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Burning Platform 108: New Frontiers for Enterprise Applications – Part 2

For the 107th and 108^th episode of Burning Platform we hosted Brian Sommer of Techventive.

In Episode 107 he presented on 3 recurring themes he is hearing from customers and vendors  - War for Talent, ESG and AI.  For my turn in this episode I provide a 25 year retrospective of cloud applications and describe massive untapped opportunities as we Re-globalize, as Industries morph dramatically and customer base migrations scream to be turbocharged

Re-Globalization

Starts around 1.52 in video below

I tackle lots of idle talk around de-globalization, de-dollarisation and de-industrialization of Germany. I discuss how MNCs are rapidly churning their country portfolios. How several vibrant new economies are the new “Tigers”. How static software vendor functionality and global presence increasingly shows them stuck in the “Old World”

Brian explains that global expansion is expensive in the traditional software sales model. The reality is hyperscalers continue to lead the way with massive global investments and  a new class of software vendors is more adept at digital channels and will support the changing globe far more effectively

New Industry Landscapes

Starts around 16.50

I discuss how the pace of industries converging and morphing has increased given all the economic shocks of the last few years. Lots of vertical edge applications have become viable and now a new wave of AI use cases is coming which will leverage industry specific operational data.

Brian believes SIs are better positioned for verticals with their account control and large investment mindsets. He says most applications vendors love to enhance their platforms with new waves of technologies. They actually find developing new applications boring; He could well be right.

I believe a new wave of vertical application vendors will emerge. And customers will increasingly build v buy such applications. The reality is one way or another there are major market chunks waiting to be won or lost. Well-designed vertical applications have shown themselves to be very sticky with revenue streams stretching decades.

Customer Base Migrations 

Starts around 30.50

I present the depressing graphic that customer bases have migrated at a very slow pace and we have ended up with a “reverse shark fin”

Brian explains that is fairly common tendency with laggards in most customer bell curves. I counter that many vendors have unusually large 50 to 80% of their customers on very old versions. Even the risks of not being in audit compliance or projecting a negative recruiting profile have not motivated them to migrate.

It’s time to leverage GenAI, RPA, accelerators, conversion factories and other automation to dramatically lower the time, cost and risk of such migrations  

Every one of the three opportunities I present is massive. However, it will take a fair amount of focus and investment. Who will step up? The next few years should see a lot of churn and chaos. Or if you see the glass as half full, lots of new opportunities

 

Burning Platform 107: New Frontiers for Enterprise Applications – Part 1

For the 107th and 108^th episode of Burning Platform we host Brian Sommer of Techventive.

Brian and I had co-hosted the first few episodes in this series over two years ago. I invited him to present on 3 recurring themes he is hearing from customers and vendors. He discussed the War for Talent, ESG and AI.  For my turn in the next episode I will provide a 25 year retrospective of cloud applications and massive untapped opportunities around globalization, verticalization and customer base migration.

1. War for Talent 

Starts around 2.26 in video below

Brian talks about the toxic employer employee environment- lots of quiet firing, quiet quitting, silent sabotage, unwillingness to explore new talent sources  etc. 

I add from my research on ‘super workers’ we have focused too much on improving employee ‘experience’ and not on productivity and outcomes. I also add we keep neglecting the aging worker talent pool and how much noise there is around when and where employees are expected to work 

2. ESG 

Starts around 11.15

Brian has recently released a book on ESG and presents several themes from that 

I have done a couple of major projects in the last year or so on the global energy market and EVs and present my perspectives on why I am concerned ESG will be another money pit ( I invoke this blog post “1 billion dollars per word’ from the Sarbanes-Oxley era twenty years ago) and a political hot potato

3. AI 

Starts around 25.02

Brian presents a pov that application vendors are not showcasing exciting use cases. He also says firms like Accenture are making significantly more investments in AI and may relegate application vendors to commodity use cases 

I summarize several nuggets from the many BP episodes on Gen and other AI I have recorded in the last few months 

In the next episode I will present on 25 years of cloud applications from 3 perspectives - globalization, verticalization and customer base migration

You may not agree with what we say but I can guarantee you will hear perspectives you have not heard before. And we show several big holes a few vendors will step up and build massive revenue sources and market capitalization around 

Educational and Entertaining! 

Burning Platform 106: The economics of Enterprise AI

For the 106th episode of Burning Platform we host Larry Dignan, Editor in Chief at Constellation Insights, part of Constellation Research. He covers a wide swath of the tech sector and we discussed the whole spectrum of the tech world which is part of the Generative AI, and broader AI wave we are witnessing. The angle was about their economics and business models

We start off talking about NVIDIA and the GPU market. He talks about alternative silicon he expects to see from AMD and others which are expected to be announced at Amazon’s Reinvent conference later this month. Later in the episode we also discuss the potential for distributed compute workloads.

Around 6.30 we switch to the world of LLMs – OpenAI with ChatGPT, Anthropic with Claude, open source and other foundational models, CoPilots and upcoming vertical and other specialized smaller learning models. We also talk about the value of data and why not every use case may deserve premium pricing.

Around 14.00 we talk about the role of hyperscalers – and how for most of them the killer app from GenAI is productivity of DevOps. We also talk about the co-opetition between hyperscaler platforms and tools and those of enterprise application vendors. We talk about impact on internal IT developers and those of outsourcers

At 20.00 we talk about Enterprise Application Vendors and the AI use cases we are seeing from them. We discuss how even after decades of cloud applications 75% of most data is still in on-prem, often in custom applications.

Around 25,00 we discuss how corporations are starting to monetize unique data streams. If Data is the new Oil, they will either sell their crude to refiners or refine it themselves and sell it in the form of gasoline, diesel, feedstock for chemicals etc.

Around 30,00, we discuss what’s coming next. Larry says 2024  “is going to be the year of (tying up plenty of ) loose ends” He is so right - so many legacy systems to modernize, so many use cases to evaluate, so much new compute capacity to procure.

We end up talking about quantum computing and NVIDIA again is well positioned. Finally, we end admiring innovators who have come up with new applications in the last few years navigating the chaos that COVID, Ukraine and other shocks have created.

Rapid fire 40 minutes, Really invigorating!

Burning Platform: Insights from Fall 2023 Industry Events

For this 104^rd  episode of Burning Platform, we host Pete Tiliakos of 3Sixty Insights and Jon Reed of Diginomica. I invited them both as we approach the end of Fall slate of Industry Events to get a distillation of perspectives from 25 or so events the three of us were privileged to be part of.

It is a rapid-fire 40 minutes and we broadly go over 5 topics. As smart analysts are prone to do, we have strong opinions, we disagree on several points, and take off on some tangents including one on the potential global scenario of “de-dollarization” starting around 31.00

The first section summarizes our “sentiment” and the attendee vibe we picked up from the events. Vendor AR and event managers will get some good, if contradictory, nuggets from this segment

Starting at around 9.15 we discuss the barrage of Generative AI coverage at most of the events. Lots of use cases and other angles here you may not have previously considered

Starting at around 18.50 we ask whether vendors are too focused on AI and not enough on transactional, vertical, localization and other customer needs including what Pete calls “blocking and tackling”

Around 27.20 we discuss economics of software projects. It is a timely discussion because there are expectations of premium AI pricing in the midst of the reality that IT budgets are under macroeconomic pressures. BTW, my episode with Geoff Scott, CEO of ASUG earlier this week also covered the economic angle extensively with a focus on the SAP customer base.

At 34.00 we have a broader conversation around automation and future of work, beyond AI and RPA technology.

Very insightful – no wonder both Pete and Jon are repeat guests on my episodes.

Burning Platform: Another Inflection Point for SAP Customers

In this 103^rd  episode of Burning Platform, we host Geoff Scott, CEO of ASUG and discuss a number of recent SAP announcements and what they mean to the ASUG and broader SAP customer base.

We discuss the SAP Q2 earnings announcement with its focus on product and pricing and the impact of RISE and GROW on ECC and early S/4 adopters. They have to factor change in one direction or another.

Next. we discuss Gen AI and other forms of AI. We talk about potential AI and automation to streamline SAP implementations, upgrades and other projects. We talk about planned Joule use cases and AI economics. More change.

We discuss stylistic differences in the way ASUG communicates with SAP executives compared to DSAG and other user groups around the world. Having dealt with vendor sensitivities for decades in my analyst role, I personally find SAP to be one of the more mature ones in dealing with all kinds of feedback. Some vendors only want positive comments – must be nice to have 100% market share😊

We discuss the sentiment in ASUG customers given all the global challenges we are facing. More changes.

However, as I tell Geoff we saw incredible innovation in the middle of so much chaos in the last few years caused by COVID, Ukraine crisis, climate change urgency and massive digital transformation – as vividly seen in Business as Unusual by Thomas Saueressig and Peter Maier we covered in a previous episode that Geoff hosted.

Importantly, we also find time to discuss baseball and college football.

As always, it is an educational and entertaining episode with Geoff – no wonder he is a regular guest in this series!

 

Burning Platform: All Things GenAI

In this 102^nd  episode of Burning Platform, we host repeat guest Tamas Hevizi, now in a new role heading the Office of the CEO at Automation Anywhere. As he says it was perfect timing with his focus on strategic initiatives with all the buzz around Generative AI

We explore many different aspects of GenAI and AI in general

We talk about a wide range of use cases across several industries - advertising, financial services, healthcare, railroads, retail and semiconductor among others 

We talk about the value of data. As he says we need to move away from ‘safe areas’ of the enterprise we have traditionally been comfortable in. Let’s focus instead on so many problems we haven’t been able to solve in the past 

We talk about technologies from Anthropic Claude to Microsoft CoPilot and approaches of enterprise vendors like Salesforce and Workday.

We talk about the economics of AI. He says ““There is this race going on in AI between data and compute. I don't know who's going to win that but so far, I'm betting on the hyperscalers and not the LLMs.”

We talk about the ethics of AI. Lots of perspectives you likely have not heard before.

Well worth spending half an hour on our back and forth. 

We end with the comment that we need to reconvene in a few months. This market segment is evolving so rapidly that we will likely have a completely different set of perspectives!

Burning Platform: Enterprise Architecture & Communities in SAP world

In this 101st episode of Burning Platform, we host Paul Kurchina, SAP Community Evangelist, Connector and Analyst. Paul has been a fixture in SAP World for 3 decades – as a customer, as an SAP Mentor, active in various user groups around the world, omnipresent at various Sapphires, and more recently conducting 19 road show gatherings across N. America and others around the world.

We spend the longest time talking about enterprise architects and their complex job as application portfolios keep growing and as application lifecycle management becomes more critical. We also discuss SAP’s recent acquisition of the enterprise architecture tools company, LeanIX, the impact of new AI applications on the EA role, the changing world economy and leveraging SAP’s global functionality and reach.

We kick off talking about communities and their changing role. He walks through his 8 Cs of community building  – conversations, coaching, content etc. He says “the half-life of education has gone down tremendously given all the rapid changes in technology”  In addition to curriculum, coaching is as important given the multiple generations of talent in the SAP community with its 50 year history and widespread customer base.

As he says “Community was important in the early days of R/3. We'd get together as customers to talk about different aspects of our journeys, whether we were implementing, or post go live, deriving value … we used to think R/3 was pretty complicated back in the day. Roll forward, 30 years later, oh, my God, it's off the charts. The importance of us learning together and working together, especially in the age of AI, has never been more important.”

We next discuss the changing SAP ecosystem which has exploded beyond the big SIs. We discuss some of the strategy firms, robotics firms, SAP.iO startups and newer players as what he calls the SAP “solar system” keeps expanding.

Finally, we talk about the resurgence of focus on Centers of Excellence.

Every step of this 30 minute conversation. I felt in awe of SAP’s vital role in our amazingly complex, global economy and admiration for enterprise architects who keep up with all the rapid changes and especially folks like Paul who have mentored so many for so long in the communities that make SAP run.

Burning Platform: Platform Wars turbocharged by Gen AI

In this 100^th episode of Burning Platform, we host George Gilbert, Principal Analyst at TechAlpha Partners. He has been a long-time tech financial and industry analyst and has focused more recently on the evolution of platforms and I invited him to discuss the likely impact of Generative AI on hyperscalers, ISVs and outsourcers.

I have known George since his Wall Street days in the 90s and every conversation with him gets me energized. This one was no different. To start with, he is extremely excited about Gen AI

“Gen AI is the biggest accelerant this industry has ever seen. We've never had a new technology that accelerated both demand and supply…

 It allows software to be used in new contexts and by new people. Because you can interact with it in natural language soon, it'll be like an agent, like a Siri that can, you can give instructions to it, and it'll go off and do stuff on your behalf. That's accelerating the demand side.

Gen AI, is its first real killer application, other than as a conversational interface is to write software. It doesn't do it completely for you. But it dramatically raises the productivity of developers, and not just like code completion. But writing the glue code between the building block services of the hyperscalers and writing the code to deploy and monitor and soon remediate applications. It doesn't turn Infrastructure as a Service completely into Platform as a Service. But it does start to close that gap and the complexity.”

With that as a nice setup we discuss the world of platforms, the coopetition between hyperscalers and ISVs, the coming pendulum swing from buying to building applications, especially industry and company specific. We discuss the likely impact on outsourcers as low code development becomes increasingly ubiquitous and likely AI use cases that will get prioritized.

He also touches on the economics of AI infrastructure

“You know, the scarcity of NVIDIA GPUs is exactly like Cisco was in the late 90s. People are double and triple ordering. Because they want to make sure they get some allocation. There's a lot of work going on to make the inference costs come down, way down. We're already hearing rumors of order cuts to Nvidia, at least, you know, at the margin. This could be rumors, but we're gonna solve that problem. That's not where the value is being created. And by the way, we saw from, from Google, that they anticipated this problem like 10 years ago and started designing their own TPUs. So they're not constrained by the GPU shortage.”

We cover a lot more ground in this 30 minute episode. Agree or disagree with us, it will make you think of other angles to the rapidly evolving world of Gen AI and AI, broadly.

Burning Platform: Zoho’s “Transnational Localism”

In this 99^th episode (and 98^th yesterday) of Burning Platform, we host 3 Zoho global executives: Carla Garcia, Head of Latin America; Suvish Viswanathan. Head of Marketing for UK and EU and Ali Shabdar, Regional Director of MEA.

Zoho announced yesterday they have reached the impressive 100 million user milestone (from just 1 million 15 years ago)

CEO Sridhar Vembu, in an interview, said

“We have an impressive innovation pipeline covering the next 10 years and are investing in deep technologies to serve billions of users around the world…”

The conversation with the 3 executives brings out how Zoho’s unique approach to globalization – what they call “transnational localism” - has accelerated growth in the last few years and will be critical to reach the billion user milestone.

In the first episode yesterday, they talked about how they target across the 150+ countries in their 3 focus regions. Ali mentioned Bahrain, Israel, Jordan, Kenya, Nigeria, S, Africa, Saudi Arabia and UAE in his comments. Suvish mentioned developed economies in Europe and also emerging demand in Southern and Eastern Europe. Carla described how Zoholics events help in a culture where customers prioritize face to face interaction, and how Zoho is unafraid to leverage billboard and other analog marketing channels.

In episode two today we drill into 6 additional topics

• How they prioritize localization for so many countries (language, currencies, unique laws and business practices)
• Liaison and collaboration with host governments and commitment to their digitalization journey
• How they customize economics and licensing to many local demands
• Relationship with hyperscalers like Microsoft, Google and AWS which are shaping DevOps around the globe
• How their regions are reacting to the GenAI phenomenon
• How CIOs in their region are adopting low and no code tools to build v buy applications

Worth watching both episodes – they cover so much ground. In a recent post I wrote there is a lot of glib talk about the collapse of globalization. I maintain we are going through a re-globalization. This episode captures Zoho’s unique approach to this new world.

 

Burning Platform: Globalization and Zoho’s next milestone: a Billion Users?

In this 98^th episode (and 99^th tomorrow)  of Burning Platform, we host 3 Zoho global executives: Carla Garcia, Head of Latin America; Suvish Viswanathan. Head of Marketing for UK and EU and Ali Shabdar, Regional Director of MEA.

Zoho announced today they have reached the impressive 100 million user milestone (from just 1 million 15 years ago)

CEO Sridhar Vembu, in an interview, said

“We have an impressive innovation pipeline covering the next 10 years and are investing in deep technologies to serve billions of users around the world…”

My conversation with the 3 executives brings out how Zoho’s unique approach to globalization – what they call “transnational localism” - has accelerated growth in the last few years and will be critical to reach the billion user milestone.

In the first episode below, they talk about how they target across the 150+ countries in their 3 focus regions. Ali mentions Bahrain, Israel, Jordan, Kenya, Nigeria, S, Africa, Saudi Arabia and UAE in his comments. Suvish mentions developed economies in Europe and also emerging demand in Southern and Eastern Europe. Carla describes how Zoholics events help in a culture where customers prioritize face to face interaction, and how Zoho is unafraid to leverage billboard and other analog marketing channels.

They use the term “trust’ often which is reinforced by their regional data centers, clear commitment to data privacy, their private ownership, fair pricing and their unique culture.

In episode two, tomorrow we will cover 6 additional topics

• How they prioritize localization for so many countries (language, currencies, unique laws and business practices)
• Liaison and collaboration with host governments and commitment to their digitalization journey
• How they customize economics and licensing to many local demands
• Relationship with hyperscalers like Microsoft, Google and AWS which are shaping DevOps around the globe
• How their regions are reacting to the GenAI phenomenon
• How CIOs in their region are adopting low and no code tools to build v buy applications

Worth watching both episodes – they cover so much ground. I end the session tomorrow with this comment:

“I am hearing a lot of glib comments like “globalization is collapsing”. Or Germany's getting “de-industrialized, or after Brexit UK is dead, or the US is going through “de-dollarisation”. I keep telling them, we're going through a “re-globalization” phase. Multinationals are moving resources around – they leaving Argentina, they've been forced to leave Russia, they are moving the supply chains away from China. There's a lot of change going on. And then you have the emerging economies. Kenya is coming up with new consumers, new developers. Ali, you probably have six countries in your region that are blazing new trails. We've got places like Indonesia, you know, there's so many emerging markets that are going through a re-globalization phase.

So I love talking to folks like you that are on the ground. Seeing that happen. Keep the faith. We'll have you back in a few months. Let's do this every few months.”