Wednesday, October 26, 2011

Feeding the Ecosystem Becomes part of the PAC Blog!

Dear Visitors and Subscribers,

We would like to inform you that our expert views and articles on the Application Services market since October 2011
have been availableon the PAC BLOG:

View our latest posts:

The interests of software manufacturer SAP and those of its customers are inherently different. However, especially in the case of strategically important software systems such as those from SAP, the two parties are interdependent. The German-speaking SAP user group (abbreviated as DSAG) controls the dialog between software customers and manufacturers. This relationship is seldom completely free of conflict, but SAP’s [...]

TCS strengthens its localization strategy for Germany
A key aspect in this is the adaptation of its global strategy to local market requirements. For example, TCS is adapting its service portfolio by developing customer- or industry-specific solutions for the local market. Similarly, specific portfolio elements, such as SOA Agile or SAP-related solutions, will be pushed especially in the local German market [...]

SAP defies the economic gloom Economic gloom has continued more or less unabated in recent months in the US and much of Europe. Yet this doesn’t seem to have dampened companies’ desire to invest in enterprise applications. Oracle’s Q1 results last month were surprisingly strong – particularly in Europe – and today SAP has unveiled “record” 32% growth in (new) software license revenues, at constant [...]

Supplier Shake-Up in Dutch SAP Services Sector A burst of M&A activity is shaking up the SAP services market in the Netherlands. Outside of the market leading players (such as IBM, Logica, Atos Origin and Capgemini), the Netherlands is home to a number of specialist SAP services providers, such as Ctac, MyBrand, Magnus and Superp. However, intense pressure on discretionary budgets led to a 4.7% decline in [...]

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Tobias Ortwein

Wednesday, August 24, 2011

SAP Business ByDesign 3.0 - Beyond the Headlines

Amidst the hype festival surrounding the SAP HANA General Availability (GA) announcement in June and the waiting game around SAP BusinessObjects 4.0, the latest release of Business ByDesign (Feature Pack 3.0) came and went on August 4 without much fanfare. But there was a news story around ByD 3.0 after all, as well as some interesting new features.

The whole point of a SaaS-like release schedule is that feature packs are more iterative and closely tied to customer requirements. That may take away from the blogging frenzy over a long-awaited release like BI 4.0, but there’s no doubt that more frequent releases reinforce customer value and confidence. ByDesign currently stands out amongst SAP products as the software SAP has been able to consistently release on time (or darn near on time) with each iteration. Every six months, a new ByD release comes out, raising the bar for the significantly slower Business Suite related products. Hopefully I’m not the only one to see a news story there.

In terms of the ByDesign 3.0 release, there were some headlines and some subtler points that didn’t get much attention.

First, the headlines:

1. The ByDesign “SAP Store” is now open, accessible to customers, partners, and anyone else willing to go through a (free) registration process. The ultimate success of the ByDesign depends upon the proliferation of add-on apps and industry solutions. The ByDesign apps store is a step towards that goal. (Aside: yes, SAP now several online stores and has told me they intend to simplify the online storefront approach).

2. ByD 3.0 includes enhanced functionality for subsidiaries of SAP Business Suite customers in the form of “packaged integration scenarios.” It has not always been clear how important SAP felt the subsidiaries play was to ByDesign, but it’s now obvious that SAP is going to feature this aspect heavily as part of its “two tier ERP strategy.” (Though it should be noted that SAP Business One is also pitched as part of a two tier ERP strategy also, setting up yet another juxtaposition between SAP’s cloud and on-premise SME products that could create some market confusion). I recently conducted an SAP Community Network podcast with Clause Gruenewald, who went into some detail on SAP’s plans for ByDesign and subsidiaries.

3. An “Ideas Forum” is live for customers and partners to submit (and vote on) product improvements via a Community Platform. I believe this forum should eventually be expanded beyond customers and partners in some fashion. For some reason SAP is using a third party ideation service ( rather than its own Idea Place for this feature. SAP has a long way to go with ByDesign community building in general. I’ll reserve judgment on the ideas forum until I talk with customers and partners who have used it.

4. Last but not least for the countries involved, ByDesign is now available in Mexico and Australia as of ByD 3.0. ByD 3.0 also features what SAP calls an “New User Interface Design” for more flexibility in customizing the corporate look of the screens (I hope to kick tires on the latest UI look at SAP TechEd Las Vegas). Functionality enhancements spanned all the ByD components, including third party order processing (Manufacturing) and Professional Services Provider capabilities like profitability and revenue recognition, which was a much-needed function not present in 2.6 (the next release of ByDesign, 3.5, is the edition where the Professional Services capabilities will be totally fleshed out and put under the analyst microscope).

5. The ByDesign Studio was also enhanced to enable partners to develop customer-specific and industry-specific add-ons. The SDK is still limited to a select group of ByDesign Solution Partners, leading to many questions about its capabilities (though SAP has provided hands-on sessions with the SDK at SAP TechEd and will do so again at this years’ TechEd events). To get a clearer view of the ByD SDK, I conducted a video interview with Vijayan Venkataraman of ERP Logic, who has worked on the SDK since 2008 when he was employed by SAP Labs. Vijayan’s insights into the ByD SDK were interesting, confirming the lack of need for ABAP and the current ability to use the SDK to build “one off solutions” for specific customer requirements:

A few other less-reported points to note about ByDesign and 3.0:

1. SAP continues to work on performance (system speed) for ByDesign. New customers in the U.S. are added to a U.S.-based data center, and it’s my understanding existing North American customers also have migration options to move to that data center.

2. The extent of the partners’ ability to configure ByDesign is something to watch. Some partners have told me they would like to be able to more deeply configure the product than is currently allowed. SAP should have more to say on this in the future.

3. Just because ByD 3.0 is out doesn’t mean all existing ByDesign customers immediately move to 3.0. 2.6 customers will be moved in “waves,” while customers prior to 2.6 may need to move to 2.6 first and then to 3.0. I expect these migrations to new versions of ByDesign to be smoother with upcoming releases as SAP’s multi-tenant architecture is in a much more finalized state than it was for the earlier ByDesign customers.

4. On August 23rd, SAP released the SAP Business ByDesign iPhone App version 3.0 (it is also called the ByDesign Player). According to Leonardo De Araujo of Beyond Technologies, a Canadian ByDesign partner, the Player is written in mobile device specific language (as of now, iOS for Iphone/Ipad). This player connects to SAP ByDesign backend system, reads the user profile/role and displays all the transactions that are mobile-ready in “workcenters” (logical groupings of transactions). De Araujo says that the mobile workcenters are similar in look and feel to the ByDesign desktop version.

The Player follows the UI approach by workcenters on the Netweaver Business client, available on the latest SAP Business All-in-One release. That’s a major plus as this is SAP’s best UI. The player then renders the transaction in mobile format, respecting the mobile capabilities and look and feel. The "ByD Player" will soon be available for BlackBerry and Androids as well. As De Araujo puts it, "The good thing about the player is that this makes the development of mobile apps completely transparent. Partners like us code in the ByD Studio, and the transaction will render correctly in any mobile device supported by the player."

Business ByDesign has a long way to go to build that thriving developer ecosystem and seamless apps store experience, but 3.0 is yet another overlooked milestone in a release that may not be moving rapid fire by SaaS standards, but is certainly setting an internal standard for other SAP products to measure their release schedules against.

As SaaS Continues to Rapidly Grow, How will IT Services Delivery Change?

In just a matter of a few years, SaaS and cloud-computing have gone from IT buzz words, to a new emerging architecture, to a leading market driver on the IT market. No where is that more clear than the accelerated growth of, who reported 38% growth last week for their FY-Q2, on revenue of $546 million, while surpassing the 100,000 customer mark. Beyond Salesforce, there's a cadre of other suppliers in the S/P/IaaS space, along with Workday, Taleo, Concur; as well as mature IT suppliers who are building out their own offerings, such as Microsoft Azure, SAP Business ByDesign & Lines of Business SaaS... and of course Oracle's Siebel CRM OnDemand (although I haven't heard much about this one in a while!).

Given this momentum, IT services companies need to prepare for SaaS. While from a percentage basis today, SaaS-related IT services projects are relative small compared to on-premise projects, the accelerating growth may bring a sea-change sooner than most suppliers realize...

First off, SaaS-related implementation projects are entirely different beasts than on-premise. While individual projects vary, what used to be a multi-million dollar services project tied to Siebel CRM in the early 2000's, can now be in the 100's of thousands around On major PaaS solutions, such as, the integration and development costs may bring up project values, but since a lot of the commodity (R.I.C.E.-based work, application development and maintenance, upgrades, technical servoces) services are baked into the PaaS, project services cost tend to be 25-to-50% lower than on-premise...

So far what has been most successful around SaaS-related project services has been a more industrialized, higher volume approach for implementations. Since systems integrators can now easily use customer data during pilots, and even fine-tune some solutions during pre-sales meetings, the whole design to roll-out phase is much more compact, and much more collaborative. Data, as in on-premise, is always a major issue, and having enough resources and the proper tools for data migration is step #1, and step #2 is to make sure there is a long-term plan and adequate resources for data management and administration.

So with much of the commodity-level services around SaaS either being removed, or greatly reduced, how should IT services companies prepare their resources?

Business Solution Architects:

Something that my PAC colleague Tobias Ortwein and I have been talking about for many years in the Enterprise Application Services space is the on-going need for business solution architects (BSA)'s. And to grab a phrase from my dot-com days, these are truly the "purple squirrels" of our time!

BSA's are consultants with both a deep domain expertise (typically coming from the industry), along with a strong technical acumen, but not a hard-coder. Increasingly in the enterprise space, and especially in SaaS, PAC sees a growing need for BSA's to restructure and innovate around business processes... all applied to a company's unique business model and industry needs.

"Cloud Factories":

Surprisingly, I have not seen the Indian offshore players more involved in this emerging segment, but rather companies such as Accenture and IBM. There are a few areas that are "resource heavy" during a SaaS implementation, and they include data migration services, cloud-to-cloud or cloud-to-on-premise integration, as well as custom development on a related PaaS. By creating highly industrialized services around SaaS solutions in a "cloud factory" model, some innovative IT services companies are looking to further reduce the TCI (total cost of implementation) for a SaaS solution, in order to free up additional resources around innovations (business transformation, creating custom solutions on PaaS) and effectiveness training & consulting services (related to sales, HR, logistics, etc.). So essentially, by leveraging lower cost "cloud factories," a company like Accenture can then propose more high-end consulting services, in order to bring clients more differentiation in their SaaS solutions.

In my next blog post related to this topic, I will be addressing the future of Offshore services in the SaaS world. Given that commodity skills are often reduced in the cloud, how do you see offshore services adapting? As always, please feel free to comment below and I'll make sure to address them in my next post!

Friday, May 20, 2011

SAP’s Partnership with China Telecom – a New Channel into the Chinese Market, and an Early Glimpse at Partner Hosting for Business ByDesign

On the first day of SAP’s annual Sapphire conference, SAP announced a strategic partnership with China Telecom, the largest telecom provider in the world by subscriber size, to host SAP’s SaaS ERP solution, SAP Business ByDesign.

For me, this is a major announcement for two reasons:

  • First, in order to execute SAP’s global business strategy in China, the company needed to adapt the Business ByDesign solution, and to work with a local supplier. And in this sense, China Telecom gives SAP China the opportunity to further localize the SAP Business ByDesign solution, as well as to meet local requirements, in order to have a truly scalable SaaS business in China.
  • The other major point with the China Telecom partnership is that now all global SAP services partners will be watching to see how the partnership will evolve. So far, SAP Business ByDesign has not been available to other IT services partners to host, since SAP has been focused on making sure the solution was working properly, that new customers could be brought on efficiently (with approximately 10% of the effort of a traditional ERP implementation), and that performance, reliability and security KPI’s were met. Thus China Telecom marks the first partner to host the ByDesign solution, and for the time being, the only one…

Specifically for the Chinese market, this new SaaS offering will support the multi-pronged approach that is being applied by SAP China’s President, Hera Siu. As Ms. Siu explained to me at Sapphire, “... large state-run enterprises were the earliest adopters of IT, while privately-owned entities (POE’s) have traditionally been IT laggards, and need to modernize their IT.” Taken a step further, one could consider that the POE’s are at a similar stage as U.S. companies in the early 90’s, grappling with the importance of enterprise management systems and the promise of business process engineering. This also explains why, as Ms Siu confirmed to me, on-premise ERP is king for these mid-market POE’s, with the ability to customize and to have physical ownership of the system and data, being of the highest importance.

Concerning on-demand in China, she explained that for larger enterprises and for POE’s who are looking to go global (as opposed to those focused on the local market), SAP Business ByDesign can be a very suitable ERP solution. On one hand, POE’s, as IT laggards, can take advantage of their clean IT slate by adopting the preconfigured processes within the SaaS solution. While on the other hand, large enterprises looking towards global growth can leverage ByDesign under a "hub-spoke" model, in order to more efficiently roll-out an integrated and consistent ERP solution outside of China through the SaaS model.

While it is clear that SAP China is taking quite a unique path compared to SAP’s operations in “mature” countries, this partnership may turn out to be an instance where a new delivery model piloted first in an emerging market like China, helps seed new partnership models elsewhere. PAC will be sure to keep up-to-date, both with SAP China’s future performance, as well as the evolution of its work with China Telecom.

Tuesday, May 17, 2011

ByDesign Follows a Familiar Path to the Large Enterprise

Let's be straight, SAP Business ByDesign has had a well documented, bumpy start to its life for the past 4 years or so. But this was partially due to SAP's own cautious nature as a development company, aiming to get a relatively small number of customers up and running (and happy), while it continued to refine the solution and its own SaaS strategy.

Fast forward to 2011, and according to SAP executives at the annual Sapphire conference, the solution has just reached 500 customers, and they are aiming to get this number into "the thousands" by the end of 2011. After years of false starts, it seems that the solution is ready for the big leagues, with the release of an SDK for the ByDesign platform to partners earlier this year, and as a result, the first of many partner solutions to come, all showcased on SAP's own "app-store" ... the SAP Store.

Today at the event, a partner solution tailored for the Chemicals sub-vertical was unveiled by Accenture.... Accenture?!?! Yes, that's right. Which points to two major movements: First, while ByDesign will always target the SME market, it is clearly moving upmarket, just like R/3 did in the 90's. At first opportunistically, and for very specific areas, but growing with partner adoption into the large enterprise. And second, Accenture is clearly showing that while the bulk of their business has been focused in the large enterprise (especially the Fortune 200), the company is capable of, and actively targeting more scalable offerings to the upper mid-market. While this will clearly be a smaller focus for Accenture, as the SaaS-related portion of its SAP business grows along with SAP's own SaaS offerings, PAC expects to see more and more efficient and scalable offerings from the company, using its unique "cloud factory" approach.

Frankly, today's Sapphire announcements were a bit light, but tomorrow is expected to reveal much more about SAP's SaaS Lines of Business, as well as Mobility... stay tuned!

Monday, April 18, 2011

John Wookey Leaves SAP

Coming just a month before SAP's annual Sapphire conference, John Wookey, has decided to leave the company after 2 and half years. SaaS solutions being developed by the company in Mr. Wookey's "Lines of Business" unit were expected to be front and center during the event, as SAP adapts it's offering to address the success of this new application model.

In my opinion, SAP is going to have to address this leadership hole very quickly, since Wookey himself often descibed his SaaS "Lines of Business (LOB) team" (meant for the large enterprise customer), as "a business within a business" for SAP, leveraging new development technique, models, and even culture, influenced from various competitors (such as Oracle/Siebel,, Workday and Taleo), as well as more upstart SaaS-focused suppliers from the silicon valley area (where the LOB team itself is based).

Also worth noting is that initially the SaaS platform for the Lines of Business applications developed by Wookey's team were to be based on an earlier SaaS acquisition (Frictionless). The platform was later shifted to the SAP Business ByDesign SaaS solution. While ByDesign was much maligned early on, it has shown signs of shaping up more recently. However, this also limited the LOB team's independence to some degree, since it now had to develop in parallel with the ByDesign team, which while very innovative, was much more from the SAP "old school" than LOB's "new school."

Despite Wookey's departure, PAC expects the SaaS focus at the upcoming Sapphire event in Orlando to be heavy... the crucial question is who will be placed in charge of finishing and releasing to market the many "Lines of Business" SaaS solutions planned?

Monday, March 28, 2011

SAP Sales OnDemand – Addressing the Lingering Questions

On November 8, 2008, John Wookey left Oracle to lead SAP’s large enterprise “Line of Business” (LOB) team. Since Wookey joined SAP, we’ve seen internal clarifications of SAP’s LOB on-demand strategy, but not much new product. That changed on February 24, 2011, when SAP hosted a group of “influencers” at the Boston Museum of Science for a hands-on debut of Sales OnDemand, the first LOB app from SAP that was built from the ground up with a new role-based, “socialized” design approach (Sales OnDemand is currently in ramp-up with about 50 customers participating, with a GA optimistically targeted for Q2 2011).

It’s surprising that there isn’t as much talk about SAP large enterprise (LE) on-demand as there is about Business ByDesign. ByD will face its share of established competitors, but there are more “greenfield” accounts in the SME space ByD is built for, when you take into account Global 2000 subsidiaries as well as thousands of smaller companies struggling with chaotic QuickBooks/Excel financial operations. Contrast that to LOB on-demand, where the pie in some key areas, CRM and HCM in particular, is being rapidly divided up, with SAP late to the party as moves in on 100,000 customers - including more SAP customers than anyone at SAP should be comfortable with.

After the event, attendees such as Josh Greenbaum and Paul Greenberg posted worthwhile summaries of the event (Greenbaum had two posts, one reviewing the product strategy, and one about the clever “gamification of the analysts” approach SAP took for the event; Greenberg issued his usual monster post, with screen shots). Ray Wang (Constellation Group) did not attend personally but posted another take from his own briefing, also including screen shots.

However, not all the analysis was coherent. The product was misrepresented by other media sources (such as Forbes’ inaccurate comparison of Sales OnDemand as a “Chatter rival”). Lingering questions from the event nagged at me. After chasing down some loose ends, it's time for a post about the questions I’ve been sorting through:

1. SAP Sales OnDemand is NOT a “Chatter Rival.” Perhaps the ill-advised comparison of the products is understandable given that they both have an activity stream, but the differences between the two are significant. Chatter was built as a “social layer” applied to after it was built. Chatter is an enterprise activity stream, whereas SAP Sales OnDemand is a CRM (specifically a “Sales Force Automation”) product that was designed with a social sensibility and an integrated activity stream before a line of code was typed.

There are advantages to both approaches. As a layer on the platform, Chatter can more easily be applied to other apps on the platform, and in fact has been applied contextually into It remains to be seen whether SAP can take the social technology it developed for Sales OnDemand and apply it to other products. In theory, future Line Of Business apps should be able to lift this “social tech” into their design. Whether SAP could ever take this activity feed and apply it across their new “unified on-demand platform” remains to be seen.

One thing we do know: SAP would have a much harder time applying an activity stream across the on-premise Business Suite, and I’ve heard of no plans to attempt that, except perhaps with targeted StreamWork integration – with the caveat that StreamWork is NOT really a Chatter equivalent as some think – it’s a collaborative decision making tool currently best applied to specific projects or situational resolutions.

StreamWork does have an activity feed that can be used to monitor project activities, and I get the impression that the product development team has some bigger plans in mind for what StreamWork could mean to enterprises down the the road for broader collaboration. But StreamWork does not yet make use of the @mention protocol that is so useful for pulling people into relevant tasks, and the project-based invitation system is very different than an open collaboration layer applied across a platform as Chatter is on StreamWork is nowhere near being applied across the Business Suite as a collaboration layer, for example. I personally don't think that's the best StreamWork use case anyhow. In a process context, I like StreamWork better for exception handling scenarios and prioritization exercises for decisions with many variables. Meanwhile, StreamWork has some not-small usability issues of its own, but that’s another blog. (updated: 4/31/2011)

2. Future SAP LOB OnDemand Apps will be built using the same role-based, socialized approach. Now that SAP has clarified its “core and edge” on-demand platform, it will be easier going with the design/rollout of new LOB apps. If SAP can hold to their plan, which includes Career OnDemand and Travel OnDemand both slated for ramp-up in the second half of 2011, that will be a significant improvement on previous years when internal design and platform issues held SAP back from new LOB on-demand products, unless you want to count Carbon Impact, which is technically a simpler “edge” app that runs on the River platform intended for lightweight on-demand apps.

This is not the place to describe SAP’s “core and edge” on-demand platform in detail; I’ve already done that elsewhere. What we can say is that SAP has had a breakthrough in terms of leveraging the ByDesign multi-tenant architecture for Line of Business as well. This solves vexing technical and platform ecosystem problems. At the Boston event, Wookey’s group was clearly energized by their ability to focus on what they consider to be groundbreaking product design and not platform headaches. Sales OnDemand (and other LOB apps) should be able to utilize the same (or similar) SDK as ByDesign and hopefully benefit from the partner development community that SAP must energize for ByD to be successful.

Greenbaum captured the potential of this ByD/LOB integration: “The secret sauce for Sales OD comes in the form of an even tighter connection to SAP Business ByDesign than had been previously intimated. ByD has become not only the platform for Sales OD and SAP’s other present and future on-demand applications, but the functionality in ByD – all the non-CRM, ERP stuff that ByD is designed to do – will be made available via a forthcoming software development environment that is similar to the SDK SAP released last year.

He concludes this will allow Sales OnDemand to incorporate process and data integration with ByD’s ERP processes, making Sales OnDemand “the kind of deeply integrated CRM/ERP application that Salesforce has to partner to deliver.” I’ll be honest – this reads a bit like science fiction to me, but it’s possible Greenbaum picked up on these details while I was refilling my tea. Here’s what IS clear to me: the LOB-ByD connection and platform compatibility is going to help SAP going forward. This won't erase all confusion about the disparate on-demand packages that have been grandfathered in from various SAP acquisitions (Sourcing OnDemand for example), but it should clear things up going forward, both for SAP developers and for customers. Speaking of clearing things up:

3. SAP CRM On-Demand – the “hosted solution” SAP first launched in 2006, is going away. It’s no longer featured on the LOB on-demand web page. When I asked SAP about this, their official response was, “We stopped selling CRM On-Demand before we started to work on Sales OnDemand… Existing SAP CRM On-Demand customers are currently either migrating to an SAP on-premise solutions or will be participating in the ramp-up program for Sales OnDemand.

4. SAP took a bigger risk than people realize by letting analysts try to “break” Sales OnDemand at the Boston event. I read some nice blogs about the gamification of the event, and while it was fun to fight with other analysts about commissions as if we were salespeople in the hunt for our next deal, we were in a sense “breaking” the system, or seeing if it would break. That’s not something SAP is used to doing and the outcome could have been a PR mess. This resulted in some glitches and a consensus verdict that the functionality of Sales OnDemand is still limited, but SAP’s gutsy approach to this event was refreshing. SAP is figuring out that you can’t hide behind ramp-up.

One event highlight was a very open discussion about filtering and prioritizing information in a noisy activity feed. The last thing companies want to do is to distract their best closers with meaningless happy talk updates of the kind we see on Facebook. In my view, the solution is to give users a range of customized choices about the information they want to see and the devices they want to interact on, but it was a useful discussion for both sides, with SAP literally taking notes and following up. Some might see this as a sign of weakness or product chaos, but I saw it as a valuable exercise in transparency that can only help SAP if it becomes a habit.

I really wanted to ask John Wookey about the "live without a net" experience of the event, so here’s a short video of Wookey reflecting on the risk SAP took and what he took away from the event. The production values of this “twilight video” are not going to win any awards, but the moment was still worth capturing:

5. SAP has work to do on pricing – and that means learning how to talk about it. Greenberg, who liked the event overall, honed in on this problem: “First, sets the bar for the pricing - meaning an enterprise edition that is $125.00 per user per month. Second, Microsoft is on a pricing rampage, with their SFA product, Microsoft Dynamics CRM Pro, which is aimed at the enterprise customer, running as low as $34.95 per user per month. That sets a different kind of bar that is not ignorable, even if you’re used to SAP on premise pricing.”

When it’s time to get pricing questions answered at SAP events, it's typical to run into a wall. The standard response is that “SAP doesn’t discuss pricing during ramp-up.” And it seems like the products we really want to talk about at these events are always in ramp-up. Perhaps that’s a separate problem, but SAP would do well to figure out how to share pricing considerations more openly. Some key players inside of SAP realize there is an issue here, so hopefully we’ll see more information not only about Sales OnDemand pricing, along with a more forthcoming approach to pricing talk in general.

6. SAP’s late start may have a hidden benefit – next generation design. SAP clearly needs to pick up the pace with its LOB on-demand releases. However, the late start could pay off in this respect: the socialization of the enterprise is now in a “test case” phase, giving SAP a chance to bake proven collaboration techniques into the design and tie Facebook/Twitter like activity feeds into re-envisioned “enterprise roles.” In the case of Sales OnDemand, this meant designing an application around the constant pressures and interruptions of today’s salesperson, all the while rethinking the meaning of sales from a “solo hunter” to a team concept that is increasingly impacted by collaborative software.

Only the real social media nutjobs think we need Facebook for the enterprise, but during the gaming exercise, it was immediately obvious that the streaming notifications and @mentions that Twitter and Facebook users are accustomed to can have an impact on enterprise tasks – as long as the user is in control of who gets to ping them and in what context.

Of course, this invokes a new problem of older knowledge workers who may not be adept at these social conventions or even interested in their use. If so, that’s a problem SAP is going to get a crash course in as it takes this product to market. It bears remembering that the problem salespeople have had with Sales Force Automation is not magically solved by creating a fun and interactive UI.

Salespeople have their reasons for keeping vital account information in their heads, and the sleek technology of Sales OnDemand and iPads don’t solve that issue. Ironically, the most effective solution I have heard is to force salespeople to enter data in order to receive commissions – a brow-beating tactic from the hierarchical enterprise coming to the rescue of the (supposed) “flat social enterprise.”

Concluding thoughts

SAP has it work cut out for them building out LOB on-demand while competitors surge ahead. One of the most interesting possibilities, Service OnDemand, is an area SAP told me they are “definitely considering” but without further details at this time. For now, SAP will move ahead with an apparent plan of building LOB apps where competitors are doubtless selling into the SAP install base (SFA, HCM, travel/expense management). The downside is that by not moving immediately into Service OnDemand, SAP will lack the service component that gives competitors, Oracle, and Microsoft more complete on-demand CRM Solutions. As for Sales OnDemand, I’ll be surprised if SAP hits its goal of General Availability in Q2 2011 – there are still plenty of functional threads to tie together. If I have to eat those words, then more power to SAP.

Compared to the ByD rollout, SAP has even more to prove with its LOB on-demand strategy. It’s hard to imagine any significant revenue impact from these new apps until well into 2012, so don’t expect them to take center stage at SAPPHIRE NOW this year. A heavy dose of HANA, mobility, and analytics, all closer to impactful revenue, should push LOB on-demand off center stage for a while. I don’t recommend under-estimating Wookey or his team, but with these questions answered, there’s a whole new batch to tackle.

Note: SAP covered my travel and accommodations to this event.

Friday, March 25, 2011

How IBM’s Strategy as an SAP Partner is Evolving

Just a couple of days ago I met IBM's new General Manager for its SAP alliance, Todd Kirtley. For me this meeting was very interesting for two reasons: For one thing, I am still under the impression of SAP's recent announcements by its top executives to put a new focus on its ecosystem. So meeting the new SAP alliance manager of SAP's largest and strongest partner and discussing with him the current situation and his view on SAP, challenging him with regard to IBM's SAP strategy, was the right thing to do at the right time (let me take the opportunity to again thank Todd very much for spending time with me).

Of course we started our discussion with SAP's major topics, “mobility”, “on demand” and - highly interesting to discuss, I will come back to this a bit later - all the topics linked to BI/in-memory/HANA. Todd made it clear that in his view, IBM’s major opportunities and differentiators were related to its unique capability to bring innovation to the market. And, as Jim Hagemann-Snabe pointed out, SAP is currently driving more innovations than ever before. For this reason, one of his major goals is to take the collaboration between IBM and SAP to a new level, especially when it comes to developing innovations and finally bringing them to the market. From my point of view, this is exactly what I would expect from this relationship.

In the recent past, I have had the impression that IBM's focus with regard to SAP has been too much on efficiency improvement rather than on the effectiveness of IT. However, to defend IBM's activities of the last few years, I must say that SAP was not the most innovative company on the market, thus making it hard for its partners to drive innovation bringing a clear business value together with SAP.

Especially in terms of “mobility”, I expect both companies to become more ambitious, as Todd shared my opinion that this topic was also of major interest to them. IBM is one of the few partners of SAP that combine all the competencies necessary to develop mobile business scenarios and to implement the required IT from A to Z. As a consequence, my expectation as a market analyst would be for IBM to develop holistic solutions in this space, as this is IBM's USP.

Even more interesting to discuss was IBM's approach regarding “business analytics”. SAP and IBM have had a long-standing partnership that has also always been characterized by fields of “coopetition” (we still remember the two companies’ explanations why “WebSphere” and “NetWeaver” do not compete with each other... ;-)). However, with its “Business Analytics Optimization (BAO)” approach, IBM has kind of divided itself into two camps. On the one hand, in its lab in Boeblingen, IBM showed me its activities to create the hardware basis for running HANA with even more performance. On the other hand, we all know that IBM is putting a lot of efforts into pushing its BAO approach into the market - mainly based on its own products which compete with SAPs BI solutions. Anyway, the fact that customers will be able to choose between two interesting approaches when creating their “business analytics” scenarios is not bad at all...

We are looking forward to seeing how IBM will fulfill its role as an innovation partner in the SAP ecosystem and how SAP’s strategic approach to better leverage its ecosystem will bring benefits for its customers.

By Tobias Ortwein, Senior Vice President, PAC Germany

Thursday, March 17, 2011

HP Enterprise Services: A group In transition

Last summer HP made the commitment to spend $1 billion dollars to transform its Enterprise Services group. Even though this process is expected to last into 2014, HP says it has been making progress by developing ‘factory models’ for clients, which define project objectives, as well as creating a synchronized and repeatable model. Of course, in keeping with larger HP objectives, this also now includes the drive to create an instant-on cloud model.

HP Enterprise Services, which includes a broad area of application services, business process outsourcing, IT infrastructure outsourcing and industry solutions, also has several solution areas that it will be focusing on. These include applications modernization and a redoubled effort to commercialize new IT products that HP Labs are creating.

To achieve these goals HP has hired approximately 1,000 new sales people to lead the charge. HP also realized that previous sales staff might not have been properly equipped to talk the talk of enterprise services so it is taking great pains to put new sales personnel through crash courses at the new HP Sales University in Plano, Texas.
To create greater success in enterprise services, HP will have to hire IT talent that brings business and domain skills to the industries it currently has traction (healthcare, transportation, telecom) and build a repository of these talents internal to HP Enterprise Services. This can serve the company well as it tries to take healthcare enterprises services to the Europe and Asia markets, something HP plans to do. In fact HP has plans to globalize to other vertical like public sector but will hold off on other verticals, fearing it may spread itself too thin.

HP is probably wise to take this conservative approach in growing the Enterprise Services group. Even with a large budget it is tempting to hire in all directions for all verticals. By lining up the services solutions template first and making it mostly repeatable in multiple geographies, HP will get the largest bang for its buck and while also increasing its chances for satisfied enterprise services clients that will come back for more based on an initially successful experience.

by Scott Tiazkun

Wednesday, March 16, 2011

The New HP Way: New Strategy is Heavily Cloud Based

The first HP analyst event since Leo Apotheker become CEO sees the company fully embracing the cloud and positioning cloud solutions for enterprises and consumers alike.
HP laid out a vision for its cloud offerings in San Francisco today, including an open cloud marketplace that will have services for consumers, developers and businesses, including enterprise apps, security products and analytics.

HP is looking to balance the needs, wants-and large opportunity- of consumers and business enterprises as it has the IT products and services to appeal to both.

HP also unveiled plans to build the WebOS it acquired from Palm into a more robust and widespread connectivity platform. The company said it wanted to achieve 100 million WebOS enabled devices in a year. Even though a tall order, HP sees long range value in having this software platform more widespread as a basis for selling larger IT solutions systems to clients that will hopefully also see the value of a unified OS platform.

Specific to services, HP sees opportunity in to modernize and optimize systems around application lifecycle management, converged infrastructure, security and information optimization. Specific to optimizations, HP will also pursue vertical acquisitions and use these to craft industry specific data analytics solutions.

HP has a big agenda and will need to further refine how it will differentiate itself form cloud competitors. But its emphasis n SMV and consumer services might gain traction with its already large client base.

by Scott Tiazkun