deal architect

Windows 8 mistakes

Oh how I wish Ed had written a few months ago this nice summary of Microsoft mistakes around Windows 8.

Instead, I have had a frustrating time for 6 months now with my Toshiba Ultrabook. I have had a phenomenal  run of success with Toshiba laptops every 18 months now going back 6-7 years.  This experience will end that streak.

Sorry, Ed unlike you not sure I want to wait for Microsoft to fix the mess it created.

SAP: Partners First

Most companies will say things like customers are our highest priority. Or quality. Or Investors. Or even write bestselling books about "Employees First". 

But SAP unabashedly says Our Partners are Job 1.

Not sure how else to explain that SAP actually commissioned an IDC infograph to showcase that its partners will "earn US$220 billion in revenue in the next five years related to analytics and big data solutions from the company."

It's not exactly new news. I have written for years about SAP's "Egosystem" - the massive crowd of systems integrators, hosting partners, offshore application management partners that surround SAP.

As a customer though, it raises 2 questions:

a) is the multiple around SAP's own price a factor of 10, 30 or 100 over 5 years? What is our tax burden of that $ 22o billion?

b) how truly independent are those partners who offer to help you through independent assessments of  Hana, Vertica, Hadoop, other analytical platforms?

 

Automation and Jobs - Unevenly distributed

I have been reading plenty of stories recently about how technology and automation are killing jobs. And my usual reaction is to think of William Gibson and his quote "The future is already here — it's just not very evenly distributed".

All the talk of job losses rarely accounts for collateral job growth.

It's like in aviation. In the 40s, some of the commercial planes had four pilots, three flight engineers and two radio operators. That has shrunk to today's cockpit of 2. But look at the massive explosion in aviation on a global basis and all kinds of cockpit,  cabin, ground jobs that has created. And as international flights extend nonstop coverage, it is common to have 2 relief pilots on each flight.

Or the Apple iEconomy. People love to bash Apple for its labor leanness relative to its revenues and market valuation,or just dismiss the jobs as low wage.

Look at what they don't factor:

Jobs at

• The long list of global suppliers that provide components for Apple products
• Contract assemblers like Foxconn and Pegatron. Between Apple (its largest customer), HP, Microsoft and other electronics vendors, Foxconn has a global staff base of over a million employees.
• Fedex and other logistics providers that move inbound components and outbound product from assembler to retail and customer destinations.
• Apple telecom partners related to massive growth in mobile customers and broadband infrastructure
• Its 400+ retail stores which hire on average of 100 employees each
• The App store which has created plenty of mom and pop jobs from the over $ 10 billion in royalties Apple has paid out. And more to the music ecosystem via iTunes royalties
• The cottage industry which makes accessories and home and auto equipment to surround Apple products
• Local economies as Apple investors spent some of their wealth from the valuation increase
• And on…

Of course, there were job losses:

• Apple’s iPhones and iPads have led to Dell, HP, RIM, Nokia, Microsoft and others losing out
• iPods and iTunes led to a demise of record stores, Sony and other devices
• Mobile broadband has impacted landlines and related equipment
• Over the decades, Apple jobs at plants in Elk Grove, Il; Cork, Ireland, Singapore have moved on

And that is the point. Technology leaves its imprint on far flung corners of the global economy. Much of it, looked at from a wider time and place lens, is positive.

 

A sobering moment for IT Services

Two large agencies, Publicis and Omnicon, announced a merger yesterday.  Famous brands such as BBDO Worldwide, Leo Burnett and Saatchi & Saatchi will be part of the new empire. With merged revenues of $ 23 billion, it will become the world's largest advertising firm, displacing WPP. 

In the last year or so, IT services firms have been quite excited about the CMO buying center. They hope their digital expertise in other areas of the enterprise will give them a leg up. The size of the agencies and their heritage of CMO access should be a wake up call on how difficult the CMO center will be to penetrate. These agencies are no digital slouches - Publicis, for example, has well established digital units in DigitasLBi and Razorfish.

Even more sobering are Avi Dan's comments about the merger

"Technology and digital media distribution are now more valued than the creation of content: the combined market capitalization of the new company is $35 billion, while Google's market cap is $295 billion, almost 10 times as bigger on revenues of $31 billion, with a third as many employees as Publicis Omnicom’s 130,000 staff. The world has changed and as it moves at the speed of technology, and the indispensability of scale is going the way of the three-martini lunch."

The comment about scale is also true in IT and BPO services. The large armies of consultants that the bigger firms have accumulated are a reminder of too large ERP and Y2K projects. The world has surely changed since. As with the advertising space, small, talented teams is what clients covet as I wrote here

 

EIs look ahead to 2018

Gartner has been talking for a while about the ‘Nexus of four forces – Social, Mobile, Cloud and Information”

Forrester warns “”Today’s Hottest Technologies Will Be Ho-Hum By 2015”

Many of the customers I have interviewed this summer for the book project would say Forrester is late by 2 years as they are already implementing uncertainty engines, semantic product memories, agile robots, next-gen cybersecurity etc.

At this rate of change, who has the courage to look 5 years out?

My Enterprise Irregulars colleagues do. I asked them to peer into their tarot cards and exotic crystals.

Here are some of their forecasts – not just IT centric

Dion Hinchcliffe

• Home automation/control of everything (Z-wave, Zigbee hubs and mobile apps)
• 3D printers will be used to print up many home repair parts + new use cases we can't imagine but suddenly want badly
• Google Glass-based devices will just be hitting mainstream (20M+ devices a year)
• TV/cable suddenly crumbles almost entirely to digital delivery over apps/IP-based devices
• Voice, gesture, and even some thought-based UXs actually work well and are widely used in everything
• My bank will at long last finally allow mobile check deposits <-- Outlier ;-)
• The advent of One Device for everything (phone, apps, SLR quality video/photos, wallet, remote controls, secure enough for BYOD at work, everything)
• And the One Device will have enough storage to hold every single digital asset we possess (and/or will make it seamless to the cloud)
• We are issued government digital identities and most Web sites require them for e-commerce, taxation, antiterrorism, censorship
• Recycling of old devices aging out of the cloud becomes a big business and/or mandatory in many places
• The Google of analytics rises (and it might even be Google), making #bigdata mainstream to the average person (querying/analyzing their life, both personal and professional)

And just as important what will be missing in 2018

• On-premise data centers
• Laptops as we know them
• Windows
• Half of the established large social networks
• Dedicated digital music players
• Patient-controlled health records
• An end to widespread extra-legal digital surveillance by government

Tom Raftery

• Connected cars with built-in analytics. EV's will also have advanced to take a significant share of the market share.
• Connected homes, with analytics, energy storage and arbitrage
• Connected people, with e-health monitoring, environmental monitoring (and analytics!)
• better password management through combination of biometric technologies (voice & facial recognition, for example)

Phil Fersht

• robotic automation should have advanced a lot by then -
• you won't need (much) manual labor to process payroll, issue benefits statements, insurance claims, invoices, receivables, manage systems....

Sameer Patel

Network-first business software will drive a significant portion of cloud based software innovation. Network-first enterprise software delivers on the notion that the network is more utilized than the transaction or process elements to derive and deliver value.

Network-first enterprise software will come to a subset of software categories such as SFA, Talent Management, Supply Chain, Customer Service. We're now in the fist phase of this transition where we're embedding social software and your network inside traditional application software. This is a natural fist step as many organizations in the near term may not want to forklift incumbent transactional technology.

Early beta models of this that exist today are Ariba, Branchout, and others. A great example of this is Yelp where the power of the network and reviews now allows Yelp to let restaurants predict demand. Yelp built the network first, then monetized the "big data" and only last week got into the restaurant transaction business with the acquisition of seatme. And LinkedIn's network is of course, which already powers a lot of pre-sale conversations that is critical part of any CRM process.

Naomi Bloom

• fully voice response, non-intrusive, wearable devices that include most of what we now get from a combination of smartphone and content consumption tablets (as opposed to serious content creation and/or data analysis devices) and which are able to display needed images for others to see.
• breakthroughs in the technology of health management/wellness, e.g. using the "device" above reminding me when it's time to move, what's the calorie and nutritional content of what I'm about to eat, whether or not the water I'm about to drink is clean enough, and so much more. 

Esteban Kolsky

Wearable and embeddable

Steve Mann

Neural/computer interfaces....first for prosthetics and moving into even more advanced areas such as computation.   DARPA has a pilot project already in place for amputees.

Readers, throw in your forecasts below.

SAP: Run Like Before

I was watching the new SAP commercials with the theme "Run Like Never Before" and reminiscing on the annual pilgrimage Gartner colleagues would make to Waldorf in the late 90s. It is striking how much the company has changed in the last decade or so.

We would break into groups and at end of day marvel at the product features and other details each of the SAP teams would go into. The quality was consistently good, and the tone generally modest.

In recent years, it seems like SAP wants to take credit for everything.

Apple's hugely successful iOS app store. Yes, we run that. Probe a bit, and the answer is actually no, but we do some admin for the iTunes store. 

Coca Cola's innovative FreeStyle machines. Yeah we run that. Turns out they feed an SAP BW warehouse. The actual machines are designed by Pininfarina which is better known for working with Ferrari, Maserati and Alfa Romeo among other automakers.

Twinkies back from oblivion. Yeah we can take credit for that. Not sure the new owners would agree.

And lots of brags like "SAP customers produce 70 percent of the world’s chocolate" and "SAP systems touches $12 trillion of consumer purchases around the world". No credit to the numerous other IT and other suppliers which make that possible. 

Cloud revenues are only 6%. No problem - we are the "cloud company"

As Vishal Sikka ascends in the SAP hierarchy, my sincere hope is he takes SAP back to the Waldorf culture of 15 years ago.

I for one, would like SAP to adopt for itself the theme of "Run Like Never Before"

Microsoft Enterprise Apps: A Revisit

In March I asked why Dynamics teams alway lag in leveraging innovations like Azure, Surface, Lync and others that Microsoft colleagues are developing just down the office.

Maybe I spoke too soon.

Josh Greenbaum does not have too many kind things to say about Lync, Windows 8, XBox and other recent Microsoft deliverables. The recent quarter shows poor market reception for the Surface tablet and Win 8.

So, maybe Dynamics is correct to not be an early adopter of Microsoft technology.

But what about process/partner delivered innovations?

As I wrote in March:

"Microsoft lives with a (mostly) mid market customer base which is fairly content with “good enough” core ERP/SFA functionality, and a partner base, which while extremely loyal and developing vertical extensions (though if you look at the Expo listings for the event some partners unabashedly claim to service 40+ industries!) ,  is not exactly known for filing for countless patents or other breakthrough work."

Josh still manages to say Dynamics is a "leader in its core market"

If that's the case, it sounds like a core market ready for massive disruption.

IFRS, as in SAP

I think Jim Snabe, co CEO of SAP is creating his own new terminology for reporting numbers when he says about 1H13 numbers

"First of all, we don't like to be in the category of traditional software players. We're now a cloud company. And as opposed to the competition, we didn't outsource the cloud to partners. We actually invested in cloud ourselves."

Let's parse that:

a) "we don't like to be in the category of traditional software players"

If you look at segment revenue, EU 4295m of total revenues or 56% comes from maintenance. More than half of revenues from legacy is a pretty good definer of "traditional software company". And if you truly want that to shrivel and die, why do you keep trying to raise those rates?

b) "We're now a cloud company".

Cloud revenues = EU 457m or 6% of revenues. To be considered a cloud company you have to  be close to 100% like salesforce, Netsuite, Workday, AWS.  Here's another thing that's baffling -  SAP said at Sapphire,  it had 29 m cloud users. Annualized, that's only EU 60 a user?

c) "We actually invested in cloud ourselves."

So no credit to SuccessFactors and Ariba who invested before SAP acquired them? And btw, how much capex has gone into BYD and HANA cloud? Not sure SAP has disclosed details I asked for in this post

 

 

HR Tech Conference

My old friend Bill Kutik is leaving after this year as co-chair of the the popular HR Technology Conference he started 16 years ago.

Rather than coasting to a finish, he continues to run as fast as he can with several new features and formats this year in Las Vegas, Oct. 7-9. Also the largest Expo that sector has ever seen.

First is “The HR Tonight Show Starring Bill Kutik,” with another HR veteran, Naomi Bloom. Another old friend, Brian Sommer is one of the four guests, who include Mercer’s President for North America, Pat Milligan.

Next is “HR Tech Talks,” short, high energy speeches given by some of the highest energy people I know. Mary Sue Rogers, formerly of IBM and now at Talent2; Paul Sparta, the founder of Plateau, now part of SAP/ SuccessFactors; Ray Wang of Constellation; and Gartner’s recent gain, Yvette Cameron.

I have a conflict this year I am hoping to get around,  but have always loved it previous times I have gone.  So Bill has given me a discount to offer you.

Get $500 off the onsite rate of $1,895 by using Promo Code VINNIE13 (all caps) when you register at http://bit.ly/HRTech13. See you there!

Systems of Advantage

We all know of systems of record. Geoffrey Moore coined the term Systems of Engagement a few years ago to reflect growing social applications. It’s time to recognize systems of competitive/strategic advantage.

I wrote this in the Preface to The New Technology Elite last year

“I started my technology career in the 1980s when there was palpable excitement about technology providing strategic advantage. Then technology, IT in most companies, went into the woodshed for the next two decades. It focused on costs, controls, and compliance. It was not focused on competitive advantage. In fact, its costs and overruns made many companies uncompetitive.

Several years ago, that two-decades-old hope flickered again,
and as I wrote my last book, The New Polymath, I saw an amazing amount of technology-enabled innovation being planned. This book builds on that hope.”

My next book experience this summer shows such  systems have spread across countries and industries as companies embed technology in products, move to technology enabled business models, redefine distribution channels with technology.

Three trends come through.

a) These are multi-threaded initiatives. Insurance companies are leveraging advanced analytics, telematics, mobile tech and and. Banks are leveraging next-gen data centers, event engines and and. Manufacturers are leveraging robotics, 3D printing, M2M networks and and…Shippers and logistics companies are utilizing elaborate asset management and track and trace technologies and and…Auto companies leveraging telematics, radar, wireless technologies and and. You ask them about the Gartner nexus of forces – social, mobile, information, cloud - and they smile and say “keep going. And, and”

b) The advantage is fleeting.  Some features in  a $ 80,000 Mercedes show up in a few years in a $ 25,000 Skada or even in a $ 3,000 Tata Nano. So, the pace of Advantage systems has to be relentless. When you think in those terms, you see more clearly GM’s decision to cut back on a long term EDS relationship. You want to own the Advantage resources and you want them thinking 3-4 releases ahead.

c) How little analysts and bloggers write about this stuff. Robert Scoble explained it well in a post about the “underhyped” radar in his Toyota Prius. To paraphrase him, that’s because “Most tech journalists haven’t bought a new car in the past year”, “Safety systems just aren’t as “sexy” as other toys on cars””, “There aren’t big companies who are pushing the radar systems to bloggers”, “It’s hard to demo” ,“It’s expensive” 

If that’s true of a car feature, think how little analysts or bloggers write about turbines or locomotives.

But that does not mean Advantage systems are not being worked on. Across 3 books now I have seen the pace accelerate. More from the New Technology Elite:

“We live in exciting times. To some degree the current landscape is the throwback to the 1960s and 1970s, when we dreamed of competitive advantage through technology. Sabre, the American reservation system, and American Hospital Supply were spoken of fondly for changing their
industries.”