deal architect

The Pot and the Kettle

Jeff Nolan of SAP complains about Oracle's advertising and Gartner slaps Oracle's wrist for misrepresenting its research in the ad. I am surprised this did not come up when Oracle announced its OFF SAP program in June. I guess it was mostly press releases back then - this time it was a full page WSJ ad.

Jeff points out Gartner/Forrester/AMR research about Oracle's own migration issues in the past. I have written before - about Oracle's 11i quality issues when it was introduced and about its "forced march" of 10.7 customers to the unstable release. I have also written about Oracle's risks as it plans an even more ambitious migration of PeopleSoft, JDE, Siebel and other customer bases to Fusion.

But ...SAP does not have that much to be proud about either. The industry's track record with migrations is pretty poor as I wrote in Of Serengeti and Software Migrations. Many clients have told me they cannot afford to upgrade to mySAP. And they resent having to pay SAP a premium to stay on the older versions - when they know SAP has been moving its labor to lower cost countries and maintenance is almost 90% margin.

I know several customers that are looking to get off SAP maintenance and bring it in-house or have cheaper third party options support them. Just like Oracle customers are looking at lower maintenance from TomorrowNow - ironically, owned by SAP.  Software maintenance from both vendors is overpriced.

Instead of running ads and complaining about each other both SAP and Oracle should be listening to their own customer bases. Or they will both have a large bar called "lost customers" in future bar graphs...

PS - Here is the link to the ad in question on the Oracle site

PPS: Friday, Dec 23 - Oracle appears to have taken the ad image off the page referenced above on its site in the last couple of days.

Forget Web 2.0...let's jump to 3.0

Phil Wainewright at ZD Net has been talking quite a bit about Web 3.0  - his term for the convergence between enterprise apps and Web 2.0 concepts - here, here, here and here.

He is to be complimented about taking to a more formalized level what I had mentioned about corporate CIOs adopting "business casual" user experiences and generally getting more hip about emerging social networking and collaboration technologies.

John Hagel has a nice commentary on Phil's columns here

I have three nits:

a) Most CIOs have to look at innovation beyond what is being classified under Web 2.0. As I wrote in Florence during the Renaissance they can evaluate sensor telemetry, more sophisticated analytics, open source etc. His term Web 3.0 may be too narrow a focus.

b)  He quotes the CIO of  Dresdner, JP Rangaswami in one of his posts. Technology is considered lifeblood so many banks spend 10% of revenues when the average manufacturing  CIO is lucky to justify 2%.  Also, Banking is pretty heavily custom built applications, so you do not have to wait for SAP or Oracle - backbone applications in many other verticals - for years before they release new innovation. Phil's suggestions may be years ahead of reality for them.

c) Finally, "enterprise 1.0"  - today's incumbent, utility spend eats up too much of IT spend. We need to crunch that spend before we can find funds for many 2.0 or 3.0 initiatives. Every time the large vendors deliver "innovation" they price it at a layer above the base, previous layer.

Nice framework, Phil...we need to get CIOs the money to do what you suggest and other innovations around RFID, GPS, and so much more...

The delicate art of market analysis

It was October and the Indians on a remote reservation asked their new Chief if the coming winter was going to be cold or mild. Since he was a Chief in a modern society he had never been taught the old secrets. When he looked at the sky he couldn't tell what the winter was going to be like.

Nevertheless, to be on the safe side he told his tribe that the winter was indeed going to be cold and that the members of the village should collect firewood to be prepared. But being a practical leader, after several days he got an idea. He went to the phone booth, called the National Weather Service and asked, "Is the coming winter going to be cold?" "It looks like this winter is going to be quite cold," the meteorologist at the weather service responded.

So the Chief went back to his people and told them to collect even more firewood in order to be prepared. A week later he called the National Weather Service again. "Does it still look like it is going to be a very cold winter?"

"Yes," the man at National Weather Service again replied, "it's going to be a very cold winter."

The Chief again went back to his people and ordered them to collect every scrap of firewood they could find. Two weeks later the Chief called the National Weather Service again. "Are you absolutely sure that the winter is going to be very cold?"

"Absolutely," the man replied. "It's looking more and more like it is going to be one of the coldest winters ever."

"How can you be so sure?" the Chief asked.

The weatherman replied, "The Indians are collecting firewood like crazy."

PS: I was sent this by an analyst at the one of big research firms! Bundle up!!

Finding $ 280 billion

Santa is being good - very good - to China. It reports it "found" another $ 280 b to add to its GDP. Apparently the services sector was under estimated. This would make China the 4th largest global economy - behind the US, Japan and Germany.

A truism that was emerging in sourcing circles was - for low cost manufacturing go to China, for services look at India and elsewhere. Well, may not be that simple. This was confirmed by a dinner I had 2 weeks ago with executives from a Chinese IT services firm. The capital they have access to because of the strength of the overall economy will allow them to grow much quicker than Indian firms did as they were ramping up.

Technology Innovation and Mona Lisa

New Scientist reports that "emotion-recognition" software used on Mona Lisa's famous enigmatic smile showed she is 83 per cent happy, 9 per cent disgusted, 6 per cent fearful and 2 per cent angry.                                                     

Not sure the Louvre will lose many admiring fans who line up to see Da Vinci's most famous piece of art - and continue to speculate for ourselves what her smile means. (I myself prefer the museum's huge Egyptian section).                                        

What is interesting is likely future applications of the technology -  looking at photographs or videos could lead to PCs that adjust their response depending on the user's mood, as well as smarter surveillance systems.

Open Source momentum

Two recent reports -one on open source's growing momentum in the buying community, the other on the impact on the incumbent enterprise software market.

Courtesy of Om Malik, I saw this report from Optaros, an open source systems integrator, on adoption trends in Open source adoption in large and mid size companies.

The 451 Group has a report focused on  how established enterprise software vendors should embed open source, how investors look at software with open source etc.

Open source, global labor, cheap broadband...the raw materials have become so cheap, why not the finished software product? You can see why my clients love to hum along with me the Police song Wrapped around my finger as we negotiate software deals.

Wrapped around your finger

Nick Carr writes about Oracle's "simplified" pricing here.

Having a few negotiations under my belt, the best ones follow the script in the famous Police (and Sting) song

It starts with the vendor salesperson listing every combination of user, processor, engine based license; maintenance, training, consulting line item conceivable.

You consider me the young apprentice
Caught between the scylla and charybidis

Chisel, cajole, reason, threaten...usually there is little movement

I can see the destiny you sold
Turned into a shining band of gold
I’ll be wrapped around your finger

Bring in competition. Show them benchmarks. Show them you understand their economics and margins. Some reason starts to flow

Devil and the deep blue sea behind me
Vanish in the air you’ll never find me

Hold out for 80% license discount (not a typo). Negotiate credits against the maintenance pricing. Bring in partners with much lower consulting rates.

I will turn your flesh to alabaster
Then you will find your servant is your master

Shake hands - and they notice...

...you’ll be wrapped around my finger....

Credit EDS where it is due

I happen to think they are overpriced and would like to see more market leadership, but EDS does know a few things about  high availability and demanding SLAs...as their response to Dennis Howlett confirms. Typepad should consider talking to EDS about their hosting needs. Happy to help negotiate with EDS...

Let's not forget Japan

In all the noise about China and India, it is so easy to forget about Japan. Here is BusinessWeek with a subtle reminder - Japan's supaa ginoshas or super technicians. In fact, it may be their answer to cheap labor all around them.

Of course, Japan has also the most sophisticated, gadget savvy (crazy?) consumers in the world. They get pampared with gizmos us gaikokujin can only dream of...

6 billion technologists

My tracking software tells me readers from 99 countries have accessed my site (it counts "satellite provider" and "anonymous proxy" as separate countries so may be a couple short).  37% of the visitors are from outside the US. A tiny reminder the world is getting flatter - and smaller.

Here's some recent, related tech globalization articles:

NY Times on how Skype has given tiny Estonia technology fever.
Countries everywhere trying to emulate India's offshore success
$ 100 laptops being planned for Brazil, Cambodia and Tunisia - and many other places
440 million mobile users in China by 2006.

Future consumers - and producers - of technology. New Florence. New Renaissance.