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12/13/2011
11:56 PM
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The Case For A Holistic View Of The Enterprise Software Market

It's getting increasingly difficult to cover a broad swath of each vendor's product portfolio in order to give customers all the insight they need.

As an industry analyst, I'm used to be being slotted, even though my goal has always been to cover as broad a swath of the enterprise software market as possible. I assume that customers and users need help understanding the full context behind their enterprise software decisions, and not just listen to a vendor pitch, write a check, and be done with it.

This goal is often anathema to how vendors organize their analyst relations functions, having historically followed the big analyst firms down the path of splitting the market into discrete analytical areas, mostly for the purpose of selling discrete analyst services. Thus, a general practitioner such as myself often must contend with multiple analyst relations teams that frequently don't communicate with one another, in the pursuit of full coverage for any vendor with a complex product portfolio.

Lately, this problem has grown in spades as vendors like Oracle have branched into hardware, vendors like Microsoft have started successfully blending its non-enterprise assets into enterprise product lines, and hardware stalwarts like Hewlett-Packard have become erstwhile enterprise software vendors. With my holistic market view as the goal, as vendors evolve to provide broader product portfolios, analysts who want to follow the customer's perspective need to follow a larger swath of each vendor's product portfolio as well.

Which, in most cases, turns out to be largely impossible, to the detriment of vendor and customer alike (and it ain't so good for us general practitioners either).

[ For Josh Greenbaum's latest insights, see Microsoft Dynamics Has Become Microsoft's Locus Of Innovation. ]

If I were (even) more cynical than I pretend to be, I'd think the inability of most vendor analyst relations teams to understand the need to cross-pollinate the analyst community with the full scope of the vendor's product lines--or at least offer up the opportunity for analysts to try to understand the big picture--was deliberate. It's sort of a divide-and-conquer strategy intended to keep out any dangerous, holistic analysis that might reveal key dis-synergies in the strategy.

And if I were immodest I'd claim that this total vendor coverage is easy and fits well with the capabilities and interests of most industry analysts and analyst relations departments. As someone who tries to do this, I can assure you it's hard and at times damn near impossible.

But it's not completely impossible, and in many ways very possible indeed--and very much needed, now more than ever.

The reasons are simple: If a customer wants to buy the very best software at the very best price, with the very best performance possible, how that software interacts with the rest of the IT stack is critical. (This has been the rationale for my analyst coverage for years and the basis of my strategy advisory practice as well.) And as an increasing number of vendors are not only providing more and more of the stack but are actually optimizing their enterprise software for their own stacks, advising the customer requires an understanding of how all the pieces fit together. Merely commenting on the capabilities of discrete pieces of enterprise software without understanding the rest of picture just doesn't cut it anymore.

The other pieces--hardware, middleware, database, deployment options, development tools, advanced UI tools, etc.--aren't just important, they're often key points of differentiation between vendors and provide key selection criteria for customers. Customers almost never implement in a greenfield manner, rather, their selections for new software are intertwined with their existing infrastructures and applications portfolios. Which means that just buying the very best ERP system won't cut it if that system doesn't interoperate with the customer's existing software and hardware infrastructure. And, in more and more cases--whether its Oracle touting the synergies of its enterprise software running on its Exalogics systems or Microsoft showcasing how its Kinect gaming interface can be used on the shop floor--understanding these interactions and how all these pieces interoperate are must-haves for any well-qualified decision-making process.

Which leaves us with a dilemma: how to make the analyst and the analyst relations role a better fit for the analytical requirements of the enterprise software market? The answer isn't simple: vendors with complex portfolios need to cultivate analysts who can understand that complexity and provide them with a level of access intended to make sure the synergistic, holistic view is articulated and understood. This requires in many cases both a revamping of how analyst relations thinks and acts as well as a similar reconsideration of how analysts look at individual companies.

These shifts aren't always easy, for functional as well as political and cultural reasons. Analyst relations teams often reflect their respective product and solution marketing teams, which in turn means that changing the status quo means changing the structure of how products go to market and even how products are developed (or acquired, depending on the vendor's particular innovation strategy). That makes this concept of total or holistic vendor coverage holy hell for anyone trying to make it happen, inside or outside a particular vendor.

But I'm convinced that this is a necessary evil that must be confronted, assuming the goal of educating and informing customers so that they make the right choices is the goal of the vendors' market communications. Unless the misplaced cynicism noted above is actually justified.

Josh Greenbaum is principal of Enterprise Applications Consulting, a Berkeley, Calif., firm that consults with end-user companies and enterprise software vendors large and small. Clients have included Microsoft, Oracle, SAP, and other firms that are sometimes analyzed in his columns. Write him at josh@eaconsult.com.

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