deal architect

Be like Bill and Warren and Elon ...

Michael Simmons writes about the 5 hour rule of many successful executives

"Over the last year, I’ve explored the personal history of many widely-admired business leaders like Elon Musk, Oprah Winfrey, Bill Gates, Warren Buffett and Mark Zuckerberg in order to understand how they apply the principles of deliberate practice..... Many of these leaders, despite being extremely busy, set aside at least an hour a day (or five hours a week) over their entire career for activities that could be classified as deliberate practice or learning.... For the leaders I tracked, the 5-hour rule often fell into three buckets: reading, reflection, and experimentation."

If you want to emulate them from the reading angle, you are in luck - as there is a bumper crop of just-released books 

I am a long term member of the Enterprise Irregulars. We are known as a group of analysts and bloggers. Well, almost to make the point that long-form content is still alive and well, 5 of us have just released books. Denis Pombriant and Brian Sommer have already contributed guest columns about their books on this blog. I am interviewing Paul Greenberg about his book next week. Thomas Otter has just finished his dissertation around data privacy and is turning that into a book. You have been reading on this blog excerpts from my new book, SAP Nation 3.0.

That's just the start. I interviewed Bruce Cleveland about his Traction Gap book and will run a two part conversation next week. Similarly, I talked to Tom Bogan at Adaptive (now part of Workday) about their new eBook and will run that interview soon. I hope to talk to Brian Solis about his new book, LifeScale.

Two people I have long admired, Tom Peters and Rick Karlgaard both have books on very different topics, Excellence and Late Bloomers, that I hope to review soon.

Paul says it very well for every author in his book intro

"Sigh. Every time I finish a book, I vow never to write another one. They are so hard. But then, within two to four years, the book is almost obsolete because a sea change of some kind comes along and makes dramatic alterations to institutional thinking, approaches, systems, technologies, and cultures that stirs my blood and makes me get back into it again."

The books I am reading and reviewing cover a wide range of topics from Denis with renewables to Rich with societal expectations. Paul's books are always chock full of interesting anecdotes. My book has plenty of history - that of enterprise tech in last two decades and that of the US westward expansion in the 1800s.

For me, each of my 7 books has opened up opportunities for conversations before, during and after writing the books. I interviewed over a hundred SAP customers and watchers for my new book. After he reviewed the book, I interviewed Ray Lane about what he is seeing now as an investor. These conversations in turn give me ideas for my blogs and make our client services richer. It is a virtuous cycle for my three roles as advisor/analyst/author.

Budding authors now routinely ask for my advice. To me, that is so heartening. And if more readers start following Bill, Warren, Elon and others in their reading habits, it will be so much more.

Brian Sommer guest column: The origin story of "Digital with Impact"

Vinnie’s readers might not know that he and I frequently team up on larger client projects. Yes, we’ve been arch-enemies at times but have done lots of deals and even launched a dot-com together.

About two years ago, we noticed a number of client projects that weren’t coming to fruition. I distinctly remember Vinnie one time opining that “51% of all ERP selections were ending up with a no-decision conclusion”. I was seeing something similar, too.

As time wore on, we individually and collectively encountered many projects of various names that were prematurely being halted. Some of those project names are in the following exhibit.

While Vinnie loves to document transformation successes in his books and his New Florence blogs, I thought more energy was needed around the digital misfires that were all too common.  I wanted to find out why we always seem to read about the same 8-10 digital transformation success stories in the business press and never about the ones that didn’t make it. 

And so began a journey….

Early into this journey, I noticed all manner of projects getting digitally washed with the digital transformation moniker. Many projects were a simple “introduction of digital technology to a process”. This isn’t transformation: it’s incrementalism. I also ran into lots of consultancies and integrators who were rebranding their ERP practices as some sort of transformational journey guides. They weren’t. In fact, little of what I encountered would really qualify as transformational or a project that was going to harness vast amounts of new data types (e.g., IoT sensor data).

But there were the great clients and companies that really wanted the holy grail. Sadly, many of these went looking to their old technology and integration partners for solutions. And, even when Vinnie and I would try to tell them what they were going to find, they just wouldn’t believe us. Radical new solutions and business models may require you get new partners who truly understand the modern digital world.

My research into the space took me to numerous firms, factories, industries, geographies, etc.  I can’t even begin to tell you how many business journals and other reference materials I also poured through. What I learned was that there was no one reason that these projects suffered. But patterns did emerge. And in those patterns, I also saw the way forward for other firms.

The book, Digital With Impact, is designed as an executive guide. It takes readers through four phases that must be completed if a digital transformation project is to be successful.  And, as straightforward as those four phases seem, there are significant pitfalls in each of them.

While this summary won’t do the book justice, these phases are See, Think, Reconcile and Transform. The See phase is where transformation teams need to get out of the office and kick the tires of dozens or hundreds of new innovations. They need to see what the art of the possible is with new technology, new business models and emerging competition. The Think phase is where the team starts designing radically new (not incrementally improved) processes, businesses and more. The Reconcile phase looks at the company’s resources (e.g., employees, skills, capital, plant & equipment) and compares them to the new project requirements. Just because a firm can dream up something big doesn’t mean they can get it done. The Transform piece is something a lot people actually have experience with; however, the scale of these initiatives could make even the best people wince.

Digital misfires often occurred when firms tried to skip or shortcut one or more of these phases. Surprisingly, many firms flat out tried to go straight to transform without doing any real research or developing new designs. I just can’t emphasize enough that firms must do the work if they ever want to get the rewards.

Vinnie and I even made some visits to non-clients to assess their digital savvy. Amazingly, some didn’t see any need or urgency to change. Some, incorrectly, think they can get to a new (but undefined) future state on their timetable without any concern re: net-new competitors. You had to be there for some of these meetings!

Somewhere in the middle of this work, Vinnie and I met in Chicago to spend a day or two documenting exercises and activities that companies could use to work through these phases. Since then, I added more exercises and experimented with several of these with real business people. Not surprisingly, many people are very close to their job/company and find ideating radically new business concepts to be hard to do. I’m starting to think my business cards need to reflect my real value add to clients: pusher. I push people out of their familiar comfortable business world and into one that is unlike anything in their past.

I finished up the manuscript a few weeks ago and started to shepherd it through the publishing process. I got some great feedback on the manuscript from a number of tech leaders and colleagues. And, thankfully, their feedback was positive and I even snuck a few of their better suggestions into the book itself.

If this book helps just one team be successful, it was worth it.

Brian

p.s., a big thanks to Vinnie on his pushing to get me to write this.

Denis Pombriant: Green New Deal is a tipping point

Many of you may know Denis Pombriant as a CRM analyst. He is way deeper than that as his bio says "Denis Pombriant lives in the Boston area and writes about the enterprise software market. Denis specializes in disruptive innovation and its effects on business and markets. He has been researching and writing about climate change for a decade."

He has recently finished another book, this time on sustainability and I invited him to write a guest column about it.

I consider Denis a friend - besides analyzing technology vendors, we share a love for history and good food. On this topic, I am ambivalent - I catalog many renewable innovations on the New Florence blog, but renewable energy has repeatedly disappointed, and so we need to show it tough love not continue to write blank checks as I wrote here. However, he makes many points that merit healthy discussion   

With the Green New Deal, the national discussion about pollution and global warming has taken on the cast of an economic challenge and this should be seen as a watershed. But what kind?

As I write in my book, “The Age of Sustainability: The Space Race, Disruptive Innovation, and Ecosystem Services,” the science and technology aspects of solving climate change are already well in view. What’s missing is a discussion of economics.

Solving climate change is like solving a Rubik’s Cube. You have to solve all sides at once else you could end up with one perfect side while the others still look like a dog’s breakfast. Solving “the cube” requires minute tradeoffs and negotiations in one’s mind while iterating towards a solution and much the same can be said of climate change. To solve climate change, we need interlocking solutions for carbon abatement, energy provision, and economics.

Up to the present moment a discussion of climate change might likely include controlling emissions and the tacit assumption that our energy paradigm, our reliance on fossil fuels, can somehow remain intact. But both are flawed assumptions. There’s already too much carbon in the atmosphere and oceans, enough to cause severe weather conditions that are getting worse. So, controlling emissions will, at best, slow down the rate of increase but that’s not a solution.

Also, our reliance on fossil fuels is nearing an end, something few want to discuss. But we haven’t found net new oil anywhere on earth since 2003 and the current boom in hydraulic fracking may help extract oil from existing fields, but it’s not a discovery tool. Experts tell different but related stories about oil. For instance,

A 2013 article in The Guardian states, “Official data from the International Energy Agency (IEA), US Energy Information Administration (EIA), International Monetary Fund (IMF), among other sources, showed that conventional oil [production] had most likely peaked around 2008.”¹⁹ The article quotes Dr. Richard G. Miller, who worked for BP from 1985 until retiring in 2008, saying, “We need new production equal to a new Saudi Arabia every 3 to 4 years to maintain and grow supply. . . .New discoveries have not matched consumption since 1986. We are drawing down on our reserves, even though reserves are apparently climbing every year. Reserves are growing due to better technology in old fields, raising the amount we can recover—but production is still falling at 4.1% p.a. [per annum].”²⁰

–The Age of Sustainability

In addition, the 2014 BP Annual Report stated that the Earth had a 53-year supply of oil remaining in the ground (proven reserves) if extracted at current rates. At some point soon, we’ll need to face the reality that we need an energy plan B because it will take time–probably all of those remaining years–to convert to renewable energy sources. So, we’re faced with the unpleasant reality that the current energy paradigm is doing significant harm to the ecosystem we live in, and it’s running out. Humanity is cornered but there are ways out of this maze.

Also keep in mind that we only burn about 60 percent of the fossil fuels we extract the rest goes into products. For instance, there are 500 pharmaceuticals based on coal and it’s an important part of steelmaking. Natural gas is used extensively in making polymers like plastics and other materials, and most carbon sources can be used in making fertilizers, rubber, paints, varnishes, glass, cement, and much more. Petroleum is also the raw material for making jet fuel, something we’ll always need for air travel and defense. So, the fossil fuels that are left are rapidly becoming too valuable to burn in most applications.

Enter economics

The question of economics is becoming important for two reasons. First, it is the gateway to a discussion of writing down the significant investments in the fossil fuel paradigm. This amounts to many trillions of dollars in global ventures supporting oilfields, ocean-going drilling platforms, pipelines, refineries, mines, tankers and more. Most of them will become worthless over the next half century as our energy diet inevitably shifts. There are also storage facilities, liquified natural gas terminals, and distribution channels that we are barely thinking about.

Just consider pipelines. In the US alone there are more than 185,000 miles of liquid petroleum pipelines; 320,000 miles of gas transmission pipelines and more than 2 million miles of gas distribution pipelines bringing natural gas to homes and businesses.

We need a serious discussion about how to write down all of this sunk investment without causing a global recession.

The second economic question worth considering is the so-called Green New Deal, a call for government involvement in all of this. Certainly, there’s a role for government in this massive transition. For example, supporting road construction to both repair the existing infrastructure and to prepare us for electric driving makes sense and is a traditional government responsibility. But there doesn’t appear to be a good reason for government nudging, or investment in, such things as electric vehicle manufacture for instance.

Most major car companies have already announced plans to deliver electric vehicles to the market as soon as this year. It’s a long list including the usual suspects like Ford and GM and most Japanese and German manufacturers including Porsche and BMW. But also, smaller companies like Volvo and the super luxury maker Aston Martin have all made commitments to building electric vehicles.

K-waves

So the Green New Deal exists in a very different economic time and space than its namesake, New Deal from the Great Depression and some contrarians are already griping about the significant costs that could be involved, perhaps rightly so. The original New Deal formed a Keynesian economic stimulus, an approach that put money into the pockets of working people to get a stalled economy moving again. But that’s not the case today.

To understand this economic moment, you need to understand the normal ebbs and flows of modern capitalism that began in the Industrial Revolution. Research shows that on a schedule of 50 to 60 years, the capitalist economy goes through a cycle of invention, distribution, consolidation and decline based on one or more significant disruptive innovations.

For instance, there was an age of steam and steel in which steel-making and steam engines powered the economy. When we developed steam engines small enough to fit in boats and on rails, we ignited a huge transportation disruption and we learned to build those engines out of steel while laying down steel railroads that spanned the continent. That age, as all ages do, eventually commoditized. We still rely on steam to generate electricity and we still build skyscrapers and bridges from steel, but neither drives the economy as they once did.

Today we live at the tail end of the age of information and telecommunications. From the time the silicon chip was patented in 1959 until the present, that innovation has changed or inspired such industries as computers, software, cloud computing, handheld devices, and social media, to name a few. Communications is digitized and from POTS (Plain Old Telephone Service) grew the Internet and communications satellites and much more.

The next age

K-waves take shape because a technological disruption ideally fits the demands of an age. Steam power served the power needs of an industrializing society, railroads and the telegraphy system they brought along, knitted together a continent-girding republic. Computers and modern telephony enabled the information management needs of modern business and finance.

The next K-wave will focus on the energy needs of a world population that will reach 10 billion by mid-century. Some of those needs are well established such as transportation but others are only now emerging. Consider fresh water for example. Many countries are experiencing the early climate-linked effects of desertification when insufficient rainfall and irrigation make farming difficult or impossible. Other regions are experiencing too much rain and flooding during critical planting seasons. Historically, we’ve regarded fresh water as an ecosystem service, something that nature provided and that we didn’t need to think very hard about but that’s changing.

Syria provides an important lesson. Drought hampered wheat farming in Syria, forcing agricultural people to migrate to cities where crowding and resource scarcity contributed to widespread dissatisfaction with their government. The resulting civil war is ongoing, but the diaspora of millions of Syrians has destabilized governments throughout Europe and beyond. The planet cannot afford for this to normalize.

So, some of the new energy inputs will need to be dedicated to things we've taken for granted like provisioning fresh water and providing better irrigation support for dry farming regions. We’ll also need to manage water where it is hyper abundant. There will be other resource needs that we traditionally got from nature that we will need energy to satisfy too.

Final thoughts

The great thing about K-waves is that the seeds of the next one are planted in the present though we might not immediately realize their significance. The first computers were developed in secret near the end of WWII or just after. They were room-filling things made of vacuum tubes and they were hand soldered together. The tubes gave off enormous amounts of heat too. They were the impractical playthings of geeky scientists and few people thought they would lead to pocket size devices that are tens of thousands of times more powerful today.

Our handheld devices represent what could be the ultimate commoditization of computing. There may be a lot of life left in the information technology sector but, like steel-making, it is becoming simply part of the economy and not its driver.

The new economic driver is likely sustainability. The term sums up the most important needs humanity faces in this century. That need translates into demand and with the global population trend this demand will likely translate into the greatest jobs creating, industry producing, and wealth generating opportunity in human history. Failing to take advantage of this opportunity could also spell doom for our species. But history shows we’ve always made the right decisions in similar situations. The opportunities only come around every 50 to 60 years and

SAP Nation 3.0 Excerpts: A tapestry of customers and strategies

My new book is now available to buy here in print version, and for pre-order in the Kindle version. As with my earlier books, I will excerpt roughly 10% of the 400 page book in a series of posts on my two blogs. While there is plenty in the book about what Brian Sommer calls "shale-fracking customers' wallets" and Jarret Pazahanick calls the "Wild West" of the SAP SI ecosystem, the bulk of the book is customer case studies.

I personally interviewed the majority of executives who are quoted. They spent countless hours talking to me, reviewing their transcripts (nearly 1,500 printed pages) and their book profiles (distilled down to 250 book pages). For a handful of other customers, I extracted the text from videos of their presentations at SAP and other events or from their quotes in articles.

They are spread across 4 customer categories I used for the book - Risk-Takers, Modernizers, Diversifiers and Bystanders. They represent over 20 industries and over 15 countries, and talk about experiences across a wide range of relatively new SAP products - S/4HANA, C/4HANA, SCP, IBP, AIN and also Salesforce, Workday, Plex, Rimini Street and other surround products and services. They are balanced - critical of SAP where needed. In book, I am also critical of SAP's competitors for their own missed opportunities.

Across these and other customers I noticed a wide range of customer strategies

"Here is a sampling:

• Ring-fencing ECC with many of SAP's own cloud properties, as with SuccessFactors at Terumo BCT and components of C/4 at Pregis.
• Two-tier deployments with SAP ByD and S/4 in their subsidiaries.
• Migration from ECC to S/4 on-premise at Johnsonville Sausage.
• New implementations in the S/4 Public Cloud as at a restaurant chain.
• New implementations of the SAP Analytics Cloud as at the Executive Huddle at the San Francisco 49ers.
• Trying out relatively new on-premise, but impactful SAP functionality like IBP at Louisiana-Pacific.
• Trying out Leonardo ML pilot projects as at Costco and Queensland OSR.
• Developing new ISV functionality on SCP as Vertex has done with their indirect tax app.
• Moving to new licensing and hosting models like Bombardier with IBM.

We also are seeing blends from this growing toolbox of strategies. So, some are moving to S/4 in the cloud, and at the same time have shifted to TPM for ECC support while they gradually migrate. GEBHARDT has been implementing a variety of SAP cloud products around its ECC on-prem implementation. Additionally, it has developed a customer portal and set of predictive maintenance services using Leonardo IoT and AIN capabilities.  

Given the wide proliferation of products and terminology in SAP World, my firm, Deal Architect, recommends (and often facilitates for clients) an intense offsite meeting to help customers take a fresh look at SAP and the broader market. That confab should cover and assess the fit of many of the strategies above, while also evaluating internal and external talent and fit with emerging technology trends."

More excerpts to come over the next few weeks....

Oracle: How about an Application Analyst summit?

It's no secret. I have written in several posts that to me the highest value vendor event is an analyst summit. I feel like I am intruding on customer time at user conferences and similar events.

Workday started off the trend with its first analyst summit almost a decade ago. Since then, the quality of such summits has kept improving. Plex often combines them with customer plant visits or allows us to mingle in a Customer Advisory Board meeting. SAP recently combined their analyst summit with the Qualtrics X4 event. Other vendors have their interesting twists - lots of access to executives, customer presence, often an interesting social activity.

I raved about a cloud summit Oracle hosted four years ago. For some reason, Oracle has moved away from such summits - it has short 3-4 hour ones which seem hurried. In fairness, they may hosted longer ones I have not been invited to. Unlike other vendors, Oracle persists with a "caste system" and has different agendas for those they consider "independent analysts" versus those from my former employer, Gartner or other bigger firms.

So most of my Oracle exposure has come from OOW or its thematic events.  It would be nice if they would facilitate connecting us with customers, executives and partners at such events. That has not happened much in recent years.

As a result, I have not traveled to Oracle events in the last year. In retrospect, looking at the agenda, I should have gone to MBX/MCX events last week. Oracle suggested I at least watch 4 streamed keynotes. 6 hours is an investment I will gladly make especially if I don't have to put up the wear and tear of travel.

So, I watch the first MCX keynote here.  First 25 minutes are marching bands and cute Ann Handley talk. Then come buzzwords about the "Experience Economy". Finally after 50 minutes, there's a customer on stage. Judy Sims, CMO of Oracle does a nice job interviewing Jennifer Storms, CMO of NBC Sports Group for about 20 minutes. Then more announcements. No product demos. Not a strong start I say. My grade for this segment = C. Without the NBC Sports customer segment it would have been be a D. 

On to the next keynote - this time from the MBX track. Marching band again and introductory comments for first 15 minutes. Charlene Li of Altimeter then talks about "Disruption". She is very good on other topics, but was a bit flat here. When I hear disruption, I expect example after example a la Clayton Christensen. Around 40.00, Steve Miranda of Oracle takes over. He spend a few minutes on history of change in enterprise tech. Starts demo around 50.00 - does a credible job, but focuses mostly on digital assistants and ML. Around 60.00, Steve interviews an executive from Caesars Entertainment. Around 75.00, an Accenture partner discusses some jargon - mercifully for a consultant, he does not have 80 slides in tow. He then interviews an exec from Willis Towers Watson. Most of the focus in the session has been on hcm and financial processes. Nothing on SCM or operational processes. My score for this session = B

On to the next MCX keynote - to me, the best of the four keynotes I watched. I enjoyed the tap dancing and hand jiving that kicks it off. Around 15.00,there is some product focus with Oracle thoughts on Design. Then, it gets better. Co-CEO Mark Hurd talks about sales and marketing trends at Oracle, the 80 customer "touches" it takes to sell enterprise applications, his efforts to recruit salespeople straight from campus. He was initially mocked for the idea but Oracle has persisted and now has 10,000 such recruits, many in inside selling. That is followed by an interview with Andrew Sinclair of Motorola Solutions. Very impressive description of how the company supports emergency services around the world.

My score for this session = A-. Would have been higher with more Oracle product exposure

Finally, the second MBX keynote. At around 10.00 Willis Sparks of Eurasia Group covers geopolitical trends. He is very good. At 40.00, Mark takes over. He presents his view on the industry. Nice if you have not heard him - but I have heard many variations of this from Mark. Around 70.00 he brings customer executives on stage - Hormel Foods, Adventist Health for 10 minutes each. Again more focus on financial and hr processes. Finally, a half-hour session on digital trends by Deloitte.

My score for this session = B- . It would be even lower without the Willis Sparks segment.  

4 webcasts - little over 6 hours. Not enough product or customer exposure, a little too much time given to partners. I listen to Jon Reed and Brian Sommer's podcast and read Bob Ferrari's posts from the event. They do not appear to have picked up on much new functionality in Oracle products. Brian comments the event was "crawling with chatbots"

After my research for SAP Nation 3.0, I believe SAP's competitors need to step up. In Oracle's case I would love to see it showcase much more intensely how its applications are growing in function points across geographies, industries and processes. Mark keeps predicting 80% of production apps will be in the cloud by 2025. After 15 years of Fusion and countless acquisitions, Oracle still mostly showcases CRM, HR and financial apps. Unless this changes, it will have a very small share of what Mark is projecting for the 2025 cloud enterprise apps market.    

Oracle, how about a 2 day analyst summit focused on your applications? Focus on SCM, operational, vertical applications you are working on. Allow us to spend some time with your application visionaries and customers who are pushing the boundaries of your applications. Entertainment and partner sessions, optional. 

I will gladly travel for that. How about it, Oracle?   

Update: someone just reminded me Oracle NDAs and admin processes can be pretty onerous. I suspect even if Oracle decides to host a summit I request above, there may need to be some negotiations before analysts decide to show.

SAP Nation 3.0: Early Book Reviews

I got very nice feedback from tech executives I respect who had seen early copies of the book

"Don't be fooled by the title - the book is not just about SAP. It is about drama in enterprise computing. As Vinnie points out, few would have speculated in the late '90s that Apple, near dead or Google, not born yet would have many times revenue of SAP or its peers.  I’ve been fortunate enough to have a front row seat overlooking this market both as executive and as investor. With new startups and developer communities reshaping the industry, SAP’s opportunity to reshape itself is still on the table, but only if it is willing to take a zero-sum approach. Platform vendors have to use their market cap and sales organizations to offer new services.  Otherwise Amazon, Google and Microsoft will within a few years position to operate enterprise workloads, anywhere at any cost. Vinnie deftly brings out the trajectory at SAP and its enviable blue chip customer base, but also its many missed opportunities."

Raymond J. Lane,

Managing Partner, Greatpoint Ventures.

Previous Leadership/Board Roles at Oracle, HP, Kleiner Perkins and Carnegie Mellon U.     

“A prolific writer and prescient observer of technology trends, Vinnie Mirchandani has produced an intriguing look at the many forces shaping enterprise applications today.”

Francisco D’Souza

Vice Chairman and CEO

Cognizant

"In previous books, Vinnie has painted a rather dim view of SAP as an expensive, back-office system, grudgingly accepted by business as a necessary evil. The fast changing and rapidly expanding digital landscape in the enterprise now presents incumbents like SAP a fresh opportunity to move into front-line operations in many industries. Will they be able to dominate this new digital space or will they squander the opportunity? This book does an excellent job of examining this question, taking a somewhat optimistic tone about their chances of success supported by a number of examples. Time will tell how the story ends."

Phiroz Darukhanavala (Daru)

CTO , BP (Retired)

"We are in the midst of massive digital transformation.  Software companies are not immune.  The shift from on-premises to cloud and now the shift from clouds to data driven digital networks will leave some vendors behind as the industry consolidates and evolves into digital duopolies.  Vinnie’s book looks at the shift and asks key questions about how SAP and other software vendors will make this transition.  More importantly, he raises the question on how the software market will look like post a financial engineered world,  asking what strategies they should take, where they should invest, and whom they should partner with.  A must read for those who want to know how the software market will evolve in the next decade."

R “Ray” Wang

Founder and CEO of Constellation Research

Author of Disrupting Digital Business

As usual, Dennis Howlett was the first to publish a media review on one of my books. His summary "SAP Nation 3.0 is very much a book of its time that will surprise, delight, infuriate and more." 

Dennis did not, however, get the first review in on Amazon. Marco gets that honor.

"This is the third volume in Mirchandani’s unfurling saga of the SAP software juggernaut and its ecosystem of clients, app providers and other partners. As in the previous two installments, he manages to *animate* the enterprise computing space like no other commentator I’ve encountered. His secret weapon is that he is attuned to – and integrates throughout the book – all the key aspects of the Big Picture: the technological dimension, the business side, user experience, market behavior, vendor dynamics, etc. While this approach succeeds at dramatizing this ongoing technology/business story, and even instilling an element of intrigue – will the software giant rally and prevail? – Mirchandani does not shoehorn the narrative into any pat conclusions, but rather lets the dozens of sharp voices of the interviewees tell the tale in their own words. He subtly emphasizes what the subjects bring up, such as how SAP has or hasn’t succeeded at addressing individual vertical markets or cloud deployment and what styles the firm uses in negotiations, etc. As with any picture drawn with great detail, the eventual image is loaded with complexity and yet it is coherent. This detail is culled from many dozens of diverse participants from throughout the business and technology value chain … and for anyone with a stake in enterprise or application software, the insights they continually offer are gold nuggets. Perhaps the book’s biggest takeaway – and the main reason this work could be vital to the whole C suite, not just CIOs and CFOs – is the myriad ways that technology is driving innovation and business success."

There will be plenty more reviews. I am sure there will be reaction from SAP, its partners and its competitors.

As one of the sections in the book says "It's not your Dad's SAP". I see a lot of one-dimensional commentary on SAP - related to rumors of its recent restructuring, about its Indirect Access stance, its SI ecosystem. To me, SAP Nation is a fascinating, complex, evolving organism. It deserves a fresh look every few years. I hope I start that process this time around for a number of readers and with customer executives I advise. 

Here comes the sun...and the book

It is a glorious Spring day and I heard the Beatles this morning - this song cheers me up no matter what time of the year. Then I got an email from Amazon "Congratulations, the paperback edition of your book "SAP Nation 3. 0: Manifest Destiny" is live in the Amazon Store." 

It's available on the amazon.com site here. It may take a couple of days for Amazon sites around the world to show as available. This is the print-on-demand version and works best for orders in small quantities. If you want 25+ copies at a much better unit price please send me a note. Corporate Graphics is running a bulk job and those copies should be available by the end of April.

The Kindle eBook version should be out by early April. You can pre-order here.  Many other channels are serviced by Ingram-Spark and they also have a print-on-demand version uploaded.

Whew! As the Beatles sang "Little darling, it feels like years since it's been here".

This had the longest gestation period of all my books. I wanted to explore many dimensions of the ever-changing SAP Nation. I started the book thinking it would mostly be S/4HANA focused - that gets plenty of coverage, but so do many of SAP's new products including C/4HANA, SCP, AIN and IBP. My last few books have averaged 250 pages - several readers told me they liked books they could finish on a long flight. I broke that rule for this one - it is 400 pages long. I would be remiss to shortchange the 35 case studies which make up 250 pages in the book. As it is, their raw transcripts are five times as long.

I personally hope lots of customer executives read what their peers told me over the countless hours they spent with me. And that they revisit their view of SAP and their own investments in software and talent.

"Given the wide proliferation of products and terminology in SAP World, my firm, Deal Architect, recommends (and often facilitates for clients) an intense offsite meeting to help customers take a fresh look at SAP and the broader market. That confab should cover and assess the fit of many of the strategies above, while also evaluating internal and external talent and fit with emerging technology trends."

In the meantime, thank you to the village which helped bring the book to  life. As the lads sang "I say, it's all right". 

Conversations with ASUG

Merriam-Webster defines ecology as a "branch of science concerned with the interrelationship of organisms and their environments". If ecologists were to study today's software vendors they would be fascinated not just by how the core organism functions but by the tapestry of their environments. Their halo includes layers of resellers, systems integrators, hosting firms, ISV partners, platform participants, developer communities, analysts and other influencers, media and other watchers. And then you have user groups. SAP alone lists 38 user groups around the globe.

In my long career as analyst, advisor and author I have interacted with most of this "surround" environment around software vendors. Honestly, the one element with which I had the least interaction is user groups. I am on mailing lists of a few, and I periodically reach out to their leaders but never could get a continuous conversation going. I blame myself for not trying harder.

That changed last year. I approached Geoff Scott, CEO of ASUG to see if we could talk every few weeks. Geoff's wonderful assistant, Kim made sure we didn't ignore each other. She would diligently reschedule calls if needed and made sure we talked. So talk we did, openly, off the record about what we were seeing in the SAP ecology. 

As I was writing SAP Nation 3.0, I asked Geoff if he could describe from his vantage point, on the record, how SAP and ASUG have changed in the last 5 years. I liked his first draft so much that I asked him if he could reshape it as a foreword to the book. I am glad he agreed. The book is about customer conversations - 35 case studies over 250 pages make up bulk of book, so the foreword from the head of one of SAP's biggest user groups is like the cherry on top of the dessert.

Here is an extract from his section

"As SAP has changed to become more cloud-centric, ASUG has changed, too. We invested in new ways of learning and connecting like-minded SAP customers and partners, and we launched new programs and services all with the goal of helping our customers maximize the return on their SAP investments.

The process has taken time and energy, and key to it has been the involvement of our members, including our 12-person Board of Directors and more than 300 volunteers. Which leads me to an example from 2017-2018, one that is emblematic of how much the relationship has changed and how it’s benefited SAP customers. The topic? SAP licensing and indirect access (IA) of SAP software."

It went further. He introduced me to several executives from his Board who ended up describing their companies and their SAP investments. Very honest feedback about the software and the relationship with SAP - on the record, as you will see in the book.   

Tom Wailgum, part of analyst relations at ASUG, facilitated those interviews. He later told me 19 of the companies profiled in the case studies (most I had identified from other sources) are ASUG members. He also identified a few journalists I have since sent a media review copy of the book. He also shares with me periodic ASUG research like he did this week about the "State of the Community". The extract below is a small fraction of the long infograph - check here for full graph. Drill down here and you get more detail below the infographic. Even then, it is a very high level summarization of the nitty gritty of what users do on a daily basis. And the conversations they have with each other. That's what ASUG facilitates -  as their site says

"From the outside, we’re a huge organization of more than 100,000 members from thousands of companies—from global enterprises to startups—spanning traditional and emerging industries across North America. But the real power of ASUG lies in informal partnerships formed through knowledge-sharing and commitment to a common cause."

In the book, couple of CIOs talk about how they find it easier to find answers to their questions by networking within ASUG than going through their contacts at SAP. ASUG is a mother lode of information that I hope I get to mine further in coming years.

Having had this experience with ASUG, I hope I can open up conversations with some of SAP's other user groups around the world. Even more, I would love to start conversing with user groups of other vendors. That is if they can be as open as Geoff and Tom have been at ASUG.

 

Oracle Applications: a new chapter?

Steve Miranda, EVP, Applications Product Development at Oracle briefed analysts about this week's co-located Modern Business Experience (MBX) and Modern Customer Experience (MCX) in Las Vegas. He also blogged about it: "we are bringing together marketing, sales, and service with HR, finance, and supply chain, because we are seeing more and more similarities between each area."

On the earnings call last week, Mark Hurd, co-CEO of Oracle glowed about the applications business

"Fusion Apps, 35% up, Fusion ERP revenue was up 47% organically. NetSuite revenue was up 28%."

Steve is one of the nicest guys in the software industry. He is also one of the smartest application architects in the industry. Mark has run some of the most sophisticated supply chains and salesforces in the tech industry. I have talked to him about complex business processes and applications. I know they know business applications cold.  

And yet when I was researching my new book, SAP Nation 3.0, I repeatedly saw Oracle miss out over the last two decades on opportunity after opportunity to become the dominant enterprise application vendor.

"Oracle continues to dominate the database market. By many measures, Oracle should also by now be the undisputed leader in enterprise applications....Starting with the PeopleSoft acquisition in 2004, Oracle went on its own binge, claiming it was time for "industry consolidation." They made significant acquisitions: PeopleSoft for US$10.3 billion, NetSuite for US$9.3 billion, Siebel for US$5.6 billion, Micros for US$5.3 billion and Hyperion for US$3.3 billion. Other investments like i-flex, Portal, Primavera and Retek brought them banking, telecom, complex project and retail functionality, respectively.  By 2006, they were loudly celebrating that they were "halfway there" in developing their own next-gen Fusion cloud applications....For all that, Oracle has done just OK. It has seemed more intent in going after Amazon for the cloud infrastructure and platform markets ...Around business applications, Oracle has focused more on Workday and Salesforce with HCM and CRM functionality, and not so much in manufacturing or other verticals where SAP has greater presence.....While it has launched an exciting autonomous version of its database—which it calls "self-driving"—it has not brought a similar level of automation to enterprise applications. "

Mark explained during the q&a during the earnings call that he is not that concerned that his on-prem customer base is not moving to the cloud. He said "our user base actually knows our cloud roadmap. They actually have confidence in our R&D, they know we’re going to be there to migrate them when they want to be there. They actually have less of a sense of urgency in many cases to move than the (competitors like Deltek and Lawson) you’re describing, Brad, because they’re in much more desperate situations without a roadmap, without knowing how they’re going to get from here to there, knowing their competitors are beginning to move."

In the book, I  point out that after two decades of cloud applications (Netsuite was founded in 1998), we actually now have an industry crisis. CIOs are reporting it is increasingly difficult to recruit talent to their on-prem environments. The customizations and technical debt around those applications are increasingly a security and compliance risk. And they have little hope of seeing the benefits of better UX, multi-tenancy, machine learning or IoT any time soon. 

In this post I called for SAP, Oracle, Infor, Microsoft and other on-prem apps vendors to "tilt the bell curve". Of their own customers - not worry about those of competitors.

Mark also said "Our vertical revenue was up 38% and our annualized revenue in the verticals is now over $800 million." I would love to see details - to me vertical applications do operational stuff - merchandising in retail, claims processing in insurance, net metering in utilities, support robotics and wearables on the shop floor etc. If it has those, why is Oracle not aggressively showcasing these capabilities? I like the fact that they are bringing marketing and hcm executives under the same tent in Vegas, but why not operational executives in various industries? I asked Steve and he basically said the risk was the agenda would become unwieldy. On the other hand, that would hugely differentiate them from what Workday, Salesforce, SAP and others can offer today or in the foreseeable future. Also, in the last wave of ERP and CRM projects customers mostly implemented back office functionality and showed poor payback. This time around many want to start with operational areas.

Under NDA, Steve described exciting new features in the horizontal applications they will showcase in Vegas this week. Every time I listen to Steve and Mark, I get excited about Oracle's application future. 

But when I step away and look at what could have been, I turn cautious.  The industry could use a much more focused and vibrant Oracle applications business. Are we seeing the start of a new chapter with the new event format in Vegas? I hope they can turn my caution to enthusiasm.

SAP Nation 3.0: Those who ignore history.....

The book is available for advance purchase on Amazon here. I am sending out media review copies this week. Over the next few weeks, as I do with all my books, I will share about 5%  of the 400 pages in posts on this blog.

I recently summarized the book for a SAP Executive. I told him there were three waves of history in the book:

a) The ongoing turnaround at SAP since the first volume of SAP Nation 5 years ago has been impressive and in many ways unrewarded by Wall Street or analysts. Most of the 35 customer case studies talk about SAP products that did not exist/had not been acquired. Many of the SAP executives I profile in the book have a sense of urgency I find lacking in its competitors.

b) When you look at the industry from a 20 year lens, however, SAP does not look that impressive. Many, many missed application opportunities while SAP has been distracted with platforms and databases. I also cover plenty of "unforced errors" SAP has made like its Indirect Access licensing policy. As the book says "Few of us would have speculated that Apple, near dead or Google, not born yet would have many times SAP's annual revenue. The market is fragmented—waiting for fast followers who missed out on the first wave of opportunities."

c) I also profile the race in the North American Continent in the 1800s. There is plenty for SAP and its cohorts to learn from how that history evolved. Two extracts from book:

• In 1800, the United States, then the original 13 colonies, was a young, skinny country. Two-thirds of the population lived within 50 miles of the Atlantic Ocean. You could have placed bets on who would win the race for North America—would it be the Americans, the Spanish, the British, the French, or maybe even the Russians or the Dutch? Over the next few decades, Americans had the biggest market share.
• (The Louisiana Purchase) was a major risk for President Jefferson but it doubled the real estate of the young United States. What if the population had just yawned and clung to the Atlantic Coast and not moved to the new territories? That's a good analogy to what SAP faces. It has new real estate in the form of S/4, Leonardo, SCP, HANA and its cloud properties, and yet the majority of its 400,000 customers are clinging to the "coast" of legacy products. Helping them migrate is SAP's major short-term opportunity.

In 400 pages, I cover a lot of ground - actually, the customers in the case studies do quite a bit of work for me. If you want to hear gossip about SAP's recent restructuring you wont find too much in the book. Nor will you find too much adulation about the $8 billion investment in Qualtrics. Both are there as milestones in the journey.

There is plenty on how the enterprise software industry continues to morph.  And as I ask in the book

"Are they ready to issue the Manifest Destiny clarion call to go from "sea to shining sea"? The continent of enterprise computing is waiting to be tamed."  

Look forward to your input as various formats of the book become available for purchase throughout April.