deal architect

“Draw a bigger circle”

I recently saw an article which talked about Oracle at a trillion dollar market cap. Whoa!

Then, I looked closely and it said perhaps if the AI boom continues, and maybe if starting 2026 its CAGR increases from a current 6 year average of 5.6% to 12% it could have that heady valuation in 2030. As of Friday, its market cap was just shy of $400 billion.

Similar "4 comma club” scenarios are being painted for SAP, Salesforce, Accenture and other enterprise software and services vendors. SAP and Salesforce closed last week near $250 billion, Accenture at $200 billion.

It is what I call “Mag 7 envy”. Mag 7 as in the Magnificent Seven stocks - Alphabet, Amazon, Apple, Meta Platforms, Microsoft, NVIDIA, and Tesla.  3 of them were valued on Friday over 3 trillion each, 2 over 2 trillion. Tesla in the only one whose market cap has dropped under a trillion.  

I call it “envy” because each of the enterprise vendors could already be part of that rarefied club, but have missed out on major market opportunities over the last couple of decades. Now, they don't even have a tenth of the valuations of several of the Mag 7!!!

I had 2 conversations last week about the missed opportunities – one with Whynde Kuehn, starting around 21.00 here and another with Dan Aldridge – see video below.  (My points deal more with enterprise software, and Accenture did well in acquiring a series of digital agencies, but they sat out the cloud infrastructure market that hyperscalers have run away with, and the huge contract manufacturing market that Foxconn and others dominate)

I have regular conversations with executives at these enterprise vendors and keep hearing comments like

1. Our advisers tell us focus is good – just keep executing
2. You are always pointing to markets where we need to make investments – why don’t you help us sell what we have in the bag today?
3. We cannot make our economics work in emerging economies

In one of my books, I quoted Bill Joy, one of the co-founders of Sun Microsystems, and all-round Polymath

“If you cannot solve a problem, make the problem bigger. If you draw a bigger circle, you start to see several systems you can work on.”

It’s going to require a lot of new thinking – new business models and partners to sell into fast growing economies, joint ventures with customers to help monetize their data assets, build deep vertical operational capabilities, develop very different AI use cases which get us out of our SG&A, white collar comfort zone, find a drug to cure our allergy to large CapEx investments and more.

Don’t get me wrong – these are healthy companies. They are entitled to be content with where they are – they are doing much better than most of their competitors.

However if they have Mag 7 envy or aspirations, I would say they are need to draw bigger circles. Much bigger ones.

Burning Platform: Turning Strategy into Reality with Business Architecture

For the 122nd episode of Burning Platform, we host Whynde Kuehn of S2E Transformation and discuss the critical role of Business Architects, alongside those of Enterprise Architects. She has a new book coming out July 11 titled The Execution Challenge: Delivering Great Strategy at Scale.

This episode is in 2 parts.

She leads off with a presentation around her approach to Business Architecture as a disciplining force for turning strategy into reality. She introduces her passion "is to help organizations (especially large ones) take really big ideas and move them into action. I've had the honor of working with organizations all around the world, from large corporations, governments, startups, and helping them to bridge the journey between the big ideas and being able to implement them across organizational units, products, geographies …how I'm able to make that possible is through the discipline of business architecture. I'm a long time business architecture practitioner, thought leader, educator. I live these ideas every day. I've led some of the largest transformations, ran my own team of business architects, and I'm a co-founder of the Business Architecture Guild.”

She then delves into the detailed and disciplined components of her approach

Next, we go back and forth on innovation projects and what I call “catch up” investments to reflect massive changes in industries, geographies and companion automation like robotics, drones etc. We also discuss the need for business architects to not just work with enterprise architects but to challenge and lead them so the end result is business objectives not just shiny new technology.

Fascinating presentation, followed by conversation of roughly 20 minutes each.

A must watch

Burning Platform: Workday’s Rapidly Expanding Ecosystem

For the 119th episode of Burning Platform, we host Matt Brandt, Senior Vice President, Global Partners at Workday. He is a very articulate West Point graduate with a long tenure in various roles at Workday.

I wrote recently about Workday’s Innovation Summit and how they are spreading their wings in multiple directions. Not surprisingly, Matt presented there an expansive view of how Workday’s ecosystem is evolving and I invited him to elaborate below.

“If you look at Workday, a roughly $7.5 billion dollar revenue company, we have had a relatively small services partner ecosystem (about 50 firms globally). We've always been known for prioritizing the quality of our service relationships over the quantity of our relationships.”

That is rapidly changing.

“As Workday transitions from an application company to a platform company, the needs of our partner ecosystem changes. And so that's what my organization is charged with - transitioning how the partner ecosystem will support the company as it transforms into a platform company.”

“We have operations in every theater globally and we operate in just about every industry globally. Instead of piece mealing this market by market and partner by partner, we've taken a really simple approach…if we focus on 3 things - building, growing and delivering, then long term we will have great outcomes for our partners, and for our customers. And then ultimately, for Workday. That’s how we've chosen to communicate with our partners, and align the investments that we're both making in our respective businesses”

He drills into examples of innovations from partners like Huron, Accenture and KPMG specific to the healthcare vertical. I particularly liked his description of Kainos, a partner in Ireland (but widely represented across the EU) which works on multiple dimensions with Workday. They have built new applications on the Extend platform and “they have influenced hundreds of sales opportunities and they're one of our best deployment partners”

When asked about new vectors, he cites Insperity, a Texas based PEO (professional employer organization). And ‘there are more opportunities like that, than we have time for. I'm not sure what the future will look like. But I think whatever it looks like it's going to be pretty exciting.”

We will just have to bring him back every few months to describe new frontiers he keeps exploring, In the meantime, enjoy this fast-paced State of the Ecosystem conversation.

Workday: “Unleash the Beast”

The Workday Innovation Summit last week ended with a very nice sit-down dinner. I was intrigued by the Synchronicity Strings Trio playing the violin, viola and cello. Trio?  I checked their site, and they offer quartets, duos and solos as well to fit in with the size of the venue and the subtlety you want for the music to not drown out table conversation. I thought it was a fitting recap to a couple of days where it was all about exploring new verticals, new AI use cases, new channels and new geographies – a new sense of flexibility to react to a rapidly changing world. As Doug Robinson, Co-President, (and superb MC for the Summit) put it in a side conversation with me, Workday has been “opening our aperture”. He was too polite to say it, but the goal of the Summit was also to widen the horizons of the analysts in the audience.

Matt Brandt, SVP Global Partners expressed the broader focus in his own poignant way. His military training has disciplined him to present 3 and only 3 bullets on any topic. But he broke with tradition and presented 4 pillars for his vision of the next-gen ecosystem– Connect, Compose, Built on Workday and Embed. I am interviewing him for a Burning Platform episode this week and you will hear more about these definitions.

However, the most change was evident from the commentary by Carl Eschenbach, the new CEO (Aneel Bhusri has moved to the Executive Chairman role). While being respectful of the culture and momentum he has inherited, he talked about how in his 16 months, they have brought in a new CMO, CFO and CIO. They also have new go to market leaders in Europe and APJ and new execs around services, revenue and sales operations. They have also promoted plenty from within including the new Chief Product Officer, Dave Somers. Many CEOs use their first year to do a “world tour” and learn the organization. It is impressive to see how Carl, helped by his years on the Workday board, has hit the ground running.

I was especially impressed by how many young execs led sessions including Athena Karp, CEO of HiredScore, recently acquired by Workday, Shane Luke who presented on their version of LLMs and other AI technology and by Ryan Basilio on outbound integration via its Extend Platform. Not just young, all incredibly smart and articulate.

I heard about countries and verticals I have not heard about in previous Summits – Japan, Federal Government, CPQ and Subscription billing for the services sector and more.

Aneel Bhusri made a cameo appearance and in a q&a contrasted “We had this advantage with the emergence of cloud (computing) and we could wipe the slate clean in terms of starting a company. I think it is different with AI. I think the incumbents, whether its Google or Microsoft or Amazon or Workday, or Salesforce, we have that huge data advantage”

He is absolutely right, even machines at large vendors like SAP and Oracle cannot be trained by the majority of their customer data since it is locked up in their on-prem applications in data centers they cannot access. However, most of the data of the cloud vendors applies to the SG&A portion of a customer’s P&L – accounting, hcm, procurement, call center data. There is a much bigger and higher payback opportunity with COGS and Revenue line items but that operational and customer data is unique to industries and countries. The best way to access that data is to build  transaction processing capabilities which generate that data.

Which is why I hope Workday continues to recruit unique domain expertise and build applications which reflect vertical depth and unique localizations for countries. There was talk during the Summit about becoming a “Platform company”. A platform is essential for customer and partner extensions but Workday’s key differentiators are that it is respected as an application vendor (you won’t believe how many customers over the years have told me they wished Workday would extend applications to their industry or country). And one which is culturally fun and easy to work with. It would be a shame to lose those unique advantages.

Fortuitously, the application competition is currently weak or distracted by the AI noise and not building modern transaction capability. SAP has formidable vertical and global strengths but the majority of their management focus in on preserving their ERP franchise - moving the ECC customer base to S/4HANA. Oracle is fixated on moving up the hyperscaler ladder away from its distant positioning behind AWS, Azure, Alibaba and Google. Besides, it spent tens of billions on Retek, Primavera and many other vertical plays earlier in the century and more recently with Cerner but those reflect business processes from a different generation of corporations. It had an opportunity to localize NetSuite for so many emerging countries and has not done so. Infor verticals still position Baan, Lawson and Intentia functionality it acquired  – again decades-old processes. Salesforce has plenty of application assets but they compete for management attention needed to yield better from the nearly $50 billion it spent on tools like Slack, Tableau and Mulesoft. Lots of vendors talk about being focused on the services economy but when you ask them about the exciting trend of “servitization” – post-sales monitoring, maintenance and outcome based subscription contracts in aviation, mining, shipping and many other asset intensive sectors – they will beg off “ we are not into manufacturing”. Manufacturing? They would have to invest in digital twins, IoT, field service, more sophisticated CPQ and other functionality but that would additionally make them more competitive in their incumbent markets.

Workday has a massive opportunity to bring contemporary functionality and architecture to so many markets. A couple of times, Carl hedged and said their biggest challenge is prioritization. He is right, of course, but many of these markets are attracting new players like Zoho which could end up with a huge headstart. The risk is Workday will continue with its core finance and HCM focus in primarily English-speaking counties and try and merely “spray paint” vertical and country localizations.

Which brings me to us analysts also widening our horizons. We have to accept part of the blame that after 25 years of cloud applications, 75% of the country/industry grid is blank when it comes to cloud application choice (and as a result we have shockingly limited AI trainable data in the enterprise compared to the consumer web). Paul Greenberg recently interviewed me about how analysts should also be evolving with changing markets. Watch our conversation here. Unfortunately, we are still imprisoned in market categories like ERP and CRM we helped define at Gartner in the 90s and ossified tools like Magic Quadrants and Waves. We should be leading vendors and customers into edge applications, high-growth economies and high-impact AI use cases.

Rapidly and dramatically.

Talking of analysts, he is not considered one, but I want to call out “Silent James” who calls himself a “visual notetaker”. He created 8 session illustrations during the Summit. It is fascinating how he listens, synthesizes, then colorfully and real-time summarizes key themes from each session – “your ideas become productive art”.  As Paul and I had discussed, modern analysts create plenty of video and social media content, we advise, we write blogs and books. We are a far cry from how my content was delivered as a Gartner analyst. Yet, few of us have James’ unique skills. We need to keep evolving, not just in the markets we define but also in how we present our perspectives to the market.   

Net-net – the time is opportune for Workday to spread its wings. It has an enviable choice of new markets to develop. It is truly an exciting time for Carl and the Workday family.

Time to “unleash the beast”

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: 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.

Analyst Cam: Deal Architect 2024 Research Agenda

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 is a presentation on Deal Architect’s 2024 Research Agenda. We recorded it as part of a longer conversation with Ton Dobbe of Value Inspiration where he covered his perspectives on the year ahead for entrepreneurs

I cover 4 of our focus areas

Re-globalization (starting 2.07) – 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

Industry churn (starting 10.40) – Industries are constantly evolving into adjacent markets, changing with new regulations etc. However, the last 4 years thanks to COVID, Ukraine crisis, climate change urgency and massive digital transformations, the changes are even more dramatic. As a result, there are countless edge applications for each sector which have become viable, even necessary.

GenAI and other automation (starting 15.49) – In some ways customers are trying more ambitious use cases around GenAI. Others are looking to monetize their unique operational and other data; They are adding new data streams to update their predictive analytics. More ambitious ones are expanding their automation landscape – harnessing robots, drones, satellites, sensors etc., in addition to AI

Application Modernization and Migration (starting 21.08) – After 25 years of cloud applications, it is shocking how many customers are stuck with client/server and even mainframe applications. We look at why this is so, and the massive opportunity to automate and streamline migrations.

 

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.

Industry Event promises v Everyday realities

Wearing my analyst hat, I go to 8 to 10 industry events a year. Some tend to be vendor specific like SAP Sapphire, others are industry specific like HIMSS for healthcare or region specific like NASSCOM in India or CeBIT in Germany,

I like to mix them up – rotate them every 3-4 years to see how they have evolved. Many I don’t go to but watch streamed sessions, or get advance briefings

The events keep our research fresh, provide fodder for the New Florence innovation blog, Instagram galleries and other content channels we keep introducing.  

The better events keep evolving. However, all of them tend to be way ahead of what we see in real life. The rollouts and customer adoption lags the glitz and hype in most events – in many cases by years.

I was thinking of three events, in particular. which always get a lot of attention because they kick off every new year – CES in Las Vegas, NRF (the Retail show) in New York and WEF in Davos.

In my book, The New Technology Elite I had analyzed the 2011 CES and highlighted

Lost in the excitement about iPad killers and iPhone rumors at the show was an even more significant nugget – the list of exhibitors included companies from just about every non-technology vertical industry.

In the 13 years since, CES has become a showcase for new EVs and autonomous vehicles, smart homes, robotics for restaurants, drones for insurance, AI for healthcare and so much more.

It has also rotated many of its major exhibitors as TechCrunch wrote

“Over the years, CES’s influence has waxed and waned. Prior to the pandemic, some of the event’s largest exhibitors opted to follow Apple’s lead, saving the biggest announcements for their own events. As companies were forced to launch virtual events in recent years, that strategy solidified for many. After all, if you can attract enough interest to your own standalone events, why bother releasing news during the noisiest week of the year?”

It also has not displaced large auto, robotics and countless other shows around the world. In many ways, it has become a generalist, a Jack of all trades.

But more significantly, you wonder if its impact is mostly in the echo chamber of analysts and journalists. They get fodder for their blogs and videos, but see how long it takes products which are highlighted at CES to show up at your local Best Buy or at your auto dealers.  The vast majority of products shown at CES are gimmicky and only appeal to hobbyists.

I have been invited to a couple of vendors briefings about what they plan at NRF next week. Not surprising this year there is plenty of focus on GenAI. I would frankly like to see, in addition, better self-service kiosks, more optimized routing of last mile delivery, easier reverse and micro-fulfilment logistics.

Look at the reality in our eCommerce, retail stores and groceries. There is such a wide gap. Returns to Amazon via its Whole Foods or UPS are a dream.  Other retailers, in contrast, discourage returns by making the process painful.

The in-store experience has gotten worse. Try to find an item at Home Depot. Their associates, when you can find them, rely on memory and usually tell you to go to the wrong aisle and bin. They never seem to double check on their mobile devices. Looking for gifts for the holidays I found them on the Total Wine website. But in store I could only find a 2 count of a particular wine. I had to ask for help for the other 3. A ladder arrived and after several opening of boxes in an overhead bin and they found the missing 3. I was grateful but wondered with their thousands of SKUs how difficult inventory tracking and fulfillment must be.

Or take our local grocery chain, Publix. We like to get fresh bread and vegetables from their stores. However, their prices have gone up many, many, many times what the government says the inflation rate is. The excuses are many – supply chain breakdowns, wage inflation etc. Why is there not technology which is helping these retailers manage their operations much more efficiently so they can shield the customer from such gouging?

Curbside pickup was supposed to negate the need to enter the store. But try Walmart’s dizzying array of choices – different for orders for groceries to packaged goods. Some stores with robotic towers which dispense your order, others with pickup counters hidden at the back of the store where you wait till someone bothers to show up.  

Self-checkout kiosks at some retailers should come with a user manual. Others should invest in maintenance crews – shocking how many kiosks are constantly broken. More companies are trying out direct to consumer channels but most need better micro-fulfilment support. I could go on.

As with CES, the reality is years behind what was being promised at NRF years ago.    

Now on to Davos.

A Reuters article shows you might as well be attending a United Nations conference this year

“The 54th annual WEF gathering in the Swiss ski resort of Davos will occur against its most complicated geopolitical backdrop to date, its president Borge Brende said on Tuesday. A challenging global economic picture, with shifting interest rate policies and rising debt, will also confront the central bankers, financiers and business leaders attending.”

The global reality is there is also lots of positivity and growth around the globe. As the Economist recently wrote “By 2050 there will be a new crop of economic powers—if things go to plan. Narendra Modi, India’s prime minister, wants his country’s GDP per person to surpass the World Bank’s high-income threshold three years before then. Indonesia’s leaders reckon that they have until the mid-century mark, when an ageing population will start to drag on growth, to catch up with rich countries. The middle of the century is also the ultimate finale for many of Muhammad bin Salman’s “Vision 2030” reforms. Saudi Arabia’s crown prince wants to transform his country from an oil producer into a diversified economy. Other smaller countries, including Chile, Ethiopia and Malaysia, have schemes of their own.”

Hopefully the event will focus on that reality in addition. And that it will adopt a more balanced energy perspective as the recently concluded COP event in Dubai did. It somewhat pragmatically concluded even in the face of hostility that “we are entering the “beginning of the end” of the fossil fuel era”. Previous WEFs have been overly optimistic of the adoption of solar and wind and EVs around the world. Some would argue they have misled many politicians to implement overly ambitious green agendas.

Once again, as with CES and NRF, the reality has significantly trailed what was predicted.

A few years ago, for Silicon Collar, I studied automation and societal adoption over a century. How UPC scanners were adopted in the grocery industry, how ATMs became common in banking, how automatic transmission was adopted by drivers etc. It was eye opening that in these and many other examples, societal adoption trailed product availability not just in years but in decades. It led me to catalog “circuit breakers” which slow down rapid adoption of new technologies. I summarized my findings in an article titled “Slow-motion automation” for Strategy+Business magazine.

We go to these events and convince ourselves the rate of technology change is intensifying. In many ways it is – but adoption does not accelerate at the same rate of change. Enjoy all these events, but when you drive or fly back home map what was promised with what you will see at your home, your office and your local stores in the next year.

Keep your reality filter handy.   

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