Dave Vellante and Jeff Kelly interviewed me for The Cube at Inforum about Infor, my book on the SAP Economy and other enterprise vendor trends.
I have written in past about Infor’s micro-vertical strategy and its quest with its internal design agency Hook +Loop to make enterprise software “beautiful”. I saw more of that at Inforum in New Orleans this week, but I also signs of the messages maturing more into a focus on efficiency and value from software.
To start with, it is good to see an application vendor talk feature/function and business process, not just platforms and speeds and feeds. I spent time at the event with customers and Infor execs from healthcare, hospitality and fashion. Transactional systems and analytics to optimize revenues and operations. The analytics focus was particularly pronounced with pretty visualizations, but even more of a focus on predictive analytics with MIT data jock class talent in its “Dynamic Science Lab”
Not just verticals, there was more in what Infor calls “Corporate”. A new General Ledger for the global, multi-entity, multi-calendar world we live in. Expanded HCM footprint with more analytics around workforces.
And new CRM functionality with a recent acquisition, SalesLogix. New discrete PLM functionality via a partner, Aras to add to process PLM Infor offers via its tool Optiva.
To me, it was more exciting to see a focus on value from software – coming at the heels of my summer writing a book about the bloated SAP economy.
Infor has taken a leaf out of the SAP sales playbook and has a Value Engineering team which focuses on payback analysis. What’s different is it is also showing up in efficiency in UX. Infor talked about a paradigm it calls Clear Work and the goals are improving appeal to users, but as important to increase productivity, to decrease errors and to decrease training time. It talked about attacking the “tyranny of the super user” – simpler functionality so organizations don’t become dependent on a handful of individuals.
The Value Engineering impact is also being felt in payback analysis across vertical processes with several examples like one below:
CEO Charles Phillips has been quoted as saying “Friends don’t let friends buy data centers”. There was significant talk of Infor’s commitment to Amazon Web Services for its cloud infrastructure. Why not leverage the biggest “super computer” with auto-scaling, Redshift, cloud trail and many other services to the benefit of your customer community?
The partner expo was full, but not ostentatious – nothing like the 2,000 square foot booths and 22 foot tall signage at SapphireNow. Many of the partners are regional and industry specific like Ciber and Stoltenberg. Most are low-hype and operationally focused. The latter is particularly important as most Value Engineering payback is in the operational areas not as much the “corporate functions” which many services firms do better at.
Overall, Infor’s wide product, services and talent portfolio continues to grow. Many analysts find Infor difficult to categorize. Infor plays to many three letter acronyms but it is always breaking into new ones.
Charles described a call from an executive of a Commercial Real Estate company asking if he would be interested in developing functionality for their micro-vertical. At other vendors, they would be lucky to get a call back. Charles’ response “we will be glad to analyze the market and if we can find a group of charter customers, sure we will”.
Expect more breaking of boundaries from Infor.
As the SAP Economy book shifts to editing phase I have been looking at book covers, titles etc.
One title which will not make the cut is “HANA and her siblings”
My wife liked it, then preferred some other ones I am testing
Three (male) CIOs panned it right away. Not strong enough title for the book’s theme. Not a statement on what they think of HANA, the product.
One male reviewer said a younger and global audience may have never heard of the Woody Allen movie it references
One female reviewer said Woody is not the most politically correct personality to invoke
So, that will definitely not be the book title.
I could tell you the leading candidate at this point, but then I would have to also have you deal with Mossad
Starting next week I will get briefings from a wide range of enterprise players – Infor, Workday, Oracle, Rimini, Salesforce and Microsoft among them. Conference season is in full swing.
I have not been so excited in a long time. The reason is I feel a thaw in the enterprise market.
My SAP Economy book research has allowed me to talk to a range of its customers. While the book has a ways to go with publishing edits, my sample of customer interviews suggests the natives are very restless.
My case studies are organized as follows
A. The Un-adopters – outright turning off SAP, or moving to third party maintenance
B. The Diversifiers – ring fencing SAP with cloud apps, or tiering around SAP
C. The Pragmatists – changing outsourcing models, more demanding before extending SAP reach
D. The Committeds – adopting HANA, consolidating SAP instances etc.
SAP, of course, is no slouch. My book will bring out plenty of what it has done right in the last three decades. It now has a charismatic new leadership which can energize the company and the customer base.
But SAP is burdened with a bloated ecosystem with a poor delivery record and an unattractive cost base. SAP has also neglected a number of application areas with its intense focus on HANA, NetWeaver etc, so it is also more vulnerable than it has been in a long time.
I have ordered front row seats to watch the tournament over the next couple of years.
With the largest single day product launch ever in Apple history – multiple iPhones, Watch, Mobile pays – Tim Cook will likely quiet a number of his critics who have been harping Apple has forgotten how to innovate. The Watch in particular breaks the mold with the wide range of configurations of size, alloys, straps and other components. In some ways, it reflects the wide number of SKUs Cook has seen Nike introduce as a member of their board and what Angela Ahrendts has brought from her Burberry’s fashion industry background.
Nothing against Cook, but some of the credit still goes to Steve Jobs. His biggest single contribution was building a dream team as I have blogged before
“To me, Steve Jobs created a petri dish and threw in all kinds of rare elements – Tim Cook’s operational excellence, Jony Ive’s design aesthetic, Ron Johnson’s retail experience, Scott Forstall’s ecosystem vision, Phil Schiller’s marketing chops, and many others including Terry Gou, CEO of Foxconn, the contract manufacturer. It took a while to gell, and likely required all kinds of ego and conflict management, but his enduring legacy is having created and managed that dream team which even with a few changes continues to do well.”
Dr. Hasso Plattner has written a long blog post about Business Suite on HANA. He has 12 reasons justifying why. His passion for the product screams through the post.
I wish he would make it a Baker’s dozen and add a 13th point: that SAP plans to change its business model around HANA.
I am writing a book on the SAP economy so dollars and euros are high on my mind. In the last couple of years, as the Big Data phenomenon has taken off, I have been impressed with all the fresh economic models I have seen.
So, when GE announced its Industrial Data Lakes recently, I spoke to Bill Ruh there. GE is looking at exabytes of data from its aircraft engines, turbines, locomotives, medical scanners and other industrial equipment. GE’s big driver “How do we reduce by orders of magnitude the cost of managing a terabyte of data?” That led to some radical rethinking of data structure, ingestion and management I catalog in the book.
In the last year I have talked to entrepreneurs like Nader Mikhail at Elementum, Omar Tawakol at Bluekai and Adeyemi Ajao at Identified. They have no interest in selling software or hardware. They want to sell you supply chain, marketing and HR data, or even better insight, as a service.
I have seen communities of data scientists emerge at Kaggle and at Topcoder (part of Appirio). It is a new talent sourcing model.
In contrast, SAP still wants people to buy software. Then buy hardware and services from its partners. Beyond 4TB of memory, commodity components don’t scale, so that is not cheap. As someone pointed out “With data volumes exploding, will we need to look at IBM’s custom made 128TB Blue Gene/Q supercomputer? And have to use IBM’s traditional talent model?”
With the HANA cloud, you could argue SAP is moving to a new business model. Not quite. Sit down with two displays and open up SAP’s and Google’s data center web pages. SAP emphasizes privacy, security and data protection (all important, even more so to German and other EU customers). Google focuses on data center innovations – efficient servers, container design, carbon neutrality among other initiatives. SAP is just beginning an efficiency journey that Google has been on for over a decade.
The other challenge with the HANA cloud is customer connectivity. Amazon Web Services with its Direct Connect and Microsoft Azure with AT&T’s NetBond have tried to combat the MPLS and WAN costs carriers charge individual customers. SAP customers do not have such an option.
HANA as an OLTP platform – SAP is actually regressing its business model. To give customers database portability, R/3 kept away from stored procedures and other database specific features. To boost HANA TP performance it will have to move increasing amounts of code away from the application layer.
Over the course of my interviews I have heard many customers say HANA economics are not compelling – even the ones which are early adopters and have good use cases. The recent ASUG survey emphasized the point in spades.
Dr. Plattner don’t ignore all that feedback. Add a thirteenth point to your value proposition – a compelling business model to cover your software and your partner’s hardware and services costs.
I love interviewing senior corporate executives for my books. The conversations are always about large problems they are trying to solve.
So, for this book, an executive talked to me about how they define Big Data. 15 gb of data for every flight. Half a terabyte of data from a turbine. Similar from other equipment. Now multiply that by thousands and thousands of units. Major consideration – how do we minimize cost of managing a terabyte of data and how to dramatically reduce data ingestion time? How do we deliver orders of magnitude improvements in each?
A oil executive told me how 3D visualization, sensory analytics and massive computing power, now enable a geologist to perform sub-surface analysis of a formation remotely and empower the corrosion planner to virtually create plans in hours versus walking around facilities or in the field for days. Much safer to humans and much, much better decisions.
A manufacturing executive told me they move 25% of their plant capacity across borders in a year so they can produce closer to emerging market demand as middle classes blossom around the world. Think of the logistical implications of such constant moves.
None of these challenges have off the shelf tech solutions. They require integration of multiple tools and lots of customizations.
That frustrates many analysts because they do not neatly fall into market categories. Consultants lose interest when they don’t recognize the vendors that provide the solutions. My books have no such constraints. The grander the challenge, the more ink they get.
I formally invited SAP to provide a 10 page, unedited column to include at end of the book I am writing - how things will be different with its new management team.
The book model shows customer spend at a run rate of over $ 200 billion a year – $ 1 trillion (yes!) since the recession while SAP’s own sales/deliverables have leveled off. That includes cost of SAP licenses and maintenance, systems integrators, hosting/infrastructure, consultant travel, application management providers, BPO firms, MPLS circuits, upgrades, SAP staff at customers etc.
The book does a root cause analysis based on 20+ years of archive data and based on interviews with SAP customers, partners and market watchers.
I thought it would give a somewhat positive ending to book to let SAP provide an optimistic (and unedited) future after all the failures and inefficiencies cataloged in the previous chapters. My model shows SAP itself accounts for only about 10% of the total cost of the economy around it. So, this would have been their chance to discuss how the ecosystem, cloud delivery model etc would be different going forward.
They thought about for a month and have declined. Not exactly surprised – I see how SAP has reacted to a recent ASUG survey on (slow) HANA adoption. This is their customers talking and yet SAP defensively brushes it off.
I have similarly interviewed plenty of customers about their SAP investment strategies and I could move one of those sections to the end, but I would like to invite alternate ending suggestions from my readers to fill at least a few of the 10 pages I had blocked off.
Please comment below or send me an email at vmirchan AT gmail DOT com.
I will contribute $ 250 to the charity of choice of the entrant with the best suggestion by August 27. Or buy them a nice dinner. Their choice.
Thanks for participating.
Last week, at the grocery store checkout I overhead a man congratulate another about his new book. Curious I asked the author what his book was about. Hugh Sullivan has written about his 40 year career as a Navy Corpsman. He was awfully proud of his book Doc! as he should be. We shared publishing stories and I went home and downloaded the Kindle version.
My son home for the summer break told me last week he enjoyed his visit to the public library. How quaint I thought. On the same day, the Wall Street Journal had a story about how libraries are surviving, and in fact thriving in an age of eBooks.
Books are not dead – not by a long shot
I am finishing my 4th book so clearly I am into that channel of communication. I love to meet and encourage fellow authors.
But my blogger friends often ask me why I write books – so old-fashioned is their tone. Of course, heavy tweeters ask bloggers the same question
And when they do, I am reminded of my former Gartner colleague, Erik Keller who is now a master gardener. He had a nice quote when I interviewed him for The New Polymath
The term “ legacy ” is considered a negative in technology whereas in farming it is a positive. Because the nature of technology is not to preserve the past, it often functions in a circular, self - destructive mode.
Here’s my experience
1) A book is a very disciplining mechanism. Somebody once said “Vinnie, you can make a brown bag sound interesting”. Thanks, but I am actually picky around topics I write books about. Most times they are ahas which smack me with a 2x4. They are my ice bucket challenges that wake me up.
The New Polymath came about because I started to notice from my blogging “complex products” where companies were learning to blend infotech with biotech, cleantech, healthtech. The Digital Enterprise was Karl-Heinz Streibich’s aha – I helped him flesh it out. The SAP book came about from some modeling I did which estimates its customers have spent post-recession over a $ trillion even as SAP’sales/deliverables have leveled off.
I spend 2-3 months doing research, talk to 75-100 executives and analysts for each book. The 360 degree view challenges my original position, polishes it, nuances it. And as I cook and reduce and reduce some more, end up with 10 to 15 case studies which form the backbone of each of my books. The early weeks of research and interviews are the most enjoyable part – the back end editing, publishing chores are not much fun, but with each book, the publishing industry has evolved and they are less and less painful.
2) My audience – executives – do not have much time for much reading. Books, magazines, analyst research, blogs all fight for their attention. I don’t expect each reader to scan my books cover to cover. But I go back and periodically review an Amazon feature called Popular Highlights. It tallies sections that multiple readers have marked up on their Kindle apps. These mark ups tend to be all over my books. Same with readers I encounter on my travels. They will cite back sections they enjoyed (or some they disagreed with) that appear random. They may not have read the whole book, but I would be hard pressed to predict which 10, 30,50 pages they do read. If I did I would write 30 page eBooks. But they would be boring without case studies, and interesting anecdotes. Which means I would likely not write them.
3) The book itself is only one channel. My book research feeds my blogs, my speaking, my consulting. My books in turn benefit from my blogs, my speaking, my consulting. They make each richer as a result. If books were my sole focus I would likely be writing about Lady Gaga or iPhone 6 rumors not boring old SAP
4) Books broaden my vocabulary and personal “Wikipedia” . As part of this book I learned the term “coal-face” – not the Mary Poppins kind, but front facing – term apparently very commonly used in the UK. During the Digital Enterprise I learned all kinds of details about the German economy. From the New Polymath, I learned much about the Italian Renaissance. It’s continuing education.
This weekend I read about Rodrick Markus who travels the world seeking out exotic teas, truffles, oils and other delicacies. I hope I can continue to similarly find ahas to keep writing about for a long long time.
Pew Research has a thought provoking study on the impact of algorithms and robotics on jobs. Half the experts polled are very pessimistic, the other half just pessimistic. Definitely worth a read.
What I find fascinating about these discussions is how IT centric – as in IT and impact on white collar jobs, shop floor, logistics – the focus is. That is the world many of us live in, so it is understandable.
I like to periodically go back and read the Grand Challenges that the National Academy of Engineering has laid out
Sure many of these will need software, sensor, satellite support and other IT centric skills, but think how many chemists, mathematicians, engineers of all stripes, and biologists and other STEM skilled workers we will need to solve these challenges. And how many more we will need to deploy the solutions. And keep maintaining and improving them. And this is just the tip of the challenge iceberg. There are hundreds less pressing challenges our world faces which need talent to focus on.
The other thing we forget is old jobs never completely disappear. Did you know there are still over 50,000 dairy farms just in the US.? Most are family owned and continue to provide good livelihood to the family members. Sure automation has reduced the human element, but even after decades not eliminated all the jobs.
Finally, hardly anyone talks about the positive impact for consumers. Automation keeps prices affordable and quality consistent and production improvements quicker.
Way too many of us are quick to beat up on Amazon for not paying enough attention to Wall Street, or for buying up Kiva the robot maker or thinking of drone based deliveries. But Jeff Bezos has made famous “the empty chair” in meetings to remind his executives to be ever cognizant of the customer. Most automation discussions ignore the customer point of view
Once again Gartner is in the news. Its is being sued and a whole slew of blogs and articles have piled on.
My summer project researching and writing about the SAP economy has allowed me a chance to go back and review 20+ years of market research, articles, blogs and presentations.
Part of me wonders why Gartner did not break so many stories or lead challenging positions when I review
But does that mean Gartner is not independent as it used to be or has become a “pay for play” firm?
Three perspectives – again from the lens of my summer research
a) The average Gartner analyst tries hard to be independent
From 1995 to 1999, I was one of the lead analysts on the SAP (and broader ERP) consultant marketplace and I repeatedly warned the market
While acknowledging that R/3 is merely an enabling tool and that their end goal is to help clients develop world-class business environments, few consulting firms have adequately documented process improvements around R/3 projects. Similarly, few could show examples of business cases or return-on-investment (ROI) analysis to justify the large investments their clients are making around R/3. Finally, a number of firms, afraid of being viewed as negative on SAP, are not objective enough when advising their clients in the evaluation, contract negotiation, and "gap analysis" phases of the projects.”
It is time to revisit the impact of consultant travel on implementation projects. Through limitations and incentives in SI contracts, creative use of telecommunication technologies and changes in attitudes, users should actively manage project team travel. Once accepted as a necessary evil, it is becoming clearer that the large amount of travel in today's consulting market is significantly impacting project economics and productivity
and and and
My alma mater, PwC asked Gartner I should not be allowed to cover them, because I knew them “too well”. And this was 3 years after I had been gone! A partner at another firm sarcastically told me “I thought you were gone from PwC” suggesting I was too nice to PwC. Needless to say, such complaints would lead to detailed reviews and audits of my research. And earned me badges of honor from my analyst colleagues.
I have a hard time believing the average Gartner analyst of today does not try just as hard to be as independent. I meet them at industry events and they remind me of younger me . Passionate, smart, may be a bit more diplomatic than I was, certainly with fuller head of hair
b) the average Gartner analyst has so much more to cover
When we first issued a detailed review of SAP SIs in 1996, we had profiles of 20 vendors. Now with the SAP services market ten times as large, Gartner still only profiles in detail 20 of the biggest firms (IDC and Forrester profile even smaller numbers).
The marketplace has changed dramatically. There are hosting firms, offshore application management firms, telcos, regional firms around world that did not have an SAP practice when I was covering the market. Many did not even exist. In turn, many of these firms have digital agencies, BPO offerings, mobile development and countless other practices.
The matrix of coverage at Gartner has grown exponentially. Gartner looks at SAP in many different “Magic Quadrants” – ERP, Sales Force Automation, Strategic Sourcing, Horizontal Portals, Master Data Management, Mobile Application Development Platform, Implementation Service Providers, Data Warehouse and many others. They cover some segments well, others not so well.
c) The average Gartner analyst is just one small market watcher
I will have a section in the book on SAP Market Watchers. It looks at how regulators, media, analysts, bloggers, user groups and academics have watched over the SAP economy. My model shows it is at a run rate of $ 220 billion a year, larger than the GDP of Ireland so clearly deserves a fair amount of attention
Such a massive SAP economy and yet, such fragmented coverage. Way too much coverage goes to SAP itself, and there much to the gossipy executive revolving door and to nationalistic stereotypes. In the meantime, gross inefficiencies in the data centers, networks, armies of talent running SAP get little attention. It reminds you of the fable of the blind men around the elephant – one who touched a leg thought it was a pillar, the one who touched the tail called it a rope and so on.
So, yes Gartner deserves scrutiny because it is the biggest analyst firm. But it is just a small and often misunderstood element of the marketwatcher community.
August 10, 2014 in Industry analysts (Gartner, Forrester, AMR, others), Industry Commentary | Permalink | Comments (3) | TrackBack (0)
When I started to write the book on the SAP economy I had counted on customer, market watcher and competitor input.
What’s been surprising – and actually inspiring – is how restrained competitor executives have been in their critique of SAP.
Of course they have quotes in articles in the 20 years of archives I am mining for the book. I will use them sparingly and let the customers and the analysts I have interviewed and the data I have access to, to do more of the talking.
You have heard the expression “Fool me once, shame on you. Fool me twice, shame on me”. But if you get fooled 6-7-8 times, who do you blame?
As I go through every nook and crevice of the SAP economy for the book I am writing, it is staggering how every type of vendor has premium priced – over and over. Of course you get the usual validation – oh, it comes with better SLAs, responsiveness, Q0S etc etc.
a) SAP has made a habit of charging in different ways for “adjacencies” or repackaged functionality customers have previously paid for
b) Consultants brag about having done thousands of SAP projects, then expect a premium for that experience, when they should be passing along economies of scale and repetition
c) Consultant travel continues at staggering levels even as telepresence has improved and many project phases should be done in “factories” not at client sites
d) Indian vendors who proudly delivered continuous improvements via their CMM Level 5 and Six Sigma programs on legacy and even arcane vertical apps, seem to have forgotten that in their SAP customers
e) Any one with a credit card can buy cloud storage from Amazon at 3c a gb a month. SAP hosting partners charge 10-20-30X.
f) MPLS pricing for networks into centralized SAP sites continues to be shockingly high. Rates of $ 100 to 200 per mbps, when you and I as consumers pay $ 1-5 per month. Hey but it’s more reliable.
g) HANA hardware, being memory intensive and only certified from a handful of vendors, is off the charts compared to other server pricing.
Like I said, most customers have good validations for the spend but looking at it from the wide set of data points I have collected, you have to wonder how many of them realized they were buying a car would need premium fuel, and yet deliver low MPG, need $ 100 oil changes and $ 1,000 tires and and …
Oracle invited me to moderate a panel in their DaaS launch today. Watch the whole hour for some great perspectives on this exciting new market category, and our panel starting around 26.00.
Talking to Steve Miranda and Omar Tawakol before and after I got even more excited about the concept
a) There is a new generation of data asset entrepreneurs like Omar (whose company, BlueKai Oracle acquired) who are about separating signal from noise– under NDA I have been briefed by other entrepreneurs focused on supply chain, HR and other DaaS. Scary smart folks.
b) Watching Omar talk about all the social and other marketing data feeds, Steve talking about feeds from machines and wearables, you realize we are not anymore in the Kansas of internal, structured data so many companies are still heavily invested in
c) How rapidly business and deployment models are changing. While the old model of “buy hardware, install software, load data, clean for quality – pay for all that” is not going away the speed of getting started with and the economics of DaaS are going to be compelling
d) How effortlessly Oracle with its decades of data management experience and horizontal and vertical application knowledge could play in a wide range of DaaS categories.
As the World Cup winds down, it has been such a celebration of global diversity. Polite Japanese fans cleaning up after themselves. Crushed Brazilian fans applauding the German team.
And the reverse – way too many leaders blaming losses on the field on geopolitics. The need to have a campaign to stand up to racism.
My research for my book on SAP is exposing me to more national stereotypes. 2 decades ago, I used to hear clichés about German engineering prowess. As if hardware and design excellence applied equally to enterprise software. Or the reverse in the form of German bureaucracy and works councils and the related paralysis.
Now it is the reverse about the “Americanization” of SAP. That new CEO, Bill McDermott will be SAP’s Stephen Elop. He will gut the company and sell the IP and data to non-Germans. That it is one big, bad NSA plot.
Lost in all this nonsense is the fact that SAP’s biggest threat is its runaway economy. That Bill should be aggressively taming its ecosystem which year on year adds 8 to 10X to customer burden what SAP charges them. Rather than spending time in Walldorf convincing people he is not Elop.
My daughter came back from a European trip this summer and announced “Dad, your 50 country tally is well within reach”. At her age I had been to 2 countries!
The more we globalize, the more nationalist morons of all stripes raise their ugly head. And just paralyze progress. By the time Rita gets to 50 countries on her passport I hope we have evolved more positively.
Kudos to Germany for that amazing victory.
But it was just a game. Brazil has been winning millions of hearts in the last month. Like that of my nephew who had a fabulous week there during the FIFA WC. And hundreds of millions who have watched Brazil welcome all kinds of fans to its stadiums, its beaches and its forests. Watching the street art and listening to the samba and the spine tingling anthem on ESPN reminded me its been 20 years since I have been there. Time to revisit.
I must say I was rooting for Brazil after I saw Tom Rinaldi’s heart warming story on deaf/blind Carlos who with the help of tactical field and optical communication from two very dedicated sign language instructors has enjoyed every game.
All three must be crushed tonight but hope they realize they have won many fans around the world.
Filing quarterly corporate taxes I came across Deal Architect’s incorporation papers. Happy (belated) birthday!
It’s a good time to thank so many for the decade:
So many more to thank. Sincerely appreciate the continued support!
Those who read my books know they tend to be case study heavy and dense with forward looking details – that’s the nature of innovation genre writing.
My book on SAP is similar – heavy with customer dialog, but very different in that it has a focus on the past.
Turns out it is my 25th anniversary of “meeting” SAP. In 1989, while on assignment with Price Waterhouse in London, I led a team to set up SAP R/2 and McCormack and Dodge prototypes on our mainframe in our brand new Docklands data center.
So, the book is turning into a bit of retrospective. Archives from my Software Intelligence Group at PW which analyzed emerging client/server applications from 1993-1995. Customer notes, Walldorf visit notes and many research notes on SAP from my stint at Gartner from 1995-2000. Documents from our start-up IQ4hire from 2001-2003 where we built tools to help customers better pick systems integration services. Notes from many visits to SAP application management and hosting firms around world as part of Deal Architect consulting. Countless Sapphire trips and SAP meetings and related blogs over last decade.
It is deja vu all over again to see warnings we issued in 1994 and every couple of years since have become reality in the countless stories of overruns and lawsuits around SAP. How wave after wave of SAP partners have taken advantage of loose controls in its ecosystem.
It is striking to read the word “simplification” over and over from SAP executives now going back 15 years. Or that Hasso Plattner actually once said ‘The more complex, the better. We Germans could never invent such a simple product as Coca Cola.”
What has been much more enjoyable has been to talk to customers about their strategies to manage SAP and players from its ecosystems and their sprawl of instances.
It has been as enjoyable to meet several “influencers”. One is a historian who explained to me using S curves the emergence and growth of the SAP economy. Fascinating. Another has followed software licensing trends for over a decade. Another has watched outsourcing trends for a while. Another has a database of 000s of articles and blogs, elaborately tagged, on the software industry. Talk about a treasure trove.
I called them “influencers” in quotes because you don’t see them at SAP events. They are not on the SAP twitter circuit. I doubt SAP ever talks to them.
I hope they allow me to quote them by name in the book. Because customers need to get to know them better. And when they do they will realize how siloed and shallow current coverage of SAP and its ecosystem really is.
Not surprisingly, I have been thinking quite a bit of late about the Santayana quote “Those who cannot remember the past are condemned to repeat it.”
More positively, I am enjoying the recall of many happy and humorous times in the last 25 years. The book, I hope, will on balance reflect that positive vibe.
Half way through the year, FitBit tells me I have walked nearly 2 million steps – so slightly above my goal. Typepad tells me I have posted 480 entries on New Florence, so slightly below my goal.
The rest of the year should look achievable on both goals, but is actually pretty daunting.
I am working on two books which will take away from blogging time, even though the innovation fodder I have access to keeps growing. And the heat and humidity and bugs in FL are getting to uncomfortable levels.
So, I am treating both as stretch goals for now. FitBit’s frequent badges are a nice reward. Continuing comments from blog readers are an even nicer source of support.
Keep them coming- thanks!
It’s not unusual to go to vendor events which have 50, 75, 100 analysts and bloggers in attendance. Smaller vendors just cannot afford that level of coverage, so I appreciate a “shared service” Judith Rothrock of JRocket Marketing offers her vendor clients. She invites 20 to 30 analysts to an event hosted by a few of these vendors.
I try to go every couple of years – the format is a few hours of slide presentations, a panel with a few of their customers and partners and a fun evening to mingle. She is particularly creative about the evening theme – in 2009 she had a menu which replicated the meal from President Obama’s inaugural dinner.
This year the location was Chicago, around a somewhat predictable Gangster theme. Johnny Rocco, our shuttle driver and “Slippery Sloop”, our guide set the stage with Al Capone and Tommy Gun anecdotes. And uptight analysts gamely got up and danced – if you can believe it to an audience of a fish tank at the Shedd Aquarium!
But there was plenty of serious content. I particularly appreciated Joey Benadretti, President of SYSPRO USA, summarizing results from a MAPI survey on manufacturing trends. In almost a complete reversal of the maquiladora trend where manufacturing moved to the Mexican border, recent US manufacturing has been moving to states closer to the Canadian border. It was eye-opening to listen to Karen Watts, CEO of Apparency talk about the countless forms vets have to navigate and the inefficiencies at the Veterans Administration.
The time with the invited executives was even better.
Kim Pederson, CEO of 1000bulbs, is the epitome of a small entrepreneur who has successfully grown his business through technology. He described his humble start from door to door sales of light bulbs and growth to now a web $100 million business, selling 30,000 SKUs to over a million customers a year. In a one on one, we discussed his global supply chain, and how he transitions his business between industrial and consumer lighting markets (as in holiday lights).
Ned Hunter, a former Naval Aviator, spoke with credibility about the challenges at the VA. Apparancy is licensing some of the IP he had developed to offset the inefficiency: “GS level 4-5 workers were reviewing claims and passing stacks of claims to GS level 12 workers to adjudicate who then passed their work back to a GS level 4-5 to manually key the data into the “VetsNet” system to release an monetary award or appeal letter.”
Mike Murray of Rochester Electronics described components few of us think about. These are “end of life” electronics and dies and other parts where the original supplier had long been out of business, patents have expired, often the design has to be reverse engineered. In a one on one, he described the quality issues that counterfeit components can cause with aging platforms in the aerospace industry.
In reverse, David Ryan of SaaSOptics described a far more contemporary trend – the growth of SaaS and other subscription revenues and a new set of jargon like “MRR Cohort”. His company helps with revenue recognition and invoicing and optimized analytics for tracking key subscription metrics.
Looking back, that was a wide array of topics to have covered in a day. Not your typical analyst briefing but something as an innovation author and blogger just brightened my day.
June 24, 2014 in Industry analysts (Gartner, Forrester, AMR, others), Industry Commentary | Permalink | Comments (0) | TrackBack (0)
When you get two ex-accountants together, talk invariably turns to numbers.
Dennis Howlett and I spent some time at the Plex conference a week ago and in discussing the book on SAP I am working on he advised me: “watch your numbers”
It’s good advice and I have reached out to more analysts for data for my model, even though the book is less about numbers and more about how customers are coping with or walking away from SAP and its ecosystem’s economic burden on them.
But I also remarked to him how ironic that comment was. The “book of record” or as its fans have said countless times “the single version of the truth” has chosen to not build its own model of customer costs in implementing or operating its software, so observers like me have to.
Even more ironic is the fact that Dennis has told me countless times, he does not believe SAP customer numbers it posts on its website. Several other analysts agree with him. Ditto with membership counts in its community. No single answer.
Same with number of licensed users. So when SAP says it will have a billion users by 2015, people yawn, when they should call it out.
Or when SAP reaches for the stars and talks about a $ 90 trillion “network economy” (yes trillion), nobody stops to say the Gross World Product (yes the entire planet’s ) was only $ 72 trillion in 2012. Or that it is highly unlikely more than a small fraction of the planet will use Ariba or the new SAP partnership with eBay for that commerce
Ah, yes the single version of the truth.
But Dennis’s advice has led me to more analysts who tell me my original model may actually have been conservative.
By the time my book is out, maybe my model will have even more shocking numbers and I am sure I will have nitpicking sessions with Dennis and others.
Or may be not – the book has to be about the voice of countless customers who are trying to optimize their SAP investments.
(Credit for the GWP number to my friend Anshu Sharma)
I was making small talk with Shaun Rheingold at the Plex conference earlier this week. He is a former Tesla designer who has moved east to Michigan to start Canvas Watch. I asked him if Elon Musk is worried about BMW’s $ 2 billion investment in its new I series electric vehicles. Shaun’s view – Musk is so passionate about sustainable transportation that in way he is pleased to see major automakers take electric models seriously.
Indeed today as he announced he is “open sourcing” his Tesla patents, Musk says “Our true competition is not the small trickle of non-Tesla electric cars being produced but rather the enormous flood of gasoline cars pouring out of the world’s factories every day.”
Shades of Mark Zuckerberg. In The New Technology Elite I quoted James Hamilton of Amazon, a data center “jedi master” about Facebook’s hyperefficient Prineville DC and its Open Compute Project.
“In the past, I’ve seen some super interesting but top secret facilities and I’ve seen some public but not particularly advanced data centers. To my knowledge, this is the first time an industry leading design has been documented in detail and released publicly”
Neither Musk nor Zuckerberg are being altruistic. By releasing component details, they hope to attract a wider scale of suppliers for their designs.
Then there is the “Data General” effect. In the Pulitzer prize winning "The Soul Of A New Machine", Tracy Kidder wrote of an ad that Data General produced but never ran. It read "They Say IBM's Entry Into Minicomputers Will Legitimize The Market. The Bastards Say, Welcome"
At least short term, it bought Data General respect as a pioneer. So much cheaper and better than paying armies of attorneys to defend patents against even bigger armies of attorneys of bigger competitors.
Vishal Sikka has landed as CEO of Infosys, a few weeks after a tumultuous exit at SAP.
My reaction – beyond the short term calming of jittery investors, Vishal will have his plenty of other opportunities. As I wrote last year in How Infosys lost its sheen the problems run deep.
What Infosys needs is to move application management, its bread and butter business, into the newer multi-tenancy world. SaaS vendors support 50 to 100X more end users per support staff. Upgrades of thousands of customers are done in days not years common in the Infosys world. Given India’s higher wage inflation, the pressure to be more productive is even greater. Amazon is delivering lower data center price points every quarter. Can Vishal push that cloud mindset?
Given his recent HANA focus, I can see Vishal pushing analytics as a focus area for Infosys, He will find a newer set of talent sourcing companies have been exploring. Players like Mu Sigma and BGI have already scaled to thousands of staff in India and China respectively. They are not traditional outsourcers (BGI focuses on genomic analysis) but are showing clients there is a potentially different staffing model – MasterCard is a client of and an investor in Mu Sigma. Even more interesting is Kaggle’s crowdsourced data scientist model. Can Vishal position Infosys as a differentiated analytical player?
Given his software heritage, I can see Vishal take Infosys into more IP enabled revenue or product engineering services. Two Indian companies, HCL and Wipro have traditionally done better in product engineering, and even they have a shrinking market share as companies invest heavily in their own IP enabled products and services (In The New Technology Elite I had profiled such investments in 75 industries) . As an example, most auto companies these days have hundreds if not thousands of software engineers on staff in their product engineering/R&D groups working on infotainment, safety, fuel efficiency and other technology enabled features. Can Vishal reposition Infosys there?
The opportunities Vishal walks into are many. One thing is for sure – Infosys’s presentations at Oracle Open World should improve dramatically. The last few have been pretty uninspiring
Remarked Plex CEO Jason Blessing about the video about various shop floors at customer sites which kicked off his user conference, PowerPlex yesterday. Actually he need not have used any footage at all. He had 900 attendees in person representing 1,100 sites across 20 countries where the software helps with shop floor, product quality, in-bound logistics and a variety of other operational areas.
It was a show about ERP as it was meant to be when we at Gartner in the 90s had evolved the concept of MRP. Somehow, along the way ERP lost focus on the plant and became much more a white -collar, back-office phenomenon. In the two decades I have seen consultants hype up the concept as a reengineering platform, a change agent and more. At the other extreme, I have also encountered dreading executives behave as if they were marching to the gallows when they started an ERP project as if it was guaranteed to be doomed.
The mood at PowerPlex was more balanced. A muted (though optimistic with the manufacturing Renaissance I have written about) Midwestern vibe, fitting with the event held in Grand Rapids in W. Michigan. Few slick consultants. Mostly executives to whom the software is functional and affordable. The session tracks screamed operational excellence – Kanban, Finite Scheduling and Cost of Quality (CoQ). The lunches had networking tables around topics like Traceability and Recalls.
Jason and others announced customers who are doing reference calls even before they go live. That shows a refreshing nonchalance that the software and the implementation project should just work. In an one-on-one, an auto industry supplier told me the parent company that they were spun out from , a SAP customer with multiple outsourcing providers in the mix, spent 2.5% of revenues on IT. Now, they spend less than 1% and Plex is not even the largest line item. They also described how they worked with another customer to help Plex extend functionality unique to global markets they were expanding into. An aerospace and defense industry customer described how Plex has been easy to work with for customizing to unique industry needs like export compliance. Almost 70% of product enhancements come from direct customer requests.
Of course, that process will become more complicated as Plex continues to grow – something a $ 50 million cash infusion announced at the event is designed to accelerate.
Last evening, at the Rosa Parks square in downtown Grand Rapids, hundreds of young adults were “swing dancing” in the warm evening. Frank Scavo, who I was walking with, remarked the scene had a Mayberry feel to it.
Mayberry to me summarizes the event – there was a throwback, pure feel to it. ERP as it was meant to be. Just made contemporary with cloud architecture, web services, mobile UI and global functionality.
I just finished reading Robert Cringley’s book on IBM. One word to describe it : “Depressing”. Not the author or his style, the subject matter. It has more sections on financial engineering – buybacks and earnings management – than about “wow” you expect from a technology icon, but then that is what has defined the last decade’s IBM.
As an innovation author, I enjoy writing and reading about breakthrough and inspiring stuff. Cringely has little about Watson, Smarter Cities, cloud and other IBM “innovations” because I suspect he believes they are mostly marketing hype. He has little on IBM Software because I suspect he knows it is mostly milking long-in-the-tooth brands like Notes, Tivoli and DB2.
It is more depressing that he has been harping about IBM’s state for years now and few journalists and analysts have joined his cynicism. BusinessWeek recently had a critical article and I have posted an occasional critique, but by and large we have let IBM market away.
Most depressing is that customers keep writing it large checks. Indeed in the latest Fortune 500 issue, an executive talks about how IBM is now well positioned for the “front office”. Not sure what qualifies IBM Global Services (its largest product today) to help customers tech-enable their products (unlike a GE or a Siemens or a UTC, IBM has gutted its own hardware businesses) or with other digital business model and other transformations. In my latest book effort, The Digital Enterprise, none of the 20+ global brands that are case studies highlighted IBM, but the brand still endures and a new constituency will give IBM more runway.
One thing which would have made the book more interesting - more customer conversations. Cringely tends to rely on his own analysis and a wide chorus of (mostly anonymous and unhappy) IBM insiders. Again, just a style preference - my own books tend to be case study and customer cameo heavy.
Read the book after you listen to an IBM pitch and use it to balance out fawning reviews that you will get from so many other quarters.
You may find him too cynical. I find him brave.
A few months ago I announced I was discontinuing SAP coverage on this blog, What many people missed was this at the end of the post
'As I have done for 25 years, I will continue to advise consulting clients about SAP matters'
The last few months I have intensified my conversations with SAP customers. Instead of blogging about the organizational turmoil at SAP. Those conversations may become the basis of a new book
My only hesitation is it would be a pivot from the innovation focus of my last few books. But 25 years provides plenty of anecdotes to create at least a short book.
Will make a decision very shortly
In the meantime those at Sapphire, have fun. Its always a blast but I am enjoying some spectacular scenery with the family in the Pacific NW.
I asked Satya Nadella at last Fall’s analyst summit why Microsoft had been slow to leverage the multi-billion $ investment in Azure infrastructure (I had first written about the innovative data centers in The New Polymath in 2009). He seemed a bit taken aback by the question and said Office365 was one of the most successful cloud applications in the market. I clarified I meant VARs and ISVs and customers were not using it more as an IaaS. So on the announcement with Salesforce last week, I thought he had scored an IaaS coup. The announcement was more modest – about integration of Salesforce with O365, availability of Salesforce1 on Microsoft mobile – but still a coup.
In a few short months as CEO, Satya has been emphasizing “cloud first, mobile first” philosophy quite a bit and showing a willingness to work with several leading industry players. Behind the scenes, that means he is breaking down silos within Microsoft and he is also redefining “co-opetition”.
Take the Office for iPad announcement. For years, earlier tablets from HP and other Windows partners faltered because of lack of Office availability and the related lack of appeal to corporate users. To do so with Apple shows how far Microsoft has come. And yet its own Surface offering keeps getting better (version 3 has some really attractive features as a hybrid laptop/tablet). Think of the competition implications for Apple and Win OEMs a couple of years from now.
Or this week at Sapphire, Azure will get play as an IaaS play for SAP. The bigger opportunity for Azure is to replace the highly inefficient hosting IBM, HP and SAP partners have long provided its on-premise customers. At the same time, Microsoft Dynamics continues to be a viable “2 Tier ERP”’ option for many global SAP customers. More frenemies.
With the Salesforce announcement, Satya likely had to soothe his own CRM team. It has been growing its footprint considerably especially around Marketing functionality and its ability to leverage its Bing product and agency relationships.
On a whale watching trip this weekend, our captain told us all his competitors share a radio frequency where they tell each other about whale sightings. They also use congregations of seagulls and rhinoceros auklets as signs of “bait balls” whales chase. The key is getting to where the action is, then alert crew and tourists are the ones who actually see the whales as they move about quickly and come up ever so briefly. Satya’s using the same principle – work with leading competitors to get to where the action is. Then let the alert, adept win.
His track record will make for a nice book a few years from now – “Co-opetition 2.0”
I did a couple of (un-enjoyable) years to start my career at Price Waterhouse. I audited accounting processes at several companies and government agencies. 3 decades later I am still surprised how inconsistently many of those processes have evolved.
In 1990, Michael Hammer wrote his seminal article “Don’t automate, obliterate” where he described how Mazda needed only 5 AP employees while Ford needed 400. He described what is called “Evaluated Receipts Settlement” – pay upon receipt of goods, tackle inaccuracies later in cycle. Today with scanning and matching technology, it is surprising how paper intensive the process still is. Instead of using Big Data based forensics most companies still have petty AP policies. So what if the IRS says no receipts needed under $ 75, our suppliers better document every single dime they charge us. BTW talking about receipts, the travel world has become almost completely digitized (see my note on a recent cashless trip to NYC which in past required raiding the ATM machine) but the T&E process at many companies is still awfully paper intensive/
One of my first research notes at Gartner in 1995 was titled “Budgeting: The painful ritual”. 20 years later most companies still use spreadsheets and make basic adjustments to previous actual and estimates. It is still a hugely political process to agree on budgets. Even the large forecast misses during the last recession have not done much to shake this ritual. Even the ability to develop econometric models using newer analytics has not reshaped the process much.
On the flip side, I have been impressed to see many asset intensive industries use sensors and tags to allow for better predictive maintenance and asset tracking. Of course for many, it is still about glorified depreciation accounting.
Billing and Receivables
While billing has become more complex with an explosion on SKUs, assortments, configurations, and as tax calculations and shipping options proliferate, you can see the warts as they struggle to adjust to subscription revenues, tax holidays, currency conversations and other adjustments. With many government agencies and utilities it is painful to see how poorly their receivables are handled as they struggle to accept recurring credit card charges, as they accept disputes etc
A growing number of companies are looking at cloud based financial options. This is healthy, especially if they can get away from the economic burden of their legacy ERP provided accounting, but that automation needs to be supplemented with the obliteration part. Ironically, their auditors are often the barrier – they worry about cloud based security, controls, SLAs – without benchmarking against the status quo which is pretty bad.
And talking about auditors it is surprising how little sampling and forensics have evolved in that profession since I was a young pup. I am just glad I did not have to continue auditing accounting processes beyond the initial required couple of years I had to endure.
McKinsey has some examples of what it calls digital optimization of the back office
“At Starbucks, one of the leaders in customer-experience innovation, just 35 of 100 active IT projects in 2013 were focused on customer- or partner-facing initiatives. One-third of these projects were devoted to improving efficiency and productivity away from the retail stores, and one-third focused on improving resilience and security. In manufacturing, P&G collaborated with the Los Alamos National Laboratory to create statistical methods to streamline processes and increase uptime at its factories, saving more than $1 billion a year.”
Problem is in most enterprises the “back office” is much more basic back office – it is made up inefficient data centers, overpriced ERP and related outsourcing, onerous IT, procurement, hr and accounting processes. And yet in the name of compliance and controls, enterprises cannot let go.
I spoke recently to an oil company executive who was describing the huge potential of sensors and other technology in the field, but the funding will need to come from beating down their on premise ERP spend which the accountants are likely to fight. In the session with CIOs last week when I presented at UC Irvine, similar scenarios came up. Back office IT is crowding out front office IT in many environments
But try telling that to consultants affiliated with accounting firms, analysts with legacy IT roots, vendors with vested interests who continue to assure customers their back office is best in class. Even though it is nowhere as elaborate as what McKinsey calls back office.
Over the last few weeks I have had plenty of opportunity to talk to CIOs and other tech executives.
It has been a good reminder how different the conversations with them are compared to those in the social world. The social world is about whose IPO is getting delayed, SAP’s layoffs, who’s sleeping with who. The practitioner world is about value from IT, innovation projects etc.
Many of the CIOs I presented to last week are SAP customers. I did not hear a word about individual executive personalities or about layoffs. On the other hand there was plenty of conversation on how to manage the spend, two tier ERP, how to staff innovation projects around SAP etc.
I have worried for a while about the chasm between the social and the practitioner world. Last few weeks have me more convinced where I need to spend more time.
I have heard Zach Nelson, CEO of NetSuite present for years now. He is nothing if not persistent. He has often talked about CRM without integration to transaction processing systems is clearly inadequate. As omnichannel becomes a burning topic in retail, banking and many other sectors, his ability to offer point of sale, order management and other functionality to support brick and mortar, web and mobile customer facing activities shows the market acceptance of his broader definition.
He likes to remind Bill McDermott of SAP every few months he is still waiting for the 99 mph fastball Bill had threatened via his cloud Business ByDesign product. As NetSuite crosses a milestone $ 500 m in annual revenue, while SAP continues to reorganize and “evolve” its definition of cloud offerings, Zach’s taunt is more apt.
Some analysts in the audience wish Zach was not so feisty.
I liked the fact he let his customers tell his story at SuiteWorld today
Roddy McKaig, CIO of $ 5 billion+ Shaw, the world’s largest carpet manufacturer, described his initial reluctance to consider a cloud solution as they opened a large plant in China and how NetSuite has quickly become now their ERP solution in 11 Asian and Australian subsidiaries. One of several “two tier ERP” examples NetSuite can showcase.
In reverse, Vijay George who heads Innovation at the State of Texas Comptroller of Public Accounts, described how in effect NetSuite is their Tier 1 “shared service” for a number of state agencies and local governments across the state
When global companies and massive (and well run) government agencies start vindicating your message, maybe you can please those analysts and not be so feisty.
I sure hope Zach does not.
Extract from The Digital Enterprise
There is a growing acceptance that most commercially available antivirus software cannot keep up with the speed and intensity of the attacker community. Also, if attackers are going to target an enterprise directly, they are likely to use a new technique that most antivirus products will miss. Consequently, at least some CIOs are reducing their firewall
and antivirus software spend and are shifting their resources to other security tactics. However, some executives continue to rely on traditional software products because industry regulations or customer contracts mandate their use.
But it’s one thing for an industry observer like me to say it, another for a major vendor of products to say that about their category. Brian Dye of Symantec tells the Wall Street Journal antivirus is “dead” even though Norton and other antivirus tools are still their bread and butter.
"If customers are shifting from protect to detect and respond, the growth is going to come from detect and respond,"
Shades of Steve Jobs when he said the post-PC era had arrived knowing well it would affect sales of the MacBook. And kudos to Apple for improving the MacBook and pricing it to keep it competitive even in the post-PC era.
Would it not be nice for on-premise software companies and single-tenant outsourcers and land line telcos and countless other vendors to make similar concessions? And to start selling next gen products and pricing the older ones at end of life levels?
We are still a long ways from where the Apple CEO shows off a new product and the supply chain and partners have long been working on it and several million units and related apps are delivered to customers within weeks. In enterprise world we still have way too much “vaporware” – product announcements followed by years of development then years of customer adoption.
But progress is being made. Most SaaS vendors have multiple releases a year and can migrate customer bases within days. I was pleased to hear Workday announce today it had developed its Recruiting product with 7 decent sized early adopter customers, and another 70 customers have announced they are adopting it, and Workday expects the majority of them to be live after 4-6 month implementations.
We still have a long way to go to the consumer delivery model both in terms of speed and unit volumes but good to see at least some progress.
No I am not reversing course on my decision to not write about SAP on this blog. That decision had nothing to do with any individual executive but with broader customer issues I believe SAP has been unwilling to address for a while now.
Having said that, I would be remiss to not wish Vishal Sikka good luck as he pursues new paths beyond SAP. He has always been polite to me, is admired by many within SAP and you have to tip your hat at someone who can invoke Hermann Hesse’s Siddhartha as he did in a recent post even with all the turbulence swirling around him.
Oracle invited me to its Marketing Cloud event in New York City this week. While it was showcasing its growing portfolio of assets like Eloqua, Vitrue, BlueKai, Responsys and Compendium, I was as impressed with the range of conversations the event allowed with a number of high-powered marketing executives and Oracle’s own thought leaders.
John Harrobin, Chief Marketing Officer, Verizon Enterprise Solutions touched on the data analysis and transition from traditional to digital ad spend they started back in 2009. He said they have seen a 50% decrease in cost per acquisition. Not just the impact on its own marketing budget, as an ISP it also impacts their product thinking. Maryssa Miller, Director of Digital Commerce, JetBlue Airways highlighted how their email campaigns promoting available “Even More Space” seats have become more timely and targeted with demonstrable revenue improvements . Later I put in a personal request for similar emails which highlight flights which offer their gradually rolling out but blazing fast ViaSat wifi. Luci Rainey, Vice President, Acquisition and On-boarding, Comcast described the 40% increase they have seen in their email open rates. Clay Stobaugh, Senior Vice President and Chief Marketing Officer, Wiley talked about his experience with Eloqua campaigns (as a Wiley author I spent a few minutes with him afterwards about marketing support authors can provide and would benefit from).
The conversations with Kevin Akeroyd, GM of the Oracle Marketing Cloud and Reggie Bradford, SVP of Product Development covered an even wider range of topics. The continuing role of agencies who in many ways play a bigger role than systems integrators when it comes to marketing technologies. The competitive landscape for Oracle in the space –particularly vis a vis Adobe, Salesforce and Microsoft . The growing opportunities for marketers for rationalization of omni-channel CX across in-person, web and mobile platforms. The complexity of social listening and sentiment analysis across borders and cultures. The growing importance of content marketing as B2B buyers do more of their research in self-service mode rather than wait for product details from salespeople.
I also had a short conversation with Judith Sim, Oracle’s CMO about how she is using all this new technology in-house and how it is improving sales field productivity. It should make for a very interesting story - I hope to have a much longer write up when I spend more time with her.
Of course, all this was in a savvy digital setting.
A few blocks away the billboards in Times Square and the major network studios are proof traditional advertising is not exactly dying. Indeed, the Wall Street Journal today profiled Laura Desmond one of the largest ad buyers in the world who explains why TV advertising continues to be resilient (with over 12X global spend compared to that on online video). If you talk to marketers at Coke and Colgate or Ikea they explain why cricket stadium sponsorships in India, storefront campaigns in Indonesia, radio and catalog marketing in other markets are not disappearing any time soon.
All this just makes for an exciting time for a modern marketer. So many channels to optimize, so many technologies to evaluate, so much customer and product data to crunch.
With infrastructure-as-a-service enjoying a price war of sorts thanks to Amazon’s continuous price improvements, there is talk that Moore’s Law has given way to Bezos’s Law. Call it what you want but we have have had a deeper disease in our industry for a while now as I wrote in a complete chapter in The New Polymath five years ago
“The reality is that while the technology industry proudly talks about Moore ’ s Law, the majority of the industry has not been subject to it for decades. Most technology investment these days is not in hardware but in software and services — costs that are more closely tied to labor economics, not trends in transistor design and scale manufacturing. In telcos, pricing
has often been driven by regulatory influence and, in many countries, monopolistic positioning.”
“At least Intel benefited us all by “ killing its own children ” and unleashing generation after generation of chips. Most other tech companies pay lip service to new products — managers of their incumbent products undermine the new ones. The industry has validated over and over the “ Innovator’s Dilemma ” that Clayton Christensen made famous. He pointed out the phenomenon where many large, successful companies are turned off by the initially poor economics of disruptive technologies (even those from their own labs) and so they fight them. They pamper their older children, and allow them to kill their younger siblings.”
“The technology industry is replete with examples:
- IBM announced “ On - Demand ” services in 2001 in response to growing customer clamor that IT had become too fixed an expense. But it isn ’ t IBM but cloud computing vendors, which we discuss in Chapter 18 , that are delivering small, bite - size, variable units of technology procurement and provisioning.
- Major telcos such as Verizon, AT & T, and Sprint sued Vonage, claiming prior art around VoIP dating back to the 1990s. But in spite of claiming prior art, they were not very interested in, and then not very successful at, offering VoIP to their customers. In fact, many have fought providers
like Skype from offering VoIP on their mobile networks.
- Accenture (in a predecessor entity, Arthur Andersen) pioneered a software development center in the Philippines in the mid - 1980s. It did not scale that low - cost pool for years and did so years later only in response to the global delivery model that firms from India and younger U.S. companies, such as Cognizant (see Chapter 6 ), showcased to Western customers.
- SAP and Oracle are both years late in offering Software - as - a - Service (SaaS). In fact, it could be said that Larry Ellison, CEO of Oracle, smartly invested in two SaaS start - ups — salesforce.com and NetSuite — because he realized starting them as projects within Oracle would not generate much success.”
Rather than emulating Bezos I see many vendors try to explain why the AWS model is flawed. No retail customer wants to be on (competitor) Amazon’s infrastructure. No auditor will sign off on Amazon’s inadequate data location transparency. Amazon’s data centers do not use clean fuel. And on and on.
So, improve on Amazon’s model, and even charge more for that. But not 10X, and like Amazon be prepared to pass along improvements several times a year.
Let’s not reminisce about Moore’s Law or idly talk about Bezos' Law. Let’s all strive to deliver to them.
As part of their new UX project named after the tony NYC neighborhood, Infor hosted analysts at the Gramercy Park Hotel. Huge room (by NYC standards), access to the park nearby (one of the few private parks in the city), lovely Rose Bar, lots of nice touches, including elevators which appear to date back to opening day in 1925.
Past Fall, Microsoft similarly hosted analysts at a Seattle institution, Edgewater Inn. Nice lakeside views, similar old school touches.
Both hotels have also been famous for hosting celebrities. Gramercy was home to John F. Kennedy for weeks. Leonardo DiCaprio, Bob Dylan, Madonna and others have walked the corridors. Edgewater hosted the Beatles and Led Zeppelin among others.
Both also have had their history of gossip. At the Edgewater it is rumored as someone put it politely someone “brought stuff from the lake into the room, and threw stuff from the room into the lake”. Gramercy was the site of a famous suicide and other stuff which has been discreetly kept under covers.
So, I am going are these vendors tempting analysts to break out and do something really risque? While some have rock star and politician egos, best I tell most analysts are only guilty of snarky tweets.
But then I am usually snoring by 10 pm so what do I know?
April 24, 2014 in Industry analysts (Gartner, Forrester, AMR, others) | Permalink | Comments (0) | TrackBack (0)
We recently had our roof redone. Should have had it done years ago. Instead we periodically had it patched with new shingles. Cosmetics instead of real work. The thought of days and weeks of workers and cost estimates that reflected the market after our various hurricanes were gating factors.
Then in the last year I noticed several neighbors get new roofs. Impressively the work was getting done in 1 or 2 days. Roofers were using conveyors to ship all the materials up and all the debris down. They were using vacuums, nail guns, magnetic sweepers and digital cameras. Lots of technology to expedite the work and make it nice and tidy – see my blog post here on the tech. And the cost estimates were far less than what we expected.
The bids we invited were even better. Impressive warranties - 30+ years against 130 mph winds. Better energy efficiency. Between the roofer and the inspector we have over 90 photos of the work which should now qualify us for annual home insurance discounts. The ROI keeps getting better.
And I thought I was so much like a CIO who keeps patching legacy on-premise systems. Why did I hesitate to call my friendly “cloud” roofer? I knew he offered warranties in the form of SLAs and annual cost caps, but still I hesitated.
It’s because I remembered the costs of the last roof, post hurricane. I remembered how disruptive and expensive it was.
Cloud vendors are doing themselves a disservice by going in with service partners who remind the CIO of the last “roofing job”. They need a newer ecosystem of partners who use automation for the migration, the integration, the testing – the roofers who use conveyors and digital cameras. They need roofers who are done in 2 days. Partners who treat it as a repeatable, predictable job not treat it as a work of art.
Then watch CIOs talk to their peer neighbors and start making the move one after another. And watch the neighborhood start to shine.
Charles Phillips, CEO of Infor, is a sharp dresser. His lean frame and his attention to detail (he has designed his own shirt collars since he was young) certainly help. At dinner he politely explained to a few curious analysts his sartorial style. And yes, that has helped him in the sales process with executives of several well known fashion brands around the globe.
Of course, his clothes could not by themselves helped Infor sell large software deals to these companies. Infor has long had unique apparel and footwear functionality such as dimensional support (style, color, size, other configurations unique to that market) via its Intentia products. Add to that contemporary functionality to support omni-channel requirements and agility in the supply chain needed for faster fashion turns and cloud technology it has invested in. Add the design aesthetic of its in-house agency, Hook & Loop which clearly clicks with fashion executives. Add industry savvy executives it has recruited and the mix is a winning formula.
At its Innovation Summit in New York this week we heard variations of that formula applied to several industries – what they call “last mile” discussions in those sectors. They leverage assets Infor has acquired, newer ones it has developed, talent it has recruited and partners like Cerner in healthcare and Ciber around non-profits.
Take the US healthcare sector. While much of the attention has gone to the Obamacare rollout, the industry is in massive turmoil. Providers are acquiring each other, they are moving into payer turf and vice versa, private equity is investing in the sector. Infor is leveraging hospital functionality and customers it acquired via Lawson Software, recruited a Chief Medical Information Officer and plenty of other healthcare professionals, and is developing new functionality as the sector comes under significant financial scrutiny and for patient safety and clinical transformation. Hook & Loop showed off UI aimed at new ways of looking at patient data.
Charles told us about a dealer network functionality – covering aspects of field service, leasing, complex asset management - it has been developing for Caterpillar. This should be attractive to a number of other companies with similar networks around complex equipment like Deere, Komatsu etc. That one has a feel of a custom developed solution, and I asked Charles if that was of interest. His response – they generally develop or acquire new functionality which is leveragable across hundreds of customers.
Often that means cutting across industry lines which share some common traits. So, their recent PeopleAnswers acquisition has traction in labor intensive industries such as retail, healthcare and hospitality.
At other times, it means customizing components to industries. So Hook & Loop is looking at beacon and proximity sensor impact on retail, and wearable technology for sectors with field service needs
Often it means a vertical focus is really a congregation of many micro-verticals. So the government focused section of the day talked about federal, state and local agencies. But it also talked about educational institutions, libraries (such as that at the Vatican) and science labs (large ones like CERN and Lawrence Livermore)
The day also had plenty of sessions on ION, the Infor middleware, its mobile, social and other technologies, its growing reliance on Amazon Web Services as its cloud infrastructure and other architectural elements of the Infor stack. While other analysts focused on the portfolio rationalization the new management has accomplished – go forward focus on M3, S3, LN & Syteline - and some fretted about Infor’s heavy debt load, I kept getting reminded of the “Small World” ride at Disney World.
Just substitute regional costumes with aprons, hard hats, mannequins and other industry-specific accoutrements. Infor is skillfully leveraging its wide portfolio of technology, people, partners and customer assets to go the “last mile” in many sectors.
Innovation from around the globe'
iElevation – Nepal
A museum or a library? – Mexico
Technology on the ICE Train – Germany
Shipping ice cream globally – US, China
Big Data of Long Lives – Italy, Greece, Japan
Nokia alumni ecosystem - Finland
The return to the glory days of Pan Am – Singapore, UAE
Researching the Honeybee demise – Australia
Gov.uk – UK