deal architect

Analyst Cam: Transmute – Verifiable Data Platform for Global Trade

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 Karyl Fowler, Co-Founder and CEO at Transmute. It offers a verifiable platform which “transforms data from every stage of digitization and paper into secure, interoperable, machine readable, and context rich data.”

I met her as part of SAP.iO Foundry’s Digital Supply Chain startup demo day.

While the platform can be used for other supply chain flows, she focused in her presentation on import and export data flows especially for that for trade into the US. It is a shockingly analog set of flows – “a single shipment on average involves about 50 documents exchanged by up to 30 different partners, and is generally costing companies on average up to 3% of their annual revenues just spent on paper alone.” And “less than 1% of trade. documents are fully digitized today and even there they rely on piecemeal solutions like PDF formats, EDI data formats and Excel. It's no wonder that effectively the same data silos that existed in the paper world are still in existence today in digital world” So, even digitized data is susceptible to fraud – hence the need for verifiable data – “a technology that solves for data provenance in a machine readable way that allows original data to be transmitted across the supply chain in real time.”

They offer “over 80, different supply chain credential templates for commercial invoices, bills of lading  etc. so you can use their API with your existing S/4HANA or other enterprise solution with ease". And with the digitized flows, “trade facilitation representatives can focus more on the violative goods or anomaly shipments”

We discuss how global trade continues to rapidly evolve with tariffs, sanctions, sustainability, anti-forced labor and other requirements. We also discuss how even between just two countries there are unique needs like those for goods produced in maquiladora factories

She goes through the product architecture, contributions to standards which are used by regulators and industries and a lot more in this crisp 20 minute presentation

The new Enterprise Applications Gold Rush

I arrived at Gartner in 1995. My colleagues there were doing Congressional Hearings, had thrown out a number of $600 billion for enterprises to fix the Y2K bug – stuff which woke up CEOs and Boards to their technology challenges. Over the next 5 years, our applications analysts handled a fire hose of client calls about TLAs we had coined – ERP, CRM etc. In my case, it approximated 10,000 30 minute calls (yes!) related to the software vendors and related Sis – we logged every call in a database Gartner had built. The patterns across those calls meant our Magic Quadrants basically wrote themselves.

At Deal Architect, we have already been tracking a stream of new applications this decade. COVID. Ukraine war, climate change and massive digital transformations have made many vertical edge applications viable – telemedicine and personalized medicine in healthcare, EV battery management and billing in utilities, intelligent returns and reverse logistics around eCommerce, Direct to Consumer and related last-mile, small-lot logistics in consumer industries, CPQ for industrials to handle complex outcome based pricing which bundles product, spare parts, all kinds of monitoring and maintenance services, financing etc.  And many more for other sectors.

There is also a growing number of applications aimed at rapidly growing economies around the globe – they factor unique business practices and digital trends, local languages, currency, scripts. taxes, regulatory and other nuances.

Beyond these new vertical and geographic applications we are seeing a new generation of AI and data enabled applications.  This week at Dreamforce I saw Marc Benioff interview Sam Altman of OpenAI – the man who without needing any industry analysts has single handedly started a new Y2K type stampede. And in addition to the multitude of use cases I heard about during the event, Sam threw out another potential category. In his keynote, Marc had said “They call them hallucinations; I call them lies. These LLMs are very convincing liars.” Sam basically said hallucinations are not a bug, they are a feature. “A lot of value from these systems is heavily related to the fact that they do hallucinate….If you want to look something up in a database, we already have good stuff for that…The thought before was that physical and repetitive tasks would be transformed first before moving on to creative endeavors. The model takes existing data and presents it in different, novel ways (so can be used for creative and strategic work as well)

In a different session, Peter Schwartz, Futurist at Salesforce responded to my question how his Shell (the global oil company) Scenarios Group in the 70s (and comparable ones today) could benefit from today’s AI

“Most people are uncomfortable with uncertainty. They'd rather deny the uncertainty that's inherent in most of the methodologies around things like scenarios. It's not about predicting the future. It's about making better decisions today by looking at the alternatives and managing the risks both the upside and downside far better. I think AI will be a very useful tool in that. Think about it as a current conversational strategic planning partner that presents alternatives. In fact, one of my very first applications of ChatGPT was writing an article on the future of electric vehicles. And I said, give me three scenarios on the future of electric vehicles. And it gave me three really smart ones. I didn't use them literally in what I was writing, but it was a great start. And it was really amazing and actually being able to create alternatives. So when I think about it, frankly, most companies, especially small and medium sized companies, don't have somebody like me working for them. Now imagine an AI strategic planning partner that's trained on various alternatives on the methods. the mathematics of various kinds of models, and can generate real alternatives for small and medium sized businesses”

To Peter’s point about uncertainty, Gartner had taken those scenarios a step further. We assigned probabilities to them and were actively discouraged from publishing any which had a probability of 0.4 or higher. That meant it likely was not bold, edgy enough – it likely did not have enough uncertainty factored.

Couple of weeks ago, reacting to Snowflake CEO’s comments about Nvidia’s blowout quarter, I had written the premium costs driven by GPUs and scarce AI talent would lead to “premium AI applications” being prioritized. Drug discovery, mineral insights, trading patterns, design nuances are some of the use cases which would justify them. I also said “For many vendors, their predictive AI may offer more value to customers than generative AI. If you can preclude unplanned shutdowns of expensive assets with preventive maintenance AI or you can reduce production and logistics footprint, waste and scrap through better demand forecasting AI,  that may be exactly what your customers need.”

The good news about Dreamforce (and likely again at Workday Rising coming up in a couple of weeks) I heard plenty of generative AI use cases. Between the vertical, geographic and now AI enabled applications, it should allow the Gartners to come up with a new gen of TLAs. I also heard about CEOs and Boards really energized (trust me, they grudgingly go along with compliance, ESG type projects).   Except, that given the shocks of the last few years – COVID, Ukraine etc. – most enterprises have seen their industries and countries radically transformed and they expect a lot more agility than they did around Y2k.

Besides the agility, I hope companies are also less wasteful than they were around Y2K. In the 90s, I saw massive project overruns, plenty of shelfware, suites which underperformed and had to be ring-fenced with best of breed solutions.  I also expect enterprises will want their projects to be much more automated. AI should also allow SIs to rethink their labor-intensive delivery models.

I am looking forward to another fire hose of application functionality, architecture and implementation conversations. It’s the got the same feeling I got when I got to Gartner in 1995.

As Yogi Berra famously said: "It's déjà vu all over again."

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.”

Globalization – time for a fresh look at a complex topic

I was in 4 countries recently, and it reminded me I had been to each as part of my book tour a decade ago for The New Polymath. It also reminded me I had started the book with “sprezzatura” and ended it with “shoshin” – not exactly words you hear every day.

Sprezzatura is a term from the Italian Renaissance that would translate today to “being cool” – showing a confidence even when tackling complex assignments.

Shoshin loosely translates from Japanese to a “Beginner’s or Child’s Mind”. It is a Zen Buddhist concept of looking with wide openness when studying a subject.

I certainly felt both terms at work during my conversation with a friendly German immigration officer at Frankfurt airport. Flipping through my passport he asked “first time in Germany?” I said no, been here at least 25 times. “Always to Frankfurt?” No, Berlin, Hamburg, Cologne, Hanover, Munich, Fussen….”Only travel to Germany?” no, been to 75 countries. His eyes visibly widened. The more we talked the more I admired his curiosity. The more I talked I also realized I was trying to confidently answer his questions but he had no trail to confirm my statements. They were on 9 expired passports in a safe. Some visas like the Israeli had been issued on a piece of paper, not on any of the passports.

With travel opening up in the last year, I have started traveling more outside the US, listening to global strategy experts, reading more books about regional trends. It is a brave new world, post-COVID and Ukraine crisis, where we need to balance curiosity versus the confidence that comes from previous experiences.

Lots of change – and even more noise

What is particularly striking is the plethora of bold commentary you hear. COVID driven travel restrictions and supply chain chaos have led to the “collapse of globalization”, many say. The Ukraine war related energy crisis has led to terms like “deindustrialization of Germany”. Political rancor and large deficit spending in the US is leading to terms like “dedollarisation” – spelled with an “s” it suggests an even more imminent US decline. China’s one child policy has left it with a dead-end in the form of an aging, noncompetitive workforce, others say.  BREXIT, many say, signals the end of the UK.

MNCs like Shell have long had internal analysts which shape their global strategies – in their case, “Scenario groups” have been looking at global trends since the early 70s, when the OPEC oil shock took much of the world by surprise. Their team, their website says, has expertise in fields like “economics, politics, energy analysis, climate policy, socio-cultural change and competitive intelligence.”

Other MNCs leverage think tanks and geopolitical analysts (similar in some ways to us technology market analysts) like Ian Bremmer of Eurasia, Shaun Rein of China Market Research Group and Peter Zaihen among others. There is a ton of global intelligence available – demographic, industrial, energy, agricultural, climate and other data, military assets, political trajectory etc.

When you read the cross-currents across this mountain of data, most individual projections tend to be overly simplistic. Incumbent powerhouses, be they corporations or countries, rarely just roll over and die. They decline slowly and, in many cases, bounce back. Japan has started to grow nicely after a couple of decades of relative stagnation. Most companies have also become way more agile post-COVID and Ukraine. German industrial companies have moved aggressively away from Russian gas with moves to gas from other countries, to metallurgical coal, to their lignite and increasingly a focus on hydrogen as a fuel. The 2023 Fortune Global 500 list shows the power of incumbency – “The companies’ revenue adds up to more than a third of the world’s GDP. And 68% of that revenue is concentrated in companies in Japan. Greater China (including Taiwan), and the U.S.”

A wave of “re-globalization” – a gradual realignment

MNCs are not static. I am seeing more reallocation of resources across countries than I have ever seen before. Supply chains are moving to “China+1”. Sanctions against Russia have forced even more sourcing diversity for fuel, fertilizers, minerals and other commodities. High inflation in places like Argentina is causing a move to neighbors.   

Emerging economies are generating their own MNCs. In fact, Saudi Aramco barely missed being ranked number 1 on the Fortune Global 500 list – only $7 billion less revenues than Walmart which has held that rank for a decade. Companies from other rapidly growing economies – India, Indonesia, Nigeria, Brazil among them are joining the next wave of MNCs – servicing their own large markets and focusing on markets western companies have traditionally neglected

There is also a surge in digitally savvy governments. Assisted by proliferation of mobile technology and hyperscaler clouds, entrepreneurs and SMEs in places like Kenya and Estonia are flourishing. We are seeing more real-time digital tax compliance, digital citizen services and other innovation in the public sector around the world. Many governments see AI as a strategic investment focus.

An exciting time for technology vendors

We have come a long way from the time when “two-tier ERP” meant global subsidiaries were on very different software on LANs and AS/400s versus those at the HQ. We have moved to a world of hyperscalers like MS Azure, AWS and Google Cloud which have democratized DevOps across the world. We have moved to a world where Eva Zauke of SAP talks about “585 local versions (including support for payroll processing in 104 countries) as it supports 200+ million users at 440k customers worldwide.” At a smaller scale – both functionally and regionally – vendors like Zoho and Papaya Global are allowing SMEs to think beyond their borders. In the next wave of AI and ML, operational data needed to train machines will be increasingly localized and verticalized.

Not every vendor is keeping pace. It will take the investments the hyperscalers have made with presence in most major markets while meeting local data protection guidelines. It will take localization like SAP has done across so many country tax regimes, currencies and languages.

Here’s why every vendor needs to re-think global opportunity. Forget all the glib talk and simple projections. There are vibrant markets around the world. Someone else will step up to service them if you don’t.  

Time for lots more curiosity and yes, the confidence which comes from new investments and customer validation. much more than previous experiences.

Burning Platform: The changing “world” of work

In the 94th episode of Burning Platform, we host Thomas Otter of Acadian Ventures

Thomas talks about their HCM startup investments across 17 countries. As he says 3.3 billion people go to work every day – most of them in emerging economies. Not only do they represent a significant market opportunity, we can also learn from them – as in innovative use and massive scale of mobile/SMS technologies in some of these markets.

He emphasizes democratization in terms of access to platforms. “So, 15 years ago, if you were trying to build a software company in Africa, in, say, Kenya, you needed to find a data center, you needed to support the infrastructure and that was really difficult whereas today you've got a choice in Nairobi, between AWS, Azure and Google. The developer in Kenya, has access today to the same coding environments, the same infrastructures, the same technologies that a developer anywhere in the world has access to, so that boundary is now gone. You can build great software anywhere in the world.”

He discusses a slew of use cases serviced by their portfolio of startups. Some of the ones he mentions in the conversation include

• Worky, Mexico City, Mexico
• Techwolf, Ghent, Belgium
• AG5, Amsterdam, The Netherlands
• Figures, Paris, France
• Fifty, Paris, France
• Brio HR,  Malaysia / Singapore
• Palm HR,  Riyadh, Saudi Arabia
• Workpay, Nairobi Kenya
• Arist  remote USA
• Compa  remote USA
• Holiva, Marseilles, France

He also describes how by leveraging other VCs like Workday Ventures and accelerators like SAP.iO Foundries, his relatively small fund manages to have such a global reach.

Fascinating conversation about the changing “world” of work in about 35 minutes.

Analyst Cam: SAP Verticals – Public Sector

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 Ulrike Kleifeld, VP Strategy, Global Public Services and Chris Atkins, VP Global Digital Transformation at SAP.

Ulrike starts off with some of the challenges government bodies face in nearly every country. The COVID pandemic accelerated digitalization in every industry but also exposed how much the public sector lags. This was followed by the Ukraine war and other geopolitical crises. We have economic burdens from the pandemic, and the energy crisis has only added to that. Disruptions have been coming in waves and governments are struggling to adjust to that “new normal”

They also address the loss of trust in government. I ask if it is lack of trust in politicians v  government agencies. They say there is a view that government is not agile or farsighted. Ulrike says “on the one hand we want governments to be cautious and risk-averse with tax payer funds, but we also need to help them accelerate their execution capabilities.”

Chris walks through the functional scope of their solutions across the value chain from policy and planning to public finance to supporting programs and services – the citizen facing part. He shares several customer examples. About the State of Arkansas he describes the amazing outcomes the project delivered: “they were able to achieve a 95% reduction in accounting processes, from a time perspective, going from four weeks to one click for many of their processes, a 91% reduction in cost allocation process from six months to 10 days. And, yes, you heard this right, a 1,150% improvement in creating their budget reports, what used to take days now take them minutes. And for the first time ever, they were able to submit their federal quarterly reports on time.”

I like that he represented multiple countries and the “end to end value business model for how they deliver value to their citizens”

Talking of different countries, they all have their own demands around data sovereignty, security clearances etc. Ulrike mentions one “In the US, we have the NS2 cloud, which is on US soil run by US personnel in a special secured environment that is FedRAMP certified.”

They do a really nice job covering a lot of ground about this complex but vital sector in about 20 minutes. 

Burning Platform: A 360 degree perspective on the Truly Zoho event

Earlier in the week, Sandy Lo and Pooja Mittal of Zoho discussed the elaborate planning and intricate logistics of the week long Truly Zoho event in Chennai and Tenkasi in South India. 

In this, the 84th episode of Burning Platform, we host David Fauser, a Zoho customer at Cimco Refrigeration in Canada and Rebecca Wettemann, an analyst at Valoir. Both were part of the entire week and provide a very entertaining recap.

In a world which become virtual during COVID, we review the additional payback accrued from making the physical trip (over 15,000 miles round trip) and the investment in time. We discuss the huge investment Zoho makes in its people – schools, hospitals, cafeterias and whether that mindset can be adopted in the West. We discuss how other vendors will be benchmarked based on our visit – most Zoho customers have ERP and other applications from other vendors. The trip was made with the backdrop of a series of layoffs in Silicon Valley. It was striking to see the loyalty of Zoho employees and the wide berth their executives give their staff – each was extremely articulate and unfettered in every discussion.  

David and Rebecca came back with very different perspectives given their customer and analyst personas, but both are extremely positive about the week. Lots of entertaining anecdotes from from the trip. Well worth your spending about 25 minutes with them below.

Zoho raises the bar – even more - for analyst summits.

I have always been a fan of Analyst Summits – a focused gathering of analysts where a vendor can showcase a variety of product, customer, investor and other perspectives. SAP used to take Gartner analysts to HQ at Walldorf in the late 90s.  They have opened them up to a broader group of analysts and made them more regional.

If you have read my Deal Architect blog over the last 20 years, you have heard how Workday pioneered the concept for the cloud world in 2010 and has continued to vary the format every year. Plex added customer plant and innovation lab visits around their summits. Others have combined them with Customer Advisory meetings. Zoho hosted us at a ranch in Austin last year.

The creativity of such sessions differentiates the messaging of such vendors from those of vendors who continue to invite analysts to their user conferences. Easier for them, to not customize the content but a bit unfair to their customers for analysts to steal executive access during such events.

Zoho is about to raise the bar for summits even more. They have invited a few analysts to Chennai, India.  It’s not just the distance people have traveled. In conversations with Sandy Lo, who runs Analyst Relations, the event logistics have taken extraordinary efforts to put together. Not that her previous events have been plain vanilla.

The content also promises to be very different, as Vijay Sundaram, Chief Strategy Officer provides in a sneak preview

“While you're here, you will meet employees and leaders, see our campuses in Chennai and Tenkasi, and engage with various Zoho entities—our product teams, Zoho Schools of Learning, our medical staff, maybe our organic vegetable store, and some of our in-house architects, artists, and musicians. With so much to see and digest in India in just one week, you may find yourself asking: "What does farming or medicine or architecture or rural renewal have anything to do with running a tech company?"

We are about to find out in the next few days. One angle we are sure to hear about – again from Vijay

“Big Tech is quick to rake in profits when the times are good, and quicker to lay people off when they are not. Nothing about this playbook seems sustainable or regenerative. The heart of the issue is many of these companies are too big to feel, and they've directly or indirectly lowered opportunities for their core constituent—their customers. We've seen the erosion of customer choice, customer privacy, customer flexibility, and many others.

Something is radically off.”

I have been sharing sneak previews of the unique traits of Zoho for over a decade now. Here are a few:

A scientific and spiritual conversation with the CEO, Sridhar Venbu

Zoho One  - a unique enterprise suite

Zoho’s focus on emerging global markets

Zoho’s design creativity

Sure I will have plenty more to share after this week. 

Analyst Cam: SAP – Think global, act local

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 Eva Zauke  Executive Vice President, Global Head of Enterprise Adoption at SAP and discusses the massive localization effort as the vendor has 585 local versions (including support for payroll processing in 104 countries) as it supports 200+ million users at 440k customers worldwide.

The pace of legislation their software has to help their customers stay in compliance with keeps growing with COVID, and now sustainability regulations around a growing number of plastic taxes and ESG reporting. In 2022, these were 1300 legal changes across the countries. And this is a growth of 10% year over year.


click on the image to enlarge

 She also says governments are becoming more “creative” and digitalizing compliance a lot more. They are also adjusting to business model changes as companies move to more subscription billings. As governments turn over in most democracies, they invariably bring new legislation and override previous legislation. In turn, customers are constantly evaluating new locations as they try to avoid high-inflation, supply chain bottlenecks and high-tax regimes and jurisdictions with what they consider onerous requirements. So beyond compliance, there is also a planning angle for the CFO. She covers a handful of real world customer scenarios.

She ends with a reminder that SAP was born global 50 years ago. In fact, I have heard, Hasso Plattner, one of the co-founders talk about their work with one of their first customers, ICI, the global chemical company. This video takes you down that memory lane.

Very nicely done in about 25 minutes.