SAP gets SuccessFactors/Dalgaard, SFDC gets Rypple/Wookey – Game on!


Last few days have been a lot of fun in EnSW world in terms of acquisitions. Two that picked the most interest in my mind were SAP buying SuccessFactors and SalesForce buying Rypple.  It is not just the companies alone – it is the people who are going to run them that interest me more.

Lars Dalgaard founded SuccessFactors and is CEO there. He is now going to run SAP’s cloud offerings. From everything I have heard so far – he is a prize catch for SAP, and is probably a future CEO or Co-CEO candidate. But in the short term, I think the role he will play really well will be to go toe-to-toe with Marc Benioff and other cloud company CEOs. SAP needs one such player in their executive team to go play the offense side of the game. Defense is pretty well covered with the talent they have already.

Then we heard Marc Benioff got John Wookey to join him at SFDC. And today we heard he will be the head of SuccessForce, the new name for Rypple. What a master stroke – I tip my hat to Benioff. He learned the game at the knees of the best player and coach – Larry Ellison. And by all counts, he is as good as Larry now in upsetting competitors, and does not mind giving Larry himself a hard time. SFDC is a good partner of Workday, but that is not whom they bought. They insist there is no conflict with workday regarding this acquisition – but I am not buying this fully.

The beauty of this game is that Benioff did not pay anything hefty apparently for Rypple from what I read on internet articles and press releases. SAP paid a pretty good premium for SFSF. I am now trying to find out how much similarity exists in the solutions.  What caught my attention is that the hippest company on the planet now – Facebook – uses Rypple.

In terms of technology – I don’t see any one having an edge here. SFDC is not exactly spanking new technology, and neither is SAP. Both will have to integrate new stuff into existing code base somehow.  In terms of fun to use – Rypple has an edge on gamification, while SAP is still “working on it”.

What about talent – this is where I think hiring Wookey was Benioff’s master stroke. Wookey has a cult like following. I know many of his former employees who will lay down on tracks for him. Now the question in my mind is how many of them will quit their current jobs – some work in SAP too – and go join Wookey in his new team. If SAP has anything to worry – this potential for talent drain is the biggest in my opinion. Of course Lars Dalgaard will bring his own team into SAP, so this might not be a big deal after all. But a lot of ground SAP covered on Design Thinking etc might be lost if they lose key talent.  I hope SAP takes care of their top talent in OD appropriately.

Of course I expect SAP’s lawyers to go after SalesForce for renaming Rypple as SuccessForce, which sounds pretty similar to SuccessFactors. However, since SAP will probably not keep the SuccessFactors brand alive – I am not sure if they will do this. But it will be an effective way to delay the transaction from closing.  Benioff knows the mileage ORCL got on PR when they went after SAP in courts. So even if he loses the battle on the name itself, he might get enough to consider himself successful in the PR war.

I am pretty curious on what will happen to Workday now.  They will for sure have a fantastic IPO, since SAP and SFDC have ensured great valuation by their actions. But will some one remaining in the market scoop Workday up on an exceptional premium?  I expected SFDC to buy them, but that is not how it played out. Lets see how that plays out. Either way – Workday founders will retire rich.

Big enterprise cloud players now need a good middleware company to strengthen their portfolio. There has been plenty of speculation of SAP buying TIBCO. But instead, they announced a partnership. Fair enough – but I think they are a prime acquisition target now .  It could be the differentiator between Market leader and the rest. But I could be totally wrong here given TIBCO has stayed neutral, despite growing to Billion dollar size.

Q1 of 2012 will surely be a lot of fun – but who knows, we might see even more exciting news before 2011 says good bye.

Leaving on a Jet Plane, thinking they could have done it better


I am in Trivandrum Airport(Capital of Kerala,the southern most state in India – and also my hometown) now, at the domestic terminal waiting for the flight to Bangalore . There is no internet access here, so by the time I post this, I will probably  be in Bangalore, Frankfurt or even Boston.

I am on my way to Boston, MA to attend the SAP influencer summit, and this is the shortest of the 3 flights I have to endure to reach Boston. This airport now has a new international terminal, so they shifted the domestic flights to the old international terminal. Needless to say, the whole place has a big facelift now compared to any other time in the past that I can remember.

The security here is impeccable – they do a rather intrusive (by US standards) pat down before they let you in. And they seem to physically check about 50% of all carry on bags. In my childhood, they still used to do this to some extent – but used to let politicians, big company executives and the like go through without any hassle. Now they appear  very strict – and if you refuse the pat down, you can just leave the airport. No middle ground here !

The lady at the Jet Airways counter that checked me in told me – “you have 2 options to check in your bag. 1. I check it to Bangalore, and you take it physically to Lufthansa and check it again. Or 2. I check it all the way to Boston, but there is no guarantee it will reach there”. Hmmm…hard choices indeed. Seriously ? Is that even a choice to give a passenger? I appreciate the advice, and will keep it for future reference…may be 🙂

Air travel in India has been totally below par for me, and I am just very frustrated at the moment with how this Industry does its customer facing work.

Let me take it from the top – from the moment I landed in India few days ago, in Bangalore airport. The immigration guy asked me where is the immigration entry stamp in my passport for the last time I was in India. I said I know the approximate date, but no idea where the actual stamp itself is on the passport. He asked me to search and show him, before he lets me enter the country. I found it eventually amongst a million other stamps, and he solidly wasted 20 minutes of my life that I will never get again. On the plus side, I think I just found out a better game than sudoku for frequent fliers – it is called spot the random stamp.

I picked up my bag and tried to go over next door to the domestic terminal to catch a flight to Kolkatta, which was about 4 hours later. Well – no dice. The security dude won’t let me past the transfer area to the Air India counter for another 2 hours. He wouldn’t give me any reason – more like “because I said so”. So I hung around there, without even access to a decent bathroom. The one I had access to – well, let me just say I can’t describe it to you without both of us throwing up.

So two hours later, I go to Air India counter. There are 5 counters, and about 25 Air India staff there. As soon as they saw me – they said “Pls wait for 5 minutes – we won’t start till 4AM”. I waited, and then it just erupted in to chaos. They could not handle a queue – and all the passengers started jockeying for position and so on. Few minutes later, 22 out of 25 people manning the counters went over to help the lady in one counter who could not get her system to work. You can imagine the speed at the other 4 counters at that stage. It was a good thing I had 4 hours to check in.

Onward to the gate now and I will skip the minor inconveniences till I got into the flight. Well – maybe except the fact that it took about 10 people in uniform to board one flight (any wonder these airlines cannot keep their cost structures under control?). This was the first Air India flight I had taken in maybe 10 years or so. And it was as pathetic as the last time. Most of the seats had duct tape holding pieces together. The 3 flight attendants had absolute boredom writ large on their faces. Just looking at them made me yawn. They did serve a hot breakfast (of sorts) in the flight. After 2 hours of fog delay, we took off. The silver lining was the skill of pilots – amazing take off, cruise and landing despite the weather.

My bag was the first to come off the belt, thanks to the priority tag. And it had a big broken piece of what used to be a handle hanging from it. Par for course so fa, eh?.

The flight out from Kolkata – despite me being mentally prepared -was just as bad. It was Jet Airways this time, the modern airline – unlike Air India. I had higher expectations. I soon found out that Kolkatta air must be heavier by 3 KG than Phoenix Air, because they charged me for excess baggage despite me not adding any thing to my suitcase.

We took off on time, and arrived on time. Of course it took – again – 10 people to board passengers into this one flight. For a flight leaving at 6 AM and flying 2.5 hours to Bangalore, I expected it to have breakfast – either complimentary or for purchase. No luck again – and I just drank glass after glass of water till I landed. The flight attendants were all nice, but the pilot needs to go back to a simulator to learn how to land a plane without making passengers feel that their kidney and brain swapped places in 2 seconds.

I have been reading in the papers that the Airline industry in India is in some serious trouble, and that government is trying to help airlines become profitable. I know India generally has a socialist outlook historically about these things –  so I am not holding my breath on anything good happening to change this. But if there is ever a moment to let Darwin get his due, now would be it. Let the crappy airlines all die, and let more competitive, customer friendly ones take their place. Millions of passengers will be eternally grateful.

Believe it or not – I am now EAGERLY looking forward to flying US Airways flight from BOS to PHX on Wednesday. Now that is saying a LOT, as many Dividend miles elite members will agree.

SAP buys SuccessFactors – a few random thoughts


I heard the news of SAP buying SuccessFactors while in the cab to PHX airport for a last minute business trip to India. And I am typing this from the plane – the first of four that will take me to Kolkata. On my way back from India, I will get to attend the SAP influencer summit in Boston, MA. And I think I will have to throw away all the questions I had for SAP so far, and ask some on its focus on cloud. Too bad that GoGo internet is not working for me in this flight, else I wanted to contact a few people I trust to get some additional input. I guess I will post this from Denver airport before the next flight takes off.

HCM has historically not been a core focus area for me, and is probably the only part of the core Business Suite modules I have not played with hands-on. But over the last couple of years, HCM has been constantly getting on my radar, and I even put it in my top trends in SAP consulting opportunities for 2012 in my SCN blog.

The first thought that ran through my mind when I heard the news was “The founders of Workday must be partying hard”. I think SAP buying Workday sets them up nicely for bigger valuation. I know the company keeps saying they are not for sale – but then what else do you expect them to say? . Either they will have an extremely good IPO, or they will get acquired at a high premium by another company. May be SFDC will buy them? or Oracle?

SAP’s leadership team has a big job to do now – decide quickly how to integrate this new acquisition into existing architecture, and how to rationalize the portfolio. There are two major considerations in my mind – there is the platform play compared to ByDesign, and there is the solution play compared to CareerOnDemand, Business Suite etc. And of course, I assume Vishal Sikka will want to make this work on HANA, BI 4.0 and SUP too, with probably SUP being the more important one for now. I don’t think ByD or CareerOD will survive due to overlap.

Actually, I think the bigger worry for SAP is ironically their own talent management for cloud. They could not keep Wookey. All that talk about him moving out for family reasons don’t ring true anymore once he joined SFDC. So what about Lars who will come in now – will he stick around long enough? And even more important – what about the excellent team in place now for OD in SAP? Will they stick around long term and re-engineer everything new to whatever is the new platform? Will SuccessFactors team integrate well with legacy SAP? More than anything else – that is what would probably dictate success and failure for SAP in cloud.

Communication to customers and partners is key. This is where I think SAP needs the most focus in short term. They need to figure out their roadmap at the earliest, and start talking to customers and others in the ecosystem. After the experience with BOBJ and Sybase, I think SAP would know how to do this effectively. I did like one thing – I saw plenty of tweets from existing cloud team at SAP saying they are thrilled. I am looking forward to talking to them soon to get some details.

What about customers? I am going to India now for some customer meetings. I do intend to ask them what they feel about SAP’s cloud strategy now. In my opinion, customers of SFSF should expect SAP reps opening up many opportunities to buy more solutions. I am not equally sure of the converse. Existing SAP customers I guess will be in a “wait and watch” mode. SFSF reps might offer better deals now to close out – but I am in two minds on whether this is good or bad to jump into. And the reason is – I don’t know what SAP will do in terms of rationalization. Once we know the roadmap more clearly, I do expect SAP to have big time cross selling opportunities, and customers to have many solutions from one shop.

Bundled sales is the name of the game for SAP to get to the 20B plan for 2015. So far, Bill McDermott has been extremely bullish on pipeline for HANA, mobility and now also on SFSF. If that holds – I expect him to up his plans to something more than 20B, and even declare a bigger EPS plan for 2015. 2012 will be a very interesting year in SAP land. Can’t wait to see what else will happen. Parting thought – will there be few more M&A deals in 2011 in Enterprise Software? I guess there will be.