IBM Watson – what better use of analytics than fighting cancer ?


From 1992 – when I joined the mechanical engineering degree class in TKM College, till today – I have been a fan of Analytics.In fact, I am pretty sure it is the engineering education that put this fascination in me. And it was my statistics professor Mr. Kalyanaraman who took it to the next level.

Nothing fascinated me more than numbers and making inferences based on them. It was not as if I didn’t realize that texts and pictures and all the so called “unstructured” data was very important – it is just that I always felt that there was plenty more to be done in the “small data” world of numbers, before any one worried about “big data” . I have kept on questioning the value of the insight that will come out of big data for most companies, since they cannot even make decisions based on relatively small and highly structured data from pre-defined sources.

And then, along came IBM Watson and it changed my perspective on analytics and big data completely. Although I work in IBM, I don’t work in the team that works on Watson directly. If I am envious of any one professionally – it is that group of colleagues who get to work on Watson. Watson captured my imagination from the first day I heard about its plans to play Jeopardy on public TV.

Now, god knows how I don’t suffer marketing . I attribute it to the compulsory marketing classes I had to take in B School. And the irony is that IBM has world class marketing. So when IBM trumpeted Watson from the roof tops, my natural instinct was to cringe. But as I thought through the implications – it became clear that Jeopardy was the perfect way for IBM to avoid evolutionary steps, and make a grand leap into the future of analytics. Jeopardy needed everything – ability to consume big data with no structure, ability to understand natural language, truly massively parallel processing, ability to work on commodity hardware, lightning speed, ability to make a decision, ability to learn and many more. And it was a safe test bed to see if technology can stand up to that stress in an environment that is not “life and death” types, but useful enough to make a determination if this has a future.

Right after Watson won Jeopardy against the “human” champions, the IBM team started focusing it on real world problems. And this is where I was most fascinated by the choices of that team and its leader, Manoj Saxena.

IBM has a huge army of smart sales people, who could have very easily sold Watson in some form to a large number of clients across the globe.It would not have been hard at all – my own clients have asked me multiple times how they can use Watson to help their business, without me having to bring it up. As we know, IBM is a publicly traded company with a published roadmap for earnings till 2015. But instead of taking a short term view of cashing in right away, they took a long term view of proving it out thoroughly in the real world with real customers.

Instead of trying to do too many things across all the geographic regions that IBM does business in, they chose to focus on a small number of very specific high value use cases in healthcare, insurance, banking etc. And they partnered with some of the best in class clients in those industries to do so – and in public,not behind closed doors. Now, that is good marketing – the kind I can relate to. Let the customers declare the vision and the success, not the vendor.

The use case that makes me most excited is the cancer treatment one where IBM is teaming with Memorial Sloan-Kettering Cancer Center. Like everything else, there is of course a commercial angle to this – and I can imagine this to earn IBM good revenue. But that revenue could also have come from many other use cases. It is the humanitarian angle that impresses me the most. Cancer research and knowledge can now be spread across the world in very short time once this project succeeds. Doctors outside major research hospitals can reduce a lot of dependence on opinions and guess work and experience, and do a lot more “evidence based” decisions. Of course I don’t expect Watson to ever replace a doctor, but Watson has the potential to be the strongest weapon an oncologist has in the fight against the deadly disease. That is not evolutionary – it is revolutionary. It makes me wonder how many other big problems can be solved by the judicious use of analytics theory and technology.

Please watch this and listen to Dr Norton explain this

And finally, I like the sense of reality the IBM team and the clients who are partnering with them display. They clearly explain what Watson can and cannot do , and how long it will take to get there. Now, I know a lot of my friends like innovations to be out in the market quickly – and I understand where they come from. So on this cancer treatment use case, I pinged a few friends who are doctors in India, who I know from childhood to understand more. It sounded like on an average it takes anywhere from 8 to 12 years according to them for information on diagnosis and treatment to become common knowledge from the time it is published. According to them, they will be thrilled if they can cut that time by a third. So even if Watson can start being of help to cancer patients in couple of years, it will be a big deal, and quite fast in “time to market” .

I am sure the Watson team will have its ups and downs in this journey – but I think it will be well worth the proverbial blood, sweat and tears. I wish them the best. And tonight I will dream of doctors in my Grandom’s village having a pocket Watson with them when they help their patients fight their diseases.

 

Now I believe SAP is serious about collaboration


I had an unusually busy day today, and consequently missed out “officially” congratulating my buddy  Sameer Patel and SAP when he broke the news on twitter and on his blog http://www.pretzellogic.org/blog/2012/03/13/im-joining-sap-ag/.  Of course I knew about it for a while since he and I had discussed this a few times as he was considering the job. And I am very happy for SAP- they have a prize catch.

 

Collaboration is not new at SAP – just that I never got the impression that they were serious about it. Of course they have Streamwork as a collaboration tool. I even crashed a dinner with that team and Sameer, Jon Reed and Dennis Howlett in Palo Alto few weeks ago. It is just that I never took it very seriously, despite Mark Finnern and the SAP Mentors using it extensively. To me – it just did not make sense that SAP developed a collaboration tool that primarily stood alone, without being in the context of the world of business. It especially looked silly to me what SAP has the best business suite application and a pretty good BI platform – and yet did not capitalize on the opportunity to put collaboration in context of those business processes.

 

Over the last few months – a few of my customers have started asking me about collaboration capabilities . Some of them had seen streamwork demos – especially the ones with SAP CRM. But as I dug in to it a little more – it was clear that this was not “out of the box” , but more of a services offering from SAP PSO. Every time SAP comes out with something that only their own services arm can implement, I get a little disheartened – primarily since it raises questions on the maturity of the product, and the ability of a customer to support it after go-live. But since customers had started asking – I was ready to start taking collaboration a little more seriously than before.

 

Sameer is amongst the handful of people I know in the whole Enterprise 2.0 and collaboration and social business world who have a sense of reality in terms of what is possible today and what is not.  And he is very passionate about treating collaboration as a business problem, and less as a technical problem. This is EXACTLY what SAP needs in my opinion.  As much as SAP likes to be a technology or a platform company – its strength and leadership is more on the application side.  And with a guy like Sameer at the helm of the collaboration initiative – I am sure that team will find more focus in capitalizing on SAP’s traditional strengths in Business Suite and BI.  And of course, I am not discounting mobile – it is after all 2012, and no one will collaborate without a mobile device today, will they?

 

I think Vishal’s goals on HANA will come to faster fruition if SAP’s collaboration solutions can act as the glue – as in, an enabler. HANA has proven that it is genuinely fast and real time. The only thing standing between Hana and its future glory is in tethering this speed to several business use cases. I think Collaboration has the potential to be that secret sauce. I am looking forward to see what Vishal and Sameer will tell us at SAPPHIRE. I will honestly be disappointed if I don’t hear anything about this.

 

I don’t think for a minute that Sameer is going to have an easy time at SAP. It is a large and complex organization – and he will have to quickly learn how to navigate there. Everything at SAP is all about HANA – which is good and bad. Good since as I mentioned above, HANA could use a hand from collaboration. Bad because HANA will probably suck all the O2 in the room 🙂 . It is a great time for Sameer to be there though – Snabe already made it clear that Collaboration is high on SAP’s agenda. Something tells me that SAP might make an acquisition in this space  – and of course I cannot resist restating my long held view that they should buy TIBCO , and solve multiple problems in one shot.

 

And then there is the SFSF angle. SFSF has Jam, and SAP has Streamwork. There is some overlap – and I am curious to see which one will survive.  Other than for political reasons if any – I cannot imagine any good reason why customers will ever want to choose between two competing offerings from SAP. They already face that difficulty in SAP’s Planning solutions, and I am sure they don’t want an encore.

 

I am also not sure I understand Collaboration team falling under the Analytics organization, instead of applications organization under Sanjay. It probably does not matter – but just does not make sense to me at first sight.  But an even bigger question for me is if there is an engineering organization under Vishal’s group that works on Collaboration technology.  Given the nature of collaboration, I think it makes sense to treat it as a platform wide pervasive thing, rather than as a point solution. To say the least – I am super curious to get updates on how Vishal and Sethu are going to treat collaboration from the Technology & Platform POV.

 

Sameer, I wish you all the very best as you begin this new chapter of your career – and I am sure your leadership and passion will lead SAP to newer heights.

 

 

 

 

 

SAP’s Cloud Strategy – are they good on the 5 M s?


Many years ago, I went to B school in India to get my MBA. Everything there was 5 Ps, 3 Cs and so on. I have tried to stay away from talking in those terms – but then yesterday, Jamie Oswald started a facebook discussion on the use of MBA. That brought back a lot of memories of my time in B school , and I am going to try my hand at this and call it the 5 Ms of  Cloud.

The five “M” s of Cloud to me are Money, Multi-tenancy, Massive Scale , Mobile and Marketing . Lets see how they are doing on each of the Ms.

1. Money

Where is the Money? SAP is a for-profit business, and any strategy for Cloud must have a clear vision on generating profit. They have a HUGE revenue stream from perpetual licenses for Business suite etc. So, they have an advantage over other players like SFDC, Workday etc who do not have anything other than cloud.  SFDC and company are not short on revenue – they just cannot generate a profit now, since they are growing at break neck pace. I think it is the right strategy for those companies to not worry about profit any time soon, and grow as much as they can now – so that when they cut some spending on marketing etc, they will see huge profits in very quick time.

SAP has the opposite problem. SAP has the money to spend on cloud marketing and still show a profit to the street.  Their problem is lack of growth. A few years after Business ByDesign came out – they still have to keep a straight face and say they are close to 1000 customers.  Business One, which has a big customer base, is now going the cloud way according to this news http://www.pcworld.com/businesscenter/article/251354/sap_rolling_out_cloudsavvy_version_of_business_one.html.  It is not a big leap to cloud – B1 will still be available on premises. LOB on-demand solutions that SAP has are all well designed from what I have seen – but I wonder when/if they will bring the next billion dollars to the bank.

2. Multi-tenancy

The general idea here is for the vendor to use a shared database for multiple clients, with common schema for all clients using it. Then by some mechanism, vendor allows a given customer to add some custom schemas on top without affecting the underlying code base that affects every customers.

First off – I think customers don’t care much if the solution is multi-tenant or not as long as functionality provided by the application is useful. In some cases, like the data security legal issues in EU, they might even not be comfortable with the thought that their data is not physically separate from others.  However, if a vendor has to make money off cloud in a SaaS model – it is hard to imagine them doing so without multi-tenancy.  It is hard to force fit multi-tenancy on all layers of existing architecture without serious disruption.  The newer companies who went all out for cloud went for multi-tenancy right up front ( and some like Workday also went all in with in-memory too), and they have a distinct advantage.  I am not sure what SAP’s strategy is in this regard – will they force fit and make existing solutions fully multi-tenant , or will they build from scratch?

Successfactors, from what I could learn on internet, has a hybrid multi-tenant architecture. Now that SAP owns them, maybe SAP can use the abstraction techniques to build a similar model for all their applications.  Although SAP and SFSF both use java, there are differences in how they are architected beyond the usage of java.

Similarly, SAP wants to use HANA as the database for everything – and I do think they should do that ,and hopefully do it at a scale that doesn’t need customers to cough up a lot of extra money. Don’t ask me if HANA is multi-tenant. I am tired of asking SAP that question, since no two persons will say the same answer when I ask. if HANA is multi-tenant, now would be a great time to put it as the database for cloud offerings. It will help cloud solutions be faster, and take less cost for infrastructure due to compression etc. It will also help HANA mature sooner since it will get tested in mixed load conditions at massive scale. That will be enough proof for many on-premises customers to open their wallets and move SAP’s HANA revenue from 100M to a few billions.  Lets see what SAP does about that.

3. Massive Scale

Jim Snabe already acknowledged a few times that the only way to make money from cloud is by massive scale.  But how do you attain that scale? Many ducks have to be in a row to make it happen.

I don’t think SAP needs to cannibalize its on premises stuff heavily for massive scale. There are plenty of upsell/cross sell opportunities at existing clients, and many potential new clients for cloud to keep the perpetual licenses going for several more years.

Pricing obviously is one issue – it has to be affordable. Now that Greg Tomb has a cloud specific sales team, I am sure they have figured out some way of sensible pricing to cloud customers. And obviously SAP needs more aggressive targets to make sure they see a profit in some defined time frame.

Then there is the development issue. SAP has a large pool of developers – but they have competing priorities. Where will they focus between HANA, Cloud, Mobility and On-premises stuff? Will we see massive hiring? I have seen SAP hiring sales people, but not too many developers. But of course, because I have not seen it doesn’t mean that SAP is not doing it. And they need more support people if they need massive scale.  Also note that good developers are not easy to find – trust me, I have tried really really hard with that, with very little success, especially in Silicon Valley.

And then there is the question of data centers. In my opinion, it is not SAP’s core competence exactly to build and operate the kind of data centers it will need if they have to become a big cloud player.  It is a massive investment – and needs very specialized skills.  Not sure if they are going to do it all by themselves – or by buying out a hosting expert, or by partnering with some one. There is also a question on hardware. Will SAP buy a hardware company, buy HW from IBM, HP etc? or will they just contract to someone to build custom machines to spec? Massive scale comes with massive problems. Since SFSF has a lot more cloud customers than SAP does, hopefully they can help solve some of these quickly.

4. Mobile

If SAP is serious about cloud, they have to make sure their cloud strategy is hand in glove with their mobile strategy.  Amongst everything SAP has today – organic and acquired, I think the ones getting the least attention are cloud and mobility. It could just be an after effect of HANA sucking all the oxygen from the room. Hopefully – a combined strategy for both will make it easier for SAP to become a serious player on cloud. I know parts of SAP who are very serious about “mobile first” – but it remains to be seen how much traction it gets across the board.  Everything from Executive alignment to messaging to architecture to development to licensing to support needs to converge between mobility and cloud to make this work.

5. Marketing

This is where SAP has a definite edge – they have a great marketing organization under Jonathan Becher. For this time, I will resist the temptation of taking a dig at SAP’s use of Forbes Advoice :  So who is the target for marketing when it comes to cloud?  There are 3 main groups in my mind – existing customers will want to know what they can do with cloud and why they should care, there is the customer base of workday, SFSF etc that need to hear why SAP is a better bet and finally there are the partners/developers who will resell, host and extend the functionality of SAP’s base offerings.

For the existing instal base – there is already a bit of confusion that needs to be cleared up on overlap and general cloud strategy.  This can only be truly addressed one on one by the account executives, and the partners who are incumbent there.  SAP has a renewed focus on channel – so that will probably work ok.  On the developer front – traditional marketing is counter productive. For them, SAP needs to get them access to software, a licensing and revenue sharing mechanism that is fair and a good sales mechanism. Everyone from CEO to CTO and down the chain from SAP knows this, but the response has been in baby steps. Lets see how that works out when SAPPHIRE happens in May.

That is it – we are about to land in PHX, and I need to get off before the Flight attendant gets mad at me. Let me know what you folks think. never mind the content, I am just very pleased with my clever 5 M s of cloud 🙂