiability). The older SAP partners are, well, old and tired as the services space gets revitalized by a number of boutiques (see my note Outsourcing: The Seismic Changes).

 

The Un-Cola

I like to catalog complex innovation and write about Polymath organizations who can blend infotech, biotech, cleantech and a variety of STEM skills to come up with new solutions.

But there are times when a clean, crisp, simple product or messaging is such a joy to behold. Last week I wrote It’s all about the Enterprise Apps, Baby – the messaging from the NetSuite event compared to the complex transactions versus analytics, private versus public cloud messages coming  out the same time from SAP’s event.

This week, Dennis Howlett reports on Workday’s impressive Q1. Workday has an even cleaner message than NetSuite’s – horizontal finance and HR apps hosted, supported and updated 3 times a year in its public cloud all for a set price per user. Someday Workday will have deep vertical apps. It may at some offer a Platform as a service. It likely will never offer Infrastructure as a service.

Wall Street already values NetSuite and Workday at over $ 17 billion in market cap. It obviously believes there is a nice customer demand for crisp and clean in a world of more complex flavors.  

More Innovation

On the New Florence blog

Google Shopping Express

Upgrading Mall Surveillance

GE’s Industrial Internet Quests

Your virtual double

Cool Spaces

Bedtime Math

Facebook Home

The Zero TV phenomenon

The shock and awe of the public cloud

On a normal weeknight, Netflix accounts for almost a third of all Internet traffic entering North American homes. Look at the graph below and let the enormity of that sink in.

Now consider this. Netflix uses Amazon Web Services as its “data center”. Add on top of that Amazon and its affiliates retail commerce traffic, other companies who use AWS for their processing and storage, and Redshift users for complex analytics, and you see the massive scale that Amazon has built with an estimated $ 6 billion in data center capex the last few years.

Facebook 1+ billion users upload and tag 300 million + photos a day. Apple says more photos are taken on the iPhone than any other camera – and many of them get stored in the iCloud. Google says it answers more than one billion questions from people a day in 181 countries and 146 languages.

As the old adage goes a billion here, a billion there and you are talking real numbers.

And yet many in the enterprise still talk of public clouds as unreliable and unsafe. Many enterprise vendors claim they need to do better than consumer tech then brag about their data centers which are puny and grossly inefficient compared to new ones at Amazon, Google and others at Microsoft, Switch, Rackspace and elsewhere.

Fortunately, the best practices that are coming out of the consumer cloud are starting to be leveraged in the enterprise. Facebook’s Open Computing Initiative which it launched along with its hyper efficient Prineville data center has drawn interest from banks and other high volume users. Microsoft, Google and others are a bit more secretive but increasingly showcase their learnings when it comes to thermodynamics, power normalization and other data center operational issues.

An impressive example of the impact of the public cloud comes from a private cloud being rolled out by Fedex “The Colorado data center is located at an elevation of 6,000 feet, letting FedEx cool the building using the outside air instead of costly air conditioning. The design is modeled on the ultra-efficient, standards-based data centers that Internet giants such as Amazon.com, Facebook and Google have built. And that infrastructure will let FedEx move some computing capacity to public cloud services from the likes of Amazon, Rackspace and Verizon in the not-too-distant future. FedEx is set to convert a data center based on the same private cloud architecture near its Memphis headquarters. “

Admire what consumer clouds have built – then hurry up and apply the concepts to your private clouds and demand similar efficiencies from your hosting providers and other enterprise vendors.

Photo Credit: BusinessWeek

Bill McDermott and Boston

I caught a replay of Bill McDermott's pitch at SapphireNow last week. Loved it. How could you not with acronyms like B2B2C?:)

Seriously, tough to not like his sports talk and see him surrounded by sports world luminaries you see on ESPN and Fox  - James Brown, NBA deputy commissioner Adam Silver, San Francisco 49ers CEO Jed York and Under Armour CEO Kevin Plank.

I did wonder if Bill's talk would have been different if he had spent the weekend at the MIT Sloan Sports Analytics event in Boston in early March. He would have heard Mark Cuban of the Dallas Mavericks talk about how his team doctors are trying to match anti-inflammatories to player DNA markers.  He would have heard how pioneering work by the San Francisco Giants and others around secondary markets is leading to a revolution in single game and season ticket pricing. He would have heard Michael Lewis who cataloged some of the earliest applications of advanced analytics in sports with his book Moneyball. And sessions on Fanalytics, Injury Analytics and countless other technology applications in sports.

What SAP is doing in the sports world is impressive (and after that weekend I posted on New Florence its efforts), but relatively small compared to so much else going on in sports technology. 

It points to a thing I  have noticed - how SAP likes "association". Statements like "SAP customers produce 70 percent of the world’s chocolate" or "SAP systems touches $12 trillion of consumer purchases around the world."

I certainly understand it is for marketing effect. I worry, though, SAP is actually delusional and does not realize how small a role it plays in many of these companies and industries.

Which is why I wonder if Bill had been in Boston that weekend, whether his talk at SapphireNow would have more modest and celebratory of all the innovation happening in sports tech, much without SAP involvement.

Global SIs: The Forest and the Trees

A short talk with some Cap Gemini BPO execs at SuiteWorld last week and reading Phil Wainewright's post about Cloud SIs had me thinking how the global service firms are changing - and in many ways resisting change.

Most larger firms now have units like Deloitte Digital or Acccenture Interactive that are hip to social, cloud, mobile projects. But they are islands in a sea of old which still wants to sell multi-year hosting and application management deals around on-premise software. To them, the SaaS/cloud world is still anathema.

Think about it. Would you buy additional hosting from them when it is bundled in the NetSuite subscription price? Would you buy additional application management services when Workday tunes your database, fixes bugs, does upgrades as part of its contract to you? If you were them, would you sell storage or compute at cloud prices when you would rather convince even your mother your 15 year old data center is still "state of the art"?

The business model change is even more dramatic as I heard during the Cognizant BPO day a few weeks ago. Many customers still want to buy based on some headcount/FTE based model, even as Cognizant is experimenting with results-based models. Most outsourcers don't even try -  they are comfortable with the old FTE model.  The cloud, in contrast, has been pushing consumption based models for a while now.

Recognizing that these SIs have islands of hip, surrounded by seas of legacy thinking, is key. I see many SaaS vendors enamored with the big services brands who will soon grasp this reality. Similarly, customers evaluating these providers for their cloud, mobile, social, advanced analytical projects will need to make sure they are only sourcing from the "hip" slivers of these firms, not get spary-painted legacy staff, tools and methods. There are several techniques we have applied for clients to get appropriate teams and terms, but it takes plenty of diligence.

For many of them, as Phil says, boutique firms may be the better way to go. I had identified several in my note Outsourcing: The Siesmic Changes

More New Renaissance

on the innovation blog

Automating Airport Security Trays

Crowdsourcing Home Deliveries

Bequeathing Digital Assets

The changing world of puzzles

Mindfulness

Street Foodies

Google Shopping Express

Upgrading Mall Surveillance

Life after SAP

For the first time in a while I missed SapphireNow this year, and yet through some unplanned scheduling got to be around a bunch of SAP alums, ex-partners and ex-customers.

I was invited to present to SAP alum at the AtelierSAP event which preceded SapphireNow in Orlando. A lunch conversation with Paul Wahl, former US CEO, was about fuel cells and digital advertising. Another with Matthew Coote (son of Jeremy Coote, former US President) was about his role on the Romney Presidential campaign last year.

My own talk at that event focused on innovation in the enterprise as most companies develop smart products and services and how consumer tech has innovated and massively scaled its data centers, Big Data and other operations. Only my last slide pointed out that SAP (and other large enterprise vendors) had done little to help with either the smart products or the consumer tech operational excellence.

I did a call last Friday with Dr. Henning Kagermann, former CEO of SAP. It was about the role he is playing in helping Germany prepare for technology opportunities and challenges in the “Fourth Industrial Revolution”. Fascinating conversation – but SAP came up only in passing towards the end of the call.

I flew West to NetSuite’s event and had lunch with an SAP alum who had been there during the promising NetWeaver days a decade ago. Other than discussing that for 5 minutes the conversation was about other technology trends and Bay Area life. He certainly does not miss SAP.

At SuiteWorld I spoke to several SIs  and outsourcers many of whom had come from SAP partners. To a  person, the message was the days of massive SAP implementations and BPO contracts  had moved on.

As I wrote here, in his keynote Zach Nelson of NetSuite echoed the feelings of many SAP customers who are not signing up for its new products. More life after SAP.

My friend Jon Reed, writing from SapphireNow complimented SAP’s positioning around the Hana Enterprise Cloud “The lack of head-scratching afterwards was a big messaging win for SAP, which is usually expert at tripping on tech minutia.”

Seriously?

Read these FAQs and you decide if it qualifies as a “messaging win”. At SuiteWorld I heard an analyst call it a muddled cloud strategy. Couple of others mentioned SAP had pre-briefed them about 7 data centers when the FAQs talk about 4.

Minor detail.

To my question how SAP expected its partner and its own data centers to be as hyper-efficient as those in the Amazon Web Services cloud,  Juergen Schmerder of SAP tweeted me “how do you know we're not striving for world class when we haven't disclosed much information? “

Normally I am always eager to hear about next-gen data centers, but after the conversations of this week, I am less optimistic.

In many, many walks of life the world has moved beyond SAP.  I actually felt a tinge of sorrow for the behemoth which has dominated so much of our professional lives.

SAP by the numbers

29 million cloud users announced at SapphireNow drew snickers including a snarky comment about “that must include all the pencils ordered on the Ariba cloud” :)

More vexing is the question – does the HANA cloud have enough data center infrastructure? Since SAP is moving away from the almost infinite capacity of the Amazon cloud, it must believe its 7 data centers and capacity of its partners are enough to start off.

It would be nice if SAP shared more details:

• Their square footage and compute/storage capacity
• The Capex that has gone into the data centers (to get a comparable feel to the billions the Amazon, Google and the MS Azure clouds have seen in investment over the last few years)
• The “availability zones” and other resilience SAP has built into its this grid for high availability
• The specialists SAP has hired to architect and build out the centers/certify those of its partners (hopefully some from the highly scaled consumer cloud as at Facebook or Yahoo! or from a demanding cloud infrastructure user like Netflix)
• Given SAP’s emphasis on sustainability, the PUE (Power Usage Effectiveness) of each and the alternative fuels used to power them
• If SAP/partners expect to be as competitive as Amazon in pricing

It’s all about the enterprise apps, baby

Silver’s the new green …sang the Taco Bell TV commercial “It’s all about the Roosevelts” as it celebrated dimes to promote its sub $ 1 menu.

At SuiteWorld this week I wanted to break out in that rhyme at the celebration of all kinds of enterprise apps.

Zach Nelson, CEO of NetSuite, set the tone in his keynote by pointing out "SAP talks a lot about cloud and they're having their user group conference at same time we are. But while we'll spend a lot of time introducing a new product, NetSuite for manufacturing, SAP are talking about databases in the cloud". Perhaps he had read my post where I pointed out where SAP has been enamored with becoming a platform company for the last decade, when most of its customers signed up with it and have paid billions to it as an application provider.

Then he brought out Qualcomm CIO Norm Fjeldheim to describe a global deployment of NetSuite . Williams Sonoma CIO, John Strain followed with a discussion of  the “omni-channel” world the retailer finds itself in. Buzz Kross, SVP of Manufacturing at Autodesk then talked about their new world of “digital prototyping” and their PLM integration with NetSuite manufacturing functionality.

It was a nice way to showcase NetSuite’s “two tier” global deployment positioning (“stay with Oracle or SAP at HQ, use us for subsidiary sites”), their strong retail functionality, and their growing manufacturing functionality(for the new wave of smarter factory with agile robotics, wearable computing, OJT augmented reality worker training, 3D printing etc)

In brief conversations with each I got a perspective on emerging apps in varied markets – Qualcomm pov on mobile commerce and insight data, Williams Sonoma on their Pinterest and other social campaigns, Autodesk on the changing product lifecycle management space.

Evan Goldberg this morning showcased other apps – Vinsuite for the winery vertical, the planned Deem@Work with Rearden Commerce for expense management and others

In conversations with executives from Baker Tilly I heard about NetSuite projects in the mid-market, with executives from Cap Gemini about BPO opportunities where companies increasingly ask why their back offices need to continue to be burdened with the higher cost of on-premise applications.

In a panel I moderated with Brad Kugler (a NetSuite customer since 2006), Phil Wainewright, Dennis Howlett and Pedrag (PJ) Jakovljevic, we covered wide ground on analytics, global and vertical applications.

Yes, it was an unabashed conference about feature, function, industry and country needs. And fittingly, as the Taco Bell commercial asks “Why pay more?” resounded in every conversation about pricier solutions NetSuite is helping replace.

It’s all about enterprise apps, baby. Kudos to SuiteWorld for that timely reminder.

Even more innovation off the global beaten path

We hear so much about Silicon Valley and Bangalore and Shanghai that is refreshing to hear about innovations in unexpected places...

Mobile healthcare in Rio's slums

Pods at Abu Dhabi airport for work and sleep

DUMBO -NY's creative new hotspot

Seoul - City in Major Hurry

earlier ones in this series here and here and here

 

SapphireNow, Past and Future

In the run up to SapphireNow this week I have seen several blogs and tweets about SAP’s new (as in last five years) analytical, cloud and mobile products – HANA, SuccessFactors, BYD etc. During the course of the week every announcement around these products will get amplified.

The reality is after years of trying, these new products only contributed 6.5% of 2012 revenues.

To understand why SAP’s future is being shaped so slowly, I believe you have to look at SAP’s past.

In talking to SAP customers, I get two major areas of disappointment

a) “We signed up with SAP as an application provider, but in the past decade it has been enamored with becoming a platform company.” NetWeaver, Business Objects, Sybase, HANA are all visible signs of that desire and related investment strategy over the last few years. In the meantime, over $ 100 billion in application maintenance paid by customers has not yielded much in the way of functional leaps.

My friend and fellow Irregular, Thomas Otter is leaving Gartner to re-join SAP and writes

“In 1995 Klaus Tschira, one of the SAP founders, impressed me so much with his vision for HR technology that  I convinced my wife that we needed to move to Germany. There is much in that vision that still needs to be built, so in a sense I have unfinished business with SAP.”

There are hundreds of areas, especially around industry solutions, where  SAP could use other Thomas Otters to make up for neglected functionality over the past decade

b) The massive partner booths at each Sapphire are a vivid reminder of SAP’s poor management of its ecosystem over the past decade. Customers can see the impact in the metrics and benchmarks in their shops

• Hosting - SAP customers have paid more per unit of compute and storage to IBM, EDS etc than did customers of other legacy or packaged apps. And 5 to 10x what cloud vendors like Amazon or Rackspace increasingly charge per cycle or GB per month. Not sure why SAP has not tackled its partners and asked why its apps require gold plated arrays or chips.
• Apps management - SAP customers have paid more per user for Basis, config support etc to Infosys, Accenture etc than did other packaged or custom apps. Per end user Salesforce, NetSuite and others are showing they can deliver with X times fewer support staff. Again not sure why SAP has not pushed for multi-tenancy and shared services in its partners.
• Upgrades - SAP customers are some of the slowest in the ERP/BI world. Workday customers get upgraded 3 times a year in background and customers primarily test and integrate - much shorter projects

This did not happen overnight. But SAP and its partners have shown little willingness or ability to tackle the inefficiencies over the last decade.

So, while SAP employees, partners and fans descend on Orlando to hear about the future, they would be as well served to ask what SAP is doing to rectify the neglect of the past decade. 

Without that, many customers will continue to stay away from the newer products.  They may be too polite to say it, but the saying definitely comes to mind:  “Fool me once, shame on you. Fool me twice, shame on me”

More New Florence

On the innovation blog

Topological Data analysis

The Polymath Cancer Dream Teams

Big Data infrastructure at Facebook

Qualcomm brings more power innovations

Mobile is Job 1 for MLB

Lockheed and quantum computing

The Big Data of SIRF

The Railroad revival

The New Combat Zone: Tech vendors and Digital Agencies

Microsoft spent $ 6 billion acquiring the digital agency, aQuantive way back in 2007.  Think of how much more marketing has evolved since with social media, big marketing data.

Last year Oracle spent $ 300 million acquiring Vitrue and Salesforce spent $ 700 million on Buddy.

So,  not surprising Accenture has expanded its Interactive Unit with an acquisition of the London design firm, Fjord.

In turn as I blogged here Digital Agencies are helping clients with fairly creative use of augmented reality, motion capture and other tech. They are the new systems integrators, at least for digital marketing projects.

A sign of the confidence of agencies comes in this snarky comment a reader named Bill Crandall makes

" if Accenture wants to invade our agency turf, have at it ... and good luck! A better strategic corporate move would be for Accenture to call Michael Roth and see if Interpublic wants to buy them."

I think the industry should hire a Digital Agency to map this growing battle in Ironman 3, Inception style digital glory.

Or maybe Accenture's new team at Fjord?

How Infosys lost its sheen

N.R. Narayana Murthy is a revered figure in India. So, not surprising he is hearing murmurs to return, Steve Jobs style, to Infosys, the firm he co-founded. Reading this interview with him though it struck me how little of a difference it would likely make. He primarily emphasizes financial performance - “Predictability of revenue, sustainability of revenue, profitability of revenue and de-risking of revenue”. No mention of customer focus, no innovation talk.

Unfortunately, to  me  that has defined Infosys for a while now. After Tom Friedman’s World is Flat celebrated their Bangalore campus, I saw on several visits with clients and prospects how that was emphasized in the Infosys value proposition. During one visit I had to pull the sales person out and ask him “Have you been to this customer’s own impressive HQ campus? Trust me your brick and mortar will not impress them enough to do business with you. Please focus on their specific needs”

In the last few years, Infosys has paid for a pole position at Oracle  Open World – the keynote just before Larry Ellison’s. But that has been more of an executive showcase exercise, when Infosys should be putting its most innovative customers  and projects on stage. The crowds who leave in droves don’t seem to bother Infosys.

A bit unfair, but the same reporter interviewed Francisco D’Souza, CEO of Cognizant a few weeks ago. The contrast in the two interviews is striking.  Francisco comes across global, focused on new technology markets, customer focused. Murthy comes across India centric (even though Infosys has a similar global customer base) and primarily focused on financial performance.  Restoring the polish at Infosys will need to start by changing that tone.

Small batch commerce

I remember conversations with Gartner clients in the late 90s. Can order management software from IMI, SAP and others scale up to support millions of order line items, with unique pricing/promotions needs by customer and product?

Listening to Andy Lloyd, GM of Commerce products at NetSuite on its acquisition of Order Motion, it occurred to me how much the world has shifted to where smaller B2C (Order Motion nuances them as D2C – direct to customer) orders have become the new frontier. Retail stores which want to minimize in-store inventory but allow customers kiosks or virtual walls (like at Adidas) to place orders for a wider selection. Phone orders. Website orders. Direct Response orders.

Small batch orders. But extremely demanding in time to delivery expectations. As Andy pointed out B2B orders often follow multi-week or multi-month planning horizons. B2C orders, on the other hand, are measured by delivery in days, and soon will be measured in hours as same day delivery options (such as Zipments) proliferate.

Order Motion positions NetSuite for this rapidly changing B2C world. NetSuite continues to have its own B2B OMS order engine, and has in recent times invested in retail POS (with Retail Anywhere) and web experience functionality – the front end of the B2C order. Order Motion positions it better for the back end of those orders.

Order Motion brings to NetSuite 180 customers today in retail, apparel and other B2C markets such as Brown’s Shoes and Li Ning Company.

I look forward to hearing about this next week at SuiteWorld.

More Innovation

On the New Florence blog

Israel’s army of cyber kids

Making eBooks interactive

The Big Data at Uber

Lync 2013 

Big Data revolutionizing farming

T-Mobile’s “simple choice”

The Big Data of Love

Tencent fueling China’s web boom

HP–the other transformation

With all the negative news swirling around HP, it is easy to lose focus on the complex operations that continue to drive the $120 billion behemoth.

Every global supply chain was rocked by the Japanese tsunami and the Iceland volcano explosion impact on European air travel. HP’s mammoth supply chain which produces 2 printers a second and a server every 15 seconds and has plants and warehouses spread around the world has deftly adjusted to those and many other disruptions. It was the subject of a case study in my recent book, The New Technology Elite.

An even more impressive operational transformation is happening. While many large enterprises have been reluctant to move to cloud computing, HP has ploughed ahead and is poised to become the largest Salesforce.com implementation in the world. And the largest Workday (for HR functions) implementation. And the largest Fieldglass implementation (for contract labor procurement). And the largest DocuSign implementation (for electronic contracts). And other business processes are being continually moved to the cloud.

The move to the cloud could have been justified on IT economic reasons. But at HP the much bigger payback is coming from business process transformation. So, the Salesforce.com implementation has been driven by the need to provide the customer a more unified view across HP’s multiple business units – data center services, printers, software etc. The project is breaking down silos – so contracts, contacts, commissions will be in one place – needing better integration of sales with legal, HR, contingent labor procurement and with countless channel partners. It is providing better transparency to management across the sales and reseller channels.

It is also speeding up processes. The interaction with HP Financial Services has been collapsed to 10 minutes from what would take two or three days of paperwork back and forth. Salespeople are able to generate complex quotes much quicker with the integrated product, service and contract t&c data. The Salesforce implementation itself has gone through five upgrade releases in less than 2 years.

One of the other differentiations of the massive transformation is it is being driven by executives recruited from outside the high tech industry. John Hinshaw, EVP Global Technology and Operations, came to HP from the aviation/defense industry. Ramon Baez, the CIO who reports to Hinshaw came from the consumer products industry. They are bringing a fresh set of eyes to an industry where product innovation is often more valued than process innovation.

If you want to learn more, Salesforce.com is hosting a webinar on May 9 where Daryl Ganas, HP’s Director of Sales Operations will be discussing some of the transformation as it affects the sales function at HP. Registration is here, and the archive should stay online for a few weeks.

Will HR leverage the Big Data opportunity?

I have been critical of the New York Times, Wall Street Journal, Fortune and other NY publications because their coverage of enterprise topics is inadequate given their executive audiences. A little too focused on consumer tech, and their feature/functions less their supply chains or retail outlets. One consistent exception to that has been Steve Lohr at the NYT. He writes about broad technology market trends, many enterprise centric and I have cited him several times in my books and blogs.  He recently had this nice piece on work-force science about cutting edge analytics applied to HR and talent management.

My question is will mainstream HR rise to this opportunity? HR seems to miss every other wave of technology. As contract labor mushroomed in most industries, they let procurement take the lead on contingent labor management tools. As telepresence and mobile computing became more important with growing at-home and remote office employees, HR let IT take the lead. As social networks like LinkedIn have grown, few HR groups have stepped up like GE and radically reshaped recruiting.

Sophisticated Big Data analysis is delivering ahas in many business processes in every industry. But as this TCS study shows, HR functions are not leading the way - not yet. Be nice to see that change.

 

More New Renaissance

on the innovation blog

Seattle: Cloud capital

The reinvention of search

QR wallpaper

Campuses: The Valley’s next design frontier

Nigeria’s booming Nollywood

Taming a Hurricane?

Ford as a software leader

Energy ROI

The Empire strikes back

My readers know I celebrate disruptors of every ilk. This weekend though I was exchanging emails with Dennis Howlett about how British Airways and Delta have bounced back with better service, routing, even technology innovation. Incumbents have brand and other advantages that allows them to revitalize and re-emerge as strong competitors even after years of being left for dead.

Even more stunning, I was telling Dennis was how the fossil fuel industry has out innovated the green energy players with horizontal drilling, seismic analysis and other technology as this post discusses. While environmentalists fret, it is helping swing global manufacturing gravity – it’s becoming cheaper with lowered energy costs to manufacture in the US even as global shipping and labor costs continue to increase.   Even better, we may not have to send our young to fight in the Middle East as its strategic importance declines with plentiful oil and gas. Grizzled executives in the oil business will tell you they did not see the fracking success coming. They call it a Black Swan event. May be they are being modest, but the reality is another set of incumbents are bouncing back.  

Or take the US rail industry. There have been stunning innovations in fuel efficiency, predictive maintenance and several other areas as this post discusses. Who would have thought an industry so old could revitalize itself so dramatically?

I and others are tough on a number of large tech incumbents. I think there is a lesson here for many of them. Get out of the limelight for a few years and innovate like hell in the shadows while people think you are dead.  

Salesforce.com's Event Stream

I saw a tweet this morning about Salesforce sending its B team to an event in London. While rude to the presenters it made me wonder how many Salesforce events this person and others actually go to? You could make it a profession or at least a hobby like going to every MLB stadium in the country.

There are several things to like about Salesforce regional events:

-  They bring the show to citizens of major cities, rather than make everyone come to the annual show at Moscone (the current tour moves from London to Washington, Paris, Tokyo, Sydney and New York)

- The message pivots each year - this year it is "The Customer Company" and it is usually regionally customized - so in London they announced their planned European data center, and a EU 5 million challenge for startups to develop using its platform

- The demos reflect the changing product mix - through regular acquisitions and development. So in recent times the Marketing cloud has seen more focus. 

- They are high energy - usually a great place to network with other Salesforce users

So, analysts can snark, but customers and prospects in many cities are thankful the show comes to a place convenient to them, and on a fairly regular basis.

 

Privacy v. Profitability

In a panel last week at the Inforum Executive Forum I marveled at how much personal data consumers are voluntarily sharing via social networks. We are uploading 350 million photos a day on Facebook, then helpfully tagging them, sharing what we like/dislike, who our are friends are etc. Think of the billions companies spent in customer surveys in the past and got little of useful personal information in return. Think of retailers drooling that they could actually recognize you when you walk into a store via apps like Facedeals. It is been a vexing  problem for the industry since its birth.

I called it a "gift" which marketers need to be careful not to abuse. Consumers allow us access to data to remove friction in our commerce with them. Not sure they want their data incrementally adding to our profitability.

In their survey of Big Data projects, TCS reports 27% (much higher in Asia/Pacific)  of companies surveyed sell their data - "Utilities and telecom companies are most likely to sell their digital data, but insurance companies make the most from that data".

The Association of British Insurers has issued guidelines on how to treat auto telematic data as insurance companies use that to price permiums. Not sure who watches over telcos and utilities. Verizon's Precision Management Insights as an example sells anonymized, aggregated GPS and other data gathered from its wireless customer base.

During the MIT Sloan Sports Analytics conference in March, I was pleased to hear Bob Bowman, CEO of MLB (Baseball) Advanced Media say "All of us need to be aware to balance personal data privacy with the economics".

Self-policing will be essential. The "gift" I talked about could just as easily be taken away from us if we abuse the data.

Big Data by the numbers

I tend to be a bit wary of vendor surveys of technology trends - they tend to be self serving in the  scope of industries/countries they cover. But when I saw this TCS study of Big Data at over 1,200 companies I glanced through it.

It's nicely done with more of a payback, opportunity and challenge focus by industry, process and geography, not a HANA this and Hadoop  that discussion.

Some of the findings:

"Four industries -- telecom, travel-related, high tech, and banking/fi nancial services – told us they spend much more than the median on Big Data. So what do these industries have in common? For one, they have high numbers of customer interactions (especially online). In addition, according to our data, three of them generate higher than average percentages of revenue from Internet orders."

"US, India, UK and Mexican Companies are More Likely to Have Big Data Initiatives"

"On the dimension of structure, 55% of leaders’ data is unstructured or semi-structured vs. 45% of laggards. And 37% of leaders’ data is external vs. internal. For laggards, that percentage is 26%."

"The eight most highly rated functional activities are:

• Identifying customers with the most potential or actual value (sales)
• Monitoring product quality (R&D)
• Monitoring product shipments (logistics)
• Identifying customer needs for new products and product enhancements (R&D)
• Identifying customers at risk of defecting (customer service)
• Determining marketing campaign eff ectiveness (marketing)
• Pinpointing where inventory is disappearing (logistics)
• Identifying spikes in logistics costs (logistics)"

Innovation Oasis

I found myself in Palm Springs, CA last week, and it is a marvel of greenery in the middle of the harsh desert. While people criticize it for being wasteful with over 100 golf courses in the  vicinity, you have to admire how the Desert Water Agency there has kept the water flow going for decades.

The New Florence blog is a similar innovation oasis in the midst of so much wasteful technology spend. Through April, I have posted 262 innovation entries this year.  At that pace, I could beat last year's  run of 750. Not likely given my book and other commitments this year, but the DWA is pretty inspiring in its long haul track record.

Photo Credit

Even more innovation around the world

We hear so much about Silicon Valley and Bangalore and Shanghai that is refreshing to hear about innovations in unexpected places:

Amsterdam's Design and Dining Renaissance

Satellites and Sudan's war

Startups in Montevideo, Uruguay

The breakneck speed of Seoul, S. Korea

Of Oracle and Decathlons

In two seperate venues this week I saw Oracle execs, Thomas Kurian (in front of customers) and Steve Miranda (in front of analysts) passionately and articulately talk about cloud computing.

Thomas talked about the speed clouds bring citing a Herbalife 10,000+ employee Fusion HRM project which from contract signing to live took 5 weeks including the intervening Christmas break. He talked about the 4 upgrade releases a year as another indication of agility that comes from a cloud solution. He talked about shared service efficiencies in the cloud - supporting 4,800 database customers with just 6 employees.

Steve talked about the robustness of the Fusion products to support over 100,000 employees at Schneider Electric and comprehensiveness of Fusion for multi-currency accounting and global tax and stautory reporting.

And while Oracle gets maligned for the slow Fusion rollout or being late to the cloud infrastructure market, Steve  is content Oracle is on a $ 1 billion a year cloud run rate (helped by acquisitions like RightNow, Taleo, Eloqua and others).  Thomas says the IaaS market is still young - Amazon has barely generated lifetime revenues of $ 1 billion from AWS.

But unlike other cloud vendor executives, they just as stoutly defend on-premise computing and private networks and Oracle's continued support for Sun gear, PeopleSoft, Siebel and other products. It's the customer's choice, they keep saying.

Listening to them it hit me that Ashton Eaton, winner of the 2012 Olympics decathlon, could probably give Usain Bolt a run for the money if he only ran the 100 and 200 metres but he prefers to compete in a wider set of events.

It reminded me of Alfred Sloan who took GM in a very different direction in the 1920s as he segmented the market with "a car for every purse and purpose" against Ford which stuck to its single Model T model.

I did ask Thomas how Oracle's cloud would be insulated from the "innovator's  dillemma" that has plagued cloud offerings at SAP, IBM and other large vendors.

He says their cloud is more comprehensive. They are the only vendor to offer SaaS, PaaS and IaaS =  building consensus across Oracle. They have not gone down market with their cloud offerings. And finally, their CEO has been an early cloud fan (and an early investor in Salesforce and NetSuite)

Many analysts would prefer Oracle put its full weight behind the cloud. I guess it is important to remember while Usain gets plenty of buzz, it is Ashton who holds the title of "world's greatest athlete" the title traditionally reserved for Olympic decathlon winners.

Oracle’s Global Leadership Summit

Last year Oracle’s events team invited me to describe some of the better events I had been to (and that I blogged about here).  They heard me compliment a couple like Cognizant Community for its focus on thought leadership more than product marketing, for its location and for its executive audience.

Not sure if that inspired Oracle but their Global Leadership Summit today in Palm Springs raised the bar a few notches

a) the locale was spectacular – Porcupine Creek in Palm Springs the agenda was mostly thought leadership – President Bill Clinton (see my detailed note here), Dr. Laura D’Andrea Tyson (a key player in Clinton and Obama administrations and now professor at Haas at UC Berkeley), Larry Leibowitz and Bruce Lee, President and CIO at NYSE Euronext. The only Oracle executive to speak on its products was Thomas Kurian, though Mark Hurd and Bob Evans hosted the event.

c) the audience was senior and global (at lunch I sat with executives from Italy, France, Brazil, Hong Kong and Argentina)

More New Florence

On the innovation blog

The Maker culture in schools

Billboard as water cooler

The Papabili in tech glory

Crisis Mapping

Samsung’s S-Translator

Evolving security beyond anti-virus

Fan-alytics

50 Shades of Caffeine

Inforum: The Sizzle and the Substance

Jon Swartz has a nice column in USA Today to time with Inforum in Orlando today. Of course, he plays to his consumery audience and presents gossipy elements of the relationship with Oracle and Larry Ellison (‘the irony is delicious”), the nice new NY HQ digs and UI and social aspects of the software.

If he had been at the keynote this morning he would have likely focused on the nice coliseum type seating, the bright red Infor logos contrasted with white couches, the drop down display screens and other nice aesthetic elements inspired by Infor’s in house creative agency, Hook and Loop.

He does not focus on a really interesting aspect of Infor’s revival - a relentless focus on “micro verticals”. They briefed us about them in New York earlier this year, and they are visible in the hallways here and got significant play in the keynote. “The Equipment Cloud” got a special mention and builds on Infor’s strong enterprise asset management (see my post about the complex implementation at the collider at CERN), dealer service management functionality (developed with Caterpillar’s channels) and ION interfaces to a number of custom operational applications.

Another exciting announcement is the SkyVault which leverages Amazon’s cloud based Big Data engine Redshift. In a Q&A, Charles Phillips invoked his Oracle background and said “I have had a chance to work with some of the best database engineers in the world”, and expressed amazement Amazon is able to provide  massively parallelized, columnar storage and compression at just “$0.85 per hour for a single node 2TB data warehouse”

If you superimpose micro-vertical focus with affordable analytical compute power, you start to see high-payback operational and customer centric intelligence. The pervasive feeling at Inforum is a proud focus on business applications and industry specific features and functions. Oh, there is mandatory cloud, social, mobile talk, but the underlying functional focus is refreshing compared to all noise from the competition.

That to me is far more exciting than Charles telling Jon there are no bean bags in the Flatiron neighborhood HQ.

More Innovation

on the New Florence blog

Mail Catalogs: Ben Franklin is looking down in awe

Rocket Ship

Radio Innovations

Outdoor Advertising evolves and thrives

Reexamining scientific truths

Amazon EC2 Spot Instances

Rex, the Bionic Man

The Big Data of Pi

Don't stop thinking about tomorrow

Upfront a confession - my wife has long accused me of planning the next vacation instead of enjoying the one we are on.

So, I don't blame SAP co-CEOs Jim Snabe ( as he does with Dennis Howlett here) or Bill McDermott (as he does with Jim Cramer here and the Washington Post here) for constantly talking about cloud, analytical, mobile products which make up just 1, 2, 3% of SAP revenues. They cannot wait for them to become 10, 15, 30% products.

Ditto with IBM. Notice how in every commercial they talk about advanced analytics or smart cities, and their employees say "that's what I am working on". The poor souls who generate 90% of IBM revenues via DB2, Tivoli, Notes, SAP projects, data centers, deskside support, accounting BPO etc never get to make an appearance.

As Dennis says "These are the core ‘things’ that all large businesses need in order to develop an efficient organization. They represent the backbone functions upon which all businesses depend and which provide the way in which they pay and get paid for the goods and services provided."

Dennis is right. Except that between SAP, its partners, and IBM that is a $ 150 billion a year backbone burden every single year. A burden that stubbornly refuses to go down year on year. They actually come in the way of "efficient organizations". 

And the key word is backbone - little of what they provide today helps companies with smarter products or with revenue creating technology.  This is when IT is challenged to support front-facing, not backbone, support.

SAP and IBM are not the only ones with the lopsided revenue mix. Most large vendors have 60-70% revenues which is in that backbone category. But SAP and IBM stand out,  both in the percentage of that revenue, and most definitely in their noise about  the "new" stuff.

Frankly, I would be more impressed to hear from SAP and IBM how they are using Six Sigma, Agile, CMM5, better ecosystem management etc to make their "utilities" more affordable and efficient. Innovation is not just about  talking about cool new stuff, it is also about dramatic improvements to current products and processes. And they can see internally what significant efficiencies are being delivered via their new cloud and mobile technologies.

And you what, magically. as the cost of their older utilities goes down, their newer products they keep talking about will go from 1,2,3% of revenue to 5,10,15%. Their reality will catch up to their future talk.

But no - that's boring stuff you don't want to bother Bill or Ginni with or they would rather talk about.

Way more fun to sing with Fleetwood Mac.

The limits to Crowdsourcing

I am a big fan of crowdsourcing done right. GE's use of Kaggle's crowd to solve complex aviation challenges, or the use of Amazon Mechanical Turk for crowd scans of satellite imagery in the search for Jim Gray are two good examples.

This week, however, we have seen two controversial examples of crowdsourcing.

First,  the Masters in Augusta last weekend used viewer called-in information to assess Tiger Woods a 2 stroke penalty for a rule violation. Bubba Watson, last year's winner,  reacted for many:  "Nobody calls in during a basketball game or a football game. ... They're definitely not calling balls and strikes during a baseball game." Crowdsourced referees are suspect - they may not like Tiger or Bubba. That's why we have paid officiating.

Far more concerning was the crowdsourced sleuthing of the Boston bombing (far ahead of the FBI releasing the photographs of the  suspects on Wednesday). An example of the crowd identified "suspects" was on this album. One of the suspects, according  to the Associated Press was a "high school student, of Moroccan descent, said he is scared to go outside after he was portrayed on the Internet and on the front page of the New York Post as connected to the deadly Boston Marathon bombings."

My own reaction when I saw those photos was the law often issues "disinformation" early on in an investigation - so the crowd was primarily looking for backpacks with sags (due to a heavy bomb), hoodies, primarily on Boylston street,  brown folks.  For two whole days, the crowd tried to identify suspects based on a limited number of photos from amateur cameras used at the Marathon and the Boston Police scanner live stream, whereas the law enforcement had access to a far bigger evidentiary database of store, police and other videos and first-hand witness interviews in addition. Sure enough this crowd did not even know about the Tsarnaev brothers till the FBI released their photos.

The week in Boston will be analyzed from countless perspectives in the coming months. I hope one angle looks at the opportunities and limits of crowdsourcing. 

 

 

Consumerization of IT with a Capital C

Consumerization is not a new concept. In 2005, Gartner defined it as "the growing practice of introducing  new technologies into consumer markets prior to industrial markets". Unfortunately, in the years since, the definition has gotten narrower - to where many primarily use to define how IT should treat a range of employee and visitor devices or what is termed BYOD policies.

As I wrote in this InformationWeek column, consumerization defined in broader terms creates significant new opportunities for IT in the form of smarter products and services:

"Many CIOs cringe when they hear the term "consumerization."...Flip that coin over and celebrate. The same employee who's a pain-in-the-rear user is also your company's new consumer, looking for more tech in everything from cars to a hotel stay. And that fact creates incredible new opportunity for IT teams to be more valuable to their companies."

I am also pleased to see this just out Oracle commerce survey which says

"B2Bs are Becoming the New B2Cs: -- B2B organizations are not just talking the talk, they are also walking the walk and adopting B2C commerce best practices as a way to drive revenue and market share. 80% of respondents agree that customer expectations have changed due to B2C retail practices.  Personalization, online catalogs and SEO continue to be the top three B2C practices that influence revenue the most for B2Bs."

Download the Oracle report - has interesting trends around CX - Customer experience.

And don't miss out on the opportunity to let Consumerization positively influence your operations across the enterprise, not just some narrow IT area.

"How to patch stupidity"

Interesting article in Dark Reading on the relatively powerful defense that comes from users who are trained to be smarter about security.

The article goes into the growing sophistication of "spearphishing" through harvesting of social networks to present personalized data to avoid detection like this example:

"The attacker did extensive research, likely on LinkedIn, and knew that the five executives regularly worked together on projects, Murray says. Using that knowledge, the hacker crafted five different emails, each of which looked like an email from one of the five colleagues to the rest of the group referencing a fictional meeting the recipient had missed. That message included a malicious attachment that was the supposed agenda for the fake meeting. Each email had a made-up thread to make it appear there had been a flurry of responses back and forth among the rest of the group."

In this particular case, one of the conned executives had the presence of mind to tell his IT group about it.

The article points out

"Employees now detect about 10% of the advanced attacks after they’ve slipped by technology defenses. That percentage may not seem like much, but considering that these are employees from all walks of life sniffing out attacks that most security technologies couldn’t detect, it’s a meaningful boost."

Geeky Mad Men

I am constantly amazed people talk about the CMO "becoming" tech savvy. 50+ years of work with Nielsen TV ratings, 30+ years of POS data parsing, and 10+ years of web optimization with Google appear to have gone unnoticed.

Similarly, many in the industry do not seem to realize how tech-savvy creative agencies can be.

In recent months I have posted examples on New Florence where the agency helped on what is a pretty impressive, geeky deliverable:

Ikea's augmented reality catalog - credit to McCann-Erickson

Delta's Photon Shower to combat jet lag - thanks to Wieden + Kennedy New York

Levoreact's allergy video using gaming motion capture tech - JWT

U of Engineering and Technology of Peru's watercooler billboard - converts moisture in local air to drinkable water - credit to Mayo DraftFCB

 

The three seasons

There is something very reassuring when Stan Swete, CTO of Workday signs off a presentation (as he did today) on the latest release of his product with "we look forward to doing this again in 4 months"

Now in 19th iteration, the 3 releases a year tend to be manageable chunks of new functionality and technology that don't overwhelm its customers and which are conveniently delivered in background. This, while allowing customers to personalize by applying custom fields to Workday objects, creating validations associated with custom fields, and apply their own labels to fields.

The regular upgrades also allow Workday to unabashedly present in detail on new features like 170 new ones in 19 such as improved amortization useful for digital asset accounting or to drill into demos like new features like time card entry on the iOS version in shot below.(BTW, 19 also intoduces Android apps in the Google Play store. Previous versions supported iOS and HTML5)

This is so different from the high pitched, high level hype I see from so many other vendors or in reverse, death by bullets - new features listed in a press release or a static PPT presentations.  

In the spirt of Workday "re-imagining the traditional approach to software customization", I think Vivaldi should customize his concertos down from 4 to 3 - to reflect Workday's 3 seasons a year. 

The Real Deal: Mark Herring on "APIs everywhere, but not many I can reuse"

This continues a series of columns from practitioners I respect. The category "Real Deal" describes them well.

This time it is Mark Herring, SVP of Product Marketing at Software AG. I recently heard him talk about "Big Services" as a unheralded cousin of Big Data and invited him to write about the changing world of services and APIs, which his webMethods product gives him a nice perch to observe from.

“In my role I meet with many customers and have the unique privilege of seeing the hype cycle through the eyes of my collective customers. Many customers are moving aggressively in exposing their systems as API’s as they try to address the huge demand for mobile access to their systems. One misconception that I have to often address is the perception that there are so many API’s already out there that by combining a few API’s together they should be able to get their systems out even quicker.

The Programmable Web lists almost 9,000 APIs that are publicly accessible, which should be a boon to productivity. Basically the theory sounds fabulous – create new applications by combining an API from vendor A, with another API from vendor B, with a bit of business logic from my business. Unfortunately the truth is that most reusable API’s are not being reused. There are a few reasons for this lack of reuse:

 Many of the API’s that are out there are in the category of “No one cares!”. Well maybe someone cares, but by in large do we need another photo sharing service, a daily fact API or a classified service API. I would put this list at about 50% of all the API’s out there!

The next category “Interesting but no SLA” accounts for another 35%. There are a plenty of interesting API’s that I might want to use but either the company providing them is unknown, or the API has no service level agreement. There is no way that I would want to put this API in my application or mashup since it going down would mean problems for me. No one want to deal with the error “Sorry service unavailable”.

The next category is what I call “Great.. BUT”.  These APIs seem usable, they provide a service I need, they meet my requirements for availability, BUT if only they had this extra return value, or this one extra feature. There are by far the most frustrating API’s to deal with. The most common way around these is just rewrite them to give the exact results I was hoping for. This probably accounts for an additional 10% of the publicly accessible API’s.

The final list is “Widely used”. This is by far the smallest subset, I attribute 5% of all APIs in this category, but even then I think I am being a little too generous. The list includes APIs such as FedEx/UPS tracking,  Google Maps and potentially Credit Check.  The limitations with these API’s is that often an account is needed because the API provider is assuming risk/liability. For instance the Credit Check API will be provided by one of the credit bureaus or card processing services and if the check passes and funds are credited they may assume the liability if at a later stage the transaction was deemed to be from a stolen card.

What Does This Mean For YOU?

Review publicly assessible API’s, but don’t be disheartened that many of them will not fit your needs. API reuse is only one benefit; arguably the biggest benefit of API’s is mobile access to business systems. When building your own API think of public usage and reuse, since these are good design patterns to emulate. And finally, adopt a robust and secure API management strategy."

Mark can be reached at mark DOT herring AT softwareag DOT com

The Technology Switch Hitter

Oliver Bussmann, CIO of SAP is leaving to become CIO of UBS Group and this article has a comment "the idea of somebody moving from an IT services company into an end user company is quite uncommon"

Actually it is not that uncommon. This weekend I finished slides for a presentation in a couple of weeks titled "The Technology Switch Hitter". I point out executives who are good at both consuming and producing technology are indispensable. In the slides I invoke Lance Berkman, off to a great year with the Texas Rangers, and who will retire as one of the best baseball switch hitters in history.

In my recent book,  I included guest columns from Tony Scott, CIO at Microsoft and Vijay Ravidran, Chief Digital Officer at The Washington Post. Scott got to Microsoft after stints at Disney and General Motors. Ravindran was involved with Amazon in its early days and has done other startups since. They represent a growing group of  execs who cross the line from vendor to end user company and in reverse.

Actually, my book was supposed to be called The Technology Switch Hitter. My publisher got cold feet because the term is politically incorrect outside of baseball circles. So they dumbed it down to The New Technology Elite.

For the book research I spoke to some baseball personnel. I learned about the physiology of ambidexterity, the "mood swings" each side goes through, the extra time switchitters have to put in to practice each side. One reason why only about  15% of MLB players are switchhitters and a much smaller percentage is as good as Lance. 

But every team needs some, and every technology leadership, be it at vendor or user organization could similarly use backgrounds like Oliver's, Scott's and Vijay's.

 

Pause your ERP investment?

Time magazine has a cover story on the bounce back of American manufacturing. Worth a proper read (sub required) but they outline several drivers:

a) Smarter products with sensors/software and supported with advanced analytics

b) 3D printing

c) Energy economics - the US is increasingly benefitting from shale oil and gas whereas global sourcing is being hurt by increased shipping costs

d) Smarter US worker - who is looking more competitive as labor costs for more basic offshore talent keeps rising

But they also raise a few caveats

"Manufacturing is coming back, but it's evolving into a very different type of animal than the one most people recognize today,"

"Designs will be altered in real time to reflect the knowledge."

"Wanek says Ashley will reward workers who are adaptive. Part of that involves acquiring new skills while on the job and taking responsibility for devising and implementing improvements."

So,  what does have to do with your ERP investment?

a) Can your ERP system help you effectively evaluate your product design, sensor generated data, shop floor design, global sourcing, logistics, talent management, energy efficiency and many other areas to help you decide how your manufacturing/supply chain  needs to evolve, and how much should be made in the US?

b) And can your ERP itself functionally support this next-gen manufacturing of smarter products, 3D printing etc?

If the answer to a and b is unclear, maybe you should reduce or redeploy the money going to ERP maintenance, hosting, upgrades and use towards higher payback - making your products smarter, reconfiguring your supply chain, retraining your factory workers, etc.

It is an exciting time for US manufacturing. But only if we do several things smarter.