Over the last couple of years, IBM, despite having a rich internal technology ecosystem and a number of competitive blade and CI offerings, has not had a comprehensive integrated offering to challenge HP’s CloudSystem Matrix and Cisco’s UCS. This past week IBM effectively silenced its critics and jumped to the head of the CI queue with the announcement of two products, PureFlex and PureApplication, the results of a massive multi-year engineering investment in blade hardware, systems management, networking, and storage integration. Based on a new modular blade architecture and new management architecture, the two products are really more of a continuum of a product defined by the level of software rather than two separate technology offerings.
PureFlex is the base product, consisting of the new hardware (which despite having the same number of blades as the existing HS blade products, is in fact a totally new piece of hardware), which integrates both BNT-based networking as well as a new object-based management architecture which can manage up to four chassis and provide a powerful setoff optimization, installation, and self-diagnostic functions for the hardware and software stack up to and including the OS images and VMs. In addition IBM appears to have integrated the complete suite of Open Fabric Manager and Virtual Fabric for remapping MAC/WWN UIDs and managing VM networking connections, and storage integration via the embedded V7000 storage unit, which serves as both a storage pool and an aggregation point for virtualizing external storage. The laundry list of features and functions is too long to itemize here, but PureFlex, especially with its hypervisor-neutrality and IBM’s Cloud FastStart option, is a complete platform for an enterprise private cloud or a horizontal VM compute farm, however you choose to label a shared VM utility.
Last week I attended Telefónica’s leadership event, which is held annually in Miami, reflecting its very strong basis in the Americas. This year’s event attracted around 700 visitors from 130 countries, comprising Telefónica’s customers, vendor partners, and analysts. There were several external keynote speakers, like the CIO of the US government, futurologist Michio Kaku, and the chief economist of the Economist Intelligence Unit, that outlined the macro context for society and the economy over the coming 10 to 20 years. Presentations by partners like Huawei, Microsoft, Nokia, amdocs, and Samsung highlighted visions of the future from a vendor angle. Telefónica itself used the opportunity to present its own vision of how technological progress will affect society and business — and how it intends to address the opportunities and challenges ahead.
Telefónica stands out from its peer group of incumbent telcos by having revamped its overall organizational structure. The firm had already announced this new structure last fall; it effectively sets up one division that focuses on global internal administration and procurement (Global Resources), one division that focuses on emerging Internet-based solutions (Digital), and two geographically focused go-to-market-facing business lines (Americas and Europe). Telefónica Multinational Solutions is part of Global Resources and is the division dedicated to delivering services to the MNC segment.
Deloitte continues to ramp up its software-as-a-service (SaaS) consulting practice, both through organic growth as well as acquisition. Today, Deloitte announced plans to acquire Workday implementation specialist Aggressor. Aggressor has been one of a very small set of Workday integrators (along with Deloitte), which means Deloitte now further boosts its already-impressive Workday practice.
This move furthers Deloitte’s Workday practice, as well as Deloitte’s overall practice in SaaS implementation and integration work. Deloitte also has strategic partnerships with other leading SaaS vendors, most notably salesforce.com.
For buyers, this means a stronger and deeper bench of consultants at Deloitte. But, on the downside, it removes a boutique/specialist option from the market, which appealed to some because of its laser focus, smaller size, and (perceived or real) ability to be more nimble, flexible, and price competitive.
Are you an Aggressor or Deloitte client or prospect? We would love to hear your thoughts!
Today we see two basic flavors of cloud IAM. One archetype is the model offered by Covisint, VMware Horizon, Symplified, Okta, OneLogin, etc.: these vendors provide relatively tight integration, but less capable identity services based on their respective firm's own intellectual property. Because of the above, these offerings clearly have a short implementation time. The other camp of vendors believes in providing hosted services of "legacy" IAM products: CA Technologies coming out with CloudMinder, Lighthouse adding their own IP to IBM TIM/TAM, Simeio Solutions blending OpenAM and Oracle's identity stack with their own secret sauce, and Verizon Business using NetIQ'sIDM stack as a basis for their hosted offering solution.
On Monday, February 13, HP announced its next turn of the great wheel for servers with the announcement of its Gen8 family of servers. Interestingly, since the announcement was ahead of Intel’s official announcement of the supporting E5 server CPUs, HP had absolutely nothing to say about the CPUs or performance of these systems. But even if the CPU information had been available, it would have been a sideshow to the main thrust of the Gen8 launch — improving the overall TCO (particularly Opex) of servers by making them more automated, more manageable, and easier to remediate when there is a problem, along with enhancements to storage, data center infrastructure management (DCIM) capabilities, and a fundamental change in the way that services and support are delivered.
With a little more granularity, the major components of the Gen8 server technology announcement included:
Onboard Automation – A suite of capabilities and tools that provide improved agentless local intelligence to allow quicker and lower labor cost provisioning, including faster boot cycles, “one click” firmware updates of single or multiple systems, intelligent and greatly improved boot-time diagnostics, and run-time diagnostics. This is apparently implemented by more powerful onboard management controllers and pre-provisioning a lot of software on built-in flash memory, which is used by the onboard controller. HP claims that the combination of these tools can increase operator productivity by up to 65%. One of the eye-catching features is an iPhone app that will scan a code printed on the server and go back through the Insight Management Environment stack and trigger the appropriate script to provision the server.[i]Possibly a bit of a gimmick, but a cool-looking one.
My colleagues and I have just completed yet another engagement with a large client — one of dozens recently — who was facing a to be or not to be decision: whether to move its BI platform and applications to the cloud. It’s a very typical question that our clients are asking these days, mainly for the following two reasons:
In many cases, their current on-premises BI solutions are too inflexible to support the business now, much less in the future.
The relative success of cloud-based CRM (SFDC and others) solutions may indicate that cloud offers a better alternative.
These clients put these two statements together and make the reasonable assumption that cloud BI will solve many of the current BI challenges that cloud-based CRM solved. Reasonable? Yes. Correct? Not so fast — the only correct answer is “It depends.”
Let’s take a couple of steps back. First, let’s define applications or packaged solutions vs. platforms (because BI requires both).
Subscribe to a solution-like CRM
Provide standard business functions to all customers (which makes it different from “hosting;” see below)
Difficult to tailor to specific needs
Usually are used synonymously (but incorrectly, see below) with software-as-a-service (SaaS)
Platforms for building solutions
Subscribe to tools and resources to build solutions like CRM
Provide standard technical functions to developers
Contain limited, if any, business application functionality
Usually labeled either as platform-as-a-service (PaaS) or infrastructure-as-a-service (IaaS).
Oracle Corporation announced its purchase of Taleo for $1.9 billion on Feb. 9, 2012, signaling a major shift in its stance on software-as-a-service (SaaS) and talent management applications. The transaction is expected to close midyear 2012, subject to regulatory and stockholder approvals.
Oracle has long held a “we can build it better” position on talent management, learning, and recruitment applications but struggled to compete with best-of-breed talent management vendors like SuccessFactors (recently acquired by rival SAP), Taleo, Kenexa, Cornerstone, and SumTotal Systems. Oracle has been reticent to offer these (or any other) applications via SaaS, preferring a licensed/on-premises business model that provides early revenue recognition versus the deferred revenue model of SaaS.
In fact, Oracle CEO Larry Ellison has been outspoken in his anti-SaaS stance in recent years, changing his posture somewhat with the Oracle Public Cloud announcement at last October’s Oracle OpenWorld conference. Meanwhile, the HR apps market shifted overwhelmingly to the SaaS (subscription-based) deployment model, which has become virtually ubiquitous in recruitment, learning, and talent management and is also growing in core HRMS via ADP, Ultimate Software, and Workday.
By acquiring Taleo, Oracle puts itself back in the game for SaaS recruiting and talent management. Taleo is a market leader in recruitment automation and has a competitive portfolio of products across performance, compensation, and learning management. The $1.9 billion deal price is more than six times Taleo’s 2011 annual revenues of $309 million, a high premium but substantially less than the $3.4 billion and 11-times revenues that SAP recently paid for SuccessFactors.
ERP vendors are showing strong interest in the HRM SaaS market. They are either attempting to build a solution (as Oracle is doing with Fusion) or looking to acquire HRM functionality (as SAP is about to do with SuccessFactors). Talent applications — including offerings like performance, succession, and learning — are not easy to build. The niche players have been laser-focused for years on building these solutions or integrating acquisitions, and generally they have done a good job. Now we see other vendors that want this functionality buying up these niche players to offer a complete end-to-end HRM solution. The HRM market is hot! My colleague Paul Hamerman and I have authored research that shows performance growing faster — at 16.5% — than any other HRM segment (HRM Solutions: Traditional Models Clash With Next Generation Processes And Technology). Executives know that having highly skilled employees who know the business and can execute well on strategy is critical to business growth.
Some Reflections On The Deal For Competitors, Partners, and Customers
On December 3, SAP announced the acquisition of SuccessFactors, a leading vendor for human capital management (HCM) cloud solutions. SAP will pay $3.5 billion (a 52% premium over the Dec 2 closing price) out of its full battle chest and take a $1 billion loan. SuccessFactors brings about 1,500 employees, more than 3,500 customers, and about 15 million users to the table. In 2010, the company reported revenues of $206 million and a net loss of $12.5 million. A price of $3.5 billion is certainly a big premium, but the acquisition catapults SAP into the ranks of leading software-as-a-service (SaaS) solution providers — a business that will grow from $21.3 billion in 2011 to $78.4 billion by 2015 (for more information, check out our report “Sizing The Cloud”). The deal will certainly help SAP to achieve its 2015 target of $20 billion revenue and 1 billion users as it mainly targets the 500,000 employees that SAP’s already existing customers have. The deal is expected to close in Q1 next year. However, because most of the stocks are widely spread, stakeholders might hold back for now, waiting for possible counter bids from competition.
SAP is a paying a substantial premium to acquire SuccessFactors, a leading SaaS performance and talent management vendor. The press release of December 3, 2011 states that the deal price of $40 per share is a 52% premium over the Dec. 2 closing stock price. Even more startling is that SuccessFactors has a revenue run rate of roughly $300 to $330 million for 2011, and the acquisition price of $3.4 billion is more than 10 times revenue! Why then did SAP make this move?
SAP’s cloud strategy has been struggling with time-to-market issues, and its core on-premises HR management software has been at a competitive disadvantage with best-of-breed solutions in areas such as employee performance, succession planning, and learning management. By acquiring SuccessFactors, SAP puts itself into a much stronger competitive position in human resources applications and reaffirms its commitment to software-as-a-service as a key business model.
In my recent research for a soon-to-be-published Forrester Wave™ on human resource management systems (HRMS), I noted that SAP has more than 13,000 customers using its HCM suite. Yet the adoption of SAP’s learning and talent management products is much less (a few thousand, perhaps), which is noted in my colleague Claire Schooley’s “The Forrester Wave™: Talent Management, Q2 2011.” The talent management Forrester Wave also clearly shows that SAP’s embedded talent management offerings lag well behind the best-of-breed specialists in learning and performance management. The bottom line here is that SAP HCM customers predominantly run best-of-breed talent management solutions alongside their SAP core HRMS (i.e., the transactional employee system of record).