InformationWeek Stories by Josh Greenbaum

InformationWeek Stories by Josh Greenbaumhttp://www.informationweek.comInformationWeeken-usCopyright 2012, UBM LLC.2012-08-16T12:51:00ZCan HP Remake Itself Before It's Too Late?When a company's most recent success is a good Olympic slogan, it's a sad day, but such is the current state of HP. The once mighty force has become a fragmented mess.http://www.informationweek.com/news/240005672?cid=SBX_iwk_related_commentary_Peripherals_--_scanners,_printers,_copiers_hardware<div class="inlineStoryImage inlineStoryImageRight"> <a href="http://www.informationweek.com/news/galleries/hardware/handheld/232800125"><img src="http://twimgs.com/informationweek/galleries/automated/775/01_HP_Win8_Slates_tn.jpg" alt="8 Tablets Fit For Windows 8 Beta" title="8 Tablets Fit For Windows 8 Beta" class="img175" /></a> <div class="storyImageTitle">8 Tablets Fit For Windows 8 Beta</div> (click image for larger view and for slideshow)</div>It's a sad day when the bar is set so low that a company's most successful endeavor in recent memory involves <a href="http://www.youtube.com/watch?v=80RI3VepJDI"> a new slogan and ad campaign </a> tied to the Olympics, and the best news to date is that it <a href="http://www.zdnet.com/hp-wins-over-oracle-in-itanium-legal-battle-7000001992/ ">won a lawsuit</a> it should never have had to engage in. Such is the state of Hewlett-Packard today, a once mighty force in technology that's now relegated to a status that can best be described as dire. <a href="http://www.bloomberg.com/news/2012-08-08/hp-raises-forecast-sees-8-billion-impairment-charge.html">News from the last quarter</a> only compounds how dire things have become: HP took a $1.5 billion charge against earnings due to a greater number of employees taking an early retirement package than had been anticipated. As if the company could afford to lose talent. To paraphrase the old aphorism: Those whom the gods wish to destroy, they first deplete of their valuable employees. The brain drain on top of the increasing irrelevance of HP in many key markets and its inability thus far to credibly enter any new markets makes the question that remains not whether CEO Meg Whitman can keep the company alive, but how she will dismantle HP into something that's both manageable and relevant in today's market. If even that option remains. It's been almost a year since that fateful day in August 2011 when then-CEO Leo Apotheker, following the misdirection of <a href="http://www.nytimes.com/2011/09/22/business/voting-to-hire-a-chief-without-meeting-him.html?_r=3&pagewanted=all ">a board that was asleep at the switch in so many well-documented ways</a>, announced the possible spinoff of HP's PC unit, the death of Palm, and the acquisition of Autonomy. The ensuing firestorm undeservedly cost Apotheker, his chief of staff, HP's long-time CTO, and numerous others their jobs and their reputations. It was as shocking a misfire as I have ever seen in almost 30 years of covering the IT industry. Into the breach rode Meg Whitman, promising stability and leadership, and armed, one would assume, with an ironclad agreement that she would get more than the paltry 11 months Apotheker was given to clean up a mess that was decades in the making. With the close of Whitman's first year rapidly approaching, I think it's safe to say that not much has changed for HP. The company's revenue and market share continue to decline as core markets like PCs and services fall apart. The Autonomy acquisition, which couldn't have been undone even if Whitman had wanted to, has proven to be as troubled as most of the company's other large acquisitions--witness the <a href="http://www.law.com/jsp/lawtechnologynews/PubArticleLTN.jsp?id=1202555918042&Autonomy_CEO_Lynch_Among_27000_Leaving_HP&slreturn=20120704014022 ">untimely departure of Autonomy CEO Mike Lynch in May</a>, six months following the acquisition, and the complete absence of a public strategy to integrate Autonomy and create a pan-HP value proposition around its enterprise search capabilities. Meanwhile, Palm is dead (though it appears that HP is <a href="http://www.zdnet.com/hp-announces-new-company-and-brand-for-webos-gram-7000002652/ ">trying to keep a zombified version of Palm OS alive</a>), HP <a href="http://allthingsd.com/20120320/exclusive-hewlett-packard-to-combine-printer-and-pc-groups/ ">lost Vyomesh "VJ" Joshi</a>, the driving force behind its highly successful printer division, and <a href="http://www.businessweek.com/news/2012-06-05/hewlett-packard-ceo-whitman-seeking-starbucks-like-turnaround#p2 ">partnerships with the likes of SAP have been troubled</a> by the inability of HP to move fast enough on the hardware side to keep pace with its partners' software innovations. Meanwhile, EDS is being gutted amid a planned $8 billion write-down, having proven in one quarter too many that it has been unable to adapt its go-to-market to pick up the large volume of smaller, strategic deals that it needs to turn in consistent quarterly success. There is some good news: HP Software--which in retrospect might be happy it was kept separate from Autonomy--is building out a strong cloud management capability, and the systems business has some impressive products and might be getting an infusion of good karma from the HP/Oracle lawsuit ruling. The printing division has more than a few cool products and innovations up its sleeve, and HP's latest ad campaign had someone holding what looked like a new HP Slate tablet, hopefully targeting the pending Windows 8 launch. But the problem that bedeviled Apotheker and would have still weighed on him even if he had not been fired last year, remains: There's no cross-company strategy, no way of talking to the market about how the whole is greater than the sum of the parts, no synergistic product set that taps into the company's ability to provide a mix of services, hardware, and software that, taken together, provide that value-added positioning that would remake Hewlett-Packard's tarnished brand. Instead, HP remains the company that Apotheker's predecessor, Mark Hurd, was able to run to the short-term satisfaction of investors and the detriment of anyone--employees, partners, customers--interested in long-term value: A company that in reality is a federation of completely separate entities, rarely working in unison, hopefully not too often at loggerheads, unable to cross-sell, and stuck in a corporate version of the <a href="http://en.wikipedia.org/wiki/Peter_Principle ">Peter Principle</a> having risen to its level of incompetence and unable to go any further. Not that HP isn't trying, at least on the branding side. Its new "Make It Matter" spot, shown during the Olympics, is the culmination of a year-long effort that is targeted as much at the outside world of customers and partners as it is at the employees who, for good and bad, are apparently running for the exits in unexpected numbers. In that spot, the message is clear--the power of technology to help people work, achieve their dreams, learn, create, and change the world is HP's birthright, and that's what matters. Mixed into the visuals are the many ways in which the company already makes those aspirations come true, and it shows a cool side of HP that most people have no idea exists. In short, it's a well-done piece worthy of the aspirations of a once-great company. But the question remains: Is it too late to make those aspirations a reality? Can HP really matter to the market again? My sense today is that it might be too late, at least for the federated HP that aspires to be like IBM in 2012 but looks more like IBM in 1993, on the ropes and losing relevance and market share. In order for HP to be what it aspires to be would require not just a great pan-HP strategy but the rapid and flawless execution of that strategy, and that's where I'm a little pessimistic. It's hard to turn around a company whose employee base is so massively demoralized, where the silo mentality is so ingrained that acquired employees continue to use email addresses ending in eds.com and palm.com years after their companies were acquired, and where the third CEO in three years has yet to do more than triage a company that's seriously in danger of succumbing to its wounds. What Whitman needs to do, in my opinion, is emulate Steve Ballmer: sign on to a strategic vision--the cloud, in Microsoft's case--and then move everyone in the company, many kicking and screaming, toward that vision. Put a slogan in the mix and make everyone in the company use it as a tag line and repeat it until it actually starts to sink in. ("We're all in" became the de rigeur sign-off for Microsoft email messages.) And then tell Wall Street and the likes of <a href="http://www.vanityfair.com/business/2012/08/microsoft-lost-mojo-steve-ballmer ">Vanity Fair</a> to stuff it, ride out the criticism, and start moving product strategy forward. And while there are those that think that Ballmer laid an egg with his new approach (and I'm emphatically not one of them), even his detractors will have to admit that Microsoft as a company has a vision and is engaged in it, the employees are excited, and there are some seriously interesting bets on the table that could, and will, IMO, turn Microsoft around: Azure, Windows 8, Kinect, to name a few. Going the Microsoft route is hardly a guarantee for success, in part because it takes years (Microsoft has been at its new vision for <a href="http://reddevnews.com/articles/2008/11/15/microsofts-cloud-vision.aspx ">at least five years</a>, and probably needs one more year to really make it solid), and in part because coming up with a truly momentous vision is harder than just about anything else in the technology industry. And it's even harder still when triage continues to be job number one two years after Hurd left. In the end, vision will be the test of Whitman's tenure, if she makes it past the one-year mark. And my sense is that her vision won't include every one of the business units that make up HP today, mostly because it's hard to envision how to bring together a dying PC industry, an increasingly commoditized printer and server business, a chronically underperforming services business, and a software division that doesn't actually own most of the company's software assets, and forge a great, new strategy that the whole company can march toward. It's clear HP is trying with its cloud strategy, and there might still be something to do with business analytics that's meaningful, but these are initiatives that would have been visionary if they'd started under Hurd's tenure. Today they look too much like me-too, catch-up strategies. Fixing all of HP is just too hard. Even if the CEO was named Meg Wonder Woman, I wouldn't bet on her being able to bring so many struggling lines of business together and make them matter. Something will have to go away in order for HP to live on, and I would expect that a year from now HP will have been significantly downsized if, indeed, it's going to continue to matter at all. Some things are just too big for their own good, and HP today might be just one of those things.2012-07-25T08:37:00ZDell's Software Shift: 4 Big QuestionsAs Dell embarks on an ambitious software journey, it must map out a plan to overcome early obstacles. Here are some key issues Dell must address.http://www.informationweek.com/news/240004280?cid=SBX_iwk_related_commentary_Peripherals_--_scanners,_printers,_copiers_hardware <div class="inlineStoryImage inlineStoryImageRight"> <a href="http://www.informationweek.com/news/galleries/software/bi/232700311"><img src="http://twimgs.com/informationweek/galleries/automated/769/01_BI-and-IM-Salaries_tn.jpg" alt="Big Data Talent War: 10 Analytics Job Trends" title="Big Data Talent War: 10 Analytics Job Trends" class="img175" /></a> <div class="storyImageTitle">Big Data Talent War: 10 Analytics Job Trends</div> (click image for larger view and for slideshow)</div>  Dell Software last week held what it promised was the first of many media days intended to <a href="http://www.informationweek.com/news/hardware/virtual/240004070">describe to analysts and the press</a> how the erstwhile PC and server vendor plans to become a software powerhouse. Breaking the historical mold is a common theme these days, with software companies like Oracle and Microsoft looking for redemption in the hardware market, enterprise apps vendors like SAP moving into the database market, companies like Dell and Hewlett-Packard trying their hands at enterprise software, and Yahoo attempting to move beyond search. While the what--what new products, what new services, what new markets--is important in these gender-bending strategic shifts, the real issue on the table is always how: How can such a massive cultural change be undertaken without destroying the core business? How can new sales methods and channels be nurtured and maintained? How can new markets defined and conquered? And most importantly, how can these aspirations, which are invariably about attacking an established market already replete with existing and not always thriving vendors, come with enough unique value-add to rise above the noise? With Dell's aspirational foray into the enterprise software market, the what is clear--a set of midmarket products and services focused around cloud integration (Dell's Boomi acquisition), systems management and security (Quest, Sonicwall, among others), and business intelligence (insert unannounced acquisition or internally developed product here) to start, with more unspecified but hopefully value-added enterprise applications to come. But the how remains to be seen, and whether Dell succeeds in enterprise software will depend on a broad set of how to capabilities that the company has only just begun to build out. Number one on the how-to list is how to sell high-value software and application services from a company not well known for either of these capabilities. While Dell Software CEO John Swainson bravely offered up 20,000 existing direct sales people as the vanguard of this effort, the truth is Dell will need much more than desktop and server sales folks to up the software ante with the customer. To Swainson's credit, this field sales force has the relationships needed in the SMB market to get the ball rolling, and that's saying a lot. But someone else will have to show up in the buyer's office to pitch Dell's business analytics and other software offerings, especially as Microsoft and other competitors will have their relatively able channel partners outside waiting for their chance. Where that software sales force will come from is unclear. Swainson wants 70% of the business to come from direct sales, and that's going to mean hiring and training a boatload of new people. And those people must live and work in some interesting places since Swainson also wants to tackle emerging markets: the BRIC (Brazil, Russia, India, China) gang, among others. To do that means competing with already established local companies and the many global software companies now carpet bagging in the BRIC market. Not easy. How to number two comes in the form of the need for verticalized, high-value products, particularly in the oversaturated BI market. While it's hard to build great horizontal BI apps, building high-value vertical apps is bloody difficult. But <a href="http://www.informationweek.com/news/software/bi/240003548">horizontal BI is very 20th century</a> in terms of strategic value, and Dell will have to go for the bloody difficult route and still face an uphill battle overcoming a broad base of established--and, in many cases, enormous--BI vendors as well as a constant churn of venture funded BI companies all heading for the so-called low-hanging fruit of big data BI. Dell wants to start slowly, with more of a horizontal play that provides end-user tools (a la Qliktech) to do cloud-based analysis (a la Gooddata). But it's going to have to up the ante pretty quickly or hope that the Dell brand carries more value in the BI market than I think it does. Right now, Dell has a data warehouse appliance and some vertical products built by its consulting services, but the company's going to have to do a lot more to get moving in BI. A lot more.  <div class="inlineStoryImage inlineStoryImageRight"> <a href="http://www.informationweek.com/thebrainyard/article/240001229"><img src="http://twimgs.com/informationweek/galleries/automated/801/collage_full.jpg" alt="10 Social Acquisitions Signify Bigger Trends" title="10 Social Acquisitions Signify Bigger Trends" class="img175"/></a> <div class="storyImageTitle">10 Social Acquisitions Signify Bigger Trends</div> (click image for larger view and for slideshow)</div>   Cloud-based integration and data management are the areas in which Dell is already a mature player. (Security and systems management are also quite mature, but they're not really enterprise apps per se.) This maturity is thanks to the Boomi acquisition, and from my conversation with Dell Boomi's Rick Nucci, it's clear that the enterprise software integration market isn't an aspiration here, it's real. But Boomi faces the same challenge of how to move upstream with its cloud integration play, though it has a fair amount of runway for now helping integrate the nascent cloud-apps market. And while there are limits to how upstream integration can go, Boomi is wisely targeting master data management and more high-value business process integration services for its next integration value-add play. The third how-to question is how will Dell consolidate its consulting services around enterprise software? Dell's different software assets, like newbie Quest and Boomi, tend to deploy their own consultants rather than rely on Dell Consulting, which, with its Perot Systems roots in infrastructure implementation and outsourcing, isn't considered a go-to systems integrator for enterprise software. That's okay in the short term but short-sighted in the long run. Just ask HP: EDS has had massive problems with the exact same transformation, and so far all Meg Whitman has been able to do is layoff EDS staff. If Dell can't refocus its old Perot Systems consultants on new enterprise software opportunities, both Perot/Dell and Dell Software will suffer. The final how is really the meta question looming over all of Dell's software aspirations: How can Dell differentiate itself in software in a unique and highly remunerative way? Swainson hypothetically posited growing Dell Software from its current $1.5 billion in annual sales (including Quest) to $5 billion in revenue at 30% margins--we're talking some serious growth aspirations. How? Swainson and team pointed to several ways to meet this lofty goal, including focusing on the SMB market, the BRIC countries, great technology, as well as leveraging hardware and software assets, and the Dell brand. It's not a bad list, but I'm not sure it's enough. Among other factors, the massive head start that companies like Microsoft, SAP, and Infor have in enterprise software, the midmarket, and the BRIC countries will make Dell's software dreams harder to realize than it may seem. And while the focus on BI sounds great, considering the massive growth of big data, blah, blah, blah, I didn't hear anything new that showed serious out-of-the-box thinking. Maybe Dell Software has something up its sleeve, but it wasn't on the agenda the other day. The reason for the blah blah blah above is that big data and BI and analytics are unfortunately one of the default modes of vendors looking for that new new thing. They fall back on BI and analytics for new strategies the way Hollywood drops a vampire or werewolf into a teen movie plot in order to draw a crowd. BI, analytics, and big data are that same deus ex machine plot twist: it's easy to see how poorly the market is served by the tools vendors, easy to see how complex the problems of big data have become, easy to see how some established vendor flying the flag of neutrality could emerge with a big chunk of that homeless, tempest-tossed, desperate-for-real-BI market. Easy to see, hard to execute. Really hard. So in the end we're left to take on faith some basic concepts regarding Dell Software. The first is the leadership team: It's solid, and experienced, so there's a decent chance it'll get it right. The second is the opportunity: No argument there, the midmarket needs help with data, systems management, and BI. And the third is that the Dell brand counts for a lot, and its saturation in the midmarket is impressive. So, as long as this is the first of many outings for Dell Software, the company remains committed to staying the course despite early obstacles, and it figures out the critical how-to factors, there's a solid chance that Dell will make the shift from hardware to software work. Considering the declining fortunes of the PC business, it's a chance Dell has to take. In the meantime, we'll have to wait and see how much more substance Dell Software can add to the picture. There's a lot more to prove here than just good intentions and a good management team. A lot more.2012-07-19T10:15:00ZWindows 8 In Enterprises: Seeking Killer AppsMicrosoft must come up with killer apps that take advantage of the potential of Window 8, Dynamics, Azure, and the rest of its stack.http://www.informationweek.com/news/240003968?cid=SBX_iwk_related_commentary_Peripherals_--_scanners,_printers,_copiers_hardwareI spent last week at Microsoft's Worldwide Partner Conference, with 16,000 of the company's 460,000 partners, and Windows 8 was at the top of the agenda. My recent experience using a Samsung Series 7 running Windows 8 has convinced me this is a potential game-changing moment for Microsoft and the industry--rivaling even the original Windows 3 launch (which I attended way back in May, 1990). Before the game really changes, however, especially for the enterprise, Microsoft needs to show the world what the new game looks like and what the rules of engagement will be. We got inklings of that in the keynotes by Tami Reller and Kirill Tartarinov, the heads of Windows and Dynamics, respectively, but inklings aren't enough. In order to drive the market towards a vision of Windows 8 in the enterprise, Microsoft will have to come up with some killer apps that leverage the potential of Windows 8, Dynamics, Azure, and the rest of the Microsoft stack. It's an unprecedented opportunity, and missing it isn't an option. Microsoft is poised to drive a reimagining of the PC, tablet, and phone user experiences that could completely upturn a tablet market that Apple defined scarcely two years old. And essential to that reimagining is showing how users--and developers--should look at the interplay between these three device types. The opportunity to blend PCs, tablets, and phones is unique to Windows 8: Apple has MacOS for PCs and iOS for tablets and phones; and Google has Android for tablets and phones, and basically relies on browsers to deliver its desktop user experience, such as it is. But Windows' uniqueness can't and won't last long. It's hard to imagine twelve months going by without Apple trying to merge its three platforms in some way or another, particularly if Windows 8 shows signs of success. I have less confidence in Google mounting a response--its enterprise chops are pretty much non-existent, as far as I can tell, as witnessed by Google's inability to grok the need for enterprise-class security in Android devices. [ Want more on Windows 8? Read <a href=" http://www.informationweek.com/news/software/windows8/240002615?itc=edit_in_body_cross) ">Microsoft Must Get The Windows 8 Commerce Model Right</a>. ] Regardless, the challenge on the table for Microsoft is important. Underlying the need for a killer demo app is the need to impress upon the company's millions of developers, plenty of whom already moonlight developing in the iOS market, that Windows 8 is worthy of their attention. The OS has to overcome the unmitigated disaster called Windows 6 phone and its follow-up, a Windows 7 phone that proved to be another developer dead end. In order to get millions of developers geared up to produce millions of Windows 8 apps, the value add over iOS and Android must be pretty compelling. Building this killer demo app could be more daunting than it may seem, but that's mostly because of the plethora of compelling concepts and technologies that should be part of the scenario. Conceptually, Windows 8 is really intended to be the first development and deployment environment that spans the phone, tablet, and PC user experience. But there's a twist: Surface. tablets like Series 7, and the many convertible laptop/tablets about to enter the market are breaking down the artificial barrier between tablets and PCs that Apple created with iPad. Whereas iPad is primarily a consumption device, with what amounts to some elegant kludges for enabling varying degrees of input, the Windows 8 tablet experience will be for both creation and consumption. With many new hardware devices either coming with a built-in keyboard (like Surface and the convertible laptops) or supporting a variety of Bluetooth keyboards (like Series 7 and its brethren), the line between tablet and PC begins to blur. Which means the two distinct user experiences that characterize these devices--keyboard and mouse input on the PC and multitouch input on the tablet--will converge in some, if not all, Windows 8 apps. From a design standpoint that's more complex than it may seem: Not only can you add a keyboard and mouse to Windows 8 apps, but Windows 8 lets you extend the screen options so that you can have a pure keyboard and mouse (no touch) experience on a monitor, and pure touch or touch plus keyboard and mouse on the tablet. These multi-input, multiscreen capabilities greatly extend what an app can look like and do in Windows 8. Could an app have touch, keyboard, and mouse as its primary input technologies, depending on the particular use case? Why not? Imagine an asset management app that spanned the parts of the process that take place in the field (inspection, verification, inventory control, and service, for example) and at the user's desk (dispatch, verification, field service, and approvals) The same user could take his or her Surface into the field, inspect and verify using a tablet UI, and then flip open the keyboard and write a detailed report . That report could then be presented in a touch-based presentation mode or modified for collaboration with different user input modes depending on whether collaborators are at their desks, in front of a tablet, or on a Windows phone. In other words, the distinctions between what happens in "mobile mode" and what happens in "desktop mode" can be part of the same app, and have a similar and overlapping user experience. This essentially offers the possibility of extending how much of the scope of a business process can be covered by an app: Business processes that have gone mobile typically have separate mobile modes that are significantly different from their desktop modes, and in most cases the two modes are covered by different apps with different user experiences and licenses. (The situation is different with a pure consumption app like a dashboard or standalone analytic. The visualization of information can be largely the same for all three devices. It's input and interaction that require different approaches.) It's important to note that I have been unable to verify exactly how identical the Windows 8 phone experience will be to the Windows 8 tablet and PC experiences. Microsoft has been a little too mum on defining the degree of overlap, particularly from the phone side, and how that will impact app design. That's more evidence of another Microsoft silo that has to be taken down as Microsoft makes its unique play for the consumer/enterprise market. But, based on some vague reassurances I've received, the blurring of these distinctions and the extension of a single app across phone, tablet, and desktop is at least a theoretical possibility. It's clear that this won't be desirable for every app--far from it. But from a development as well as a licensing standpoint, there are many many cases where building one app to cover a business process that spans all three devices will be hugely important for developers and customers. There are a number of things that must be straightened out before we can assess what this killer app scenario will look like. A big question is simply how well will Windows 8 support different deployment options: Partners at WPC were assured that when Windows 8 goes GA in October. it will support multiple screen sharing scenarios. The version on my Samsung tablet has pretty much the same four scenarios available in Windows 7, with some contention between what can be on which screen when. Also necessary will be clarification about whether a native Windows 8 app can simultaneously have a desktop keyboard and mouse user experience and a tablet touch experience: I tried to see if any of the Windows 8 apps on my Series 7 would support that kind of operation, and the answer seemed to be no. While these questions may seem trivial, the underlying question they beg isn't: How different can the Windows 8 experience be from what we think of as a desktop/tablet/phone experience today? I can imagine a number of scenarios where I'd I want sit at my desktop with my tablet mounted next to or above my keyboard and mouse, and alternate between the two input modes. Add the phone on the other side of my keyboard--maybe that's what stages all the voice communications for my Windows 8 apps--and now I have a multimode experience that, from the developer's standpoint, can be built as a single app and used by a single user across all three devices. The bottom line for enterprise applications is that there are many processes that could span the three main enterprise devices, and the customer experience would be all the richer for it. That richness should translate into opportunity for Microsoft and its partners, and headaches for Apple and Google. But to make this happen, Microsoft must show the world what the killer enterprise app experience can be. Maybe some partner will do it first, but my sense is that this should be job No. 1 at Microsoft. If Microsoft wants the market to tilt in its direction, it must do this. Apple had the easy job of defining the ultimate consumption device. To Microsoft falls the task of reinventing consumption to include creation. Did I say this rivals the game-changing precedent of the Windows 3 launch? If Microsoft succeeds, that prediction may prove to be an understatement. A very big understatement. 2012-06-25T08:30:00ZMicrosoft Must Get The Windows 8 Commerce Model RightMicrosoft has innovated well on the tech side of Win 8/Metro, but it has a huge problem on the commerce side.http://www.informationweek.com/news/240002615?cid=SBX_iwk_related_commentary_Peripherals_--_scanners,_printers,_copiers_hardwareI've spent the last few days test-driving a Samsung Slate PC running Windows 8. It's quite similar to the Surface Pro tablet that Microsoft announced this week, and it's clear to me that the concept of a tablet that can run both the new Metro interface and older Windows 7-style applications is a winner. But concept and reality don't always come together according to plan, and Microsoft definitely has some major challenges making its new platform a contender in the same weight class as Apple and Android. It's not technology that promises to make things complicated for Microsoft: That part of the equation seems to be relatively solid. It's the non-technical side that needs serious help. The equation I'm referring to is what I call the three rules of success in the mobile/cloud commerce world. The rules are based in part on what has made Apple, the Apple Store, and iOS such a success, with a nod to how Amazon has been able to rule its increasing large corner of the e-commerce market. When Microsoft gets these three rules right, the market will have a new contender for Apple's vaunted position as the premier mobile/cloud commerce company. Right now, Microsoft has gotten one requirement right and has a fighting chance at acing number two. But number three, perhaps the most important of all, needs a major reset. [ Want to read more from Josh Greenbaum on Windows 8? See <a href=" http://www.informationweek.com/news/software/windows8/240002076?itc=edit_in_body_cross ">The Windows 8/Metro Challenge</a>. ] My first requirement for mobile/cloud success is a great user experience. Microsoft has successfully nailed this one with Metro. It isn't just another touch interface, but one that's designed in ways that iOS users might even be jealous of. For example, you operate many important applications and system controls by swiping the left and right screen edges, with a finger if the tablet is on a stand and with the left and right thumbs if it's being held. Navigation is simple and intuitive, and remarkably different from the more simplistic swiping iOS affords. And then there's the fact that Windows 8 with Metro supports all the functionality of the Windows apps world. It's very much an OS for creating content as well consuming it. From a usability standpoint, this is a winning combo. The second requirement is to have a great choice of apps to deploy on the new platform. Microsoft has a long, long way to go to match the countless apps available to iOS and Android users. While this isn't a trivial issue in the least, I believe Microsoft has more than a fighting chance to build out a large portfolio. It plans to harness millions of existing Windows and Java developers, so at a minimum many developers will be able to target the Windows 8 environment using the dev tools they already use. This apps question will remain an issue for some time, but the stage is set for a large number of developers to build a lot of apps for Windows 8/Metro, and hence for nailing mobile/cloud requirement two. My final requirement is one that Microsoft has gotten half right and half wrong. And getting one half without the other is a guaranteed failure. The requirement is relatively straightforward--provide an easy, relatively pain-free and lucrative way for developers to sell their apps, and a concomitantly easy, pain-free, and simple way for customers to buy and deploy these apps on their devices. The plans for the Win 8 app store appear to favor developers, making it easier to get apps approved compared with the Apple Store, as well as giving developers a larger slice of the revenue pie. That's a good start, as both Amazon and the Apple App store have proven, the commerce model may be the most important of the three: It don't mean a thing if it's hard to go ca-ching. It's as simple as that. But the customer side of the Microsoft commerce experience has a long way to go if my recent experience with the Slate is representative of how things can go wrong, particularly in terms of how Microsoft wants to integrate its different online commerce systems. In a nutshell, three unforgiveable errors happened in the course of doing something as simple as buying a movie to watch during a recent business trip. And those three errors added up to a big fat fail for the commerce side of the Microsoft experience. The first problem by itself was pretty egregious: The Xbox back-office accounting system where the Metro Video app sent me to buy the movie has a well-known bug, well-known because once I talked to technical support, it was apparent they'd encountered it many times before. This little bug prevented me from linking a credit card to my account: I verified with my credit card company that the authorization went through on its end, just not on the Xbox side. That makes it hard to actually buy the movie. Tech support kindly spotted me the points I needed to rent the movie (points, as this is Xbox, a gaming site, so, you don't transact in actual currency--more on this problem later), but the only way I could buy any more movies for three days until they fixed the back-office bug was to purchase a pre-paid Xbox card. This bug is so well known that tech support even knows how long it takes to get it fixed. It's clear from the Xbox back-office bug that something is rotten in Microsoft's e-commerce strategy, especially as it's apparently a known bug that for whatever reason remains unfixed. That this can and should be fixed goes without saying, and it should be easy enough for a company with Microsoft's tech firepower. How it can persist for more than a few days makes me wonder if Xbox gamers are just more tolerant of this kind of nonsense, or if they have some other way to get the points they need from Microsoft. Regardless, it was strike one against Microsoft's commerce model. Strike two happened when I tried to watch the last two-thirds of the movie, and the Slate Video app crashed, yielding some arcane error code. Fair enough, this isn't the GA release, so I never expected the Metro experience to be bug free. But the problem escalated when I contacted Microsoft tech support to resolve the problem. Since I bought the movie from Xbox, I contacted Xbox account management support people. They hemmed and hawed, and finally said I'd have to talk to someone at Xbox Live support to resolve this issue. Okay, I thought, what do I know about Xbox and Xbox Live. But more importantly, why do I even have to know the difference to buy a movie? I should mention that support wanted to authenticate my account by asking me for the credit card I had provided, which meant I had to launch into the back-office software story. Luckily, there was a security question that I'd set up in my Microsoft Live account years ago that I actually could remember--on the second try. By this time, I had decided to download the movie onto to my Windows 7 laptop and watch it there. That should be easy, right? I bought the movie from Xbox, surely I could just move the download authorization to another device (something I can do with an audio book on my public library's website, so it should be easy). But Xbox Live support punted on this as well: Not only didn't they understand what was happening on the Slate, they couldn't help me download the movie to Windows 7. That, I was told, was a job for Zune support. Zune? I was on a Metro tablet buying an Xbox movie that now needed support from Zune, which, when last I checked, was a discontinued iPod wannabe. (Actually, the brand has morphed into a digital media store, though why the brand was worth preserving is beyond me.) And herein lies the gist of problem two: Microsoft has two commerce sites trying to serve a single customer with a single goal, and their lack of integration makes the consumer experience more than just problematic. Pain in the ass is the best way I can describe it. By now I'd been trying to resolve this Slate problem for an hour. Factor in the time I spent trying to add a credit card to my Xbox account, and I'd already spent two hours--pretty much the movie's entire runtime--without having seen more than the first 30 minutes of the movie. So now for Zune, which doesn't offer telephone support; chat is the only way to communicate. But they had a fix: I had to download Zune for Windows 7, sign on (using my Windows Live account), and then find my movie, download it, and run it on Zune. Right. I was on it. When I finally got the Zune process underway, believe it or not, I could no longer download the movie because the download timeframe had expired. Zune support generously offered to refund the points I had spent, but first we needed to verify my account using my credit card number! OMG! At this point, I hope you're laughing, because I was truly in stitches. This comedy of errors was beyond unbelievable. Luckily I knew the security question cold, so we got that settled quickly, the points instantly appeared, and my Zune download began. Now I'm on the airplane home, daring myself to actually try to watch it. If you hear about a Virgin America passenger who ran amok and started eating his laptop, you'll know this story didn't end well. On to problem three: The lack of an integrated customer experience. I have a Microsoft Live account that I use to sign into all sorts of things. It has a little graphical icon that appears when I sign on to use various non-commercial services at Microsoft (like registering for Microsoft conferences.) I had to use that same Live account for Xbox (a gaming site, though I've no interest in being a gamer), where it has its own funky Xbox avatar, and I used it again for Zune (another service I have no connection to), which created a third little graphic next to my account name. This multiple personality disorder is a mess and will be the nail in the coffin for Microsoft's aspirations to beat Apple if it doesn't get resolved. This problem isn't just a matter of signing on, of course. Buying movies with Xbox gamer points, making it hard to move content between devices, not to mention the support morass--all this will help Tim Cook sleep well for some time to come. The moral of the story is that Microsoft has innovated well on the tech side, but it has a long way to go on the apps side and even more so on the commerce side. While the groundwork has been laid for a critical mass of apps to emerge, I have concerns that the commerce side is showing Microsoft's infamous siloes at their worst, and it may take a while for this mess to be resolved. It's not just Win 8/Metro that's in release preview, it's the whole business model. My concern is that Microsoft is working away at making Win 8/Metro even better and setting the groundwork for a robust developer community, but it's asleep at the switch when it comes to the commercial experience. Hopefully I'm wrong, because if I'm not my Slate will end up in the pile next to my HP Touchpad. It would be a shame to see such a good start go to waste. Josh Greenbaum is principal of <a href=http://www.eaconsult.com/ >Enterprise Applications Consulting</a>, 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 <a href="mailto:josh@eaconsult.com">josh@eaconsult.com</a>. Every company needs a social networking policy, but don't stifle creativity and productivity with too much formality. Also in the debut, all-digital <a href="http://www.informationweek.com/thebrainyard/gogreen/062512by/?k=axxe&cid=article_axxt_os">Social Media For Grownups</a> issue of The BrainYard: The proper tools help in setting social networking policy for your company and ensure that you'll be able to follow through. (Free with registration.) 2012-06-20T08:15:00ZAfter Yammer, Microsoft Needs HR Software PlayWhile rumors about a Yammer deal are getting all the attention, Microsoft really should focus on filling the human resources management system gap in its product line. http://www.informationweek.com/news/240002344?cid=SBX_iwk_related_commentary_Peripherals_--_scanners,_printers,_copiers_hardwareAs the rumors swirl about Microsoft's possible acquisition of Yammer, and what that means for Microsoft Dynamics and its social computing strategy, I must confess that I'm a bit bewildered. While social is hot and cool and trendy (can you guess how lukewarm I am about this corner of the market?), and has been glaringly missing from Microsoft's enterprise portfolio, I expected the company to make a move into the human resources management system and talent management space first. The reason I'd have opted to spend a billion or two on HRMS is simple: The business case for social looks pretty solid for early investors but not so solid for early adopters, while the business case for HRMS and talent management just gets better all the time. And with Microsoft positioning its Dynamics offerings, particularly AX and CRM, as enterprise-class products that fit nicely into the larger Azure and Windows 8/Metro picture, the lack of HRMS increasingly looks like a massive strategic gap that needs to be filled. It's not like Microsoft doesn't understand the problem. In several conversations, Dynamics execs have been quick to point out that AX, NAV, and GP all have HRMS capabilities, but it's pretty obvious these HR modules aren't sufficient for Microsoft's large enterprise aspirations or the needs of many of the Microsoft customers and prospects that I've talked to. [ Want to read more about Microsoft from Josh Greenbaum? See <a href=" http://www.informationweek.com/news/software/enterprise_apps/232800468?itc=edit_in_body_cross">Microsoft's Switch From Siebel CRM To Dynamics Speaks Volumes</a>. ] At issue is the fact that HRMS is moving from being the HR department's unique domain to being a strategic linchpin in everything. For example, with demand planning, you need to know if you have the right talent pool to meet customer demand; with product lifecycle management, you need staff using a skunk works approach to design the new product line; and with overall business strategy, you need to plan the right mix of temporary, contract, and salaried employees in order to optimize a new five-year plan. In this light, Dynamics' lack of strategic enterprise-class HRMS/talent management makes it clear that Microsoft needs to buy its way into this market in a big way. And fast. So, with the possibility of a Yammer acquisition having sucked the oxygen out of the M&A rumor market last week, let me add some fuel to the M&A fire for the weeks to come. Microsoft needs a major HRMS acquisition, one that fits in well with .NET, Azure, and Dynamics, and has a strong mobile story and a strong software-as-a-service capability. This Yammer rumor is hardly a diversion--$1.2 billion wouldn't be chump change, even for Microsoft--but I think a bigger HRMS/talent management deal is in the works. It's too obvious a need for Microsoft to ignore. Josh Greenbaum is principal of <a href=http://www.eaconsult.com/ >Enterprise Applications Consulting</a>, 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 <a href="mailto:josh@eaconsult.com">josh@eaconsult.com</a>. New apps promise to inject social features across entire workflows, raising new problems for IT. In the new, all-digital <a href="http://www.informationweek.com/gogreen/060412/?k=axxe&cid=article_axxt_os">Social Networking</a> issue of InformationWeek, find out how companies are making social networking part of the way their employees work. Also in this issue: How to better manage your video data. (Free with registration.) 2012-06-15T08:31:00ZThe Windows 8/Metro ChallengeMicrosoft's game-changing new interface: Good for the enterprise, not so good for Apple and Google.http://www.informationweek.com/news/240002076?cid=SBX_iwk_related_commentary_Peripherals_--_scanners,_printers,_copiers_hardware <div class="inlineStoryImage inlineStoryImageRight"> <a href="http://www.informationweek.com/news/galleries/windows/operatingsystems /240001349"><img src="http://twimgs.com/informationweek/galleries/automated/803/win8-02_tn.jp g" alt="Windows 8 Preview: Key Features" title="Windows 8 Preview: Key Features" class="img175" /></a> <div class="storyImageTitle">Windows 8 Preview: Key Features</div> (click image for slideshow) </div> <a href="http://www.informationweek.com/news/software/windows8/240001890">Microsoft's TechEd conference</a> this week showcased more than just Windows 8 and its amazingly well-designed Metro touch-based user interface. It also heralded what may prove to be a tectonic shift in the strategic position of Microsoft in the enterprise. And with that shift may come an equal and opposite shift in the fortunes of Google and Apple as they contend--in their respectively challenged ways--for the heart and soul of the enterprise/consumer convergence. We've seen versions of this movie before. And while the past is never as good a predictor of future performance as we all wish it could be, this is looking like a rerun of the Windows, Office, and SQL database market share wars of yesteryear. In all three cases, Microsoft was not first to market, nor were its initial products instant successes. But over time, and through that plodding patience that has frustrated competitors since the company was founded, Microsoft eventually clawed its way into a leadership position. This year's version of "Revenge of the Nerds" is brought to you by the combination of a helluva great user experience in Win 8/Metro and an underlying platform and development strategy that only Microsoft could even try to pull off. And while nothing is ever guaranteed in techy land and Microsoft could still lay an egg with its new approach, some glaring omissions and unavoidable limitations on the part of Google and Apple give Microsoft more than a fighting chance at success, especially when it comes to meeting the needs of the enterprise and its employee/consumer constituents. [ Is Windows Phone gaining traction? Read <a href="http://www.informationweek.com/news/mobility/smart_phones/240001507?itc=edit_in_body_cross">Windows Phone Marketplace Crosses 100,000 App Mark</a>. ] The core of Microsoft's strategy is relatively easy to explain: provide a single, unique, and visually superlative multitasking user experience (Metro) across mobile and desktop devices while simultaneously providing a single development environment that supports an extremely broad set of development technologies and a write-once, deploy-anywhere design paradigm. Back that up with an enterprise-class security model and commercial experience, and you have, at least on paper, a major comeback strategy for Microsoft's converged phone, tablet, and desktop aspirations. And just to cover all the bases, Microsoft is allowing Win 8 users to run a fully Windows 7-compatible desktop for those apps and users who want or need to interact in the older desktop paradigm. This desktop option exists because not every app that developers build for Win 8 will work well as a Metro app. Some apps simply aren't suited for three different form factors, and/or they need so much functional variety that they're really better suited to a classic desktop (think Photoshop). But Microsoft's development strategy is clearly intended to allow a Metro or desktop app to be developed in C, C++, C#, HTML, Javascript, Visual Basic, and others, and then deployed on a phone, tablet, or desktop as needed. On the commercial side, Microsoft is offering an app store experience that doesn't subject customers to the vagaries of <a href="http://www.informationweek.com/news/security/app-security/240001691">Google's Wild West, security-challenged, malware-friendly app store</a> and that rewards developers with a more streamlined on-boarding experience and a much greater cut of the action than they can get out of Apple. Enterprises that develop their own Metro apps can opt to have them provisioned exclusively from the Windows store or distribute them internally to their users (who must use a corporate site-licensed account to access the internal apps.) The result is a very enterprise-friendly development and deployment model that solves the security and platform problems of Google while out-enterprising Apple, which is the undisputed master of the retail technology market but is still trying to figure out how to target corporate IT's procurement needs. There are, however, three glaring problems facing this otherwise rosy-looking future for Win 8/Metro: --The operating system isn't yet in general release. --The enterprise will need a major hardware refresh in order to take advantage of this opportunity. --Microsoft will be facing an uphill battle for critical mass against Apple iOS and, to a lesser extent, Android on the mobile and tablet side of the enterprise. This is hardly a trivial matter, and Microsoft will have a hard slog in order to overcome Apple's amazing momentum. There's a fourth factor as well: there need to be more Windows 8 phones on the market in order to entice consumers, and I don't think Nokia can--or should--do this alone. Interestingly, there's no dearth of products on the PC or tablet side--I'm writing this blog post on a Lenovo X220 convertible tablet/PC, which will run Win 8 just as soon as I have a moment to install it--and new tablets and PCs are coming from pretty much every PC vendor on the planet: HP, Dell, Lenovo, and Samsung, to name just a few. On the other hand, there are four factors in Microsoft's favor. The first is that the BYOD "movement" has been only grudgingly supported by IT folks, who would rather have a more secure way to ensure that mobility doesn't result in data leaks or theft. Second, BYOD in the enterprise is still in a nascent phase, especially on the tablet side, as corporate IT and the line of business work out the apps and use cases for these devices ahead of truly massive procurement cycle. This means Microsoft can stay in the game: A single OS (that multi-tasks on all three platforms) and underlying security model would be one way to bring your own device to work without inadvertently taking home or giving away something you shouldn't. The third factor is that Google is flunking enterprise security and RIM is imploding, which opens up the number-two phone spot for Microsoft. And finally, the development model for Win 8/Metro can harness a developer community that is second to none in size and enterprise knowledge. This overcomes a prime requisite for building critical mass, and any competitor that discounts the potential of this developer community does so at its extreme peril. It's pretty clear to me that Win 8/Metro will be a hit in the enterprise--the question is really how much of a hit. From a development standpoint, having a single user experience for enterprise software will overcome a major innovator's dilemma for the entire enterprise market: right now, innovative new functionality that is being deployed on the iPad--whether from a newbie like Workday or an old-guard vendor like SAP, Oracle, Microsoft Dynamics, Infor, and the like--makes pretty much anything they try to sell on a desktop or browser look last year's model. It's been remarkable how quickly <a href= http://www.eaconsult.com/2011/09/26/the-mobile-metaphor-rules-for-better-and-worse/">the mobile/iPad user experience has leapfrogged</a> most of what the enterprise software vendors have done to provide a modern user experience over the last few years. Metro can change that dramatically, and presenters at TechEd this week showed prototypes from SAP and Microsoft Dynamics of Metro-based apps that would instantly bridge the desktop/tablet gap that iPad presents today (and for which Apple has no comparable fix). Again, this will require a hardware upgrade for most users, though even that may be less onerous than upgrades have been in the past. In addition to buying laptop convertibles like the Lenovo X200, companies can pick up Samsung's Slate PC/tablet, currently retailing for approximately $1100, which can function as a Metro tablet or sit in a docking station and function as a keyboard-based Windows 8 desktop machine--and switch back and forth as the app requires or the user prefers. Either way, that's one device that covers both the desktop and the tablet. And with cell phone pricing geared toward low up-front costs in exchange for long-term contracts, it's safe to assume that the consumer retail cost of Microsoft's hardware refresh would be about $1300 at the high end. That's a cost that IT procurement should be able to improve on significantly and that Apple can't even begin to touch. I firmly believe that even without any net new apps, Win 8/Metro's usability and unified user experience across all three platforms, compared to a touchless keyboard mouse paradigm and a wholly separate tablet experience, should provide a lower TCO and a demonstrable ROI for the hardware upgrade. So while it's a gamble on Microsoft's part--and a big, bet-the-business one at that--I don't think there's much chance that it can go wrong. The real question is how right it can go, and whether the result is a zero-sum war of attrition against Apple and Google, or a rising tide that lifts all three vendors, despite their differences. I'm leaning towards the former. The consumerization of IT has made IT buyers more like fickle consumers than conservative, buy-for-the-long-term IT procurement specialists, and that means "new and cool" will get its day in the sun more rapidly than it has in the past. And that's before we factor in the advantage that Microsoft Azure will play in the development and deployment of Win 8/Metro apps. This will bring another whole set of capabilities that add significant cloud-based functionality to the Microsoft enterprise experience. Win 8/Metro may prove to be much more than just a sequel to "Revenge of the Nerds" a la Windows, Office, or SQL Server. This tectonic shift could happen much more quickly and dramatically than anything Microsoft has ever pulled off. And that's saying a lot. Josh Greenbaum is principal of <a href=http://www.eaconsult.com/ >Enterprise Applications Consulting</a>, 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 <a href="mailto:josh@eaconsult.com">josh@eaconsult.com</a>. InformationWeek is conducting a survey on Windows 8 adoption. Upon completion of our survey, you will be eligible to enter a drawing to receive a 16-GB Apple iPad. Take our <a href="http://informationweek.2012Windows8.sgizmo.com/s3/">InformationWeek 2012 Windows 8 Survey</a> now. Survey ends June 15. 2012-06-13T08:30:00ZLarry Ellison Is Needlessly Clouding Oracle's Cloud MessageOracle's CEO should just talk honestly about what his company is doing, instead of putting on a show. Ellison the reasoned market leader is whom we'd like to hear from.http://www.informationweek.com/news/240001891?cid=SBX_iwk_related_commentary_Peripherals_--_scanners,_printers,_copiers_hardwareOracle has some seriously significant things to say to its customers about the cloud, enterprise software, engineered systems, and the rest of its strategic portfolio. And if the company approached the task a little more seriously, it would start winning not just in the eyes and wallets of its customers, but also in the court of public opinion. Instead, Oracle remains severely message-challenged by the way its CEO, Larry Ellison, puts out the company's message. Ellison manages to create a mess worthy of Newt Gingrich in the Republican primary campaign, turning what should be a discussion of facts and issues into an annoying sideshow, a mix of cheap (and factually off base) swipes at the competition, and some massively hyperbolic claims about the history of Oracle's cloud efforts and exactly how many cloud apps the company has. Yes, Oracle is an undisputed leader in cloud apps, a position it earned through organic growth (Fusion Apps) and acquisitions, most recently ATG, Taleo, and RightNow. But that's apparently not enough. At last week's unveiling of Oracle's cloud strategy, Ellison claimed that Oracle has 100 cloud apps, while trash-talking (incorrectly) competitors that he claimed have only recently acquired their way into the cloud or are allegedly saddled with the wrong technology. Ellison also revised Oracle's history by claiming that it started down the road to the cloud with the original Fusion project seven years ago, when that trip really started just two or three years ago. I'm amazed at the 100 apps claim. I've been following Oracle as close as possible (which ain't easy--Oracle in recent years has been the undisputed leader in running a mediocre influencer program, though in recent months it has been trying to fix that problem), and I simply can't see where that number came from. [ Want to read more from Josh Greenbaum on enterprise software vendors? Check out <a href=" http://www.informationweek.com/authors/Josh-Greenbaum">these stories</a>. ] Indeed, Ellison boasted that Oracle is eating its own dog food, running four of its own cloud apps. At that point, a familiar list appeared on the screen: Fusion Sales and Marketing, Fusion Financials, Fusion Talent Management, and Fusion CRM. (I couldn't help tweeting "Where are the other 96 apps?") To its credit, at the end of last week, the aforementioned, clearly improving influencer team put Steve Miranda, senior VP of Oracle Fusion Applications development, on the phone to clear things up. Oracle, Steve explained, is counting each module of each application set as a separate app, even though Fusion Data Quality Address Cleansing couldn't begin to stand alone without the rest of the Fusion Data Management App. In the end, Steve and I agreed to disagree on the nomenclature issue: Terminology is all over the map in this market, even, or especially, at Oracle. Indeed, at one point in a presentation Steve gave to industry analysts earlier this year he referred to "suites" of cloud apps (which would definitely open up the possibility that each suite contains multiple apps), while at another point in the same presentation he clearly refers to Oracle's seven Fusion Apps (Financials, CRM, GRC, HCM, Project, Procurement, SCM), using the designation for apps that most of us are familiar with. Steve pointed out that Oracle doesn't have a monopoly on hyperbole. He's right: A great example comes from a recent Workday press release that claims the company supports customers in 219 countries. That's pretty hard to do: most online sources show a maximum of 193 countries in the world (and, I would imagine, quite a few of them, South Sudan, for instance, aren't exactly places cloud vendors would want to set up shop.) So, if it's just a question of a little hyperbole and a problem with nomenclature, what's my beef? Part of my annoyance is admittedly personal: Does Ellison really believe that his audience, which includes me and my fellow analysts, and a collection of rather intelligent customers and prospects, will walk away from an Oracle event that conflates fact, fantasy, and, shall we say, atypical terminology, with a positive impression of the company as a market leader? To me Ellison's performance looked desperate, trivialized the important issues, and otherwise reminded me of Newt Gingrich's wacky presidential campaign and his reality-challenged ideas for the country--the equivalent of talking about going to the moon when the economy is teetering and the world is poised for war on three continents. The rest of my annoyance is based on trying to understand why Ellison bothers to play the game this way at all. Fusion Apps is looking pretty good, customer uptake is decent for a nascent product, the competitive wins are convincing, and when you add recent the acquisitions in, it's safe to say that Oracle boasts the largest cloud apps portfolio in the business. Why not just say that? And why not, if you're going to bash a competitor like SAP, hone in on the fact that it had to go outside twice to get its cloud strategy right (first hiring John Wookey after he quit Oracle and then giving the cloud apps strategy over to Lars Dalgaard of SuccessFactors), instead of making up some nonsense about SuccessFactors being the only cloud app that SAP has? Why not take Workday to task for something real, instead of pretending that the company has made a bad bet on using Flash when it has publicly committed itself to HTLM5? Why even bother claiming that Fusion started as a cloud project? Who bloody cares, really? When it comes to Oracle, I have a dream. In that dream, Larry Ellison decides to take the high road, and just talk honestly and credibly about what his company does, has done, and will do, instead of putting on an intelligence-insulting show. There are plenty of people inside Oracle who already do that, though their voices are often drowned by Larry's hyperbole. It's time Larry took a chance on being more than just Larry Ellison the guy playing for cheap laughs and sound bites. Larry Ellison the reasoned market leader would be a refreshing change from what we're being subjected to today. If only dreams could come true … Josh Greenbaum is principal of <a href=http://www.eaconsult.com/ >Enterprise Applications Consulting</a>, 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 <a href="mailto:josh@eaconsult.com">josh@eaconsult.com</a>. New apps promise to inject social features across entire workflows, raising new problems for IT. In the new, all-digital <a href="http://www.informationweek.com/gogreen/060412/?k=axxe&cid=article_axxt_os">Social Networking</a> issue of InformationWeek, find out how companies are making social networking part of the way their employees work. Also in this issue: How to better manage your video data. (Free with registration.) 2012-05-24T08:30:00ZSAP Energizes Its Cloud StrategyAs the Lars Dalgaard era begins, SAP faces a major challenge in sorting out its cloud strategy.http://www.informationweek.com/news/240000943?cid=SBX_iwk_related_commentary_Peripherals_--_scanners,_printers,_copiers_hardwareOne of the most amazing cross-country flights I ever took found me over the center of the country at night, flying through an unbelievable electric storm, with an almost constant arcing of lightning illuminating vast canyons and mountains of clouds. As the pilot maneuvered us through this unforgettable vision of nature's wonder, he came on the intercom to offer a phrase that has stuck with me since: "It's incredible how much more lightning there is in the sky that you simply can't see from the ground." That metaphorical image is the cloud version of the iceberg's hidden girth--what you see from your puny perch in the bow of a ship at sea or with your neck craned to scan a stormy sky is a small part of a much larger phenomenon. And as I try to put my arms around SAP's long and often sordid cloud history, and make my way through the many cloud announcements at last week's SAPPHIRE, this image of an invisible, behind the scenes sturm und drang is the best way to describe not just how SAP got to its present strategy, but why it looks the way it does today and how it will evolve. First and foremost is the lightning and thunder personified in Lars Dalgaard, founder and CEO of SuccessFactors, which SAP acquired early this year. His onstage and offstage personality is in the mold of the Norse god Thor, wielding his signature hammer in battle against myriad monsters and other evils. Watching Lars in action made it clear to me that this conceptualization is relatively close to the mark: He has been given a mighty hammer to wield across SAP's fractured cloud landscape, and he has no problem banging it in public and private. It's also clear from the glimmer in the eye of co-CEO Jim Snabe (a fellow Norse god: Odin, Thor's father, perhaps?) that there is some appetite, at least in the executive board-cum-Valhalla of which Lars is now a member, for a little hammering. Handing off SAP's troubled cloud history to Lars at face value looks like a good idea--though I have a few caveats that I'll bring up in a moment. I was impressed to hear that he made the decision to keep Business ByDesign largely by installing it at SuccessFactors, instead of just listening to proponents' and opponents' competing presentations. I was also impressed by the rollout of a growing list of on-demand apps and the positioning of the SAP NetWeaver Cloud as the one true cloud fabric to rule them all: SuccessFactors, ByD, and the rest of SAP's cloud apps and technology will all come together under the NetWeaver Cloud umbrella. Of course, when this will be ready is a moving target; the NetWeaver Cloud will be generally available this summer, but don't expect it to be fully formed for some time. [ Read more from Josh Greenbaum on SAP. See <a href=" http://www.informationweek.com/news/software/enterprise_apps/232600276 ">SAP's Success And Looming Challenges</a>.] So while the theory is largely sound, there are some serious problems with how quickly SAP will be able to realize this vision, mostly because the realization of a comprehensive cloud strategy is about much more than just "ending software" and creating a development platform and some APIs. There's a huge amount of work that has to happen--from reorganizing the field to adjusting revenue expectations to building a real cloud services platform that SAP, and every other vendor, will have to deal with. Rather than just make the cloud safe for staging cloud-ified versions of on-premises software, cloud success for SAP and its competitors will require the development and deployment of net new cloud apps. I've previously referred to this as value-added SaaS: applications that provide functionality, which would have been impossible to build or afford on-premises. This is why the entry of SAP or any other traditional on-premises software company to the cloud can't be judged by the yardstick of pure on-demand pioneers like Salesforce.com, or SuccessFactors, for that matter. The value-added cloud is very different from the first-generation cloud, and it requires a different set of, pardon the pun, success factors: 1) A robust, open development environment that supports existing tools and comes with easy license terms--but strict quality and security controls--that can energize an enormous developer base. 2) A set of application building blocks, components and objects that developers can use to build great cloud apps by leveraging existing technology and packaged business processes. 3) Quality content in the form of third-party data services that, like the application building blocks, can be used to build out next-generation cloud apps. 4) A built-in, robust IaaS capability that allows integration to be exchangeable and interchangeable, and essentially drives the cost and complexity of cloud-based integration to zero. 5) A commercial environment for the staging, commercialization, and consumption of cloud-based apps--an App store--that makes it easy to buy and sell great new apps. SAP's progress on all these fronts is limited to date, though it's moving forward on all except number three as far as I can tell. But, when compared to Microsoft Azure, SAP is significantly behind. Of course, Azure is very behind as well, which means that the entire market is still building out this vision, and no one, including a market leader like Microsoft, has completely nailed it yet. SAP's biggest hole for now is on the developer side, and here's where SAP's greatest potential strength is a major weakness. The cloud opportunity that SAP presents encompasses all three of its major focus areas: mobile, in-memory analytics, and business process innovation. In an ideal world a great cloud app would be mobile, use HANA when and if necessary, and reuse SAP's large base of business objects and processes, if not connecting directly to the Business Suite or ByD itself. The problem with this vision is that there's no single development environment for building that cool mobile, in-memory, cloud-based, value-added business app. The erstwhile developer wanting to leverage all of SAP's coolness will need a lot of patience figuring out how to proceed. This pretty much guarantees a siloed approach to applications innovation, at least for the time being. That's part of the old-school, 20th century model that SAP has to kill off in order to make good on its potential. Again, following Microsoft's lead may be a good idea. Microsoft iterated through this problem years ago by creating the catch-all umbrella of .NET and is now working on unifying its mobile, desktop and cloud development paradigm under the Windows 8/Azure umbrella. Some of this is more market-tecture than technology, but it's good market-tecture, as it serves the purpose of giving developers a single target to shoot for. SAP certainly understands the need to make the developer community its new BFF. And in conversations across the company it was clear to me that this isn't just lip service but a significant new focus that acknowledges the need to pull in a vast ecosystem of partnerships--from individual developers to startups to big ISVs to global systems integrators to corporate IT shops--in order to make good on the platforms that SAP is depending on for growth. This makes the announcement of free developers' licenses for HANA one of the more significant ones at SAPPHIRE. And the prospect of a SAP NetWeaver Cloud that not only unifies the company's disparate cloud infrastructures but also provides developers with the option to deploy on non-SAP cloud architectures promises a degree of flexibility that will appeal to the development community. This model will need continual extension and modification if SAP is to make good on cloud and other opportunities. For example, the company must make it easy for startups to partner, as opposed to the death march that partnership has meant for smaller companies in the past. And it must simultaneously make sure that quality and security remain top considerations for its ecosystems partners: Google and Android, with their almost criminally negligent security and privacy models, have handed SAP (and Microsoft and Apple) a golden opportunity to codify enterprise mobility in a real enterprise-class security and privacy model. SAP in particular can use the Sybase Unwired Platform to great effect in this regard, though of course it will need to be linked up to the rest of the SAP development world to provide the one-stop-shopping model that SAP's developers will need. The rest of the SAP cloud story is, I believe, relatively sound, mostly because the market is still nascent enough that SAP doesn't need to nail it all right now. In fact, considering the agile development underpinnings of cloud technology and deployment, it's fitting that every vendor's strategy--as well as their customers' strategies--be refreshed regularly. Any vendor that says it has a 10- or even five-year strategy for the cloud would instantly reveal how little it understands the cloudy future of this market. That situation should hopefully reassure SAP that it isn't late to the cloud in the way it was allegedly late to the Internet in the dotcom era. The cloud party has yet to get going; the realignment of the vendor community is only presaging a much larger realignment of global business towards the new functionality and business opportunities that the cloud can bring. That realignment—including those pesky customers who don't necessarily follow the market up every hill as quickly as vendors and pundits would like--still has a good ten years to play out. And ten years is a century in our industry. Which brings me to a final point about Lars the thunder god. Nordic culture has a strong warrior ethic, and the Eddas, the epic poetry of the region and the Norse equivalent of Greece's Homeric tradition, are replete with stories of great struggles and heroics. There's another, less well-known part of Nordic warrior culture that bears mentioning here. The Vikings had a special class of warrior called Berserkers, truly dangerous, wild men who fought with psychopathic fury and were feared and respected by their otherwise fearsome peers--in case you hadn't noticed, this is the origin of our English word berserk. Berserkers were just the guys you wanted leading the charge against the most formidable foes, but in times of peace they were encouraged to go off to the forest and leave civilized society alone, as the traits that made them great warriors were antithetical once the war was over. Lars' big challenge will be to stay in place as a Thor-like "god", wielding his hammer and knocking a few heads in the process, without being perceived as a Berserker, someone to keep around when heads need knocking but send back to the woods once the battle is won. SAP's cloud strategy is as much a cultural as it is a technological shift, and it's clear that Lars has been given a hammer precisely because massive cultural change is best effected by a combination of war and peace, of pen and sword. But to be most effective the two will must be wielded together carefully, very carefully, something a Thor might be able to do, but a Berserker could never accomplish. As they say in Lar's homeland, til lykke Lars, good luck. And while luck favors the prepared mind, and Lars is nothing if not prepared, there's a large element of luck that will have to play out in order for him and SAP to succeed. The Lars/cloud bet is clearly SAP's biggest one ever. It's the most necessary and the most risky bet ever undertaken by a traditionally risk adverse company. This is the hidden struggle--the lightning at the top of the storm that only high-flying pilots can see--that SAP must sort out as its cloud strategy matures into an expectant future. So do what I did that stormy night at 38,000 feet: fasten your seatbelt, dim the lights, and look out the window at the flashes of light in the distance. And remember, even as the storm on the ground abates and clear skies loom, the sturm und drang in the sky isn't necessarily over. Josh Greenbaum is principal of <a href=http://www.eaconsult.com/ >Enterprise Applications Consulting</a>, 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 <a href="mailto:josh@eaconsult.com">josh@eaconsult.com</a>. The pay-as-you go nature of the cloud makes ROI calculation seem easy. It’s not. Also in the new, all-digital <a href="http://www.informationweek.com/gogreen/031412s/?k=axxe&cid=article_axxt_os">Cloud Calculations</a> InformationWeek supplement: Why infrastructure-as-a-service is a bad deal. (Free registration required.) 2012-04-12T08:30:00ZSAP Says Hana Tests Well On Performance, ScalabilityIf SAP's new benchmarks are accurate, in-memory technology could take scalability concerns off the table and help SAP compete with Oracle on better terms.http://www.informationweek.com/news/232900171?cid=SBX_iwk_related_commentary_Peripherals_--_scanners,_printers,_copiers_hardwareSAP has been trying hard to demonstrate the business case for its in-memory, RDBMS-killer--Hana. A key issue has been proving both Hana’s scalability and appropriateness for serving as an analytical platform for large SAP transactional systems. The case for both of these proof points appears to have been significantly advanced by the results of recent internal benchmarks on Hana that SAP shared with me this week. The results are unverified and therefore must be viewed in light of the on-going Oracle-SAP marketing war. But at a minimum, the data puts the onus on Oracle to match or better, if it can, what look to be relatively impressive numbers. Here’s a summary of this latest Hana scalability test: 100 billion records of relational data, representing five year's worth of SAP sales and distribution data, were loaded into Hana, which compressed the original 100 terabytes of disk data down to 3.8 terabytes of RAM. The Hana system was running on a commercially available IBM X5 16-node cluster, which is four times as large as the platform used for SAP’s previous Hana scalability test. The cost of such a system would be around $600,000, SAP says. [ Want to read more from Josh Greenbaum on SAP? See <a href=" http://www.informationweek.com/news/software/enterprise_apps/232600276?itc=edit_in_body_cross ">SAP's Success And Looming Challenges</a>. ] What's impressive is that SAP is claiming that not only does this configuration deliver sub-second response times--300 to 500 milliseconds for a set of standard SAP Business Warehouse-like queries--but that this is the identical query response time it got when it ran Hana on the smaller 4-node X5 cluster. Equally impressive is that these response times were achieved with no database tuning; the data were partitioned at load time, but nothing in the way of typical RDBMS tuning tricks were used to achieve these results. The test also included ad hoc (as opposed to BW-like) analyses that compared customer data across different time periods with equally impressive results. Being able to do this without using material views is another potential feather in Hana’s cap. The benefits don’t just accrue to analysts looking to leverage data in the SAP Business Warehouse or a generic data warehouse. SAP is also counting on a tool called Landscape Transformation, which replicates data from the SAP transactional system to Hana, to let customers analyze real-time transactional data alongside their BW data using Hana. There could be two possible and important effects from the results of these scalability tests, once they're independently verified. The first would take the Hana scalability issue off the table and drop it squarely in the competition’s court. And the second is that these results make the business case for Hana center on relative functionality and price/performance, making it a potential winner for both the business user and the IT department. I’ve placed the caveats around this data for an important reason: SAP needs to have these results independently reviewed, and, once reviewed, Oracle and any other competitor that feels threatened by Hana should be given the opportunity to respond with scalability data of their own. If SAP’s data holds up under independent scrutiny, it will shift the competitive conversation in SAP’s favor. And that, in turn, will be further proof of the waning importance of relational technology as a cost-effective and functionally superior approach to modern analytics. Josh Greenbaum is principal of <a href=http://www.eaconsult.com/ >Enterprise Applications Consulting</a>, 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 <a href="mailto:josh@eaconsult.com">josh@eaconsult.com</a>. InformationWeek is conducting a survey on the state of enterprise applications and business processes and organizations' priorities in evolving technology over the next 12 to 24 months. Upon completion of our survey, you will be eligible to enter a drawing to receive an 32-GB Apple iPod Touch. Take our <a href="http://informationweek.2012enterpriseapps.sgizmo.com/s3/">Enterprise Applications Survey</a> now. Survey ends April 20. 2012-04-09T08:30:00ZMicrosoft's Switch From Siebel CRM To Dynamics Speaks VolumesThe "moat" around Oracle's CRM products that once kept customers from leaving is drying up as Fusion comes up short and more viable options emerge.http://www.informationweek.com/news/232800468?cid=SBX_iwk_related_commentary_Peripherals_--_scanners,_printers,_copiers_hardwareOne of the many interesting revelations that came out of Microsoft's recent Convergence user conference was that Microsoft has successfully weaned itself from its massive Siebel CRM deployment, in favor of its own Dynamics CRM. It was an interesting comment on the viability and scalability of Dynamics CRM that's worth exploring, particularly in light of the some of the post-hoc analysis of the back-story behind the switch. Perhaps the most interesting comment comes from blogger Dana Blankenhorn, who opines that, rather than a negative for Oracle, the five years it took for Microsoft to make the shift shows how strong the "moat" around products like Siebel is. "If it takes Microsoft five years to switch CRMs," Dana says, then prospective Dynamics CRM customers should ask "how long will it take them?" It's a good question, but the answer isn't going to be about the same five years that Microsoft spent moving off Siebel--not by a long shot. And rather than being at all positive for Oracle, the Microsoft replacement indicates just how vulnerable Oracle is becoming as its core legacy products age and its new Fusion products fail to excite customers. Indeed, the question of how long it takes to move from Siebel to Dynamics CRM really begs a couple of important issues. The first is the implication that the same migration that took five years, starting in 2007, would take five years if it were started in 2012. The current version of Dynamics CRM is a very different from the one Microsoft had available in 2007, in terms of scalability, deployment options (the on-demand version wasn't available then) and overall functionality. My Microsoft sources tell me that a massive migration of tens of thousands of Siebel users today would take significantly less time, depending on how much back office integration and customization is needed. And even more time can be saved if the deployment is done on Azure. [ Want to read more about Microsoft Dynamics? See <a href=" http://www.informationweek.com/news/software/enterprise_apps/232700091?itc=edit_in_body_cross" >Microsoft's Answer To The End Of Software</a>. ] Perhaps more important is that Microsoft didn't set out to do a Siebel replacement in 2007; the replacement project didn't start in earnest until several years later. The original impetus to use Dynamics CRM in-house came from various groups of internal users who felt that it was better to leave Siebel on the shelf than try to work around its limitations. Dynamics CRM was brought in to keep them from devolving back to Excel. As the number of internal users and the robustness of Dynamics CRM grew, it became clear that it was cost-effective and a good overall business decision to go whole hog with Dynamics CRM. While it's probably true that Microsoft wouldn't have likely replaced Siebel with another Oracle product, the fact that Siebel customers now have many viable alternatives makes Dana's concept of an Oracle moat look a little shallow. And the fact that Fusion CRM doesn't have anywhere near the vertical industry coverage of Siebel makes it much easier for Siebel customers to look outside the red box for their next generation CRM product. This situation is similar to the dilemma facing Oracle's PeopleSoft customers--as Oracle lowers the support window for older PeopleSoft versions, the inability of Fusion HR to cover similar functionality as PeopleSoft HR makes it relatively easy for these customers to look to competitors like Workday and SuccessFactors. And the fact that Microsoft's migration to Dynamics CRM has saved it <a href= http://blog.technologyevaluation.com/blog/2011/01/24/what-2010-meant-for-microsoft-business-solutions/ >a reported</a> $10 million per year also speaks to what's left of the "moat" once a migration is over. Even if Oracle could retain a customer the size of Microsoft with its Fusion CRM product, it would have to expect that both license and therefore maintenance revenue would be significantly lower than the original Siebel implementation. As Dana is writing for a financial blog, I'll close with a little red meat for investors. The moat that's represented by Oracle's maintenance revenue stream is going to dry up for a host of reasons, and the relative feature, functionality, and price of its products is an important one. Ending support for key products and increasing competitive choice for its core products are also issues. And the over-emphasis on hardware to the detriment of applications is the final point: Oracle made a choice last fall to make OpenWorld predominantly a hardware show, and its applications customers have been voting against this ever since. If Oracle would take some of that aggressive market energy and pour it into making things right for its applications customers, I think the market would respond positively. It still has great products, great people, and happy customers. But for now, the moat that Dana refers to is more like a swamp, and Oracle seems to sinking further and further into its mire. Josh Greenbaum is principal of <a href=http://www.eaconsult.com/ >Enterprise Applications Consulting</a>, 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 <a href="mailto:josh@eaconsult.com">josh@eaconsult.com</a>. InformationWeek is conducting a survey on the state of enterprise applications and business processes and organizations' priorities in evolving technology over the next 12 to 24 months. Upon completion of our survey, you will be eligible to enter a drawing to receive an 32-GB Apple iPod Touch. Take our <a href="http://informationweek.2012enterpriseapps.sgizmo.com/s3/">Enterprise Applications Survey</a> now. Survey ends April 20. 2012-03-23T08:30:00ZMicrosoft's Answer To The End Of Software Microsoft's Convergence user conference convinced me that Dynamics will be a major player in the cloud, as Redmond bets big on customer choice.http://www.informationweek.com/news/232700091?cid=SBX_iwk_related_commentary_Peripherals_--_scanners,_printers,_copiers_hardwareI saw something cool this week at Microsoft’s Convergence user conference that convinced me that anyone who thinks Microsoft isn’t a player against Apple’s IOS and Google’s Android needs to think twice. Make that three times. Trying out Windows 8 on a Samsung tablet and a Lenovo laptop/tablet hybrid made me wish I could justify adding one more techy toy to my collection. And that was just the part of the conference that appealed to my geeky nature. The enterprise software side convinced me that anyone thinking that Microsoft Dynamics isn’t a player against SAP, Oracle, Salesforce.com and Infor needs to rethink their position a few times, too. From Dynamics’ hybrid cloud strategy to the growing market acceptance of its flagship AX and CRM software to its stronger large enterprise direct sales and services strategy, the message is clear: Dynamics isn’t just playing in the big leagues, it’s poised to be a major contender. And don’t just take my word or the word of the company’s executives, the customers I talked to made it clear that they were ready to vote with their dollars. In conversation after conversation, the message was consistent: AX and Dynamics CRM are viable alternatives to SAP and Oracle in a number of strategic areas. In the case of SAP, it's AX's ability to play in the subsidiaries and other tier two entities of SAP's large enterprise customers. In the case of Oracle, it's Dynamics CRM's ability to be the replacement of choice for Siebel customers looking for a desperately needed refresh. And those were just two of the bigger pipelines for Dynamics in its competitors’ markets. [ Read more on the future of enterprise software? See <a href=" http://www.informationweek.com/news/software/enterprise_apps/232601596?itc=edit_in_body_cross" >The Rise Of The Hybrid Enterprise</a>. ] Microsoft’s emerging hybrid cloud strategy also helps make it a uniquely powerful contender in a cloud market that, despite Salesforce.com's success and Workday's pending success, is really still in its infancy. That infancy, best characterized by Marc Benioff’s “end of software” battle cry, is looking increasingly immature in the face of Microsoft’s hybrid strategy, which wisely leaves the timing of software's end up to the customer and not the vendor. Microsoft's “end of the end of software” strategy has two essential characteristics that will make it hard not just for Salesforce.com, but for SAP, too. The first is the ability to deploy identical software both on-premises and in the cloud, and to move back and forth between the two deployment modes. Dynamics CRM can do that now, NAV and GP will be able to do it in 2013, and AX will follow shortly. This strategy is the ultimate in customer choice, acknowledging that there are many good reasons why the cloud simply isn’t a viable solution. (On-premises AX customer World Vision, a global charity that delivers goods and services to some of the poorest countries, discussed a reason that I hadn’t heard before: Working in places where Internet services aren’t advanced enough to support a cloud deployment.) Characteristic two is the leeway Microsoft is giving its cloud customers in accepting software upgrades. The plan for Dynamics CRM--which will also be used for Microsoft's other cloud products--is to give customers up to a year to accept the upgrade, during which time they will be able to run on their current version. So as not to break the multitenancy model, Microsoft will cluster these “recalcitrants” in a separate instance according to their rev. That approach lets Microsoft maintain the cost effectiveness of multitenancy without force-feeding an upgrade on its customers. Coming a little later will be the ability to run test and dev instances in the cloud as well, so that both upgrades and other changes can be tested before being made part of a live system, just as we do in the on-premises world today. Taken together, these two components (three if you count the test and dev piece) of the strategy make it abundantly clear that, by comparison, Benioff’s “end of software” was more about the “end of customer choice.” This, in fact, becomes the underpinning of Dynamics’ cloud strategy: the “beginning of customer choice” in the cloud. (Microsoft isn’t alone in this approach--Hewlett Packard also is actively supporting customer choice in the cloud and is expected to showcase more of its strategy at an analyst event in Boston next week.) Two more highlights of the Convergence conference added strongly to the customer choice theme: The first was the fact that Microsoft across the board will actively support heterogeneity in the operating system and browser worlds. This means that customers and partners that want to access Dynamics on IOS and Android devices, or make their Web pages sing on Safari, Firefox and Chrome, will get the full support of Microsoft’s technology and applications stack. This isn’t going to be mere window dressing (pardon the pun), but rather it’s part of a fully formed strategy of acknowledging the heterogeneity of the IT-consumer convergence (pardon the pun, again) that has made supporting BYOD an essential component of every company’s IT strategy. In a similar vein, Microsoft COO Kevin Turner revealed that Systems Center 2012 will support deployment of applications and services to any hardware, cloud and virtualization platform Microsoft’s customers want to deploy. This support for hybridized, bring-your-own-platform strategies further enhanced the customer choice theme that Microsoft was clearly trying to emphasize. To great success, IMO. Let me add a few more observations about Windows 8 and the Metro UI that it deploys. From an enterprise standpoint, this isn’t just a me-too IOS or Android user experience, but a complete refresh. The standout capability for me is the ability to navigate through a tablet’s applications by treating the workspace like a map that can be zoomed in and out of, allowing a user to increase and decrease the detail and visibility of individual applications and functions the way zooming in and out of a map changes the granularity of the map’s geographical features. Kind of brings to mind a fractal space reminiscent of Benoit Mandelbrot’s famous paper <a href=" http://en.wikipedia.org/wiki/How_Long_Is_the_Coast_of_Britain%3F_Statistical_Self-Similarity_and_Fractional_Dimension ">“How Long Is The Coast Of Britain?”</a> That’s just one of many standout features that I can see making serious inroads into Apple’s still nascent enterprise efforts. With that long list of positives, let me close with two things that were clearly missing in the admittedly full plate that was being served to Convergence attendees. The first was any overt mention of SQL Server 2012 and the BI and analytics capabilities that it lends to Dynamics. This was a significant omission not just because of the obvious need for Dynamics customers to know where to go when they want to up the ante in the big data-big analysis wars. It was also significant insofar as SQL 2012 has some new capabilities--including in-memory, columnar database processing--that, in case you’ve been hiding under a rock, has become one of the major points of contention between SAP (HANA) and Oracle (Exalytics). Sticking SQL 2012 into the Convergence fire hose wouldn’t have been a good use of time. But being able to articulate an advanced DBMS and BI strategy in support of Dynamics would have spoken directly to a real customer need that shouldn't be taken for granted no matter how well SQL Server’s BI capabilities are embedded in Dynamics. Final gripe: Has everyone heard about the Azure Marketplace and Data Market? I didn’t think so. Let me fill in the omission with a <a href=" https://datamarket.azure.com/ ">link</a>. And I've now given more airplay to these two very important, and very cool, parts of the overall Microsoft cloud strategy than they were given during the two days I was at Convergence. Too bad. In the end, Convergence--playing to a record crowd of 10,000--was further affirmation that Microsoft’s technology stack has its best and most powerful use case in the Dynamics marketplace, and that Dynamics, with the rest of Microsoft behind it, is making a case for putting its software up on the same short list as its much bigger rivals. And that’s without counting some pretty cool technology heading to the enterprise--and probably to my house as well--in the next 12 months. Josh Greenbaum is principal of <a href=http://www.eaconsult.com/ >Enterprise Applications Consulting</a>, 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 <a href="mailto:josh@eaconsult.com">josh@eaconsult.com</a>. The pay-as-you go nature of the cloud makes ROI calculation seem easy. It’s not. Also in the new, all-digital <a href="http://www.informationweek.com/gogreen/031412s/?k=axxe&cid=article_axxe_os">Cloud Calculations</a> InformationWeek supplement: Why infrastructure-as-a-service is a bad deal. (Free registration required.) 2012-02-28T08:30:00ZThe Rise Of The Hybrid EnterpriseAs on-premises ERP dies a slow death, the hybrid enterprise, not pure SaaS, will be the dominant model for some time to come. http://www.informationweek.com/news/232601596?cid=SBX_iwk_related_commentary_Peripherals_--_scanners,_printers,_copiers_hardwareThe future of the enterprise is very much up for grabs. Just as Salesforce.com proposed the end of software and then became very much a software company, Zuora's CEO Tien Tzuo recently authored a much-referenced article on <a href=" http://www.forbes.com/sites/ciocentral/2012/02/09/the-end-of-erp/" >the end of ERP</a>, despite the fact that Zuora is very much a player in enabling a new hybrid enterprise that needs ERP as much as it needs Zuora's subscription billing software. What Tzuo does get right is that business models are rapidly changing globally, and those that are more suited to the services world aren't well-suited to using traditional ERP software--which itself is an outmoded term more rooted in old-style 20th century manufacturing than it is in the dozens of industries and lines of business to which “ERP” companies like SAP, Oracle, Microsoft, and Infor now develop and sell on-premises software. What's really dead or dying is the pure on-premises business, and with it the notion that IT is a purely inside-the-firewall phenomenon. And what's growing rapidly, aided and abetted by pure-play software-as-a-service vendors like Zuora and Salesforce, is the hybrid enterprise. Indeed, the question for many of these pure-play SaaS vendors is whether, in the long run, they'll be able to sustain their growth and market clout without having something to sell to the on-premises world. While there's no denying the extraordinary growth of companies like Salesforce, the problem of coexistence with the on-premises world has always been the bete noire of many pure-play SaaS vendors. Zuora embraces this coexistence, as its subscription services model is unlikely to become the system of record in most of the large enterprises it's now targeting. For Salesforce, the extraordinary demand for automating customer interactions in every industry and geography has mitigated the problem, independent of an immediate need for back-office connectivity. But as CRM on-demand and other SaaS models mature, the fact remains that co-existence with on-premises software, not its end, will be the dominant model for some time to come. What I do grant Tzuo is that the definition of a customer and what the customer's relationship is with the enterprise will never again be the sole purview of an ERP system, if it ever was. Too much is changing in the product and customer lifecycle to think that ERP will evolve at its core to take on these new responsibilities. This is one of the fundamental phenomena that Tzuo refers to in postulating ERP software's end, and I agree wholeheartedly that ERP won't be the software that crosses that chasm. But while many SaaS companies can look to purebred SaaS-based business models for much of their early growth, this dependence on net-new processes masks an even greater opportunity in hybrid business models. A good example comes from the ability to take the best of the new SaaS customer interaction models and use that data to create a vastly improved and nuanced demand model for the enterprise. This improved demand signal feeds directly into the very ERP and supply-chain management systems that are supposedly on their deathbeds. While much can be done in the cloud to improve that analysis--just ask Demand Solutions, Kinaxis, and E2Open, among others--the results of those cloud-based analyses will not only add value to existing on-premises systems but will extend their life spans. The opportunity for hybridization isn't just about process; it's also about amortization and user acceptance, and the reality of how far SaaS products of today can go in the enterprise. First and foremost, let's agree that there's really no way that a global ERP instance a la SAP ECC and Oracle eBusiness Suite could be ripped out and replaced by any SaaS ERP product on the market. Neither Oracle Fusion, SAP Business ByDesign, nor Netsuite can play this role today or in the near future. And even if tomorrow, a product emerged that could, what possible financial incentive could there be to rip and replace an existing large enterprise on-premises system with a SaaS competitor? Large companies that are deeply entrenched with a given vendor's product can't be incented to move to a competitor's on-premises product for love nor money, much less move to a new vendor with a pure SaaS model. Despite SaaS's opex vs. capex benefits, the disruption of such a large-scale project would be extraordinary. The end of ERP would be more like the death by a thousand cuts--a whittling away at the edges, slice by slice--but that could still take eons in technology time to happen. The other problem with the end of ERP is user acceptance, and here I have to deviate from the common wisdom that new SaaS software is, ipso facto, more user friendly than non-SaaS software. (In fact, some of this “new” SaaS software is more than a decade, and several paradigm shifts in user experience, old.) That, indeed, isn't even the issue. The issue is that when it comes to enterprise software, familiarity breeds contempt of new software, and moving the enterprise from a well-entrenched user experience to a new one, much less from an on-premises model to a SaaS one, involves expending enormous amounts of political capital. And for now, there's no post-ERP option worth that expenditure. So, excepting the green field opportunities, the hybrid enterprise, not the pure SaaS model, will be the dominant model for some time to come. And it's this growing predominance of hybrid IT models that's driving SAP's recent acquisition of SuccessFactors and Oracle's recent acquisitions of RightNow and Taleo. Many see these moves as acts of desperation, signs that the old dinosaurs won't go down without a fight. But the reality is that SAP and Oracle are responding to a market opportunity to be the alpha software vendor in an increasingly complex business environment, one that combines--instead of eschewing--the older on-premises world with the new on-demand world. This hybrid future is also driving Microsoft's Azure strategy and Infor's growing proximity to Salesforce's Force.com and Infor's integration as a service offerings. Even without buying their way into big cloud acquisitions like SAP and Oracle, companies like Microsoft and Infor are also furiously ramping up their hybrid enterprise strategies. Perhaps the best indication of the growth of the hybrid enterprise can be seen in Informtica's spectacular success. Once the denizen of a sleepy corner of the data integration market, it has emerged as a powerhouse in the integration of cloud and on-premises data. The opportunity to mix and match big data in the cloud with big data in the enterprise has been powering Informatica's industry and recession-busting growth, with no end in sight. The beauty of Informatica's business model is that there's a lot of complexity in powering the hybrid enterprise and a lot more to the data end of the problem than the old ETL triumvirate of the on-premises database world. As enterprises move towards this hybrid model, they're going to need a lot of the non-ETL offerings in the Informatica portfolio. So rather than the end of ERP, I see a resurgence. One of the effects of all the Zuoras and Salesforces, and Workdays--and SuccessFactors and RightNows and Taleos--will be to extend the value of core ERP for some time to come. I look at this phenomenon the way I look at home improvement: while it may be a lot of fun to imagine tearing down and starting over, if the foundation is solid and neighborhood is still good, it makes much more sense to upgrade the wiring, build a new addition, throw some solar paneling on the roof, and stay put. That's the most likely role of SaaS in the enterprise--enhance the value to the core on-premises systems, rather than replace them. There will be a total end of software, a final SaaS revolution, but it will take time--lots of it. The proponents of revolution always have an abundance of vision and limited patience, but the fact remains that change happens in the business world more slowly than any of the proponents of SaaS would like to imagine. Their time will come, but not until we've squeezed a lot more value out of the hybrid model. And there's still lots more value to squeeze, even in those old, supposedly dead, ERP systems we all love to hate. Josh Greenbaum is principal of <a href=http://www.eaconsult.com/ >Enterprise Applications Consulting</a>, 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 <a href="mailto:josh@eaconsult.com">josh@eaconsult.com</a>. Private Cloud Blueprint Find out how to move beyond server virtualization to build a more flexible, efficient data center in the new <a href="http://www.informationweek.com/nwcdigital/feb12/?k=axxe&cid=article_axxe_os">Private Cloud Blueprint</a> issue of Network Computing. (Free registration required.) 2012-02-10T08:30:00ZThe Public Sector CRM OpportunityDisconnected governments and disempowered citizens are why we need a full-blown, nationwide public sector CRM program.http://www.informationweek.com/news/232600608?cid=SBX_iwk_related_commentary_Peripherals_--_scanners,_printers,_copiers_hardwareCRM has lots of proponents and lots of market momentum, mostly for all the right reasons. But one reason in particular--specific to the public sector and dramatically, almost radically, important in its potential impact--is taking on a new focus. If you're wondering why <a href= "http://crm.dynamics.com/en-us/government" >Microsoft</a>, <a href= "http://www.informationweek.com/news/software/enterprise_apps/232400405" >Salesforce.com</a>, <a href= "http://ovum.com/2011/10/27/oracle-rightnow-acquisition-promises-crm-saas-and-more/" >Oracle</a>, and others are increasingly going after the public sector CRM opportunity, read on. I have a proposal that I think would appeal to all sides of the political spectrum. How about a new moon shot for the United States: a full-blown, nationwide, public sector CRM program. There's a whole lot more to public sector CRM than just cutting costs and streamlining services. It represents a new way to define the interactions between democracies and their citizens, and drive new models of constituent relations and civic culture. And a little uptick in civic culture is long overdue. [ Read about Microsoft's latest Dynamics CRM update in <a href=" http://www.informationweek.com/news/software/enterprise_apps/232600319?itc=edit_in_body_cross ">Microsoft CRM Embraces iPhone, iPad, Android</a>. ] Improving interactions between citizens and government has long been a goal of politicians, civil servants, and their constituents, but the ability to provide efficient and cost-effective service to constituents while empowering them to have a stake in their government has remained elusive. As the complexity of government service and the bureaucratic process has increased in the last century, the ability of citizens to feel as though they have a stake has diminished and engendered a growing disconnect with their governments. These issues play out in the context of a global need to streamline government and render it more efficient while lowering taxpayer costs. These requirements have been ignored at best, and more often than not, the cost of new technology that might help address them has been high. Now, the global recession has made cost cutting essential for the preservation of much-needed public services. In recent years, a new class of constituent relationship management systems has been deployed and is changing this discussion. Public sector CRM--long promoted as to cut costs--is emerging as a tool that can help reverse the trend towards disaffection and disempowerment, provide a bridge between government and citizens that promises a more effective civic culture, and do so in an extremely cost-effective manner. The Benefits Well-designed and well-implemented public sector CRM provides two key benefits: First, it can greatly improve the efficiency and cost-effectiveness of government services by facilitating, automating, and streamlining interactions among citizens, government employees, service providers, and other stakeholders. In addition, CRM provides public sector workers with better tools to perform daily tasks, improving interactions inside government. Microsoft is one of the leading vendors in this sector. Its somewhat disjointed public sector websites yield some great examples of how Dynamics CRM is used in public sector organizations all over the world. Dynamics CRM is used for the obvious constituent management and 311 call center management functions, which are the closest to commercial CRM. It's also used for "offender management", a wonderful law enforcement euphemism for tracking the bad guys; asset and infrastructure inspection, repair, and compliance; event management; health and public health management; case management; permit tracking and approvals; teacher certification and management; and lottery sales and management. It's a long list that seems to have no bounds. As an IT user, I get a little envious reading what some of these leading edge agencies are doing. Imagine if your town had a central CRM database that could be accessed for all the services you need. How about submitting applications for permits online? How about a geographic database that knows where you live so that when you report a street light outage, you don't have to find an obscure number on the pole? What about automating dispatch for pothole repair? As a taxpayer I would be even happier if my city did half the things a modern CRM system can do. There's an almost insane amount of opportunity for public sector CRM. In addition to helping governments cope with budget and manpower issues, the adoption of commercial CRM technology in the public sector can help local and national governments overcome constraints created by both the quality of the technology available to support public sector activities and different government entities' ability to consume this technology. These constraints are becoming more and more limiting, and are exacerbating another key problem: The growing complexity and reach of government activities and services, and the resulting distrust and dissatisfaction citizens feel towards their governments. Citizen distrust and dissatisfaction has been well-documented, what is less well-known is a similar level dissatisfaction on the part of many government service workers, particularly those in the front-line of constituent service who bear the brunt of citizen frustration. An excellent example of this dynamic can be seen in the problems that people in Los Alamos County, New Mexico, face in identifying the correct agency to contact for a tree problem. Depending on what needs to be done—pull out a tree that's interfering with power lines, inspect an infested tree--and which local jurisdiction is responsible for the tree--the county, the U.S. Forest Service, the Division of Public Works, among many others--there are twelve agencies under whose jurisdiction any particular tree might fall. As cited in <a href=" http://bookstore.icma.org/Customer_Service_and_311_CRM_T_P1881C141.cfm" >Customer Service and 311/CRM Technology in Local Governments: Lessons on Connecting with Citizens</a>, published in 2008 by International City/County Management Association, any citizen calling a local government office in Los Alamos County about a tree problem must run a gauntlet of jurisdictional and administrative bureaucracy that's equally unclear to the government officials trying to respond. This situation is all too common. The report goes on to note that the results of this service complexity and a dearth of tools to deal with it can prove frustrating for all: Even in small communities with populations less than 10,000, it is not unusual to find eight to ten departments operating within the local government. For citizens trying to determine which department or division they should call with their specific questions or requests for service, the complexity of the organization can be confusing and time-consuming to unravel. And often, local government employees are not sure themselves where to direct a particular phone call. They can end up misdirecting people and possibly leading to multiple transfers before the citizen reaches the right staff member. Public sector complexity combined with citizens' inability to navigate the complexity and public servants' lack of a means to properly assist are at the root of a growing set of problems in modern democracies. And those problems are what are eroding trust and civic culture in local, regional, and national governments worldwide. Citizens And Civic Culture: The Problem Set At the core of the complexity and trust problems is the inability of many governments to optimize the services they deliver to citizens in ways that benefit the many stakeholders. In addition to citizens, these stakeholders include employees, such as call center and field service employees, who work directly for government agencies, as well as third-party contractors who provide services on behalf of the government or interact with governments on behalf of citizens. All the stakeholders must interact to accomplish the many processes that inform civic life, and they must do so in an optimal way. Whether it's providing a permit or license, garbage services, support for visitors and tourists, or processing parking tickets and voter registration, efficient execution is key in the defining the perception of effective government. Inefficient and wasteful processes that frustrate people are part of a government "performance" problem that researchers like Harvard professor Pippa Norris, author of <a href=" http://www.hks.harvard.edu/fs/pnorris/Books/Critical%20Citizens%20Revisited.htm" >Democratic Deficits: Critical Citizens Revisited</a>, say ends up eroding civic culture. Three key problems are causing the inefficiencies that are rampart in the public sector: >>The growth of information. The data required to efficiently run even a small local or regional government is growing at an extraordinary rate. Understanding how that data can be used efficiently is a major challenge. >>The accessibility of that information. Not only is there a massive amount of data in these processes, many public sector information systems are ill-equipped to make it usable for the different stakeholders. Systems are often antiquated, siloed, and suffer from a lack of funding and expertise. Meanwhile, the vast majority of IT research and development is targeted at commercial sector systems, and the resulting applications and tools are often ill designed for the public sector. This results in much of the technological lag in the public sector that President Obama referred to in an address at the <a href="http://www.whitehouse.gov/sites/default/files/omb/assets/modernizing_government/ModernizingGovernmentOverview.pdf" >White House Forum On Modernizing Government</a> in March, 2010. Public servants, President Obama noted, are more than willing to participate in improving the interactions between government and citizens. "But all too often," he said, "their best efforts are thwarted because the technological revolution that has transformed our society over the past two decades has yet to reach many parts of our government." >>The inability to keep up with the need for new processes Governments have historically been unable to keep up with the need for new processes to effectively manage the growth in information and to better manage citizen-government interaction. This problem is both a public policy and an IT issue: Governments need to mandate change, and then work closely to ensure that it's implemented in the most effective manner using the best technological tools available. Using technology to improve government effectiveness doesn't necessarily mean spending more to do more. Indeed, in many cases, these approaches are extremely cost-effective. According to a report by CALPIRG, the California-based public interest research and lobbying group, the payback for undertaking initiatives that bring citizens and governments closer together can be significant. CALPIRG's <a href=" http://www.calpirg.org/reports/caf/california-budget-transparency-20 ">California Budget Transparency 2.0</a> highlights the example of the state's Reporting Transparency in Government website. The site, which cost $21,000 to develop and $40,000 annually to maintain, provides access to state budget and other data for citizens to download and analyze. In one example, the report said, citizens viewing usage data on the site for the state's automobile fleet directed administrators to information that suggested that the fleet was larger than needed. The state was able to cut the fleet by 15 percent, savings $24.1 million. The CALPIRG report and others like it show that many of the technologies that businesses use to engage customers and partners can be applied to helping citizens and other stakeholders interact with their governments. This is very much the case with CRM software and related technologies. The success of a number of vendors' public sector CRM offerings shows that there's a way to help improve government and reverse some of the corrosive effects of complexity and citizen disaffection and distrust. Public sector CRM systems are becoming less expensive to implement and maintain, meeting the need for governments to be accountable to taxpayers with tech spending. Accountability is a key element in civic culture and trust, and being able to build highly effective citizen interaction systems based on a cost-effective CRM package provides additional value to public sector agencies. CRM systems ability to analyze public sector processes can further enhance public sector accountability. A CRM-based municipal service and support system can assess data on malfunctioning parking meters or calculate citizen satisfaction rates. This type of analysis supports a metrics-based society that, in turn, can optimize its citizen-support processes based on real data, something that most public sector organizations haven't been able to do. Finally, the notion that modern CRM can improve government employees' effectiveness and job satisfaction provides a new lens with which to view the role of public sector technology. Ensuring that the growing number of interactions between citizens and public sector employees take place under optimal conditions provides an environment for improved public service that benefits all. Public sector CRM is an idea that has so many applications, so many private sector examples to draw from, and so many good products to deploy, that it's almost criminal to consider running a democracy without a full-blow system. I'd love to see this become part of the dialogue in the coming election cycle, instead of some of the nonsense we're seeing. With CRM's proven ROI in the private sector, it should be easy to cost-justify a serious national investment in modernizing citizen-government interactions. Who needs to colonize the moon when there's so much more we can do to make life better here on earth, for so much less? Josh Greenbaum is principal of <a href=http://www.eaconsult.com/ >Enterprise Applications Consulting</a>, 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 <a href="mailto:josh@eaconsult.com">josh@eaconsult.com</a>. IT's jumping into cloud services with too much custom code and too little planning, our annual State of Cloud Computing Survey finds. The new <a href="http://www.informationweek.com/gogreen/020612/?k=axxe&cid=article_axxe_os">Leap Of Cloud Faith</a> issue of InformationWeek shows you what to be aware of when using the cloud. Also in this issue: Cloud success stories from Six Flags and Yelp, and how to write a SAN RFI. (Free registration required.) 2012-02-06T08:30:00ZSAP's Success And Looming Challenges The vendor must get ready to grow its developer community, harness the sensor data revolution, and bring together the consumer and enterprise worlds.http://www.informationweek.com/news/232600276?cid=SBX_iwk_related_commentary_Peripherals_--_scanners,_printers,_copiers_hardwareNothing succeeds like success, the old saw goes, but there's a dark side to the kind of success that SAP has been enjoying for the past year. Success of that magnitude is hard to achieve and harder to maintain. As I look at SAP's recent financials and growing market clout--not to mention the strategic stumbling of archrival Oracle--it's obvious that co-CEOs Jim Hagemann Snabe and Bill McDermott have an even more daunting task: keeping the new penny called SAP bright and shiny. The problem with success is that people get used to it, and then require ever more success. The congratulatory glad-handing and back-thumping is quickly replaced by questions about "what have you done for me lately," and absent the right answers, those lead inexorably to a reversal of fortune and the ignominious exit of the leadership that just moments before seemed infallible. At the risk of mixing metaphors, the best one to describe what's happening to SAP comes from mountaineering: Experienced climbers know that having enough energy and supplies to get you to the summit is only half the battle, and sometimes it's the easiest half. They must save enough energy and resources to get back safely to base camp. For lots of reasons--fatigue being only one of them--getting down off the mountain can be much more treacherous than going up. Getting back to base camp is what it's all about, because if you're a real climber you're not going to be satisfied with conquering just one peak. You must get down off the summit you're on in order to prepare to climb the next one. [ Read more from Josh Greenbaum on SAP. See <a href=" http://www.informationweek.com/news/software/enterprise_apps/231601807?itc=edit_in_body_cross ">SAP's Software-Only Innovation Challenge</a>. ] SAP is facing its own mountaineering challenge, and it promises to be as big as any the company has faced. This climbing-down-the-mountain-to-climb-back-up problem is totally self-inflicted: Simply put, the problem stems from the fact that SAP is standing on the summit today. Pretty much any way you measure success, SAP has it. Great revenue; growing customer base; some amazing innovations; two recent, very strategic, big acquisitions; good people; and, if you subscribe to the zero sum theory of enterprise success, a ton of affirmation in the apparent flaws in Oracle's business and technology model. SAP needs to just get off this particular mountain successfully. It also must get started identifying and climbing the next peak. Here's my take on these two imperatives: Back To Base Camp SAP's biggest challenge is to consolidate a long list of initiatives, products, and technologies--not to mention acquisitions--into a coherent whole. Or as coherent as possible. It's not just that the company has too many individual products in more than a few categories: five HRMS systems, three CRM systems, four databases, a wide-ranging collection of mobile apps, and an even wider range of development environments. It's also that SAP must find a single voice and a single message to surround its ever-growing portfolio, however broad and overlapping it might be. This is essential not just for the immediate go-to-market effect of having internal and external consistency, it's also a requirement for SAP to scale its next set of big peaks. Along with coming up with a coherent message, SAP also must present coherent leadership. The dynamic tension in a company with two boards and two CEOs can be a major source of strength: I'm convinced that this large and complex structure has served as the forge for SAP's current market leadership and success. So, while I don't think for minute that SAP should move to a more centralized and autocratic model (which it couldn't if it wanted to), I do think that as SAP climbs down the mountain, it must be seen inside and out as working from one plan. And that involves not just ensuring that messaging and positioning are synchronized, but also that the company's famous consensus culture is valued as an asset and not used as an excuse for disharmony. This is essential as SAP tries to harmonize its products and messages under a single banner. There are a hundred battle lines that could be drawn in the push to build a more singular vision and product set: The worst thing SAP could do is to let those lines be drawn in the first place. SAP must make sure it's functioning more as a team and less as a set of competing factions. For better or worse, the company's competing in a market where the autocratic model predominates, which gives SAP's rivals a maneuverability that an SAP at war with itself will eventually lose to. Finally, SAP has to take a more visible position on the world stage as a global player. The fact that no one from SAP was at the table when President Obama visited Silicon Valley last year is emblematic of this. I'm not talking about politics as much as perception, especially in the consumerization of the IT mountain that SAP wants to climb. Obama's dinner companions included Yahoo, Google, Apple, and Twitter, at least in part because they're identified across the consumer and business domains. They're seen as leading edge companies driving innovation and growth, not to mention jobs. And, to top it off, Oracle's Larry Ellison was at the table too. Bottom line, SAP needs to be counted as a member of this club. What good is having an American co-CEO if he can't get a dinner with the President? Once SAP reaches its base camp, it must get ready to scale three new peaks that will help Bill and Jim keep the company's shine alive. The first is to grow a developer community worthy of the new harmonized platform and product strategy that SAP needs to create. It's clear that everything about SAP's aspirations as a cloud company, an analytics company, a database company, and a mobile company will depend on having a solid, unified, and highly focused developer community that can make SAP the App Store of the enterprise. Developers will only show up if there's a clean, easy commercial environment--a la the Apple App Store--where they can sell their wares. This is a huge mountain to climb, and an expensive one. But everything on the enterprise side of SAP's future success, and on the consumer side as well, rests on the creation of this community and where it can sell its wares. And without the harmonization of product and direction, this community won't even know where to start, much less where SAP will be able to take it. The second peak ahead for SAP is harnessing the sensor revolution, also known as the Internet of things. There will be billions of sensors sold in the next few years in phones, tablets, and smart appliances as well as in cars, factories, refineries, libraries, utility meters, and medical devices. Every one will have enough intelligence to act as a data source, if not a data consumption device. These devices present SAP with two extraordinary opportunities. On the data analysis side: if ever there were an incredibly rich source of data for HANA to analyze, these sensors are it. The second opportunity is on the business process side: The sensor-generated data streams, once analyzed, will present decision makers with opportunities to make much more intelligent decisions across the enterprise and in their customer interactions. And the richness of the data and decisions will provide new ways to improve existing business processes and create new ones. That will be particularly true when sensor-based data is married to internal ERP, supply chain, CRM, and HRMS data: If SAP can broker that marriage, then the gains of the last two quarters will look modest indeed. The final mountain SAP must climb is the convergence of the consumer world and the IT/business process world. This will be huge, and hard to do credibly. Very few companies can actually do this – Microsoft and HP can, but that's mostly a back-end, not a go-to-market, convergence built on leveraging internal synergies. And despite the iPad's success in the enterprise, Apple still has to prove that it can change its DNA and get into the enterprise via the front door, instead of coming in the backdoor as it has with the iPad. SAP will need to get its ducks in a row to be able to graft a real consumerization play on top of its enterprise play. Not doing this isn't an option: This is where technology is going, and it's where SAP needs to go, too. Notice that I haven't mentioned mobility, in-memory, or on-demand once. That isn't a mistake: while the on-going focus on the big three initiatives at SAP has provided a much-needed coherence over the last two years, I think they've worn out their welcome. The reason is simple: all three represent enabling technologies, not business-ready or consumer-class solutions. Bill, Jim, CTO Vishal Sikka, and pretty much everyone at SAP has done their level best to ensure everyone knows that SAP can deliver on these three technologies. But now's the time to talk about what SAP is going to do to synchronize these technologies with demonstrable business, and eventually consumer, value. HANA as a replacement technology for Oracle DBMS in the SAP Business Warehouse is an excellent example, and from a sales pipeline standpoint it's a big win. But SAP needs more examples like this one for mobility and on-demand, and this solutions dialogue is the one that it needs to have with the market, much more than the pure technology conversation it's been having of late. Keeping the shine on SAP won't be easy, so don't be surprised if there's a new sense of urgency now that the company is at the top of its game. SAP must abandon the old battles--Walldorf vs. Palo Alto, marketing vs. development, my new thing vs. your new thing--to make room to engage new ones. And that's not just because the company must get ready to scale a few more peaks, but because its never-ending list of rivals--Oracle, IBM, Salesforce, Microsoft, Workday, Infor--will be trying to either climb the same mountains or find others from which they can challenge SAP. Every one of the above rivals, and many others, will be dead set on putting a little tarnish on Bill and Jim's shiny new SAP as they climb down the mountain and get ready for the next peak. Nothing succeeds like success, but success makes SAP even more of a target. This year marks the 40th anniversary of the SAP's founding. With the benefit of 40 years of hindsight, it's safe to say that things have never been better for the company. And they've never been as precarious either. Josh Greenbaum is principal of <a href=http://www.eaconsult.com/ >Enterprise Applications Consulting</a>, 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 <a href="mailto:josh@eaconsult.com">josh@eaconsult.com</a>. IT's jumping into cloud services with too much custom code and too little planning, our annual State of Cloud Computing Survey finds. The new <a href="http://www.informationweek.com/gogreen/020612/?k=axxe&cid=article_axxe_os">Leap Of Cloud Faith</a> issue of InformationWeek shows you what to be aware of when using the cloud. Also in this issue: Cloud success stories from Six Flags and Yelp, and how to write a SAN RFI. (Free registration required.) 2012-01-19T08:30:00ZSAP Acquires Datango's Software, Entering Enterprise Training RaceNow SAP faces the huge task of convincing the jaded enterprise training market to invest in training.http://www.informationweek.com/news/232500099?cid=SBX_iwk_related_commentary_Peripherals_--_scanners,_printers,_copiers_hardwareSAP is doing something significant with its <a href="http://www.computerworld.com/s/article/9223460/SAP_buys_training_software_from_Germany_based_Datango ">Datango acquisition</a>, the question is will the market react accordingly. The move is significant in that Datango offers a new paradigm for enterprise software training, but that significance is tempered by the sorry state of training content and the unfortunately legitimate attitude of many a CIO that spending big on training is wasted. The attitude is legit largely because of how poorly the market has approached the development and delivery of enterprise software training. Basically, enterprise training is broken, and most companies ignore it entirely or pay lip service to training their end users. This situation has come about is because most training content doesn't match the implementation reality: Training only happens at the time of implementation, and it's usually dumped into user's heads during mind-numbing day-long classes, which means that it's forgotten the moment the class is over. Not to mention the fact that few companies refresh their end-user training during the enterprise software lifecycle, nor do they bother to train new hires. [ Where does SAP stand in the market? Read <a href="http://www.informationweek.com/news/software/enterprise_apps/232400420?itc=edit_in_body_cross">SAP Leads, Oracle Lags In Enterprise Apps</a>. ] The problem with this picture is that good training could make a huge difference in many areas: Process mastery and overall software ROI is only the start. End users who are well trained tend to like their jobs more. Customers who interact with well-trained employees tend to like their vendors better. And companies in regulated industries that train their employees well tend to stay out of regulatory purgatory more. There's no end to the potential ROI of good training. Despite the theoretical value that good training provides, training in the enterprise software world has been a colossal failure. It should come as no surprise that training budgets--as well-evidenced in SAP Education's declining revenue--have been falling over the years as the awfulness of most training content has met the real problem of cost-justifying this awfulness. (For a look at what happens to SAP customers who skimp on training, Michael Doane's work on <a href=" http://sapsearchlight.blogspot.com/2010/07/how-bad-are-we-reality-check-on-your.html ">SAP end-user maturity</a> is essential.) Datango's ability to do advanced simulation provides an excellent platform for transforming training from being a dumping ground for talent and aspirations into being a strategically necessary arrow in any enterprise software user's quiver. I spent some time looking at Datango several years ago as part of a major review of enterprise software engagement models, and it was clear that Datango could add a lot to the development and delivery of next-generation training. The main problem for SAP and Datango will be in convincing CIOs and business process owners to invest in technology and people in order to elevate training's strategic value. Oracle bought UPK in 2008 with the similar goal of driving advances in training into its customer base, and thereby building a solid training revenue base. Those goals have largely been dashed in the ensuing three years, not because UPK isn't a good product--it most fundamentally is, and enjoys a significant penetration in the SAP customer base as well as the Oracle customer base. The problem is that the value of training has never been elevated to meet the technological advances that UPK and now Datango can offer. The result has been missed opportunities for both vendor and customer. So, good for SAP that it now has Datango under its belt (and, by the way, when they get around to adding Right Hemisphere's visualization technology to enterprise training, SAP will have an truly impressive-looking training platform). The trick will be to convince a weary and jaded enterprise training market that it's time to take another look at this neglected corner of the budget and prioritize training and process mastery once again. My guess is the investment in changing the industry's collective mind about the value of training will make whatever SAP paid for Datango look small in comparison. Josh Greenbaum is principal of <a href=http://www.eaconsult.com/ >Enterprise Applications Consulting</a>, 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 <a href="mailto:josh@eaconsult.com">josh@eaconsult.com</a>. More than 700 IT pros gave us an earful on database licensing, performance, NoSQL, and more. That story and more--including a look at transitioning to Win 8--in the new all-digital <a href="http://www.informationweek.com/gogreen/011612/?k=axxe&cid=article_axxe_os">Database Discontent</a> issue of InformationWeek. (Free registration required.) 2012-01-09T08:30:00ZEnterprise Gamification Ready To Make The Collaborative Dream Real2012 is the start of an enterprise gamification revolution that will let companies achieve social collaboration goals.http://www.informationweek.com/news/232301447?cid=SBX_iwk_related_commentary_Peripherals_--_scanners,_printers,_copiers_hardwareI've been working in the interactive gaming and gamification industry for more than four years now, first as the founder of a now-defunct start-up focused on developing interactive training games, and most recently in enterprise gamification. It’s been gratifying to see this idea become a topic of considerable interest--and research--in 2012. The majority of what has been done with enterprise gamification has been about marketing and customer engagement. But I believe that we’re poised for an gamification revolution inside the enterprise that will take the largely unrealized concepts of social collaboration and create the engagement metaphor that will, finally, help companies achieve these lofty social/collaborative goals. This revolution will also provide some payback on lofty investments many have made, users and vendors alike. [ For more on enterprise gamification, read <a href="http://www.informationweek.com/news/software/enterprise_apps/229219542?itc=edit_in_body_cross ">SAP Plays Games With The Analysts</a>. ] The bottom line as to why enterprise gamification will enable real social engagement and collaboration is this: Our existing enterprise business culture and its processes and technology have left us ill-equipped to support the kind of ad hoc collaboration that we need in order to take business efficiency and effectiveness to the next level. Nor are we able to use new social media and collaboration tools to force fit this requirement into the enterprise. Why? Because, fundamentally, we don't know how to collaborate in this wild world of unstructured, ad hoc, highly interactive, always-on and highly virtual people-to-people-to-enterprise connectivity. We don't just need new technology but new kinds of processes in order to meet these requirements: Enterprise gamification will show us the way. In the old world of ERP-based transactions, business processes were largely proscribed – either by regulation, law, or practice. This made it relatively easy to design and build a process for, say, invoice reconciliation, that, while perhaps boring and inflexible, was proscriptive precisely because there was a process that had to be followed to reach a desired outcome. This ability to define processes led to the growth of the enterprise software market that we know today: proscriptive, repeatable processes codified in packaged software. That's been the state of the market for over 20 years. In the new, post-ERP, post-transaction world, we've discovered that trying to harness the potential for human interaction and collaboration can't be based on neatly proscribed processes, because real human collaboration simply doesn't work that way. Indeed, we often cannot begin to fathom what the process would be to, say, collaborate on building and maintaining an enterprise knowledge base, mostly because to command that it happen, the way we command that invoices be processed according to GAAP rules, is neither possible nor desirable. You simply can't order your way to a truly collaborative process. Rather, when looking at the post-ERP requirements of the 21st century social/collaborative enterprise, instead of proscribed processes, we have desired outcomes. This notion of outcome becomes the focal point of a collaborative process the way transactions were the focal point of classic business processes. Thus, an outcome might be something as basic as "better customer service" or "better cross-business unit collaboration," but in either case outcomes start with two basic characteristics: that lack of proscriptive process I just mentioned and a conviction that an outcome can benefit from collaboration between different stakeholders, if only there were a collaborative process in place to make that happen. The notion of outcomes has two more essential characteristics that need to be understood: they have a genuine value to the enterprise, and that value can be turned into a KPI that hopefully can be measured in some fashion. Gamification, it turns out, is ideal for analyzing and reporting on these values. Finally, there's the final rock-solid foundational component for enterprise gamification, which I alluded to above: Despite the desirability of the outcome, the stakeholders need to be shown how to collaborate in order to reach these goals. This is the dirty little secret of the social/collaborative world in which we're trying to live. We're not a very collaborative society--this is, after all, the nation of the rugged individualist, the Jeffersonian pioneer conquering the wilderness. Enlightened and capable, naturalement. But collaborative? Not us. This is where enterprise gamification becomes a powerful tool for the 21st century enterprise, providing a system of incentives and disincentives that direct individuals and groups towards a set of behaviors that in turn positively influences a desired outcome. A well-designed enterprise gamification environment becomes an engagement mechanism for collaborative behavior that can overcome the natural inability of people and enterprises to collaborate effectively towards a common goal. Thus, the classic gamification elements, such as points, badges, contests, leaderboards, ratings are put to use incenting people to collaborate and cooperate towards the desired outcome. On the way, people get tangible rewards, peer and supervisor recognition, a sense of purpose and collective action, and other psycho-social rewards that can help them and the enterprise reach the apex of Maslow's hierarchy. And they have some fun getting there. But that's not all. Because all the stakeholder interactions are taking place inside a gamified technology platform--even those interactions that require use of some enterprise or desktop software system--there's an unprecedented ability to measure how well individuals and groups are collaborating. This analytical capability isn't just limited to people: The same environment can also show us how well the technology components, both the gamified elements and the enterprise or desktop software systems, are working towards serving the desired outcome. This ability to measure how people and processes interact and offer guidelines for improvements will provide an unprecedented window into the enterprise's overall effectiveness. Meanwhile, something subversive is happening inside the newly gamified enterprise: People are more engaged, more able to understand and support the outcomes that matter to the enterprise, and they're being recognized and rewarded for these actions. This ability to acknowledge the contribution of individuals in a collaborative endeavor isn't unique to gamification. But only in a gamified environment can everyone--employees, their peers, and their supervisors--see the value of those contributions to the individual, the work group, and to the company as a whole. In conclusion, I have to confess to an essential problem that continues to bedevil enterprise gamification: a real ROI. Enterprise gamification is very theoretical, there simply is no data to prove it works, yet. That's the goal for 2012: Take the theory into the field, show how it works, and do it well. That's one of my personal goals as a gamification catalyst, and one that I'll be writing about as the year unfolds. Luckily for all of us in enterprise gamification, there's lots of solid data on how well traditional multi-user, online gaming works in terms of issues like user engagement and knowledge transfer. Multi-user game researchers like Nick Yee and game-based training researchers like David Williamson Shaffer, to name two of hundreds of researchers in these fields, have amassed considerable data that supports the notion that gamification could have a powerful impact on the enterprise. This body of research is vast, comprehensive, and, in my opinion, provides an effective starting point for cost justifying enterprise gamification. But more is needed, nonetheless. So, hold tight, it's going to be a fun year, and a year when fun enters the enterprise in the most subversive guise possible: as a means to make good on social collaboration and the potential for greater efficiency in the performance of ad hoc processes. It's a worthy goal, and enterprise gamification is a worthy platform. Onward! Josh Greenbaum is principal of <a href=http://www.eaconsult.com/ >Enterprise Applications Consulting</a>, 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 <a href="mailto:josh@eaconsult.com">josh@eaconsult.com</a>. The evolution of virtualization has exposed complexities in application distribution and management that we couldn't have imagined in the days of disposable disk images. Our <a href="http://reports.informationweek.com/abstract/25/8502/Virtualization/fundamentals-application-virtualization.html?k=axxe&cid=article_axxe">Application Virtualization</a> report will help you get started. (Free registration required.) 2011-10-12T17:01:00ZOracle's Stack Is Engineered For Investors, Not CustomersApplications strategy is the antithesis of integrated, a hairball of products born of a mergers-and-acquisitions strategy.http://www.informationweek.com/news/231900679?cid=SBX_iwk_related_commentary_Peripherals_--_scanners,_printers,_copiers_hardwareI spent much of last week sorting through the absolutely overwhelming communications disaster called Oracle OpenWorld in search of some clarity on Oracle's vision for its customers. I have come to the following conclusion: Oracle's applications customer strategy just isn't about making things better for its customers. The problem with the Oracle of today is that some of the best technology minds in the industry have been hijacked to fulfill a vision that is skewed more towards fulfilling the promise of a decade-old merger and acquisition strategy rather than making customers both successful and happy. And the vision comes with a built-in irony that has me convinced that the customer comes second at Oracle, second to the shareholders whose addiction to Oracle's margins has driven the executive team at Oracle to consider investors, not actual companies that consume its software, as the real customers. Let's start with the irony: Oracle is selling a vision of an integrated hardware stack that is magnificent in its simplicity: everything from the silicon to storage to networking are all "engineered" to work together. I wouldn't be surprised if the electrons inside their boxes are also engineered by Oracle. If they could gain some sort of system-level efficiency by altering the laws of physics, they probably would do that, too. [ Want another critique of Oracle's engineered systems? Read <a href="http://www.informationweek.com/news/software/info_management/231900561?itc=edit_in_body_cross">IBM Calls Out Oracle On Server And System Claims</a>. ] Contrast that with the software side of Oracle's product line. Oracle's applications strategy is the antithesis of integrated: In reality it is a <a href="http://www.oracle.com/us/corporate/Acquisitions/index.html">hairball of products</a> and underlying technologies, data models, and deployment models that could have only been "engineered" by an M&A strategist. Any real engineer would be crucified for pretending this software strategy makes sense for a customer looking for an integrated applications environment. Four (or five, depending on how you count it) main product lines, each with its own code base. And literally dozens of other products, acquired with the goal of improving shareholder value, most of which also came with their own proprietary software or data models. Hundreds of business processes, many overlapping and redundant from one product to the next. And a big, hairy-chested middleware "suite"--Fusion Middleware--that is itself a conglomeration of technologies--a little Java here, some BEA and BPEL there, some MDM, some analytics, some DBMS technology, the more the merrier, all jammed into a one-size-fits-no-one morass of integration options. To simplify things, they also have an integration system called AIA that is used infrequently for the very reason that it's an expensive, complex, technically challenging, and hard to cost-justify Tower of Babel. Despite Larry Ellison's insistence--could he be that out of touch with his customers that he believes this?--that integrating his software stack is easy, the reality is that integration is hard, expense, and the responsibility of the customer, not Oracle. There is no magic bullet, no easy-to-configure wizard, for the majority of the integration that Oracle customers require to run their businesses on Oracle software. Nope, it's all about custom development, using expensive development resources. Sure, there are more "integrations" being built by Oracle all the time. And as long as time is not of the essence, one day Oracle will have filled out the massive matrix of integrations required to link hundreds of key business processes across dozens of often overlapping applications. One day. In the meantime, the customer has to wire this hairball up. And, having talked to many customers about this issue, the conclusion I came to is that Oracle's investors are missing a big part of the problem they have helped to create. Because, in the long term, as long as customers are not using AIA to solve this problem systematically, the total cost of ownership of the investor-driven software model Oracle has foisted on the market will remain excessive, and render Oracle vulnerable to a lot of smarter, and more agile, and better rationalized competitors. The irony of the roll-your-own integration conundrum on the software side is how much of a non-starter it would be on the hardware side. Imagine having to solder the connections in your rack systems, splice the cables to your storage systems, write your own network protocols--kind of reminds me of the state of the art when I started in this business in the 1980s. And here we are, 30 years later, and Oracle's customers have been pulling out the soldering irons and user manuals in order to realize their vendor's integrated software stack vision. It's amazing how pervasive the problem is, and how out of touch Oracle seems to be about it. Even customers who were hand-picked by the Oracle communications team to talk to the influencers at Open World had war stories about this problem. One customer I spoke with was told by Oracle that Agile PLM would plug right into a process manufacturing instance of eBusiness Suite. Two years later, this happy customer (Stockholm Syndrome, anyone?) was still fighting Oracle's integration battle inside his company, at his expense. Another customer shared a similar story about Siebel CRM and eBusiness Suite, another about PeopleSoft and Siebel. And so it goes in the engineered-for-investors Oracle stack.This disconnect, this dystopic vision, becomes even more ironic when you add Fusion Apps to the mix. Here's a new suite that has to be sold in parts to customers using other, older parts of the Oracle product mix because selling it as a suite would expose its severe limitations in terms of industry-specific functionality. With integration as the starting point, you'd think Oracle would engineer the integration between Fusion Apps and the key products in the suite to be a no-brainer for the customers. Wrong. Coders, start your engines: Oracle Fusion Apps require the customer to do the majority of the integration work in order to make the products work with the rest of the Oracle stack. Sure, they are building the integration points--there are 10 or 15 available today as Fusion goes GA--but how that piecemeal approach to the core requirement of integration helps control customer costs and deliver customer value is beyond me. I'm not even sure it delivers customer value either. Interestingly, I spent much of Open World button-holing applications customers and asking them if they were planning on upgrading to the Exadata/logic/lytics strategy. The answer was universal--not now. When I asked them why, it was because they couldn't see the value in such a migration, not when they were up to their eyeballs upgrading and integrating their apps. And when I asked them when they might consider such a move, the answer boiled down to the following: when Oracle gives me a clear ROI strategy for migrating that I can take to the board. And when I asked Oracle for evidence of this strategy, the answer was simple, there is none. [ Want another critique of Oracle's engineered systems? Read <a href="http://www.informationweek.com/news/software/info_management/231900561?itc=edit_in_body_cross">IBM Calls Out Oracle On Server And System Claims</a>. ] One Oracle exec whom I asked did discuss an ROI strategy, but his answer was basically about the ROI for Oracle. (Sound bite: running on Exadata lowers Oracle's support costs. Translation: investors get even better margins.) And while I was promised that this ROI strategy would be revealed to me when it was available, I'm not holding my breath. Because in the end Oracle's roll-up the best of breed strategy has never been about better TCO for the customers. It's been about optimizing the sales opportunity for Oracle's incredibly effective sales machine, while bringing smaller, inefficient software companies under the razor-sharp cost-cutting eye of Safra Catz. There is certainly a fair amount of consideration about customer choice in the strategy as well--they have many truly best of breed apps in the portfolio--but that has increasingly fallen prey to the requirement for delivering more red meat--in the form of profit margins--to an extremely avaricious investor community hell-bent on looking out for number one. That hunt for profit margins is now all the more acute because of the strain that the Sun acquisition has put on those margins. Safra Catz is now on the record for two quarters promising that the company will soon get back to its former, pre-Sun, margin glory, with little specific guidance on when that will actually happen. Hence the real focus of Open World, which was one big, fat commercial for Exa-everything. Sure, there were plenty of keynotes about things like clouds and apps, but there was no mistaking what Larry was really selling: engineered hardware systems. And there is no mistaking the almost frantic urgency in the subtext to that message: we won't make good on our promise to Wall Street if the customers don't start buying more hardware. The shame of it all is that the applications team and their products, the above notwithstanding, are some of the best of the best. The core products continue to evolve nicely, Fusion Apps like Distributed Order Orchestration and Talent Management are pretty cool. I even like what Larry is saying about the cloud and multi-tenancy (it's not the be-all and end-all of cloud computing, despite the orthodoxy of the much of the SaaS market). But the way that Oracle has now slotted its applications strategy into the larger investor strategy, and effectively forced customers, particularly apps customers, to bear the financial and complexity burdens of a strategy designed primarily for the investors, is more than a shame. Where does this all lead? There are definitely apps customers who could benefit from engineered systems, but I think a more agnostic, customer-choice hardware model fits the needs of modern businesses best. Meanwhile, Oracle's acquisition of best of breed vendors will run into a more rapidly shifting <a href="http://www.informationweek.com/news/software/enterprise_apps/231602221">mobility-based user experience revolution</a> that is already under way, and already making new user experiences like those in Fusion Apps look old and tired by comparison. And therein lies a big risk for Oracle's investors and customers alike. SaaS and PaaS make it much easier to slot in best of breed than ever before, and new development environments make it easy to build new SaaS-based apps more quickly than ever before (<a href="http://www.informationweek.com/news/software/enterprise_apps/231602221?queryText=%26quot%3BMobile+Metaphor+rules%26quot%3B">Kenandy</a> built its ERP apps using Salesforce's APEX in months, not years). Meanwhile, customers are under pressure to genuinely lower costs in a demonstrable way, and that means more attention to TCO in software and hardware, even if their vendors try to hide the true cost of their systems and pretend that, as Oracle claims, it's time for a hardware refresh because the vendor says so. All this means that as Oracle is forced to carry this enormous legacy portfolio forward, and as its Fusion Apps continue to be hamstrung by a lack of vertical and geographical specificity, the risk that Safra won't make good on her promise to Wall Street increases. Right now, Oracle's case to its customers on the value of engineered systems looks too much like the case it's making to Wall Street. Until that changes--if it can change--Oracle is headed down a path that at best lacks customer-centricity and at worst is genuinely customer hostile. Engineered systems can be useful, but only as long as they are engineered for the right reasons. Josh Greenbaum is principal of <a href="http://www.eaconsult.com/">Enterprise Applications Consulting</a>, 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 <a href="mailto:josh@eaconsult.com">josh@eaconsult.com</a>.2011-05-31T11:53:00ZSAP And Sybase: The Synergy BeginsThe two companies appear to be on track to become a cohesive strategic unit, now it's time to execute on that potential.http://www.informationweek.com/news/229700180?cid=SBX_iwk_related_commentary_Peripherals_--_scanners,_printers,_copiers_hardwareFollowing a grueling three days at SAP's <a href=http://ematters.wordpress.com/2011/05/20/who%E2%80%99s-the-top-innovator-sap-or-oracle-a-customer%E2%80%99s-query-from-sap%E2%80%99s-sapphire-user-conference/>Sapphire user conference</a>, a few lucky analysts got to travel to New York and spend a day and a half with an even luckier set of analysts (you could tell who they were because their brains were still functioning), listening to presentations about how well the combined companies are doing, and where they plan to go in the coming years. Where SAP plus Sybase is going can be summed up as follows: The combination of Sybase database and mobile technology has found a perfect home at SAP, and SAP’s yearnings for a fast track to one billion users may have found its perfect home in Sybase. The rest, as they say, is in the execution. The solidity of the two product lines that Sybase brings to the table is augmented by a strong presence in some key markets that SAP can make tremendous use of. Financial services is the strongest, and despite the tribulations of recent years, this is a sector that knows how to spend on IT. Sybase’s mobility technology promises to let SAP expand in other significant markets as well. More on this in a moment. One of the more intriguing aspects of the new synergy is the potential for Sybase’s ASE database to unseat Oracle as the DBMS of choice in the SAP market. The announcement that ASE had been certified for SAP was made at Sapphire, and I had a chance to follow-up with the Sybase team in New York on some of the details. One of the problems with the ASE for SAP strategy--and any rip and replace strategy--is that technological certification is only the beginning and, in fact, represents the easiest and therefore least important of the issues at hand. Rip and replace has always been an interesting theoretical possibility that all too often falls apart in the face of reality: Assuming the technical barriers are overcome, there are still significant economic, cultural, psychological, and contractual barriers to contend with before the theory can become reality. For any company thinking of such a strategy for their Oracle DBMS, all four factors are vigorously at play. First, SAP/Sybase has to build a strong TCO case for ASE. Sybase thinks there’s a case for making one, but until they do so the theoretical TCO advantage will probably be too theoretical for most CIOs to take action. That TCO case also has to be able to overcome the psychological inertia that looms large in any complex strategic shift: As with many high-priced IT buying decisions, the role of pure logic is usually overemphasized. Making a major DBMS shift, even if it looks good on paper, can and should be a scary prospect for any company. And fixing what ain’t broke should always be viewed through a skeptical lens. Reassuring the decision-makers that rip and replace is a really really good idea and will need to be made really really carefully, or the will to shift valuable resources, political capital, and peace of mind to a rip and replace project will go absolutely nowhere. Additionally, rip and replace strategies will have to deal with two powerful forces arrayed in opposition. The Oracle world is aided and abetted in the IT department by armies of well-paid, and relatively powerful Oracle DBAs, who will clearly play the role of fifth column against any effort to unseat the Oracle DBMS. And riding in on the vanguard will be Oracle’s lawyers, who won’t let these customers off easy if they have anything to do with it. There's a famous industry trick hidden in contractual minutia that could be leveraged against the customer who wants to rip and replace: Many volume license discounts have triggers that jack up maintenance fees if pieces of the portfolio are decommissioned by the customer. I’ve seen IBM do this to its DB2 customers, and I would assume that Oracle would do the same if it could. The operative word is if: As many, if not most, of the SAP customers who run Oracle actually bought their license through SAP, it may be easy enough to move these customers to Sybase. We’ll have to see: regardless of how it eventually sorts out, I’m pretty sure that Oracle’s lawyers will have their say, if not the final word, on how these rip and replace projects will go. Sybase also has to worry that it may face a similar rip and replace onslaught against its database products, for which Sun hardware represents the number one platform. Sybase may be additionally protected by the differences between how SAP works with relational database and how ASE-based apps work with ASE. SAP basically treats the underlying database more like a data store than a full-fledged RDMS, and therefore doesn’t take advantage of many of the individual bells and whistles in the many databases that it supports. This means that, while it may be easy to move an SAP application from one database to another, in many cases it will be significantly non-trivial to move many of the high-end Sybase apps running on Sun to an Oracle DBMS. Those apps, most of them custom-built, not packaged, are deeply optimized for the database they run on. Shifting that optimization layer to Sybase would be possible, but Oracle would have to come up with a helluva better economic case for such a switch than I think it possible. On to the mobility opportunity: The good news is that Sybase is relatively strong in the high-visibility sectors of mobility--cell phones and tablets. The even better news is that there are signs that Sybase understands the mobility opportunity outside these markets, in particular those sectors, such as health care, engineering and construction, rail transportation, and other industries where very expensive assets come with wheels and have a tendency to end up in places where they either can’t be found or are far from a wired grid. These industries have a huge interest in managing mobile assets in ways very similar to those in the cellphone and tablet world, with an interesting twist: Phones and tablets have a few sensors that, when added to more traditional CSR data, make for an interestingly large data stream that need to be managed by Sybase’s SUP mobile platform and its newly christened ESP complex event processing and management platform. But their data stream is miniscule compared with what’s coming out of much more <a href="http://insiderprofiles.wispubs.com/article.aspx?iArticleId=5726">sensor-rich, and therefore data-rich environments</a>. Embedded sensors can send back not just telemetry data, but temperature, humidity, chemical composition, and a host of other valuable data points from the kinds of mobile assets in use in industrial settings. Connect that data to the back-end ERP system and a lot of exciting new, analytically rich apps can be built. It’s an amazing opportunity that both Sybase CEO John Chen and SAP co-CEO Jim Snabe get. And once they add this extended mobility scenario to the already rich cellphone and tablet opportunity, the billion-user mark starts looking relatively easy. Cellphones and tablets touch every consumer on the planet, something that should help SAP with that billion user target, and extended mobility extends the operational and analytical footprint of SAP into key industries in which SAP already plays much more deeply than ever before. Which brings us to the one big question still sitting on the table: How does SAP/Sybase monetize these opportunities? SAP clearly wants to sell enterprise-class apps into Sybase’s mobile market, but doing so at a price point that works will be tricky. The price points for consumer cellphone apps may not work for an SAP that's used to more value-based and, therefore, much more expensive prices. Chen clearly has some notion of how that pricing should work, but the jury is still out on how to balance the pricing models to ensure that SAP gets what it thinks it deserves and the customers pay what they think they should be paying. These are good problems to have in the greater scheme of things. What's clear is that the opportunities are there and the two companies are on the right track to become a cohesive strategic unit. Some glitches are bound to surface: Sybase has a set of mobile CRM apps that demo really nicely on an iPad, so nicely that they might confuse buyers trying to decide what SAP CRM offering would be best for their mobile workforce. The user experience of these mobile apps is so different from Sales On-demand that some convergence would need to take place before they could be deployed to the same sales force. Not such a good problem to have. But in the end, it’s a good beginning for the newlyweds, considering how recently the nuptials took place. The rest, as I said in the beginning, is in the execution. Stay tuned. Josh Greenbaum is principal of <a href="http://www.eaconsult.com">Enterprise Applications Consulting</a>, 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 <a href="mailto:josh@eaconsult.com">josh@eaconsult.com</a>. 2011-05-24T08:00:00ZWho's The Top Innovator: SAP Or Oracle?A customer's query at SAP's Sapphire User Conference forces a closer look at the two companies. http://www.informationweek.com/news/229625415?cid=SBX_iwk_related_commentary_Peripherals_--_scanners,_printers,_copiers_hardwareComing down from the dais after a panel discussion on mobility, I was approached by an attendee with the following story. He was on the IT staff at a Fortune 500 company that was a wall-to-wall Oracle shop, and his boss, the CIO, had sent him to Sapphire with the following mission: Make sure that the company's planned upgrade of its Oracle system made sense. In other words, should the company consider switching over to SAP as opposed to sticking with a massive upgrade of its Oracle software? With that as the premise, here was his question for me, which he half-jokingly gave me five minutes to answer: Of the two companies, which is the more innovative, Oracle or SAP? To be fair, the comparison is profoundly unfair for the following reason: Sapphire 2011 represents easily the fifth public event I've been to that was hosted by SAP in the last year for the purpose of giving industry analysts an in-depth view of SAP's innovation vision. That doesn't include the dozen or so briefings I've had from SAP on different aspects of their products and strategy. Funny how all that input comes in handy when a customer wants to know the difference between a couple of competitors. Contrast that with Oracle, which, since last fall's Open World, has had exactly zero analyst-level events to discuss their enterprise software strategy. As for briefings, I was able to get a short update on Oracle Fusion recently, after no small amount of prodding. But there's been really no attempt to keep me or my fellow analysts systematically up to date with Oracle's latest and greatest thinking on what once seemed to be a strategic focus of the company: enterprise software. So, with that in mind, it was relatively easy to tell this customer the SAP innovation story and much harder to discuss the Oracle story. Here were my six major points about where SAP is innovating: 1) Hana in-memory database: SAP CTO Vishal Sikka's Sapphire keynote on Wednesday had almost an overabundance of customer testimonials on the value of Hana. I talked to a major consumer products customer who told me that with Hana he will be able to do sales analysis at the vending machine level for his products in real time, something that will make a huge difference to his company. This product is real, it's amazing, it changes analytics for any company with a lot of data and the need to understand that data's value in real time. It's not just a piece of technology: There's a whole raft of <a href="http://ematters.wordpress.com/2011/03/10/sap%E2%80%99s-in-memory-hana-database-appliance-gets-apped/">Hana-based applications</a> coming soon and in following years. And Hana is in a pre-beta test for a cloud deployment later this year as well. The term game changing is one I try to use as sparsely as possible, but when it comes to Hana, it seems uniquely appropriate. The buzz around Hana at Sapphire among customers was louder than any new product introduction in recent memory. 2) Mobile: The Sybase acquisition has brought the Sybase Unwired Platform and its associated technology and applications (including a set of iPad-ready mobile CRM apps that are quite slick looking) under the SAP umbrella. Marrying the billions of mobile endpoints that can be serviced by SUP with SAP's Business Suite has the potential to change not just the cellphone/tablet world but the relationship of every mobile and sensor-based device to the back-office. While the acquisition was an Oracle-like move and hardly indicative of organic innovation, SAP's plans to marry SUP and mobility to Hana and the SAP Business will provide a platform for some truly never-before-seen innovation. That marriage will be highly innovative, and SAP gets major points from me for making the whole significantly greater than the sum of the parts. (More on this in a subsequent blog post.) 3) On-demand applications: SAP is in the market today with its <a href="http://ematters.wordpress.com/2010/07/23/the-return-of-business-bydesign-and-the-future-of-the-on-demand-erp-market/">Business ByDesign</a> SME suite and a pending ByDesign SDK that will let partners and customers build unique on-demand applications that use ByDesign's full business functionality as a set of building blocks. While this is the vision of Force.com and the reality of Microsoft's xRM SDK for Dynamics CRM, ByDesign's palette of building blocks is significantly broader and can function as a platform for innovation, that is, until Microsoft's own AX ERP suite becomes similarly enabled and provides SAP with some hard-to-beat innovation mojo. SAP is also rolling out <a href=http://ematters.wordpress.com/2011/03/02/sap-crm-sales-on-demand-heads-to-market/>Sales On-demand</a>. While late to market, it's a legitimate fast-follower for the SAP customer base. SAP also has a collaborative on-demand tool, Streamwork, that's quite innovative as well. Then there's Carbon Impact, Sourcing On-demand, and on-demand apps for travel management, talent management, and service management will be hitting the market later this year. While SAP hardly created the on-demand market for enterprise software, it's following fast with a steady stream of on-demand applications for specific vertical industry requirements. 4) Application deployment and upgrades: SAP's enhancement packs, which effectively upgrade the Business Suite without actually forcing the customer to go through an upgrade, have been around for a few years and are an example of SAP's innovation in the customer-critical application lifecycle arena. The company has followed up on these with its Rapid Deployment Solutions, which, as the name implies, deliver fixed-price industry-specific functionality wrapped in best practices that are intended to get the customer up and running quickly and cheaply. SAP has RDS for CRM, SCM, IT management, finance, and sustainability, with more on the way. These approaches to the application lifecycle are truly innovative at a time when total cost of ownership has never been more critical to customers. 5) Enterprise Performance Management and analytics: SAP is also pre-packaging its analytics offerings in order to make them more consumable at a lower TCO. I attended an early morning session at Sapphire with a group of customers that highlighted how valuable they think the EPM strategy is. Again, some of these products, like planning and consolidation, are the result of an acquisition (OutlookSoft, in this case), but many of the newer ones, like disclosure management and spend performance management, are homegrown. Hats to SAP for raising the bar on delivering analytics value while minimizing the need for consulting services. 6) The Sapphire User Conference: Then there's the Sapphire conference itself. SAP has made a virtue out of designing a show floor and conference layout that's so impressive it deserves special mention. The way SAP positioned conference keynotes, booth space, communications, and customer spaces was really unique, and made for a conference unlike any other in the industry. This is the second year SAP has used this layout, and it recently won an event industry award for last year's show. The user experience at Sapphire represents an enormous contrast to the admittedly much larger Oracle OpenWorld, which is crowded, crammed, and exceptionally user-hostile by contrast. I stopped at six. There were others, but the customer had only given me five minutes to pontificate. What did I tell the customer about Oracle? Well, there's the company's new stack strategy, which is sort of innovative from the sales side (it has great revenue potential for Oracle), but I don't believe that most companies will truly benefit from buying the entire stack from a single vendor. Then there's Fusion Applications, which are coming out later this year. Fusion has a great user experience, and some nice functionality. But while that user experience looked good the first time I saw it more than two years ago, the time it has taken to move towards general availability has taken a lot of the luster off Fusion. There's also lots of innovation in the individual components of Fusion, like Distributed Order Orchestration and Compensation Management, and the overall deployment model (on-demand, on-premises, hosted) is an innovative approach in and of itself. That's where I sort of run out of steam in discussing Oracle's innovation strategy. If I dust off my eight month old notes from Open World, I don't see a whole lot more. While it's hard to believe that Oracle hasn't moved the innovation needle since then, if they have they've told no one about it. What's clear is that the departure of Charles Phillips and the acquisition of Sun have shifted priorities at Oracle, and one of the casualties seems to be innovation in enterprise software. The moral of the story is twofold: SAP has been doing a ton of innovation. And while it may be hard keep track of all the pieces--even for SAP--the company has gone out of its way to build an influencer program that's top notch for the simple reason that it provides an on-going infusion of updates and knowledge about what SAP is up to. That helps everyone--analysts, and through our myriad interactions, customers--know what's happening. Oracle, by contrast, may have been innovating its enterprise software strategy over the last eight months, but if it has, the company has chosen not to communicate about it. The result of Oracle's poor dialogue with the market may be deliberate--if you have nothing nice to say, then perhaps it's best to say nothing at all--but, knowing the people on the applications side of the house relatively well, I remain convinced there's a there there. But if you ask me, I couldn't tell you, even if I wanted to. Josh Greenbaum is principal of <a href="http://www.eaconsult.com">Enterprise Applications Consulting</a>, 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 <a href="mailto:josh@eaconsult.com">josh@eaconsult.com</a>. 2011-04-26T10:10:00ZGet To Know The New HPLeo Apotheker has Hewlett-Packard positioned right where it needs to be.http://www.informationweek.com/news/229402220?cid=SBX_iwk_related_commentary_Peripherals_--_scanners,_printers,_copiers_hardware It's been a little more than a month since Hewlett-Packard's new CEO, Léo Apotheker, stood up in front of financial and industry analysts and laid bare his plans for the new HP he inherited from the muck and mire of Mark Hurd's untimely departure. In that month, the economy has continued to recover, and HP's stock price has failed to follow suit. Meanwhile, pundits have been decrying the new strategy, second guessing key appointments, continuing to speculate that HP wants to buy SAP, and otherwise conducting themselves as if Léo's <a href="http://www.horsesforsources.com/hp-plotting-042011">HP is doomed</a>, new ideas and new leadership notwithstanding. This is more than just healthy skepticism; there's a lot about the new HP that isn't reflected in the consensus opinions of both the punditocracy and the market. On the assumption that a little clarity might enlighten and inform, here's my take on why, if I were to break my golden rule and buy tech stocks (my golden rule involves, among other goals, steering clear of SEC investigations), HP would be the one to buy. First and foremost, HP's assets are beyond compare in many domains. It's number one in printers, PCs, and servers, but the domain that makes the most sense moving forward is the convergence of the enterprise and consumer markets. As this convergence gains strength, there are only two technology companies that have a brand that's equally strong in both areas: HP and another company you might have written off lately, Microsoft. Not Apple (though it's emerging as the anti-establishment enterprise brand), not IBM, not Oracle, not SAP, not Google, not Salesforce.com. And not, perish the thought, Amazon, which gave me rare bragging rights as a pundit by performing <a href="http://ematters.wordpress.com/2009/07/15/enterprise-vs-the-consumer-cloud-azure-vs-amazon/">as I predicted two years ago</a> when it proved unable to provide enterprise-class service to its cloud customers. More on this delicious example of schadenfreude in a moment. While brand isn't everything in all markets, where enterprise and consumer markets converge, brand power is what will win the day. Having a brand that commands respect and positive opinions will be an absolute requirement for the company that wants to tap into the power behind that convergence. This is why the recent appointment of a new chief marketing officer, Marty Homlish, is so important to HP. When I first met Marty, shortly after he assumed that role at SAP ten years ago, he forthrightly admitted he didn't know the enterprise software market, having been at Sony for 15 years. Today, not only can Marty no longer make the same claim, but those 15 years at Sony, instead of serving as a self-effacing liability, are now a key asset in the role he gets to play at the new HP. This is a rare opportunity to build a rare convergence around a single brand, and Marty is one of the few marketing execs who can legitimately claim to know both sides of the opportunity equally well. This convergence of consumer and enterprise is huge, one of those only-a-few-times-in-a-generation inflection points. The trend is dictating software and hardware design, development and go-to-market strategies, business model and business processes change, and consumer and enterprise user behavior. Staying on top of a trend that's moving this fast and making this many waves is non-trivial and, indeed, having a foot in both camps is a distinct advantage. Adult Supervision Is What's Needed Being a little old school, particularly on the enterprise side, is a key advantage. HP, is uniquely positioned to capitalize on this because convergence requires the adult supervision that's lacking on the consumer side: Apple's anti-establishment approach in the enterprise, along with the Google/Android gang's enterprise play, pose some massive problems in terms of IT security and standards. The same goes for the use of social collaboration tools and on-demand services like Gmail and Amazon's EC2. As these consumer devices and services proliferate in the enterprise, how a company ensures that its IP isn't leaking out the door, or its employees aren't violating SARBOX, HIPAA, EU privacy regulations, etc., or its service levels are unserviceable, becomes a major problem that the likes of Apple, Amazon, and Google can't understand and won't solve. Long-standing, enterprise-savvy players like HP get it, and know how to provide grown-up service and support for these nascent technologies. And while this convergence is so new that we don't even know what the processes that drive it necessarily are or will be, HP's position of enterprise strength, as well as excellence in key consumer endpoints like PCs, laptops, and printers, gives it much better street cred than its erstwhile enterprise and consumer competitors in terms of making convergence a safe, serviceable, and profitable enterprise. The cloud has a similar need for adult supervision, as Amazon has so starkly shown us, in the form of managing the convergence of customer choice and technological progress. This is more than just a matter of SLAs: "End of software" cloud companies like Salesforce.com like to enforce on-demand orthodoxy (Thou shalt be on-demand and multitenant or be damned to eternal technological obsolescence) despite serious and important differences in customers' business and security requirements. HP's strategy for the cloud--a strategy, admittedly, that needs to be fully realized before it can be fully judged--is to eschew imposing technological and business model orthodoxy in favor of support for whatever deployment modality the customer requires. On-premise, on-demand, managed service, hybrid: It's up to the customer, not the interpretations of technology trends by charismatic entrepreneurs, to determine what makes the most sense for the market. With just these two issues—enterprise/consumer convergence and the cloud—Leo's chance for a quick upside is enormous, for one simple reason: if all he does is get HP's famously disparate business units to work synergistically in terms of development, productization, marketing and sales, he'll be able to engineer an enormous amount of growth for the company. Right now HP's big three divisions—printers, PCs, and enterprise--are largely uncoordinated in every way. Cross-selling, much less cross-product development, has never been HP's strong point, and, under Mark Hurd, compartmentalization became more of a virtue than ever before. This is a key part of the Léo Apotheker strategy that's largely ignored today. Wall Street's evaluation of HP has been very much a 1+1+1=3 equation, meaning the sum of the parts is equal to the whole: That's the legacy of no up-sell. If HP can start building a cross-sell/up-sell capability, there's an enormous upside to be had without disrupting any cash cows. While that's hardly simple, Leo's chops as a global sales executive are unassailable and making this kind of shift at HP is very much within reach. Palm is another <a href="http://www.engadget.com/2010/10/19/webos-2-0-review/">undervalued and unappreciated asset</a>. While there are many who think the mobile market is already sewn up (though by whom seems to change frequently; Nokia's decision to go with Windows 7 Mobile apparently <a href="http://www.geek.com/articles/mobile/idc-windows-phone-7-to-be-second-only-to-android-by-2015-20110329/">changed the game again</a>), the fact that Palm's WebOS will find its way into 100 million HP devices--pretty much any printer worth more than $100, and all its PCs, and of course, phones--means that mobility is about to mean something more than just a cool cell phone and a massive apps marketplace. (Though WebOS is cool too, as unheralded in the market as it is: The only multitasking OS is actually one of the best, most intuitive cell phone operating systems in the market.) This multitouch mobility strategy has many legs, including the aforementioned convergence opportunity, as well as the analytics focus that Leo is planning on bringing to HP. The company's strategy involves leapfrogging several well-worn domains in enterprise software, and analytics is one of them (the other two are core ERP and the relational database: HP won't reject them, but they're not part of its leading edge innovation strategy). The Analytics Opportunity The acquisition earlier this year of Vertica was clearly a defining moment in the strategy: next generation analytic tools and services that go beyond the old-style relational data warehouse/BI tools approach that was already old and tired at the dawn of the 21st century. While there is much to be learned about the details of HP's analytics strategy, you can assume that Vertica is just the first of many acquisitions. It's clear that HP intends to take the analytics opportunity and do a much better job at driving value and controlling cost, and effectively cleaning up one of the most lard-heavy, and results- and ROI-challenged, parts of the IT budget. Marrying this next-generation analytics approach to a ubiquitous mobility offering like WebOS is an important linchpin to the strategy: Next-generation analytics depend on a analyzing significant amounts of data coming from myriad distributed devices and delivering the resulting information back to whatever endpoint the business user or consumer prefers. With WebOS at all the endpoints--printers, PCs, laptops, tablets, phones—the collection of data and the delivery of information to anyone, anywhere becomes something HP could have a significant advantage in providing. Again, this a could be an opportunity, one that HP still has to fully realize, but it's potential as a game changer for the industry and for HP is huge. Finally, there's the services part of HP's business. This is the big question mark in Leo's strategy: HP's EDS unit will be able to provide a significant amount of support for the cloud services side of the business since the similarities between outsourcing and cloud services far exceed any differences, but there will have to be an acquisition or two if HP wants to build a high-level services offering that can take this strategy into the field and execute on it. Talking The Talk Which brings up the final reason why I'm bullish on HP. If I were to level an elevator-speech-length criticism at the old HP, it would be this: HP doesn't have the market position that gives it a legitimate reason to directly engage at the C level and at the business-user level simultaneously. The old HP did well in the space in between these two sets of influencers, but the new HP has to do a much better job at expanding its conversations with the market to include the execs at the very top and the masses of business users everywhere else. The convergence requires it, the cloud requires it, next-generation analytics requires it, and driving synergy in sales and services requires it. Léo Apotheker's new strategy positions HP right where it needs to be. If he can make this strategy a reality, it will be one of the great turnaround stories in technology. And stock price and critics notwithstanding, so far, so good. Josh Greenbaum is principal of <a href="http://www.eaconsult.com/">Enterprise Applications Consulting</a>, 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 <a href="mailto:josh@eaconsult.com">josh@eaconsult.com</a>. In the new, all-digital issue of InformationWeek Government: More than half of federal agencies will use cloud computing within 12 months, our new survey finds. Security, ROI, and management challenges await them. <a href="http://www.informationweek.com/gogreen/041811GOV/index.jhtml?k=axxe&cid=article_axxe_os">Download it now</a>. (Free registration required.)2011-04-15T17:00:00ZMicrosoft Dynamics Lines Up Against SAP, Oracle, And SalesforceThe vendor has hit its stride on the technology front and now must worry about how to compete in the channel.http://www.informationweek.com/news/229401719?cid=SBX_iwk_related_commentary_Peripherals_--_scanners,_printers,_copiers_hardwareI've just returned from the Microsoft Dynamics' Convergence conference, where the news about Dynamics' progress in the enterprise software market can be summed up as follows: The company's two flagship products--its Dynamics AX ERP system and Dynamics CRM--have reached a functional level that basically places them on par with the best of their respective categories. This leveling effect not only puts Microsoft in elite company comparable in many ways to SAP, Oracle, and Salesforce.com, but also effectively takes technology and functionality off the table with respect to its three largest competitors, at least today. This means that in all but the very largest enterprises--where only Dynamics CRM plays--Microsoft will win and lose deals based on the quality of its partner channel and their ability to provide support for local and micro-verticalized extensions of the Dynamics product line. The idea that Dynamics needs to play catch-up with its bigger brethren is no longer on the table. That's good enough for now, but in a couple of years the playing field will shift even more, potentially giving Microsoft an important advantage. Dynamics' promise--laid out in keynotes and one-on-one meetings over the course of the conference--to fully support on-demand, on-premises, and hybrid deployments of AX, CRM, as well as GP and NAV, means that, starting approximately in 2013, only Microsoft will be able to offer pretty much any possible deployment model of its software from a single code-base. This is an important distinction that may be hard for its competitors to deal with. SAP, Oracle, and Salesforce.com won't be able to offer customers the choice of running their deployments on premises, in the cloud, as a managed service, or as a hybridized mix of the above across their core products--never in the case of Oracle and Salesforce.com, and not for a while in the case of SAP. While each of Microsoft's competitors has plans for a mix of on-premises and on-demand products, the breadth of choice they can and will offer will be much less clean. Oracle's Fusion will be deployable in a similar fashion to AX, with two powerful limitations: There are no plans to sell Fusion as a suite, nor will it in the conceivable future have the broad industry coverage that Oracle's eBusiness Suite offers (or AX, for that matter). There's also the question of when Oracle will actually release Fusion into general availability; the official word is that there's no official word on when, leading to considerable speculation about the company's commitment to what was to be its flagship, post-acquisition binge product. The impact on Salesforce will be harder to gauge: The on-demand market leader has tremendous momentum as the original go-to company for on-demand CRM, and its pure play strategy will appeal to on-demand purists. But as multimode deployment options gain ground, it will be harder for Salesforce to insist that on-demand is the only way to offer rapid deployment and a means to shift the CRM budget from capex to opex. SAP has a much broader shot at competing with Dynamics' vision, though its Business ByDesign and forthcoming <a href=http://ematters.wordpress.com/2011/03/02/sap-crm-sales-on-demand-heads-to-market/>Sales OnDemand</a> have no on-premises deployment model, nor do any of the on-demand products under development at SAP that I am aware of. The larger Business Suite may someday become available in the cloud, but plans for that haven't been shared publicly. In short, SAP, which I believe has much a more solid cloud strategy than Oracle, won't be supporting the level of deployment choice that Microsoft has in mind. There are many who think providing the breadth of deployment options that Microsoft has planned isn't all that strategic. A pretty formidable cast of pundits say this level of choice is either unnecessary or heretical or both. Time will tell, but I'm in the camp that believes that customers will prefer the multimode option for many of their deployments if given that option, and Microsoft's plans to offer a supreme breadth of options is the right one for the foreseeable future. And that choice effectively starts now--or rather later this year with the full release of AX 2012. Microsoft has promised that this version, while not the Azure-ready, dual-mode version that offers multimode deployment out of the box, will be readily upgradeable to the multimode version when it's available, effectively letting customers buy an on-premise ERP system today and have the option to move it to on-demand at the next revision cycle. For the customer who prefers to sit on the fence and keep his or her options open, AX 2012 is looking good. This in no way wipes Business ByDesign's prospects off the map, nor does it obviate the fact that SAP has a strong product set for the mid-market--All-in-One, Business One for the on-premises customer, and Business ByDesign for the on-demand customer--that competes well against Dynamics. There's still considerable customer choice for SAP's prospects; multimode deployments are possible, though from different code bases. And SAP's willingness to fight aggressively with its direct sales approach against Dynamics' partner-driven model is a distinct advantage that one day Microsoft must do something about other than take the hit and live to fight another day. The bottom line is that Dynamics has really hit its stride on the technology front and now needs to worry about how to compete in the channel. The problem with using an indirect sales approach against competitors like SAP and Oracle that deploy direct sales forces against Dynamics in the upper mid-market and lower echelons of the large enterprise market will someday have to be addressed head-on, in my opinion. There are already Microsoft teams that call on large accounts, and then bring in partners to close the deal. That may need to change as the capabilities of AX 2012 and beyond make it clear that Microsoft can play a stronger role at the top end of the market. At which point it may need a top-end sales strategy to match its technical prowess. That's the price Microsoft will pay for growing up so well. Josh Greenbaum is principal of <a href="http://www.eaconsult.com/">Enterprise Applications Consulting</a>, 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 <a href="mailto:josh@eaconsult.com">josh@eaconsult.com</a>.2011-04-12T09:19:00ZMicrosoft Dynamics Makes Manufacturing A Game, Sort OfBetting on sell-through synergies between enterprise apps and the rest of the company, Microsoft shows that shop floors can benefit from consumer tech.http://www.informationweek.com/news/229401387?cid=SBX_iwk_related_commentary_Peripherals_--_scanners,_printers,_copiers_hardwareDuring his keynote at this week's Convergence 2011 customer showcase, Microsoft Dynamics chief Kirill Tatarinov demoed the use of Microsoft's Kinect interactive gaming system as an interface to the company's AX ERP system. It was a relatively lackluster demo as far as Kinect goes -- no wild gyrations, or dislocating motions, no funky music or funky moves. Not exactly hyperkinetic on the AX side either. But by the time the quick demo was over, Microsoft had set <a href="http://www.informationweek.com/news/software/enterprise_apps/229401366">another stake in the ground</a> as both an innovator and a company that can create synergies out of its historically disparate business units. And the cause of <a href="http://www.informationweek.com/news/software/enterprise_apps/229219542">gamifying the enterprise</a> was furthered once more. The demo was a simple simulation of a shop-floor environment where a gloved worker uses hand gestures to manipulate a kanban system by pulling down menus and exposing underlying data. I would have made the demo a little more exciting -- I honestly imagine real workers would be tempted to liven up their Kinect sessions with a little more pizzazz than we saw on stage. But the outright functionality of the Kinect-driven user experience was undeniably cool. Does this mean that Dynamics ERP is becoming a game? Not really. The use of Kinect absent any specific game mechanics means that no real games were created in the process of making the demo. But two observations on the ensuing gamification of the shop floor: the first is that, assuming that the <a href="http://digitaldaily.allthingsd.com/20101213/new-for-xbox-kinect-bombastic-ballmers-2-billion-blowout/">enormous uptake of Kinect</a> since its inception will continue apace, it will be hard for anyone to look at this user experience and not see the gaming components that Kinect could potentially bring on board. "Hey kids, mom uses a Kinect at work, too" will actually add some gaming cachet to the boring, old-school shop floor we have come to know and (wrongfully) vilify. The temptation -- make that the imperative -- to gamify the shop floor won't be far behind. That's the second effect: Kinect's presence on the shop floor will make it virtually essential that some game mechanics be added to Dynamics ERP. It was hard (at least for me) to look at the brief demo and not imagine a little leader board pop-up that showed who was the best at making a manufacturing line lean, among myriad possibilities. That and a monthly dance contest based on the Kinect Dance Connect game, which could do wonders for employee morale, too. The ability to both improve shop floor interactions and employee engagement sounds like a win/win to me. The interfaces for this new Kinect capability are coming out shortly, and my sense is that any customer that is looking at touch screen interfaces to their ERP or MES systems should welcome the touchless touchscreen that Kinect provides. The bonus of being set up to start the gamificaiton of the manufacturing shop floor should be tempting to any forward-thinking company as well. The fact that this breakthrough is coming to ERP via Microsoft's gaming division is the kicker. Kirill's number-one goal when he took over four years ago was to up the value and visibility of Dynamics in the greater Microsoft. For the last few years the sell-through synergy between Dynamics and the rest of the Microsoft stack has been a vastly unheralded story. The fact that the Xbox division is working hand-in-glove (pun intended) with Dynamics is further testimony to the success of Kirill's internal synergy strategy. How far into gamifying Dynamics will Microsoft go? My guess is we'll see more in the near term. Microsoft's Bing group gets gamification as well, and was one of the key presenters at last fall's <a href="http://www.amiando.com/gamificationsummit.html">Gamification Summit</a>. As the concept of gamifying the enterprise <a href="http://www.businessweek.com/technology/content/apr2011/tc2011044_943586.htm?link_position=link1">gains momentum</a>, I expect to see Microsoft Dynamics, with the rest of Microsoft at its back, take a leadership position. The game is afoot. Josh Greenbaum is principal of <a href="http://www.eaconsult.com/">Enterprise Applications Consulting</a>, 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 <a href="mailto:josh@eaconsult.com">josh@eaconsult.com</a>.2011-03-10T07:11:00ZSAP's Hana Appliance Gets AppedCEOs and line-of-business buyers will be impressed by the list of supercharged applications and the BW upgrade. Now it's up to competitors like Oracle to respond.http://www.informationweek.com/news/229300683?cid=SBX_iwk_related_commentary_Peripherals_--_scanners,_printers,_copiers_hardwareThe old canard that SAP is not an innovator took another hit this week with the partial unveiling of a new set of applications built to run on top of SAP's Hana in-memory database system. The new apps, due out in a set of rolling releases thus year, fill an important gap in SAP's Hana strategy to date: actual applications that appeal to a line-of-business user, as opposed to Hana's nerdy technology appeal. Not that there's anything wrong with that, who doesn't get all excited about a column-based, in-memory database appliance that can crunch a few hundred million records in a split second or two. Well, actually, there was one small thing wrong with the last two year's worth of Hana demos: after the first couple of amazing demos, a certain amount of buzz-fatigue started setting in. After all, once you've see the button pressed and the Explorer rows fill instantly with data from a humungous database, the gee-whiz factor starts to lose some gee. So, while SAP didn't do any comprehensive demos of the new Hana-ready apps, just the prospect of a few good reasons for the line-of-business buyer to get excited was a refreshing sign of the potential that Hana has to rewrite the good book of data analysis in the very near term. The Hana apps due to come out this year provide an impressive-looking range of functionality. Below is a list of the applications SAP has slated for release this year, mostly in Q3 and Q4:<dir> Strategic workforce planning (out now) Sales and operations planning (due Q3) Cash and liquidity management (due Q3) Trade promo management (due Q4) Intelligent Payment Broker (due Q4) Smart meter analysis (due Q4) Profitability engine (due Q4) Customer revenue performance management (due Q4) Merchandising and assortment management (due Q4) Energy management for utility customers (due Q4) Customer-specific pricing (due Q4) Intelligent Payment Broker (Q4)</dir> Analysts at an event in Boston yesterday only saw snippets of a couple of these apps, it's an impressive list, and adds to SAP's potential cred as an analytics vendor with some highly competitive functionality. This list clearly comprises eleven in-memory applications that SAP will have by 2012, as compared to all those in-memory apps the competition has -- as in none. How broadly any of these apps will attack their specific functional domains in release 1.0 requires an understanding of the back story to these apps: They have been developed using an agile methodology that would have been heretical at SAP only a few years ago. When I asked about the 90 days that Vishal Sikka, SAP's CTO, said it took to develop Strategic Workforce Planning (SWP), the answer I got was that SWP and the rest of the Hana apps were being developed without trying to exhaustively deal with the exceptions and special cases that sop up early development resources. Rather, the Hana apps are being developed first to cover the more general-purpose use cases, with the outliers to be dealt with in subsequent releases. So, will SWP 1.0 arrive in the market as the be-all and end-all of workforce planning? Probably not. But it will be the only one in the market that can totally kill the big-data problem behind workforce planning.Other topics of note in a day crammed with noteworthy topics: Vishal also promised that <a href="http://www.informationweek.com/news/software/enterprise_apps/showArticle.jhtml?articleID=228901265">Business ByDesign</a> would eventually be running on Hana, as would SAP BusinessOne, though no precise timetable was given for when the Hana versions would be released. There was no word on when (not if, IMO) SAP plans to make the decision to move the Business Suite onto Hana. While the full Suite's timeframe for Hana is up in the air, pretty much everything in the SAP portfolio will be Hana-ized in coming years. And those apps will be available as on-demand apps – SAP partner Medidata is already providing its clinical trial management system, running on Hana, as an on-demand application. (And doing some pretty impressive analysis of the metadata being captured by Hana.) Also noteworthy was the announcement that SAP would be offering to migrate its existing Business Warehouse customers to Hana, a move that would not only give these customers a screamingly fast data warehouse but also significantly lower the DBA costs associated with their BW database, especially if it's an Oracle or IBM database. This migration also gives existing BW customers a leg-up in deploying Hana apps, as they will be able to run the new Hana apps on the same Hana engine they are using for BW. Not a bad twofer in Hana's favor. Actually it's a threefer: a faster BW, lower DBA costs, and a Hana engine that can be deployed to run Hana apps. This isn't just good for SAP's customers, it's also pretty bad for its competitors. Especially Oracle, which has bet its business on a stack strategy that SAP is trying to disintermediate with products like Hana. In addition to the possibility that Hana will replace Oracle in the BW market, the fact that it can run on standard, multiprocessor, multicore systems means that the hardware costs for Hana aren't just cheap, they are decreasingly rapidly as the market for commodity RAM and Intel's multicore processors just gets better. Sikka noted that a high-end Hana machine his team built last year at a cost of $530,000 was down to $405,000 four months later. I won't enter the comparison pricing rate race here, as I don't have enough Hana data to go on, but these prices are likely to put Oracle's Exadata strategy on the defensive. In the end, while the details were sparse, there was enough meat on the bone to make it clear that Hana’s future will be targeting the LOB and CEO as much as the IT department: the prospect of advanced, in-memory analytics was always a great idea in search of a critical mass of proof points. By this time next year I expect those proof points to be well ensconced in a new market that SAP is hoping to dominate. The onus is now on SAP's competition to provide some meaningful competition. The clock is ticking... Josh Greenbaum is principal of <a href="http://www.eaconsult.com/">Enterprise Applications Consulting</a>, 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 <a href="mailto:josh@eaconsult.com">josh@eaconsult.com</a>.2011-03-02T13:30:00ZSAP Sales On-Demand Heads to MarketThe secret sauce is tight integration to the entire Business ByDesign suite. That makes it possible to deliver the kind of deeply integrated CRM/ERP app that Salesforce has to partner to deliver. http://www.informationweek.com/news/229300045?cid=SBX_iwk_related_commentary_Peripherals_--_scanners,_printers,_copiers_hardwareMore proof that SAP is serious about making a break from its on-premise past, and in the process challenge on-demand titan Salesforce.com, came last week in the form of a preview look at SAP Sales On-demand. The preview, granted to a group of industry analysts in Boston, proved that SAP isn't afraid to be innovative in ways that could threaten the very on-premise enterprise software edifice that SAP itself has helped create over the last 20 years. And it showcased the latest in a growing portfolio of on-demand applications that, at a minimum, gives SAP serious credentials as an on-demand player-to-be. The preview gave a clear view of a collaborative CRM application that represents a serious break from how SAP, and most of the industry, view CRM. While the goals of the current product are relatively modest by the overarching breadth of the CRM acronym -- Sales OD is targeted at enabling the sales team, and does not include marketing or other adjunct functionality -- the result is a solid first salvo over the bow of the current on-demand champion, Salesforce.com, and the main contender, Microsoft's Dynamics CRM. The key component that makes Sales OD stand out is its implicit support of sales team collaboration. As I wrote here, SAP had the analysts play, literally, with Sales OD in order to give us a sense of how it works. It was clear from <a href="http://www.informationweek.com/news/software/enterprise_apps/showArticle.jhtml?articleID=229219542"> the game</a> that Sales OD was designed from the get-go to be a collaborative sales tool, as opposed to having collaborative features glommed on as part of an enhancement release. This collaboration is enhanced by support for content access, analytics, and other key features that round out a pretty good-looking CRM tool. But what is under the hood is perhaps even more significant, insofar as it gives us a glimpse into a broad-based SAP strategy that will give Sales OD users and partners access to a large portfolio of functionality that will truly challenge Salesforce, and provide a potent rivalry to Microsoft's plans for Dynamics and its Azure on-demand platform. The secret sauce for Sales OD comes in the form of an even tighter connection to SAP's <a href="http://www.informationweek.com/news/software/enterprise_apps/showArticle.jhtml?articleID=228800575"> Business ByDesign </a>than had been previously intimated. ByD has become not only the platform for Sales OD and SAP's other present and future on-demand applications, but the functionality in ByD -- all the non-CRM, ERP stuff that ByD is designed to do -- will be made available via a forthcoming software development environment that is similar to the SDK SAP released last year.That makes it possible to extend Sales OD to include direct process and data integration with the rest of the ByD stack's individual on-demand processes, making it the kind of deeply integrated CRM/ERP application that Salesforce has to partner to deliver. This on-demand integration will be in addition to direct integration to the on-premise SAP Business Suite. The ByD connection will also bring Sales OD into the extended CRM world that Microsoft's Dynamic CRM is targeting with its <a href="http://ematters.wordpress.com/2010/07/13/how-to-make-money-in-the-cloud-microsoft-sap-the-partner-dilemma-and-the-tools-solution/"> xRM development environment</a>, which has huge implications for partners as well as customers. Of course, for the most part, Dynamics is targeting the SMB market, whereas Sales OD is a large-enterprise product targeted, initially at least, at SAP's installed base. Microsoft's Dynamics CRM will also have a different competitive profile due to its ability to provide a complete hybrid on-premise and on-demand CRM option, something SAP and Salesforce.com can't do. But the ability of Dynamics CRM Online to eventually make use of a rich palette of services to be available in the Azure on-demand environment -- on top of its current ability to extend the CRM model using the xRM SDK -- will put it on a collision course with Sales OD and ByD. At a minimum, Sales OD will make it hard for Salesforce and Microsoft Dynamics to pick off the easy wins among the SAP customers unhappy with earlier SAP CRM versions, much as ByD's CRM functionality will be able to cut into competing vendors' ability to poach the subsidiaries of smaller operating entities of SAP's large-enterprise customer base. And when Sales OD can be extended to include ByD's non-CRM capabilities, the combination will be a potent competitor in the market. When Sales OD reach this highly competitive milestone? Looks like the full complement of functionality, including the SDK, will await a future release of the product, probably in the 2012 timeframe. Meanwhile SAP will be pushing Sales OD as a "standalone" on-demand product in its initial versions, coming this year. Sales OD comes as the latest entrant into SAP's on-demand portfolio, following ByD, Sourcing On-demand, Streamwork, and Carbon Impact (which is not on the ByD platform), and precedes the market entry of Travel On-demand and Career On-demand, due out later this year This growing portfolio proves that a revolution is underway at SAP, and in the industry: The old days of SAP as a purveyor of big, monolithic enterprise apps is gone. Sales OD proves that SAP is going to mount a frontal attack on the nascent on-demand market. Even if it means disrupting the very forces it helped create. Josh Greenbaum is principal of <a href="http://www.eaconsult.com/">Enterprise Applications Consulting</a>, 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 <a href="mailto:josh@eaconsult.com">josh@eaconsult.com</a>.2011-02-28T21:04:00ZSAP Plays Games With The AnalystsThe 'gamification' of the enterprise could make work more compelling, engaging and -- gasp -- fun.http://www.informationweek.com/news/229219542?cid=SBX_iwk_related_commentary_Peripherals_--_scanners,_printers,_copiers_hardwareI went to a preview showing of a new SAP product last week and had about the most fun I've had an analyst event since… well, if I had more fun than I had at last week's event, I can't remember. In the process I got to see the product up close and personal, and it looked really nice. While that's not really meant to be a "and by the way, product X was really nice" – there's an embargo on the news until March 1, so I'll have to be circumspect [Note: The follow-up column covering the product is <a href="http://www.informationweek.com/news/software/enterprise_apps/showArticle.jhtml?articleID=229300045">posted here</a>] — I have to admit that they way in which we were shown how the product works was perhaps as significant as the product itself. That's because SAP chose to "gamify" the presentation of product X to the analysts: the SAP team very cleverly used the doldrums of the post-lunch digestive phase to stage a game in which the analysts were teamed up and then competed to take the product through its paces. We were given some very rudimentary tasks that gave everyone a good sense of what the user experience of the new product looked and felt like. There were bugs, there was confusion, and there was a ton of fun to be had in the process. Most importantly, there was engagement at multiple levels. We engaged with the product, we engaged with one another, we collaborated, we competed, and, here I am, a few days later and still under embargo about the product itself, mulling over how what I saw and what I experienced is still fresh in my mind. This is the promise of gamification, the latest buzz word to rage around the technosphere. Gamification is fundamentally the process of taking the engagement mechanisms we find in games -- rewards, punishments, excitement, drama, competition, collaboration -- and "plugging" them into our day to day lives. A game is "Angry Birds"; a gamified user experience is one in which the user is having fun by being challenged and rewarded for his or her actions. The challenges and rewards come in a many different forms -- called game mechanics -- that borrow from the world of online games, like Angry Birds, as well as offline games, like Solitaire. The goal is to make "work" enough like a game to be as compelling and engaging as a game, but with an outcome that has measurable benefit beyond pure fun. Which is exactly what took place at the product X preview last week. And it worked. And if gamification can work in taking a product demo to the next level, imagine what it can do for, say, purchase order processing. SAP has been looking at gamification for a while, and is beginning to make a run at the concept in its development work as well as in analyst events. SAP's Community Network site has a number of references to recent <a href="http://www.sdn.sap.com/irj/scn/weblogs?blog=/pub/wlg/23487">gamification activities</a> that are on-going at the company. One of SAP CTO Vishal Sikka's team was at the recent <a href="http://gsummit.com/">Gamification Summit</a> in San Francisco, and the company recently had a talk by Stanford professor Byron Reeves, author of a book on the subject of <a href="http://totalengagement.org/authors.html">gamifying the enterprise</a>.What does SAP see in gamification? The earlier "gamification activities" link says it all in the headline, "Gamification or How to win 1 billion Users until 2015." This is the basic concept underlying SAP's moon shot quest to reach a billion users: If you want to get people to be deeply involved in an activity, you can either coerce them or find a way to engage them in a more positive manner. The old model that the tech industry has followed has been mostly coercive: users are forced to engage with their enterprise software because the boss said so, their job performance demands it, and they basically have to or else. The new model says that people should be engaged with enterprise software because they want to, because it's compelling, because it's -- gasp -- fun. Having fun at work is a very subversive notion, though of course anyone who is having fun at work will tell you how much having fun compensates for working too hard. And anyone not having fun at work will tell you how much not having fun makes work even less fun. Subversion is complicated that way. So is fun. And work. Why gamification is having its heyday has to do with the raging success of online gaming (by which, in this context, I mean games like World of Warcraft or Farmville, not the other gaming, which involves gambling and other vices.) Not only are games like WoW, Farmville, and Angry Birds popular, but they have spawned enormous online communities where the amount of time spent on community activities -- chatting, forming teams, sharing tips, bragging, etc. -- vastly exceeds time spent actually playing the game. Translate this to the enterprise, and suddenly the notion of reaching one billion users puts the word "reach" in a different perspective. If a company like SAP can not only reach these users, but engage them in a gamified experience that is compelling and fun, SAP can potentially make users something more than just users: they can be participants in a community environment where that old coercive model of engagement is a thing of the past. The trick is that gamification is hard, coercion is easy. It would have been so much easier if SAP had just lectured the analysts into a stupor, instead of taking a risk and engaging us in a game. Of course, the results of gamification are vastly different, and SAP took a risk in getting the analysts so deeply engaged in the product -- after all, playing a game around a bad product will only serve to reinforce a negative experience. But, regardless of the tenor of the analyst's assessments that will come out tomorrow, it's clear that all of us writing about Product X can do so from a rare position of knowledge, gained from the gamification of the knowledge acquisition process. A little fun can go a long way, especially in the enterprise. Josh Greenbaum is principal of <a href="http://www.eaconsult.com/">Enterprise Applications Consulting</a>, 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 <a href="mailto:josh@eaconsult.com">josh@eaconsult.com</a>.