Apps Strategy: Now's the Time to Design a 5-Year Packaged App Strategy

What do ERP fatigue, instance consolidation, upgrades, SaaS, third party-maintenance, and BPO have in common? They are all stop-gap measures in addressing the key issue of having a long-term apps strategy.

Some key areas to consider include:

• Most packaged apps were bought in the mid to late 1990's
• Software lifecycle is about 7 to 10 years and we are entering a new upgrade replacement cycle
• Large demand for small projects skirt the real issue of a need for a packaged application strategy
• Architectural renewal via SOA and adoption of Web 2.0 functionality driving interest

As we move into one of the biggest upgrade cycles in a decade, enterprises should take the time to design a top-down view of their apps strategy before committing project budgets. A high-level view of the key components of this strategy include:

• Long term vendor strategy and management
• Packaged applications internal inventory
  
• Maintenance and support schedules
• Upgrade strategy
• Instance consolidation strategy
• Deployment option analysis (SaaS, Hosting, BPO, or On-premise)
  
• Change management readiness
• Business process maturity
• Custom development requirements
• Hardware/data center migration plan
  

(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

IPO Watch: Deltek Files S-1

After much anticipation since New Mountain funds took the company private with a 75% stake in 2002, Herndon based Deltek Systems filed its S-1 on May 8th 2007. As a Project Based Solution (PBS) vendor, nothing could be more fitting than coming out with the NASDAQ symbol "PROJ". While private, Deltek remained active and acquired Wind 2 in 2005 and Welcom in 2006 leading to a doubling of its size and customer base. The results of this acquisition and maintenance strategy speak for themselves -- software license growth up 215.7%, maintenance increases of 89.1%, and overall revenues up 153.33% since 2002 (see Figure 1.) Key to Deltek's future will be the expansion into new vertical areas beyond its strengths in public sector, A/E/C, non-profit, and research. Deltek's key competitors include industry stalwart Primavera, .NET competitor Epicor, and Microsoft with its Project and Solomon offerings.

Figure 1. Deltek Consolidated Financials as Filed in S-1

		2002				2003				2004				2005				2006
		(in thousands, except per share data)
Statement of Operations Data:
REVENUES:
Software license fees		$	23,742			$	36,636			$	34,934			$	45,923			$	74,958
Consulting services			18,063				22,842				28,585				41,212				66,573
Maintenance and support services			43,987				47,778				54,178				63,709				83,172
Other revenues			4,512				2,091				3,516				2,112				3,565
Total revenues			90,304				109,347				121,213				152,956				228,268

As the Project Based Solutions (PBS) space heats up, expect rapid consolidation in the next 3 years among vendors such as Agresso, Artemis Software, Augeo Software, BST Global, CA (Computer Associates)Niku, Computer Methods International Corp. (CMiC), Deltek, Dexter & Cheney, Epicor Software, IFS, Lawson, Maconomy, Maxwell Systems, Mercury Software, Meridian Systems, Microsoft Dynamics, Oracle, OpenAir, Pacific Edge, Planisware, PlanView, Primavera Systems, ProSight, Sage Software, SAP, Softrax, Tenrox, and Viewpoint Software (formerly BidTek). According to Forrester Research, the PBS market is expected to grow to $6.5B by 2010.

(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

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

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

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:

• 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

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 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.

Overall, clients and partners once again found value in the event. And of course, EVP Dean Hager's presentations were as energetic, informative and entertaining.


(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

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

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 Systems, Microsoft Dynamics, Oracle, Primavera, Sage, SAP, Tenrox

(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

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