Wednesday, April 30, 2008

Trends: Recent New License Sales Remain Healthy

Calendar Year 2008 Q1 numbers still show profitability for most vendors
Recession concerns for the enterprise software industry may prove to be a bit pre-mature. Recent earnings report over the past 2 months lean towards mild caution. While most vendors showed profitability, guidance numbers were down. The leading indicator is new software license sales for on-premise companies and recurring revenue for SaaS companies. Here's the break down of year over year quarterly new license sales numbers/recurring revenue include:
  • CDC Software - Down 15% to $12M
  • Epicor Software - Down 16% to$18.5M
  • JDA Software - Up 18.8% to $20M
  • Lawson Software - Up 21% to $32M
  • NetSuite - Up 47% to $34.1M
  • Oracle - Up 7% to $451M
  • QAD - Up 14% to $22.4M
  • Right Now - Up 27% to $24.4M
  • SAP - Up 11% to 622M€
The bottom line
Overall, the enterprise software market looks good for the next 2 quarters despite some cautionary guidance among the mega software vendors. Key drivers come from integration and upgrade projects for the core ERP and packaged apps landscape. Interestingly, the CRM market also shows continuous growth in new deployments as customers enter the next phase of CRM adoption.

(The personal contents in this blog do not reflect the opinions, ideas, thoughts, points of view, and any other potential attribution of my current, past, or future employers.)
Copyrighted 2008 by R Wang. All rights reserved

Monday, April 14, 2008

Trip Report: Dubai Day 1 - Go East... or is that West my friend?

(Copyrighted 2008. Photo by R Wang. All rights reserved)

Much has been said about Dubai. Some have called it the Singapore of the Middle East, others liken it to Hong Kong in the 1980's. Whatever the analogy, this bustling and booming middle east powerhouse, is one of seven emirates in the United Arab Emirates (UAE). Much of Dubai's success is credited to Sheikh Mohammed bin Rashid al Maktoum, often affectionately known as the "CEO" of Dubai Inc. He also serves as the Vice-President and Prime Minister of the UAE. Faced with depleting oil reserves, the Sheikh embarked on a mission to transform the emirate into a world port, financial center, trade center, and tourism destination. The success in diversification has led to tremendous growth. In fact, Dubai's economy was $17B in 2000 and $35B in 2005. And unlike other governments in the region, oil only contributes less than 6% of the nation's GDP.

With this boom, Dubai has attracted western investors for capital and convinced both individuals and corporations to start new ventures . In fact Dubai's growth has probably surpassed China's this year. The result - expatriates have come to this tax-free haven to offer services in a host of industries from real estate and construction, hospitality, and high tech. Consequently, expatriates from the east (i.e Indian, Pakistan, and the Philippines) provide the low cost labor that fuels the building and services boom while those from the region and west (i.e. Iran, Lebanon, and Europe) play white collar roles.

  • Construction and real estate booms rival those of Shanghai. Real estate and construction activities abound. No matter what direction you look, you'll see a new high rise or construction project. Almost 24 percent (i.e. 30,000 of 125,000) of the world's construction cranes operate in Dubai. Projects such as the Palm Jumerirah and the World highlight how manmade islands and a flair for design can successfuly come together. The world's tallest skyscraper, Burj Dubai has already surpassed Taipei 101. The actual height has not been disclosed. Meanwhile, continual construction of beach side destinations include the world's only 7 star resort, Burj Aj- Arab.
  • Burgeoning high tech economy resides in special zones. Technology also is doing quite well. Special business districts dot the city and cover areas such as Media and Internet. Launched in 2000, Dubai Internet City (DIC), comprises of 600 companies focused on high-tech. Industry stalwarts Cisco, Dell, HP, IBM, Microsoft, Oracle, SAP, Siemens, and Sony Ericsson have substantial presence in Dubai. This has led to an exciting market for technology professionals and in fact quite a battle for greenfield accounts, especially in the enterprise software market.
The bottom line
Tremendous growth in the region brings large green field opportunities for enterprise software. Almost every new project, venture, and local office is either updating, replacing, or considering new systems to meet exponential growth. (edited thanks to anonymous...Expect this market to remain recession proof and emerge as a beacon in a world slowly sliding into recession) Expect this market to remain less susceptible to recession this economic cycle and potentially emerge as a beacon in a world slowly sliding into recession.

(The personal contents in this blog do not reflect the opinions, ideas, thoughts, points of view, and any other potential attribution of my current, past, or future employers.)
Copyrighted 2008 by R Wang. All rights reserved

Thursday, April 10, 2008

Event Report: Sun Labs Open House Showcases Growing Strength In Enterprise Class Tools

Lab days are always a great opportunity to see what's new and what's possible. Sun's event is always no exception and one of the highlights during the year. With 40+ top Sun researchers, fellows, and distinguished engineers in the labs, attendees could feel the passion for innovation in both their infomal one on one demos and formal and talks. A few projects really caught on with trends in virtual worlds and platform/software as a service include:
  • Project Wonderland brings "Second Life" -like tools to the Enterprise. Built on Project Darkstar, a software infrastructure that supports massive scaling for virtual worlds, social networking, and gaming, Project Wonderland, delivers a toolkit for those looking to build 3D virtual worlds. On site, the demos highlighted how unified communications and virtual worlds can come together to deliver colalborative work environments.
During the informal demo, someone from the off-line world could dial in and be represented as an orb that would be escorted to different meeting environments and passed on from room to room as needed. Virtual white boards could be used side to side with other applications that could be shared in a collaborative fashion. Sun internally uses these worlds and dubs it as MPK20, referring to the numbering systems at the Menlo Park campus.
  • Project Caroline provides a scalable platform as a service This project highlights how a GNU General Public License version 2 platform as a service offering can be used to rapidly deploy dynamically scalable Internet based services. Using Java and Perl, a series of enterprise class applications and web services could be hosted and delivered via this platform. The project currently uses a PostgreSQL dB. Though no comment was made about a productized version, insiders noted that MySQL will be supported in future developments and this could lead to productization. T
A host of other projects of interest that have potential to touch on the enterprise software world include:
  • Project Sun SPOT - showcased at last year's event, this experimental platform showcases how Java can be embedded with robotics, wireless sensor, and swarm intelligence technologies. Like many of Sun's new offerings, this one is available as Open Source on and has a lot of great promise work automation and artificial intelligence applications.
  • Project Fortress - this project debuted two years ago as a new programming language for high performance computing (HPC). Released March 31, 2008 as Project Fortress Version 1.0, the first specification of the language is now synched with an implementation. This new programming language shows a lot of promise as software increasingly will rely on HPC and more complex modes of virtualization and Project Fortress could provide a viable option for the Open Source world. Key features include static checking; library based defined languages; implicit paralleism; and flexible, space-ware mathematical syntax.
The bottom line.
Despite repeated reports of the "Sun" setting at this venerable Silicon Valley icon, innovation is alive and well . Software continues to be one of 4 key focus areas. These latest innovations provide insight to what may be possible in a world where Open Source emerges an alternative platform. With the acquisition of BEA by Oracle, Sun could emerge as a strong independent platform for other system integrators, ISV's, and independent minded developers to extend and build solutions on top of. Of course, this would be dependent on Sun's commitment to building tools and a strong ecosystem to provide other innovators and customers who want an independent choice.

(The personal contents in this blog do not reflect the opinions, ideas, thoughts, points of view, and any other potential attribution of my current, past, or future employers.)
Copyrighted 2008 by R Wang. All rights reserved

Wednesday, April 9, 2008

News Analysis: Rimini Street Says "No" to Tomorrow Now

Recent press releases from Rimini Street indicate that the third party maintenance provider will not pursue an acquisition of Tomorrow Now from SAP. A few reasons why an acquisition of Tomorrow Now might not make sense:
  • Why buy when they are coming for free? Many global and big named customers already have made the decision to migrate to Rimini Street. Money spent on an acquisition could be used to improve existing service offerings instead.
  • Top talent has moved on to SAP. Many of the best account managers and support engineers have transitioned over to SAP's Active Global Support (AGS) organization and no longer work within the TomorrowNow unit. Existing customers have expressed some frustration with the "skeleton" crew.
  • Tomorrow Now currently a money losing operation. With SAP losing and estimated $35M a year at the Tomorrow Now operations, only a provider with enough scale could stem the losses. In addition, the pending litigation from Oracle continues to put a damper on any potential acquisition.
The bottom line.
With Erwin Gunst at the helm as COO and his board mandate to cut costs and increase margins, its inevitable that a deal to unload Tomorrow Now will become a near term reality. However, the new buyer will have to stem the tide of customer defections to Rimini Street as well as find a way to keep Oracle off its backs. Despite such set backs, expect the pressure for third party maintenance options to increase as the recent maintenance price increases by SAP for new customers will only add to the mounting pressure for new options.

(The personal contents in this blog do not reflect the opinions, ideas, thoughts, points of view, and any other potential attribution of my current, past, or future employers.)
Copyrighted 2008 by R Wang. All rights reserved