deal architect

The Infor reboot

I had a chance to listen to Kevin Samuelson, the new CEO at Infor, along with his executives on what he calls Phase 3 of Infor's evolution, focused now on Customer Centricity and Execution.  Phase 1 was Build and Acquire. Phase 2 was SaaS transformation.

To me, this is more of a continuing reboot of Phase 2. I had been very excited at the start of Phase 2 and then saw Infor under-deliver over the next few years. 

As I have written:

"Infor had once been called an “ERP graveyard,” as it had accumulated a wide portfolio of ERP brands including Baan, Lawson, MAPICS, SSA Global Technologies and Systems Union. Those in turn had made acquisitions of their own (such as Lawson buying Intentia). Since they arrived in late 2010, Infor CEO Charles Phillips and his team have been reinvigorating the company. Phillips had called Infor “the world’s largest start- up.” The differentiation Infor promised was CloudSuite for 15 verticals (such as automotive, fashion, and food and beverage) and three horizontals (including corporate and human capital management). Since then, in spite of sizable investments from Koch and others, Infor has not delivered on its promise of vertical functionality."

Without the industry-specific operational functionality, Infor was forced to compete more on horizontal finance, hcm, crm and analytical functionality and its investments in UX with an in-house design agency against Workday, Salesforce and other cloud vendors. In spite of initiatives like UpgradeX, Infor struggled to migrate its on-premise customer base to the cloud without the vertical functionality.

Infor had benefited from the emergence of Infrastructure-as-a-Service. Previous CEO Charles Phillips used to say "Friends don't let friends build data centers". They took some of the capital that would have put towards the infrastructure and applied it into application functionality. Except that they did not architect the product to be multi-tenant like many competing cloud products. I have seen several of my analyst friends heatedly dissect Infor's architecture. Infor has been gradually rolling out specific products in multi-tenancy.

Rod Johnson, Head of Americas touched on their go to market, implementation accelerators and value points. The goal is to encourage legacy customer moves to the cloud. That to me, again, is part of the reboot if customers on such a vast array of products can be consolidated to a smaller, newer portfolio of products.

Kevin and team are modest in what they are promising this time. They are concentrating on 4 core ERP engines - LN for discrete manufacturing, M3 for process manufacturing and distribution, S3 for service industries and back office, and CSI for midmarket. Unbelievably, the competition there has not evolved much, so even after a decade Infor believes it can still do well with these engines. And they are breathing new life into what they call Edge Applications like EAM and CPQ. Especially in areas like EAM, Infor has never had much competition.

What's negative from their point of view is that competitors are starting to focus on verticals. At Dreamforce last month, I saw 7 very well put together industry sessions each with big brand customers on stage (I wrote about some of them here). Workday has been doing well in healthcare and the government sector and with its Prism Analytics and increasingly with its Cloud Platform partners will do even better. Plex has moved into MES for the auto industry. Plenty of startups and SIs are targeting other verticals.

However, we are entering a new decade. Every one of its competitors has had recent changes at the top and Infor similarly deserves a fresh look. In that spirit, I am looking forward to Phase 3 of their evolution.

Okay, enough of the silliness about SAP

I am stealing words about silliness from my friend, Bob Evans as he recounts here Larry Ellison's comments about competitors during the recent Oracle earnings call.

Larry was particularly vocal about SAP's vulnerability. My response to SAP competitors (many whisper more than scream like Oracle does), when they say that is: "Tell me exactly why?"

There are over a million SAP, Oracle, Infor, IFS, Unit4, Epic, Cerner and other legacy application customers. They are all "vulnerable". Have been for a decade.  None of the vendors has shown much momentum moving their on-premise customers to next- gen. The cloud competition has not delivered knockout punches. They are narrow in reach - don't cover operational areas. Besides, the cost of migrating to a completely new platform, with little automation, with the need to retrain users on the new UX and IT on the new architecture is daunting. Show me how you are making it compelling to move SAP customers. If anything I see a bit of the reverse. I see SAP's broad range of applications and customers looking at application portfolio rationalization. They are looking to reverse a decade of "ring fencing" their ERP with best of breed cloud applications.

Also, I see SAP with plenty of assets to turn the tables against the competition. It has a dominant Asia-Pac presence. I wrote after an event in Bangkok "SAP has been in Asia over 30 years and now has over 9,000 employees spread across 31 office in the region. The event in Bangkok showed me just how far the competition has to go to catch up." With all the musical chairs in the executive suite at many CRM vendors in the last few weeks I get the sense that market is poised for disruption. SAP's CX portfolio, especially the Commerce piece, and with new leadership under Bob Stutz, will get another shot. The SAP Analytics Cloud keeps growing in reach and maturity as I wrote here. The recent "Microsoft Embrace" opens up support of the vast Microsoft channel, and also simplifies the hyperscaler choice for many undecided customers (while keeping open support for customer loads on AWS, Google and Alibaba clouds).

Yes, SAP has had plenty of executive turnover this year. However, as I recently told a journalist "Not just Jen and Christian, the exciting thing to me is how young SAP management is now, yet how technologically and globally sophisticated." Show me a vendor which has not had changes at the top in the last year or so - in different ways, Oracle, Infor, ServiceNow, Salesforce, Workday, Unit4 all have. The turnover in their customer tech teams and budgets is even more dramatic. And that has opened the door for many new competitors

I wrote recently "In the last decade, we have seen Google and Facebook run away with digital advertising spend. Amazon has commoditized order taking and fulfillment functionality by offering it as a service to millions of SMEs. Foxconn, Flex and design shops have taken over contract manufacturing as products of every stripe get smarter with embedded technology, GE, ABB, Rockwell and others are getting the lion's share of IoT generated revenues. None of the major enterprise application vendors have seen much revenue from any of these markets. And in industries like financial services, many customers are back to custom building and even becoming vendors in their own right."

Tongue-in-cheek, I had sent a copy of SAP Nation 3.0 to the editors with the sub-title of "In the land of the blind, the one eyed man is king". Looking at the last few years, I had been taken aback at how little its direct competition had grown and taken advantage of SAP's challenges.

So here's my question: if SAP is vulnerable, what would you call its current crop of competitors?

Decade-end review: Not your Dad's outsourcing market

Over the last month, as we get ready to welcome the 20s, I have been reviewing blog posts and books I have written and the notes from advisory work helping clients pick vendors, negotiate contracts, review vendor performance from the last decade.

I wrote about enterprise software last week, here is one on the services/outsourcing market.

It is the enduring power of brands, but I chuckle when I hear executives still talk about the "Big 6" - the accounting firms from the 1990s. I started my career at one, and have seen them and their competition transform dramatically. Or that placement offices at most business schools still mostly target a handful of consulting firms for their MBA students. Today's outsourcing market is remarkably fragmented - just in the Business Process Outsourcing (BPO) category, the analyst firm, Everest Group estimates there are over 200 firms with annual revenues in excess of $ 50 million.   

The previous decade had seen the fragmentation caused by the maturing of Indian and other global talent pools. By the end of that decade, however, I had written "And looked at from the lens of new price points in SaaS and cloud computing models, the (Indian) vendors I coined as SWITCH have become the new expensive "Big 6" "

The stage was set for this decade which saw even more dramatic changes. First, lets look at how service categories morphed, then we will look at macro trends that affected the outsourcing market.

IaaS

I wrote in 2012 about the evolution in data centers

"As a result in my last two books, I have profiled the Microsoft Azure data center infrastructure and more recently the Facebook Prineville data center and Google’s massive wind and other alternate fuel commitments for its data center and other operations. They are the modern data center innovators and when you talk to them they don’t talk admiringly about IBM or HP. They talk about Amazon’s data center network, Apple’s iCloud, the Switch NAP – interestingly, mostly about other consumer tech companies."

Well, it dramatically affected infrastructure outsourcing. We don't hear much about EDS or Sun or telcos.  Its about AWS, Azure, Google and Alibaba. More shock waves are likely as customers settle on hybrid clouds and start to roll out 5G.

Packaged applications

As I wrote in SAP Nation (2014), services around SAP, Oracle, Infor and other enterprise applications had become a massive revenue stream for most outsourcers. SaaS vendors like Salesforce, Workday and NetSuite which bundled upgrades, hosting and application management into their contracts threatened to dent this market. Deloitte, Wipro and others managed to do well even with these vendors. Over a million SAP and other customers are still on the previous on-premise products, and the AMS opportunity persists there. Third party maintenance vendors like Rimini are starting to expand their focus and also get into the legacy AMS market.  As products like S/4HANA get largely implemented on-premise or in private cloud mode, the outsourcing opportunities appear to have increased. The pushback is coming more from buyers who realize that project failure rates in the last wave of projects were too high for the large fees and consultant travel that they paid for.

"Glo-ver"

Cloud application vendors did not globalize or verticalize sufficiently during the decade - it was what I called the "Glo-ver" miss for software companies. This has opened up major opportunities for firms like Accenture, IBM, DXC, TCS and Cognizant which have impressive industry practices. And for most large outsourcers to help customers with two or three tier globalization strategies. This showed in opportunities for firms to market their own IP, help software vendors (especially startups) develop contemporary functionality and to help customers custom build industry or geography specific operational functionality.  

BPO

Call center, payroll and other back office services continued to be the bread and butter in this category, and India and Philippines continued to lead in global delivery locations. While many firms tried to bring automation to low level tasks in these processes, most continued to take over legacy processes around expensive applications. Their value proposition would have been far more compelling if they could have also moved clients to "lighter" platforms.  

Digital Advertising

While every outsourcing firm chased after CRM projects, many of them missed out on the mega trend - digital advertising was outpacing TV, print, billboard and other traditional advertising. Google, Facebook, and more recently Amazon have been the big winners. Accenture Interactive, through a series of acquisitions, has became the biggest digital agency in the world. IBM with iX, PwC and Deloitte have also done pretty well.

Smart products

My 2012 book, The New Technology Elite had looked at how every industry was making their products and services "smarter" with software and sensors. While some firms like HCL did ok in market to help redesign products and services, the big winners were Foxconn, Flex and other contract manufacturers and design shops like IDEO and frog.

Digital transformations

This was a segment with a lot of hype. Like they did in the "reengineering" boom of the 1990s, if you check references of many outsourcing firms, their definition of digital transformation has mostly been about migrating clients to new, but undifferentiated, packaged software. The Digital Enterprise (2014), written for Karl-Heinz Streibich, looked at how some of the biggest brands in the world were rethinking their logistics, business models, channels and shop floors with new technologies; if you read the case studies in the book, you will see very few of them highlight substantive roles for outsourcers. Even later in the decade, if you look at many of the impressive transformations they were led by customer executives with limited contributions from outsourcers.

Automation

My 2016 book Silicon Collar looked at how automation - drones, robotics, machine learning, kiosks, wearables etc were reshaping every business process and job description. For the most part, outsourcers have focused on RPA and Machine learning as opportunities and there in white collar jobs. There are plenty of blue collar and trade jobs - on the shop floor, in fulfillment centers, in the operating room, in agriculture that outsourcers have not done much with.

Strategy practices

After decades of promise, technology is finally showing it can provide competitive advantage. So, it was not surprising to see strategy firms like McKinsey, Bain and BCG have built strong technology practices. Many of the larger outsourcing firms have, in reverse, built strategy groups. Many are, however, hired only in operational areas. For many clients they are also conflicted - the strategy groups reflect only about 10% of the revenues and their interest is in getting the far larger implementation and maintenance contracts. Analysts firms like Gartner have missed out on an opportunity to play a meaningful role around tech strategy consulting. They tend to be siloed across technology spend, and prefer to deliver their services in analyst mode. 

Big, macro trends that impacted the outsourcing market:

Global politics

As we started the decade, it was common to evaluate economies and policies in outsourcing destinations - will India's wage inflation continue, how will China's IP policies affect, is Ukraine or the Philippines stable enough? Now, it has become as important to also factor the source - How will US trade and visa policy affect outsourcing? How will Brexit affect outsourcing in the UK and EU? Global politics used to be the elephant in the room, now they are front and center for the outsourcing sector.   

The Alt-Job economy

 With so much fragmentation in the outsourcing market, it is easy to ignore what I have called the Alt-Job economy. This includes developers on Apple and other platforms, SMEs on eBay and Amazon Fulfillment, franchisees in every sector. This is "work" that outsourcing firms have missed out on - also these formats are now competing for their own talent.    

Focus on operational excellence

When you are given a multi-year contract, customers expect to see productivity improvements after the initial transition period. I used to constantly hear about CMM Level 5 and Six Sigma performance metrics, though mostly from Indian outsourcers. In the past decade, I have heard much less so. Same with shared services across clients and remote delivery to reduce travel cost and consultant burnout. While many outsourcing vendors have adopted PSA functionality to better track their staff and administer their time and billing,  a source of friction with many buyers is around automation of outsourcing delivery. Since large chunks of many practices involve repeatable tasks codified in methodologies the logical next step is applying machine learning, RPA and other technologies to outsourcing labor. This will be a major battleground for the coming decade.  

Service Procurement and Management

Buyer procurement and management of contract labor has significantly improved with tools like Fieldglass and Ariba. That around projects did not improve much - too many projects fail on metrics of economics and deliverables, and very few projects have outcome based economics. Those disciplines around long term contracts continue to be weak - little focus on continuous improvement, very basic SLAs etc. Ecosystem management by technology vendors similarly did not evolve much. Most vendors treat outsourcers and systems integrators like resellers and measure success as impact on their revenues, not as much on success in the field and customer satisfaction. Many outsourcers think weak buyer or partner oversight is good for them. It is at times, but it actually hurts them - buyers continue to depend on relationships, more than qualifications, shoddy delivery affects the entire sector's reputation etc. 

Takeaways from the decade

There are plenty of lessons for outsourcing vendors from this decade. Constantly keep expanding your definition of addressable market; keep refreshing your competitive intelligence database; stay on top of global trends and keep evaluating your delivery locations; get serious about automating your own operations and prepare for more sophisticated buyer and partner management disciplines.

And for buyers, the biggest aha was that their service procurement and management disciplines need to get much stronger. In 2005, I wrote about putting "Strategic back in Strategic Technology Sourcing". I said "The average technology sourcing department is outgunned in most negotiations". Read it again and 15 years later that statement is even truer today. The number of services keep on growing, so does the choice in vendors. It's easy to blame the service providers, but buyers need to quit making the same mistakes. And adding new ones to that long list.

It was a fascinating decade and portends an even more exciting next decade with newer services, new entrants, more sophisticated buyers and way more machines as part of the delivery mix.

7 Surprising Findings from Workfront’s Annual State of Work Report

A guest column from Steven ZoBell, Workfront Chief Product and Technology Officer. In his role at Workfront, Steve leads the engineering and platform hosting and operations organizations and works closely with the product and services teams to evolve the technology platform to meet customer and market needs. As the previous CPTO at ADP AdvancedMD and CTO at inContact, Steve brings more than 20 years of product development, software engineering, and business management experience to Workfront. Steve has been involved in the development of more than 25 critically acclaimed, award-winning, commercial software products.

"At Workfront, we regularly touch base with knowledge workers worldwide about the state of modern work, which is growing more complex by the day. Amid so much ongoing transformation, leaders—and their team members—often feel like they’re flying blind as they chart their course into an unknowable future. It’s hard to predict what changes in the marketplace will take hold tomorrow or next week, let alone within the next year or beyond.

But knowledge is power, and that’s why we conduct our annual State of Work report. This global survey helps us gauge conditions on the ground, provide valuable insights into how work is being done, discover opportunities for growth and improvement, and identify the things top-performing organizations are doing to gain a competitive advantage in an unpredictable environment.

As we crunched the data from this year’s report, we uncovered seven surprising findings that may change the way you think about the modern world of work.

1. Employee engagement is not a problem.

It may seem like common knowledge that employees struggle to stay engaged in their work responsibilities. After all, Gallup has reported that more than 2/3 of employees in the U.S. and 87% worldwide are either not engaged or actively disengaged at work.

But that story doesn’t hold for every sector of the job market. According to our report, most people surveyed feel proud of their work (91%) and believe their role matters (89%).

This is welcome news. But it leaves one vital question unanswered: is everybody engaged in the right work?

2. Strategic alignment is a problem.

“No” is the answer to the previous question. Enterprises today struggle mightily to keep their people engaged in the right strategic priorities. Another Gallup poll, the State of the American Workplace, revealed that 70% of employees feel disengaged as a consequence of failing to see how their work helps move their business forward.

Likewise, in our State of Work report, only a third of respondents would describe their work as “harmonious and connected,” while 15% went as far as to call their work “uncoordinated and disconnected.” And the larger and more dispersed your organization is, the more challenging strategic alignment can be.

These survey results signal the need for leaders to bridge the gap between team members’ daily activities and strategic enterprise goals. Connecting the work and the why creates outcomes-focused thinking and work that improves employee engagement, productivity, and talent retention.

3. Agility is about more than speed.

As we studied the results of our report, we determined that companies that outpace their rivals focus on agility as a core competency. And their commitment to an agile mindset goes beyond making work move faster or increasing employee productivity. Instead, they seek a more fluid, dynamic, and holistic approach to work, which embraces change, empowers new leaders, and enables them to regularly redeploy at every organizational level to drive new opportunities in the market. As McKinsey puts it: “Enterprise agility is about the distinct qualities that allow organizations to respond rapidly to changes in internal and external environments without losing momentum or vision.”

4. Employees want to be rewarded based on their contribution to results.

“There are two worldviews in leadership,” writes Workfront CEO Alex Shootman in his book Done Right. “Some leaders believe people go to work with the intent to do their best. Other leaders take the view that people’s prevailing instinct is to shirk.” Which worldview do you believe is closer to the truth? According to our State of Work data, it’s the first.

Knowledge workers aren’t there to punch a clock or pass the time. They sincerely want to contribute, and have their contributions noticed. “Everyone wants to be trusted to do the job they were hired for,” Alex continues. “Good ideas exist at every pay grade.”

5. Visibility should go in both directions.

The tools of modern work are better than ever at providing downward visibility. In other words, leaders have a greater ability to watch how work is progressing than ever before. But equally important is the employees’ ability to see upward, connect their daily tasks to the company’s greater vision, and understand how and why business decisions are made. According to our State of Work report, there’s a lot of room for improvement in this area.

6. Work itself needs to be platformed.

We’ve reached the point where enterprises of all shapes and sizes are accustomed to the idea of platforming their sales, marketing, HR, and finance activities using enterprise work management technology that streamlines processes, increases visibility, and connects the myriad digital tools we use to get work done.

But today’s top-performing organizations are realizing that they also need to platform the work itself. Without the ability to look at work strategically and cohesively, it’s not possible to adapt, evolve, and continuously improve enterprise work processes, which is increasingly vital.

7. Employee experience matters as much as customer experience.

Our final surprising finding from the State of Work report reveals that 91% of knowledge workers crave modern technology solutions. They expect the same ease and simplicity from their work tools that they find when they use Google, Instagram, or Amazon. And 87% believe their leaders are missing opportunities by not adopting more cutting-edge platforms.

While the sentiment itself is not surprising—of course digital natives expect their work tools to be user-friendly—the strength of the response is remarkable. Almost everyone agrees that workplace technology should provide seamless connection, access to information, a good user experience, and even personalization. That’s what they get from the apps they use at home. It’s only natural they’d desire similar usability from the tools they use at the office.

Empowering leaders with the insights they need to succeed

The more business leaders understand what leading companies are doing to conquer the increasing complexity of work in the modern age, and the more they can peer into the minds of their team members, the better they’ll be able to differentiate themselves, remain competitive, narrow in on what will move the needle, and keep people not just engaged at work, but engaged in the right strategic priorities."

Source of all images: Workfront 2020 State of Work Report

 

The Evolution of SAP Analytics

I had been invited to an SAP Analytics influencer summit earlier in the year. Many of the sessions were under NDA, so I had not written about it. However, my notes showed:

• Ambitious, exciting vision, but fragmented execution across portfolio of  tools. Presentations did not appear well connected.
• SAP should be drawing on the operational data and scenarios it has access to across so many industries and geographies. Many of its presentations focused on financials and hcm data.
• The Qualtrics acquisition is still new, but should give SAP a chance to blend X and O metrics - that could be a significant differentiator
• SAP has a partnership with Cloud Elements to access 150 cloud data sources
• 3 customers who presented got into operational metrics, integration with other SAP tools like IBP.
• Lots of Microsoft product mentions across the sessions - O365, Power BI, Surface Hub, HoloLens etc.
• Microsoft with all its tools, Workday with Prism Analytics and Adaptive Insights, and Salesforce with Tableau, MuleSoft and Einstein scenarios, appear to be doing a better job presenting their analytical credentials in the field

This week I heard an update webinar and the messaging was much tighter (with not as much focus on HANA, the database and related services in this webinar). BTW - click on each slide to enlarge.

The SAP Analytics Cloud continues to evolve as a "one-stop shop" for BI, broad enterprise planning and augmented analytics (use of machine learning for pattern recognition, insights etc)

 

SAC is being gradually embedded into various SAP cloud properties. Slow integration (not just with SAC) across SAP cloud applications is a sore subject with many customers so it is good to see this progress

 

BusinessObjects lives on and will continue to be supported till (at least) 2027, (see SAP statement of direction here) and as customers adopt SAC will call for various hybrid management strategies.

I would like to see SAP Analytics continue to evolve so it stands out in the competitive landscape - here's where I will be looking for progress

• Embedding SAC into each SAP cloud app is a good start, but ideally should allow for bi-directional navigation across the properties
• Plenty of sophisticated customer data is in SAP tools like Qualtrics, IBP, AIN, Leonardo ML. Be nice to see them show up in SAC demos.
• Be nice to see more real life customer scenarios in demos, especially those with operational data.
• As it tightens its relationship with Microsoft around Azure, clarify how will that impact the "frenemy" status when it comes to analytics
• We should hear more about automated migration and hybrid management tools SAP is developing to help customers move from the on-premise to the SAC world
• Similarly be nice to hear how license conversion credits will work for customers looking to adopt SAC.

Look forward to the continued evolution.

The Future of Work is....Dystopian?

Most conversations about the Future of Work that we hear in professional circles are similar to those in this Cognizant webinar and report. The comments tend to be tough, but fair. 

In mainstream media, however, I am seeing increasingly hostile pieces about the state of work, how workers are being driven "insane", how Americans have less than $400 in the bank, how "unequal" are our corporations and our wealthy. In just the last couple of weeks, I have read the 3 pieces below. I am not particularly political and there I am a registered independent. I read these articles because they were brought to my attention by colleagues and in one instance I heard the writer present at a tech event. And because they are talking about workers and workplace technology - those are topics I am definitely interested in.

A New Republic book review titled "Life under the algorithm": "Seen from Guendelsberger’s point of view, America’s working class is quivering in stress and fear, hurting from torn-up feet, and all covered in honey mustard."

A Washington Post piece which is about a miserable Thanksgiving air travel experience (which we can all empathize with) then turns into a much angrier piece about the state of work : "Like 78 percent of U.S. workers, I live paycheck to paycheck. We hear numbers like these in our political debate, where they usually signal how ill-prepared Americans are for disasters and medical emergencies. Like 40 percent of U.S. adults, I regularly wouldn’t be able to scrounge $400 in a crisis."

A Time editorial which talks about the new 'Gilded Age" and ends with "The age of capital has been facilitated by a remarkable solidarity among the ultra-fortunate. Putting that period in the museum will take other, broader solidarities."

My analyst instincts kicked in and I ended up with a bunch of questions. Writers are entitled to their individual perspectives, but I wondered if the editors at these publications ask questions similar to what I came up with to balance out their coverage.

a) Where does our middle class work?

I realize politicians like to focus on extreme ends of the wealth bell curve and there is glib talk about our middle class being dead. But consider this - Costco has over 90 million members, most in the US, and the average family member annual income is about $95,000. That is a large chunk of the US population.  Automakers continue to sell over 15 million vehicles a year, again largely to the middle class.

That middle class - not just Warren Buffett, Mike Bloomberg and Bill Gates - owns a large portion of our $28 trillion in IRAs, 401Ks and retirement assets. The real estate we own or are likely to inherit is valued at over $32 trillion.

Clearly, a large portion of the population has way more than $400 in the bank. Why are we not hearing more about their work and workplaces?

b) Don't employers have to compete for talent?

Forbes, Glassdoor and others regularly survey for employee satisfaction and compile lists of "best employers". You would think few fast food employers would qualify as leaders. Yet, Chick-Fil-A, In-n-Out, Starbucks consistently do. In retail, you would think they are high turnover machines. Yet employers like Costco, and Wegmans consistently show up as leaders. In outsourcing, IBM and Deloitte do pretty well. So, if McDonalds, Amazon and Covergys are poor employers (as the book in the New Republic piece focuses on), don't they feel the pressure to do better, especially in a full employment economy?

c) Why is there not more labor mobility?

The Bureau of Labor Statistics tracks over 800 occupations and has been reporting nearly 160 million civilian workers for several years now. Many more are employed by the government.  The BLS stats also show many more job openings than people looking for work. Sectors like trucking have been reporting chronic shortages year after year.  We also have a large (and not well understood) Alt-Job economy. As I wrote here, that includes developers on Apple and other platforms, SMEs on eBay and Amazon Fulfillment, franchisees in every sector, ethnic grocers and on and on. We hear plenty about rideshare, fast food  and call center employers as villains, but is it fair to ask why those workers do not seek out other opportunities where they would be less miserable?

d) What do consumers want?

I find many consumers empathetic to workers. Many refuse to use self checkout kiosks to not deprive a fellow human of a working opportunity. I don't know too many consumers who wake up for the opportunity to scream at a call center worker. Most customers chuckle about the sad state of CX and blame poor process and policies, more than workers.  If Amazon and McDonalds are tough task masters (I wrote here after a visit to an Amazon fulfillment center. It is a model of efficiency but that does put demands on its workforce), would consumers be willing to accept slower deliveries or slower service? If not, the history of automation shows machines take over dull, dirty and dangerous tasks. Are consumers ok with that?

With the resources these big publications have I would love to see them explore those questions. In return, analysts like me would enjoy a dialogue. Many reporters use the HARO service to get analyst input. We should ideally expand that to discussions about the present and future of work.

Our workers, especially our younger ones, need a fuller and more balanced coverage of their opportunities. 

The Future of Work will be ....fascinatingly complex

Let's face it the term "future of work" has been hijacked by technology vendors and "thought leaders" of every stripe - often peddling products and one-dimensional concepts which are spray painted to cover their distant past.

So, it was refreshing to watch this webinar where Ben Pring of Cognizant moderated a panel with Soraya Darabi, a General Partner at Trail Mix Ventures; Michael Schrage, a Research Fellow at the MIT Center for Digital Business  and Desmond Dickerson, a Manager in the Cognizant Center for the Future of Work.

They covered wide ground with 10-12 minutes each on the five broad themes in the graph below (click on graph to enlarge). My notes highlight things like portfolio careers and slash/hyphenated titles and nuggets like "meetings that can be emailed", "thermostat settings are likely to go up as you recruit more ladies", "bring a dentist to work". Well worth listening to the replay - about an hour.

Actually they just scratched the surface - 42 "From..To" scenarios are covered in the companion report.  You may not agree with everything from the panel or in the report but they will make you think how different workplaces, work automation and work policies are likely be.

And if you think all that sounds very different, consider this: One feedback point I sent to Ben. "I thought the focus was mostly on white collar work. In my conversations with manufacturing, logistics, utilities, property insurance, agriculture etc with lot more blue collar and trade skills there are very different future of work conversations from drones to initiate property claims in disasters, to AR in design, to vertical farming, to Amazon fulfillment center robotic and ML applications."  

Yes, conversations of future of work will increasingly also be industry specific, geography specific, gender specific and on.

Complex and fascinating.

Decade-end review: Enterprise Applications have NOT eaten the world

Over the last couple of weeks, as we get ready to welcome the 20s, I have been reviewing blog posts, books I have written and notes from advisory work helping clients pick vendors, negotiate contracts, review vendor performance etc from the last decade

The decade started off so optimistically. In June 2009, I had a series of guest columns from execs I called "cloud pioneers". I celebrated Workday's IPO in 2012 - not just as a bonanza for investors but for the payback to tech buyers. I called Infor a "grown-up stealth startup" in 2013 and looked forward to all kinds of micro-vertical coverage. In 2013, I was excited about "One Microsoft" - as they started to leverage a wide portfolio of technologies to redefine industry applications

Vendors have done well by Wall Street standards but as a whole, I think enterprise application vendors have underachieved using Marc Andreessen's lens when he wrote "Why Software Is Eating the World" in 2011

"Six decades into the computer revolution, four decades since the invention of the microprocessor, and two decades into the rise of the modern Internet, all of the technology required to transform industries through software finally works and can be widely delivered at global scale."

Marc was correct in part - in many consumer markets that is turning out to be true. In enterprise applications, it has not. The major enterprise software vendors have not cannibalized adjacent hardware, telecom, services markets. In fact they have barely "eaten" previous generation of applications - we are still running, for the most part, applications 20, 30.40 years old. The majority of over a million ERP, CRM, EPM, other enterprise application customers are still on-premise.

And these vendors certainly not transformed many industries - they continue to sell horizontal applications.  After 20 years of cloud applications, you see mostly white spaces in 80% of a grid across industries and geographies. There are plenty of accounting, hcm, crm applications, very few vertical applications. Global support? Hardly. Try finding vendors that will support your plants in Malaysia and Brazil and Slovakia as you expand manufacturing to meet changing middle class markets around the world. You can find decent choice in only in a handful of global markets.

I went back and looked at over a 100 case studies in 3 of my books - The New Technology Elite (2012) had looked at how every industry is making its products and services "smarter" with software and sensors; The Digital Enterprise (2014), written for Karl-Heinz Striebich, looked at how some of the biggest brands in the world were rethinking their logistics, channels and plants with new technologies; Silicon Collar (2016) looked at how automation - drones, robotics, machine learning, kiosks, wearables etc were reshaping every business process and job. These case studies described what Marc was talking about - how software was reshaping every aspect of business. Interestingly, very few of the case studies talk about the role of Oracle or Unit4 or  SAP applications. These vendors were mostly watching these transformations from a distance. 

The vendor's own numbers tell the story even better. Compare them to IDC estimates that buyers have been spending nearly $ 5 trillion a year on software, hardware, telecom etc.

Based on presentations to investors in the last few weeks, Salesforce and Workday, by far the most exciting application vendors of the last decade only lay claim to $168 billion and $88 billion of that spend, respectively. And their actual revenues this year together will be under $ 20 billion, only 8% of their own definition of addressable market. And less than .5% of the total IDC estimated technology spend.

SAP, the biggest enterprise application vendor, and in many more industries and countries than either Salesforce or Workday was not much more ambitious - it claims an addressable market of around $300 billion and will have revenues in the range of $ 30 billion.

I meet executives from these companies all the time - they run really hard, and yet the overall market keeps expanding way beyond their reach. In the last decade, we have seen Google and Facebook run away with digital advertising spend. Amazon has commoditized order taking and fulfillment functionality by offering it as a service to millions of SMEs, Foxconn, Flex and design shops have taken over contract manufacturing as products of every stripe get smarter with embedded technology, GE, ABB, Rockwell and others are getting the lion's share of IoT generated revenues. None of the major enterprise application vendors have seen much revenue from any of these markets. And in industries like financial services, many customers are back to custom building and even becoming vendors in their own right.

In this greatly fragmented market we are seeing many opportunities in "edges" and "junctions" - Zoho is finding new customers in Nigeria, UAE and other markets that bigger vendors have ignored, Plex is moving into MES as plants are increasingly modernized, Rimini is doing fine with third party maintenance as companies stay with legacy, Workfront is finding traction in new buying centers that have increasingly been digitized - Marketing Operations, New Product Development, and various corporate shared services. RPA vendors like Automation Anywhere, tools like Prism Analytics from Workday and MuleSoft from Salesforce are increasingly bridging gaps across the enterprise fragmentation. The big caveat from this fragmentation - application portfolios are screaming to be rationalized.

There are plenty of lessons for vendors from this decade. Hire functional and industry visionaries, not just good technology architects; constantly keep expanding your definition of addressable market; keep refreshing your competitive intelligence database; make your platform vibrant - like the Apple iOS store and the Amazon Fulfillment ecosystem make your platform lucrative for your ISV partners and, in contrast, shrink the labor component in your partner ecosystem.

And for buyers, the biggest need is to revisit legacy applications. Those old applications are recruiting liabilities, compliance and security risks, they cannot support innovations like multi-tenancy and machine learning. But don't just replace old with new. Look for applications which will "eat" your own inefficiencies and truly help you improve your products, and your customer relationships to eat your competitor's lunch.

The roaring 20s are back! The enterprise buffet is served and waiting to be eaten.

Trailblazer by Marc Benioff - a review

I have been reading Marc Benioff's new book and also factoring what I heard at the latest Dreamforce, Salesforce's annual conference.

At times, I felt like I was re-reading Frederic Laloux's "Reinventing Organizations" and his points about companies like Patagonia and their deep "sense of purpose". At times, it sounded like Benioff's memoir - he introduces us to his late father, Russell; his mother, Joelle; her father, Marvin and many others and the influences they had on him.

Most times though I felt like he was talking to me. The first person tone of the book brings out plenty of authenticity and comments like "Vulnerability is scary. But it also makes you stronger." I have known Marc as a technology analyst for a while and watched Salesforce take off like a rocket. He has been generous with forewords to my books and invitations to plenty of events where I have found anecdotes for my books and blogs. I chuckled even as I winced when I read how a fall had convinced him to give up on an acquisition bid for Twitter. I had a fall in a restaurant in downtown San Francisco a few days prior. No Twitter bid for me - just reminded me people over 6 feet like him and me just are a bit clumsy and have farther to fall! So, yes, I enjoyed the personal tone in the book.

What's interesting about the first person tone is over 400 Salesforce executives helped shape the book. I understand there was an elaborate process involving coded copies and NDAs. And it shows in the rich set of anecdotes in the book. Which to me was the most enjoyable part. I liked the section he calls the "Merrill Stumble" - if they had not been able to salvage that customer, it would have likely had a significant impact on thee financial services vertical Salesforce has done so well in. I liked how they creatively sold Toyota with an early IoT network called Friend, how they worked with Home Depot to think digitally about a community not just brick and mortar stores.

I also like that the book is generous by citing a wide range of his mid-level executives like Simon Mulcahy, Cindy Robbins, Srini Tallapragada, Molly Ford, Tony Prophet and many others.  

You have to admire Marc for his bravery and the stands he has publicly taken on LGBTQ issues, gender pay equality, homelessness in San Francisco and many other issues. He certainly lives up to a moniker he uses in the book - Activist CEO. He was initially uncomfortable with the term, but with so many causes he has been associated with, the tag fits.

What I would have liked more of is around the other moniker he uses - Chief Answerer of Questions. I ended with many questions reading the book

a) By now, he must be a magnet for all kinds of causes. At Dreamforce his keynote was interrupted by protesters. What filtering process does he use to prioritize which causes should get his attention?

b) A question I have asked a couple of his execs and did not get a good answer. Technology is bought based on functionality, architecture, economics. As an right-brained analyst, I doggedly tell customers not to assign more than 5% of scoring to "intangibles". Should we break that paradigm and give Salesforce a lot more credit for its being a good corporate citizen?

c) As a customer advocate, my biggest "cause" is value and innovation for customers. In the last few years, I have heard from several customer execs they could use a better internal advocate for their R&D priorities especially when it comes to vertical functionality, their quest for productivity over the multi-year contracts they sign, their concern about the cost of all the SIs and other "Trailblazers" in the Salesforce talent market economy. I would love to hear more about that.

Marc is a remarkable human with a heart as big as his hug. His conferences break the mold  - musicians, philosophers, politicians walk the corridors. So, anything he writes draws on his optimistic point of view and his fascinatingly rich network. This book definitely does. Highly recommend it - with the recommendation that you should let the left side of your brain savor it more than an analyst can allow.