deal architect

Lunching with Larry

Larry Ellison at his confident, contradictory best in a Forbes interview.

a. "Google has had one or two good ideas. Searching the Internet, right, and then selling ads. That's a complete list of everything clever they've ever done."

Larry, you have done one thing right in your history - database. Everything else Oracle has been a bit player at or has acquired. You have done ok for a "one trick pony".

b. "It is hard to believe that Microsoft has Google envy. We're in the software business--we don't do ads. We're not going to sell ads on top of our database."

Yes, but boy will Oracle try to sell over, under, around the database in the stack.

c  On Open Source "It's like Fort Knox, except everyone has the keys and takes whatever gold they want whenever they want it."

And Oracle is marshalling to drive out all the Raiders of that Ark.

d. On Oracle's cash. "We can buy back our stock. We can buy…I'll give you a list. We can buy BEA and buy our stock back. Buy a lot of our stock back and buy Business Objects. Buy a lot of our stock back and buy somebody else".

Larry, how about giving some of it back to customers in lower maintenance?

e. On partying. "Not in Monaco. But usually, we're never at the dock. A lot of people do. They have parties. They want to be seen."

Us tech folks are too geeky to be want to be seen.

f. "The trouble with software is that it is very hard to show your aunt in Florida what you've done.".

Now that, Larry is uncalled for. We have become a pretty demographically young state. You should sail more here. We will show you our open source voting practices...

The Middle East and the Attention Economy

In Washington today, it hit me how the Middle East greedily grabs our attention all the time. The snot faced child demands attention by throwing tantrums.

Grab my attention with positive stuff. You have way overdrawn it with negative news

Here are some examples of what I mean by positive stuff. When:

-    An Arab proudly talks about his daughter or sister graduating from school, not that his dignity comes from Hizbollah’s testosterone
-    An Arab leader says he thinks $ 40 for a barrel of oil is more than generous and he will increase supply to get us there
-    An Israeli software company makes it big on the global scene

So go ahead and throw that tantrum. Bang your head against the wall. There's too much good, positive change happening in so many other parts of the world for us to keep pampering you.

Germany's Loss

Wal-Mart has decided to pull out of  Germany. Realize Wal-Mart is not everyone’s cup of tea. Also their store I visited outside of Frankfurt about a year ago was pretty drab.

But when the most efficient supply chain in the world cannot make money or does not feel welcome in a market, its consumers are the losers, even if politicians and competitors rejoice.

The Oracle Alumni Club and SaaS

Phil Wainewright observes that most of the panelists at the AlwaysOn SaaS panel are ex-Oracle:
Ray Lane (now with Kleiner Perkins), Marc Benioff (salesforce.com), Zach Nelson (NetSuite) and George Kadifa (Corio, now part of IBM).

When Oracle acquired Siebel Phil was a lot more optimistic about Oracle's On-Demand capabilities.

A year later, the AlwaysOn panel is telling how that market has moved on.

Right Message. Wrong Messengers.

I am watching a live video feed of Bob Suh, Chief Technology Strategist at Accenture present a keynote at the AlwaysOn conference. Lots of words, but kept coming to: There's plenty of innovation, not enough adoption in the US. Chinese CIOs have little legacy, and so are earlier adopters of SOA, and more willing to take risks.  So the basic message to Western CIOs - do more new stuff.

He then joined a panel which also had Irving Wladawsky-Berger, Vice President, Technical Strategy and Innovation, IBM. Irving talked more about his concerns about the US being overly concerned about illegal immigration and moral issues about stem cell research. He also had a refreshing view on Open Source - the cat's out of the bag. Quit fighting it.

But here's the irony. The two companies are poster children for why CIO budgets are so full of utility, legacy budgets and have little left for innovation spend. Irving can talk Open Source, but only a small sliver of IBM revenues comes from Linux. Most of the rest comes for closed model software and services revenues. Accenture represents several $ 100 + million ERP and custom developed projects that their clients are still amortizing years later. Many CIOs cannot wait to re-negotiate their multi-year outsourcing deals with each.

It's fine for them to talk innovation.  But till they innovate their own business models, not sure they have street cred...

Corporate versus Software SG&A

If the software industry (in particular, though other tech companies and research firms like Gartner also have this problem) needs more urgency on why it needs to slash its high SG&A, here's another major reason: Its Customers are ruthlessly slashing their own SG&A.

Courtesy of Sukumar, I see Hackett's 2006 Book of Numbers shows that world-class companies (manufacturing, financial services etc) are now spending 40 percent less than typical companies overall on SG&A (9 percent of revenue versus 15 percent).

When you walk in to a first-quartile 9% SG&A company, even the slickest software sales guy cannot sell the need to spend 25, 35, 45% in his/her industry...

BTW - Hackett has been doing pioneering work around business process benchmarking for a while now. I quoted their benchmarks at Gartner starting in 1995. I have invited Rick Roth, the Chief Research Officer to do a Real deal guest column for this blog.  In addition to obviously being real smart, really nice guy.

When Padawans Tangle

NetSuite announces "thousands" of salesforce.com users are switching.

So how will sfdc respond? Larry Ellison is an investor in both. Both CEOs, Zach Nelson and Marc Benioff, are ex Oracle. They both learned from the Jedi Master.

Most of the references cite the Suite in NetSuite is why they switched. AppExchange must not qualified as enough of a "suite" for them.

Here's a thought for sfdc - they should hire Jeff Nolan as a consultant to do an analysis of the "switches" as he did as Oracle announced it had beaten SAP 585 times last year. He has shown himself to be pretty adept with the lightsaber...

The Shifting Sands of Business Applications

Blog readers may enjoy this article I wrote originally published in the May/June 2006 issue of JDEtips, a publication of Klee Associates, Inc.:  www.JDEtips.com. Posted here with permission.

Download JDEtipsShiftingSandsBusinessApps845.pdf

"Paedagogically suspect"

"(Giving every child a laptop) may actually be detrimental to the growth of creative and analytical abilities of the child", India's Education Secretary Sudeep Banerjee told the Planning Commission in a letter sent last month, according to The Hindu as he urged rejection of planned participation of the MIT Media Labs plan to build a $ 100 laptop.

Interesting coming from the place where software programmers are rock stars, where Bill Gates is treated better than George Bush, which has 60% of all CMM Level 5 certified sites in the world...

Don't cry for me.......

First of all, it is remarkable that some one from SAP is even talking about "free" software, as Jeff Nolan does in his post No Money Down, Zero Percent Financing

But it is like Eva Peron at peak of power empathizing about the slums of Argentina... nice, touching story but little action.

Forget free. SAP and other enterprise software vendors could make 2, 5, 10% adjustments in a number of areas and things would be so much better. Evolution is always better than revolution.

Rethink the price list. To get 80+% discounts today you have to be willing to write SAP a multi-million dollar check. Average discounts are still in the sixties - a far cry from free.

Even if SAP substantially discounted core ERP, the majority of its licensing cost now comes from various "engines" - many industry specific, and to me a major reason why so many customers find building or maintaining legacy vertical functionality a better option.

For every dollar in discounted license you are still committing to another dollar in maintenance over the next 4-5 years. SAP offers cut rate TomorrowNow maintenance pricing to Oracle customers, but not to its own customers. How's that for empathy?

You are easily talking about many more dollars in SAP training, systems integration partners etc. SAP can complain but has not done much to whip its partners in to the new world pricing reality. Then you have constant fixes, service packs, upgrades.

No - SAP need not think about free. But it (and Oracle) and other vendors can do so much better - small adjustments in a number of areas of the software TCO.

Quit singing. Start implementing. The masses are getting restless.