Just returned from a trip to China, obstensibly to visit friends and family, but the workaholic side of me couldn't help but arrange for a variety of conversations with businesses large and small doing business in China ... as well as the investors who fund them. I have to admit that came back both awed, as well as a bit disillusioned by what I can only describe in the word, "massive."
First, everyone is filled with the potential of China as THE booming market. You can't help but notice much of it in the lack of rules and constraints, whether in ...
(1) the hyper aggressiveness of startups quickly replicating and expanding on existing ideas ... an example is my conversation with Bill, the founder of KU6, a hot Draper funded "youtube+" that has brought together not only user generated content with shared ad revenue, but also user generated advertising.
(2) the continued drive of innovations in mobile in areas such as pervasive branded experiences ... for example MyClick
(3) whole new business models ... a key observation is that without incumbants defining business boundaries, companies actually have the ability to cross traditional market lines starting from a strong web-presence into things like ... amusement parks, retail, or media. Some would use this to justify some of the large pre-IPO valuations. Very exciting. Then again, a little too much like the height of Silicon Valley craziness, including the extreme sense of developer entitlements that was a hallmark of the bubble.
At the same time, to many around the world as well as a key driver of the economy, China is still about execution: IT Outsourcing, BPO, and cheap labor ... especially for Korea and Japan, for whom India cannot provide the Asian language skills. I had interesting conversations with BearingPoint regarding their evolving strategy ... and how it necessarily includes expanded use of the Global Development Centers. Interestingly, China, as validated by BearingPoint, struggles to support the rapid growth for Services due to (1) education system inadequacies and (2) a booming local economy ... something that India has less issue. A recent McKinsey study does a nice job outlining the looming shortage of manpower for service industries in both China and India. As mentioned above, the local market is expanding incredibly rapidly, whether in Internet, as well as consumer services, retail, entertainment, etc., competing for human capital.
All that in mind, there is something disturbingly hopeful about the rapid rise of the Internet to both entertain and ultimately, connect people in China. In a society where Internet entreprenuers openly speak of the fact that China has become a very lonely place - in many cases driven by government policy of single children households, breakup of the extended family unit, and forced movement to the cities and mass production, mass living, mass education ... resulting in a mass of lonely people looking to connect.
Monday, April 30, 2007
Wednesday, April 25, 2007
Enterprise Software Earnings Watch: Solid License Growth Amidst Increasing Customer Backlash on Maintenance Pricing
Recent positive earnings announcements from SAP, Oracle, Microsoft, Business Objects, Agresso, and Epicor signal that the enterprise software market remains quite healthy. Despite doomsayer analyses that talk about the slowing economy, high single to double digit growth in license revenue demonstrate the success of recent initiatives to capture new industries and market segments (e.g. SME and services industries). Both Agresso and Epicor show significant success in net new license growth in the SME market.
Agresso- 2006 FY License revenues up 16% to €56.8M
Business Objects [BOBJ.O]- Q1 2007 License revenues up 9% YOY to $137M
Epicor [EPIC.O]- Q1 2007 License revenues up 14.1% to $22M
Microsoft [MSFT.O] - Q3 2007 License revenues up 20% (MBS Dynamics break out not disclosed)
Oracle [ORCL.O]- Q3 2007 License revenues up 57% $423M (organic/acquisition mix TBD)
SAP [SAP.N]- Q1 2007 License revenues up 16% YOY (Constant Currency) €563M
However, the real story remains the growth in maintenance revenues which account for 2x to 3x of license revenues. Many vendors report a 25% to 50% increase in maintenance revenues and retention in the 90%+ range. Estimates on profitability for maintenance range from 25% to 90% margin.
As maintenance costs average from 20 to 25% of the license fees, customers continue to express outrage over the value they are receiving. Despite the number of Y2K replacement projects slated for 2008 to 2011, many customers express ERP upgrade fatigue. Consequently, expect upgrade projects to be pushed out to 2009 through 2012 and third party maintenance options to remain attractive.
(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
Agresso- 2006 FY License revenues up 16% to €56.8M
Business Objects [BOBJ.O]- Q1 2007 License revenues up 9% YOY to $137M
Epicor [EPIC.O]- Q1 2007 License revenues up 14.1% to $22M
Microsoft [MSFT.O] - Q3 2007 License revenues up 20% (MBS Dynamics break out not disclosed)
Oracle [ORCL.O]- Q3 2007 License revenues up 57% $423M (organic/acquisition mix TBD)
SAP [SAP.N]- Q1 2007 License revenues up 16% YOY (Constant Currency) €563M
However, the real story remains the growth in maintenance revenues which account for 2x to 3x of license revenues. Many vendors report a 25% to 50% increase in maintenance revenues and retention in the 90%+ range. Estimates on profitability for maintenance range from 25% to 90% margin.
As maintenance costs average from 20 to 25% of the license fees, customers continue to express outrage over the value they are receiving. Despite the number of Y2K replacement projects slated for 2008 to 2011, many customers express ERP upgrade fatigue. Consequently, expect upgrade projects to be pushed out to 2009 through 2012 and third party maintenance options to remain attractive.
(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
Thursday, April 19, 2007
MDM and the Information Supply Chain: Applying Supply Chain Principles to MDM
Like demand signals in the supply chain for the auto industry, the flow of information via data drives our ability to evaluate, decide, and act in our information worker economy. Delivering relevant data to the right person, time, and place, in the appropriate context remains a key challenge MDM professionals encounter. Taking a page out of Japanese-born lean principles in supply chain, we can apply the following:
Copyrighted 2007 by R Wang. All rights reserved
- Push information quality processes towards perfection. Lean companies are not driven to beat competitors, they strive for perfection by proactively engineering the removal of process mistakes (pokayoke) through the reduction of production time, errors, and inventories. Data governance and MDM efforts should focus on streamlining how data is acquired, cleansed and optimized for usage among stakeholders. This level of quality will deliver the real-time decision making that will improve an enterprise's operations.
- Flow data through the system pulled by the stakeholder. Lean manufacturers do not wait to push inventory into the plant; they let demand signals from customer orders pull each unit through every step in the value chain. One car company streamlines the flow of test drive requests from the website to be delivered instantaneously to the closest sales person. Customer experience a 60 minute or less response. Any process step that hinders a smooth flow is eliminated as waste (muda).
- Eliminate redundant data via continuous improvement. Like overproduction and excess inventory, routine data quality efforts such as cleansing is similar to eliminating waste (muda). Instead of waiting for problems before making major changes (kaikaku), leading companies have call center agents who casually verify customer information at every interaction and supplier portals that validate shipping and billing information throughout each transaction. These small improvements everyday area the heart of kaizen.
Copyrighted 2007 by R Wang. All rights reserved
Wednesday, April 11, 2007
Industry View: SaaS Applistructures Deliver on the Promise of Tying Web 2.0 to Enterprise 2.0
Walking out of the SalesForce.com Event on Tuesday the 10th had me thinking about the promise of Web 2.0 for the enterprise via middleware, SaaS platforms, and this notion of Applistructure. The thing that really struck home was not the utility computing model that Marc rants and raves about, nor the great drag and drop content management capability of Koral that was being demo'd. What struck home more than anything was how applistructure was taking shape via SaaS and how quickly SaaS could deliver Web2.0 capabilities to the Enterprise.
Okay, let me take a step back, what's applistructure? Well, applistructure refers to the boundary blurring between business applications and infrastructure software. Originally coined by Ken Vollmer of Forrester (Giga) in 2003, the term is shaping up, especially with the rise of middleware platforms (e.g. IBM WebSphere "Blue Stack", Oracle Fusion Middleware "Red Stack", Microsoft VS.Net "Rainbow Stack", and SAP NetWeaver "Blue and White Stack") that are doing everything from being the appserver, delivering BPEL, modeling business processes, addressing content management, providing business intelligence, coordinating master data, solving identity management, etc. SaaS itself is an applicstructure and as these applistructures take hold in the enterprise world via middleware, the SaaS vendors including SFDC, NetSuite, and WorkDay, have the best opportunity to deliver on most of the collaborative aspects of Web2.0.
Unfortunately for most enterprises, not much of the Web 2.0 impact we feel here in the Valley has made it into the mainstream middleware platforms. In fact recent announcements of Lotus Quickr, SAP's end-user widgets, Microsoft Office 2007, and Oracle Web Center show slow to moderate progress in this arena. Hot for Web2.0 for years has been tagging, mash-ups, social network, participation architectures, and the spirit of the individual and wisdom of the tribe. Though we're starting to see wiki's, blogging, and RSS become the new collaboration standards for enterprises its really been the SaaS movement that's driving Web2.0 adoption into the Enterprise.
Similar to the shift in attitude on utility computing and the simplification of licensing and pricing to cost/user/month, I think we can count on SaaS to be the game changer again. I eagerly await to see what other Web2.0 innovations like the Koral acquisition by SFDC will make its way to the likes of SAP, Oracle, Microsoft, and IBM in this emerging solutions centric software world order.
(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
Okay, let me take a step back, what's applistructure? Well, applistructure refers to the boundary blurring between business applications and infrastructure software. Originally coined by Ken Vollmer of Forrester (Giga) in 2003, the term is shaping up, especially with the rise of middleware platforms (e.g. IBM WebSphere "Blue Stack", Oracle Fusion Middleware "Red Stack", Microsoft VS.Net "Rainbow Stack", and SAP NetWeaver "Blue and White Stack") that are doing everything from being the appserver, delivering BPEL, modeling business processes, addressing content management, providing business intelligence, coordinating master data, solving identity management, etc. SaaS itself is an applicstructure and as these applistructures take hold in the enterprise world via middleware, the SaaS vendors including SFDC, NetSuite, and WorkDay, have the best opportunity to deliver on most of the collaborative aspects of Web2.0.
Unfortunately for most enterprises, not much of the Web 2.0 impact we feel here in the Valley has made it into the mainstream middleware platforms. In fact recent announcements of Lotus Quickr, SAP's end-user widgets, Microsoft Office 2007, and Oracle Web Center show slow to moderate progress in this arena. Hot for Web2.0 for years has been tagging, mash-ups, social network, participation architectures, and the spirit of the individual and wisdom of the tribe. Though we're starting to see wiki's, blogging, and RSS become the new collaboration standards for enterprises its really been the SaaS movement that's driving Web2.0 adoption into the Enterprise.
Similar to the shift in attitude on utility computing and the simplification of licensing and pricing to cost/user/month, I think we can count on SaaS to be the game changer again. I eagerly await to see what other Web2.0 innovations like the Koral acquisition by SFDC will make its way to the likes of SAP, Oracle, Microsoft, and IBM in this emerging solutions centric software world order.
(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
Monday, April 9, 2007
Why I can't recommend Open Source CRM....yet
I have recently been receiving pressure from certain vendors and CRM SIs to give more visibility to Open Source CRM products. Open source may be in fashion, but that's hardly a reason to recommend it.
Open source is not better. Yet. And I won't recommend it for enterprise size companies. Yet. And here's why.
Last week I had an inquiry from an SSPA member about how to handle customer emails regarding open support incidents. It turns out that the company is using an open source CRM package, and when an agent emails a customer about an open support incident, and the customer replies, the customer reply only posts into the open ticket if the email is from the contact who opened the ticket. If that person sends it to their system administrator for input, they go on vacation and someone else inherits the problem, or perhaps they escalate to their boss who then emails, the emails are opened as new support incidents.
Why? Unlike just about every customer support application on earth, instead of using XML embedded in the header record to route the email correctly, the open source product routes the email and posts it using the customer's email address. So if a different contact at the customer account replies, the email isn't recognized as related to the open case. And a duplicate case is opened. I have no idea what happens when a customer has 2 tickets open at the same time.
This irritates me because I worked for one of the very first customer support vendors 12 years ago, and even then, our product was smart enough to use a batch load process for inbound emails, validated by the incident ID in the email header. This basic logic is now in every packaged CRM suite.
I completely admit that there has been little or no advancement in case tracking/trouble ticketing in many years. This piece of CRM is totally a commodity. But, and this is the important part, it is a commodity that is the bedrock of every customer support organization in the world. While commodity software is perfect to recreate in open source, there should be a baseline of functionality that is assumed.
I have lobbied for years to get rid of RFPs listing hundreds, if not thousands, of functional line items. Companies spend months writing them. Vendors spend weeks responding to them. But functional laundry lists don't help you determine if a vendor's products will help you solve your business problems.
If moving to open source means having to make sure the software behaves according to normally accepted industry paradigms, RFPs will only get worse. Companies will have to be even more specific about how they expect applications to behave, or else receive some ugly surprises after implementation.
Call me a luddite. But there are too many avenues for excellent customer support software, many costing very little (check out FrontRange and Numara, for starters). And here's the best part: no surprises. And when it comes to enterprise software, no surprises should be a requirement.
Open source is not better. Yet. And I won't recommend it for enterprise size companies. Yet. And here's why.
Last week I had an inquiry from an SSPA member about how to handle customer emails regarding open support incidents. It turns out that the company is using an open source CRM package, and when an agent emails a customer about an open support incident, and the customer replies, the customer reply only posts into the open ticket if the email is from the contact who opened the ticket. If that person sends it to their system administrator for input, they go on vacation and someone else inherits the problem, or perhaps they escalate to their boss who then emails, the emails are opened as new support incidents.
Why? Unlike just about every customer support application on earth, instead of using XML embedded in the header record to route the email correctly, the open source product routes the email and posts it using the customer's email address. So if a different contact at the customer account replies, the email isn't recognized as related to the open case. And a duplicate case is opened. I have no idea what happens when a customer has 2 tickets open at the same time.
This irritates me because I worked for one of the very first customer support vendors 12 years ago, and even then, our product was smart enough to use a batch load process for inbound emails, validated by the incident ID in the email header. This basic logic is now in every packaged CRM suite.
I completely admit that there has been little or no advancement in case tracking/trouble ticketing in many years. This piece of CRM is totally a commodity. But, and this is the important part, it is a commodity that is the bedrock of every customer support organization in the world. While commodity software is perfect to recreate in open source, there should be a baseline of functionality that is assumed.
I have lobbied for years to get rid of RFPs listing hundreds, if not thousands, of functional line items. Companies spend months writing them. Vendors spend weeks responding to them. But functional laundry lists don't help you determine if a vendor's products will help you solve your business problems.
If moving to open source means having to make sure the software behaves according to normally accepted industry paradigms, RFPs will only get worse. Companies will have to be even more specific about how they expect applications to behave, or else receive some ugly surprises after implementation.
Call me a luddite. But there are too many avenues for excellent customer support software, many costing very little (check out FrontRange and Numara, for starters). And here's the best part: no surprises. And when it comes to enterprise software, no surprises should be a requirement.
Monday, April 2, 2007
News Analysis: Workbrain brings key workforce management capabilities to Infor customers
Acquisition of Workbrain marks 20th for privately held Infor Global Solutions, GmbH
Infor's acquisition this morning of Workbrain for $227M marks its 20th. Assimilation of the Toronto based workforce management vendor fills a significant void in the # 3 ERP vendor's product portfolio. Workbrain delivers key work force planning, time and attendance tracking, scheduling, absence management and related solutions that help companies contain costs and develop optimized human capital management strategies. Marquee customers include British Airways, Target, and General Mills Inc. Infor and Workbrain have similar customer profiles that should lead to many joint sales opportunities.
By adding key workforce management functionality, Workbrain complements Infor's greater strategy of growing revenue among its 70,000 customer base via sales of extended solutions. Infor's business model primarily focuses on customer retention and maintenance revenue optimization. While Infor continues to maintain a strong track record in retaining acquired customers, future prospects should continue to validate the level of support and quality of enhancements delivered among current products with existing customers. On the next gen architecture front, Infor's future SOA strategy remains visionary in its approach. When delivered, one would expect it to lower overall TCO by design and extend flexibility to existing customers seeking the flexibility and integration requirements of SOA.
(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
Infor's acquisition this morning of Workbrain for $227M marks its 20th. Assimilation of the Toronto based workforce management vendor fills a significant void in the # 3 ERP vendor's product portfolio. Workbrain delivers key work force planning, time and attendance tracking, scheduling, absence management and related solutions that help companies contain costs and develop optimized human capital management strategies. Marquee customers include British Airways, Target, and General Mills Inc. Infor and Workbrain have similar customer profiles that should lead to many joint sales opportunities.
By adding key workforce management functionality, Workbrain complements Infor's greater strategy of growing revenue among its 70,000 customer base via sales of extended solutions. Infor's business model primarily focuses on customer retention and maintenance revenue optimization. While Infor continues to maintain a strong track record in retaining acquired customers, future prospects should continue to validate the level of support and quality of enhancements delivered among current products with existing customers. On the next gen architecture front, Infor's future SOA strategy remains visionary in its approach. When delivered, one would expect it to lower overall TCO by design and extend flexibility to existing customers seeking the flexibility and integration requirements of SOA.
(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
Sunday, April 1, 2007
Industry View: What's Up with Adobe Apollo?
Last month I found myself at a Adobe user's group presentation on Adobe Apollo. I went because I was looking for a Flash developer to help out with some work on a web project. The presentation I saw was from a group called Effective UI. They were demoing a proof-of-concept front-end for eBay built in Apollo.
There were some things I found really interesting about the meeting.
There were some things I found really interesting about the meeting.
- Effective UI is moving out of some very nice offices, because they have grown so quickly in the last year. I guess demand for UI work in Flash and Flex is soaring. There must be some market momentum around these tools. I had thought of Flash as a space for one-off contract developers, but now there are teams of people working on fairly complex applications.
- From about 20 people, the group was divided into about a third from Effective UI, a third from another local company called photobucket, and a third miscellaneous Flash / Flex / ColdFusion developers. (Everyone was very nice to me, even after they found out I work primarily in C#). As a group, they seemed youthful, energetic, and smart. It reminded me a little of the groups attending Microsoft presentations about 10 years ago. They understood things about graphics and presentation layer issues that few of today's business developers binding row after row of data into grids understand.
- Apollo is going to set Adobe head-to-head on a collision with Microsoft in the developer tool space. Its cross-platform, runs rich-client applications, and has a decent IDE leveraging Eclipse. If I had to build a rich-client application to run on Windows and Mac, I would probably have to at least think about Apollo.
- No one at the meeting knew (or would discuss) what the Apollo run-time distribution vehicle would be, but I'd like to venture a guess. If I was a program manager at Adobe, I'd want it bundled with the Flash Player. All the browsers distribute it anyway, and even Microsoft might have trouble distributing a browser which doesn't support Flash.
I was looking for a Flash or Flex developer, so I announced that twice at the meeting. I only got one card back for a salesperson at Effective UI. I guess everyone at the meeting was already pretty busy and not looking for extra work...
Wednesday, March 28, 2007
Event Report: CDI-MDM Summit, SF, CA
I recently moderated a track with a colleague of mine (Rob Karel) at the CDI-MDM conference this March 26h and 27th at the San Francisco Marriott. Though master data management penetration in the enterprise still hovers in the high single digits, its obvious the energy, activity, and investment around MDM continues to grow. Some quick observations at the event:
In general, this event was a great chance to catch up with others pursuing the development of MDM tools and solutions. And as always it was great to see my familiar faces from Siperian, Initiate, DataFlux, Purisma, IBM, Oracle, VisionWare and, i2 at the 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 2007 by R Wang. All rights reserved
- Hierarchy management and data governance remained the most sought after topics
- Vendors seemed to outnumber clients (We found this later not to be the case)
- Clients who were there remained at the technical level
- Projects were beginning to require a higher level of executive sponsorship
- Effective change management was beginning to become a critical success factor in all sizes of projects
- Customer projects (given the bias of the event) dominated discussions though other entity types such as products and location became ancillary requirements.
In general, this event was a great chance to catch up with others pursuing the development of MDM tools and solutions. And as always it was great to see my familiar faces from Siperian, Initiate, DataFlux, Purisma, IBM, Oracle, VisionWare and, i2 at the 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 2007 by R Wang. All rights reserved
News Analysis: SAP in a Post-Shai era?
It's hard to believe that less than 7 years ago, SAP was seen as a stodgy, client-server based, and very stubborn German software company. That transformation from "borg-like" vendor to innovator wasn't easy, but at the helm of that transition was Shai Agassi. As one of the few non-German executive members, he harnessed the can-do attitude of Silicon Valley, brought the Israeli practicality, and tied the engineering talent of SAP closer to the pulse of innovation. And despite the skeptics, he shifted power away from Germany and Newtown Square to Palo Alto.
Looking back, Shai leaves an organization with quite a legacy. First and foremost the transformation from client-server to internet. Shai also drove the efforts to get mySAP CRM out the door and build out the mid-market. But even more importantly, the strong software ecosystem and partner network that Shai so evangelized leaves SAP with the foundation to innovate and build last mile solutions so needed in the micro-vertical market. SAP's success in building buzz and attracting ISV partners includes work with Microsoft on Duet that continues to differentiate SAP from its chief competitor, Oracle, in the applications space. Finally, the vision and swagger Shai brought to SAP will be the most memorable. Customers often left impressed by the possibilities they could see in their investment in SAP.
Yet, challenges abound for SAP in a post-Shai world with or without him. Microsoft shows continued success in the SMB side of the house with wins in hub and spoke SAP environments and subsidiaries of SAP enterprises looking to wean themselves from the high cost of ownership and upgrade to mySAP ERP 2005 Meanwhile heavy discounting by Oracle in the large enterprise space, put quite a squeeze on SAP in the near term for new business in the large enterprise space, as only Oracle can afford to bolster app sales with middleware and database revenues. SaaS entrants like SalesForce.com and NetSuite chip away at SAP's cost structure and usability while the entrance of Dave Duffield's WorkDay may complicate SAP's efforts to beat Oracle/PeopleSoft at HCM. As user experience becomes important, SAP has fallen behind in building products that showcase the best of Web 2.0 meets Enterprise 2.0.
So while Shai brought vision and innovation, much work needs to be done in a post-Shai world. The need to execute becomes greater as promises made to customers, partners, and employees must be kept. Investment for better tools in NetWeaver and MDM would help partners build more efficiently and allow for a stronger ecosystem foundation. Success in the mid-market and a strong SaaS offering would put competitors SalesForce.com, WorkDay, Oracle, and NetSuite on the defensive. Moreover, a move away from middleware infrastructure in general would expedite the transition from Oracle database to anything else and keep SAP from indirectly funding future Oracle acquisitions and Oracle's development of competitive products.
But without a visionary like Shai at hand, the top tier talent he brought into the valley will need a reason from management to remain. Execution of Shai's vision has always been the most challenging role to play and we will know in the next 3 to 5 years how SAP will fare in the market. Yet despite execution being the key to near term success, SAP will still need an articulate visionary at the helm or risk retreating on the visibility and panache Shai brought to the industry.
For additional information:
Official SAP Press Release
San Francisco Chronicle
SearchSAP.com
Managing Automation
(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
Looking back, Shai leaves an organization with quite a legacy. First and foremost the transformation from client-server to internet. Shai also drove the efforts to get mySAP CRM out the door and build out the mid-market. But even more importantly, the strong software ecosystem and partner network that Shai so evangelized leaves SAP with the foundation to innovate and build last mile solutions so needed in the micro-vertical market. SAP's success in building buzz and attracting ISV partners includes work with Microsoft on Duet that continues to differentiate SAP from its chief competitor, Oracle, in the applications space. Finally, the vision and swagger Shai brought to SAP will be the most memorable. Customers often left impressed by the possibilities they could see in their investment in SAP.
Yet, challenges abound for SAP in a post-Shai world with or without him. Microsoft shows continued success in the SMB side of the house with wins in hub and spoke SAP environments and subsidiaries of SAP enterprises looking to wean themselves from the high cost of ownership and upgrade to mySAP ERP 2005 Meanwhile heavy discounting by Oracle in the large enterprise space, put quite a squeeze on SAP in the near term for new business in the large enterprise space, as only Oracle can afford to bolster app sales with middleware and database revenues. SaaS entrants like SalesForce.com and NetSuite chip away at SAP's cost structure and usability while the entrance of Dave Duffield's WorkDay may complicate SAP's efforts to beat Oracle/PeopleSoft at HCM. As user experience becomes important, SAP has fallen behind in building products that showcase the best of Web 2.0 meets Enterprise 2.0.
So while Shai brought vision and innovation, much work needs to be done in a post-Shai world. The need to execute becomes greater as promises made to customers, partners, and employees must be kept. Investment for better tools in NetWeaver and MDM would help partners build more efficiently and allow for a stronger ecosystem foundation. Success in the mid-market and a strong SaaS offering would put competitors SalesForce.com, WorkDay, Oracle, and NetSuite on the defensive. Moreover, a move away from middleware infrastructure in general would expedite the transition from Oracle database to anything else and keep SAP from indirectly funding future Oracle acquisitions and Oracle's development of competitive products.
But without a visionary like Shai at hand, the top tier talent he brought into the valley will need a reason from management to remain. Execution of Shai's vision has always been the most challenging role to play and we will know in the next 3 to 5 years how SAP will fare in the market. Yet despite execution being the key to near term success, SAP will still need an articulate visionary at the helm or risk retreating on the visibility and panache Shai brought to the industry.
For additional information:
Official SAP Press Release
San Francisco Chronicle
SearchSAP.com
Managing Automation
(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
Wednesday, March 21, 2007
News Analysis: Tammi Reller's transition to Interim Head of MBS
The recent transition of Satya Nadella to the new Search and Ad Platform group came as quite the surprise to many outside of the Redmond community. Satya had recently taken over in September 2006 from long time Great Plains icon Doug Burgum. (Doug is retiring later this year.) Insiders say that Satya was chosen for Search and Ad mainly because of his ability to turnaround teams and deliver on results.
The transition to Tammi Reller makes sense, as Tammi has had many roles within Dynamics, most recently as Corporate Vice President of MBS marketing. Customers should expect little disruption in strategy as Tammi's an insider and has worked closely with Satya and Doug for quite some time. It's expected that Tammi's role as interim head of MBS should become permanent and many remain excited as she brings some marketing buzz and excitement to the 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 2007 by R Wang. All rights reserved
Thursday, March 8, 2007
Event Report: Lawson CUE
After a horrendous time getting out of the Mumbai Airport where I missed my flight and had to fly to NY in order to get to California... I finally made my way to sunny San Diego for Lawson's CUE event on March 4th to March 7th. Though I missed the Sunday festivities, the week there was well worth it as Lawson continued to show progress in developing its product line, winning customers, and building tighter partnerships.
Some quick observations from the 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 2007 by R Wang. All rights reserved
Some quick observations from the event:
- The general mood was upbeat among both clients and partners
- Lawson furthered their relationship on IBM's "Blue Stack" including the WebSphere ESB with current releases:
- For S3 customers, WAS, Tivoli Directory Server, and DB2 are also offered in Lawson S3 System Foundation 9
- For M3 customers, the new Lawson M3 System Foundation includes WAS as well as LSF runtime technology
- On the hosting front, Lawson Total Care Platinum tied the highest level maintenance and support program with full hosting and application management services with IBM as well as other partners.
- From a social, corporate responsibility angle, Lawson announced a Corporate Social Responsibility Initiative that packages pre-configured Lawson applications and Lawson Business Intelligence (LBI) to report against over 100 indicators that could support at company's corporate social responsibility initiatives.
- Recent high profile wins at a major global retailer bode well for Lawson's future global roll-out and functionality capabilities.
(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
Saturday, March 3, 2007
Ecosystems: Systems integrators should transform to solutions providers
As I reflect on my current trip to India, I can't but help feel the deja vu of the Silicon Valley during the late 90's. Streams of business people come in and out of the lobby with ideas, deals, and lots of excitement. I'm typing away from the Hotel Leela in Bangalore where I just met with a client in the system integrator space. Like others, she also commented on the tremendous growth in just the past year. Among the construction cranes, cows in the street, motorized rickshaws, and the hustle and bustle of a country on the move, I have firmly experienced an outsider's perspective on India's growth.
With each trip, I notice new architectures and campuses being built or expanded for each of the SI's. India's info tech economy continues to grow and their system integrators now play a significant role in the global professional services business. As they continue to make progress and gain multi-billion in revenues, they remain on an aggressive move towards the next step in the value chain.
With that perspective in mind, opportunities exist for these highly skilled system integrators to make the transition from system integrator to solution provider. More importantly, those system integrators who have the development capabilties and understanding of various middleware platforms such as BEA WebLogic/AquaLogic, IBM WebSphere, Microsoft.Net, Oracle Fusion Middleware, and SAP NetWeaver have an opportunity to change the software environment in their next transformation. Just like Electronic Arts who builds software on Sony's Playstation, Microsoft's X-box, and Nintendo's Game Cube, imagine a world where an Infosys, Wipro, Satyam, Cognizant, and HCL deliver their own Chinese HR talent acquisition solutions or eastern european process manufacturing solution on top of NetWeaver, Fusion, WebSphere, VS.NEt, or WebLogic.
Delivering last mile solutions regardless of middleware platform potentially transforms system integrators who are channels for the big vendors like SAP and Oracle into solutions providers who view SAP and Oracle as a strategic supplier. But to get there, these SI's will require internal transformation in their capabilities. Customers must view these firms as trusted advisors across the enterprise.
However, skills shortages still abound in advanced capabilities such as change management, master data management, business process reengineering, and overall IT strategy. But with some retooling, expect the most nimble and adaptive of these system integrators to make the transformation. Clients desperately seek resources to deliver process innovation while optimizing commoditized processes via BPO. The key success factor will be the capability to deliver modular last mile solutions by industry and geographies on top of agnostic middleware platforms or SaaS deployment options.
Once that transformation has been attained, IBM and Accenture will nervously have to look in their rear view mirrors as the competition charges forward. But for now, their positions remain safe.
(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
With each trip, I notice new architectures and campuses being built or expanded for each of the SI's. India's info tech economy continues to grow and their system integrators now play a significant role in the global professional services business. As they continue to make progress and gain multi-billion in revenues, they remain on an aggressive move towards the next step in the value chain.
With that perspective in mind, opportunities exist for these highly skilled system integrators to make the transition from system integrator to solution provider. More importantly, those system integrators who have the development capabilties and understanding of various middleware platforms such as BEA WebLogic/AquaLogic, IBM WebSphere, Microsoft.Net, Oracle Fusion Middleware, and SAP NetWeaver have an opportunity to change the software environment in their next transformation. Just like Electronic Arts who builds software on Sony's Playstation, Microsoft's X-box, and Nintendo's Game Cube, imagine a world where an Infosys, Wipro, Satyam, Cognizant, and HCL deliver their own Chinese HR talent acquisition solutions or eastern european process manufacturing solution on top of NetWeaver, Fusion, WebSphere, VS.NEt, or WebLogic.
Delivering last mile solutions regardless of middleware platform potentially transforms system integrators who are channels for the big vendors like SAP and Oracle into solutions providers who view SAP and Oracle as a strategic supplier. But to get there, these SI's will require internal transformation in their capabilities. Customers must view these firms as trusted advisors across the enterprise.
However, skills shortages still abound in advanced capabilities such as change management, master data management, business process reengineering, and overall IT strategy. But with some retooling, expect the most nimble and adaptive of these system integrators to make the transformation. Clients desperately seek resources to deliver process innovation while optimizing commoditized processes via BPO. The key success factor will be the capability to deliver modular last mile solutions by industry and geographies on top of agnostic middleware platforms or SaaS deployment options.
Once that transformation has been attained, IBM and Accenture will nervously have to look in their rear view mirrors as the competition charges forward. But for now, their positions remain safe.
(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
Friday, January 26, 2007
SaaS: SaaS takes off in Japan
Tokyo still remains one of my favorite destinations in APAC and on a visit with clients and media, it became quite apparent that SaaS was top of mind in the market. I wondered if I had came to Japan a week after Marc Benioff or if the market had been that enthusiastic to begin with. (I would later find out it was SalesForce.com's Japanese AppsExchange pre-announcements. )
In either case, the number one topic of interest from system integrators related to how one could build a SaaS business. Meanwhile customers sought more information on SaaS offerings and the media kept asking for details on the difference between SaaS, Hosting, ASP, and OnDemand. SalesForce.com and NetSuite had top billing in terms of mindshare, while WorkDay remained of major interest given the tie back to PeopleSoft founder Dave Duffield.
SaaS continues to gain mind share, especially as customers remain frustrated with paying so much for maintenance, receiving very little in terms of value in upgrades, supporting legacy applications, and refusing enhancements and feature requests to the business side. More importantly, business leaders in large enterprises choose SaaS mainly because they can do an end run on the IT department, receive new functionality, and pay for it using operational expense instead of capital expense. That last bit is key because they don't need board approval for an operational expense. As more business leaders weigh-in on IT decisions, SaaS vendors see growing interest from enterprises instead of the SMB market as anticipated.
Related Forrester Research
Comparing The ROI Of SaaS Versus On-Premise Using Forrester's TEI™ Approach
The Financial Impact of Packaged Applications
The State of Enterprise Software 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 2007 by R Wang. All rights reserved
In either case, the number one topic of interest from system integrators related to how one could build a SaaS business. Meanwhile customers sought more information on SaaS offerings and the media kept asking for details on the difference between SaaS, Hosting, ASP, and OnDemand. SalesForce.com and NetSuite had top billing in terms of mindshare, while WorkDay remained of major interest given the tie back to PeopleSoft founder Dave Duffield.
SaaS continues to gain mind share, especially as customers remain frustrated with paying so much for maintenance, receiving very little in terms of value in upgrades, supporting legacy applications, and refusing enhancements and feature requests to the business side. More importantly, business leaders in large enterprises choose SaaS mainly because they can do an end run on the IT department, receive new functionality, and pay for it using operational expense instead of capital expense. That last bit is key because they don't need board approval for an operational expense. As more business leaders weigh-in on IT decisions, SaaS vendors see growing interest from enterprises instead of the SMB market as anticipated.
Related Forrester Research
Comparing The ROI Of SaaS Versus On-Premise Using Forrester's TEI™ Approach
The Financial Impact of Packaged Applications
The State of Enterprise Software 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 2007 by R Wang. All rights reserved
Monday, January 1, 2007
Blog Move!: Transition to Blogspot
I'm moving my blog to Blogspot. Stay tuned.
(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
(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
Monday, November 6, 2006
SaaS: WorkDay is now Official!
Coming out of stealth mode
Built from the spin-out prior to the Oracle acquisition, Workday's officially came out of the closet. Dave Duffield, Aneel Bhsuri, and Stan Swete lead 65 employees from their Walnut Creek, CA base. Many of the key employees are former PeopleSoft alumns.
Workday's products take advantage of Rich Internet Application architecture and show some great capabilities of Web 2.0 meets Enterprise 2.0. Initially just HCM, other applications will be on the way. Dave's reputation and the SaaS option continue to draw the most buzz as the Workday booth brought the biggest crowds at this year's HR conference in Chicago, IL.
Products currently target the mid to upper mid-size company. I'd expect launch customers to double in the next few months as the organization begins the ramp up process.
(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 2006 by R Wang. All rights reserved
Built from the spin-out prior to the Oracle acquisition, Workday's officially came out of the closet. Dave Duffield, Aneel Bhsuri, and Stan Swete lead 65 employees from their Walnut Creek, CA base. Many of the key employees are former PeopleSoft alumns.
Workday's products take advantage of Rich Internet Application architecture and show some great capabilities of Web 2.0 meets Enterprise 2.0. Initially just HCM, other applications will be on the way. Dave's reputation and the SaaS option continue to draw the most buzz as the Workday booth brought the biggest crowds at this year's HR conference in Chicago, IL.
Products currently target the mid to upper mid-size company. I'd expect launch customers to double in the next few months as the organization begins the ramp up process.
(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 2006 by R Wang. All rights reserved
Saturday, July 1, 2006
Project Based Solutions: Transition from manufacturing to service economy requires the right software
Project professionals remain challenged with business solutions that force fit production and manufacturing applications to meet the needs of knowledge based, information workers. Though today’s work often focuses around projects, most enterprise applications remain designed for a functional world leaving professionals in public sector, legal, accounting, IT consulting, business consulting, market research, advertising, architecture, engineering, and construction to custom build solutions or heavily modify packaged applications to support end-to-end project based processes.
As enterprises make the shift to a service based and project based world, project based solutions are the only applications category that enterprises can rely on to deliver on process automation, process improvement, and innovation for this new world of work. Expect more in this category and more from vendors such as: Agresso, Augeo, BST Global, CMiC, Deltek, Epicor, Lawson, Maconomy, Meridian
(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 2006 by R Wang. All rights reserved
As enterprises make the shift to a service based and project based world, project based solutions are the only applications category that enterprises can rely on to deliver on process automation, process improvement, and innovation for this new world of work. Expect more in this category and more from vendors such as: Agresso, Augeo, BST Global, CMiC, Deltek, Epicor, Lawson, Maconomy
(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 2006 by R Wang. All rights reserved
Wednesday, January 25, 2006
Analyst 101: One year later
What a year! What a ride. This job has been good. I've been insulated from all the politics which has really been a luxury. Being out West, you can really focus on the vendors and learn what's going on. Meanwhile, we've got great clients and some great projects ahead of us. Anyways, 16 docs, good inquiries, good consulting.
More importantly, many thanks to everyone who has helped. I'm glad I've got some really good mentors out there. John Ragsdale, Paul Hamerman, and Merv Adrian have been great in bouncing ideas and themes. I did miss the chance to learn from Erin Kinkin who's probably still the sharpest CRM analyst out there, but I get the feeling more people may leave as they find what the right balance of work/life is for them.
In the meantime, I've got a really big public sector vendor selection project ahead of me and some more ideas to put on paper. There's some concern I'll burn out, but I think it's hard to when you are having fun. Like any job, if they add some BS politics, then it'd be bad and bog you down from being productive. So far, none of that out west and on our teams. It's a god send compared to what my friends at other firms have been experiencing, but I suspect it's b/c my managers hide that from us.
Either way, this has been an awesome job. Next stop, building some more new and cool coverage areas.
(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 2006 by R Wang. All rights reserved
More importantly, many thanks to everyone who has helped. I'm glad I've got some really good mentors out there. John Ragsdale, Paul Hamerman, and Merv Adrian have been great in bouncing ideas and themes. I did miss the chance to learn from Erin Kinkin who's probably still the sharpest CRM analyst out there, but I get the feeling more people may leave as they find what the right balance of work/life is for them.
In the meantime, I've got a really big public sector vendor selection project ahead of me and some more ideas to put on paper. There's some concern I'll burn out, but I think it's hard to when you are having fun. Like any job, if they add some BS politics, then it'd be bad and bog you down from being productive. So far, none of that out west and on our teams. It's a god send compared to what my friends at other firms have been experiencing, but I suspect it's b/c my managers hide that from us.
Either way, this has been an awesome job. Next stop, building some more new and cool coverage areas.
(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 2006 by R Wang. All rights reserved
Thursday, February 24, 2005
Analyst 101: Debut of Beyond Order to Cash
Business pressures to grow market share, improve margins, reduce time to market, and retain customers with existing enterprise application investments compel enterprises to re-examine their existing order management cycle (OMC) strategies. With multiple categories of vendors offering order management solutions, business complexity across supply and demand chains should be the strategic driver in determining the appropriate solution fit. Companies looking to implement OMC strategies immediately will not find a single vendor solution.
Check out my first Forrester research report
Beyond Order to Cash
(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 2005 by R Wang. All rights reserved
Check out my first Forrester research report
Beyond Order to Cash
(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 2005 by R Wang. All rights reserved
Tuesday, February 1, 2005
Analyst 101: One week later
It's heads down time as I've got to figure out how to get my order management research out the door. I'm already getting a ton of inquiries and getting on the phone with briefings. I'm glad some of the vendors remember me from previous positions. Having done the job from the other end, I hope I have the empathy to not drive the AR managers crazy.
This order management research is quite the thing as we move from a functional CRM, ERP, SCM view of the world to a process centric view of the world that includes Order to Cash, Procure to Pay, Hire to Retire, and Campaign to Order. All fun stuff. Stayed tune to see what I publish
(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 2005 by R Wang. All rights reserved
This order management research is quite the thing as we move from a functional CRM, ERP, SCM view of the world to a process centric view of the world that includes Order to Cash, Procure to Pay, Hire to Retire, and Campaign to Order. All fun stuff. Stayed tune to see what I publish
(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 2005 by R Wang. All rights reserved
Wednesday, January 26, 2005
Analyst 101: Day 3 - So much to live up to!
I haven't been to Forrester's Cambridge offices before, but it's quite the location, at least that's what the maps show me. It's smack in the middle of MIT and just a mile from Harvard. So far Orientation's been a blast. Virginia Crossa is quite the instructor and has a great way with motivating and challenging the class.
There's a few of us from the Santa Clara office as well, Jasmin Dave who's an ADM in sales, and Frank Chiang who totally missed the flight and is on Video Conference. In addition, there are 4 new analysts in the program, some have started already. We've got a government expert, Alan Webber coming in as a Consulting Analyst. He's got quite the background with many federal agencies. There's also a telecom analyst, Ellen Daley, who's has a ton of telecom experience with a great presence. On my team, I've got a colleague, Bill Band who's the neighbor of Chris Mines, the head of research. He's a former Accenture Partner and Coopers guy covering CRM. With such company, this should be quite the class.
So much is spinning in my head right now. You've got phone calls to take, docs to write, and consulting to worry about. I have no idea how I'm going to hit these goals at the moment, but it's well worth the try. This job looks like it'll have a steep ramp up!
(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 2005 by R Wang. All rights reserved
There's a few of us from the Santa Clara office as well, Jasmin Dave who's an ADM in sales, and Frank Chiang who totally missed the flight and is on Video Conference. In addition, there are 4 new analysts in the program, some have started already. We've got a government expert, Alan Webber coming in as a Consulting Analyst. He's got quite the background with many federal agencies. There's also a telecom analyst, Ellen Daley, who's has a ton of telecom experience with a great presence. On my team, I've got a colleague, Bill Band who's the neighbor of Chris Mines, the head of research. He's a former Accenture Partner and Coopers guy covering CRM. With such company, this should be quite the class.
So much is spinning in my head right now. You've got phone calls to take, docs to write, and consulting to worry about. I have no idea how I'm going to hit these goals at the moment, but it's well worth the try. This job looks like it'll have a steep ramp up!
(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 2005 by R Wang. All rights reserved
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