Hello from Dubai! I arrived a few days ago for customer visits across the region including UAE, Qatar and Bahrain. Although I’ve traveled extensively, this is my first trip to the Middle East.
As a frequent flyer (both in terms of travel and airline loyalty), I looked first to my preferred airlines when I booked my flights to the region. Neither of them (yes, I fly two airlines regularly which suggests that I’m not all that loyal) provided service to my destinations. So, I looked for a partner airline – one that is part of my preferred airlines’ networks. I went with Emirates which not only serves the Gulf States I was planning to visit, but enabled me to stay within network and collect my frequent flier miles. Why do I mention this? Well, I have been thinking about that model of a “Star Alliance” or a “Skyteam,” and how it could apply to service providers of other kinds.
For those of you unable to attend, I will summarize some of the content that I presented on SAP’s overall growth and innovation strategy. SAP has a double-barreled product strategy focused on Growth and Innovation.
The Growth strategy rests heavily on the current Business Suite, which includes the core ERP product that is used by approximately 30,000 companies worldwide. SAP claims that it touches 60 percent of the world’s business transactions, which is hard to validate but not all that hard to believe. The main revenue source today is Support, which comprises 50% of the total revenues of the company at more than 5 billion Euros annually, and it grew by 15% in 2009. Other growth engines include:
Well, it's been a whirlwind two days at the Infrastructure & Operations Forum here in Dallas! I know that not everyone has the opportunity to attend these events, so for all of you stuck at home (and not in sunny Dallas), I've summarized some of the keynotes (with help from Christian Kane and Lauren Nelson) for you to check out. There is also a great conversation about the forum on twitter , so you should definitely check that out as well.
Rob Whiteley kicks off the day with a preview of the next two days and some AC/DC music (the theme of the event is "Back in Black"). First up is Glenn O'Donnell:
The New I&O Landscape: Aligning I&O With Post-Recession Business Imperatives Glenn O'Donnell, Senior Analyst, Forrester Ha, this presentation is based on the book "He's Just Not That Into You" and it is about the love story between I&O and the business.
I&O, how can you win the love of the business?
Social networks have their foundations in the space-time continuum—you know, the funky coordinate system that Einstein was so keen about.
Social network analysis is all about looking for patterns of “proximity” among people, considered in their cultural capacities as influencers and followers, innovators and imitators, first-movers and late adopters. Down deep, I consider social network analysis an important new branch of decision support systems as a discipline. The core question is: What unique situational chemistry causes various people, individually or collectively, to make various decisions at various places and times?
That’s where space and time enter the social network analysis equation. It’s not enough that I look up to your shining example and take my lead from what you say and do. It’s just as important that we be in the same city, neighborhood, or room. More than that, it’s important that you and I actually cross paths in order for you to actively influence me to buy that latte, or for you to calm me down and thereby stop me from storming out the door and severing my relationship with a retailer who has ignored my complaints one time too many.
Apple pitched the iPad at launch as a third device that consumers would use alongside the PC and the phone. While the iPad has genuinely innovative software and hardware, Apple has done little new to make the device easy to use in tandem with existing devices, beyond what is already in the iPhone. Consumers must sync the iPad using a cable with PC/Mac iTunes to transfer music or videos; while photos and podcasts are easiest if loaded the same way.
Apple has left too much in the hands of consumers to transfer and manage manually. For example, if a consumer wishes their video viewing position to be remembered across their devices, then they must sync first the iPad with iTunes, followed by syncing their iPhone or iPod. Contrast that with Amazon's Kindle: Whispersync maintains a person's reading position automatically between Kindle apps on PC or iPhone and Kindle eReaders.
The same issue hits multiple areas on iPad from games' scores and progress, the reading position on Apple's own eBooks, and the preferences of Apps downloaded from Apple's App Store, email, calendar and contacts.
There are workarounds for some of the above from app developers. Games built with the Plus+ network essentially have their own cloud service built in. Consumers may sync Calendar/email/contacts with a cloud by using a specific provider such as Google apps, a corporate account with Exchange, or Apple's own MobileMe. Other apps have their own app specific cloud abilities like Evernote or the iPhone/iPad Kindle app.
For iPad to really fly, preferences, usernames, passwords, and content should transfer automatically across the different devices that Apple intends consumers to use together: PC, phone, and iPad. Apple should use a consumer cloud to do it. Consumers should not have to think, all of this should just work. Tethered sync is a twentieth century product feature.
If Apple does not extend its consumer cloud services, iPad will rely on a patchwork of cloud services to deliver the third device experience. But, as a consumer cloud is essentially software, Apple could easily fix all of these things mid-life for existing iPad owners. iPad is after all very much a version 1.0 .
Every time I think of the iPad as "the third device," the image of Orson Welles from the film the Third Man appears in my head:
"You know what the fellow said – in Italy, for thirty years under the Borgias, they had warfare, terror, murder and bloodshed, but they produced Michelangelo, Leonardo da Vinci and the Renaissance. In Switzerland, they had brotherly love, they had five hundred years of democracy and peace – and what did that produce? The cuckoo clock."
iPad is no cuckoo clock, but it's not, yet, a Michelangelo either.
IBM has been talking a good cloud game for the last year or so. They have clearly demonstrated that they understand what cloud computing is, what customers want from it and have put forth a variety of offerings and engagements to help customers head down this path – mostly through internal cloud and strategic rightsourcing options. But its public cloud efforts, outside of application hosting have been a bit of wait and see. Well the company is clearly getting its act together in the public cloud space with today’s announcement of the Smart Business Development and Test Cloud, a credible public Infrastructure as a Service (IaaS) offering. This new service is an extension of its developerWorks platform and gives its users a virtual environment through which they can assemble, integrate and validate new applications. Pricing on the service is as you would expect from an IaaS offering (and free for a limited time). If you are testing with IBM software you can either bring your licenses or check out the equivalent instances from their service catalog. There’s even a new version of Rational Software Delivery Services for shops familiar with Jazz.
NetSuite, a leading SaaS ERP/CRM provider, recently announced that it is revamping its channel partner comp model: 100% on Y1 subscription revenue, and 10% thereafter. VARs have been remiss in taking up the SaaS torch, largely because most SaaS vendors haven’t provided a financial model conducive to VARs’ cash flow requirements. Per the on-premise license model, channel partners make a big portion of their nut on initial product margin, i.e., up front. But vendor SaaS economics minimize up-front remuneration and spread revenue out over a long period of time. Though it sacrifices year-one revenue, NetSuite’s 100/10 model more closely mirrors VARs’ accounting practices.
NetSuite’s model will be the first of many SaaS channel model “experiments” that will ultimately be a shot in the arm for the SMB market in particular. Contrary to popular belief, SMBs have been slow on the uptake of SaaS (application hosting outpaces SaaS adoption by SMBs by a factor of 3-4x) ...
... due to the fact that VARs, in ownership of the customer trust asset, haven’t been pushing SaaS. But the financial barriers to channel partners’ SaaS advocacy are being broken down.
Now that the path for VARs to play in the cloud is being forged, and their play along with software vendors, aggregators, and ISPs being validated, distributors and DMRs, long wedded to on-premise license models, are going to have to figure out their place in the new cloud channel order.
What do you think? Is this one of many experiments? What is the role for distributors and DMRs in cloud computing?
It was my pleasure to participate in the latest DM Radio podcast panel yesterday. Eric Kavanaugh and Jim Ericson always do a fine job of organizing these events, and, with their stellar industry panels and fun “morning drive-time crew” on-air patter, they keep it lively. And these guys actually know a thing or two about information management.
The latest DM Radio panel was right in my core coverage area. They called it their “Third Annual Appliance Showdown.” That got to me to thinking: early 2008 (when they held their first) was also when Forrester began our coverage of data warehousing (DW) appliances, starting with publication of my report “Appliance Power: Crunching Data Warehousing Workloads Faster And Cheaper Than Ever.” When I published that report, DW appliances were still not quite in the enterprise mainstream, because they were still regarded by enterprise IT as, in the words of Kavanaugh, an “adjunct” to the enterprise DW (EDW) for fast table scans and query processing, rather than as platform that could scale to support all EDW functions.
I spent a couple of days with HP executives this week here in Boston. As I worked there myself for 20 years (up to 2001, so I have distance as well), I’d like to comment about how their enterprise business strategy now looks. Of course, I wasn’t alone there; there were 250 of us. Those who follow my peers in Twitter may already be overloaded with multiple 140-character cuts: my impression is that the tool tends to makes them behave more like adolescent journalists than analysts. Often, they were broadcasting tweets before even noticing that a particular statement was “under NDA”. Vendors will learn to be more cautious in the future; which is not good for us analysts. Anyway, here are my highlights of the HP briefings.
HP’s Converged Infrastructure story includes the pending acquisition of 3COM
Nice to see that HP now has (servers + storage + networking) PLUS power & cooling! Now, HP has Cisco squarely within their sights with this one, dropping statements like “they’re just a $30B vendor while we spend over $50B in our supply chain”; “as soon as we can, we will replace ALL our Cisco gear with 3COM and realize 45% savings”; and “of course, all 3COM products use the same operating environment, unlike them”.
My Take: Well, Cisco started this. They are, indeed, seriously threatened. If HP apply their financial muscle and play the pricing game, Cisco’s business and margins may well suffer. Remember, networking is the highest margin area in IT infrastructure: HP is adding it, Cisco is diluting it. But, I also think that Cisco will make other game changing moves in the next months. HP strategists should not be resting on their laurels, they should be doing scenario planning - and thinking way outside the IT infrastructure box.
Larry Ellison angrily dismisses suggestions that Oracle’s business will be harmed by the rise of cloud computing. Many misinterpret Ellison’s remarks to mean he (and by extension Oracle) thinks cloud computing is a dumb idea that Oracle won’t pursue. We are now learning that Oracle does, in fact, intend to pursue cloud computing. But we're also learning that Oracle's strategy is more limited than those of IBM and Microsoft, its large-vendor competitors.