Job Opening: $400,000+ Per Year Application Developer

Ever since I read today that Goldman Sachs formerly employed a $400,000 programmer, I have been contemplating a career change. What software could Sergey Aleynikov develop that you or I couldn't also develop for $400K per year? Whatever, he knows must be valuable because he apparently left the Goldman job headed for a better one that would have paid him 3 times that amount. He would have that is, if he hadn't been arrested by the FBI.

Sergey is probably not writing any code right now, because he has been charged with "theft of trade secrets" by the FBI after he alledgedly stole codes used for sophisticated automated stock trading, improperly copied proprietary computer code, and then uploaded it to a computer server in Germany.

I don't know the exact details of the blackbox trading application that Sergey wrote to generate huge bonuses for the Goldman traders. But, I bet it involves a mixture of computational finance, low-latency pattern detection, and some voodoo rules from some hotshot trader (like Jim Cramer back in the day).

Shhhh. Use A Complex Event processing Platform (CEP)

Keep this quiet. You can use a complex event processing (CEP) platform to easily detect the patterns in the voluminous stream of market event and then initiate the trades. Don't tell your prospective employer that you intend to use CEP because then they won't want to pay you the big bucks anymore. Instead, they will just buy a CEP platform.

 

 

 

Do Application Developers Need To Change Their Ways?

Controversies and eccentricities notwithstanding, Michael Jackson is a brilliant musical artist and performer. I was acutely aware of this on February 2009 in London after 3 colleagues and I went to see the new West End show, Thriller Live at the Lyric Theater after Forrester's EMEA Enterprise Architecture Forum. If you are in London, go to this show! Go, especially if you have no rhythm because you will probably find it there. The show is a celebration of Michael's breathtaking musical career shown through the performances of very talented singers and dancers. The hits are nonstop.The night flies by leaving you wanting more. Go.

Michael's sad and untimely death on June 25, 2009, reminded me to finish this blog post which I originally started after being inspired by one of the songs in the show, Man In The Mirror.  

Do Application Developers Need To Change Their Ways?

In his reflective, 1988 hit song Man In The Mirror, Michael Jackson observes "If you want to make the world a better place/ take a look at yourself and make that change." Michael goes on to declare, "I'm starting with the man in the man in the mirror/ I'm asking him to change his ways." The implication? We should all look in the mirror once in a while to become better. (watch on youtube)

What if application development professionals look in the mirror? What changes would you make to develop better applications?

Here is what I think many application developers would see in the mirror and would change to build better applications:

• Understand the business in your bones. Many developers think they understand the business because they listen to business stakeholders and users. Listening is not enough though because users and the business can not always articulate what they want, what they need, and most importantly, what is right for the business. Truly great applications require a deep understand of the overall business context (not just for the app you happen to be developing). Developers need to continue to listen, but they also need to observe and empathize with business stakeholders and users.
• Be a developer not a coder. Too many developers give in to process and tools.The result: They become mindless coders rather than people who create great applications. Developers should not play second fiddle to business analysts, project managers, or architects. But, developers cannot rise to this if they do not know the business in their bones.
• Use new technologies, but only when they make a difference. Sure, once you use a power nailer you won't want to go back to a hammer. When it comes to application development tools there is always a new "power nailer". Developers need to resist the temptation to jump on new tools and technologies too quickly because this can often be a distraction with developing great applications and trends sometimes die quickly. For example, Ruby on Rails or the latest version of Eclipse is not going to make a difference in creating a great application. Developers need to adopt new tools and technologies, but for the right reasons.
• Become architects again. While frameworks and design patterns can save development time and provide architectural consistency, they can also be constraining. Developers who have become framework zealots or drunk on design patterns see solutions only in these approaches. If a problem doesn't quite fit, they sometimes tweak and tweak and tweak to try and make it work. Developers need to create an application architecture that is appropriate for the applications. The framework or design pattern should be a slave to the application architecture versus the other way around.

Readers: What other changes do you think applications developers need to make to build better applications?

Whatever you may see in the mirror, "make that change."

Thanks,

Mike Gualtieri

 

Cloudmania: Developers Need A Personal Cloud

Cloud, Private Cloud,     fill in the blank   . Personal Cloud. Don't be surprised if you hear about the Personal Cloud. It is the next natural progression in Cloudmania. Don't get me wrong. I am a fan of Cloud computing as an exciting new deployment option for applications as I said in a previous post. But, this is a classic case where many cloud vendors are trying to make a case for why cloud is the uber solution to everything - including a subject that is near and dear to me - application development.

Can The Cloud Improve Application Development Effectiveness? No.

The case I have heard very recently about how the cloud can improve application development goes something like this. Developers have a need to spin up complex environments for development and the cloud makes it easy to do that. In addition, the cloud makes it easy to provision test environments. First of all, most developers are working on their own computer. For example, Java developers will have an IDE like Eclipse that is integrated with a Web Server, possibly a local database, and perhaps a connection or two to some outside "development" databases. As developers write code, they are constantly testing. Write a few lines. test. Write a few more lines. Test. Debug. Write a few more lines. Check in the code. Come back tomorrow. Every developer knows this develop-test cycle. They do it constantly throughout the day.

Cloud Or No Cloud, Application Developers Still Have To Write And Test Code.  

Every few days or perhaps every couple of weeks, a couple or JAR files or perhaps and EAR file will be deployed to a test or UAT machine that is configured for testing by QA or end-users. I can see an advantage to the cloud for provisioning test environments, but there is no advantage for developers because they are working locally. 

Obligatory Moore's Law reminder: Computers including PC are getting faster and faster.

So why would we want to reverse the trend of using all the computing power available on the desktop for developers? We would not. Because developers who write code are also constantly testing that code as they work, the best case is to keep the dev environment local and use application lifecycle management(ALM) tools for collaboration. That is just more efficient.

Developers Need A Personal Cloud

What developers could use is a Personal Cloud that would allow them to configure their local environment in multiple way and take it with them wherever they go. I know this sounds like virtualization and it is to some extent, but extend PC virtualization with cloud concepts and you get the Personal Cloud.

The Personal Cloud is not just for developers either. Everyone should have a Personal Cloud that follows them around (the mobile cloud is still the Personal Cloud) while at the same time making the most of the increasing amount compute power available on personal computers.

WIM: With all of these clouds floating around cloud interop standards will start to emerge making it even more confusing for customers to decide which way to go.

Forrester's IT Forum 2009 - Come see your favorite speakers!

Forrester’s IT Forum 2009 is fast approaching — May 19-22 in

Las Vegas

At this event, you will learn how you and your app dev and program management peers can move beyond the oft-cited, overly simplistic mantra of "cheaper, faster, better" to creating substantive, lasting value for the enterprise. Forrester’s IT analysts will examine critical issues at the intersection of business and information technology. We have great speakers this year, with keynotes from:

Guest speakers

David Barnes, Senior Vice President and CIO, UPS

Chris Capossela, Senior Vice President, Microsoft Business Division, Microsoft

Dana Deasy, CIO and Group Vice President, BP

Gary Heil, Founder and Consultant, Center For Innovative Leadership

Robert W. Moffat, Jr., Senior Vice President and Group Executive, Systems and Technology Group, IBM

Tom Peck, Senior Vice President and CIO, Levi Strauss & Company

Richard M. Soley, Ph.D., Chairman and CEO, Object Management Group

Check out some of the app dev & program management track session highlights!

Showdown At The Project Corral: Traditional Project Delivery Meets Agile And Lean
Mary Gerush, Margo Visitacion, and Dave West will be leading a discussion on the tension between traditional project-oriented approaches to deliver software applications, versus newer concepts like Agile development and lean process management, that challenge traditional project delivery processes. This session will explore the benefits and challenges of traditional and disruptive project delivery practices, and will provide actionable recommendations to streamline processes and improve outcomes by incorporating Agile and lean approaches:

Developing Applications Using Advanced Information Architecture
Mike Gilpin and Noel Yuhanna will report on their in-depth research into a number of new case studies that highlight the various technologies and approaches associated with next-generation information architectures. You can use these new approaches to implement new applications and business intelligence dashboards, and the session will offer guidance on how best to take advantage of new ways to access information.

Bringing Product-Centric Software Development To Service-Sector Organizations
Roy Wildeman applies key product life-cycle management (PLM) principles and practices from the manufacturing sector to services firms in industries like financial services, government, and telecom services. But the traditional PLM application’s manufacturing-oriented capabilities don’t always fit the bill for services firms — requiring product development IT professionals to seek out and assemble more complementary application options like product catalogs, publishing functionality, and other point solutions.

You can visit Forrester.com for all of the relevant information. If you’re attending, here are some great ways to maximize your experience:

• Check this blog for our in-depth updates from keynotes and track sessions.
• RSVP on our Facebook Event page, and network with attendees.
• Follow us on Twitter as we plan and launch the Event.

If you can’t be there, you can still stay connected with these platforms. But we hope to see you in Vegas!

News Analysis: Oracle Waives Fees On Extended Support Offerings

Oracle President Charles Phillips pleasantly surprised Oracle Applications User Group (OAUG) Collaborate 09 attendees this morning during his keynote with the decision to waive Extended Support fees for a number of product lines through 2010 and 2011. As customers and prospects face one of the worst global economic crises, proactive relief on support and maintenance fees could not come at a better time.  Summary details of the program can be found in Figure 1.

Figure 1. Oracle's Revised Support Policies

(Source: Oracle Corporation)

Proactive change in support offering creates a win-win

Oracle's move to address the support issue may stem from a variety of reasons but the main focus centers around improving the vendor-client relationship for a few reasons:

• Responding to the global economic crisis.  Oracle has taken the initiative in listening to customers, partners, and industry watchers about customer reactions to the escalating costs of software maintenance.  Oracle's Applications Unlimited and Lifetime Support Programs have been successful in retaining acquired customers and have shown customers that acquisitions need not be slash and burn with minimal reinvestment.
• Providing more time for customers to adopt Fusion Apps. With the slow down, Oracle may be anticipating slower upgrade rates.  While no clear date and product road map has been communicated to customers, removing the price pressure on extended support fees provides customers with some breathing room on upgrade timing.
• Mitigating attention on high profit margins and its M&A strategy. After touting record profit margins near 50% and continuing its M&A strategy with the announcement to acquire Sun, customers have become concerned about the impact of less choice in the market.   This move may appease regulators and industry watchers and show that Oracle has some self regulating policies.

The bottom line - user groups should now determine the minimum R&D percentage of investment from revenues

Oracle continues to gain economies of scale with each acquisition.  The good news - Oracle has the capacity to reinvest $2.6B per year into R&D and the real dollar amount has increased from 1.9B in 2006.  While this is a large figure, the bigger and more important issue - what percentage of the maintenance revenues have been reinvested?  Here's where we find a slight drop from 12.6% to about 11.6% in 2008.  Consequently, like SAP's users and user groups, OAUG and the other Oracle users and user groups should begin to track the ratio of R&D dollars that tie back to the amount of maintenance revenue.   In fact, they may want to take a look at the SUGEN KPI's and see if they are applicable to Oracle's environment.  R&D spend from maintenance and the need for Third Party Support options will be the key ownership issues for the next 5 to 10 years.  In any case, the need for preserving and strengthening independent user groups will be one effective check and balance in the consolidating world of enterprise software.

Your POV

Do you feel Oracle made the right move?  What have your experiences been like with Applications Unlimited and Lifetime Support?  Send me a private email to rwang@forrester.com.  Posts are preferred!   Thanks and looking forward to your POV!

Copyright © 2009 R Wang. All rights reserved.

Reposted from http://blog.softwareinsider.org

News Analysis: SAP and SUGEN Make Progress on Enterprise Support

Since SAP's announcement of its single tier Enterprise Support plan last July, customers have continued to express dissatisfaction.   In response to such complaints, the SAP User Group Executive Network (SUGEN) of 12 SAP user groups and SAP have been engaging in discussions around the value derived from this new offering.  This morning SAP and SUGEN announced an agreement on three key areas of the Enterprise Support offering:

• Defined list of key performance indicators to measure the results of SAP Enterprise Support (ES) services. As part of the agreement, the value of ES will be measured by through the jointly agreed SUGEN Key Performance Indicator Index (SUGEN KPI Index).
  Based on the press release and informal conversations, the four areas covered include business continuity, business process improvement, protection of investment, and total cost of operations.  No public details have yet been provided on the specific metrics but there is an expectation for customers to realize value within a four year time frame of the benchmarking program

  POV: The four areas measure how choice, value, and predictability of investment come together in the overall maintenance offering.  If successful, this represents a unique and transparent approach to demonstrating value in maintenance.  In the coming weeks, SAP users will want to seek details of the specific KPI's and determine how those KPI's will be measured on a consistent basis across different types of organizations.

• Joint benchmarking program to define and measure how SAP customers may derive value from ES. With agreement on the KPI's in place, a formal benchmarking program will be instituted to provide baselines to quantify value.   SAP and SUGEN have agreed on the parameters of the representative customer sample.  SUGEN will choose the customers.   Importantly, an independent party will validate results will conduct quality assurance and independent validation of the results.

  POV: Benchmarking remains the critical factor in this program.  SAP customers should pay close attention for balance in the representative customer sample.  Key variables include level of internal SAP competency, size of organization, complexity of environment, number of instances, industry, and geographic focus.   One can not overemphasize the importance of this program.  The results not only impact future maintenance fee increases, but also provide important benchmark data on SAP operations.

• Changes to the 2008 pricing program for current contracts that may will be migrated to ES. Based on the KPI program, SAP agrees to postpone subsequent price increases pending the realization of targeted improvements measured by the SUGEN KPI's.  These changes have been made to the 2008 pricing program for ES.  Instead of ongoing increases until 2012, the new program ends in 2015.  As stated in the press release "Starting in 2010, the price of SAP Enterprise Support for existing customers will continue to increase based on individual contract terms but will not be higher than a yearly fixed upper cap. This translates to an increase average of no more than 3.1 percent per year from 2010 onwards. The price of SAP Enterprise Support will be capped at 22 percent through 2015. "

  POV:  Two scenarios emerge.  Should the value of ES not be realized, then the price increase will not pass.  However, customers will more likely face a more gradual price increase to the 22%.   This may prove to provide some relief for recession strapped customers.

The bottom line - progress on Enterprise Support issue may result in a win - win for  SAP customers

Expect customers to take the news with cautious optimism.   Should the benchmarks succeed, customers may gain value.  Failure to meet targets meet a freeze on maintenance.  In any case, this is welcomed news and provides a hard fought win-win for the customer and the vendor-client relationship. Congratulations go out to SUGEN and SAP for coming to a common ground!  This shows the importance of preserving independent user groups and the role active users play in shaping the overall agenda.  The one thing left in the choice, value, predictability equation is choice - meaning a tiered maintenance program or access to third party maintenance.  With the less than positive Q1 earnings report announced today, let's wait to see how other chips will fall into place.

Your POV

Do you think SAP met its promise to SUGEN?  Will this help you with your commitment to SAP?  Do you feel SAP has now done the right thing?  Send me a private email to rwang0 at gmail dot com.  Posts are preferred!   Thanks and looking forward to your POV!

For more POV's:

Dennis Howlett - April 28, 2009 "SAP software revenues plummet, announces new deal on maintenance"

Copyright © 2009 R Wang. All rights reserved.

Reposted from http://blog.softwareinsider.org

News Analysis: Oracle Acquires Sun, Enters Open Source and High End Computing Markets

Oracle announces a $7.4B deal for SUN just a few weeks after the IBM deal fell through.  Oracle now controls a significant major open source alternative and a nice piece of the high end computing business.  These open source components have been viewed as the alternative to the dominance of the Big 4 or MISO (Microsoft, IBM, SAP, and Oracle).   Oracle also gains an innovation engine with the assets of Sun's Labs groups which pioneers a series of innovations that include potential enterprise solutions for the virtual world.  The deal puts Oracle on a continued path to acquiring deeper components of the enterprise computing stack.  Here's how the stack looks:

• Middleware - While Java and Solaris may appear to be the crown jewels in the deal, Oracle has managed to slowly buy out other stack competitors (i.e. BEA and now Sun) and integrate them into the Fusion Middleware suite of tools for custom development and its own Fusion Applications product lines.   Sun complements BEA.
• Database - Oracle takes out the low cost competitor to SQL server on the low end and gets a shot at converting them to Oracle DB instead of IBM.
• Hardware - Oracle gains another great recurring revenue (maintenance) base with Solaris.  This complements Oracle's large and profitable database installations on Solaris that would have fallen prey to the IBM DB2 team.

The bottom line- Oracle succeeds at post merger integration where others often fail

Despite skepticism, Oracle has made these acquisitions work from a financial perspective, with year-over-year quarterly profit growth that has generally been well above 20%. Some key success factors include:

• Acquiring companies for the recurring revenue. Oracle's first set of deals (i.e., PeopleSoft and Siebel) focused on installed base acquisitions that provided a strong foundation of support and maintenance customers. This base of recurring revenues provided Oracle with the room to continue strong R&D investment while reducing overall costs.  Oracle takes out another highly profitable maintenance base adding pressure to competitors.  In this acquisition it gains the profitable Solaris revenue stream while moving into a maintenance business for open source software.
• Eating its own dog food. In the late 1990s, Oracle made a major commitment to re-engineering its back-office processes using its own applications. As a result, Oracle has become highly efficient, with a ratio of general and administrative expenses to revenues of 3% to 4% - in most calendar quarters, one percentage point lower than SAP's and even lower than other large software vendors like Microsoft and Symantec.  Expect Oracle to put the Sun assets into its arsenal of tools for delivering software innovation.
• Mastering post-merger integration. With two former investment bankers at the helm, Oracle has one of the best post-merger integration teams in the business. Oracle's profit performance signals that it has been able to add new companies and their stream of revenues while keeping costs down.   Sun will provide considerable synergies in the short and long run.

Your POV

What do you think abou the acquisition of SUN?  Did you count on SUN as your open source stack alternative to the Big 4? Send me a private email to rwang0 at gmail dot com.  Posts are preferred!   Thanks and looking forward to your POV!

Copyright © 2009 R Wang. All rights reserved.

Reposted from http://blog.softwareinsider.org

Tuesday's Tips: Five Simple Steps To Reduce Your Software Maintenance Costs

Maintenance costs represent a major part of the software budget and the largest growing source of revenue for software vendors.   In fact, an aggregation of the past four quarters of software vendor financial results definitively demonstrates double digit declines in new license revenue, even more exacerbated by the evils of currency flux from the strong dollar for US based vendors. Not surprisingly, vendors are hard at work vigorously protecting their 70 to 80% margin in maintenance revenues just as clients and readers of this blog now zero in on this line item as the major concession target during contract negotiations.  Here are five steps (i.e. A,B,C's to software maintenance) you need to do now*:

1. Assemble all the relevant contract information. Aggregate all your contract information and vendor interaction history so that its centrally accessible.  Determine the value of your maintenance agreement. Examine how often you call for support, apply patches, conduct upgrades, and require technical assistance.  Then calculate the total support and maintenance spend.  Most customers will find that for $1M a year, 5 support calls can be pretty pricey at $200k a pop, especially when upgrades aren't in the picture for the next 24 months.   The vendor better show up the next day with white gloves and be there in person.
2. Breakdown the total cost of shelfware. Simply put, shelfware is the software licenses purchased, not deployed that is incurring support and maintenance fees.  That great deal 3 years ago you got on 1000 user licenses, when you only ended up using 800, now comes to bite you in the butt.  Calculate the maintenance fee you have for 200 user licenses at $1000/user which is $200,000 X 20% annual support and maintenance X 3 years.  At $120,000, you had better make up the "big" discount you got for buying 1000 user licenses by at least 12% this year and 15% the next year.
3. Craft your overall software adoption strategy. Consider the business drivers that impact software adoption.  Assemble the domain experts, vendor management and sourcing professionals, legal experts, business owners, and IT team.   Apply a long term apps/ recession proof apps strategy and determine when and how licenses will be used in the software ownership lifecycle.  What processes will be supported? What roles will use the software?  When will you upgrade?  Can you consider an alternative?
4. Determine all the alternatives. Depending on your adoption strategy, multiple paths exist.  If there are no intentions to upgrade or enhance the software, self support and third party maintenance (3PM) options from vendors such as Rimini Street and Spinnaker should be considered.  In some cases, an upgrade should be completed before switching over to 3PM or self support.  If the system can be replaced, begin vendor selection efforts so that you will have leverage during the negotiation.  If the system cannot be replaced, consider swapping out unused licenses for credit towards newer or more desirable modules.  Reduce your CPI for new maintenance.  Focus on reducing new license costs.
5. Engage account representative at least one quarter before the contract expires. Put preparation on your side and begin to let your sales rep know 3 to 6 months in advance that you are unhappy with the current agreement.  Based on steps 1 to 4, you now have the ammunition you need to negotiate from a position of strength.

The bottom line - align your contract negotiations strategy with your product adoption strategy.

Successful negotiations will require these 5 steps.  However, more importantly, organizations should keep a current apps strategy and product adoption strategy.  Without these two key documents, lack of visibility into the business case will lead to shortsighted negotiations that fail to meet the true requirements of the business.  Sourcing, procurement, and vendor management professionals should partner with domain experts who can provide third party, independent and objective advice that will complement contract negotiations strategy.  Click here for more contract negotiation strategy tips.

Got more enterprise software contract negotiations questions?  Set up a call with the inquiry team and ask for R "Ray" Wang.

Your Turn

What's your best practice in reducing maintenance costs?  Post your comments here or send me a private email to rwang@forrester.com

Contribute to the 2009 Enterprise Software Licensee's Bill of Rights

Take the new poll on what rights should be included in the 2009 Enterprise Software Licensee Bill of Rights   Posts are preferred!  For every good idea or comment, whether or not we use your idea, we'll send you a copy of the final report.  Let's put the collective wisdom of the web to work and help our end user clients create a fair win-win playing field with the vendors.  We'll be publishing the official update in Q2 2009.  Thanks and look forward to your input!

*Caveats are as follows:  1) This does not constitute legal advice.  Please consult your legal counsel for an official opinion and wording.  2) This does not consider any procurement or vendor management rules that must be applied to your enterprise.  Please work with your vendor management teams for compliance.  3)  Contract negotiation support provides insight into overall trends and price points.  Benchmarks are not provided as each user scenario is unique.

Copyright © 2009 R Wang. All rights reserved.

Reposted from http://blog.softwareinsider.org

It's Time To Update The Enterprise Software Licensee Bill of Rights!

Now's The Time To Assert Your Rights

With the market now in favor of the enterprise software licensee, its now time to update the Enterprise Software Licensee's Bill of Rights to include newer topics such as virtualization, SaaS and subscription pricing, newer usage based pricing models, open source, and vendor lock-in avoidance.  As mentioned in a call to action in a December 2008 Monday's Musings, this groundbreaking report, originally published in December 2006, will be updated to reflect current market conditions.  The goal - improve this reusable contract negotiation model that cuts across the 5 key phases of the software ownership life cycle:

Charles Darwin's Assessment Of Application Developers

This month marks Charles Darwin's 200th birthday. His classic work, The Origin Of Species, wasn’t much of a hit when it was originally published back in 1859 but no one can argue that the idea of evolution hasn’t changed the world. Survival of the fittest is an elegant explanation of why so many species exist, why some become extinct, and why some flourish. So, what would Charles Darwin have to say about the species that are so affectionately known as application development professionals? Hmmm.

Observed in their natural habitat, application development professionals seem to be doing quite well. They are a hearty lot, who have made themselves indispensible in a world that is driven by an ever increasing demand for technology. As long as developers continue to write billions of lines of code, they are not going the way of the dinosaurs or the buggy whip manufacturers anytime soon. What is the secret to their success? Charles Darwin himself has the answer:

“It is not the strongest of species that survives, nor the most intelligent, but rather the one most responsive to change”

Please don’t misinterpret. It is not that app dev pros aren’t strong and intelligent. They are. But, above all else application development professionals are responsive to change. If you are not an app dev pro, stop snickering. You are probably thinking that developers are slow to change. Well consider this: in the last 30 years we have gone from practically zero applications to an uncountable number and growing. Application developers have used dozens of different programming languages and written applications for almost every purpose known to humanity – all in response to the world around them. And, all this happened in a short 30 year time span.

It is this breakneck responsiveness to change, this adaptability, that makes application development professionals indispensible and inveterate survivors.

Mike Gualtieri

Senior Analyst