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Yes, the Enterprise Software World Changed Today

Yesterday I went out on a limb predicting that SAP’s new On-Demand mid-market offering, codenamed A1S will be a game-changer. ZDNet quoted my conclusion:

My bet is on SAP: they may stumble a number of times, which will effect their quarterly numbers – but in the end, I believe they will succeed. They will become the dominant SaaS player in the mid-market, forcing smaller players like NetSuite down-market. In the next 2-3 years while SAP flexes their On-demand muscles, we’ll see just how pervasive SaaS proves in the large corporate market, and that will determine whether A1S remains a midmarket solution or becomes the foundation of SAP’s forey into that market – their natural home base.

This was the day before the announcement. This morning my fellow Enterprise Irregulars jokingly asked: “Has the world of Enterprise Software really changed?’ We did not know the answer than, but now we do: Yes. SAP Business ByDesign is really a game changer. Key reasons:

  • Breadth of functionality
  • Fixed, Trasnparent pricing (which, I might add will put the squeeze on Salesforce.com ad NetSuite)
  • All this coming from SAP, the recognized leaders in automating business processes.

I will soon have more details, but suffice to say the Enterprise Irregulars contingent here came to the same conclusions. Here are the initial reactions:

ZDnet/Software, Rough Type, Redmonk, Computerworld, WSJ.com, ZDNet/IT Project Failures, The Ponderings of Woodrow, ZDNet/Software as a Service, Between the Lines,

Photo: the Enterprise Irregulars with Henning Kagermann, SAP CEO. Credit: Prashanth Rai

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The World of Enterprise Software Will Change Tomorrow

I really would have liked to be at TechCrunch40, temporary HQ of all-things-Web. Instead, I’m in New York, where the world of Enterprise Software will change tomorrow. That’s when SAP will unveil A1S, the new generation SaaS solution for the SMB market. Incidentally, this may be the last time we hear A1S, as SAP is expected to reveal a new name.

I suspect after Wednesday there will be a lot of talk about the new system’s features, but for now, very few people have actually seen it, and they are all under rock-solid NDA. So for now, just a few preliminary thoughts.

SaaS and Enterprise Software

I am a big fan of Software as a Service, have repeatedly written about it, but mostly in the context of the small business or consumers space. My own passion comes from the time when I switched from “sell side” in the SAP business to actually being a customer in a small business (Sales VP, NOT IT type!) and was shocked at the sorry state of infrastructure and systems (more lack of) available to most SMB’s. I became convinced that for small businesses that don’t have IT staff at all, On-Demand solutions are the only way to go.

Does this mean SaaS is for small businesses only? Not at all. While it’s easy to declare that for small businesses without their own IT resources there is no better option than SaaS, there is no clear “winner” for large corporations. There shouldn’t be. SaaS is not a religion; adopting it should be a business decisions that these organizations have to make individually.

SAP and SaaS

On-demand “purists” (the religious types;)) have long criticized SAP for being laggards, taking a half-hearted hybrid approach to SaaS – but why would they do anything else? After all, SaaS is still only 10% of all enterprise software sold, although growing fast. Even if we believe “the future is SaaS” (which is of course unproven, but I happen to believe in it), there is a lot of mileage left in the “old” Enterprise model, and market leaders like SAP have certainly no reason to turn their backs to their huge and profitable customer base. Protection of the legacy market is largely the reason behind the segmentation, i.e. A1S being strictly a small- and midmarket solution – but I don’t believe this segmentation is cast in stone.

Anyone who saw one of Hasso Plattner’s numerous “new idea” presentations will have to realize he is talking about a lot more than just a new SMB product. Plattner “gets it” and if he does, so will SAP. Clearly, for now the product is slated for the SMB market – new product, new markets – but it also allows SAP to get their feet wet in SaaS, before fully plunging in.

This also explains what may appear as inconsistency at the low-end of the market (less than 50 employees) where SAP continues to offer Business One, their on-site solution. I fully agree with Dennis , for all the above reasons it’s exactly these businesses that would be better off with SaaS, so perhaps Busiess One should be replaced by A1S. But if SAP considers A1S as a test-bed, eyeing the Enterprise Market, they need a certain minimum organization size, and level of complexity. Complexity, after all, originates in the organization, not the software – but this brings us to the next point.

So why is it such a Big Deal?

Believers of the “SaaS Religion” should be happy when a behemoth like SAP throws in it’s weight – and the $400M it expects to spend on marketing A1S. But let’s dispel with a huge misunderstanding here. I literally go nuts when analists (even my fellow Enterprise Irregulars) mention SaaS players like Salesforce.com, Netsuite, Succesfactors, Constant Contact on the same page, as one category. For the purpose of a specific analysis, like Charles did, it makes sense, but please, please, let’s remember, the so-called SaaS market is an artificial aggregation that eventually will make very little sense.

Companies do not buy software just for the sake of having it: they buy it to solve problems. They need inventory management, order and billing systems.. etc – not simply SaaS, just like in the past they could not care less if their software was delivered on tape, CD or DVD. Yes, I know I am simplifying to a great degree, but remember, It’s all about the functionality, not the delivery method.

So labeling Salesforce.com the “market leader” is misleading – yes, they are the the largest pure-play SaaS player, but a relative point solution with a fraction of the functionality enterprises need – and the Appexcange / Force.com attempt to become a platform has not changed this picture.

There is no market leader in On-Demand, complete integrated solutions, because so far no company has offered anything comparable to SAP’s functionality. Granted, I have not seen the system yet, but when SAP puts three tousand developers to work for 3 years, you know you are getting something significant. (In comparison Salesforce.com has less than 200 engineers.)

It’s all about Execution

The SaaS model allows for largely simplified business execution: marketing, awareness, “pull model”: instead off direct sales, the customer comes to the vendor, buying solutions on the Net. Consulting, Support all happens online. The reality of this pull-model is still debated, but I think waht’s often forgotten in the debate is that the “pull-efect” really works is the “S” part of SMB, (in fact, VSB), which are typically green-field businesses, often first-timers to transactional business software, without their own processes carved in stone, so they can test, configure and use software “out-of-the-box”. As we discussed, with size comes complexity, and since SAP targets the high-end of SMB, they will face such complexity, and that requires a “hybrid” model.

So far their Go-to-market strategy appears to be largely based on telesales and leaving support to a network of partners. Where these partners come from: existing All-in-One or Business One partners, or new ones – and if the first, how they will not cannibalize their existing business is a huge question.

A1S is a big bet for SAP,” said Gartner analyst Dan Sholler. “This has to succeed or they will have a whole host of business challenges ahead of them. No one has ever proven they can sell this type of business technology this way. SAP is betting the profitability of the company that it will be able to do it.

My bet is on SAP: they may stumble a number of times, which will effect their quarterly numbers – but in the end, I believe they will succeed. They will become the dominant SaaS player in the mid-market, forcing smaller players like NetSuite down-market. In the next 2-3 years while SAP flexes their On-demand muscles, we’ll see just how pervasive SaaS proves in the large corporate market, and that will determine whether A1S remains a midmarket solution or becomes the foundation of SAP’s forey into that market – their natural home base.

SAP understands New Media

Last but not least, a word on how SAP “gets it”. Part of Hasso Plattner’s “new idea” sounds like a Web 2.0 pitch: he embraces social networking, wikis, videos. How much, if any of these have made it into the first incarnation of A1S remains to be seen.

But SAP as a company themselves actively embrace new media. They have the best bloggers’ program, originally started by Jeff Nolan and now enjoying continued support by Michael Prosceno. I’m heading to the Big Show on Wednesday, but first tonight I’ll be in a group of 8 bloggers to meet SAP CEO Henning Kagerman. Two weeks later I will attend SAP TechEd, which, for the first time includes a full Community Day – an event certainly to be popular by bloggers. Oh, and who is the first keynote speaker? Mr. Web 2.0 Tim O’Reilly himself.

Not exactly dinosaur-like behavor, if you ask me.;-)

Off now, time to play tourist in Manhattan. And, in the meantime, I’ll be kept more then up-to-date on TechCrunch40 thanks to fellow bloggers on the scene.:-)

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Enterprise 3.0: Where Is It Headed? – Interesting Panel with the Wrong Title

I’m not a big fan of the whole 2.0 /3.0 theme, but I have to accept the fact that Web 2.0 and related concepts have become commonplace, everyday terms that today we’re taking for granted. Enterprise 2.0, on the other hand is far more debated. Definitions range from loosely saying “Web 2.0 tools in the Enterprise” through Harvard Prof Andrew McAfee’s “Use of emergent social software platforms within companies, or between companies and their partners or customers” to MR Rangaswami’s much broader synergy of a new set of technologies , development models and delivery methods that are used to develop business software and deliver it to users.” Then we have a set of attempts to simply “get to the point”, without long academic debate, like lightweight software, or Meet Charlie, a simple yet effective slideshow that personalizes the story.

One thing there is agreement about is that there is no agreement – in terms of a definition, that is… but that does not prevent us from attending conferences like Enterprise 2.0 or Office 2.0, and more importantly, businesses from embracing Enterprise 2.0 to varying degrees. It is happening, whether we have a “final” definition or not.

However, I really don’t think we’re ready for Enterprise 3.0 – not now, not ever. There are quite a few articles on the subject, but they all come from the same author, Sramana Mitra (except for two old ZDNet articles quoting Shai Agassi and JP Rangaswami). Sramana has certainly “cornered” the market – except there really is no “market” if she’s the only one using the term. Her definition: Enterprise 3.0 = SaaS + EE. What’s EE? Extended Enterprise:

The modern enterprise is no longer one, monolithic organization. Customers, Partners, Suppliers, Outsourcers, Distributors, Resellers, … all kinds of entities extend and expand the boundaries of the enterprise, and make “collaboration” and “sharing” important.

Let’s take some examples. The Salesforce needs to share leads with distributors and resellers. The Product Design team needs to share CAD files with parts suppliers. Customers and Vendors need to share workspace often. Consultants, Contractors, Outsourcers often need to seamlessly participate in the workflow of a project, share files, upload information. All this, across a secure, seamlessly authenticated system.

Sounds familiar? Of course, back in the 90’s this is what we called (Extended) Supply Chain. I’m not sure we need to create another label just yet. But if and when something is so significant that it deserves a new name, let’s get a bit more creative … I’m with fellow Enterprise Irregular Thomas Otter, who humorously ranted:

  • The car isn’t called horse 2.0.
  • The lightbulb isn’t called candle 2.0
  • Fax (Facsimile) isn’t called letter 2.0

If we are so innovative in the 21st century, the least we can do is to think of some new terms that inspire. Think ROBOT, Television, Velcro, Radio, even scuba (Self-Contained Underwater-Breathing Apparatus) … If this stuff is really that innovative then it deserves a proper word.

Back to Sramana and “Enterprise 3.0”: next week she will be moderating a panel discussion of the MIT Club of Northern California, with the ambitious title: Enterprise 3.0: Where Is It Headed?. Excerpt from the event description:

Collaboration, wikis, blogs and social networking are new tools igniting the enterprise market. Service based models are emerging as alternates to desktop software and enterprise servers. In March 2007, Cisco acquired WebEx for $3.2 billion, stepping in with a splash in the enterprise collaboration space. Meanwhile, Google has assembled a whole suite of word processing, presentation, and spreadsheet tools and just acquired Postini, an email management company. Microsoft has been adding collaboration and knowledge management capabilities to its Windows Platform and just announced plans to offer Web-based versions of its applications. Then, there are exciting startups that are offering alternatives.

This panel will explore the impact of Web 2.0 on the prosumer i.e. the individual user in the enterprise and the evolution and integration of office tools, communication and collaboration technologies.

Sounds vintage Enterprise 2.0, if you ask me.smile_wink That said, I think it’s an exciting subject, and they will certainly have a first-rate panel:

  • Tom Cole, General Partner, Trinity Ventures
  • Cliff Reeves, GM, Emerging Business Unit Team, Microsoft
  • Jonathan Rochelle, Product Manager, Google Docs and Spreadsheets
  • Sridhar Vembu, Founder, CEO, Zoho / Adventnet last minute change: the event site now lists Tim Harvey, VP Planning, Webex, Cisco Systems instead of Sridhar Vembu.

Whatever we call it, I plan to be there. If you are reading this blog, chances are you’re also interested in these subjects, so if you happen to be in the Bay Area Wednesday evening, perhaps I’ll see you there. Here’s the registration page. (Warning: the form is way too long, asking for way too much information – vintage 1.0 stylesmile_omg)

Additional reading: Open Gardens, Portals and KM, Anne Zelenka, Luis Suarez, the FASTForward Blog, Read/WriteWeb, Chris Pirillo, Fake Steve Jobs smile_tongue , just to name a few…

Update (8/21): as much as I hate this 2.0-3.0 labeling, I like Don Dodge’s new formula: Web 2.0 = web app + 2 founders + 0 revenue

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The Wikipedia Enterprise 2.0 Debate – Again

If you’re in business, have some interest in collaboration, software, workplace dynamics, it’s hard to imagine you haven’t heard the term Enterprise 2.0. Especially so after the recent Enterprise 2.0 Conference in Boston.

Quite a difference from last year, when the term was intensely debated and the very existence of the relevant Wikipedia entry questioned. I learned a lot about the workings of Wikipedia, and chronicled the debate, but in the end concluded that it was irrelevant:

“Enterprise 2.0 as a term my be relatively knew, but it’s not some theoretical concept a bored professor is trying to sell to the world. It’s disruptive change, a confluence of technological, social and business changes in how corporations conduct business using new IT tools. No Wikipedia gatekeepers can prevent this seismic shift. Let’s move on, do our work, and in less than 6 months Enterprise 2.0 will find its way back to Wikipedia.”

And it did. The Wikipedia entry on Enterprise 2.0 was allowed to stay. Of course as Enterprise 2.0 became “fashionable”, new players claimed ownership, the entry barely resembled the original, and at some point Harvard Professor Andrew McAfee, whose April 2006 article in the MIT Sloan Management Review started it all was relegated to just a footnote. (He probably cared more about practical adoption in business then about turf-wars.). But none of these changes are comparable to what just happened.

Ironically, not long after the publication of a HBS Case Study on Wikipedia (largely based on the debate-experience), a Wikipedia administrator heavily edited the Enterprise 2.0 entry – in fact he almost completely wiped it out and rewrote it. Here are Professor McAfee’s notes on the change, and the key part of the edited article:

“Enterprise 2.0 is a term used at least since 2001 to describe a second-generation approach to online knowledge within a business…

The term Enterprise 2.0 was coined in 2001 by Participate Systems, Inc. CEO Alan Warms[5] and grew through its use in business and in industry conferences…

So supposedly Enterprise 2.0, which just in 2006 was not noteworthy or original enough to be mentioned in Wikipedia, has been used for half a decade. In that case, there sure is a lot of evidence – why didn’t Andy McAfee’s search on the joint terms “Alan Warms” and “Enterprise 2.0.” bring any meaningful results? Nowadays, “if it’s not on Google, it does not exist“…

Alan Warms’s company, Participate Systems no longer exists, having been acquired in 2004, but thanks to the Wayback Machine we can find some information on their products from several years between 2001 and 2004:

Participate Enterprise is a software solution that takes the collective expertise of your organization and puts it to work on every sales call.

Our software solution, Participate Enterprise 2.0, is built on an open architecture technology that provides our clients with unmatched community functionality that features the industry’s most robust question-and-answer natural language querying engine.

Participate Systems combines best-of-breed Self-Help, Expertise and Community management systems in one comprehensive collaboration platform, Participate Enterprise 3.

Hm… it sure looks like they had a software product named Participate Enterprise, which had subsequent releases, including 2 .. and 3, by the time they got acquired. Yes, they used the term, but not to describe a concept, which would belong in Wikipedia, rather as part of a product name. (I suspect if we look long enough, we might dig up a Microsoft/other vendor product that has an Enterprise version and has/had a release 2.0).

That said, I don’t know all the facts, and I may be wrong in my conclusion. However, what’s really disturbing here ins the process of how this Wikipedia admin got so dramatically changed by one single administrator. All the discussion, the references, the very concept of Enterprise 2.0 is gone – instead we have a history of facts somewhat related (?) to the term. 2006, the year of Enterprise 2.0 is gone – but perhaps that’s not so surprising, given that the Wikipedia admin who wiped it all out, only discovered Wikipedia in 2006, after the Enterprise 2.0 debate:

“I first encountered Wikipedia on the web when I was doing some research. Wikipedia seemed to come up first on my Google searches, so I decided to check it out. I first posted on October 12, 2006. By December 2006, I realized that Consensus and Assume Good Faith were behind Wikipedia’s success.”

Hm… single-handedly wiping out what dozens of experts edited does not exactly indicate respect for Consensus to me. I guess it does not matter, when you’re an administrator. Time to update the Harvard Case Study on Wikipedia.

Update (8/4): There’s a lively discussion going on in the Enterprise Irregulars group right now (and it’s 6am on Saturday!). We’re wondering how to properly fix the bungled Wikipedia entry. Jreferee’s handywork would normally amount to Vandalism, and vandalism is best dealt with by restoring the previous “correct” version, then editing from there. But when vandalism is committed by an Administrator, is it still vandalism?

Update #2 (8/4): Finally! A Wikipedia Admin with common sense smile_regular . From the Enterprise 2.0 entry’s History record:

00:46, 5 August 2007 Ruud Koot (Talk | contribs) (11,391 bytes) (some of these product have a version 3.0 (and likely a version 1.0) as well. they have nothing to do with enterprise 2.0.)

00:56, 5 August 2007 Ruud Koot (Talk | contribs) (40 bytes) (this article is fatally flawed, restoring redirect to Enterprise social software) (undo)

The interesting but completely irrelevant blurb about software products that include the term “Enterprise” and a release number is gone, the Enterprise 2.0 entry is now redirected to Enterprise social software. I tend to think it would deserve its own entry, but let’s be real, it’s difficult to restore a vandalized entry, and this one is a lot closer to the subject matter than the previous version.

Update (8/23)“It’s over. The Deletionists won.” – says Nick Carr in the “Rise of the wikicrats“.  A story worth reading… I’m not about to spoil it.  Here’s just the conclusion:

Maybe the time has come for Wikipedia to amend its famous slogan. Maybe it should call itself “the encyclopedia that anyone can edit on the condition that said person meets the requirements laid out in Wikipedia Code 234.56, subsections A34-A58, A65, B7 (codicil 5674), and follows the procedures specified in Wikipedia Statutes 31 – 1007 as well as Secret Wikipedia Scroll SC72 (Wikipedia Decoder Ring required).”

Related posts: Between the Lines, Venture Chronicles, Scott Gavin, ReputationXchange, broadstuff, Deal Architect, Open Gardens, Collaboration Loop.

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Web 2.0 Wiki Essentials Kit Served up 1.0 Style

Socialtext, the enterprise wiki company offers a free Wiki Essentials kit for download. It includes a basic wiki-intro, two analyst briefs and several customer case studies. Of course all of them Socialtext-flavored, but that’s quite understandable, and I think the package is a valuable intro into how corporations can use wikis – just replace Socialtext with “enterprise wiki” and do your own research.

What I’m not too happy with is the way these web 2.0 goodies are served up in good old “1.0-style”. smile_sad

  • Registration form. Ouch! This is where I normally quit, but since I wanted to report about it, I patiently filled out all the fields. Sorry for the phone no. 111-111-1111, but some of you at Socialtext have my real number… I understand this is part of a sales-push, but believe me, it’s also a turn-off for many. Why not just be the nice guys (and gals), serve up information, and provide your contact form at the end of each doc? Which brings me to the next point…
  • Download. Unzip. Deal with several PDF files. This is so un-cool and 1990’s. Why not make them available online? In fact, why not link the individual documents to each other? Wait… wouldn’t that be a … wiki? smile_wink

(P.S. I’d like to make the point that this is good info, I’m just teasing ST for not delivering it 2.0-style)

Update (7/19): There is indeed on online site Cases2.com, which is not a 100% overlap: it does not have the analyst writeups, but Harvard Prof. Andrew McAfee expects it to grow into Case Study Central” .  It’s open for contribution by anyone – the Web 2.0 way. (hat tip: Ross Mayfield)

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On-demand CRM: Lunch is (Almost) Free

Will Microsoft eat Salesforce.com’s lunch with their freshly announced pricing for hosted CRM? There is a heated debate on the subject, with longtime enterprise software guru Josh Greenbaum declaring that Microsoft is about to eat Salesforce.com’s lunch:

“2008 promises to be the real year of on-demand CRM: It’s Salesforce.com’s market to lose, and, unless something changes dramatically in their favor, lose it they will.”

Josh has been bearish on Salesforce.com for a while, declaring it the next Siebel. It’s a bold call, but calling it ahead of the curve, based on fundamentals, going against the trend is what makes a real analyst.

Salesforce.com does not seem to be worried about their lunch-ticket though:

“What it looks like is that Microsoft is just marking down an inferior product to what customers are actually paying right now. “

says Bruce Francis, vice president of corporate strategy on Tod Bishop’s Blog. Ouch! He goes on:

“Also, one thing that I haven’t seen is the url where I can sign up for a 30-day trial.”

Well, I can point to such a URL, albeit not at Microsoft: http://zohocrm.com. (Disclaimer: I’m an advisor to Zoho)

I’ve long stated that Zoho’s product is actually more than just CRM: with Sales Order Management, Procurement, Inventory Management, Invoicing functionality Zoho seems to have the makings of a CRM+ERP solution, under the disguise of the CRM label. The company also stated they are working on Accounting and HR, they have a database/application Creator, and the best-in-class Office Suite: can you see the Big Picture?

Now, for the best part: pricing. Microsoft is heralded to undercut Salesforce.com with their $44/$59 per user pricing. That’s still a hefty price, if you ask me – Zoho CRM is free for the first 3 users, then $12 per user. I don’t know who is eating whose lunch, but if you are a business user, $12 bucks for CRM+++ is as close to a free lunch ticket as you can get.smile_regular

How can Zoho do this? They are passionate about the real meaning of the On-Demand revolution: bringing good quality yet affordable software as a service to the masses. They are an efficient development “machine” and manage to cut out “fat”: Sales expenses, traditionally representing 70-80% of costs in the enterprise software business. We have an ongoing debate in the Enterprise Irregulars on whether this inexpensive “pull” model is hype or reality. The nay-sayers point to Salesforce.com, or the new IPO-hopeful NetSuite: sales costs are sky high, and for all the “no software” revolution Marc Benioff has brought about, he employs a rather traditional enterprise sales staff, a’la Oracle. The key differentiator IMHO is the target market:

“Salesforce.com is focusing more of its efforts these days on capturing larger enterprise accounts”

-says Phil Wainewright, and that means traditional, expensive sales. Viral Marketing, demand generation, try-online-then-sign-up works better with the Small Business market, which is what Zoho is focusing on. The Street only seems to value the large corporate market, so it’s understandable that venture funded, IPO-driven or already public companies strive to move up the chain; Zoho is privately owned, and can afford to grow their business as they wish – apparently they see the goldmine waiting to be explored on the SMB market.

Related posts on TechMeme: eWEEK.com, Enterprise Anti-matter, Software as Services, Steve Clayton, Techdirt , CNET News.com, Microsoft News Tracker ,Zoho Blogs

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Software 2007 – First Impressions, Opening

First impressions:

Registration is smooth, there’s hardly any wait.  Hm.. am I too early… where is the crowd?

 This is growth: the badge is triple the size from last year: it’s actually a little bag, with a zippable compartment to store goodies.  Are we close to dressing up in a badge? 🙂

WiFi: Finally, free WiFi! (Oops, it does not work in the main Conference Hall, where the Opening Keynote is about to start. 

MR Rangaswami, Opening Speech

Started this event in 2003,in the middle of the tech depression, still had 1100 participants – today it’s 1900.   Now we’re thriving.  Theme for this conference is Innovation.  Name a few innovative companies: Apple, FedEx, Southwest..etc.  But where’s software? 

Innovation in software was thought of as product innovation.  Get it out the door, see what customers say.  Industry changed, innovation is more than Product Release.

McKinsey Innovation Tech Vendor Survey.

PE funding is now larger than VC funding.   Surveyd 475 customers: 55% believe innovation is on the upswing.  CIO’s expect innovation from “little guys”.  (contrast to recent other survey)

Share of software expanding withing IT budgets.

Download two surveys jointly issued with McKinsey:

Enterprise Software Customer Survey

State of the Software Industry

New Sand Hill Index (stock index, obviously public companies)

 

Hasso Plattner, SAP

Innovation, Speed, Success.  Uses blackboard-style slides, with chalked handwriting. Dressed in matching black:-)

This is good, breaking it out in separate post…

 

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Software 2007: Plattner to Turn the SAP Mothership Again

Photo Credit: Dan Farber, ZDNet For half an hour or so I felt I was back at University at Software 2007 – in Professor Hasso Plattner’s class. That’s because his keynote was a compressed version of his recent SAPPHIRE 07 speech, which in turn was an “offsite class” for his Stanford students – literally so, he flew the entire class out to Atlanta. To make his point, he used the blackboard-metaphor, with chalked handwriting (and dressed in matching blacksmile_shades).

I don’t normally enjoy keynotes, but found this one fascinating: it was about a lot more than most in the audience thinks – more on this later…

The “lecture” was about his New Idea for enterprise software – more than an idea, it started as a side-project about 5 years ago, then about 3 years ago they realized they can’t do it with one codebase.. so it became a completely separate system from SAP’s current business suite. They kept the project secret as long as they could, but this year they started to talk about it: it’s code-named A1S, and currently 3000 people are working on it (For comparison, Salesforce.com has less than 200 engineers). It will be On-Demand, and not a point-solution, but a full-featured, integrated business solution, as one would expect from SAP.

Some of my raw notes on the key concepts:

  • On-demand: Google, Salesforce.com showed it works. Time now for the whole enterprise to run in the cloud. Very small footprint at customer.
  • New markets: small business customers.
  • Key difference: user-centric design. Iteration, version 7 of user interface already, it will be 8 or 9 before it launches. Every single functions delivered either by browser or smart client. They look 100% identical. Office (MS) client, Mobile, too.
  • Separation of UI, App, Db – physical sep, multiple UI’s for same App. Front ends very specific to industries. Portal based. Company, departmental portal. User roles. Multiple workplaces. In smaller companies users have multiple workplaces. High degree of personalization.
  • Event driven approach. Model based system. Instead of exposing source code, expose the model. Not just documentation, active models. Change system behavior through models. Very different from SAP’s original table-based customization. Completely open to access by/ to other system. 2500+ service interfaces exposed.
  • The future of software design will be driven by community. SDN 750K members, 4000 posts per day. We’ll have hundreds of thousands of apps from the community. Blogs, Wikis, Youtube.
  • In-memory databases. Test: 5years accounting, 36 million line items. 20G in file 1.1G compressed in memory. Any question asked > 1.1sec. There is no relational database anymore. Database can be split over multiple computers. Finally information will be in the user’s fingertips. Google-speed for all Enterprise information. Analytics first, eventually everything in memory.

For a more organized writeup, I recommend Dan Farber’s excellent summary, and for the full details watch the original SAPPHIRE 07 Keynote (after a bit of salesy intro).

As it became obvious during the post-keynote private press/blogger discussion, most in the room thought Plattner was talking about the mysterious A1S, SAP’s yet-to-be-seen On-Demand SMB offering – although he made it clear he intentionally never used the A1S moniker. I think what we heard was a lot more – but to understand it, one has understand Hasso Plattner himself. No matter how his formal position changed, the last active SAP Founder has always been the Technology Visionary behind the company – the soul of SAP, it there is such a thing.smile_wink He is not a product-pusher, not a marketer: he sets direction for several years ahead.

SAP has an existing (legacy) market to protect, and they clearly don’t want the On-Demand product to cannibalize that market. But Plattner knows On-Demand is coming, and I bet the SMB space will be the test-bed to the new system eventually “growing up” to all of SAP’s market segments. Hasso Plattner gets the On-Demand religion, and when he gets a new religion, SAP typically follows. Plattner oversaw two major paradigm changes: the move from mainframe to client/server, which was entirely his baby, and the move to SOA/Netweaver, where he embraced Shai Agassi’s initiatives. The ‘New Idea” will likely be the last time Plattner turns the Mothership around. Next he will need to find “another Shai” to make sure there is a strong tech DNA in SAP’s leadership, as the Sales/Marketing types take over at the helm.

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The Long Swim to SAPPHIRE

SAP’s Craig Cmehil is excited to come to Atlanta as part of the Bloggers’ Corner at SAP’s annual mega-event, SAPPHIRE. He even included the map of the Congress Center area. Nice … but Craig, you should look at another map – the one that tells you how to get there. Pay special attention to step# 35. I hope you start training soon.smile_shades

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Atlassian is Hiring a VP of Marketing

I don’t typically broadcast job searches, but I’m breaking that tradition now for a few reasons.

1: Cool cartoon smile_wink

2: Atlassian is a great company, that I wrote about quite a few times. Being “great” means not only $ucce$$ful, fast-growing, but also a good team to be part of.

3: Transparency. I just wrote about this recently, and Atlassian President Jeffrey Walker proves it again, by sharing his thoughts on the hiring process. I agree with almost all his points, except #8, the backup plan: Executive Recruiters. I think Atlassian is still at a size where they are better off finding the right candidate through their personal network – or they may face situations like this.

So while it looks like they are well on their way finding the right person, if you, or somebody you know are the candidate they’ve been waiting for, contact Jeffrey NOW. Somehow I think the beer-test might be relaxed this time.

But be warned: great company as it is, it’s also a dangerous bunch! smile_shades