A Software Insiders Point of View

Official Google Blog: Can we talk? Better speech technology with Phonetic Arts

2010-12-03T13:26:00.000-08:00

Official Google Blog: Can we talk? Better speech technology with Phonetic Arts

Move your butt over to the new site!!!

2008-12-02T10:59:00.002-08:00

Just a friendly reminder that the we've transition over to the new blog. Here are a few helpful links:

Subscribe to the new site on feedburner.
Fave the blog here on technorati.
Follow on twitter.

Cheers and see you on the other side!

Copyright © 2008 R Wang. All rights reserved.

Quarterly Financial Tracker: Q3 CY Quarterly Revenues Show Deflection Point

2008-11-26T05:09:00.000-08:00

Check this post out in the new blog!

UPDATE YOUR BLOG LINKS: New site

2008-11-24T00:01:00.000-08:00

Hello! Starting in December 2008, A Software Insiders Point of View will be moving to a new home. As we are in beta, look forward to new ways of sharing and reaching out. Look forward to your suggestions!

Here's the new blog link:

http://blog.softwareinsider.org

Cheers!

Monday’s Musings: The Three Pillars of Software Maintenance And Support Policies

2008-11-17T02:17:00.000-08:00

After more than 350 conservations with customers about the maintenance and support issue in the past 4 months, it’s becoming quite clear users expect from their software vendors. While those issues can be broken into tens of categories, three themes have emerged that include:

Choice. Customers want to choose between tiered plans. The best plans allow customers to select the option best for them. Choice means the availaiblity of a basic plan or the full range of services expected in a comprehensive “insurance policy”.
Value. Users expect plans to show ROI or meet service level agreements (SLA’s). These SLA’s should reflect outcomes not just process. If a user contacts a help desk 5 times a year and pays $500,000 in maintenance, at $100,000 a call, they better be getting platinum response levels of 1 hour or less and a resolution in 24 to 48 hours.
Predictability. Maintenance and support remain one of the biggest budget items in the ownership of packaged apps. Changes in price, policies, or service levels should be communicated with at least 4 quarters notice. The best vendors provide guidelines that give customers predictability 2 to 3 years in advance.

The bottom line- can vendors deliver on such promises?

Let’s see which vendors can deliver on all 3 pillars. Recent financial analyst reports from investment houses (i.e. Merrill Lynch’s Kash Rangan w.r.t. Oracle and Merrill Lynch’s Raimo Lenschow w.r.t SAP) indicate a sharpening downward trend in revenue estimates, not only for Q4 2008, but also for FY 2009 and FY 2010. Software vendors under pressure to make margins will be forced to choose whether they are willing to take short term pain in stock valuations for long term gain in improving the vendor-client commitment or make their numbers by disenfranchising customers during a time of crisis by violating any one of the three tenants of maintenance pricing. Because many software vendors have blown through their Q1 2009 pipe in Q4 2008, new deals are scarce and maintenance revenues are the easiest targets for “guaranteed” revenue and price increases.

Your POV.

Are you being hammered in your existing maintenance arrangements? Do you feel locked in or do you feel your vendor is willing to work with you on deals? Feel free to share with me your experience. You can post here or send me a private email to rwang0@gmail.com.

Event Report: Dreamforce 2008 - Love is In the Clouds

2008-11-12T17:26:00.001-08:00

Over 9,000 attendees made it to the annual San Francisco pilgrimage to hear the high priest of SaaS kickoff the event. This year’s theme focused on the future of Cloud Computing, a focus on success, and how much Salesforce loves its customers. Key product, technology, and partnership announcements from the November 3 to 5 event include:

Force.com expands usage to new product and services. Force.com sites allows customers to publish Force.com data and apps to any site, basically supporting customer built web apps. SFDC will take care of domain, URL, RSS management, etc when customers run their Web apps on Force.com. Other expansions include Force.com for Amazon and Force.com for Facebook. On the Amazon front, SFDC also will support applications being built using Amazon web services, in effect creating a mega cloud. Facebook support allows developers to tap into the Facebook Platform and Facebook Connect.
POV: Movement to expand the platform into new B2C facing markets give SFDC credibility in new social media markets as well as taking the Cloud wars to the consumer. Consider this a continuation in the battle for domiance of IDE’s in the cloud.
CODA showcases its financial package on APEX for the North American market. While Coda2Go was launched at Dreamforce Europe in London last May, attendees at Dreamforce 2008 in SanFrancisco had a chance to see first hand how the 30 year old vendor had completed its rewrite. With enterprise financials built on this new platform, Salesforce.com customers now have more choice in financial solutions within the ecosystem.POV: Like many mid-market vendors, CODA had the opportunity to bet on the next platform and chose a SaaS approach over an on-premise middleware platform. Most mid-market vendors bet on a Microsoft VS.NET “Rainbow” Stack, IBM Websphere, or Progress Software. These middleware platforms allow companies to spend 10 to 15% of budget on tools and technology instead of a staggering 33% that many would spend if they built their own middleware. CODA’s decision is market leading for the industry and is reflective of its groundbreaking historical bets on HP3000 in the 70’s, VAX (DEC) in the 80’s, and AS/400’s (IBM) in the 90’s.
Glovia, a Fujitsu Company, builds order management on Force.com. Customers seeking lead to billing solutions in order management can now turn to the Glovia solution for order management, inventory, fulfillment, and billing. Glovia takes the order from Salesforce.com and brings it into the order maangement system giving it visiblity from prospect to invoice. Enterprises can also check status via the web or on a mobile device via Salesforce mobile.POV: Salesforce.com’s ecosystem strategy allows other vendors to build key back office end to end processes. As more companies add to the ecosystem, SalesForce will continue to gain market relevance against enterprise vendors struggling to move to a true multi-tenant onDemand delivery model.

The bottom line - SaaS platforms continue to morph into cloud computing

Recent decisions by CODA, Glovia, and a host of software vendors show that the transition from on-premise middleware platforms to cloud-based platforms has begun. Application development and delivery professionals seeking new delivery models can benefit from these new platforms. Force.com is gaining momentum and given its history will emerge as one of the top 3 platforms for both customers and software vendors. The real question out there - what will vendor lock-in look like in the world of cloud computing? Will it be like the mainframe lock-ins 40 years prior?

Your POV.

Are you considering a SaaS deployment? Will you move to the cloud? Are you a software vendor looking at ditching your on-premise middleware platform? Feel free to share with me your thoughts. You can post here or send me a private email to rwang0@gmail.com.

Monday’s Musings: The Role of User Groups - Check and Balance

2008-11-09T23:31:00.000-08:00

Conversations and polling at recent user group meetings confirm a common sentiment that user groups should play a role as client advocates with the vendors. Information dissemination, benchmarking, product issues, training, and maintenance fee reductions rise to the top of the list in this 235 person on-going survey. While not explicit in all charters, here’s a full list of expectations user group members seek from their user group:

85% - Communicate vendor news and updates.
73% - Benchmark performance.
72% - Address product issues, bugs, enhancement requests.
68% - Deliver training and educational sessions
65% - Fight for maintenance fee reductions.
63% - Influence product road maps.
59% - Share product and technical knowledge.
51% - Facilitate peer networking opportunities like user group meetings
40% - Provide recruiting opportunities.
35% - Liase with software vendor executives
32% - Negotiate license discounts

The bottom line - Get involved and make a difference.

Companies join user groups for both professional and social reasons. User groups command true power in influence a vendor’s direction while bringing common issues for discussion and sharing. Recent actions by SUGEN - the SAP User Group Executive Network in making some progress on the topic of maintenance fees and improving the vendor-client commitment show how publicity and impact can shape influence. The key is for user groups to leverage the power of the users and clients to publicly and privately create checks in the balance of power with the vendors. Go make a difference and contribute your time to your user group today!

Your POV.

Do you feel your user group has given you value? What are you looking from your user group? Feel free to share with me your experience. You can post here or send me a private email to rwang0@gmail.com.

Wednesday’s Whispers: The Word On the Street

2008-11-05T00:25:00.002-08:00

PEOPLE WHISPERS: MOVES, PROMOTIONS, AND MILESTONES

Congratulations to all! Thanks for your emails and alerts. If you’ve got a change or know of a promotion, keep dropping me a line!

Bruce Cameron is now President of CDC Software. The former executive vice president of worldwide sales and marketing was promoted from within. He now reports to Peter Yip, CEO of parent company CDC Corp.

Jocelyn Eisenberg has started her own analyst relations firm at Eisenberg Analyst Relations Services.

Garland Hall has been appointed SVP of Product Support at Deltek. Garland joins Deltek as of October 6th and brings experiences from EnterpriseDB, Composite Software, and webMethods. As a direct report to Kevin Parker, Garland will manage the global customer support operations.

Klaus Kreplin, the head of SAP’s NetWeaver Product and Technology Unit retired from SAP in October.

Allen Lovett joins Compiere as EVP of Field Operations. Allen will drive go-to-market stratgy for global expansion in sales and professional services. Lovett comes from senior experiences at Sawis Communications, Oracle, Siebel Systems, and Upshot.

John Papandrea joins SAP as a SVP of the Healthcare IBU from Deloitte.

Hannah Smalltree became Editorial Director, Enterprise Applications Media Group at TechTarget in July 2008.

Sergio Segal became a consultant in Competitive Intelligence at SuccessFactors in June 2008.

Borys Stokalski, VP at Infovide-Matrix has become President, Mazovian Chapter at PTI (Polish Information Processing Society) in October.

Michael Van der Breggen has been promoted from Operations Director to Vice President at Atos Origin. He will lead the company’s ERP services in North America as of October 29th.

Ben Wan became Board of Advisor at Motally in August 2008.

CORPORATE WHISPERS

Got a scoop or something to share? Please post or send on to rwang0@gmail.com and we’ll keep your anonymity.

Heatlhcare Information Systems are still all the buzz. The VC’s I’m talking to hint that a big name like a McKesson, Cerner, Epic, or Medi-tech may make the move or be the target. One could even expect the acquirer to be a Big 4 vendor.
SaaS Integration vendors may be the next big area for M&A. As customers struggle for seamless hybrid integration, vendors are looking for the best integration tools.

Tuesday’s Tip: Vendor Selection - Deciphering Vendor Provided Customer References

2008-11-04T00:05:00.000-08:00

As competition intensifies for new license deals and users are under pressure to be cautious with new spending, all parties should expect increasing pressure for quality customer references. Customers seeking references should focus on the following areas of relevance:

Industry - expect to get down to the micro vertical level
Market size - focus on number of employees and revenues
Geographical - address local as well as global requirements
Role - consider individuals in similar roles or account for different roles for a different perspective

Its customary for the vendor to provide their reference lists. Keep in mind, many of these references are receiving monetary and non-monetary favors for their time. For vendor supplied references, customers should ask seven key questions to gauge the motive and incentives of these references:

Did your organization conduct an open vendor selection process?
If you were not representing this vendor, which product would your organization have purchased?
Is your organization part of a vendor specific reference program?
Are you earning points or credits for other vendor related services such as training, conference passes, professional services, etc.?
Does your organization receive prioritized functionality requests?
Who is your executive sponsor? Is that person available to regular customers?
Have you received travel compensation for today’s activities?

The bottom line.

As an industry analyst, we often encounter vendor references that are genuine. However, from time to time, we have had to deal with vendor provided customer references who have vested and biased interests. In one MDM related example, 3 out of 5 of the vendor’s references did not conduct an open vendor selection process. 2 out of 5 vendors told us that the product was working well even though we had received inquiries to the contrary from other parts of their organization. It pays to do your due diligence. Make sure you understand what incentives and motivations are driving the reference to spend time talking with you.

Your POV.

Have you had a great vendor reference only to find out that the reference had stretched the truth? Feel free to share with me your experience. You can post here or send me a private email to rwang0@gmail.com.

BLOG UPDATE: Change your links to blog.softwareinsider.org

2008-11-03T01:01:00.000-08:00

Hello! Starting in January 2009, A Software Insiders Point of View will be moving to a new home. As we are in beta, look forward to new ways of sharing and reaching out. Look forward to your suggestions!

Here's the new blog link:

http://blog.softwareinsider.org

Cheers!

Event Report: IBM Unveils the Information Agenda at IOD 2008

2008-11-02T01:49:00.003-07:00

(Photo: The show floor from IBM IOD 2008 at the Mandalay Bay Convention Center
Copyright © 2008 R Wang. All rights reserved.)

IBM’s third annual Information On Demand event emerges as part of the “Must Attend” list of Enterprise Software pow wows. More than 7000 attendees were treated to 600 technical skill building sessions and 120 business leadership sessions. This year’s theme focused on the need to create an Information Agenda to sustain a competitive advantage and achieve business optimization. Some interesting perspectives from the event:

Business optimization growth is twice as fast than business automation growth. IBM makes the case that workforce productivity, customer profitability, financial risk insight, and other optimization applications gain more traction than automation apps like ERP, HR, Financials, and CRM.
POV: The era of automation emphasis is coming to an end. After years of depositing data into systems, enterprises seek value from all the information in their ERP, CRM, or HR system. Users expect more than automation from systems and want actionable insight designed for roles that are proactively delivered.

IBM is positioned for business optimization via its acquisitions in Information On Demand. The thesis - IBM is delivering information assets via DB2, FileNet, and Informix. Business value in this trusted information can be unlocked via InfoSphere and then realize optimized business performance via business intelligence (i.e. Cognos)
POV: Delivering an Information Agenda requires a tightly integrated stack. This requires significant integration of canonical data models, business processes, meta data, and semantic information. While IBM has made progress in bringing together its acquisitions, at this point in time no vendor has truly delivered on this from a software basis. Considerable amounts of professional services help is still required for success.

Customers See Value In an Information Agenda, now that they know what to call it…

As I was there to give talks on integrated data management strategies - Track 2787: The ROI of Instance Consolidation and Track 2792: The Business Value of Integrated Data Management, it was refreshing to find an information focused audience. Here are some interesting conversation snippets and observations:

Customers desperately seeking access to “real-time” and “near-time” data from legacy apps.
Everyone wants more device delivery choices.
The stack war will be Blue vs Red in the next 3 to 5 years.
Operational business intelligence critical for actionable insight.
BI is not a luxury during a downturn but a necessity for success.
Data archiving plays an interesting role in data optimization and meeting compliance requirements
MDM continues to gain traction as deal volumes have picked up in Q3 and Q4. This could be the “last big spend” before 2009 as a VP of Apps at a large CPG firm expressed.

Your POV

Have you created your own information agenda? Does this term resonate with you? Has your organization shifted from treating data as a commodity to valuing information as an asset? Post a comment or privately reach out to me at rwang0@gmail.com .

(Photo: View from Mix @ THE Hotel during the IBM Cognos reception - IOD 2008
Copyright © 2008 R Wang. All rights reserved.)

Tuesday’s Tip: SaaS - Integration Advice

2008-10-28T00:45:00.002-07:00

Continued interest in software as a service (SaaS) stems from the pay as you go pricing, constant stream of innovation, rapid deployment options, and the ability to do an end run around IT. As the number of options proliferate, enterprises will increasingly lean on SaaS as the mission critical system. Thus, end users need an enterprise apps strategy for SaaS that addresses the "I" word - Integration. The requirements and leadership for integration will lead to the pragmatic realization that SaaS can no longer be ignored by the IT department. As organizations brace for the proliferation of SaaS procurements integration should focus on:

Data mapping - as data moves from one system to another, data must be transformed accurately. More importanlty, service and related metadata are cataloged into a repository for discovery by management tools and development tools.
Business process orchestration - granularity of web services must be harmonized so that the overall process flow is seamless among various systems. Integration services actively manage service access, execution and quality of service.
Quality of service - Like SOA, QoS metrics ensure that the information flow was delivered to the right system at the right time for the right person. Characteristics such as security, transactions, performance, style of service interaction, etc. are explicitly identified and specified for each service

A few key solutions providers to watch out for in the SaaS integration space include:

Blue Wolf Group - a system integrator with an Integration as a Service (IaaS) offering
Boomi - a SaaS integration layer services company
Cast Iron Systems - a software based integration appliance (i.e. hardware)
Informatica - a data integration provider with a multi-tenant, cross-enterprise data integration on-demand service
Magic Software - a business and process integration provider
Pervasive- a data integration provider with an Integration as a Service (IaaS) offering
Snap Logic - an open source data integration tool provider

The bottom line.

The successful adoption of SaaS solutions will transform usage from purpose built point solutions to integration into mission critical processes. The result - SaaS integration will emerge as a key discipline in the overall enterprise app strategies of enterprises who seek to manage a portfolio of provisioned services.

Your POV.

Have you completed a successful SaaS to on-premise integration? How'd it go? Was it easier/harder than your on-premise integrations? Feel free to share with me your view points. You can post here or sending me a private email to rwang0@gmail.com.

Monday’s Musings: Consider Consortium Buying as a Win-Win Strategy

2008-10-27T00:53:00.001-07:00

Falling revenues, crumbling custom systems, and declining budgets often bring municipalities, state authorities, and related agencies together to gain efficiencies in vendor selection, purchasing power, implementation, maintenance, and support costs. End users in the private sector seeking long term efficiencies may want to take a page from the public sector and consider shared services consortium buying. Here are three reasons enterprises in similar industries or within large corporate entities may consider shared services consortia:

Vendor leverage. Industry specific consortia can provide a check and balance with the vendor in pushing for functionality requests and prioritization of bugs and enhancements. Many consortia offer more than one solution to keep this check and balance alive.
Purchasing power. Properly designed consortia deliver buying power that reduces the incremental unit cost per user. Areas for improvement include license fees, hosting costs, and support resources.
Staff retention and recruitment. Consolidating a critical mass of IT talent allows for shared knowledge, improved collaboration, and increased training opportunities. Improved margins allow for investment in staff development and investment in the latest technologies and releases.

The bottom line.

Operational efficiency lessons learned from the public sector are applicable to private enterprises . Natural places for consortia development include primary nodes of networked enterprises. For example, a high tech manufacturer could standardize on 2 vendors and negotiate a license that would allow its suppliers and channels to incrementally add on. In some cases, industry trade groups such as as Blue Cross and Blue Shield in the health insurer space could provide such services. Depending on the legal structure of some user groups, such services could also be delivered. Consider software vendors such as CGI, Lawson, and Oracle for their expertise in arranging such agreements.

Your POV.

Got a consortia experience to share? Have any other tips for the economic down turn? Post a comment or drop me a line at rwang0@gmail.com.

Event Report: Siperian Masters 2008 - Customers Confirm Multi-Entity MDM Trends

2008-10-22T15:59:00.000-07:00

About 200 attendees were present as Ramon Chen, VP of Marketing, kicked off the event to the theme of adventurers and pioneers in MDM at the Bridgewater Marriott (New Jersey). CEO, Peter Caswell, led the keynote session with a view on where Siperian has been, where Siperian is going, and then introduced the Ravi Jagannathan VP of Product Management and Manish Sood, Senior Director of Product Management. They presented Siperian's road map well into 2012. Key announcements include:

Ongoing expansion of the partner ecosystem and alliances.
Announcement of semantic masters for unstructured data.
Focus on easier to maintain GUI
Continued availability of modular deployment options and other cost effective implementations
New state management and work flow integration tie backs to the Lombardi BPM tools
Visually appealing data governance dashboards.

In addition, a few key trends emerged from conversations with customers and partners:

Most customers who had MDM projects also were embarked on SOA projects
Pharma customers successfully proved ROI and justification despite being in SAP and Oracle "only" environments
Availability of system integrator resources has improved.
MDM projects need to be more pervasive and address innovation in order to gain long term political support.
Many customers have reached what Forrester Research considers a Level 3 and 4 MDM maturity.
Prospects continue to see Siperian as short listed vendors
Many seek more innovation from their MDM systems and are beginning to branch out of their single data entity focus.

The bottom line

Siperian customers seem to be well ahead of the pioneering stage with MDM. Customers we spoke to remain satisfied with their decisions and have been successful in proving existing value. Many customers have transcended past level 3 on the MDM maturity model.

Your POV

Do these trends jive with what you are seeing in MDM and CDI? Looking forward to hearing your thoughts. Post a comment or privately reach out to me at rwang0@gmail.com Check it out on the Forrester Blogs.

Tuesday’s Tip: Master Data Management - Focus on the End in Mind

2008-10-21T01:02:00.000-07:00

“Begin with the end in mind” is based on the principle that all things are created twice. There’s a mental or first creation, and a physical or second creation to all things.”

~ “The Seven Habits of Highly Effective People” by Stephen R. Covey

This Coveyism rings quite true especially with MDM deployments. Those seeking to innovate with MDM as opposed to just finish the job will find themselves asking key questions such as:

For whom will this data be for? How will they use this information to take action?
What’s the outcome? What are we trying to achieve?
What will this information look like for another user?
When does this question need to be answered by?
How does this align with our business drivers?
Where can we find the most accurate source?
Why is this data important?

This “end in mind” reasoning then leads to the First and Second approach as Covey puts it:

Mental creation. When beginning the design of an MDM project, focus on the result provides a design point to work backwards from and design role based scenarios. With those scenarios in hand, business process can be mapped back to the corresponding data.
Physcial creation. With a solid blueprint in hand, the implementation teams can now test the scenarios. Assumptions about data integration, process integration, and strength of executive sponsorship will all be put to the test.

The bottom line.

The planning phase is a critical component of MDM. Successful projects often start with a detailed design process that asks the key questions with both a proactive data management focus and role based actionable insight approach. Successful project teams tailor design to how people are using the information. Build this Coveyism as a principle in your design phase and avoid the hassles of a failed MDM project.

Your POV.

I’d love to hear your lessons learned. Feel free to share with me your MDM implementation story. You can post here or sending me a private email to rwang0@gmail.com.

Monday’s Musings: Expect More Acquisitions By the Big 4 in 2009

2008-10-20T01:04:00.000-07:00

Continued economic slow down, credit crisis, and diminished IPO market create the perfect storm for the Big 4 or as fellow blogger Josh Greenbaum likes to call it, MISO (ie. Microsoft, IBM, SAP, and Oracle). Here are four trends at work that shape the thinking on why 2009 will be another year of continued consolidation:

Most privately held vendor exit strategies focus on acquisition not IPO. Many firms with IPO plans have been told by their boards to refocus on revenue growth and partnerships. The intention - use partnership success to both drive revenue growth and attract acquisition by a larger vendor. Many see acquisition by the Big 4 as the best exit strategy at this point in time.
Strategic acquisitions target vendors with strong recurring revenue streams. Chatter from BBQ’s and luncheons highlight vendors with large maintenance revenues as an area for potential targets. Nurting a profitable and recurring revenue stream will allow many vendors to share overall development and support costs as they weather the next storm. The hunt is on for vendors who fit this bill as private equity and vendors chase after these assets. Case in point - the intention to acquire Epicor by Elliot Associates.
Economic conditions lowers publicly traded vendor valuations. For companies with a prescribed target list, its never been cheaper to acquire a competitor. Most P/E ratio have become quite attractive and fall below the standard 2X to 3X revenue price target.
Pressure remains to grow new markets. the larger vendors express tremendous interest in acquiring new distribution channels, micro industry verticals, and new geographical coverage. One great example is the movement in the Microsoft Dynamics partner base. The rumors of M&A run fierce as the partners consolidate to gain scale for regional and global delivery. The fight for Axon by HCL and Infosys also highlights the consolidation happening around SAP system integrators as they transition into solution providers.

The bottom line.

Despite the gloomy economic outlook, end users should assume that the biggest vendors will continue their torrid pace of acquisitions. As these acquisitions factor into long term apps strategies and planning for 2009 purchases, users must assume that truly specialized solutions with significant industry footprint will be acquired. One proactive approach is to suggest acquisitions and tie-ups to key vendors during discussions with their senior management on financial viability as well as long term roadmap and strategy.

Your POV.

Who do you think will be acquired by whom next? Look forward to your thoughts. Post a comment or drop me a line at rwang0@gmail.com.

BLOG UPDATE: Change your links to blog.softwareinsider.org

2008-10-19T01:04:00.000-07:00

Event Report: Inforum 2008 Highlights Transition from Acquirer to Builder

2008-10-17T09:27:00.004-07:00

Inforum’s attendees were treated to a wonderful pre-keynote string quartet and a booming opening inspirational from both the Las Vegas Philharmonic Orchestra and the rock band Innovation. As the orchestra took a bow, Infor’s CEO Jim Schaper, emerged from the conductor’s stand to the surprise of over 5000 attendees. The ever personable and charismatic CEO discussed how Infor would help customers compete in an emerging world of business networks that required innovation to be able to respond to change. He also spoke of the $325M being invested back into the product in the next 4 years.

Key innovation announcements from the event include:

SaaS offerings. Infor announced several SaaS options into the marketplace for users of Infor ERP SyteLine, Infor EAM (Enterprise Asset Management), and Expense Management.
POV: Keep in mind, these are true multi-tenant SaaS options, not hosted On Demand plays like other competitors. Discussions with attendees showed a mixed reaction to SaaS offerings, but in general there was receptivness to a new lower overall cost model. Most attendees believed this showed Infor’s investment into new technology.
Expanded relationship with Microsoft SQL Server. The announcement of a single Infor point of contact for sales, maintenance, and support provides a cost competitive option for customers seeking to take advantage of significant performance and feature improvements in Microsoft SQL Server.
POV: Over 50% of Infor’s customers have deployed solutions on Microsoft SQL Server across 20 solutions. This move delivers a win-win for customers in price and support. In the future, new features in SQL server could provide customers with stronge BI capabilities.
Role based launch pad. Infor MyDay is a web 2.0 user interface that’s role based to 150 personas that Infor has defined for its clients. Infor’s MyDay product represents the leading edge thinking in user experience where tasks, alerts, and performance indicators are pushed to users based on their roles. This first release involves 16 roles across four ERP products.
POV: This builds off of Infor’s announcement last year where there was a push towards portals. The key differentiator is the move towards persona based development which gives Infor a unique design approach on par with the Microsoft Dynamics approach. Infor joins Lawson, IFS, and Epicor as early adopters towards more Web 2.0 centric approaches.
ERP LX enhancements for the i-Series base. New enhancements delivery improved regulatory compliance and usability. In addition, there are added globalization capabilities that support multiple languages in a single data basis and a key GMP (Bood Manufacturing Practice) requirement for the US Food and Drug Administration and the European Food Safety Authorit.
POV: The i-Series base has been neglected a bit for some time. These improvements were well received by the ERP LX customers on site. After speaking with about 23 customers on older versions of BPCS, there was now a good incentive to upgrade to ERP LX.

The bottom line

As one of the few enterprise apps vendors over $1B in revenues, Infor is set to be one of the survivors in the next economic cycle and a significant alternative for Oracle and SAP customers looking for purpose built solutions and divisional standalone applications. In addition, Inforum as an event is well on its way of must attend events during the year and highlights the key trends in the SMB market.

Your POV

Do you own an Infor product? Are you expanding the usage of Infor products? Do you see these as more value oriented alternatives to the Big 2? Do you have issues with Infor. Looking forward to hearing your thoughts. Post a comment or privately reach out to me at rwang0@gmail.com

Tuesday's Tips: Software Licensing and Pricing - Q4 Bodes Well For Discounts

2008-10-14T00:34:00.001-07:00

In both the enterprise and SMB space, recent market conditions point to a lack of available financing for enterprise software purchases. This trend will continue as the credit markets tighten. The result - vendors will be more inclined to discount. Enterprises engaged in contact negotiation with software vendors should take this opportunity to seek additional discounts as the scarcity of new deals will put customers in the driver seat. Keep in mind a few tips:

Push for deeper discounting. Now's the time to buy more licenses should you need them and if you have the cash to spare. Vendors remain anxious for new deals and new deals are far and few between. Apply lessons learned from the last economic downturn. Discounting will include non license areas such as implementation, training, and support. Push for maintenance fee decreases where possible.
Don't hesitate to wait till January 2009. Customers are now in the driver seat. Taking the time to push purchases off till January 2009 buys time for the implementation markets to slow down and provide enterprises with the best deal.
Expect vendors to raise revenue recognition rules as a barrier. Vendors often use revenue recognition issues raised by AICPA Statement of Position (SOP) 97-2 as an excuse to limit certain levels of discounting. In many cases, vendors may be bound on how the recognize the licensing, selling, leasing, and/or marketing of that software. Vendor specific objective evidence known as VSOE requires a company to demonstrate fair value, especially when deliverables like license, support, upgrades, and maintenance are bundled. One approach - have the vendor demonstrate the range of discounts as they apply to their VSOE rules. Often times, the sales person is confused about how these rev recognition rules impact and hides behind these rulings. Breaking down the revenue recognition components often identifies hidden opportunties. Keep im mind there are some limits.
Understand how non-monetary concessions have value. Once you reach the point of a price floor, consider asking for the right level of product development and executive sponsors. Other options include more favorable changes in software licensing clauses such as a set rate of maintenance for the life of the contract. Consider being a reference account should the vendor agree on functionality enhancement delivery deadlines or SLA's during implementation or upgrade. Opportunities to establish industry standards with peers may also prove beneficial.
Seek escrow accounts for vendors that may pose financial viability issues. One way to protect your software investment is to seek a deposit of the software source code into a third party escrow account. This is one way to ensure the maintenance of software, and if the vendor goes bankrup or fails to maintain and update the software as promised, you own the code. You can also set up other conditions like change of control or certain thresholds of financial performance.

The bottom line.

The next 6 to 12 months will provide a unique opportunity to negotiate for new deals. Expect continued discounts until the credit markets stabilize. Keep in mind that the above advice should be approved by and in partnership with your own legal counsel and vendor management professionals.

Your POV.

I'm curious as to how you did on your last deal. Share with me your story and concession by posting here or sending me a private email to rwang0@gmail.com. If I use it in my next research report, I’ll send you a copy of one of our Long Term Packaged Apps Strategy reports. Look forward to hearing your thoughts!

Monday's Musings: 5 Steps to Restoring Trust in the Vendor - Customer Relationship

2008-10-13T00:34:00.000-07:00

Software vendors face significant decisions in the next 6 to 12 months on how to respond to the economic downturn. Anxious shareholders and slipping quarterly forecasts may lead vendors to ignore their implied vendor customer contracts. This "implied contract" is the inherent trust a customer has with their vendor to do the right thing. It's a trust that the customer placed with the vendor when they moved from custom apps to packaged software. This is important for two main reasons:

Crisis of confidence among consumer industries will spread to B2B. Why is this important? According to the latest BBB/Gallup Trust in Business Index Survey, almost half (47%) of those surveyed say that "they have some, very little or no trust at all with the companies they do business with in everyday life." Moreover the trust in businesses, for 13 of 15 industries measured, has fallen 14% during the last 7-month period. The survey and index, commissioned by the BBB and conducted by Gallup, measures consumer trust in businesses they regularly deal with. Growing lack of trust with every day businesses will eventually spill over to other business relationships such as technology vendors.
Vendors who squeeze customers during the down turn will breed mistrust. As economic conditions worsen, software vendors often find themselves faced with margin pressures that eventually lead to cuts (in order of priority) in marketing, back office, customer service, sales, and R&D. Efficiency efforts often result in short term gains as management finds ways to be more efficient and improve their processes. Unfortunately, some vendors will go too far, leading to poor customer service, aggressive sales forces, and stagnating product lines. This often results in angry but locked in customers who will defect at the first opportunity during the next economic recovery. But the underlying issue here is trust. Does the customer currently trust their software vendor to do the right thing?

Software Vendors Can Take Proactive Measures To Improve Trust During Economic Uncertainty

So the real question - Will software vendors take a longer term view to find ways to both reduce expenses and improve how they treat their customers while delivering new innovation. At first, this may sound like a paradox, but unlike industries such as financial services and retail, high tech companies have not run out of cash. In fact, lessons learned from previous boom and bust cycles have taught them to hoard cash for rainy days or acquisitions. Most software vendors who survived the last economic rout socked away healthy levels of cash on hand. The real issue - convincing nervous shareholders that they need to reinvest a greater percentage of revenue back into areas such as service and R&D during the downturn so that they are able to capitalize during the next economic boom cycle.

5 Stakeholder Focused Strategies Can Be Funded Through Maintenance and Support Fees

Where would the money come from? Maintenance and support fees represent the most logical source. Recent conversations with insiders estimate the profitability of maintenance and support fees at up to 85% of the fees for products in the third year or greater in maturity. Further, most support organizations privately admit that not enough of the fees actually go back into the support organization, let alone new product development. Vendors could quickly earn customer trust by providing transparency as to where those monies are being allocated. Five steps that would improve ownership experiences and improve trust include:

Lowering the overall cost of ownership. Customers seek rapid implementation methodologies, richer admin tools, and lower cost access to skilled resources. Cost of maintenance for established products should drop over time, not increase because customers also gain greater proficiency and can leverage self service help tools. Customers seek a reduction in the complexity, cost, and time required to upgrade products. The outcome - efficiency efforts will leave money on the table for innovatioin and new projects.
Delivering hybrid deployment options. With SaaS adoption doubling every year and potentially increasing during the down turn, today's products and solutions should support multiple deployment options. Customers may choose hybrid options that require seamless integration among on-premise, hosting, and SaaS models. The outcome - choice will keep customers from feeling locked in.
Increasing the pace of innovation. By reinvesting more maintenance dollars into the product, vendors can better meet industry specific and customer specific enhancement requests. Inclusion of customers in the design process of future releases, improves the relationship and provides a tangible value to the maintenance dollar. The outcome - rapid delivery of such requirements will build long term trust of how the customer's maintenance monies are deployed.
Supporting greater heterogeneity. Vendors need to deliver on the promise of SOA and web services. Customer have sought improved integration from this next generation of architecture. The intent is to connect legacy systems and support best of breed vendors. The outcome -Any action to improve the capability to integrate with other systems will improve value.
Orchestrating value in partner ecosystems. The larger vendors have the opportunity to show how their ecosystem partners can also provide a complete solution that support regulatory compliance and operational efficiency business drivers. Smaller vendors can identify synergies with partners to build ad hoc and eventually mutual partnerships. The outcome - customers will see the value in how ecosystems can bring new solutions to life.

The bottom line.

The most valuable commodity in this economy and in business relationships is trust. The current downturn in the economy has been exacerbated by a deterioration in trust and a lack of any one party to improve trust and accountability. Software vendors have this opportunity to take their position of strength and demonstrate how they can provide customers value during a down turn. In doing so, they will help their customers succeed and earn customer loyalty and good will when the economy picks up.

Your POV.

If your a vendor, what's missing? Will you be able to convince your board and management? For customers, what else are you looking for from your vendor. What will breed greater trust? Post a comment or drop me a line at rwang0@gmail.com.

Initial News Analysis: Oracle Buys Primavera

2008-10-08T08:16:00.000-07:00

Oracle’s announced the acquisition of Primavera, a leading project based solution (PBS) provider. This latest acquisition signals continued consolidation in the project based solution market which is a 6.6B market based on recent market forecasts. Oracle’s move addresses a significant need as project professionals remain challenged by existing business solutions that force-fit production and manufacturing applications to meet the needs of knowledge-based information workers. The new global business unit is in line with Oracle’s industry strategy and will be headed by Primavera’s current CEO, Joel Koppelman.

As enterprises continue the shift to a service-based and project-based world, project-based solutions (PBS) are the only applications category that enterprises can rely on to deliver process automation, process improvement, and innovation for this new world of work. PBS transcends traditional functional boundaries of project management, ERP, CRM, and supply chain management (SCM) to include requests from areas like project accounting, change management, time/expense, and analytics that surround the work being accomplished.

The bottom line.

Oracle’s acquisition signals its intent to prioritize project based businesses such as architecture, engineering and construction, government contracting aerospace and defense, professional services, oil and gas, and utilities. Expect more consolidation in this industry as project focused businesses gain the attention of apps vendors and the users who already benefit from this project focused world.

For deeper analysis check it out on the Forrester blog.

News Analysis: IBM Storms Into Cloud Computing With an ISV Friendly Pricing Model

2008-10-07T08:06:00.000-07:00

The War for Mind Share In the Skies

The recent announcement of IBM’s Cloud Computing initiatives represents the latest front in the marketing and delivery battle for customers, partners, and ISV’s. IBM has pulled together a mix of existing technologies and new developments into a four pronged attack that focuses on:

Cloud service delivery to end customers - leveraging existing Lotus Collaboration technologies (e.g. Sametime Unyte) and the newly announced Bluehouse, a web-delivered social networking and collaboration cloud service.
Customer integration of cloud services - delivering system integrator led practices around salesforce.com and Succeess Factors through IBM’s Global Business Services (GBS).
ISV enablement of cloud services - providing ISV’s with tools to design, build, deliver, and market cloud services.
Customer enablement of cloud services - helping customers deploy their own clouds through a suite of enabling technologies known as “Blue Cloud”.

Pricing Model Favorable to Broader ISV Adoption

With vendors looking to attract the greatest number of ISV’s into their cloud, OEM pricing often becomes an issue for PaaS adoption by ISV’s. Typical barriers to entry stem from a disconnect on how middleware is paid for and how SaaS models generate revenue, prohibitive upfront costs, and the lack of scaled pricing. IBM’s SaaS pricing pilot launched in July makes a pont to address key barriers wth low up front cost, fixed predictable annual costs, and a one year cancellation option.

The bottom line.

SaaS platform wars continue to intensify. Oracle’s announcement last week at Oracle Open World and this week’s announcement by IBM stresses the importance of this emerging battleground. As the enterprise vendors join Amazon, AppNexus, GoGrid, and Google, expect the convergence of Web 2.0 and Enterprise 2.0 to hasten.

Your POV.

So now your turn. Do you think the enterprise vendors will transition to the new world or will today’s cloud vendors become tomorrow’s enterprise veterans. Post a comment or drop me a line at rwang0@gmail.com.

Tuesday’s Tip: Packaged Apps Strategy - Building Blocks for a Recession Proof Apps Strategy

2008-10-07T00:09:00.000-07:00

The tightening credit crisis continues to impact IT budgets and 2009 planning assumptions. Ongoing conversations with clients confirm that most enterprises anticipate some retrenchment of budgets. As business and IT teams seek to reduce the cost of existing systems, several key enterprise packaged app strategies rise in importance:

Software contract reviews - leading clients invest time in reviewing existing contracts for new opportunities to reduce costs, anticipate business model flexibility, and contain overall vendor lock-in.
Vendor rationalization without lock-in risk - now may be the right time to identify vendors core to the overall business strategy and build stronger long term partnerships. On the other hand, vendors who have tried to raise prices or failed to deliver as a technology partner should be weaned off approve vendor lists, especially if you risk vendor lock in.
Shared services deployment - enterprises with multiple divisions and business units are looking at shared services to drive further efficiency by eliminating duplicate software, infrastructure, and staffing.
Project portfolio analysis - clients are looking to “stop feeding the beast” and reduce the overall spend for legacy systems while freeing up the remaining budget for new innovation. Leading clients deploy application scoring and ranking methodologies.

The bottom line.

As you begin the planning of your recession proof packaged apps strategy, leverage a long term apps strategy frameworks to assess people management and organizational alignment, business process definition and optimization planning, technology strategy planning, and solution centric ecosystem maturity. Keep in context the 4 major business drivers from efficiency, regulatory compliance, growth, and strategy.

Your POV.

Got a strategy, lessons learned, or success story to share? Post here or send a private email to rwang0@gmail.com. If I use it, I’ll send you a copy of one of our Long Term Packaged Apps Strategy reports. Look forward to hearing your thoughts!

Monday’s Musings: Adoption of SaaS Models May Accelerate with Economic Downturn

2008-10-06T00:10:00.000-07:00

All signs lead to an impending slow down in economic spending. Whether this will adversely impact IT budgets is not the issue, but how much will the carnage be is the concern being debated. Regardless, overall funding for new investments appears to be bleak which is why innovative business leaders seeking to fund innovation without significant capital outlays will most likely gravitate to alternative deployment options such as Software as a Service (SaaS) or other OnDemand models because of:

Subscription billing - why worry about the cumbersome capital expenditure budgeting process when you can sneak this in with operational expenses?
Rapid deployment - avoid the headaches of complicated deployments, the expense of system integration, and the cost of maintaining a data center.
Affordable constant innovation - avoid the cost and disruption of upgrades while receiving more frequent delivery of new features and innovation.
Purpose built functionality - most SaaS offerings are designed for a specific industry, role, or market segment. The result - strong capability in micro-verticals and other purpose built scenarios.

The hallmarks of SaaS are hard to ignore, especially during the advent of an economic slow down. Based on some of the growth rates in the previous quarter, vendors like Amitive, Concur, Intuit, NetSuite, Plexus, SalesForce.com, SuccessFactors, Taleo, and Zoho may have the leg up.

Your POV

Look forward to hearing your comments about how on-premise vendors will fare compared to the SaaS vendors. If you’ve got an idea or suggestion to share, please comment or send a private email to rwang0@gmail.com. Look forward to hearing your thoughts!

Event Report: Initiate Exchange - Customers Confirm Latest Customer Hub/MDM Trends

2008-10-02T14:24:00.000-07:00

Quick thoughts from Scottsdale. Initiate as many you know is one of the leaders in the customer hubs/MDM market. At their annual conference, Initiate Exchange, a few key trends emerged from conversations with customers and partners:

Rapid deployment still key to securing buy-in a the business level. The registry style approach lends itself to demonstrating quick value. This has led project sponsors to secure more funding for longer term MDM projects. Conversations with Initiate customers confirm that implementation times are quicker because of the types and complexity of the initial deployments.
Exchanges move beyond the healthcare arena. Commercial customers are learning from the trend of collaborative Healthcare networks. These networks typically share patient and provider data within and across their networks in order to support accurate information across the ecosystem. Retailers and manufacturers are starting to see the value in this area.
Scarce skill sets abound in kicking off MDM projects. Customers confirm that staffing of technical resources has improved significantly. But both system integrators and customers admit that scarce skill exist for project kick off activities such as setting the stage from change management, building the infrastructure for data governance, and creating and staffing effective program management. This is a trend not just for attendees but across the inudstry.
Version 8.5 generates a lot of interest. Customers who stopped by the demo kiosk expressed positive comments about the new collaborative data stewardship capabilities, streamlined user experience, and the Initiate Inspector Inbox. Those with Group 1 looked forward to using the geo codes in the new adapters.

The bottom line

Initiate customers remain quite satisfied with their choice and the level of investment in R&D by the management team. A growing list of partners continue to bolster Initiate’s mindshare in industries outside of their core pharma, healthcare, and public sector.

Your POV

Wednesday’s Whispers

2008-10-01T10:12:00.002-07:00

PEOPLE WHISPERS: MOVES, PROMOTIONS, AND MILESTONES

Congratulations to all! If you’ve got a change or know of a promotion, drop me a line!

David Corrigan is now a VP of Product Management at Camilion Solutions. David was the public face for MDM at IBM and the acquired entity DWL.

Ira Hall is now Acting Director of Global Revenue at Silicon Graphics. He joins from PWC where he served as a Director and Advisory Services Partner.

Charlene Li is now a Thought Leader and Founder at Altimeter Group as of July 2008. She joins from Forrester Research where she was a VP and Principal Analyst; and co-author of Groundswell.

Jeff McKee is now a Sr. Director, Microsoft OEM Division Product Management. He previously led various roles within the Microsoft Dynamics AX team including Director, Microsoft Dynamics ERP Industry Product Management.

Robert McNeill is the Founder at ThoughtBright. He joins from Service-now.com where he was the VP of Strategy and Marketing.

Mark Szeleyny is now Director of Product Marketing at ON24. He joins from Jigsaw where he served similar roles in growing that startup.

Eric Verniaut is now at Lawson as the company’s Executive VP of Lawson Professional Services. He joins from T-Systems North America where he serve as the CEO and Chairman - Americas Regions.

CORPORATE WHISPERS

Got a scoop or something to share? Please post or send on to rwang0@gmail.com and we’ll keep your anonymity.

Project Based Solutions - The word on the street is that there will be some more acquisitions in the project based solutions space. This market is going through consolidation and the acquisition of OpenAir by NetSuite was just the beginning.
Heatlhcare Information Systems are all the buzz. The VC’s I’m talking to hint that a big name like a McKesson, Cerner, Epic, or Medi-tech may make the move or be the target.

(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

Tuesday’s Tip: Software Licensing and Pricing - Stop paying for shelfware

2008-09-30T12:09:00.001-07:00

First of all, some of you may be wondering what shelf-ware is so a quick definition. It’s software you buy and don’t use. So if you bought 1000 licenses of Vendor X’s latest ERP software and use 905 licenses, you now have 95 licenses not being utilized. That’s 95 licenses of shelfware you pay maintenance on whether or not you use the software or not.

To avoid paying for shelfware you have to do a few things:

Conduct an internal software audit. Figure out how much software you have and are using.
Look at your contract to see if you can reduce shelfware. Vendors are smarter than clients in most cases. You might just find a clause that says any return of software subjects you to repricing of the contract. There are a number of similar clauses like this.
Determine future demand. Find out if you will use the software in the next 3 months. If you have a demand, then it doesn’t make sense to return.
Consider price protection. Arranging for future discounted prices helps with reducing shelfware and paying maintenance on software not deployed. These clauses are a good way forward

Your POV

I’m in the process of updating the Enterprise Software Licensee Bill of Rights. If you’ve got an idea or suggestion to share, please comment or send a private email to rwang0@gmail.com. If I use it, I’ll send you the updated version. Look forward to hearing your thoughts!

Monday’s Musings: Will Tech Vendors Without Credit Lines Survive The Financial Crisis?

2008-09-29T19:55:00.001-07:00

Let’s hope the government finds the most equitable and expeditious solution to the current financial crisis. Without access to credit lines, enterprises lack the financial means to respond to the current economic downturn by transitioning their legacy systems and transforming their business processes. Tech vendors who lack vendor led financing options will be the most vulnerable to this credit crunch. These vendors may find themselves unable to close deals with clients shut out from the credit markets.

Vendor led financing initiatives may prove to be the lubricant that keeps tech spending moving forward. Tech vendors such as Sun, Intel, HP, Microsoft, IBM, and Oracle are best positioned to whether the financial crisis because they have their own financing arms - an important resource which will provide them with such capabilities to extend not only to their customers, but also to their key partners.

Your POV.

Look forward to hearing your views. Where do you think the current crisis will take us?

Related posts: See Infor’s Move with IBM

BLOG UPDATE: Change your links to blog.softwareinsider.org

2008-09-28T21:55:00.002-07:00

News Analysis: Oracle SaaS Platform Offering Adds Choice to Emerging PaaS Platform Wars

2008-09-22T23:53:00.013-07:00

Emerging SaaS platform wars akin to on-premise middleware wars
With consolidation in the middleware market fairly under way, adoption of SaaS platforms (i.e. PaaS) by solution partners represents the next land grab in the enterprise software space. Current key players include industry leaders and specialists such as Salesforce.com, NetSuite, IBM, Microsoft, Oracle, and Magic Software (UniPaas). Today's announcement by Oracle indicates that:

R&D investment in the on-premise stack is very applicable to the cloud. As Oracle continues to strengthen it's "Red Stack" initiatives, it's looking at how to effectively win in multiple deployment options from hosted, single tenancy, multi-instance, and multi-tenancy. The platform offering currently includes Oracle database, Oracle Fusion Middleware, Oracle Enterprise Manager, and Oracle VM along with security and other high availability support. The existing partnership with Amazon WebServices show cases this commitment to work with other cloud providers.
Oracle seeks to become the PaaS vendor of choice. Oracle's foray into SaaS platforms and cloud computing gains momentum as 250 ISV's have chosen the Oracle SaaS platform for delivery and development. ISV's include Adaptive Planning, Ariba, Asknet Inc., Blackboard, Callidus Software, CashEdge, Click Commerce, Inc., Docupace Technologies, dthree inc., EnterConnect, eXpresso Corp., frevvo, InfoNow, Intacct Corp., MAXIMUS, Inc., OpSource, Perot Systems, Sabrix, SuccessFactors, Teranode Corp., Where 2 Get It, Wireless Matrix, Workstream Inc., Xactly Corp, Zogix. The list of ISV's is impressive given the size of the vendors, industries, and geographies.

The bottom line...
SaaS platform wars will intensify as Oracle enters a parallell market where BEA, Microsoft VS.NET, and WebSphere traditionally played in the on-premise world. This move can be seen as Oracle's ambition to be the software deployment and development platform of choice for the cloud based computing world. In effect, Oracle now places itself in direct competition with SalesForce.com, NetSuite, and Google for mindshare and technology partnerships. ISV's looking for a PaaS partner now gain another option.

Your turn.
What are your thoughts on Oracle in the Cloud Computing space? Do you see Oracle as an effective provider of solutions for your ISV? Do you believe you can partner with Oracle? Does Oracle provide you with the right tools? Look forward to hearing from you! Feel free to post your comments here or send me a private email at rwang0@gmail.com.

Trip Report: 2008 Oracle Open World Day 1

2008-09-21T12:56:00.016-07:00

View from the Moscone North to South Above Ground Crosswalk Looking into Moscone West
(Copyrighted 2008. Photo by R Wang. All rights reserved)

In the world of enterprise software, Oracle's Open World is one of the grand slam must attend events of the year. Day 1 starts with the Oracle Users Forum, a collection of 420 affiliated user group communities participating in special interest group sessions, and the Oracle Partner Network Forum at the Hilton including the Titan Partner awards. Conversations with partners and customers at these user group sessions reveal an emerging and evolving perception of Oracle and its long term strategy that include conversation themes such as:

What's in the Fusion Apps and when are they coming out? I was stopped a number of times by clients who wanted to know if we had seen the Fusion apps. Sworn to secrecy, I can say I've seen it. We saw real live code at the Oracle Apps Analyst day a few weeks back. The user experience is first rate and I can't comment anymore unless I plan to give up my first born. However, if they deliver, this may be game changing.
Should I go with the "Red Stack"? The stack wars represent a consolidated vendor reality. For years, we've used the term "Red Stack" (i.e. Oracle), "Blue Stack" (i.e. IBM), "Rainbow Stack" (i.e. Microsoft), and "Open Stack" (i.e. LAMP) to describe how consolidation is impacting database, middleware, and applications. Increasingly, partner and customers see themselves choosing among stacks. Notably, we see a lot of discussion from the services based businesses about how they are facing a decision that may require a bet on either the "Red Stack" or the"Blue Stack". Others are looking at coexistence with the "Rainbow Stack" in the Oracle enviornments. I spoke with one Federal agency customer who talked about how legacy system replacement was big and how the were looking to see what Oracle could offer in iGovernment. In general, these discussion occur in the large context of an apps strategy and a solutions strategy. Our standard advice, just don't get locked in to a vendor and find yourself with no leverage to switch.
Custom versus packaged apps, does this even matter? With a lot of the tools in Fusion Middleware and other application stacks improving, many customers expressed a viewpoint that packaged apps were just a starting point. One customer from a large multinational hardware provider pointed out how they are extending a lot of their packaged apps using Fusion Middleware to meet new business models. Another customer in the retail sector talked about how deal management and demand planning was back in vogue as the focus shifted to operations from financial engineering. This customer was looking for the capabilities to configure using JDeveloper over some of their other customization efforts.
Can I trust Oracle as a partner? Oracle is prioritizing efforts to partner with apps and solution providers. For years, Oracle apps partners have often talked about how it was hard to talk about whitespaces in roadmaps, gain commitment from senior executives, and seek joint go-to-market strategies. Conversations from the Partner floor seem to signal a shift in attitude and some optimism in colalborative relationships. More importantly, there was much chatter about new marketing development funds and a renewed focus on partner enablement.
What's Oracle doing about "Green"? There's a surprising amount of interest in Oracle's Green Room Sessions. Being in San Francisco, it's not surprising to find a lot of interest in the Green Marketplace. A few people kept asking me if I knew what was going on with environmental stewardship, sustainability, and green activities. Not being the green analyst I'm making a point to drop by to the Novellus Theatre on Thursday to check out a few of these sessions.
Have you tried Oracle Mix? Hands down this beats the old clunky Oracle Connect! A lot of "early adopter type" attendees have taken advantage of Oracle's new social networking framework at Open World. It's an enterprise version of facebook meets ning! Check it out..(https://mix.oracle.com) or check me out at https://mix.oracle.com/user_profiles/21960-r-ray-wang . drop me a message or add me to your network. Better yet, send me a linked-in request.
Are you checking out tonight's keynote? You bet! In the midst of this year's best reality show (i.e. the US Presidential Election), how can you turn down the all time best political power couple and strategists - James Carville (D) and Mary Matalin (R)? See you there!

Next stop: Forrester's Business and Technology Leadership Forum (JW Marriott, Orlando)
I'm off to Orlando and then back to San Francisco again for the rest of OOW. But come hear the future as we keynote what life will be like in 2020 across the Business Process and Apps Professional, Information and Knowledge Management Professional, and CIO roles in the Business Applications 2020: A Three Role Perspective event!

(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

Trip Report: Fall Event Tour Summary

2008-09-19T14:51:00.001-07:00

For those of you on the road this fall, may be we can find a place to meet up!

September
09/08 to 09/12 SAP's Tech Ed, The Venetian, Las Vegas, NV - Not Attending
09/10 to 09/11 Intuit's Enterprise Solutions Users Conference, Hyatt Regency, Dallas, TX - Not Attending
09/21 to 09/26 Oracle Open World, Moscone Center, San Francisco, CA - Attending
09/23 to 09/24 Forrester's Business Technology Leadership Forum, JW Marriott, Orlando, FL- Attending
09/29 to 10/01 Initiate's Exchange, Westin Kierland Resort, Scottsdale, AZ - Attending

October
10/01 to 10/03 iGate User Event, Ritz Carlton, Orlando, FL - Not Attending
10/05 to 10/08 IFS Customer Summit, Westin Chicago Northwest, Chicago, IL -Not Attending
10/12 to 10/16 Terradata Partners User Group Conference and Expo, Mandalay Bay, Las Vegas, NV - Not Attending
10/14 to 10/14 Microsoft Dynamics AX 2009 Launch, New York, NY - Attending
10/14 to 10/17 Consona Connect User Conference, MGM Grand, Las Vegas, NV - Attending
10/14 to 10/16 Infor's Inforum 2008, The Venetian and Sands Expo, Las Vegas, NV - Attending
10/19 to 10/22 Epicor's Perspectives 2008, Caesar's Palace, Las Vegas, NV - Not Attending
10/26 to 10/31 IBM's Information On Demand, The Mandalay Bay, Las Vegas, NV - Attending

November
11/02 to 11/05 SalesForce.com's DreamForce'08, Moscone Center, San Francisco, CA - Attending
11/10 to 11/11 UK and Ireland SAP User Group, London West Novotel, United Kingdom, - Attending
11/16 to 11/18 HCL Global Meet, The Disney Yacht and Beach Club Resort, Orlando, FL - TBD
11/17 to 11/20 Sage Summit, Mile High Convention Center, Denver, CO - TBD
11/18 to 11/20 Open Text Content World, JW Marriott, Orlando FL - TBD

(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

Food for Thought: Is There a Correlation with Good To Great Companies and the Primary ERP System of Record?

2008-09-14T23:01:00.003-07:00

From time to time, this question comes up as to what ERP systems are used in the 12 companies listed in Jim Collins, "Good to Great" book. Here's the "official" system of record as gleaned from public sources including press releases, SEC filings, and media quotes. If you work for any of these companies, please let me know if I've got any of these wrong as things may have changed...

* Abbott Laboratories - SAP - Primary. BPCS (Infor) and JD Edwards (Oracle) run at the plant level
* Circuit City - PeopleSoft (Oracle) - Primary. Retek (Oracle) at the retail level.
* Fannie Mae - Custom ERP systems
* Gillette – Oracle (At the time of the book), P&G acquired Gillette and runs SAP
* Kimberly-Clark - SAP - Primary
* Kroger - Custom ERP systems. Retek (Oracle) at the retail level.
* Nucor - Custom ERP systems. IFS and Microsoft Great Plains at some plants
* Philip Morris - SAP - Primary
* Pitney Bowes - Oracle - Primary
* Walgreens - Custom ERP systems
* Wells Fargo - PeopleSoft (Oracle) - Primary

The bottom line.
The final score here is 4 for Custom ERP systems, 4 for SAP, 2 for Oracle, and 2 for PeopleSoft. With such a small sample size and Oracle buying up PeopleSoft, it looks like a 3-way tie for SAP, Oracle, and a custom ERP system. If there's any lesson learned here, technology serves a role as an accelerator and not a change agent. One might want to place bigger bets on people, especially Level 5 leaders, strong management, and self-discipline.

Your turn.
As far as one can tell, there rarely is a correlation with the ERP system and how well a company does, but I'll let you be the judge. Do you think the ERP System of record makes a difference in how a company runs? Share your thoughts here or send me a private email at rwang0@gmail.com.

(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

Trends: What Customers Want From Maintenance And Support

2008-09-09T13:44:00.001-07:00

One of the hottest topics this year has been maintenance and support. With many vendors contemplating another price hike, customers increasingly ask where's all that money going. The dirty secret - many vendors typically take up to 85% of the fees as profit, leaving a paltry 15% for reinvestment in support, maintenance, and upgrades. What's worse, some vendors have not only under invested in the core technology, but they have also failed to deliver basic enhancement requests that a majority of customers have asked for. Below's a top 10 wish list that customers are asking for from their vendors (in classic Letterman style):

10. Web based self service driven user support communities
9. Knowledgeable and culturally appropriate support professionals
8. Fixed pricing with no CPI or other inflationary price increases
7. Transparency into functionality and enhancement and prioritization
6. Time and materials billing for products outside of vendor stated support policies
5. 24/7 follow the sun support
4. Service level agreements for response times and quality of resolution
3. Transparency in how much of the maintenance and support dollar is reinvested versus how much is going to profit
2. Choice in support options and packages (i.e. tiered maintenance options)
1. Option for third party maintenance

Bottom line
Some major ERP vendors, especially those in the more competitive midmarket, have seen the light and are beginning to take steps towards delivering on the above wish list. It goes to prove that competition keeps everyone honest. However, those customers who are "locked in" to a vendor, need to organize and band together to create the right leverage with vendors who are hell bent on milking their customers for all their worth in the maintenance dollars. Start the movement with your user groups or other industry trade groups. If you fail to organize, well, you'll know it when you find yourself locked in.

Your turn.
Are you finding that your long term costs to keep the lights on continue to grow? Would you rather spend 80% of your budget on innovation and new projects instead of commoditized back office processes? Would you like to organize with other customers to affect change. Look forward to hearing from you! Feel free to post your comments here or send me a private email at rwang0@gmail.com.

(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

The Big Picture: Dichotomy In Revenue Growth for Q2 CY Quarterly Revenues

2008-08-31T14:36:00.001-07:00

As many main app vendors continue to lower guidance on earnings, this calendar year Q2 public company quarterly earnings analysis shows that larger vendors and specialty vendors such as SAP, Oracle, Lawson, and Deltek gain ground in license revenue growth while growth for the mid-market players now comes from maintenance and services. SaaS vendors all appear to be growing subscription revenue at breakneck paces with Concur (76%), SFDC (50%), SAP (45%), and NetSuite (43%), leading the charge in year over year quarterly revenue growth.

As mentioned in past conversations, the leading indicator for long term growth is new software license sales which drive recurring revenue for vendors with perpetual license models. The trailing number is maintenance revenues which track retention. In the SaaS world this would be subscription revenue. Renewals represent retention.

Here's the break down of year over year quarterly new license sales numbers/recurring revenues:

Enterprise Software Vendors with Perpetual License Revenues (YoY)

CDC Software - License down 20% to $14.8M / Maintenance up 26% to $26.8M / Services up 12% to $27M
Deltek - License up 18% to $22.1M / Maintenance up 11.3% to $28.3M / Services up 12.9% to $22.3M
Epicor Software - License down 3% to$24.3M /Maintenance up 23% to $48.7M / Services up 21% to $41M
IFS - License down 27% to SKr 111M ($17.2M) /Maintenance flat at SKr 165M ($25.7M) / Services revenue up 9.5% to SKr 324M ($94.2M)
Lawson Software - License up 3% to $41.7M/ Maintenance up 14.4% to $88.9M / Services up 8% to $102.4M
Oracle (Apps) - License up 36% to $989M / Maintenance up 17.7% to $1.044B / Services up 16.8% to $957M
QAD - License down 23 % to $11.4M / Maintenance up 8% to $34.5M / Services up 34% to $23.6M
SAP - License up 25% to 898€ / Maintenance up 22% to $1.151B / Services up 21% to 2.06B€

Enterprise Software Vendors with Subscription Revenues (YoY)

Concur - Subscriptions up 76% to $53M
NetSuite - Up 43% to $36.6M
Oracle (On Demand) - Subscriptions up 28.5% to $194M
Right Now - Subscriptions up 25% to $24.5M
SAP - Subscriptions up 45% to $64M
SalesForce.com - Subscriptions up 50% to $240M

The bottom line
Growth for most vendors continues to be driven by maintenance and services revenues. The impact on customers will be a continued squeeze to increase maintenance fees and an increase in the number of service offerings delivered by the vendor. Users should begin their long term account planning and right set expectations. One place to start is to align your business drivers with a long term apps strategy.

Your turn.
Are you seeing a push by your vendor's sales person to up the size of the maintenance contract? Are you seeing more value added offerings in services? Is it getting more difficult to reduce the overall cost of operating your apps? Look forward to hearing from you! Feel free to post your comments here or send me an email at rwang0@gmail.com .

(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

Food for Thought: In a World Of Partner Solutions Does the ISV or SI Partner Designation Matter?

2008-08-07T15:31:00.006-07:00

Old World Definition Of Software Partners Still Prevalent
From a vendor's point of view, partners can play a critical role in expediting time to market, improving sales reach, or delivering a complimentary solution to a customer. There traditionally have been 5 defined categories:

ISV - Independent Software Vendors specialize in delivery software. They typically partner to complement a solution offering or create an integrated solution offering for a target market.
SI - System Integrators focus on bringing various technology components including software to ensure a complete solution. They bring a solution offering to life and may also provide additional business transformation services.
VAR - Value added resellers build on top of existing solutions and to resell the "value add" on top of an existing product. VARs partner by expanding a solution offering for a geography, market segment, industry, or role.
OEM -Original Equipment Manufacturers develop components for use by another company in their product. In this context, the vendor provides their solution as an OEM to be embedded by a partner.
Technology Partner - Technology partners supply solutions in other areas such as hardware, networking, tools, and related components.

Next Generation Partner Solutions Blur the Lines
Recent discussions with over 150 customers and partners of software vendors and their partners at Microsoft, IBM, Oracle, SAP, Lawson, SalesForce.com, and NetSuite highlight two trends:

ISV's continue to provide system integration via new services. The hunt for quarter to quarter growth has many of the ISV's bulking up their pro services offerings. While many of these vendors continue to build additional partnerships to expand their reach, there remains considerable investment in internal professional services teams and other value added consulting offerings. Some examples include additional "value added" support services or business value services offerings.
System integrators break ISV dependencies by delivering solutions via SaaS or PaaS. Previously, the large consulting firms have invested in solution platforms for custom delivery to clients such as a specific utility billing platform, tax collection system, or telecom call center solution. By moving to a one to many multi-tenant deployment option, system integrators break their dependency on a vendor and can now mitigate the cost of supporting clients should they choose a multi-tenant approach. This means they can deliver one to many support and get into the solutions game without worrying about excessive costs to support various client templates and deployment intricacies

The bottom line.
In the world of partners and partner solutions, customers remain confused at all these designations. At the end of the day, they just want to know the solution is offered in a consistent fashion, certified, supported, and part of a socialized ecosystem.

Your turn.
You've heard my view. As I write this, I'm in the midst of my next report on solution centric ecosystems. Do you agree or disagree that these designation no longer have the same meaning? Is there value in having a uniform way of evaluating these new partner solutions sans the old world monikers? Would a maturity model help? Looking forward to your comments!

(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. All NDA's have been honored.)
Copyrighted 2008 by R Wang. All rights reserved.

Food For Thought: Can You Have It All - Faster, Better, Cheaper?

2008-07-31T01:17:00.010-07:00

Return of the FBC Mantra
With pending economic uncertainty in sight, almost every conversation in the past 2 months has referred back to the mantra of Faster, Better, and Cheaper (FBC). Maybe it's part of living here in the heart of high tech companies where product life cycles are as a short as the next haute couture dress on a Paris runway model. But we're hearing it more and more across all industries. Is this a new client based reality or just another step towards the price-based commoditization whirlpool? Let's take a look at the components:

Faster. Can you get this to market faster? Can you reduce the time it takes to sell the product? Will you be able to collect money more quickly? Can you respond to a safety issue more quickly?
Better. In the eyes of a customer, is this a significant improvement? Are the trade offs we make worth the effort. Will this compel someone to select our offering?
Cheaper. Can we do this for less? Can we do this with less people? Are there regulatory or compliance issues that prevent us from reducing cost? Do we have to hire so many people? Do we have to hire so many good people?

Market based reality shows it's tough to achieve all three: One could argue that it's been next to impossible to support all three for all industries. For example, in the March 2000, NASA FBC Spear Report, a former NASA engineer stated that "the faster, better, cheaper" approach that pushed agency engineers and scientists to crank out more frequent, low-cost, and stripped down missions was a failure. In learning from the aftermath - we are seeing that top technology trends in the enterprise software industry do not normally support all three either. Two out of three seems to dominate current trends. For example:

SaaS. Faster - rapid deployment, real-time upgrades, 99.99% uptime and reliability. Better - more dynamic UI, newer functionality, configured not customized. Cheaper - this remains to be seen. Today ROI studies over a 10 year period show that SaaS is cheaper for companies with less than 1000 employees. Once over 1000 employees, we see SaaS costs comparable to on-premise. This becomes more of a life style thing.
Third party maintenance providers. Faster - this is debatable in terms of responding to regulatory updates, vendor changes, etc. Better - users often find that vendors like Rimini Street optimize the instance when they bring over the product. Cheaper - up to 1/2 the cost of maintenance price can be reduced which frees up money to invest in all the other projects that have been neglected for some time.

Your turn.
You've heard my view. Got an example where all 3 work? Or do you think this is all a fallacy? Maybe it's true that, "You can only have 2 - Faster, Better, Cheaper" in enterprise software? Looking forward to your comments!

(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. All NDA's have been honored.)
Copyrighted 2008 by R Wang. All rights reserved.

News Analysis: SAP Moves All Customers Onto More Expensive Enterprise Support

2008-07-16T01:00:00.028-07:00

Margin Pressures Drive Maintenance Fee Increases
Announced at the 2008 Field Kick Off Meeting (FKOM), the elimination of the Standard and Premium support offerings was originally developed just for new customers. However, today's announcement that existing customers will be "transitioned" to Enterprise Support as of January 1, 2009 will come as an unpleasant surprise to SAP's 17,000 customers on basic support. This move may stem from a variety of factors including:

Increasing complexity of the SAP user landscape. SAP often cites the movement towards SOA environments and the growing complexity of IT landscapes as the main drivers for a more comprehensive, differentiated, and streamlined support offering. In fact, SAP customers would concur that their environments have become more complex to manage and own. Many of SAP's largest customers have decided to skip the upgrade to ERP 6.0 and wait for SAP's next major release.
Failure of Business ByDesign launch. Inability to scale BBD in a cost effective manner and delays in moving BBD onto the new NetWeaver 7.1 platform have led to a major loss in potential revenue growth. Most notably, SAP will not reach the 1000 customer target by 2008 as promised in its Q4 2007 earnings call.
Margin pressure exerted by Oracle. During the 2007 Q4 earnings call, Oracle’s CEO, Larry Ellison, stated an overall goal of reaching 50 percent margin and 20 percent earnings annual growth. The effect - SAP has had to react with an equivalent profit margin growth strategy. Combined with the recent $83M payout to i2 and the pending TomorrowNow legal issues, SAP has been left little choice but to respond with a maintenance fee increase to achieve double digit earnings growth.

Compared to the Rest of the Software Industry, Enterprise Support Does Deliver Relatively More Value...
Despite the price hike, SAP should be given credit for holding maintenance fees at 17% for over a decade. Unlike the policies and practices of other vendors, SAP's increase does comes with additional benefits:

Free trial period and graduated increase. Customers will be moved to Enterprise Support as of July and not begin payments until January 1st 2009. Expect increases of about 8% a year until the 22% maintenance fee is reached. For most customers this will occur around the 2011 - 2012 period.
Upgrade commitment. SAP provides a technical upgrade commitment that every installed base customer can be upgraded to the next release. In addition, SAP commits to deliver all the tools required to manage a technical upgrade. However, customers must migrate to ERP 6.0 to take advantage of Enhancement Packages (EHPs).
End to end operations support. Enterprise Support comes with a central test plan for core business processes, a quality manager that will validate test execution and completeness, and a central transport mechanism and change control system. SAP also commits to 7 X 24 support advisory, 7 X 24 root cause analysis, and continuous quality checks via remote access and supportability.

... However, Most Customers Barely Use What They Have.
In conversations with over 100 SAP customers, most express minimal utilization of the existing Basic Support offerings. Basic Support typically includes problem resolution, quality management, SAP Solution Manager, SAP standards for solution operations, knowledge transfer, continuous improvement, and access to the SAP Service Marketplace. The average customer claims to connect with SAP less than 5 times a year. This is the software equivalent of getting an expensive but comprehensive insurance policy and never utilizing it.

The bottom line.
Maintenance fees continue to erode the value of a perpetual license. At 22% of net price, customers pay the equivalent of 2X their original license cost over a typical 10 year ownership lifecycle. Maintenance continues to be the most expensive cost component of enterprise software. Customers should take action by:

Considering third party maintenance options. Rimini Street's recent announcement to provide third party maintenance in 2009 is worth a look. JD Edwards and PeopleSoft customers who have considered this option already save up to half of their Oracle maintenance fees.
Galvanizing the SAP User Groups to take action. Now is the time that customers should leverage their independent users groups to organize a campaign against this maintenance fee increase. Groups such as ASUG, DSAG, SAP Users Group UK & Ireland need to step up to the plate and find a solution to this increase. This will be the real test of these users groups effectiveness. It will become painfully obvious which individuals in leadership positions have been under the influence of SAP and which individuals will be willing to back the end users.
Determining long term SAP containment strategy. Most SAP customers adopted a single vendor strategy. The initial benefits were driven by a fear for complicated integrations, desire for process standardization, and need to expedite deployments pre Y2K. This strategy has led to vendor lock-in and vulnerability. Long term apps strategy should consider how to contain future risk in a single sourced ERP scenario.

Your turn.
You've heard my view, but I'm looking to see how you feel about this latest increase by SAP as well as the Oracle price increases.

For more details on how SAP has raised maintenance fees see the Forrester Report from March 3, 2008 "SAP Raises Maintenance Fees for New Customers"

For some other interesting posts on this topic check out the news time line:

July 11, 2008, Enterprise System Spectator's Frank Scavo, "SAP Botching UP Support Transition"
July 16, 2008, Irregular Enterprise's Dennis Howlett "SAP pulls the trigger on higher support costs" and SAP 'Mittelstand Customers Upset at SAP Maintenance Increases Computerworld Germany Link (for those of you who sprechen Deutch and Babelfish)
July 17, 2008, The Register's Joe Fay "Comment on SAP forces customers onto premium support package"
July 18, 2008, UK and Ireland SAP User's Group's Statement on SAP Support
July 18, 2008, Cio WebLog's Scott Wilson, "SAP Jacks Support Costs"
July 21, 2008, E-piphanies' Michael Hickins, "Tomorrow Now Comes Early"
July 28, 2008, Irregular Enterprise's Dennis Howlett, "More dissent on SAP Maintenance Price Hike"
NEW! - July 28, 2008, The Register's Chris Williams, "SAP Defends Forced Price Hike"
NEW! - July 28, 2008 MyCustomer.com - Stuart Lauchlan "UPDATED: SAP customers furious at 29% hike in support costs
NEW! - July 29, 2008, Enteprise AntiMatter's Joshua Greenbaum, "Friendly Fire: SAP Flubs the Maintenance Business"
NEW! - July 30, 2008, Enterprise System Spectator's Frank Scavo, "Mad As Hell: Backlash Brewing Against SAP Maintenance Fee Hike"
NEW! - July 31, 2008, Computing's Tom Young and Janie Davies, "Fury as SAP raises support costs"

(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. All NDA's have been honored.)
Copyrighted 2008 by R Wang. All rights reserved.

Reality Check: Sales reps matter more than product

2008-07-14T14:16:00.002-07:00

I haven't posted for so long, butI felt like I had to give Mr. Analyst of the Year a break and actually write something.

Over the last year I have become increasingly aware of something and wanted to share it with a larger audience. When I have conversations with companies about a pending software purchase (usually CRM or eService), they tell me the core business problems they are trying to solve, then give me the list of vendors they are considering. And almost every time, I hear a little jingle from Sesame Street in my head:

One of these things is not like the other
One of these things just doesn't belong
Can you guess which thing is not like the other
By the time I finish this song?

Why? Because the obvious vendor(s) who are specialists in their problem are not on the list, and they are selecting from a group of vendors who all do something else. So I ask, "Um, why isn't Vendor X on the list?" And here is the universal reply. "Oh, we started with them, but their sales rep was an asshole."

I don't think developers and marketers at high tech companies have any idea how many deals they are losing based on the personality of the sales rep. What is really shocking is how many times the obvious 'best fit' vendor is dismissed from a deal because:

The sales rep was arrogant (I've heard this a dozen times about 1 vendor in particular)
The sales rep was late to multiple meetings and conference calls and the company felt the vendor didn't want the business
The sales rep didn't know bumpkis about the product functionality and tried to BS their way through--always a big turnoff

Maybe I'm a troublemaker (OK, I admit it, I am) but sometimes I contact the vendor who lost a particular deal and asked them about it. So far, not a single time has the 'win/loss' report had anything about the sales rep or the sales process. Usually it is a useless excuse like, "they weren't ready to make a decision," when that obviously wasn't the case. Or, "we couldn't meet their price," when I knew the discussions never even got that far.

This is all very frustrating for me, because I want to see companies buy the right product to fix the right problem, and when there is a mis-match from day 1, it isn't good for any of us. The customer ultimately doesn't receive the ROI they expect. The vendor never has a referenceable customer. And I have far fewer success stories to write about than I should.

There is so much pressure in my industry (service and support) on after call satisfaction surveys, I wonder why companies aren't doing a better job of understanding the impression their sales staff is making on customers? Why doesn't the VP of sales follow up with prospects after the initial sales visit and ask how it went? Why doesn't someone other than sales create the win/loss reports so at least companies know how much business they are losing because of sales rep hubris?

So all you Software Insiders who read this blog, ask yourself, "when was the last time I did a 'ride along' on a sales call?" Regardless of what your role is (engineering, support, marketing, etc.), maybe you should start making your presence known in more customer facing sales situations. From what I'm hearing, you may be shocked at what you see.

Thanks for reading!

John Ragsdale

Ragsdale's Eye On Service

News Analysis: Infor Teams Up with IBM Global Financing

2008-07-01T22:26:00.001-07:00

Vendor Financing Options Provide a Key Weapon in Battle for Tech Spending
On June 28th, 2008, Infor and IBM Global Financing (IGF) announced a worldwide customer financing program for Infor customers. With the worsening global crunch on credit, this program provides Infor's customers with:

Access to a line of credit for key tech investments. Similar to other IGF deals, the program includes more than just Infor's entire line of business software. Other eligible items include software, services, hardware, and maintenance.
Flexible payment options. Customers can spread traditional up-front payments over time. Flexible payment plans for loans or lease extend up to 60 months. Interest rates are country specific.

Key facts about the deal:

Geographies: All
Products: All products, No IBM hardware or software required
Length of program: Up to 5 years, typically 24 to 36 months
Interest rates: Country specific
Partner eligibility: Open to all partners
Program inclusion: software, services, hardware, and maintenance.

The bottom line.
Vendor-led financing options and payment alternatives provide users with opportunities to avoid up front payments and efficiently deploy capital. While financing options do not address the issues of recurring costs for support, upgrade, and hardware infrastructure, the bundling of professional services, hardware, and other related software offerings provide a compelling business case to choose one preferred IT vendor while deferring capital outlays. Financing will continue to prove to be the game changer in this consolidating and competitive software market.

For more details on how other vendors have accomplished financing options see the Forrester Report from August 29, 2006,"Assessing New Software Vendor Financing Options" .

Your turn.
You've heard my view, but I'm looking to see how you've used vendor financing and if you see this as a game changer or not. Looking forward to your reply.

(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.

News Analysis: Multiple Factors Lead to Shifts in Oracle List Prices

2008-06-17T10:58:00.009-07:00

Dollar Based Pricing Drives the Bulk of Recent US Based "Price Increase"

On June 16, 2008, Oracle updated its localized price lists and software investment guide. Applications previously priced at $3995 per user rose 13.1% to $4595 per user in US dollar terms. Database pricing increased 18.75% from $40,000 per CPU to $47,500 per CPU. Other price increases approximate 15% on average. Despite Oracle’s role in vendor consolidation, increases during an impending economic downturn appear illogical. Recouping for dollar devaluation is the main rationale behind the recent price shifts for the following reasons:

Oracle offers one single global price list. Unlike many vendors who account for global currency fluctuations with country, region, and industry specific uplifts, Oracle maintains consistent pricing in dollars. The dramatic devaluation of the dollar has led to a de facto discount in the 30 to 35% range for multi-nationals who purchase in Pounds Sterling, Euros, and to a lesser extent, Yen. As a result price increases mainly impact the US while other Euro zone countries will not see a major increase in real dollar terms. A closer look at country specific pricing for Germany shows that the Euro price has not changed in constant Euro terms.
Management aims for 50 percent profit margins. During the 2007 Q4 earnings call, Oracle’s CEO, Larry Ellison, stated an overall goal of reaching 50 percent margin and 20 percent earnings annual growth. Given Oracle's global presence and geographical distribution, a large proportion of Oracle's sales and sales expenses are incurred outside of the US and the currency issue has hampered this margin objective and created pricing arbitrage. In the past, key recommendations to end users include purchasing in non-dollar currencies and take advantage of the currency arbitrage. Oracle’s pricing moves aim at mitigating this end user pricing strategy.

Other Price Shifts Reflect the Level of Market Competitiveness
Oracle typically provides pricing changes on a 9 to 12 month basis to account for iterative changes and acquisition activity. Despite dollar based pricing being the main rationale for this recent price shift, some changes reflects the level of competition Oracle faces in the market. For example:

Business intelligence (BI) minimum pricing cuts reflect a competitive market. Head to head competition with IBM, Information Builders, Microsoft, SAP and SAS leads to a change in pricing strategy. Financial BI analytics moved from $400,000 per customer to $5800 per application user with a 25 named user minimum purchase.. This change at list pricing reflects a minimum user drop from 79 users, effectively targeting the SMB market but raising the price for companies with more than 79 users.
App sever increases may reflect Oracle’s dominant market position. Acquisition of BEA puts Oracle in the dominant market position. The price for BEA WebLogic server is now $25,000 per CPU, a 47.1% increase from $17,000 per CPU. Currency fluctuations can not explain this level of price increase. One possibility could be an overall change in packaging that may include additional components.

The bottom line for end users
Contracts Must Take Into Account The Software Ownership Lifecycle

Software ownership spans across five phases of ownership: selection, implementation, utilization, maintenance, and retirement. List prices represent one part of the cost equation. Maintenance fees, upgrades, and staffing have longer term implication and should be factored in contract negotiations and vendor selection criteria. Though Oracle’s specific price changes impact US based or dollar based markets the most, Oracle clients should:

Never pay list price. Most initial offers for enterprise software carry a discount. While discounting percentages may vary due to revenue recognition rules, list prices rarely impact the final cost. Expect the software market to remain competitive in the US and license discounts will remain in the same ranges.
Focus on total contract value, not the discount percentage. Because of the dollar based price increase, discount targets should factor in the price changes. A 30.4% discount for 2008 would be required to achieve the same 20% discount in 2007 due to the list price increase.
Minimize maintenance fees. Maintenance represents the largest chunk of long term apps costs. Rates at 20 to 25% a year represent the equivalent of buying new software every 5 years and spending two times the original license cost over a period of 10 years. Euro zone customers who purchased software prior to 2006 should renegotiate rates to reflect the recent dollar devaluation.

The bottom line for vendors.
Like Big Oil and Petrodollars, Dollar Devaluation Creates a Silicon Dollar Effect.
Dollar devaluation not only impacts the price of oil, but now enterprise software. Expect other US based software vendors with a global presence and single global price list to make changes to the “Silicon Dollar’ equation and raise prices accordingly.

(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

Order Management Hubs: 20 Steps to a Perfect Order

2008-06-08T19:33:00.007-07:00

A Perfect Order still means many things to many people
Recent studies show that enterprises who deliver perfect orders have a direct correlation to positive customer satisfaction scores. Despite the stakes, success in consistently delivering a perfect order continues to elude many enterprises because existing systems lack the flexibility to move orders across the order management cycle.

Process views should trump functional fiefdoms
One source of confusion stems from the lack of clarity in what the components of a perfect order should entail. Confusion often stems from a functional perspective which may be predisposted from an ERP, CRM, eCommerce, or Supply chain heritage. Tossing out the three letter acronyms, order management hubs are about 4 key business processes:

Opportunity to order capture - all the stuff to capture information for the order and send it on to the next step
Order capture to order fulfillment - the guts and logistics of fulfilling an order from pick,pack, ship to TMS, WMS.
Order fulfillment to order completion - the processes that may occur before an order is satisified such as returns, after market service, installation scheduling, and warranty claims.
Order completion to order settlement - invoicing, AP/AR, financial stuff.

Moving from 10 steps to 20 steps towards a Perfect Order
The basic notion is a stakeholder gets an order and they have their expectations to have this filled every time, without question and with minimal effort. In previous discussions on Perfect Orders, 10 steps were identified. The definition has now been expanded to cover 20 key steps which include the delivery of an order:


1.		Through any channel at any time
2	.	Multiple types of stakeholders can
3	.	Engage in a consistent brand experience by
4	.	Selecting the right product or service with
5	.	The correct quantity and configuration that
6	.	Meets the acceptable levels of quality for
7	.	The stakeholder's entitled pricing policy
8	.	Supplied from the agreed upon sources
9	.	Delivered to or installed with the right customer within
10	.	An agreed upon period of time to
11	.	The correct locations in
12	.	The most appropriate packaging that
13	.	Includes the right documentation over
14	.	The right frequency with
15	.	An accurate invoice that can be
16	.	Collected and efficiently settled and/or
17	.	Returned via any channel for
18	.	Warranty claims against defects and/or
19	.	Scheduled for repair based on
20	.	Agreed upon service contracts

The bottom line for end users
Achieving a perfect order requires enterprises to revisit how existing order processes support multiple selling channels, multiple fulfillment scenarios, across functional areas. Ultimately, these business processes must be measured against metrics and key performance indicators (KPIs) such as:

Availability to promise visibility
Order status across all stages
Picking error rate
On-time delivery percentage
Cases shipped vs. ordered ratios
Type and percentage of unsellables
Days of supply
Order cycle time
Shelf level service ratios
Warehouse to store fill rate
Order accuracy percentages
Accurate and timely invoices percentages
Percentage of data synchronization
Stakeholder satisfaction
Lifetime monetary value of stakeholder.

News Analysis: NetSuite's Acquisition of OpenAir Signals Importance of Services and Project Based Businesses

2008-06-02T08:01:00.005-07:00

Like the consolidation in the on-premise world, NetSuite's acquisition of Open Air marks the beginning of the a wave in consolidation for SaaS. NetSuite's decision to acquire OpenAir for $26M is significant for a few reasons:

NetSuite gains a toehold in the Services and Project Based world. The Project Based Solutions market is hot and OpenAir is one of the poster children for SaaS in PBS. In addition, NetSuite has needed critical capabilities in project management, scheduling, and related PBS skill sets. NetSuite adds a base of 40,000 active users and 300 new service customers.
OpenAir customers add end-to-end SaaS business suite functionality. Integration between the 2 products is planned for later in 2008. End users should expect Web services integration frameworks to allow OpenAir customers to complete end to end processes for Order to Cash, Schedule to payment, and Project Design to Completion. Services and project based companies now have a complete offering delivered on a true multi-tenant SaaS platform.

The bottom line for end users
Decision making should still be led by business drivers that may span across growth, regulatory, compliance, and strategic. Key advantages when considering a SaaS solution still include:

Faster deployment of critical business functionality. SaaS solutions often provide much needed "last-mile" solutions that meet pent up business user demand. More often than not, upgrades to solutions occur with more frequency than on premise offerings. Keep in mind, enterprises should coordinate with IT on long term integration requirements, canonical data model design, and deploy the appropriate ESB's or integration technologies.
CapEx reductions that free up much needed capital. Use operating expense instead of upfront capital and avoid the long buying cycle of board approval and IT infrastructure dependencies. Take the freed up capital and apply it towards more functionality.
Growing capabilities to extend solutions via partner networks and tool kits. Vendors continue to expand their Platform as a Service (PaaS) offerings to partners and customers who are looking to ultimately extend processes and apply metadata configurations to "customize" solutions. The toolkit and strength of partner ecosystems should be one of many factors in vendor selection.

The bottom line for vendors
The growing threat (see Workday Flextronics Win) of SaaS as a business and deployment model means that consolidation will accelerate as SaaS vendors aim to bulk up for scale in sales and marketing as well as partner mindshare. Should NetSuite successfully acquire and integrate OpenAir , customers will not only gain key capabilities, but SuiteFlex partners will also gain a new avenue to extend their offerings and last mile solutions on top of one of the industry's top Project Based Solutions, Open Air.

(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

Trends: Economic Stimulus Bill of 2008 May Mitigate Recessionary Effects in the SMB Software Market

2008-05-19T08:09:00.006-07:00

On February 13th, 2008, President Bush signed the Economic Stimulus Act of 2008 (H.R. 5140) and in it were 2 provisions that directly impact SMB's:

"Bonus deprecation". Enables companies with investments in tangible property, computer software, computer equipment, and even improvements to lease property to accelerate their depreciation from a normal 5 year scale to the first 50% being depreciated the first year. However, the asset must be put into use in 2008.
"179 deduction increase". The level of these 179 deductions used to be limited to a $500,000 annual purchase of productive capital with a $125,000 deduction limit. they've raised this now to a $800,000 annual qualifying equipment purchase (not including buildings, but including capital equipment like computer equipment and software) of up to $250,000.

The bottom line
SMB's such as sole proprietorships, partnerships, and corporations will truly benefit from this opportunity to both invest and deduct in computer software and hardware. In fact, several large software companies have already sent out targeted SMB campaigns reminding businesses of these incentives. The trick is to have the software deployed by 2008, so businesses will want to make sure they start their implementations early Q4 (October 2008). Vendors who haven't targeted companies yet with this campaign should jump into the act soon!

(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

News Analysis: Workday Wins Largest SaaS ERP Deal

2008-05-13T09:03:00.002-07:00

Announced today, Workday's big win at Flextronics further bolsters the thesis that SaaS is more than just CRM and SMB. The 200,000 seat implementation for Flextronics and the 26,000 employee deal at Chiquita demystify the notion that SaaS ERP can not be successful.
Key points why 40 clients have considered WorkDay include:

SaaS model - Quick deployment, no data center to manage, and subscription pricing drive the case for this deployment option.
Web 2.0 level usability - User experiences are clean, elegant, and allow for a high degree of user configurability at the metadata level.
Strong HCM focus - WorkDay expands where PeopleSoft left off. Signature features include pre-developed interfaces that link their HCM with a growing network of employee benefits providers and deep HCM expertise.

The bottom line
On the journey towards cloud computing, the interim steps will be hosting and SaaS. As virtualizaton improves, we may find ourselves strangely back full circle to fully distributed computing models like the main frames of yester-year.

(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

News Analysis: Rimini Street Offers Third Party Maintenance for SAP

2008-05-05T05:01:00.000-07:00

Adding to the company's support of PeopleSoft, JD Edwards, and Siebel third party, support, the move to support SAP comes at an optimum time for SAP users. Most users face SAP imposed deadlines for standard and extended maintenance support. To be specific, extended maintenance for R/3 4.6c users ends at the end of 2009. R/3 4.7 users face end of extended maintenance at for an additional 2% fee at the end of March 2010. Rimini street plans to deliver these services without offshoring.

The bottom line.
The SAP market sorely needs options for third party support. With customer specific maintenance contracts north of 22%, the market demands alternative support options. Should Rimini street support SAP customers to 2020 without required upgrades, provide application fixes for serious issues and tax and regulatory updates as needed, and support client customizations, interoperability, and performance at no additional fee, SAP customers will save up to half on maintenance fees. The end result - more money to invest in SAP upgrades and additional solutions.

(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

Trends: Recent New License Sales Remain Healthy

2008-04-30T16:42:00.005-07:00

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

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

2008-04-14T01:00:00.006-07:00

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

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

2008-04-10T23:06:00.005-07:00

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 Java.net. 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

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

2008-04-09T12:05:00.002-07:00

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

Implementation Basics: Remember Lessons Learned from Y2K and Go Back to OP = Q+R+S+T

2008-03-26T01:22:00.006-07:00

Yep, it's true, sometimes we all need a flashback refresher. These past few weeks I've been with clients who are looking to either quickly implement a new ERP system or rapidly complete an upgrade. As many of you know, that's not that easy. But what's been so unsettling is how little we have learned from the Y2K experience. Let me share with you a few universe truths that keep coming up:

Governance must not be all talk, no action. Proper executive sponsorship continues to evade upgrades, re implementations, and even new project selection . Executive sponsorship remains a key component of success and companies can't afford to lose business and IT collaboration.
Program management remains a necessity, not a luxury. Change management, issue resolution, milestone tracking and communication strategies were the critical success factors for successful implementations. With almost 4/5 CRM projects and 1/2 of ERP projects failing, the key factor was strong program management. It starts with the internal organization. Whether or not you go with PMBOK best practices or seek PMI certification, don't skimp on this!
Future state has to be determined before you start, not on the fly. Implementations which have not gone through the rigors of defining a future vision upfront often fail. With proper governance, program management, and a detailed design, terprises must invest the resources for business process redesign, reduction of duplicate data models and architectures, and design and testing by use case scenarios. This blue print should define a framework for the future state. Enterprises should also carefully evaluate where heavy configurations are required and what customizations should be minimized.

Finally, the law of physics apply when talking about the outcome of a project or (OP).

OP = Q + R + S + T

Outcome of project = Quality + Resources + Scope + Time

Outcome of the project refers to the overall success and result
Quality refers to how well the project is delivered to specifications and requirements
Resources refers to the money, labor, and effort deployed on the project
Scope refers to the project objective and expectations planned
Time refers to the duration required to achieve the desired outcome

The bottom line.
Successful project outcomes require a level of upfront planning and organization. The interlay of people, process, technology, and solution ecosystem ring true and enterprise who fail to learn from the lessons of Y2K will continue to make the same mistakes leading to negative outcomes of project. By keeping in mind 3 critical success factors and OP = Q+R+S+T, enterprise will reduce the risk of failure.

(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

Event Report: Lawson Cues Up New Offerings with Flair

2008-03-19T22:23:00.007-07:00

(Courtesy of Lawson Software Inc.)

Lawson CUE 2008 attendees once again were treated to one of the best key note presentations in the enterprise software industry. Amidst CEO Harry Debes "Dean Martin Show" themed key note and SVP Dean Hager's "The Office" parody on Day 2, the team strongly articulated Lawson's progress, current successes, and future direction. Key announcements include:

General availability of Lawson Talent Management. As a part of Lawson's Strategic Human Capital Management System, Talent Management delivers capabilities in talent acquisition, performance management, succession management, learning and development, and compensation management. The solution can be delivered as a SaaS model or directly integrated within the Lawson Core HR application. Facebook integration, Smart Client capability, and an International roll out strategy help move Lawson from a North American offering to one with Web 2.0 relevance and international reach.

Lawson Smart Office information workplace offering. Smart Office is a Rich Internet user experience for S3 and M3 customers that is a part of Lawson's User Productivity Platform (UPP). Key features include dynamic personalization, collaboration and workflow, interoperability with Microsoft Office, and integrated Business Intelligence. The offering brings together tools such as Microsoft Word, Excel, Outlook, Powerpoint, and Groove within the Lawson environment. Capabilities in rich personalization include personalized field labels, bookmarks, conditional styling, tab order configuration, personal alerts, and configuration of fields and columns. (More screen shots courtesy of Lawson). Collaboration and workflow deliver "Visio based" approaches to managing business processes. Built on Windows Presentation Foundation, Lawson's Smart Office interface runs rings around current offerings from larger ERP vendors such as Oracle and SAP and is in the same League as IFS' Project Aurora and Epicor's ICE 2.0 interfaces.

(Courtesy of Lawson Software Inc.)

Lawson M3 Trace Engine 3.0 designed for food safety for food and beverage enterprises. Meeting current and future compliance requirements for EU and US food safety regulations, M3 Trace Engine simplifies the process of tracking ingredients and finished products. This latest release brings key functionality to the US market. With growing concerns about overall food safety, enterprises need to share trace data such as product origin and transport data, provide evidence about product trace lines, and recreate history in the event of food safety incidents.

Acquisition of Freeborders for key PLM capabilities for the fashion industry. Lawson acquired the PLM division of San Francisco based Freeborders. With very short product life cycle times for product concept to retail store shelf placement, PLM will provide fashion manufactures with quicker sourcing capabilities and lead time reduction. Lawson will add 79 global customers and the product will be sold as a stand alone product.

The bottom line

Feedback from customers at CUE, one on one's with key executives, and discussions with partners demonstrate that the senior management team has managed to turnaround the company while also digesting an acquisition. New offerings with a strong industry focus and future product strategy bode well for the 4000+ customers and potential prospects in key industries such as health care, public sector, food and beverage, fashion, equipment service management and rental, and distribution. Expect Lawson to continue to expand its international presence while remaining focused on its core markets.

Event Report: Microsoft Convergence 2008 - Microsoft Ends Project Green, Renews Enterprise Focus

2008-03-11T03:02:00.023-07:00

New Management Shows Long Term Commitment to Business Solutions Group

Recent Microsoft Business Solutions departures have brought into question whether the Redmond , WA giant is serious about the business applications market. Estimates of year over year growth from 2006 to 2007 have fallen from double digits to the high single digits, and this has raised doubts about Microsoft’s commitment to this $1B + business. (See Josh Greenbaum's latest) Yet, after a string of high level departures including Jeff Raikes, Doug Bergum, Satya Nadella, Tammi Reller, and James Utzschneider, it appears the new management team may be here for the long haul.

The good news - meetings in Orlando with partners, customers, and Steve Ballmer’s key note have helped mitigate many doubts while highlighting a renewed corporate wide commitment that goes beyond the appointment of inside veterans such as Kirill Tatarinov and Chris Caren, and a new business solutions head, Stephen Elop. The message from Convergence was loud and clear – Microsoft is committed to the enterprise apps space, SMB and the large enterprise.

Revised ERP Product Roadmap and Strategy Arises From the Ashes of Project Green
Project Green, Microsoft’s attempt to build a new ERP replacing all code lines, failed because partners strongly expressed as desire to keep building in their code bases, the initiative would hinder development of application breadth and depth, and Microsoft did not want to incur channel disruption across all product lines. On a technical level, existing products lacked the architectural foundations for convergence. With the death of Project Green, the Dynamics ERP team enters a new era. Early evidence shows increased collaboration among the system, platform, and tools teams; streamlined ERP product teams headed by Microsoft veteran Hal Howard; and a continued focus on long term product roadmaps crafted by Microsoft Distinguished Engineer Mike Ehrenberg. What has become quite clear:

Lessons learned from Project Green demonstrated in current releases. Despite the death of a converged product, customers already benefit from a new role-based personas focus leading to industry leading user experience. Though each Microsoft Dynamics product will retain their existing programming languages, increased platform adoption of SQL Server and VS.NET technologies allow each product line to adopt SOA, process-centric, and model driven design in an evolutionary approach. Teams will increase sharing of design specs, though not code, within the product families.

Shared investment will drive evolutionary convergence. Today all product lines share one user experience design team which implements UI with shared controls from one set of code that fits to each product’s architecture. Over time users can expect more Dynamics Attached Services, SQL Server Reporting Services (SSRS) report design/execution, unified communication (UC) integration components, and common analyst designer for Windows Workflow Foundation (WF).
SQL Server will play a critical role in future product direction. Cooperative development between the NAV/AX and SQL teams leads to new features optimized for SQL Server 2008 such as proprietary reporting to SQL Sever Reporting Services (SSRS). With Microsoft Dynamics AX 2009, preliminary performance benchmarks show the best scale on SQL Server 2008, though the product will still support Oracle databases. In addition, BI will be delivered out of the box for Dynamics AX. Via SQL Attached Services (SQLAS)
Future roadmap will optimize on Microsoft VS.NET middleware. Existing ERP applications all now use SharePoint as the portal and will leverage the capabilities of unified communications (UC) over the next 2 releases. Microsoft Dynamics SL has already been rewritten in Visual Basic .NET. Microsoft Dynamics AX, Dynamics GP and Dynamics NAV incorporate Windows Workflow Foundation (WF). Microsoft Dynamics GP has supported Visual Studio developers with their Visual Studio Toolkit which exposes, Dynamics GP objects, classes, events and forms to the VS.Net developer. Recent releases of Microsoft Dynamics NAV now incorporate more VS.NET features at run time. Microsoft Dynamics AX 2009 as well as Dynamics GP already leverage web services from Windows Communication Foundation (WCF). Complex roadmap dependencies on underlying Microsoft platform and Office releases, however, impact the extent to which Microsoft can update its Dynamics products, potentially resulting in delays of future releases.
Software plus Services initiative signal potential “SaaS-like” solutions. Future roadmaps indicate a movement towards new deployment options that include hostability, attached services, and finished services. With the changes in the 2006 Service Provider Licensing Agreement (SPLA), partners can deploy hosted solutions that will reduce total cost of ownership (TCO) and improve deployment options. Attached services like payment services and fraud prevention technology for credit card payment processing from PayPal and Chase Paymentech Solutions will extend functionality with relevant business services and integrate with on-premise ERP applications. Finished services intend to deliver new functional or vertical solutions in the cloud hosted in Microsoft data centers.
Industry Builders Initiative replaced with two new programs with more rigorous certification. Microsoft confirmed that Industry Builder, an independent software vendor (ISV) and system integrator initiative designed to deliver core vertical expertise, would be replaced with two new solutions, Microsoft Dynamics Industry Solutions (MDIS) and Certified for Microsoft Dynamics (CfMD).[i] This decision reflects an internal decision to hold off vertical expansion until the horizontal platform has been significantly revamped to support a broader range of vertical requirements. MDIS requires deeper partner synchronization to product roadmap, code quality assurance, translation, localization, documentation, and testing processes. MDIS will offer industry solutions OEM’d by Microsoft, sold on the price list, and synchronized with the Dynamics product development organization. CfMD provides validation and marketing benefits to existing veritical ISV solutions. Solutions must be tested and provide 10 customer references to qualify.

[i] Industries include apparel and textiles, automotive, construction, consumer driven planning, CPG distributors, CPG manufacturers, field services, food and beverage distributors, food and beverage manufacturers, industrial distributors, industrial equipment manufacturing, manufacturing, oil and gas – energy financial management, process manufacturing – process industries, professional services, retail chain manager, and supply chain execution.

The bottom line
It appears that Microsoft has made a renewed commitment to the Dynamics product line. Future innovations will come from both the Microsoft Business Solutions division and the system, platform, tools, teams. End users can expect to stay within their product family and not to be forced down a path of artificial convergence. Despite the death of Project Green, customers will benefit from an evolutionary approach, albeit this will take much longer than originally expected.

[i] Industries include apparel and textiles, automotive, construction, consumer driven planning, CPG distributors, CPG manufacturers, field services, food and beverage distributors, food and beverage manufacturers, industrial distributors, industrial equipment manufacturing, manufacturing, oil and gas – energy financial management, process manufacturing – process industries, professional services, retail chain manager, and supply chain execution.

Customer Experience Management: The Experience is in the details...

2008-03-07T12:06:00.003-08:00

I am not sure where you stand in the debate over Customer Experience Management -- or if you even stand somewhere. However, most people relegate it to management-consulting-fad category and would prefer that it goes away as quickly as Knowledge Management, Process Management, and Order Management... wait, none of those are going anywhere anytime soon, are they? Well, hate to say that neither is Experience Management.

However, we need to make more sense of it. Let's see if I remember how the typical vendor pitch goes... if you work with us we will redo all your processes, change your organizations into a customer-centric organization, and make your clients for life -- greatly enhancing your wallet-share, yada-yada-yada. Although some of the concepts are certain, most of the pitch sounds impossible to accomplish (and usually it is).

We are starting to see some successes in this arena though. No, it was not the "forklift" approach to process change, or the "complete redesign of the experience around the customer" that won. It was the detailed, meticulous approach to taking care of customers.

Yep, there may not be a need to change ALL your processes after all, or deploying costly and complex systems. You may just be able to do it by focusing on what you need to do, how you need to do it, and what you need to do it. If then, and only then, you notice you are missing some DETAILS, then - by golly - fix that. Chances are your business has survived quite some time by now... so you may know what you are doing. That does not mean you cannot improve it.

And, that is where the detail part comes in. Focus on the details, let the processes fix themselves (as a former mentor of mined used to say "if you take care of the minutes, the hours take care of themselves"). Don't spend your energy trying to come up with the ultimate experience - you will never be able to do it. Even if you do succeed, it will be outdated by the time you release it. No, you are better than that... You will focus on making sure your emails get answered within 12 hours (as Bank of America does), knowing that then your customers will come back to use that channel. You will make sure that you communicate with the client clearly in all your interactions (as ATT Wireless agents are trained to do) and that you manage expectations throughout the entire process ("I will place you on hold for no more than 2 minutes while I research the best plan for you", as opposed to "please hold"). You, in essence, will treat the customer the way they expect to be treated. And the hours will take care of themselves...

(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 Esteban Kolsky/ RWang. All rights reserved

Introducing: Esteban Kolsky on All Things Customer Service

2008-03-05T21:10:00.001-08:00

Former research director at Gartner Research, Esteban Kolsky brings his 2 decades of expertise on e-business, customer relationship management (CRM), customer service, and e-service to the Software Insiders Point of View. Recent research focused on trend setting topics such as Enterprise Feedback Management, Customer Service models and eService Suites.

In a previous life, Esteban founded a company that invented a technical architecture to provide point-of-need customer service. Other professional experiences includes serving as the:

CTO of Tiedosta
Director of CRM at Intraware
Senior Manager at BDO Seidman

Look to more interesting customer experience insights to come as Esteban covers the world from his vantage point and joins former Forrester Research Director and current Head of Research at SSPA, John Ragsdale in pontificating on their views of service and CRM in their free moments.

(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

Trends: VC Funding Models Favor Even Simpler Sales Cycles

2008-02-28T18:46:00.011-08:00

I've been meeting a number of VC firms this past month to see if anything new had emerged in terms of enterprise software and tech service provider trends. Standard topics ranged from Web 2.0, future of SaaS, would Larry continue to be the exit strategy, and whether or not IBM would publicly come out and enter the enterprise apps space to the depreciating dollar, state of the economy and the downfall of Billary. But a few things kept sticking out in conversations on what type of software and service companies were receiving funding. Here are some must have characteristics that bubbled out:

Payable with a credit card and not require board approval. VC's like sales models that have a fairly regular and low barrier to entry. Some examples include subscription pricing because it targets operational expense instead of capital expense (i.e. no need to go to the board).

As one VC put it, "If they can't buy it on their AMEX and run it through as an expense, it's not worth investing"

Easy to consume and work like what's on the web. These new offerings, service or products, must follow more consumer user experience models. Because most of the power in the cloud beats what an enterprise has, users are now more accustomed to paradigms on the web and not the legacy apps they replace. More importantly, they must mitigate IT dependencies in not only decision making, but also support.

A serial entrepreneur stated, "We stopped pitching to the IT user 24 months ago. They remain irrelevant because we target the decision makers who want something working now and have the budget and authority to create change. They then go back and tell IT to go figure it out"

Drive a sense of community and free user generated content. Content remains king but not if you have to pay for it. The drive towards UGC continues and the more successful offerings have a community component. This also applies to ancillary technology services and related knowledge based companies where the users and their communities create a self service ecosystem.

An Entrepreneur In Residence (EIR) confided with me and said, "These social networks create so much user generated content that we then monetize. Why pay or invest in content when the knowledge is in the community? We just need to put the tools in there and make it easy"

The bottom line.
While we may be in the midst of an economic slowdown and even headed towards a recession, VC's continue to have faith in models that put more power to an individual user or a small team of users. Lower price points, captivating and easy to use functionality, and thriving ecosystems remain the critical success factors in receiving funding. The era of funding on-premise start ups and large consulting firms may be over. This could explain the great interest in SaaS and of course the tremendous explosion of growth in the upcoming SaaS Con event.

(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

Software Licensing and Pricing: Push for value from maintenance agreements, not discounts

2008-02-19T13:56:00.007-08:00

I would like to provide an alternative view to Ray's most recent post, Software Licensing and Pricing: Stop the Anti-Competitive Maintenance Fee Madness. As head of research for the SSPA, whose members rely on maintenance revenues for their livelihood, I'm not ready to say maintenance contracts are overpriced. In fact, the SSPA view of this is the continued push back on maintenance pricing is having some major impacts on how (and how well) products are being supported.

According to our benchmark database, 81% of maintenance contracts for hardware and software are renewed annually, but over 1/3 require concesssions or discounts to renew. Enterprise hardware companies discount an average of 15% on renewals; for enterprise software companies the average is 9%.

What do you get for your maintenance? Bug fixes, new releases of software, access to community features to share best practices, and of course access to technical support. If the vendor did a good job of fulfilling these deliverables all year long, why are you balking at the maintenance renewal?

And, things are getting trickier for support organizations, whose push into proactive service means that more technical issues are identified and fixed remotely, before the customer is ever impacted. As Chip Gliedman always says, you don't call your doctor and thank them when you haven't been sick in a year. Similarly, support managers tell me that they are increasingly charged with "What have you done for me lately?" upon renewal, because so many problems were intercepted and eliminated that customers rarely interacted with support. In other words, when innovative support teams do a great job, they are invisible. And under appreciated.

If a contract is up for renewal, before you trot out your handbook on 'Negotiating with Terrorists,' be sure to get an account review for the past year and understand how many service issues may have been proactively resolved with little or no involvement from your staff. Review what support and maintenance options you were entitled to under last year's agreement and determine if the vendor delivered on these commitments. If they fell short (no timely releases, missed SLAs, etc.), give 'em hell.

This may be a radical suggestion, but instead of asking the vendor to continue giving you good service for less money, the renewal discussion should be "How can your support team help me get better value and more quickly achieve my business goals for your product over the next year?" If the vendor has not embraced this view of Value-Added Support and can't articulate how they are going to partner with you to help better leverage their products, then you are dealing with a support group in continual 'breakfix' mode that is unlikely to meet your needs for a strategic implementation. And that is a maintenenace contract worthy of hard negotiation.

If the vendor, and their support organization, has a shared interest in helping you succeed with their products, and you are getting as much (or more) value from your purchase as anticipated, then the maintenance agreement is a good investment.

Just my 2 cents. Thanks for reading!

(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 John Ragsdale and R Wang. All rights reserved

Software Licensing and Pricing: Stop the Anti-Competitive Maintenance Fee Madness

2008-02-14T22:36:00.004-08:00

Recent maintenance fee increases by several large vendors lack any logical rationale other than pure greed. Customers and prospects should demand lower maintenance fees in their contracts because:

Maintenance fees represent the biggest cost items in the software ownership lifeycle. Every percent reduction in a $1M deal equates to an annual savings of $10,000. Controlling the base line costs and future increases results in long term cost savings. Keep in mind most deals focus on the net license cost.
Maintenance and support remains highly profitable. Support and maintenance profit margins often hover between 60 to 85% after the third year of a product’s introduction. If a vendor invests 50% of that revenue into R&D, then the customer benefits. However, if the vendor pockets the profits, then the customer loses.

The bottom line
The lack of third party maintenance offerings and the anti-competitive behavior among the large software vendors has led to a de facto increase in maintenance fees without any subsequent value to the enterprise. On top of this, vendors come back and charge for new modules and functionality paid for from the maintenance and support profits. Market place consolidation has ultimately resulted in a less competitive market for consumers. Customers should revolt en masse by protesting any maintenance fee increases that do not come with additional value. Expect a potential class action lawsuit some time in the future where customers will claim collusion among vendors in charging exorbitant maintenance fees while keeping third party maintenance providers from delivering cost effective alternatives.

(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

Trends: I would blog more often if I wasn't rewriting off-shored code

2008-02-11T13:13:00.001-08:00

Back in December I was invited to visit a Silicon Valley start-up to review their software architecture and website design. I'll just refer to them as Startup. We spent two days walking through their prototype reviewing usability and performance.

One of the more interesting aspects of their software was that Startup had used off-shore staff augementation to develop the initial prototype. I recognize off-shoring software development is an emerging trend, and wanted to learn more about their experiences for better or worse. I've successfully coordinated virtual teams in the U.S. and was looking forward to an opportunity to see if the same strategies could be successfully applied to off-shore projects.

Startup had used the prototyping process to test out three different development teams, two in India and one in Russia. Having divergent teams work on the prototype was evident in the end result, functionality was duplicated and the architecture was inconsistent. For example, three different search mechanisms had been implemented.

Performance was poor. One page used AJAX for a partial page refresh of 500K worth of data.

Of course, these are the same types of results I would expect if you put three on-shore teams from different companies together on a project with little cross-team communication. Startup had been successful in finding which of the three companies they thought would be best suited for on going work.

Now we embarked on the rigorous process of revamping the prototype for usability and a scalable architecture. We agreed that I would provide architectural guidance, a member of Startup would do database design, and Team Off-Shore would do the grunt work of wiring things up. This sounded great to me, since I prefer the architectural work to writing lots of boring if-then clauses.

However, there are some big caveats to working with any remote team.

1) Experience Matters

Everyone has to make sure they check-in working and complete code. When this doesn't happen in an office, it's fairly easy to go over to the junior programmer desk, kick their chair and say, "You forgot to check-in the database change scripts!".

When the person you are coordinating with has a 12-hour time difference, and they are asleep, it means the rest of the team needs to reverse engineer and rewrite the missing database scripts. This pretty-much blows the cost savings of the off-shoring. The larger the timezone difference, the harder to recover from this type of error without duplicating hours or days worth of effort.

2) Design for Success

Developers work best when then understand the product vision or corporate mission. Specifications have to be very detailed. Its far easier to cooridinate enhancements on an existing well-defined product than on something which is literally in Startup-mode.

Startups by their nature need to be flexible and able to create features very quickly. Having a centralized team for this is faster, and improves the creative exchange. If we fail to communicate anything about design changes to the off-shore team at the end-of the day, they could be going in the wrong direction for a day before we woke up to communicate with them in the morning.

3) Communication

Teams still need to discuss things. Here again, the time barrier is a huge inconvenience. The U.S. team winds up calling India late at night. 8:30 AM in India = 8PM Pacific time = 11PM Eastern time. Having 3 coordinating calls a week to discuss progress, is a lot of overhead when they all happen fairly late in the evening.

While I am still a fan of virtual teams, I have learned that experience, design, and communication escalate non-linearly as the time differences between locations grows. This means managers need to put in even more effort before projects start to mitigate these risks.

Now, I have to go see if my database scripts have turned up yet...

Please post your comments on strategies for managing remote teams.

(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 & Michael Byrne. All rights reserved

Software Licensing and Pricing: What are Floating Licenses?

2008-01-23T00:21:00.000-08:00

The question of floating licenses has come up quite frequently in the past 3 months. Floating licenses and concurrent user licenses are the same thing. However, the term floating license is more prevalent in developer environments and in the context of server software. The term has been popularized by Macrovision, a software company that provides software publishers with OEM license management products. Users pay for a total number of access not unique licenses per client. Here's why its a benefit to users over named user licensing:

Delivers cost savings. Users buy what they need to run at maximum capacity instead of an individual license per user which wastes capacity - which leads to the capture of true capacity. Enterprises end up buying less licenses and dealing with less shelfware.
Works best in 24/7 environments. Traditionally, concurrent user licenses have been popular in manufacturing and call centers.Global development organizations, call centers, enterprises with 2 or more shifts, and international enterprises can take advantage of a set number of licenses throughout various time zones and work shifts.
Addresses licensing compliance. A set number of users have access to the system at any point in time. No requirements exist for licensing by an individual user - thus no wasted usage. Often, the process includes automatic license sharing where a license server will allocate a license until the total limit is reached. When a user leaves, a new slot is opened. Some systems have mechanisms to flex up and buy additional licenses on the spot when capacity is reached.

The bottom line for users.
In general, there are minimal drawbacks to users for floating licenses or concurrent users. Vendors who have moved to named user licensing just wanted to charge more. Typical conversion credits should be anywhere from 1 concurrent user license to 2.5 to 4 named user licenses. In the SMB space, Microsoft, Epicor, and Agresso have led the way by maintaining concurrent user licenses, providing SMB's with a cost advantage that many enterprises no longer enjoy.

(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

News Analysis: IBM Lotus and SAP - The Duet Sequel?

2008-01-21T07:01:00.000-08:00

Before 7000 customers and partners at LotusSphere, IBM and SAP revealed "Project Atlantic", the code name for SAP Business Suite and IBM Lotus Notes integration. The initial release is planned to ship in the fourth quarter of 2008 and will be sold by both companies. Some quick thoughts:

Collaboration environments just the start of things to come for SAP. Access to new collaboration platforms tied to SAP's business processes will potentially provide users with more relevant and just-in-time information. Future releases plan to include support for reporting and analytics, SAP work flows, and the role based nature of Lotus Notes. One could expect some additional collaboration capabilities that match to the new Domino server.
"Atlantic" represents the next logical step for SAP to support other user experience platforms. IBM and SAP have had a long history of partnerships. Partnership with IBM extends SAP's agnostic information management ecosystem. Previous partnerships with Adobe (i.e. Flex and Interactive Forms) and Microsoft via Duet (i.e. Microsoft Office integration) follow a concerted mission to be omnipresent in the enterprise information workplace. By being present and "seamless", SAP can increase its penetration with information workers. The result - each partner can benefit from the increased adoption and usage. The addition of IBM's Lotus Notes completes the enterprise on-premise arena.

The bottom line
This latest move emphasizes the growing coopetition among the Big 4 software vendors to expand their ecosystems and increase the usage among existing install bases. With agnostic access of information being a key driver to creating relevant role based information, one should expect new partnerships with Web 2.0 user experiences such as Google in the near future. The real question - " Will Oracle follow suit with announcements from Microsoft or IBM? or Has SAP developed a lead?"

(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

News Analysis: SalesForce.com Refines SaaS Pricing and Software Development Tools

2008-01-17T12:43:00.000-08:00

Salesforce.com announced a new pay-per-login utility pricing model for the Force.com Platform and the new Development-as-a-Service (DaaS) offering. Some quick thoughts:

Pricing by login entices casual users. Salesforce.com offers a lower cost alternative to companies that access applications in "the cloud". This new $5 per login pricing allows a users 5 logins per month at list prices. Promotional ricing is at $.99 per login until 2008. Traditional unlimited access pricing will be offered at $50 per user per month.
New pricing model increases pressure on competitors to improve ease of doing business. The SaaS pioneer once again changes the way enterprises access tools and applications. DaaS breaks down the cost barriers to innovation and provides a potentially effective forum for developers, companies, and customers.
DaaS is to Middleware as SaaS is to applications. With a set of API's and development tools designed for cloud computing, the tools provide users with access to the "stack" of database, logic, and user interface. Developers have full access to a wealth of tools including a new metadata API layer, Code Share, integrated development environment (IDE), and the SandBox.

The bottom line
Vendors too often focus on making their lives easier instead of their customers. Salesforce.com once again proves how software vendors can build customer centric offerings.

(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

News Analysis: Oracle BEA Amicably Agree On a $8.5B Deal

2008-01-16T05:26:00.000-08:00

Oracle raises the ante $1.8B more from the $6.7B initial offer for BEA. It appears a combination of activist shareholder sentiment and cooler heads at both Oracle and BEA led to this amicable resolution. This is an update to the original post on October 12, 2007. The deal remains strategic for Oracle for the following reasons:

Oracle seeks to dominate middleware. Middleware platforms provide the nexus for software ecosystems. Each vendor's last mile solutions depend on a strong middleware tool and a community of individuals and solutions providers who build and extend the platform for vendors. Whoever owns the future platform, an applistructure on middleware or a SaaS platform like SalesForce will emerge as winners in the post internet era. Acquisition also marginalizes SAP NetWeaver's role as a standalone middleware solution and puts Oracle in direct competition with IBM.
BEA's customer base remains attractive to Oracle's vertical ambitions. BEA brings high end custom dev clients to the table. With a blue chip base of the best internal IT shops, those in telecom, financial services, and public sector, Oracle or any acquirer could cement its leadership in middleware over IBM, MSFT, and SAP. These custom development shops represent the best and brightest user base and the most lucrative.
Leverage development in China. From development teams to business alliances, the BEA team has made significant inroads in the China market. Oracle sees this as a great opportunity to bolster its China investment strategy and build lower cost development capacity just like the work it did in India.
Oracle should expect a fight for BEA but the competition seems to be off guard. Oracle's potential acquisition takes away the last remaining independent major middleware platform provider leaving future competitors without a large install base and a third party supplier. Other vendors like SAP, IBM, and HP need BEA more than Oracle does. SAP's NetWeaver is among the weakest of the 5 major middleware platforms, despite one of the strongest ecosystems. IBM will be threatened by an Oracle dominance in middleware and continued challenge of commoditizing vertical service offerings into software solutions. HP could use this as an entry point to gain traction in the market. SI's who've built a long term strategy around BEA as an independent platform may seek to counter with an acquisition of BEA.

The bottom line
Oracle's long term M&A strategy centers on gaining the biggest install base around not only mission critical applications, but also middleware. At the end of the day, its also about selling more database and gaining the largest share of the IT wallet. We expect accelerated consolidation along key battle grounds of middleware platforms such as MDM, BI, Portals, BPM, and other Information Management tools. Don't expect the competitors of Oracle to sit still!

In a normal market, Oracle would expect a fight for BEA but the competition seems to be off guard. Oracle's potential acquisition takes away the last remaining independent major middleware platform provider leaving future competitors without a large install base and a third party supplier. Other vendors like SAP, IBM, and HP need BEA more than Oracle does. SAP's NetWeaver is among the weakest of the 5 major middleware platforms, despite one of the strongest ecosystems. IBM will be threatened by an Oracle dominance in middleware and continued challenge of commoditizing vertical service offerings into software solutions. HP could use this as an entry point to gain traction in the market. SI's who've built a long term strategy around BEA as an independent platform may seek to counter with an acquisition of BEA.

For BEA customers:

Seek clarification from Oracle about BEA's future roadmap. As Oracle meets with key customers, now's the time to seek clarity of what BEA's role will be in a world of 2 middleware platforms.
Lock in maintenance agreements now. Call up your sales rep right away if you are paying less than 22% maintenance. You'll want to sign a long term agreement and lock in your current contract conditions, should they be more favorable than Oracle's.
Expect Oracle to acquire more vendors with BEA backbones. The acquisition opens the door for Oracle to integrate companies with solutions built on BEA. Many of these vendors play in mission critical business apps that service the high end of finance, telecom, insurance, public sector, utility, and

For Oracle customers:

Understand how the BEA product will weave its way into Oracle's Middleware Strategy. Seek clarification on the attributes within BEA that could become common across Oracle applications. PeopleSoft customers may want to find out if they can remain on BEA for middleware or if BEA will only be applied to future acquired verticals. The BEA platform reaches out to more non-Oracle shops and provides a truly open platform for integration with less lock in at the meta data and process levels. As Oracle makes more acquisition of mission critical vertical apps vendors, expect the BEA angle to play a critical role in creating a smoother transition.
Consider consolidating middleware strategies. Customer with both BEA and Oracle may want to consider a long term consolidation strategy. Long term costs could be lowered through the reduction of redundant licenses.

Trends: Enterprise Apps in 2008

2008-01-01T00:38:00.000-08:00

ENTERPRISE APPS BUDGETS REMAIN RECESSION PROOF
A potential global financial crisis precipitated by the mortgage melt down, globalization pressures, ongoing middle east conflict, and tumultuous political conditions raise concerns about the world economy. Despite such market pessimism, most end users expect 2008 enterprise software budgets to continue to increase in high single to low double digit rates Some key factors behind this growth include:

Increasing dependence of business strategy on technology. Gone are the days where a business leader could develop a new service or product offering without incurring IT interdependencies. With time to market concerns, requests for agility, and globalization pressures, business leaders expect rapid deployment and responsiveness from future systems. The result - a push to upgrade applications, seek alternative deployment options like SaaS and hosting, and shift last mile solutions to best of breed industry specific providers.
Continued shift to business process focus. As enterprises move away from functional fiefdoms in geographic silos, new business models require process focused support across distributed environments. Current systems no longer meet these requirements and lack the ability to capture business intelligence by process let alone "play well" with other systems.
Decreased competitive differentiation in the ownership of enterprise apps. Now that everyone has industry best practices via their ERP system, best practices no longer provide significnt competitive advantage. In fact, most enterprises show negative ROI in their apps deployments. Market pressures push leading enterprises to seek vertically oriented and last-mile solutions that support open standards and work in the spirit of SOA.

2008 End User Trends
As tectonic shifts continue to impact the software industry, expect the following 10 trends:

Vendor consolidation will continue. Nothing remains more certain than the increasing pace of acquisitions. While there may not be the same flurry of mega deals in terms of size, expect the Big 4 vendors (i.e. Microsoft, IBM, Oracle, and SAP) to bulk up on areas where they are weak and continue to dominate commoditized infrastructure areas such as middleware, hosting services, office productivity, and content and information management. Expect most other acquisitions to be focused on value added solutions that extend vertical footprints. Weak markets will lead to a drop in valuations among competitors leaving vendors without a good cash flow (e.g. maintenance streams) to acquire competitors on the cheap.
Buying decisions will continue shift from IT led to business led. While IT teams will still lead most vendor selection efforts, expect business users to play a prominent role in collaborating on requirements and expectations. A growing number business users will eventually lead these initiatives with heavy IT support in validating dependencies and overall constraints.
Business drivers for new investment will align with efficiency and compliance drivers. During economic upturns, the business driver for projects tend to focus on top line growth and strategic investments. Given the pending downturn and increasing regulatory pressure, expect projects to focus on operational efficiency and compliance. Expect commoditized processes to be BPO'd, varying instances to be consolidated, and standardization on middleware platforms such as BEA Weblogic, IBM WebSphere, Microsoft .NET, Oracle Fusion Middleware, and SAP NetWeaver. Expect CFO's to invest in compliance, analytics, and master data management. Expect collaboration projects among stakeholders such as suppliers, customers, and partners to fall under the efficiency camp.
Partner ecosystems will allow best of breed solutions to reemerge. As enterprises march towards vendor standardization for commoditized technologies, expect business uses to seek best of breed or custom solutions for vertical expertise, mission critical business apps, and other last mile solutions. Standardization onto middleware platforms, and SOA based integrations will allow best of breed capabilities to thrive. Users should not expect one vendor to deliver all last mile solutions. Instead expect to focus on the quality of partner solutions and the level of certification rigor.
Deployment options will expand. Expect vendors to adopt variants of Multi-tenant SaaS, multi-instance software virtualization, and onDemand hosting. Rapid deployment, subscription pricing, and total cost parity will drive vendors to roll out new products architected and priced to compete with SaaS. Hybrid deployments will become more common as new entrants, traditional vendors, and system integrators introduce new software solutions for SaaS and SaaS-like models.
Master data management will shift from a luxury to a necessity. Business drivers such as compliance and efficiency require consistent and accurate master data around financial accounts, customers, suppliers, partners, products, locations, and employees. Process improvements and SOA initiatives will not succeed without a master data management strategy.
User experience will matter even more. Requirements continue to emphasize ease of use, intuitive experiences, streamlined flow, and easy access to information. Expect better role based paradigms to emerge from traditional vendors as they compete with SaaS and SaaS like upstarts.
Custom apps and app development will reemerge as a key skill set. Powerful new platforms (e.g. middleware tool sets, SaaS development environments, and applistructures) will allow end users to build last mile solutions on top of existing middleware platforms that are supported with each upgrade. SOA architectures will provide the reusable web service components. BPM tools will deliver the both process flexibility and agility necessary to support future requirements.
Software pricing models will bifurcate by market segment. SMB users will continue to seek user based pricing models such as concurrent user and SaaS. Enterprises will seek user based models but be forced by vendors to look at metric based on enterprise agreements in the spirit of "value based" pricing. The real question - value for whom?
Third party maintenance will gain traction and force vendors to improve value. The notion of a perpetual license remains an oxymoron. Most software buyers an no longer buy software and not expect to pay a continued annuity stream to the vendor. Despite competitive pressures from the largest vendors to stymie third party maintenance vendors, expect growing interest among the largest users to seek alternatives or more value from existing maintenance.

The bottom line for end users.
TRENDS HIGHLIGHT THE NEED FOR A LONG TERM APPS STRATEGY
Apps strategists, CIO's, architects, and IT directors will want to respond to these emerging trends by building a long term apps strategy centered around:

Aligning project requests to compliance and efficiency drivers.
Organizing a sustainable governance structure for a 5 to 10 year period
Ensuring a flexible future state business process model
Delivering technology and solutions that meet business drivers and business process flexibility
Identifying white spaces in the overall technology solution footprint and supplier road map.

Trends: The Rise and Emergence of Appliances

2007-12-16T11:39:00.000-08:00

2008 Trends Heralds A World Beyond SaaS

As the year begins to wrap up, I am already beginning to read the first rounds of predictions for technology trends for next year. Flowing from analysts, reporters, and industry pundits, among the first I caught yesterday listed in the top 10 industry trends for 2008 was increased adoption of functions (in this case security) delivered via the software as a service model. SaaS, as more commonly and easily referred to, has been red hot for a number of years and now is commonly believed to be the delivery model of choice for small and medium sized enterprises. I certainly don’t dispute the value of its ease of use and deployment benefits, nor the lower upfront licensing threshold that makes SaaS an attractive solution. However, SaaS is not the industry’s panacea for medium enterprises software adoption needs, principally because it is not a good solution to address certain functions. A case in point is in the management space. There are numerous management functions you simply cannot do over a WAN. The protocols are just not supported. Coupled with real issues around network latency and security, makes doing general purpose system management through a traditional SaaS model just not a good idea.

For Some Scenarios, Appliances Deliver The Same Benefits as SaaS Without the Long Term Costs

So how do you still get the ease of use and simplicity of deployment that SaaS delivers but for a function like systems management? You pull out a page from our short technology historical past—and I would argue our historical future too: you look to the appliance form factor. In full disclosure, my view is colored; I now work for a company, KACE, which delivers its product via an appliance. That said, I was also on the front lines of delivering early CRM and ERP applications via a SaaS model and have had ample time and experience to compare the two.

There’s a lot of truth in the statement: the biggest skeptic is the biggest convert. Indeed, I have found my religion in the appliance. It offers the ease of use and simplicity of deployment that SaaS does (slap it in the rack and turn it on), but operates within an organization’s network allowing you do everything needed to manage your IT environment securely and at blistering speed. And from the cost angle, more and more reports are being published about the real costs of subscription based pricing which while attractive up front, oftentimes proves more costly in the longer term.

Today's Perimeter Based Appliances Expand Beyond Yesterday's Purpose Built Approaches

My conversion to the appliance has been gradual. Like many in the industry and especially those coming primarily from enterprise software, my recollection of appliances dates back to the late 90’s when big enterprise players like IBM, Oracle, HP, and others were pre-installing their software on Dell or their own hardware and shipping a so called “appliance.” These “appliances” were really just pre-installed and configured servers and that was the limit of their value; it saved a sys admin a day of work getting a new server up and running. But today’s appliances are much, much more. For starters they really shouldn’t be called simply “appliances.” They are “purpose built appliances:” built from the ground up with a specific function and way of operating in mind and optimized for such. They take the black box approach to solving a problem where everything that is needed (database, OS, reporting software, etc) is built into the application, as well as all hardware required, and optimized for its specific function. The result: an all in one approach which in most cases simply needs to be plugged in.

Perimeter-based appliances have seen widespread adoption already. These are appliances that generally sit at the edge of a network and don’t require a lot of administrative interaction. Firewalls are great examples of such. There is, however, a whole new generation of appliances that could be classified as server application appliances. These have become core to the data center and are being used by administrators on a daily basis. Companies like IronPort (now Cisco), KACE, and Cast Iron are all great examples of such and have rapidly carved out a place for themselves within their respective functions of security, systems management, and EAI. This new generation of appliances is also finding a sweet spot among the customers whom they serve. While the companies mentioned above may have started out targeting different customer segments and sizes (and some still do), they have seen strong adoption by medium-sized enterprises. The reasons for this are the same reasons SaaS has succeeded; they offer a model of simplicity that is easy to deploy, comprehensive in nature, and cost effective. For the medium enterprise which is oftentimes resource constrained and lacks the expertise and know how to take on complicated software deployments, the simplicity of the appliance approach is ideal.

The bottom line for users

CUSTOMER TESTIMONY IN SYSTEMS MANAGEMENT APPLIANCES PROVIDES A POSITIVE PROOF POINT

My own conversion to the appliance was made complete when we held our user conference last month and I had the opportunity to speak with numerous customers about how they are using their systems management appliances. It literally blew me away. The customers love the appliance model! Mostly medium-sized companies ranging from schools districts, state and local entities, to financial service providers and manufacturing concerns, I heard the same statements repeated again and again:

“I love the appliance form factor.”
“I love the simplicity.”
“I love the design of the system.”
“I love the comprehensive nature of your offering.”

With more than 15 years of software industry experience under my belt, I can count on one hand how many times I have heard the word “love” to describe products I’ve worked on. In two days, I heard it, at least, two dozen times. When you hear a chord that resonates, you just know it works. I walked away from the user conference knowing the appliance model is here to stay and more than likely, poised to take off.

If you want to learn more about server application appliances and how they compare to SaaS, check out this white paper. It requires a registration, but is a good one.

Introducing: Wynn White - The World of IT Appliances

2007-12-01T11:26:00.000-08:00

There's a hot market out there in the world of appliances. And because of that, we bring you the latest insights from Wynn White, a Silicon Valley veteran who has served senior roles at Oracle, Oblix, BEA, and now KACE. For those of you who do not know, KACE is a leading provider of systems management appliances where Wynn is now the VP of marketing. We've asked Wynn to take a holistic view on the appliance market, so please welcome him to the list of software insiders!

You can view his bio here.

(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 2007 by R Wang. All rights reserved

News Analysis: Too Early to Call the Death of Third Party Maintenance

2007-11-19T18:53:00.000-08:00

Problems at Tomorrow Now unfairly cloud the market
Recent announcements about a management change of control at Tomorrow Now and letters to clients indicating a change in service agreements (we've been told that both sides could have a 60 day window to cancel contracts in the new agreeemnts) could be perceived as a death knoll for 3rd party maintenance. However, the trends for third party maintenance look good because:

Value for maintenance fees still too low. Despite efforts by the major vendors to improve customer satisfaction, response times, and upgrade benefits, most customers continue to believe that they are not receiving the 2x to 2.5x they are paying in license fees over a 10 year period.
Customers seek options. Third party maintenance, which halves the cost of maintenance, frees up money for new projects and other key IT initiatives. Customers who may have gone to Tomorrow Now look to alternatives. Rimini Street founded by Seth Ravin , a TomorrowNow cofounder, is one vendor who has grown its base to 50 customers and a beneficiary of this trend.
Third party provider market may emerge from China. Chinese IT vendors, not beholden to SAP or Oracle the way the Indian SI's are, have an opportunity to provide this capability and provide some relief to the market. As the Chinese players like Augmentum, Achievo, Neusoft, Worksoft build their outsourcing capabilities, they will be best positioned to provide 3rd party maintenance. For them to succeed, they must do this before they become enticed by Oracle and SAP.

The bottom line for end users
Despite competitive and market pressures from Oracle and SAP, this issue remains a huge pain point for customers. Vendors for too long have milked the maintenance revenue to juice quarterly profits at the expense of customers. Expect new IT players to emerge and take this space and free companies from the shackles of vendor imposed policies while delivering on the true promise of "perpetual" licenses.

(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 2007 by R Wang. All rights reserved

News Analysis: IBM Offers to Pick Up Cognos for $4.9B

2007-11-12T05:56:00.000-08:00

IBM announced its 23rd acquisition in its information on demand strategy by offering $58 per share (9% premium), or $4.9B for Cognos, the Ottawa, Canada, based BI stalwart with 4000 employees and 25,000 customers worldwide. The deal is expected to close in the first quarter of next year. A quick assessment of the deal:

Keeps IBM in the high margin information management services. The most valuable and complicated engagements involve information areas such as BI and performance management. Having Cognos in its arsenal of products and a loyal customer base gives IBM a key tool for future services and software growth. This acquisition is seen as foundational for the Armonk, NY headquartered vendor's information on demand strategy, combining information integration, data management and business consulting services.
Builds on existing relationships. The close partnership between IBM and Cognos dates back as early as 1992 and at least 8 integrated offerings that support many joint customers. Hence this takeover is seen as friendly and endorsed by the Cognos board. As evidence of this comfortable acquisition, Cognos' CEO will lead the information management software division.

The bottom line for vendors
SAS REMAINS THE LAST BI MAN STANDING
The BI space officially is no longer led by Best of Breeds. With Hyperion tied up with Oracle, Business Objects with SAP, and now Cognos with IBM, each of the Big 3 has made its move in the Business Intelligence space. This leaves SAS, headed by Dr. James Goodnight, as the last independent BI vendor. M&A talks seem unlikely, as SAS remains a privately held company, however, Dr. Goodnight has not yet identified a successor.

The bottom line for users
BI SOLUTIONS TO COME FROM THE BIG 4 INSTEAD OF BEST OF BREED
Customers stand to benefit from integrated BI solutions as the Big 4 effectively remove the Best of Breed vendors in BI from the market. This signals the move to incorporate these capabilities into the middleware platforms and create more lock in around the Big 4 offerings. However, customers need to keep in mind the trade off between sole sourcing with one vendor and the risk to innovation.

(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 2007 by R Wang. All rights reserved

Event Report: Oracle Open World

2007-11-11T18:18:00.000-08:00

Despite the stormy night before, Oracle kicked-off Open World to a classic San Francisco weekend, with blue skies, 70 degree weather, and the buzz and excitement one can only expect with 50,000 people packed around Moscone.

Tonight focused on celebrating 30 years of Oracle history and innovation. Attendees were treated to a history of Oracle from the early days of database to tools/middleware, and apps.

Some quick observations about attendees from conversations on the ground:

Feeling the effect of the Oracle surround strategy. Oracle customers and partners by acquisition was a common theme among attendees. Over the course of the past 4 years, even customers in pharma, oil and gas, and retail find Oracle to be present in their environments via database and edge applications that surround the core SAP instance.
Seeking information about future roadmap. Most attendees came to have indepth discussions at sessions with key executives and product management staff. Sessions at OAUG were quite lively with in depth discussions among audience members
Sensing that Fusion Middleware and AIA will play a big role in future solutions. As each Apps Unlimited product consumes more Fusion Middleware, attendees sought to bolster skill sets and general information. The customer base remains open to packaged SOA-based integration and seems willing to pay for this.

The bottom line for users
Customers continue to find value in Open World, despite the size. As Oracle continues to pre package integrations among its acquired products via AIA, expect customers to choose this more cost effective option over expensive integration work conducted by SI's. Customers and partners should bolster Fusion Middleware skill sets as this will be the core requirement to utilize future Oracle acquisitions.

(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 2007 by R Wang. All rights reserved

News Analysis: Dun and Bradstreet Acquires Purisma

2007-11-05T09:49:00.000-08:00

On November 5th, Short Hills, NJ-based Dun and Bradstreet revealed its $48M acquisition of Purisma, Inc, a, Redwood City, CA provider of customer hub solutions. Until now, the majority of DandB’s expertise had been applied to the company’s flagship hosted services and data products, not its on-site Integration Manager or customer hub solution. The acquisition and integration of Purisma will bring a solutions focused approach to the on-site customer hub solution and could augment strong B2B capabilities, improve internationalization, deliver hierarchy management, and support data stewardship processes.

MERGER ALIGNS COMPLEMENTARY OFFERINGS INTO A UNIFIED CUSTOMER HUB SOLUTION
DandB’s acquisition of Purisma represents a significant step in the trusted data provider’s transformation into a customer hub and potential master data management (MDM) solution provider. As a premier B2B data and hosted services vendor, DandB can now deliver on a hybrid customer hub offering with on-site data augmented by sophisticated hosted services. DandB also provides B2C capabilities through a recent partnership to OEM Acxiom’s Abilitec solutions. The acquisition of Purisma is strategic because this:

Provides DandB customers with advanced customer hub tools. DandB’s on-site customer hub solution, Integration Manager, comes with implementation services and automatic monthly refreshes of DandB data made possible through DandB’s DUNSRight Quality Assurance Process. Customer’s light on IT resources benefit by matching their own B2B data against DandB’s gold standard. Today, DandB’s offering suits companies that wanted to compare their data to DandB data rather than create or manage new “best source of truth” information. However, the acquisition and integration of Purisma’s rapid deployment solutions change the game, allowing the ability to add vertical industry versions, support data model extensibility, administer data stewardship, and leverage hierarchies to create new “best source of truth” information.
Validates Purisma’s innovative technology while removing viability concerns. As a core technology within a $1.4B leading provider of business insight, Purisma now has the visibility and funds to expand on key innovations such as team based data governance, multi-dimensional data hierarchies, what-if analyses, and simplified DandB data integration from Purisma Data Hub Version 3.0 and high availability and enhanced DandB corporate family tree management in Version 3.5. Purisma can also augment previous deficiencies with DandB’s strengths in data cleansing, integration and synchronization, and security and privacy.
Opens the door to bring other master data solutions into the DandB universe. Innovations from Purisma allows DandB to solve multi-entity data management and enter the software appliance market. Customers and prospects should expect future developments to include expansion into other data entities such as product, suppliers, locations, and financial accounts. Purisma’s head start in software appliances such as myData for DandB appliance builds preconfigured software applications which are purpose specific, configure to order, auto updating, require no installation, and deliver a managed service through subscription based pricing.

The bottom line for users
CONSIDER DandB AS A CDI PROVIDER UPON MERGER INTEGRATION
Customers and prospects stand to benefit from this complementary acquisition once DandB fully integrates the Purisma capabilities.

Existing DandB customers should consider the Purisma solution. Those with heterogeneous data requirements and hierarchy management needs benefit most from Purisma’s solution focused approach. Customers should discuss with DandB post merger integration plans, product roadmap milestones, and future partnerships. Explore how the solution may evolve into an MDM offering.
Existing Purisma customers should discuss enterprise contracts with DandB. Purisma’s pricing model differs from DandB’s approach. With almost a 70% overlap in customer bases, most Purisma customers have a relationship with DandB and should explore options to continue with Purisma’s user based pricing approach or identify a fair conversion credit to DandB’s pricing models. There may be some bundled opportunties.
Prospects now have a strong alternative for CDI. Customers with DandB data now have the option to sole source a CDI solution. Over time expect DandB to address other data entities such as product, location, employee, or financial accounts. However, those looking for immediate solutions should consider other vendors such as IBM, Initiate, Oracle, and Siperian for now.

The bottom line for vendors
ACQUISITION CREATES A GAME CHANGER FOR THE MDM WORLD
Companies increasingly rank MDM as a high priority technology initiative for 2008. CDI technologies represent a key subset of MDM. As MDM technologies continue to be consolidated into middleware stacks or complimentary solutions, the market can expect:

Trusted data providers to partner or acquire MDM capabilities. DandB has made a serious commitment here that the other trusted data sources have not made. Anticipate that vendors such as Harte Hanks, InfoUSA, Experian, and other trusted data sources will create partnerships with pure play vendors such as Siperian, Initiate, and VisonWare. Expect a rush to explore those partnership opportunities which may lead to MandA discussions.
Large vendors to hasten consolidation among “MDM” components. While trusted data source vendors will remain nervous, other well funded players will certainly enter the market. Consolidation is occurring now between the corners of competitors building master hub solutions. These include the trusted data sources, BI/Action Frameworks, Enterprise Apps, and data management players. From an information supply chain perspective, vendors will want to know where to partner, acquire, or build for the end game.
MDM vendors to enter more scenarios of coopetition. Don't expect any material impact on the market right away, but its reasonable to expect DandB to target the install base for Purisma solutions over time. Yet, despite this, expect partnerships with DandB to continue among the main MDM players IBM, Initiate, Oracle, SAP, Siperian, and VisionWare. Can vendors afford not to partner with DandB and go with a company like Austin Tetra? Probably not.

News Analysis: Deltek IPO's at $18/share

2007-11-01T10:56:00.000-07:00

Kudos to the Deltek team for their recent IPO. This public offering showcases how taking a company private can provide opportunities to regroup, reorganize, and recharge. What this means for Deltek:

New market growth opportunities. The $10M in proceeds from the IPO give Deltek the cash to build off of its base in the UK for International expansion. In addition, the vendor's strength in government contracting, professional services, and construction lends well to related industries such as IT services, architecture, accounting, and transportation services. Deltek can also take the opportunity to expand its partner network.
Visibility into the growing project based solutions market. Forrester estimates this market to be $6.5B by 2010. As work shifts from product to service orientation, solutions in this Project Based Solutions space gain prominence in the enterprise. Think of a Best Buy who's no longer selling a home theater system but the installation, delivery, and extended warranty. Expect the marketing to crank up from stalwarts such as Epicor, Oracle, Primavera, and SAP.
Debt repayment. As part of the repayment terms, the company will apply $42.9M to repay about a quarter of their debt and another $3.9M to selling shareholders who've exercised options. This should free the firm up for better growth prospects.

The bottom line for end users
Keep an eye on this space if your business revolves around projects. Vendor consolidation is sure to occur, but Deltek will be a major player in this space. Deltek's offerings cover both the .NET world and the J2EE world so platforms should not be an issue. Expect both Oracle and SAP to amp up the messaging if the Best of Breeds do really well.

(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 2007 by R Wang. All rights reserved

Buzzword Watch: Tired of Hearing Canonical and Not Knowing What It Means In the World of SOA?

2007-10-25T09:54:00.000-07:00

So, it's one of those things that drives you nuts when everyone is talking about a buzzword, and you haven't found the definition. Canonical in the context of SOA keeps popping up in the many briefings and product marketing conversations I've had these past 12 months, so I thought I'd share with you the definition as its being used.

Attempting to find a good definition...
So, I started with a good old Wikipedia try some months back and got this definition:

"Some circles in the field of computer science have borrowed this usage from mathematicians. It has come to mean "the usual or standard state or manner of something"; for example, "the canonical way to organize a file system is as a hierarchy, with extensions to make it a directed graph". XML Signature defines canonicalization as the process of converting XML content to a canonical form, to take into account changes that can invalidate a signature over that data (from JWSDP 1.6).

For an illuminating story about the word's use among computer scientists, see the Jargon File's entry for the word[1].

Some people have been known to use the noun canonicality; others use canonicity. In fields other than computer science, canonicity is this word's canonical form."

...led me to put it in the perspective of SOA
As you can imagine, the definition was utterly useless and left me still clueless. So here's what I'm starting to understand after talking to my Enterprise Architect gurus that "canonical" is often used in the context of SOA to:

Describe data models. Most of the gurus I talked to mentioned that this would be the superset of all data required to for a specific purpose, yet not reflect all the data. It may not be complete, but it would serve as the single model.
Explain how applications talk to each other. Often used in discussing messaging for SOA, it's about what metadata objects such as data types, values, and semantics are communicated to both the sending and receiving applications. The end result must be some agreement what is the right data, what does it mean to each party, and how the data will be used and shared.
Keep BPEL clean. In order to build a clean service repository, there exists an integration layer that transforms/mediates a variety of messages to a common format through common codes or an ESB. This layer sits between the service repository and the integration processes. Typical hub and spoke integration requires messages to be translated to an independent format and then into the required format. This allows you to add new applications by adding a translation layer making this more effective and reusable than point to point integration. It's common in most EAI approaches.

The bottom line
Often found in conversations about SOA, "canonical" refers to a design philosophy and approach that maps between the various data, messaging, and semantic frameworks used by multiple applications and systems. It's about an approach that allow for reuse of items, such as business processes, among different systems.

(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 2007 by R Wang. All rights reserved

News Analysis: Oracle Launches Hostile Bid for BEA

2007-10-12T05:19:00.000-07:00

Oracle added fuel to fire in the rapidly consolidating enterprise software market today with a $6.7B unsolicited bid for BEA. Here are a few quick thoughts:

Oracle seeks to dominate middleware. Middleware platforms provide the nexus for software ecosystems. Each vendor's last mile solutions depend on a strong middleware tool and a community of individuals and solutions providers who build and extend the platform for vendors. Whoever owns the future platform, an applistructure on middleware or a SaaS platform like SalesForce will emerge as winners in the post internet era. Acquisition also marginalizes SAP NetWeaver's role as a standalone middleware solution.
BEA customer base attractive to Oracle's vertical ambitions. BEA brings high end custom dev clients to the table. With a blue chip base of the best internal IT shops, those in telecom, financial services, and public sector, Oracle or any acquirer could cement its leadership in middleware over IBM, MSFT, and SAP. These custom development shops represent the best and brightest user base and the most lucrative.
Oracle should expect a fight for BEA. Other vendors like SAP, IBM, and HP need BEA more than Oracle does. SAP's NetWeaver is among the weakest of middleware platforms, despite one of the strongest ecosystems. IBM will be threatened by an Oracle dominance in middleware. HP could use this as an entry point to gain traction in the market. SI's who've built a long term strategy around BEA as an independent platform may seek to assist BEA. Oracle's potential acquisition takes away the last remaining independent major middleware platform provider leaving future competitors without a large install base and a third party supplier.
Will Fusion Apps Still be Built on Fusion Middleware or BEA? Recent rumblings about a delay in Fusion apps delivery and the future of leadership in delivering Fusion apps, add speculation to whether or not Fusion Middleware will still be the basis of Fusion apps. (See the latest from Vinnie Mirchandani). The BEA platform reaches out to more non-Oracle shops and provides a truly open platform for integration with less lock in at the meta data and process levels.

The bottom line
Oracle's long term M&A strategy centers on gaining the biggest install base around not only business applications, but also middleware. At the end of the day, its still about selling more database and gaining the largest share of the IT wallet. With so much liquidity in the market, expect continued and accelerated consolidation along key battle grounds of middleware platforms such as MDM, BI, Portals, BPM, and other Information Management tools. Don't expect the competitors or BEA to sit still!

Next up: How will Oracle deal with all the redundant technology?

(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 2007 by R Wang. All rights reserved

News Analysis: SAP Initiates Friendly Take Over of Business Objects

2007-10-07T12:01:00.000-07:00

SAP Faces the Realities of A Consolidating Market and Ecosystem
In a not so surprise move to insiders, Goldman's efforts to tie up SAP and Business Objects proved fruitful as the two companies officially announced a friendly take over offer. (Press Release). In the press release, 2 key things were made clear:

Organic strategy not enough to meet stated targets to grow the market. Despite great success with organic growth, Oracle's acquisition strategy is making a dent. CEO of SAP, Henning Kagermann's quote from the press release says it all. ""The acquisition of Business Objects is in keeping with SAP’s stated strategy to double our addressable market by 2010 as announced in 2005,” said Kagermann. “SAP will accelerate its growth in the Business User segment, while complementing the company’s successful organic growth strategy."" What kind of acquisitions will SAP make to meet this self imposed target?
SAP evaluated Business Objects for more than just BI. After Oracle's takeover of Hyperion, SAP evaluated the impact to its overall solution centric ecosystem. Business Objects strong partner ecosystem played a key role in choosing Business Objects. It seems likely that Business Objects users may be forced onto NetWeaver in the long run.

The bottom line for end users
In general, hang tight and if you have the budget, negotiate longer maintenance contracts and buy new modules for significant discounts. In the history of post merger announcements, sales reps typically will be offering sweetheart deals to close out the quarter and status as an independent company. There are many win-win scenarios out there! If you are leaning towards SAP, find your SAP rep and put in the motion for a master agreement prior to merger for completion after the merger.

A quick analysis for end user scenarios:

SAP users who chose BOBJ. Basically SAP just validated your strategy of going with BOBJ over BW. You'll want to see if you can avoid being tied to NetWeaver in the future as existing SAP users often find NetWeaver connection charges to be the highest cost of ownership.
SAP users who don't have BOBJ. Here's your chance to buy BOBJ once its fully certified on NetWeaver. BOBJ built a great product, and XI on NetWeaver may prove to be quite solid and a significant improvement to BW. There is a reason why so many self-proclaimed "SAP Only" shops run BOBJ.

Key questions all users should ask:

Will Business Objects users be forced on to NetWeaver in the long run?
Can users ensure that they do not have to use NetWeaver?
Will key management change and who will replace them?
What impact will this have on post XI releases?
Does being a "separate company" in the SAP group work like the way Tomorrow Now works?
How will SAP continue to support non-SAP users?
How will SAP and BOBJ address MDM?

The bottom line for vendors and BI competitors.
BI remains one of the hottest areas of growth as users struggle to get information out of existing legacy packaged apps. As we move to a full Y2K replacement cycle, smart companies begin the discussion with their BI strategy then with upgrade. Expect the following:

BI market consolidation in full cycle. Oracle's acquisition of Hyperion signaled the beginning of market consolidation. Though glacial in speed, expect pressure to mount on the dwindling number of independent BI vendors. Cognos is the obvious next target with IBM, HP, and Oracle as potential suitors. Other vendors include IBI, Microstrategy, Actuate, and a very unlikely SAS.
Expect a hostile counter offer. Valuations of $4.6B euros $6.8B may be less than other vendors had anticipated. Hyperion's deal at $3.3B seemed quite high and previous industry murmurings had BO and Cognos valued north of $7B. Deep pocket vendors such as IBM, Oracle, and HP could set a counter for the quite valuable BOBJ install base.
Organic growth not enough for this market. After years of building a great organic strategy, even mighty SAP realizes that this industry requires strong acquisition skills for survival and growth of partner ecosystems. Acquisition analysis should follow white space mapping and charting of valuable competitor install bases. Each technology era and segment has had dominant acquires. Think of IBM, CA, Microsoft, Oracle, and Google. One may expect other vendors to reconsider their strategies.

Trip Report: DownUnder

2007-10-03T17:52:00.000-07:00

WHAT'S GOING ON DOWN UNDER FOR ENTERPRISE SOFTWARE?
Well, it's hard to beat the weather, scenery, and market in Australia and especially here in Sydney! Amidst this wonderful backdrop is an economic boom based on Financial Services, Public Sector, and Natural Resources, especially mining. In other economic news, real state pricing has hit a drop but not b/c of the US sub-prime scandal, but more along the retirement savings laws passed by the federal government which has moved a lot of money out of the real estate market. However, rents continue to rise while construction has halted.

On the technology front, there is a lot of activity supporting the 3 key industries. Enterprise apps remain hot as the country moves into the post-Y2K replacement cycle. In the context of globalization, as expected, China and India remain the talk of the country while the Aussie public sector heats up:

China's economic influence runs deep for natural resources. China continues to be Australia's largest importer of natural resources such as copper, coal, bauxite, iron ore, and nickel to name a few. The market is such a buzz that there aren't enough truck drivers to haul loads to ports, even with salaries hitting A$ 80,000 a year and miners are clearing A$150,000 or more with bonus. (Side note: The guy that drives the train from Rio Tinto's mine to the port in West Australia makes A$150,000 per year!). From a tech perspective, apps spending is up in the mining and exploration sector to support China's large appetite for natural resources. This means heightened interest in software replacements, upgrades, and new purchases. ERP, supply chain and TMS support, and other mining specific applications are garnering significant interest.

India's role continues in global delivery models for financial services. The continual labor arbitrage for services and back office functions drives the buzz with India. With most the Financial Services firms looking at these opportunities, the system integrators are playing out the global delivery models and many of the large multi-nationals are focused on business process outsourcing opportunities (BPO). From many conversations its clear that large scale ERP replacements are also on the way for Australian based financial service companies.

Consortia and shared services provide opportunities for the public sector. On the public sector side, IT spending for new projects continue with shared services organizations continuing to lead the way. These public service consortia have been among the early adopters of BPO. Agencies such as water, building departments, land administration among others have done a great job, especially in the rural states like Western Australia.

BOTTOM LINE FOR END USERS
End users should begin the process of mapping business initiatives to software spending requirements. Business and IT projects should focus on 4 key drivers: growth, efficiency, regulatory compliance and strategy. One suggestion is to conduct a self-assessment of long term apps strategy readiness and to be focused on building a 5 -year apps strategy that includes organizational change, process optimization, technology readiness, and solutions centric ecosystem maturity.

BOTTOM LINE FOR TECHNOLOGY VENDORS
For system integrators this means a ripe market where implementation services, apps replacement and upgrades, and outsourcing provide significant opportunities as customers look at their technology requirements in the context of business initiatives

(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 2007 by R Wang. All rights reserved

News Analysis: PWC's Non-Compete Ends with IBM

2007-09-28T20:23:00.000-07:00

PwC EMERGES FROM THE IBM NON-COMPETE
In 2002, PwC sold its consulting arm to IBM for $3.5B. That transaction began a 5 year non-compete which ends on October 1, 2007. The non-compete prevented PwC from participating in IT consulting and systems integration. However, PwC could partake in other areas of business consulting such as management issues and IT advice, but not implementation. PwC now joins its former Big 4 brethren, Deloitte and Ernst and Young in being able to vigorously attack the consulting market however they want. Key points include:

Continued focus on trusted advisory roles in business. During the non-compete, PwC and others in this space built up significant businesses in post merger integration, valuation and corporate finance, Sarbanes-Oxley and regulatory compliance, performance improvement, etc. With IT decisions moving to the business side, PwC's long-lasting CEO and CFO relationships will transcend well into the new IT environment.
Expanding in IT strategy but not implementation. Expect PwC to play a 3rd party objective role in the board room on a range of issues from business to IT. With the system integration market commoditized by global SI's such as IBM, Accenture, Wipro, Infosys, TCS, etc., this industry observer would expect the operations to remain business focused and not a full range IT services supplier. Projects will focus around vendor selection, IT strategy, and independent validation and verification. This way they can play "auditor" to their former cousins who make their money on systems integration work and delivering vendor services.
Advisory and consulting work brings in higher margins than audit work. Audit work still pays the bills and holds the relationships, but margins are much higher on the advisory side. General Big 4 billing rates average in the $250 to $300/ hour rate. Working on a project with 12 to 15 people over 2 months quickly overtakes the annual audit fee at most companies.
Many alumni seek to come back. Despite the hot hiring market for resources, PwC has an advantage. Many IBM'ers are looking to head back to PwC given their experience with IBM. Along with other Big 4 alumni scattered during the last set of M&A, there's a longing to work at a private company and not at a company that talks a big game about strategy but ends up becoming a slave to the quarter to quarter Wall Street mentality. One classic post from the IBM-PwC Consulting merger days can be found at: http://www.ibmemployee.com/Highlights040724.shtml

The bottom line
Targeting the IT consulting strategy and high-end services market will allow PwC to enter the sweet spot of the market - highest value and highest margin work. Also, it seems that given a saturated system integrator market and high failure rate, PwC would probably not enter the pure systems integration market. However, it may decide to go down the higher end of the systems integration side of the house working on projects such as BI, master data management, business process management. And even if they do, the high end services side, coupled with the relationships should put competitors such as IBM and Accenture on alert as they ramp up in the next 12 to 18 months.

Event Report: SAP Business by Design (Formerly Code Named A1S)

2007-09-19T08:28:00.000-07:00

SAP this morning launched its new hosted offering SAP Business by Design. Some quick observations on the positive side of the spectrum:

SAP Business by Design runs NetWeaver. UI still runs on services and the product can access all the services in the overall SAP Enterprise Service Repository. Customers and prospects should expect SAP to fill in gaps and last-mile solutions via composites from partners. Though SAP will have to grow this new ecosystem, they've proven they can do that very well.
T-Rex and Max DB reduce dependence on Microsoft and Oracle. Finally, SAP stops funding Microsoft and Oracle with database cash. MaxDB is now the underlying database and T-Rex, the in-memory database (debuted in BIA), is put to use throughout the suite.

However SAP will have many areas of improvement in future releases to come. Here are some areas based on conversations with SMB prospects:

SAP gets the midmarket but the product still remains complex. The vendor currently leads in the mid-market by revenue ($2.563B in 2006). SAP has spent a considerable amount of research to understand this market and its requirements from a marketing perspective. Yet simplicity and ease of use still remains elusive to the vendor. Key features like easy access to reporting features, quick portal construction, and easy integration to Office could remain significant areas for improvement.
SAP fails to deliver a true SaaS offering. SAP delivers an on Demand solution. Without true SaaS in a multi-tenant design, customers may pay more in the long run but retain some flexibility. SAP had a top secret project (originally code-named A1N) headed by Shai to build multi-tenant and for whatever reason abandoned the project in January of 2007. However, customers may trust the fact that SAP is delivering onDemand and will expect the reliability of a trusted utility.
Focus on usability still falls short of industry efforts from Microsoft and Epicor. The vendor talks about breakthrough user experience. The reality: the current approach in the Business by Design product takes its WebDynpro UI to a new level of configuration and manipulation. Drag and drop features showcase better usability but the net result is still a distinct SAP experience, though it is much better than anything currently offered. In context of the market though, it falls short of the ground breaking work Microsoft Business Solutions has accomplished around roles and usability and the ease of use in process flexibility from Epicor. A move to adopt AJAX would certainly help a ton. (Editor's note: we're all tired of hitting F5)
Early adopters are no different from other early "hosted" SMB adopters. SAP's beta customers share similar requirements of all rapidly growing SMBs. They are growing, need rapid deployment, and impressed by the ability to deploy quickly without being saddled by IT infrastructure costs. Spending operational expense instead of capital expense remains a big driver as well and at $149 per month per user, this is a good deal compared to the full SAP ECC 6.0 offering. Nothing was special about the customer references, in fact, many of them may have received discounts or paid minimal licensing.

The bottom line
SAP demonstrates a good understanding of its requirements for the SMB market and a "hosted" offering. SAP should be commended for delivering a significant improvement in comparison to existing SAP products. Company's who trust SAP to deliver core ERP may consider this solution. However, the lack of Web 2.0 features that include user experience, mash-up support, interoperability, and true multi-tenant solution may turn many prospects away. Also, the lack of an easy Microsoft Office integration may keep prospects and existing customers from turning to the numerous SMB competitors who offer .NET based offerings with Office integration. The jury is still out on whether Shai's original strategy would have been better or whether or not Zencke's offering may at least meet SAP's stated growth goals for the mid-market.

(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 2007 by R Wang. All rights reserved

Event Report: SalesForce.com DreamForce 2007

2007-09-17T23:41:00.000-07:00

(Image courtesy of SalesForce.com)

At this year's Dreamforce, Salesforce.com made 4 key announcements:

The Force.com platform - platform as a service for companies to deploy their own apps
Visualforce - a page based model design tool to deliver any User Interface-as-a-Service
An AppsExchange milestone- the vendor delivered its 700th live application
Salesforce Ideas- an online innovation community and support group

Of those announcements, The Force.com had the most impact as it now opened up the platform to not only its own partners, but also any customer who was looking for a SaaS platform to build on. Like the original AppsExchange announcement which targeted partners, the opening up of the platform to customers was equally innovative because it put key SaaS development tools in the hands of innovative customers to build their own "last-mile" solutions. The net:net - the reduction of complicated software development platforms.

The bottom line
SalesForce.com remains innovative in bringing a true solutions centric ecosystem to the end user. Customers today face so much frustration in waiting for a vendor to deliver key functionality. Opening up to partners via AppsExchange was innovative. Sharing the code with customers to develop is brilliant and put SalesForce.com one step ahead of any competitor in giving control back to the customer.

(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 2007 by R Wang. All rights reserved