Apps Strategy: Applistructures Key to Custom Development Come Back

While organizations expect their packaged applications to deliver 90% of the functional requirements, most are lucky to achieve 65%. The gap has traditionally been filled by custom development. Customizations often meant expensive upgrade processes, integration challenges, and testing complexity. However, robust and maturing applistructure platforms (i.e. middleware, SaaS, etc.) and a software vendor's inability to cover the functionality requirements of every micro vertical drive many clients to re-consider custom development for last-mile solutions.

The 5 main middleware players, BEA, IBM, Microsoft, Oracle, and SAP each ofter a comprehensive platform. NetSuite and SalesForce.com offer a SaaS platform. As each of these applistructures provide a standards based approach for tools and technology such as application servers, BI tools, process mapping, service repositories, BPEL, master data, and other related technologies, vendors, system integrators, and clients now have robust tools to deliver on their personalized last-mile solutions.

Major SI's such as Accenture, BearingPoint, CapGemini, Deloitte, IBM, Infosys, and Wipro have the capability to build on these platforms as well as clients themselves because extension on an applistructure allows for upgradeability, integration support, and automated testing. As you evaluate the options, the strength of the applistructure becomes the critical design point. Because clients and partners will extend their solutions, packaged application vendors who do not deliver rich and robust applistructure tools will not succeed in the next wave of innovation. Key questions to ask include:

1. How easy it to build on one applistructure versus another?
2. Which applistructure has richer tools?
   
3. Which applistructure has a more robust ecosystem?
4. How many applistructures can my organizations realistically support?
5. How much investment is being made into the applistructure toolset?
   

We've basically come full circle in the cycle from custom apps to packaged apps and now back all in a 20 year period. Here's to living through another technology adoption cycle!


(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

Surface Computing

I guess I won't be selling my Microsoft stock this year. I was having some doubts, but then today I stumbled across this article on Microsoft Surface on the Popular Mechanics website.

Finally, a computer that my pre-kindergarten kids can use to print their own digital photos, instead of asking me!

Microsoft Surface computers will be available in limited distribution to specific corporate partners at the end of 2007.

David Pogue of the New York Times points out that there's not that much new about Microsoft's Surface computer. However, what Microsoft is historically good at is marketing, refining ideas and getting market share.

Since the business and home market for Surface computing is practically zero today, its likely to grow.

Maybe in the future this could even be incorporated into game systems and we could PlayAnywhere.

I know I'd buy one for my kids...(or myself!)

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

News Analysis: Oracle Acquires Agile

Based on their Red Pepper IPO, it was only a matter of time that Oracle CEO Chuck Phillips and Agile CEO Jay Fulcher would tie the knot. The $495 M cash deal for Agile adds leading PLM capabilities to Oracle's application arsenal and brings to Oracle over 1,250 top PLM customers and over 10,000 visualization customers globally. In fact, over 60% of Agile's customers chose this best of breed vendor to work with their SAP and Infor ERP systems. With Oracle's efficient pre and post merger integration teams, expect the acquisition to close quickly with minimal disruption by July.

Oracle customers should evaluate Agile in PLM short lists for advanced PLM capabilities. Meanwhile, existing Agile customers should push to make sure that Fusion Middleware does not become a prerequisite for future installations. In addition, customers should quickly lock-in their long-term maintenance agreements to avoid the higher Oracle 22% maintenance fees.

(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

Event Report: i2 Planet 2007, Orlando, FL

Given the recent consolidation in the industry and increasing dominance of both Oracle and SAP, I couldn't help but wonder if supply chain had gone the way of CRM or if it was a specialized field that would continue to stand out like business intelligence. In fact, I normally don't specialize in supply chain but was at this year's i2 Planet mostly to get caught up to speed on i2's order management cycle capabilities and Agile Business Process Platform (ABPP). Here are a few quick observations from the event:

• Lots of interest and enthusiasm for the new generation supply chain. Customers expect demand-supply synchronization and related real-time demand management integration to provide faster time to results and greater flexibility. More importantly, customers expect demand shaping to drive visibility across the value chain. You could see the eyes light up and the energy levels go up especially in the TMS (Freight Matrix), POS Demand Sensing, and demand shaping sessions.
  
• Supply chain continues to be a proactive discipline. More than ensuring that the right product reaches the right customer at the right time, users expect to drill into the root-cause and rapidly apply corrective actions. New generation supply chains deliver on the convergence of visibility, planning, collaboration, control, and analysis. Customers continued to express the need to be vigilant.
  
• i2 has developed significant expertise in the front end sub processes. By besting SAP at Lenovo, i2 proved not only the strength of its order fulfillment to order completion, but also its ability to move into opportunity to order capture via not only its configurator but also its multi-channel capabilities. Believe it or not, the complete order management cycle on the Lenovo site runs on i2.
• ABPP provides the technology foundation for i2's future. After some extensive discussions with both Sanjiv and Pallab it became clear that i2 has a clear understanding of its role in the future of solution centric software ecosystems. I believe i2 intends to emerge in the next 3 to 5 years as a complete supply chain solutions provider with a platform that will support a wide range of deployment options, solution options, partner extensions, and professional services. This will not be an easy task to deliver, but the intention is to provide customers and partners with flexibility via the toolkit (e.g. MDM and business content library).
• Many SAP customers continue to choose i2 while Oracle customers remain hesitant. From talking to customers and system integrators, i2 continues to hold its ground and gain some momentum in the SAP install base. Key factors include user reluctance to upgrade to NetWeaver and i2's continued lead over SAP in advanced capabilities. Penetration and growth in SAP accounts parallels the experience of BI vendors Cognos and BO who have entrenched themselves with business users in "SAP only" environments. However, i2 needs to figure out how to win over Oracle customers. To date, I see Oracle customers more likely to explore hot acquisitions such as G-Log and Retek while holding on to their latest release of JD Edwards or Oracle EBS.
• i2 remains a thought leader in the industry. I often joke if i2 stopped building software it would be the supply chain consultant of choice like an Ann Grackin at ChainLink or AMR Research. The conversations I had with all levels within the company showcase their bench strength and passion. Discussions in the breakout sessions and throughout the event showed that a good majority of the best of the best were i2 customers.
  

Despite the current industry consolidation and shift to the next generation of software, I believe i2 can pursue a strategy similar to Amdocs and succeed in not only a horizontal capability but several industries with end to end solutions and services. The push to solutions selling and services revenue on a flexible platform is the first step. The real story is how much investment in R&D and innovation capabilities will i2's board allow in a post- Mike McGrath era.

(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

An Interesting Thing Happened to Me on the Way Back From China ....

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.

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

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:

• 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.

(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

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.

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

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.

1. 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.
2. 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.
3. 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.
4. 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...

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

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

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.

After attending Microsoft's Convergence User conference in March, it's apparent that Microsoft continues to lead in the user experience department with the most resources and innovation dedicated to role based scenarios and user experience optimization. In addition, the Project Green strategy appears to be transforming from a converged product roadmap with a target date, to one where the 4 products have target dates for consumption of key middleware components such as SQL Server, SharePoint, BizTalk, SmartClient, etc. Maybe that was the original plan, but now it's becoming clear that this will be the approach for some time to come.

(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

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

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