SAP buys Concur and Oracle gets new CEOs – My 2 cents


Just as soon as I came back from lunch , I heard about both news items from SAP and Oracle . Here are my views – strictly personal opinions as always , and has nothing to do with present or past employers .

SAP buying Concur is a pretty good move in my opinion. As a frequent business traveler , the standard SAP solutions are not exactly the ones I think of as my “painkillers” . Concur fits the bill and I know there are millions like me who need their services . What is more – it is a growing business with plenty of scope for innovation given the options to travel are increasing .

For SAP – with Ariba already providing a pretty big network , this is a neat deal to add to their breadth and depth . Success factors fits in too pretty well from HR synergy . And of course there is the core FI and budgeting apps which their instal base already has in plenty . So from a portfolio synergy – it makes perfect sense to me .

I really hope that this does not start another “let’s replatform to Hana” initiative . I am sure hana fits some parts of concur really well – like maybe getting amazing insights across expenses and other corporate data like HR , risk and so on . But a blanket replatforming – especially from a transaction processing point of view , doesn’t look like high value for me .

After reading Den Howlett’s blog on the recent influencer meeting – there was only one question I asked . Was there any mention of M&A ? He said there wasn’t . And I was wondering how SAP plans to get all that top line money organically . Well today answers that question for the most part 🙂 Buying for top line improvement is something IBM, Oracle etc have done before too – so nothing new in that respect . Oracle market cap probably increased about $50B via acquisitions in last 5 years or so I think .

So now my big question is what companies will SAP acquire to bolster the platform side. ? Business Objects is good – but tired . Lumira did not exactly give tableau a run for its money . So maybe SAP can buy a modern company to boost the BI business – like Tableau or Alteryx . It probably won’t be cheap – but probably a good idea to retain BI market leadership .

Or maybe TIBCO – and have a shot at both EAI and BI in one go .

Another option might be to buy into the lower end of the stack like redhat . That could open all kinds of doors for SAP on platform side . In fact – I would rate such a purchase as way more strategic than even tableau.

No idea if any of these vendors – maybe except TIBCO – wants to be sold . And if they did – SAP will probably need $10B+ to buy a couple of them .

In any case – big congrats to Bill McDermott and SAP !

Moving on to Oracle . I am not sure what exactly changed there . Everyone seems to have moved one level up the ladder and Larry retains control of all technology aspects . And while he remains active – it is hard to imagine Oracle having two other CEOs .

There was a rumor throughout that Larry might become Chairman and buy Salesforce.com and make Benioff the Oracle CEO . Clearly that did not happen . But it is not to say that can’t happen in future . The two new CEOs (best of luck and congrats to both) both deserved the job for sure . So the possibility that they move to the board in a couple of years and Benioff getting the CEO job long term is a possibility . We will see I guess 🙂

I think it makes sense for Oracle to make a big noise to divert attention from a rather lackluster financial quarter . Beyond that , I don’t see anything material about the CEO transition .

Social Media In Marketing – Is It Too Much To Ask For Peaceful Co-existance?


While I have no claims at all to be a social media expert – I am an avid user of social media, especially twitter, Facebook and my blogs on SCN and WordPress. All of this week, I have been on vacation in the island of Hawaii – and although I kept away from work email (ok, except checking email couple of times on day 1), I was on twitter and Facebook when time permitted with hardly any “guilty” feeling. Social media never felt like “work” to me so far – and that has now changed.

I was both pleasantly surprised, and also pretty dismayed by what I saw on social media this week.

First about the surprise – when we drove up to Hilton Waikoloa for starting the second part of vacation, I was told I could not checkin for a few more hours. I have been a VERY loyal customer with Hilton, and have had a diamond status with them for several years. So I felt this was unacceptable, and I said so on twitter from my iPhone. To cut a long story short – I got a response in almost real time from Hilton customer service via twitter and then email, and got checked in pretty quickly afterwards. And then the customer service guy checked in again one day later to make sure I am treated well. I am totally happy with this – and needless to say, I will remain loyal to Hilton going forward too. In short – social media was pretty freakin awesome.

While we were having a lot of fun enjoying our little vacation , Oracle Open World was happening in San Francisco,CA. Since I was on and off twitter, I kept on getting infrequent updates on what was happening at the event. It was all rather low key till Larry Ellison took a swing ( rather small swing too, in my opinion, considering what the man usually does) at SAP HANA. Now, obviously SAP did not need any complex predictive analytics to figure out that Ellison will say something in his keynote about HANA.

Next thing I knew – twitter was ablaze with that news. The response from SAP was quite good in the beginning. Vishal Sikka, SAP Board member and CTO, wrote a very good blog on why Oracle is wrong about what they are saying, and why HANA is fundamentally different in architecture. Steve Lucas got interviewed by Business Insider on this topic too. Personally, I thought that was not the best medium for Steve to make his first response, but it was an ok article in general. Both Vishal and Steve sent a few tweets too. All was good till this point, and I did not pay much attention on twitter stream for next several hours.

And when I returned to the hotel room that evening, for the first time since I started using twitter, I felt that following only a relatively small set of people ( 186 as I am typing this) was actually a nuisance. My whole stream had like 90% hana content. It was mostly SAP employees pulsing existing HANA articles (including some of mine) and videos using the Oracle Open world hash tags of #OOW and #OOW12 . Some of the people who pushed out hana content at crazy high frequency are people who in the past have never done such a thing.

My first impression was ” Oh boy, SAP is in panic mode” and then ” This is a centrally organized offensive play – I am curious to see how far it will go” . And this is where my dismay at social media set in.

In fairness to SAP, obviously they had to do something to counter Oracle’s false accusations. And social media being a nascent tool in marketing toolkits – I doubt there were any established “best practices” for this type of social media defense (or offense depending on how you look at this, I guess) for SAP to use.

SAP is considered by many inside and outside the company as an expert in social media. So when SAP does something, I think it probably gives the impression to others that this is “best practice”. That comes with the “halo effect” attached to leaders. And if SAP should continue to be viewed as leaders in this space, they should seriously consider if this is how the future of social media should look like , especially in the context of marketing.

My own opinion is that SAP handled this in a rather heavy handed way. Looking at it with a quantitative lens, probably SAP got the results they wanted. They took over a good part of the traffic with hash tags #OOW and #OOW12 with HANA content. They clearly did a lot more than just story correction. As much as social pundits might enjoy the idea of marketing and corporate communications using social for more things – I think the net result is just more overhead for people who use these platforms, and event organizers. The need for sophisticated filtering just got more important and troublesome, in my mind.

But from a qualitative viewpoint – it looked rather tasteless to me. Taking over someone else’s event tags – especially using sponsored tweets, while that event is in progress is borderline bullying, and that is not what I expected a company like SAP to do. SAP has a long history of being on the right side of these things, taking the high ground. When excessive reaction happens – it just gives an impression that panic has set in. There is absolutely no need for panic – HANA is clearly superior to the EXA* products in what it does.

So far I have personally not seen any customer backlash – but then I have not seen or talked to any customers this week. Next week, I will be meeting several, and then much more the following week at Teched. It remains to be seen how customers view SAP’s social media onslaught.

Unlike SAP, Oracle does have a reputation of taking hard and aggressive stances on these issues. However, apart from a handful of tweets etc, I did not see Oracle trying to return the favor to SAP in real time. Of course it could be argued in two ways.

1. Oracle chose to focus on their own event, and chose not be bothered with SAP reactions.

2. Oracle had nothing to say, because SAP so comprehensively beat them on the topic.

I have no idea what was the real reason, but my instinct is to believe that Oracle, and other SAP competitors might now feel that it is totally fair game to target SAPPHIRE and SAP Teched events and try to take over the social media conversation around those events. SAP has multiple events coming up in the next few weeks – so we will know soon enough which way Oracle will go. I seriously hope Oracle will let it pass this time, and not try to respond in kind. It is not just Oracle – SFDC, Workday et al are all possible competitors who might choose aggressive social media strategies against SAP. For their part, I also hope SAP will resist the temptation of spending significant time at their events responding to Oracle and others, and just focus on their own stories.

Failing which, my back up plan is to take a break from twitter for a while. I used to think till last week that not checking email frequently will kill me. A week of vacation proved me wrong,so I am betting I will survive for a bit with out twitter too 🙂 .

Added http://aragonresearch.com/vendor-wars-customer-events-and-twitter/ This is what Jim Lundy of Aragon Research had to say about this matter. A good read.

Will SAP be completely Hardware Agnostic in future? I am betting it won’t be.


Josh Greenbaum posted this blog making a case for HW independence for SAP. http://insiderprofiles.wispubs.com/article.aspx?iArticleId=6265 .  Josh needs no introduction, and I am a huge fan of the guy. But on this topic, I respectfully disagree with him.

 

I do agree with Josh in that the Apple analogy is not exactly applicable to keep HW and SW integrated for SAP. Jobs had to do it on the front end and hence that was a good option. SAP’s work is in the data center, and not facing the customer. So the customer experience like Apple is not applicable.

 

Hardware agnostic software was a great option when hardware was pricey, many years ago. Hardware does not command such a huge premium anymore. And consequently, software companies need to re-evaluate their strategy on what they will and will not do in their architecture. Being agnostic worked for last 30 years for SAP, but I seriously doubt if it will be the same even for the next 10.  If pushed hard, I might go on a limb and predict that SAP will do something about HW in 3 years or so.

 

SAP was agnostic to databases and operating systems too – and now that they bought Sybase and have invented HANA – is it reasonable to expect them to be agnostic to Databases going forward?  HANA works only on SUSE Linux, and not AIX or Windows or anything else. And Steve Lucas already pronounced that he will get SAP to number 2 position in database world by revenue by 2015 – which is 3 years away. Will that happen by SAP being DB agnostic? no – SAP will go against Oracle, IBM and MS at every opportunity. It is the smart thing to do.

 

Ok back to hardware – if you look at HANA, it is the hardware advances that made HANA possible today, more than software. I have seen jibes thrown along the lines of “throwing hardware at the issue”  as if HW is a bad solution. HW innovations, as I mentioned before, usually keep SW innovations trying to keep up.  If RAM did not become cheaper, and multicore processing did not happen – would HANA have happened?

 

Currently SAP supports multiple vendors for HANA hardware.  For a 1.0 product , it is probably ok to do this since nothing do-or-die will run on HANA today. But as HANA matures, SAP will need to make HANA work extremely efficiently for OLTP loads, and maybe even “real” big data (the petabytes and upwards size). At this point – will SAP try to optimize HANA for seven different vendors? or will it choose one or two? or will it just introduce its own hardware that is more optimized than every one else’s ? I am betting on the latter. SAP might never completely get rid of partnerships with other HW vendors for other reasons – but if HANA is where SAP is betting the farm, then I see no way SAP is going to remain HW agnostic in mid to long term.

 

Also, SAP now wants to be a cloud player – maybe even a leader as time progresses.  Will they buy a lot of HW from IBM and HP for that? or will they do their own HW?  Since all cloud apps are eventually planned to run on HANA – this is an even stronger case for SAP to stop being HW agnostic.

 

I think Oracle is VERY smart in keeping HW and SW integrated. Just because SAP competes with ORCL is not a good reason to say stacks are bad. Oracle is a very good and successful company too.  Going forward, I do expect to see a lot more similarity between ORCL and SAP in how they create solutions.  To retain leadership, these companies will need to lead with both HW and SW.

 

 

 

 

 

 

 

Rapid Implementation – is the promised land finally here ?


Mike Krigsman posted this today morning on his ZDNET blog http://www.zdnet.com/blog/projectfailures/predicting-2012-rapid-implementation-in-focus/ . I tried to post a comment, but somehow that does not seem to have posted. So I thought of posting it here.

 

I am not entirely convinced that Rapid Deployments will bring terrific benefits, but will be watching it closely in 2012.  At the moment , I have apprehensions.

 

1.  If faster implementation is such a big agenda item for Enterprise Software vendors, why do this half way approach of Rapid Implementation? Why not go all the way and offer it as SaaS ? Is the idea to milk perpetual licenses for on-premises software for a bit longer, just by repackaging it?

 

2.  Fixed price is a good thing – but hardly unique. Most ERP projects now are following a fixed price contracting structure. I know no one likes change orders – but change orders happen mostly because of scope definition inaccuracies. Projects are progressive in nature – especially ERP projects. So even in Rapid Deployment, at some point – customers will find out they will need something else on top. Will the software vendors provide such changes for free without a change order? If not – will customers feel happy just by paying a software vendor instead of doing it inhouse or paying consultants to do the work?

 

3. Consumerization of IT – making IT “sexy” and “easy” – is a good thing for the business users. However Rapid depolyments only solve a part of this problem, which is the installation part.  While it is a good start – will customers see enough value with just one part of the puzzle solved?

 

4. Rise of CFO’s office is definitely not a 2012 thing. CFOs have always taken active role in IT (and other) investment decisions.  CIOs very rarely report to CEOs, they either report to CFO or to Chief Procurement Officer.

 

5. Who supports Rapid implementation solutions after the vendor walks out of the door? Will there be enough skills in the market for outsourcing companies to provide such support?

 

6. What about integration costs? Stand alone systems always cost more in the long term. Once the rapid implementation goes through enhancements and integration with existing systems – will it offer any benefits beyond other on-premises solutions from the same vendors? And if you enhance a prepackaged solution – will a vendor still provide standard support ?

 

Happy New Year !

 

SAP HANA vs ORACLE Exalytics – My initial thoughts


I was in Dallas this week for some training, when ORACLE announced Exalytics. Here are my initial thoughts for whatever they are worth.

1.  In terms of vision – I think SAP scores.  SAP has clearly articulated how HANA will evolve, and they have stuck to their guns. ORCL roadmap for exalytics is not exactly clear, and since they also have exadata and others exa-systems probably coming up – they need to more clearly articulate near term and mid term roadmap. And while they do that, SAP can always tell the world that it is a validation of SAP’s strategy.  However, not all my buddies agree that SAP has the right to call in-memory as “their” strategy

2. Legacy : Both SAP and ORCL have old technologies to “draw inspiration” from . ORCL had timesten/Oracle RDMBS etc to learn from, and SAP had TREX/ P*time /MaxDb/IQ to learn from.  Despite jabs at each other that it is old technology for the other guy – neither side has a great story to nail the other in my opinion. If anything, Oracle has more DB experience than SAP – but whether the RDBMS experience is useful for in-mem computing remains to be seen.

3. The talk on collapsing layers etc – I already wrote my view on this last week https://andvijaysays.wordpress.com/2011/09/27/is-collapsing-layers-a-good-thing-help-me-understand-please/. So I am not going to rehash all of it.

4. Product introduction to market : SAP used SAPPHIRE and Teched to lay out their HANA story. OOW is a huge stage – and ORCL did well to use it to bring this out.Both companies used CEOs to do it, and I think SAP did an all around better job. From using social media to its advantage – I think SAP hands down beat ORCl to it.

5. Response to each other’s product :  Larry poked fun at Hasso when HANA came out. SAP returned in kind via tweets and Forbes advoice. Here – in my opinion, SAP did not do too well, especially in the Forbes advoice. In general, I think the usage of Forbes advoice does not do SAP any favors. Today morning I read a similar blog from Aiaz Kazi on SDN, which was much better.  The flurry of responses from SAP – tweets, advoice blogs, videos etc gave me an impression that Oracle touched a raw nerve.   ORCL barely mentioned SAP – they seemed to be targeting IBM and HP mostly, but SAP seemed to be the one who reacted the most. There was no need for such a hurried reaction – one statement from Vishal or Sanjay, and then a more thought out response from Bangalore or Madrid events would have been more effective in my opinion. But then, I am not a media or marketing expert .

6. Throwing hardware at the problem : if high performance is your big goal, then every layer should be owned by you. Otherwise, you cannot optimize equally for 5 different hardware offerings – even if all 5 are superior HW than Oracle’s boxes.  I buy into the argument that being open adds flexibility, but there is then the trade off for cost of integration and efficiency loss.  If cloud is where you want to take this to eventually – then it is all the more important that you own all layers – not just for technical reasons either.  So I won’t ding ORCL here – I think they are smart to integrate everything into a true appliance. SAP’s appliance concept is more loosely defined – software from SAP and HW from a partner.  Good thing is that I know customers on each side of the camp. So both models will sell – question is how many can you convert from the other side to yours.

7.  From a datamart perspective – I don’t see any big difference between Oracle and SAP. Either one can fit that.  So for current version of HANA, the only advantage for SAP is that they moved first. It won’t be difficult for ORCL to catchup and compete. But this is table stakes. Other than for branding and marketing reasons – I don’t think either company is betting the farm on data mart scenarios bringing in the next billion dollars.

8. Oracle has a cash cow DB market  they need to protect. HANA is going to threaten with taking away a small install base – the BW customers running ORCL RDBMS. And then SAP will go after a bigger install base – Business suite customers on ORCL. The current announcement does not protect ORCL in these areas.  Unless some release of ORCL in future can beat HANA in price and performance as a DB for BW and Business Suite – SAP can pretty much win that battle.  If SAP is smart about of execution, they can utilize a first mover advantage to get HANA under BW and Business suite faster, and not give enough time to ORCL.  But then – execution is not an easy game to excel.

9. Where are the killer apps ? I ranted last week on this topic from another angle https://andvijaysays.wordpress.com/2011/10/02/enterprise-apps-change-the-rules-or-they-will-change-you/ . At least for now, SAP is ahead of this game. They have announced a bunch of apps, and will hopefully step up on execution and a few of them will get “killer” status.  ORCL is late to this party, and has ways to go to catchup.

I am continuing conversations with people who I respect in this space, and as i find more – I will post updates.