deal architect

Burning Platform: Enterprise Software in Emerging Markets

In the 71st episode of Burning Platform, we host Hyther Nizam, President, Middle East and Africa for Zoho.

Let me start off by saying I became a fan of Zoho way back in 2006 after this session with the CEO, Sridhar Vembu. Over the years I have written plenty about their business model,  his leadership style,  his humble philosophy about life and rural revival and what he calls “transnational localism” 

I had a chance to talk to Hyther about an exciting new product release (he also wears a product development hat) announcement planned for early March. I asked him if we could also talk about “transnational localism” as applied to his region which spans 10 countries across the Middle East and Africa. He does in the conversation below and you have to marvel at the product enhancements (like RTL – right to left UX needed for Arabic and other scripts), the sweat equity, the pricing subsidies and other investments Zoho makes in developing each market.

Contrast that to most other enterprise software vendors who try to replicate their expensive direct sales, partner heavy model when they look at global expansion. Additionally, most of them prioritize English speaking countries in their global plans. No wonder most SaaS applications, even after two decades, have very little customization for most of the world’s local languages, currencies and regs.

Zoho’s investments in MEA are clearly paying off as Hyther shares. His is one of the fastest growing regions at Zoho. Not sure other vendors can match their pricing model, but there are several philosophical and behavioral attributes they should consider emulating.

Personally, I am in awe of how Hyther managed to accomplish so much with global travel constrained in the pandemic affected last couple of years. And how he seems to fairly easily juggle his product responsibilities as well.

More on the product announcements next week.      

Burning Platform: Experiential Design in Enterprise Software

In the 70th episode of Burning Platform, we host Jeff Gelfuso, Workday’s first ever Chief Design Officer.

The pandemic has exposed all of us to the most honorable of customer services and in reverse, some incredibly disappointing experiences – in what I have called COVID copouts and Brexit BS. I worked on a project last year where I had a chance to ask a number of executives to catalog their good and bad personal experiences and I heard plenty around eCommerce, auto dealers, travel and other services. Accenture's design agency Fjord, has coined a term "liquid expectations" — "when you experience a service in one industry, it raises the bar for what you expect from other industries." I have a corollary to that: employee experiences play a huge part in customer experiences. Their frustration, fatigue, fear all negatively affect how they manifest themselves to the outside world.

With that backdrop, it was nice to host Jeff who has significant product design and R&D experience in the consumer tech world at Microsoft, Facebook and Amazon. It is a fascinating conversation about the enterprise tech view of experiences and how wfh and hybrid workplaces have complicated the thinking.

Jeff talks about how he spent the first few months at Workday talking to over a hundred customer executives about their experiences and expectations. He also talks about the test bed of Workday’s own employee-centric culture and how that is helping his design thinking. His personal, virtual on-boarding experience and their HR moves like “Thank-you Fridays” during the pandemic are guiding his thinking. And how the HCM experiences are being adapted to Workday’s planning, financial, procurement and other applications.

I like his point about thinking about “end to end experiences” and being humble enough to recognize that you will never be able to anticipate how every user reacts to your software. And the resulting need to think about multiple roles, tailored experiences and to build flexibility into your design. We also discuss natural interfaces and the need to weave in external collaboration tools like Slack and Teams (and soon Metaverse tools).

He has a noble goal – simplification. He defines it as not pretending you can eliminate enterprise complexity, but pushing it more to the background. Other competitors have long promised ‘Run Simple”. Jeff is doing it in a vastly more complicated, hybrid workplace with heightened employee expectations.

Kudos to Workday for recognizing the need for a visionary design officer and recruiting someone from the consumer tech world. Jeff particularly impressed me with his empathetic approach to experiential design.

Analyst Cam: Salesforce – Industry Solutions

As we have moved to virtual briefings, I have increasingly been excerpting short video segments (with permission ) as part of my Analyst Cam series. 

This time it is Jujhar Singh, EVP and GM, Salesforce Industries. He presents an update on their vertical clouds – he presented last year in the Burning Platform series

He covers a wide range of industries. He drills into micro-verticals within Financial Services, one of their strong focus areas, talking about Rocket Mortgage and investment banking. How they are helping government agencies reinvent themselves. How Slack and conversational interfaces are influencing higher ed and healthcare. How their own experiences with nonprofits and internal experience with philanthropy and net zero programs are helping verticalize ESG for various sectors. How their anonymized data across 150,000 customers in the cloud and Einstein AI are allowing for “Insights” – like a Shopping Index from over a billion shoppers and Pandemic Insights for Manufacturing. It is allowing them to move customers to more ‘impact-based” thinking – their version of “outcomes”

I like how he emphasizes their ISV, hyperscaler and SI partners.  His colleague Tyler Prince had spent much longer on their ecosystem here. Throughout the session you see the state of the economy – hybrid, working, shopping, learning from anywhere from an industry lens.

I like how he responds to my question about the vertical competitive landscape. He says “the more the merrier” and it is "heartening" that competitors are validating what Salesforce has been executing for the last few years. That reminded me of the Pulitzer Prize winning "The Soul Of A New Machine" by Tracy Kidder. It described an ad that Data General produced but never ran. It read:

"They Say IBM's Entry into Minicomputers Will Legitimize the Market. The Bastards Say, Welcome"

Jujhar is too polite to say that but he does a really nice job in half an hour given the wide scope he covers.

Analyst Cam: Altec - Connect right people at the right time with the right document

As we have moved to virtual briefings, I have increasingly been excerpting short video segments (with permission ), as part of my Analyst Cam series. 

This time it is Don Howren, President & COO at Altec, Inc.

Most ERP, CRM and other enterprise vendors like to call themselves "books of record". More often than not, they just have the meta data. The record itself is in some document system - often messy paper files, or in an unlinked digital archive.

Don presents on his DocLink product aimed at the SME market. It could used as a standalone document management system with multiple tags, rules engine and configurable forms. However, the solution becomes much more powerful with its integration with Acumatica, Epicor, Microsoft Dynamics, Sage and SAP Business One. It is designed to support cloud and on-prem integration to give customers deployment flexibility. There is a lot of rich data which is available independently without cluttering the ERP or other enterprise system.

I particularly like the wide range of use cases he discusses including Payables, T&E, Receivables, Seasonal recruiting, Disaster recovery,  Regulatory compliance and Annual audit prep. Of course, over the pandemic, it has facilitated all kinds of remote access to documents, with appropriate security, as everyone has moved to WFH.

Connect right people at the right time with the right document. The value proposition is simple and compelling, especially for paper-intensive processes.

ERP - Generation Next

I read Jon Reed's  Diginomica interview with Rondy Ng, Senior Vice President, Applications Development at Oracle. He cites some very large cloud ERP customers - Bank of America/Merrill Lynch, FedEx, Kroger and Albertsons. Encouragingly, he also cites plenty of global coverage. Good to see that traction.

But what functionality have they deployed? I saw General Ledger mentioned a couple of times along with procurement and analytics. But no mention of manufacturing, logistics, banking/brokerage functionality, micro-fulfillment, or reverse logistics. I have heard Larry Ellison similarly use the ERP moniker in earnings calls and event keynotes, but never really discuss any operational functionality. Leads me to ask: Is that the new, shrunk definition of ERP - core financials and possibly human resources?

While I was pondering that, I found myself going down memory lane to 1995 when I joined Gartner. Gartner had coined the ERP term and they had made a conscious effort to bring in several new recruits with business process expertise. Tom Ryan, as part of the ILS service, brought warehouse management and broader logistics experience. Chris Jones, part of CIM, brought process manufacturing. As part of AAS, I brought financial and hr expertise from years at Price Waterhouse. There were several others who focused on PDM, MKT and other functional areas. We definitely contributed to a proliferation in TLAs but I know for a fact we drove vendors to sharpen their process breadth and depth.  Talking of TLAs, I had coined one - AMM - Addressable Market Myopia for vendors who were narrow in their functional reach, but did not dare propose it to Gartner censors :) 

When I left in 2000, I was confident Gartner would expand its ERP focus beyond manufacturing sectors. After all, in most western economies, nearly 3/4 of jobs were in the service sector. And each has unique books of record - insurance needs those around policies and claims, health care had unique clinical and compliance requirements and so on. The manufacturing sector itself was morphing significantly. The products are smarter with embedded software and sensors. The plant was becoming more autonomous. Asset management was no longer just about calculating depreciation for the CFO. It is about predictive maintenance, more sophisticated servicing via digital twins and augmented reality.

But Gartner has only inconsistently focused on this functional evolution. Many of the process experts they had hired in the 90s were gone by the end of the decade.  If anything, it swung back to its IT comfort zone and has emphasized the architectural aspects of cloud computing. And, almost on cue, many ERP vendors made transitioning to the cloud their major focus of the last couple of decades. Functionality and process expertise took a back seat. No wonder, some vendors are shrinking their definitions of ERP to suit their limited functionality. And CRM, EAM and other categories have encroached on spaces ERP vendors have neglected.

I sense a new generation of ERP coming. The pendulum is swinging from a technology focus to a functional focus. The pandemic has sharpened industry specific needs. Telemedicine in healthcare, distance learning in higher education, virtual open houses and digital mortgages in real estate are just some of the examples.

Just last week, I had several reminders of the functional evolution. Zoho gave me a pre-briefing on its updated Zoho One suite. It will officially be announced in a couple of weeks, but the suite has now grown to 45 applications. SAP has lined up 9 briefings for me across its verticals. I met with Mike Ettling, CEO of Unit4 and we discussed how his verticals are evolving. I was part of a virtual event on Servitization and heard how automotive, construction and many other sectors are increasingly moving to "everything as a service".     

Gartner coined the term ERP just prior to when I got there. But for a couple of decades companies had already been deploying MRP and MRP II functionality. We will similarly see a next generation. It may not even be called ERP - to shed the baggage the moniker has acquired with too many delayed and bloated projects.

But the market is definitely marching forward. One thing I am fairly certain of - the next gen of ERP will not suffer from AMM - Addressable Market Myopia.

Adding from a twitter thread with Jon

In fairness many other vendors have not evolved their functionality especially during the pandemic and with recent supply chain issues. Lots of brilliant architects but few process visionaries. Need both.

With brilliant architects but no process visionaries you would never get Amazon’s fulfillment center with chaos theory models, miles of conveyors and hundreds of robots. You would deliver the old process model.

Burning Platform: AI in the Enterprise

In this 53rd episode of Burning Platform, we have Roy Altman, CEO of Peopleserv.

We draw on his recent experience editing of an issue of Workforce Solutions Review focused on AI (available here)

We cover a wide range of angles - the long history of AI , how it has under-delivered in the past and why the current iteration is more promising. We talk about abundance of data in consumer world to train machines, compared to that in enterprise settings where most data is locked up in proprietary data centers. We cover ethical issues around smart machines and whether AI will lead humanity to utopia or dystopia. 

Analyst Cam: Workday Ventures Portfolio Update

As we have moved to virtual briefings, I have increasingly been excerpting short video segments (with permission ), as part of my Analyst Cam series. 

This time, it is Barbry McGann, SVP and Managing Director of Workday Ventures. She is a repeat presenter in this series, though this is the first time she is presenting on the Ventures portfolio. She took over from Leighanne Levensaler who had presented on the fund here 

As usual, Barbry is extremely crisp and covers a lot of ground in 20 minutes. She discusses 9 new investments in the first 6 months of the year and some exits (including 2 profiled in this series - Suplari acquired by Microsoft and Zimit acquired by Workday). She discusses a very vibrant market for startups, Workday's growing focus  (both functionally and around its Prism, Adaptive, Extend tools) and areas which are being prioritized by investors like digital health and fintech.

Earlier this week, I wrote a post titled Get Busy Living or Get Busy Dying.  I pointed out vendors which look like the "living dead" with very little innovation. Listening to Barbry excitedly talk about the portfolio and even more about new opportunities, I am more convinced Workday has been very busy living.

Enterprise Applications: Get busy living or get busy dying

I have been telling some of my friends "I started my career when the pendulum said "Build systems, don't buy them". Since my first implementation (a mainframe application in 1983) I have enjoyed a glory time for packaged applications and related services. However, I am afraid I will end my career with the pendulum swinging back to "Build, don't Buy"

Ok, for starters, I am not retiring anytime soon, so this is not likely to happen for a few years. But then, I have been saying it for a while. In SAP Nation 3.0, which came out two and half years ago, I wrote

"Enterprise vendors, who were sitting so pretty at the turn of the century, have lagged in many new markets, as profiled in the last bunch of subsections (I had identified markets like smart products, digital marketing and the Industrial Internet they missed)."

and

"More alarmingly, we are starting to see customers get tired of waiting for vendors and go back to building their own replacement systems. With microservices, open source and other options, we are seeing the pendulum swing away from buy back to build. That’s a stunning reversal from the 1990s."

What happened last year has only accelerated the pace. We saw new ways of doing business (micro-fulfillment, telemedicine, virtual open houses in real estate etc etc) in most industries and geographies, but many vendors continue to sell what they had in the bag in January 2020.

I saw The Shawshank Redemption recently (for the nth time) where the Andy Dufresne character says at a pivotal point "Get busy living or get busy dying". And I asked myself why are we wasting time with vendors which 2020 confirmed are the 'living dead",  when there are so many others are vibrant?

Let's talk about the vibrant ones first. Whether you think they can get there or not, I love Salseforce's ambition to get to $50 billion in 5 years - 2.5 today's revenues or Workday with its goal of $10 billion by 2025.  My recent conversation with Tyler Prince, who runs Global Alliances at Salesforce only confirmed it.  

You can see the whole interview with Tyler here and he talks about how Salesforce ISV partners like nCino helped banks through the pandemic. He talks about how SI partners pivoted to a world of virtual deliveries. How with the Slack acquisition Salesforce is helping customers deliver Success from Anywhere with the continued chaos of COVID workplaces. How the TrailBlazer community continues to blossom.

In background, we had a chance to reminisce a bit. Tyler and I helped Price Waterhouse set up a software intelligence group - an internal, mini Gartner - in the early 90s. Tyler reminded me we "found" i2, Commerce One, Platinum Software and many other vendors and introduced them to the PW field. Most of those vendors are a distant memory - as they have changed names or are part of other entities. But it reinforced to me, Salesforce has been busy living.

There are many others who are keeping up with rapid changes. In a book, I recently helped narrate for a CEO I talked to a number of companies which are dramatically reshaping their business models to outcome based contracts and developing platforms like those of Apple and Google. I have talked to strategy consultants and investors who are putting together application portfolios for micro-verticals most vendors know very little about. More proof of busy living.

Now for the living dead. While they continue to invest in areas like quantum computing, they have done little to help move along the enterprise application game. If anything, their products and services burden applications with a significant layer of overhead.

Take Arvind Krishna, the new CEO at IBM. He inherited from the previous CEO, Ginni Rometty a labor-intensive outsourcing business and an aging systems software portfolio where application assets like Maximo struggle to be recognized (Tivoli, Domino - want me to go on?).  Ginni herself was dealt those cards by Sam Palmisano a decade prior. IBM now has a cash dividend yield which makes some public utilities look stingy. Not my idea of "get busy living" in this vibrant digital market.

Or Oracle. It continues to spend billions of dollars in legal fees trying to protect a business model of maintenance revenue which is decades old. Think how long it would take them to move to outcome based models. They call themselves an ERP vendor, but hardly ever talk about operational areas. They spent billions acquiring retail, utility, telco and other vertical industry assets but largely talk about their cross-industry accounting and HCM products. The cross-industry space is one of the most crowded with competitors. Their prerogative - but not my idea of "get busy living"

In contrast, there are companies like Amazon and Spotify delivering ecommerce and fulfillment capabilities to thousands of small merchants. On a pay-as-you-go basis. There is Zoho which has taken a page out of Amazon Prime and keeps delivering to thousands of SMEs  more apps each year for the same price as part of its Zoho One suite. Think these customers are going to sign up for Oracle or NetSuite licensing and IBM's hybrid clouds and services given the price points and convenience they have become used to? Or even large companies - I know several executives who have unwritten "no new purchase" policies around vendors who have treated them like cash cows over the last decade.

Don't mean to pick on just those two vendors. There are many other vendors who have wasted much of the last decade.

They have been busy:

- renaming products (over and over) instead of building new functionality

- pretending to be focused on UX and "experience" when much of the innovation there has come from consumer tech.

- investing heavily in analytics and cloud architecture but not growing their geographic or vertical functionality

- continuing to rely on armies of people when they should be automating and moving to digital services like their customers

- screaming about machine learning when very little customer data is available in their clouds or worse, is locked up in customer data centers their machines cannot learn from

- scheming to charge more for the same while claiming to be proud about Moore's Law

- bragging about their diversity, their "ethics", their green policies. Nice, but how about also some new features and functions?

I do hope they turn around. I am reminded of this quote from Hemingway's novel The Sun Also Rises

“How did you go bankrupt?” Bill asked.

“Two ways,” Mike said. “Gradually, then suddenly.”

I plan to spend much more time with those busy living. And especially with those that recognize they are at a critical juncture and like Andy decide they need to do something radical.

Marc Benioff, CEO of Salesforce, has long preached the Zen Buddhist concept of Shoshin = Beginner's Mind. Look at everything afresh, even if you are an expert in the field. He said again recently "In this new world, if you're not cultivating a beginner's mind as a CEO, you're making a mistake."

I could not agree more. Pivots, rebrands and turnarounds are always more fun to work with. Let's get busy living. So many new applications to create and deliver.

Burning Platform: Ecosystems Galore!

In the 50th episode of the series we have Tyler Prince, EVP Worldwide Alliances and Channels at Salesforce.

While most vendors have siloed groups to manage their SI partners, their platform ISVs and their developer communities, Tyler plays a role in all 3 in Salesforce world. That includes their SI ecosystem with a wide range of global, regional, and vertical specialists, that on their AppExchange platform and in the Trailblazer community.

That gives him a unique perspective on the cross-currents across these very different ecosystems and the vital role they will play to deliver to CEO Marc Benioff's ambition to get to revenues of $50 billion by fiscal 2026 (in FY 2021 they delivered $21 billion)

We also discuss the impact the pandemic had on the SI community and the move to virtual project delivery, how Salesforce has woven diversity and inclusion in its ecosystems and the growing role of Slack acquisition and the Success from Anywhere initiative as lockdowns continue around the world.

Refreshingly different perspective on ecosystems!

Vertical Velocity

While there is a lot of noise about "Industry Clouds", I have been encouraged to see specifics in the form of new product launches and M&A/ownership changes in the last few weeks. They promise to bring a lot more industry focus and functionality.

Admittedly, the valuations in the transactions below are frothy - but one way to look at it - you have to believe they are serious about the market segment if they are willing to pay that much for it.  

Rockwell Automation is acquiring Plex Systems. As I have been reporting for the last few years Plex, has been increasingly investing in plant level and sensory/IoT capabilities. Infor is selling its EAM product line to Hexagon AB, a Swedish vendor focused on asset-intensive energy, construction and manufacturing sectors.

Both Rockwell and Hexagon should bring operational, industrial depth to products which have been positioned for broader ERP markets.

Unit4 is separating its Higher Education Student Information System into a new entity called Thesis. Again, it should allow a sharper focus in a segment which was turned upside down last year as campuses shut down and online education took off.

I have requested briefings with each of these vendors and as the transactions formally close, hope to be able to line up those sessions.

I was also part of two briefings this week:

Christopher Dean, GM of Salesforce's Media Cloud presented on their Advertising Sales Management offering. Listening to him, I was fascinated by how complex advertising world has become. The definition of a media company keeps morphing - everybody from traditional broadcasters to telcos to gaming companies to digital agencies and many others can lay a claim. From a brand pov, clearly digital advertising is exploding but traditional print, billboard, radio and other channels are not exactly dead, especially in major markets around the world. Good to see Salesforce help both sides navigate the complexity.

SAP ran its annual Industry Analyst Base Camp event. I recently ran two Analyst Cam episodes on their Industry Clouds and RISE offering aimed at 5 of those industries - see here  and here. The Base Camp did not add much new coming so soon after SapphireNow. But, frankly, the more SAP talks about industries the better. The verticals market is theirs to lose, after establishing leadership with their IS solutions two decades ago. And as we are seeing new, serious players are starting to focus on deep vertical capabilities.