deal architect

Burning Platform: Strategic Insights on Zoho Finance & Operations Platform

For the 115th episode of Burning Platform, we host Sivaramakrishnan "Siva" Iswaran, who heads the Finance and Operations Suite at Zoho globally

At the recent ZohoDay24 event, I saw Siva present on Financial and Operational capabilities they have been investing in. Much of that was under NDA so I invited him to present below a shorter version. He showcases Zoho’s growing ambitions across several dimensions: localization for many fast growing countries, its growing ecosystem, expanding beyond its SME focus to the Enterprise Market and eCommerce, Payments and other financial services which are allowing them to branch into many verticals.

Zoho has been growing core accounting capabilities since 2011 when it introduced its Books product. Today in addition it has Expenses, Billing, integration with Contracts, Subscriptions, Inventory, Payroll,  Practice Management for services firms and other capabilities in its growing portfolio – see complete listing here He adds their platform allows for even more breadth by being customizable, extensible, automatable and increasingly AI-powered.

Starting at 11.44, he talks about their global footprint even as many other vendors are retrenching. He talks about eInvoicing in India, Saudi, Mexico, corporate tax support in UAE and other localizations.

At 15.30, he presents on the exploding ecosystem around Zoho – see image below

At 18.27 he talks about plans for the Enterprise Market and candidly acknowledges the very different approach they will need to deliver to a much larger scale, to the segment’s expectations of “solutions”, their comfort with a direct sales model etc.

I especially liked the section starting at 21.50 where he talks about global disruptions around financial services to include Payments, eCommerce and Credit. He highlights alternate payment “rails” like UPI maturing to challenge the Visa/Mastercard duopoly and their eye popping economics and about Zoho’s plans for a Unified Payment Solution. He discusses ONDC - Open Network for Digital Commerce - in India which is aimed to challenge proprietary eCommerce players and also include ride-share, food deliveries and other services.  He also discusses OCEN – Open Credit Enabled Network - which enables micro-loans and other lending markets.

Around 41.00 I ask him when the extremely ambitious vision will start to be publicly fleshed out.  As if that is not challenging enough, I also talk to him about opportunities in “servitization” in capital intensive sectors that are moving to long-term, outcome-based business models.  

Is Zoho biting off too much? As he discusses, they are used to low margins, they are adapting their SME focused digital channel to very different enterprise selling, and I have written plenty about their unique culture, their curiosity and willingness to continually experiment.  

As I tell him at the end, I look forward to hosting him every few months to get an update on many of these initiatives. It is already a fascinating conversation and future ones will be even more so as they share their product and market expansion. 

 

Burning Platform: Raising the bar for Analyst Summits

For the 114th episode of Burning Platform we host Sandra Lo, Global Corporate Communications Head at Zoho and Mariana Nino, Manager of their new McAllen, TX office, which represents their ethos of global expansion in many growing markets but also encouraging rural renewal in each.

They discuss the packed agenda and complex logistics of assembling 200 analysts, customer and company executives from around the globe to their analyst summit, ZohoDay24 in the Rio Grande Valley, at the US/Mexico border.

As I have written before the analyst day is my favorite vendor event. And vendors have become increasingly creative with the format, location, participants etc. since Workday pioneered the concept in 2010.

Zoho had taken a small group of analysts to HQ in Chennai last year. And that week required incredible planning and I thought that would stand as a high watermark for a long time, but this session came close because it had 8 times more analysts and 3 times more customer executives to coordinate and a wide set of social events.

Several folks have posted on sessions (see the 16 page agenda of panels, sessions, 1:1 meetings and social events here) and I shared live from the event and I am starting to gradually interview several Zoho and customer execs. Be sure to catch many of those.

This session with Sandy and Mariana focused more on the intricate planning, the coordination with local vendors over a wide swath of real estate, travel into 3 local airports and a lot more.

It is particularly interesting to listen to them talk about why they picked the sites for activities outside the convention center.

Some of the experiences they describe include

• Mariachis at the Opening Ceremony at the Oval Park
• The historic Spanish mansion and the path for migratory birds and butterflies at Quinta Mazatlan
• The spectacular BBQ, music and dance at The Grove in Rio Grande citrus country
• The visit to the SpaceX launch facility in Boca Chica – the "Gateway to Mars"

Watch the 40 minute video in awe - then take a nap. You will be exhausted when you listen to how much they packed in!

Definitely raised the bar once again for Analyst Summits!

Burning Platform: Software Trends in Asia-Pacific

For the 113th episode of Burning Platform we host Gibu Mathew, VP and GM, Asia Pacific for Zoho. Like many other Zoho executives he boasts career longevity and a product development start in the company, He now has a field role in an important global location, Singapore.

One of our research agenda focus areas for 2024 is Re-globalization : “MNCs are rebalancing their country portfolios, there are new emerging Tiger countries growing at rapid pace, hyperscalers have made DevOps a global competency – and all this opens up new opportunities for software vendors and service providers, many of which have mostly focused on English speaking countries and back office functions”

I have previously interviewed Zoho regional leaders in the Middle East and Africa, in Latin America and in Europe (see here and here). So, I was excited to spend some time with Gibu at the recent ZohoDay event and I invited him to record the session below.

He makes several striking points

While most vendors include China, India, Japan, Australia, New Zealand in their definition of Asia Pac, Gibu’s territory is more focused on SE Asia, particularly the ASEAN countries and a few others like S. Korea, Sri Lanka and Nepal. Zoho does very well in these fast growing economies. Other executives focus on the other large markets.

Of course, with so many countries come the complexities of multiple languages, scripts, currencies and regulations. We discuss how Zoho internally prioritizes investments across so many applications, their platform and customizations unique to countries and his personal lobbying style within Zoho to ensure his regional customers are catered to.  

He discusses how local economies are encouraging digitalization, especially in the SME sector.  He discusses collaboration with agencies like IMDA in Singapore and DEVCON in the Philippines.  

We discuss the advantages of being based in Singapore. The diverse talent pool, the impressive travel hub, the business friendly government, their incentives to do business with the region and a city state which redefines itself every few years with a changing globe are some of its unique characteristics.

It is a fascinating 25 minute conversation – as you can imagine we are talking about a wide range of markets - massive countries like Indonesia to tiny but affluent ones like Brunei.

Burning Platform: 2024 - the year ahead for entrepreneurs

For the 112th episode of Burning Platform we have Ton Dobbe of Value Inspiration.

Ton and I regularly participate in our respective podcasts and video series. He is in constant touch with entrepreneurs in the EU discussing go-to-market, operational metrics and other hands-on topics especially in his CEO Mastermind sessions.

I always enjoy his realism and his prolific writing. We somehow missed connecting last year and am glad we got together early this year.

We discuss below three themes he is discussing with his clientele.

We start off with what Ton calls “funding freedom” around 4.45. How to navigate a complicated funding environment where only AI projects appear to be getting funded. He emphasizes customer revenue-based funding and not seeking financing out of desperation. We discuss how VCs have various milestones and metrics which are very different from customer expectations of vendor viability

Around 15.20 he focuses on new metrics like ARR per employee. While I thought he was focused on productivity, he has a much more interesting pov around AI augmentation of employees and we discuss GenAI use cases which don’t just focus on SG&A but the whole P&L, especially the revenue angle.

Around 20.00. we switch gears to what he calls the “resilience muscle.” We have had “crisis after the crisis thrown upon us” in the last couple of years – more volatility than ever before in history and his next book may focus on that specific topic. On the other side, we also discuss complacency in technology world.  I make the point that Industry Analysts have not evolved their definitions of product categories and criteria for Magic Quadrants and Waves and that Wall Street does not provide premium valuations for “new” and against legacy product revenue. I invoke 3M, ranked 116 in the Fortune 500, which is driven by a metric that a third of sales should come from products that didn’t exist five years ago.

Around 29.00,  I present slides on 4 topics on my 2024 research agenda – the short version. They include opportunities around Re-globalization, Massive Vertical Industry transformation, GenAI and broader automation and Modernizing Customer applications. Watch the fuller version of that segment in this Analyst Cam episode

It is a very wide ranging conversation – like most I have with Ton. Always learn new stuff from him.

 

Burning Platform 111: GenAI – a benchmark study of early projects

For the 111th episode of Burning Platform, we host Frank Scavo and Dave Wagner of Avasant Research. With Computer Economics, now part of Avasant, they can boast a long track record of tracking technology trends and benchmarking various aspects of IT spending, and staffing.

Here they summarize findings from a survey of early Generative AI projects. The executive summary available for download here describes it as their  “first survey-based report on generative AI (Gen AI) strategy, spending, and adoption” and it provides “metrics on how much enterprises are spending on this ground-breaking technology, where they are spending it, and how they are governing it.”

In last year’s episodes of Burning Platform  (see index of all episodes here) I hosted a number of guests who covered various GenAI use cases, economics, risks and other perspectives. This is much more field research based on input from nearly 200 companies across 6 industries – healthcare, retail, manufacturing, professional services, BFSI (banking, financial services and insurance) and IT Services and Solutions

They highlight several unique angles on GenAI projects

At 10.50 they discuss governance models – are these projects centralized, are they being run by IT or federated, is the governance different by industry etc.?

Starting around 17.40 they discuss use cases by industry. While many of the early projects are somewhat horizontal and focus on customer service, procurement and HR, I liked that they broadened their focus to cover revenue angles and industry operations, not just SG&A. Several use cases are fairly ambitious – including one which described a complete replacement of an internal procurement function.

One major aha – lots of companies view software development as their most exciting GenAI use case. More vendors should be talking about impact on their implementation, application management and maintenance efforts but likely are nervous that customers will want those savings to be passed along.  

Around 26.15 they switch focus to risks from GenAI.

One big finding from the survey - very little concern about job losses and in fact, expectations of job increases. I interpret that as healthy – it comes from a focus on revenue use cases, from project ownership high up in enterprises and the realization that automation tends to target individual tasks, and transform jobs as against completely replacing the human element. Media, academia and politicians tend to cling to the job loss point of view. We also invoke my book, Silicon Collar, which looked at a century of automation and included many examples such as how UPC codes led to an increase in CPG and grocery jobs, how ATMs did not eliminate banking jobs right away etc.

The GenAI space has been moving very rapidly as the episodes last year showed and I hope Frank and Dave keep expanding and updating this benchmark every few months. Enterprise buyers, for a change, appear to be ahead of enterprise vendors in terms of expectations from an emerging technology. And hyperscalers and vendors like Nvidia, Google, Meta and others keep pushing the boundaries of the “art of the possible” and moving beyond AI to AGI.

They would welcome more use cases and other GenAI perspectives for the next edition. Please free to reach out to either of them on LinkedIn

Very informative 37 minutes.

Burning Platform 110: Market Engineering, not just Product Engineering

For the 110th episode of Burning Platform we host Bruce Cleveland of ForzaGroup Consulting. You may remember Bruce from his influential roles at Siebel, C3.ai and Oracle and as an investor at Wildcat Venture Partners.

You know I am constantly encouraging vendors to explore new markets – GenAI use cases, vertical edge applications, emerging countries etc. It was nice to have Bruce put guardrails around enthusiasm for new market opportunities. Good product engineering is table stakes these days – what you need in addition is what he calls “market engineering” – to include thought leadership, category creation, messaging, positioning, and storytelling.

He explains the shockingly high rate of startup failures and even that of new products of successful tech vendors. Every company goes through 3 phases - go-to-product, go-to-market, and go-to-scale. Over the last couple of decades the investor community via angel investors, incubators and accelerators has provided plenty of guidance for the go-to-product phase. Strategy firms like McKinsey can help you scale a business. The support for the third phase has been elusive.

Bruce met over a thousand startups in his time as VC and came up what he calls “slide 29”

“I would find the 29th slide of their 30 slide deck was often the financial one. Usually showing a hockey stick. I would go “you were able to go in great detail about the product, your new build, tell me about the market you're going to engineer because that's going to end up costing more than what it takes to build the product”. And so I call this slide 29, (riffing on) the famous Sydney Harris cartoon which has a bunch of math, then a miracle occurs.  “So what miracle is going to occur that goes from you building the product to you having a billion dollar plus company, as an outcome”, and typically, most of the startups I started to work with didn't really have great answers to this”

He had distilled his 25 years of operating experience and a decade as a VC in his book, Traversing the Traction Gap and he summarizes the concepts in the 40 minutes below. I had interviewed him in 2019 when the book was released and you can see his passion for the topic has not waned.

My favorite part starts around 13.40 where he explains the many TLAs, pillars and metrics in the book. He also explains how they relate to the jargon of funding rounds (A, B etc.) and also to Geoffrey Moore’s “Cross the Chasm” terminology – both of which the technology world is intimately familiar with. You can download many of the infographs he uses from this site.

The conversation below is just a teaser on his font of knowledge which he will be sharing soon in a course at Stanford and through his consulting assignments. However, it is 40-minute thought-provoking primer for anyone exploring new markets. And it is a great way to present to someone like me who is always pestering vendors to talk about new use cases, verticals and global markets.

Burning Platform: Workday Rising – Healthcare Panel

We recorded this 109th episode of Burning Platform at the Workday Rising event in San Francisco. We hosted Yolanda Redmond, VP Supply Chain, Vanderbilt University Medical Center (VUMC) and Keith Lohkamp, Senior Director, Industry Strategy at Workday.

VUMC in Nashville, TN is a perennial qualifier for the annual US News Best Hospitals Honor Roll. It is nationally ranked in 9 adult and 10 pediatric specialties and rated high-performing in 2 adult specialties and 19 procedures and conditions.

I spent some time with Yolonda at the event and found her very warm and hospitable – a very caring face for VUMC. In the video, she elaborates on their service ethos and what drives the hospital to deliver that level of care at their scale. As of 2022, the health system had more than 3 million patient visits a year, a workforce of 40,000, and over 1,700 licensed hospital beds.

Supply chains mean different things in different industries and I asked Yolanda to elaborate on her definition. She explains it has to ensure a wide variety of supplies and services at the right time and place across clinical, research and administrative areas. VUMC is a general medical and surgical facility and is also a teaching hospital.

Given the financial pressures on the sector it is also about ensuring cost efficiencies.

She oversees the whole procure to pay cycle, and that goes beyond the logistical aspects. Workday is providing them real time data on a unified platform to support the entire process. She emphasizes the time factor - ensuring supplies are available as promised, but also ensuring vendors are paid on a timely basis. She also mentions the collaboration benefits across supply chain, finance and hr.

Of course, COVID had a dramatic impact on the healthcare sector and that has heightened expectations of supply chain resilience. That puts pressure on vendors like Workday to make sure we don’t have a repeat of many of the issues the sector encountered during COVID. As Yolanda explains, a tornado had already impacted supply chain operations at VUMC just prior to COVID so it clearly was a traumatic phase for them.

Keith explains Workday has invested heavily in visibility into critical products, has improved demand planning, supports substitution of suppliers and SKUs and enables the sustainment of price points among other features.

Keith also elaborates how Workday’s Accounting Center product which has seen enthusiastic adoption across its financial services customers is allowing healthcare to streamline net patient revenue calculations.

AI and ML took top billing during the event. Both Yolanda and Keith talk about the opportunities around automation, anomaly detection and other use cases. Keith also talks about governance required to ensure trust in the data and related machine-enabled inference. 

We cover a lot more ground in the 28-minute conversation below. I would like to bring them back in the future to explain how AI use cases are delivering value.

It is really nice to see Workday develop richer functionality for verticals like healthcare, which is a key component of its focus on the services sector of the economy.

 

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!