Historically, the positioning of Dell versus its two major competitors for high-value enterprise business, particularly where it involved complex services and the ability to deliver deeply integrated infrastructure and management stacks, has been as sort of an also ran. Competitors looked at Dell as a price spoiler and a channel for standard storage and networking offerings from its partners, not as a potential threat to the high-ground of being able to deliver complex integrated infrastructure solutions.
This comforting image of Dell as being a glorified box pusher appears to be coming to an end. When my colleague Andrew Reichman recently wrote about Dell’s attempted acquisition of 3Par, it made me take another look at Dell’s recent pattern of investments and the series of announcements they have made around delivering integrated infrastructure with a message and solution offering that looks like it is aimed squarely at HP and IBM's Virtual Fabric.
To paraphrase Charles Dickens, Q2 2010 seemed like the best of times or the worst of times for the big software vendors. For Microsoft, it was the best of times; for IBM, it was (comparatively) the worst of times; and for SAP it was in between. IBM on June 19, 2010, reported total revenue growth of just 2% in the fiscal quarter ending June 30, 2010, with its software unit also reporting 2% growth (6%, excluding the revenues of its divested product lifecycle management group from Q2 2009). Those growth rates were down from 5% growth for IBM overall in Q1 2010, and 11% for the software group. In comparison, Microsoft on June 22, 2010, reported 22% growth in its revenues, with Windows revenues up 44%, Server and Tools revenues up 14%, and Microsoft Business Division (Office and Dynamics) up 15%. And SAP on June 27, 2010, posted 12% growth in its revenues in euros, 5% growth on a constant currency basis, and 5% growth when its revenues were converted into dollars.
What do these divergent results for revenue growth say about the state of the enterprise software market?
So what does this mean for CIOs and IT, the custodians of enterprise technology architecture?
It is clear Jive wants to play with the big boys in the enterprise software space. To date, many Jive deployments have not involved IT. This ability to deploy its technology without IT’s involvement has no doubt helped Jive to this point. Of course, having market-leading functionality hasn't hurt. (Jive has featured highly in recent Forrester Wave reports).
At the recent Enterprise 2.0 conference in Boston, I sat down with Jive’s new CEO, Tony Zingale, to explore the company strategy. From our discussion, it was apparent that Jive intends to compete for a big slice of the enterprise collaboration marketplace. Fundamentally, this is the right direction for Jive, but I foresee some big challenges for the company along the way.
There has been a lot of negative press and commentary regarding the recent Queensland Health Implementation of Continuity Project (SAP HR and Payroll), which recently experienced a very public failure as many employees were not paid due to multiple points of failure in the project. The recent Auditor-General's Report on the process is damning, spreading the blame across multiple agencies and the systems integration partner, IBM. I make no claims to be familiar with the intricate details of the process, but I have read the report and feel I have a clear understanding of the (many!) points of failure.
While this project did seem to be a monumental failure, I would suggest that we consider two important facts:
While I started my previous blog post with the observation that KACST was not a “city,” Caroline Spicer, Strategy and Market Development Leader for IBM Global Business Services, made the point later in the day that there is not “a city” but many models of cities depending on future vision. There are a couple of points to draw out here. There is not one model of a smart city. Cities can focus on particular initiatives based on their leaders’ (and their constituents’) priorities and vision for the future of the city. As Caroline pointed out these might be:
The well-planned city – focused on urban design and development
The healthy and safe city – focused on health
The sustainable eco-city – focused on the environment
The city of innovation – focused on science and technology, the knowledge base
The city of commerce – focused on trade and retail
The cultural or convention hub – focused on tourism
The rise and rise of cloud has been dominating the headlines for the past few years, and for CIOs, it has become a more serious priority only recently. People like cloud computing. Well - at least they like the concept of cloud computing. It is fast to implement, affordable, and scales to business requirements easily. On closer inspection, cloud poses many challenges for organizations. For CIOs there are the considerable challenges around how you restructure your IT department and IT services to cope with the new demands that cloud computing will place on your business - and often these demands come from the business, as they start to get the idea that they can get so many more business cases over the line for new capabilities, products and/or services, as they realize that cloud computing lowers the costs and hastens the time to value.
Here I sit finally getting a chance to reflect on my 30 hours in Saudi Arabia. Yes, just a little more than one day. But one day was enough to change any preconception that I might have had, and spark my interest to learn more. My “day” started with the VIP treatment through passport control – which I must say was much appreciated. The airport in Riyadh is certainly not Dubai International – far from it. But if there were any disappointment at the inauspicious first impression, it stopped there. Although to set the stage, I was invited to Saudi Arabia by IBM to participate in an analyst event showcasing “Smarter Cities” initiatives in the Kingdom. So admittedly, I was only presented the “smart” side of Riyadh. I am eager to see more.
Today, Google announced Google App Engine for Business, and integration with VMware’s SpringSource offerings. On Monday, we got a preview of the news from David Glazer, Engineering Director at Google, and Jerry Chen, Senior Director Cloud Services at VMware.
For tech industry strategists, this is another step in the development of cloud platform-as-a-service (PaaS). Java Spring developers now have a full platform-as-a-service host offering in Google App Engine for Business, the previously announced VMforce offering from salesforce.com, plus the options of running their own platform and OS stacks on premise or in virtual machines at service providers supporting vCloud Express, such as Terremark.
What’s next? IBM and Oracle have yet to put up full Java PaaS offerings, so I expect that to show up sometime soon – feels late already for them to put up some kind of early developer version. And SAP is also likely to create their own PaaS offering. But it’s not clear if any of them will put the same emphasis on portability and flexible, rich Web-facing apps that Google and VMware are.
So Google aims to expand into enterprise support – but will need more than the planned SQL support, SSL, and SLAs they are adding this year. They'll also need to figure out how to fully integrate into corporate networks, the way that CloudSwitch aims to do.
Returning home after IBM’s Impact user conference (Impact 2010). I’ve been to a lot of BPM conferences in my time, but never one this big. 6,000 miles (to Las Vegas) there and 6,000 miles home again to see 6,000 people going through a few of days of indoctrination and engage in a few meetings with important execs. From the point of view of a busy analyst, one has to wonder whether it was all worth it. But putting aside the sore back/neck and the lack of sleep, I think that, on reflection, it was worth the trip. I am sure other pundits will have already posted their own interpretations of the conference, so this is just one report to add to your perspective of Impact 2010.
6,000 people all gathered to hear the carefully scripted message. Well that is what it seemed like; a scripted story that was supposed to sound spontaneous. Even the Q&A was scripted on the teleprompter, which, quite apart from the wooden presentation style of one or two of the speakers, sort of took away from the central message.
There was a pretty important message there. A message that was being communicated to the faithful. And whether you like it or not, IBM has a lot, and I mean a lot, of faithful followers. I didn’t do a scientific assessment of the number of IBM badges versus non IBM badges, but even if half of the attendees were internal, there were plenty of customers there too. And those internal folks were also being recruited as emissaries and evangelists for the new mantra.
Last December I wrote about Building B2B Technology Markets, looking at how to penetrate a market with almost none of the traditional characteristics of a mature technology market? As technology vendors increasingly look to emerging markets as a significant opportunity and source of growth, this question becomes more pressing. The report explored some of the elements of Cisco’s Country Transformation initiatives in order to identify steps in the process of building market infrastructure:
For example, the report looked at partnering with governments to encourage market-friendly policies and investment in the necessary technology infrastructure to support market development and overall economic growth. And, from a sales perspective, trade associations provided an alternative channel to reach small and medium businesses in markets where distributors and resellers weren't available.
But, another element critical to successful market development is the ecosystem of partners developing solutions specific to the particular market, or even just contributing local innovation for new approaches to broader global issues. Building B2B Technology Markets discussed finding local organizations to act as partners in the market, and even investing in educational initiatives, but missed the next step of how to help create these new local ecosystem partners.