June 2, 2008

Updating my standards and disclosures

In early 2006, I wrote a pair of posts in which I discussed my general standards for analytic credibility, and disclosed some of my own relationships and biases. I have nothing to add to the generalities, but maybe it’s time to update some specifics.

November 20, 2007

I repeat — SaaS is not necessarily an indirect-channels business

From Salesforce.com’s latest 10-K:

We market our service to businesses on a subscription basis, primarily through our direct sales efforts and also indirectly through partners.

Looking back, I should have quoted that in support when I wrote:

By the way, I think the assumption SAP needs to sell ByDemand via indirect channels is an erroneous one. (Dennis Howlett seems to be at least partway to recognizing this. He also reports that SAP realizes that this is truly a sales issue.) Hence my stress on SAP’s internal sales management issues.

For 40+ years, application-oriented services have been sold in large part by direct sales forces. That goes back to the other payroll processors, and to time-sharing in general. Why would it change now?

October 8, 2007

Some quick thoughts on SAP acquiring Business Objects

1. SAP needed outside talent again. In March I wrote that Shai Agassi’s departure wasn’t as a big a deal as it seemed, because guys like Dennis Moore were still there. Well, by now Dennis Moore is NOT still there, and rumor had more of the good personnel acquisitions leaving as well. And unfortunately, my personal experience of some of those remaining is that they’re ethically unfit for their roles (and that’s putting it kindly).

2. The NetWeaver strategy has been failing. Does anybody care about NetWeaver any more? The whole thing includes some great ideas, but implementation has been lacking.

3. The Business Objects guys are proven successes at integrating disparate BI product suites. The Crystal Reports acquisition proved that.

Before writing more, I should check the extremely one-sided consulting contract I had with SAP, specifically for the expiration date of the NDA. How one-sided? Well, I naively agreed to a clause that I couldn’t sue them under the contract, expecting their concern about their reputation to keep them in line. Since then, they’ve cheated me out of considerable amounts of money that they owed. Arggh. Live and learn.

September 25, 2007

SAP ByDemand could work a lot better than critics think

As I explained in another post, it’s credible that SAP is very serious about its new ByDemand SaaS (Software as a Service) offering. While I haven’t been briefed on the product (er, service), I’m guessing ByDemand is pretty good, or soon will be. I have three major reasons for this opinion.

  1. SAP sure has a lot of resources to bring to bear – and as previously noted, I think the company is dead serious about this initiative.

  2. On the back end, the business-service granularity SAP has been implementing is well-suited to deal with the unique challenges of SaaS, both the very real (e.g., short upgrade cycles) and the largely imaginary (e.g., multi-tenancy).

  3. SAP recently hired Dan Rosenberg away from Oracle to head its UI efforts, and Release 1 of a Dan Rosenberg user interface is likely to be very good. I know Dennis Howlett has a contrary view, and he’s actually seen the product. Even so, I’m optimistic about SAP’s claims to have designed the UI with an open mind, for maximum ease and simplicity, and validated by many rounds of testing.

Read more

September 25, 2007

The unprofitability of the SaaS business is an illusion caused by growth

There’s a fallacy going around to the general effect:

Salesforce.com is the biggest SaaS company. Salesforce.com is making next to no profit. Therefore, SaaS is currently not a profitable business.

But that’s nonsense. Here’s why. Read more

September 20, 2007

Software Auf Probe

We all know insulting wordplay such as “Windoze,” deserved or otherwise. (Personally, I prefer the more subtle “Intel giveth and Microsoft taketh away.”) I just learned one in German, however, that I’m guessing is less familiar to English-speaking readers. “Software auf Probe” translates, roughly, as “Software in test.” Any resemblances to long SAP adoption cycles are purely intentional. :)

March 29, 2007

More on Shai Agassi and SAP

Sramana Mitra has a little bit of a different take on Shai Agassi’s departure than mine. At first blush, it’s a distinction almost without a difference. In essence, she argues that Shai was frustrated because he couldn’t make big needed changes fast enough. That’s pretty close to my view that change simply wasn’t happening quickly or completely enough.

But the thing is — I think SAP’s overall technology roadmap has remained too incomplete. In essence — and I know some of my friends there will dispute this — SAP is still too focused on delivering software for how people should work, and doesn’t properly support the way they actually do — or realistically would like to — work.

Yes, it’s great that Dennis Moore and Dan Rosenberg are at SAP. But nobody — and this includes Shai — seems to be driving a real software re-think down into the individual products. The move to portal-based technology needs to be the beginning of the software functionality redesign, not the end. Josh Greenbaum thinks that Duet is all that and more, but I don’t see it that way.

March 28, 2007

Shai Agassi – a contrarian view

Shai Agassi is leaving SAP because, in essence, the old guard didn’t want to turn over the reins to him as fast as he would have liked.* Often, this kind of departure is a bad thing (e.g., Ray Lane at Oracle). But I suspect that SAP may actually be improved by Shai’s leaving.

*His other stated reasons include two very good and highly admirable ones – working on energy technologies and improving matters in Israel.

SAP’s technical strategy has three core elements:

  1. Automate business processes.
  2. Provide the technical infrastructure for automating business processes.
  3. Encapsulate process and data at the object/process level.

This strategy has been heavily developed and refined on Shai’s watch, with major contributions from lots of other folks. The issue isn’t vision any more. What SAP needs to do better is execute on the vision.

Read more

January 3, 2007

Typical nonsense from SAP

Below, essentially in its entirety, is an e-mail I just received from SAP, today, January 3. (Emphasis mine.)

Thank you for attending SAPs 4th Annual Analyst Summit in Las Vegas. We hope you found the time to be valuable. To ensure that we continue meeting your informational needs, please take a few moments to complete our online survey by using the link below. We ask that you please complete the survey before December 20. We look forward to receiving your feedback.

What makes this typical piece of SAP over-organization particularly amusing is that I didn’t actually attend the event. I was planning to, but after considerable effort I think I finally made it clear to VP of Analyst Relations Don Bulmer that I was fed up with being lied to* by him and his colleagues. In connection with that, we came to a mutual agreement, as it were, that I wouldn’t go.

*and lied about

Obviously, administrative ineptitude and dishonesty are two very different matters, united only by the fact that they both are characteristics of SAP, particularly its analyst relations group. Having said that, I should hasten to add that there are plenty of people at SAP I still trust. If Peter Zencke or Lothar Schubert tells me something, I expect it to be true. And it’s not just Germans; I feel the same way about Dan Rosenberg or Andrew Cabanski-Dunning, to name just a couple non-German SAP guys.

But I have to say this — both SAP’s ethics and its internal business processes are sufficiently screwed up as to cast doubt on SAP’s qualifications to “run the world’s best-run businesses.”

April 6, 2006

Microsoft underscores its core paradigm

In a recent column called Three Views From the Top of the Software World (I generally don’t pick my titles, but that was as good as any), I opined that the big vendors had three fundamentally different paradigms from which they viewed enterprise software:

In the IBMOracle view, data — a.k.a. information — is king. IT’s job is to manage the data powerfully, reliably and (not always the top priority) cost-effectively. …

Microsoft’s vision, however, is quite different. It’s first and foremost about empowering people, at least to the extent that making them better corporate employees can be regarded as empowerment. …

While IBMOracle talks about information and Microsoft talks about people, SAP talks about business processes. …

Shortly after I wrote that, Microsoft came out with a sterling example of my claim. They told a story about composite apps. At SAP, composite apps are a business process story. At Oracle, they’re probably a business process story too. But at Microsoft? Read for yourself, in Microsoft’s own words:

The core vision behind what we are doing is Roles Based Productivity. To deliver on this vision, you have to start with “People” and really connect them up to their “work” (i.e. process). In the real world most people’s work is split across multiple applications and the “seams” show. Web Services is the foundational infrastructure that helps us get rid of the “seams”.

I don’t want to suggest I see something wrong with this. All three views are valid, and none of the vendors cited is too extreme (any more) about neglecting the other viewpoints. Still, I think this isn’t just semantics, but rather a fundamental difference in worldviews.

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