Archive for April, 2011

Quick Take: Infor and Golden Gate Gain Definitive Agreement To Acquire Lawson For $2B

Published on April 26, 2011 by R "Ray" Wang

New Firm To Focus On Verticals And Growth Markets

Golden Gate Capital and Infor entered an agreement to acquire Lawson at $11.25 per share.  The transaction is valued at $2B. Following the 7am ET press release,  a conversation with Charles Phillips and Duncan Angove highlighted key elements of the deal:

  • Focus on growth. Infor sees an opportunity to cross-sell products from both companies into the existing 75,000 customer install base.  Lawson’s HCM product line and Infor’s new release of Sun Systems Financials will provide the back office engine that was missing as independent companies.  The firm expects two-tier financials to be a growth opportunity.
  • Commitment to vertical differentiation. Infor’s trengths in distribution, manufacturing, and hospitality will complement Lawson’s core in healthcare, financials, equipment service rental, and public sector. Charles and Duncan both provided compelling examples of how products from both companies could be used to solve industry problems such as nursing shortage and asset management in healthcare. Time and attendance, planning, scheduling, and analytics would come together to solve a difficult customer problem.
  • Investment in integration.  The combined firm intends to focus on bringing applications together through integration.  Initial thoughts are to achive a common customer experience.  The engineering teams will begin with aligning ION to Lawson Process Platform. The goals – ensure that the common user experience layers are delivered adn bringing together common integration points.

More to come later in the day.

Your POV.

Does this announcement surprise you?  Are you a Lawson customer?  What do you think of an Infor takeover?  What do you hope Lawson will do? Add your comments to the blog or reach me via email: R (at) ConstellationRG (dot) com or R (at) SoftwareInsider (dot) com.

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Monday’s Musings: Lessons Learned From Amazon’s Cloud Outage

Published on April 25, 2011 by R "Ray" Wang

Amazon’s Cloud Outage Catches Most Clients Offguard

The recent Amazon cloud outage at its Northern Virgina data center from 5 am Thursday, April 21, 2011 to roughly 5 am Friday, April 22 has shaken the confidence of some executives on public cloud computing.  Most notably, FourSquare, HootSuite, Reddit, and Quora publicly suffered visible performance issues.  The industry’s reassurances in the past on up time performance and massive redundancy capabilities combined with the massive corporate adoption had everyone believing that public clouds were bullet proof.  As calmer heads prevail, most CIOs, business leaders, and analysts realize that:

  • Cloud outages are rare but can happen. While most organizations can not deliver 99.5% up time let alone 90% performance, disruptions can and will happen.  The massive impact to so many organizations last week highlights potential vulnerabilities of betting 100% of capacity in the cloud.  More importantly, it showed that broad adoption does not equate with bullet-proof reliability.  Most organizations lacked a contingency plan.
  • Cost benefit ratios still favor cloud deployments. For most organizations, the cost of deploying in the cloud remains a factor of 10 cheaper than moving back to the traditional data center or even a private cloud.  Capital costs for equipment, labor for managing the data center, excess software capacity, and the deployment time required to stand up a server create significant cost advantages for cloud deployments.
  • Current service level agreements lack teeth and should be improved. Most organizations lack teeth in the cloud/saas contracts to address service level agreement failure.  Despite all backups and contingency plans, clients should consider scenarios where core business systems go down. What remedies are appropriate? What contingencies for system back up are in place.   Who is responsible for disaster recovery? Will the vendor provide  liability and for what?

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Tuesday’s Tip: Dealing With Pesky Software Licensing Audits

Published on April 19, 2011 by R "Ray" Wang

Organizations Report Increase In Software Licensing Audits

Across the board, the largest complaints about software vendors and their business practices have come from increasingly aggressive software auditing practices.  Once thought to be a small possibility, the software vendors now wield this big stick to drive up sales and of course ensure compliance.  Given the 32 percentage gain since Q1 2008 in the percentage of respondents faced with a software audits, procurement managers, CIOs, and CEOs have paid attention (see Figure 1).   Even the recent Gartner report from star analyst Jane Disbrow et al. shows that 61% of their customers have been audited by at least one software vendor.

Figure 1.  Software Vendors Ramp Up Software Audits

Software Licensing Audits Masquerade As Sales Tactics In Disguise

Is this shocking?  Should customers be concerned?    Given the relatively strong compliance rates in the high 80′s, customers should be livid that vendors are willing to jeopardize a relationship to shake down for cash (see Figure 2.).  Here are some key reasons for the audit:

  • Check for compliance
  • Identify installed base competitors
  • Drive incremental license sales
  • Prospect for up-sell/cross-sell

After speaking with 13 major software vendors, most admitted that software audit served two purposes.  The first – keep customers in compliance.  The second – shaking the bushes for new deals during the recession.

Figure 2.  Most Organizations Were In Compliance Post Software Audit

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Event Report: The Sentiment At Microsoft Convergence 2011

Published on April 10, 2011 by R "Ray" Wang

Refresh Cycle Reflects Bullish Outlook By Partners and Customers

Microsoft Convergence kicked off over the weekend in Atlanta, GA at the Georgia World Congress Center.  With an anticipated increase in attendance, many new product announcements, and a technology refresh cycle in play, attendees seemed upbeat.  The event kicked off in true tradition including the must attend Randy and Andy (IBIS, Inc) welcome party.  Anticipated cloud announcements, new features, and industry extensions dominate discussions among partners.  Through a survey of over 60 customers, we found the following observations:

  • Customers expect to upgrade ERP and CRM in 12 to 18 months. Good news for Microsoft partners.  Most ERP and CRM customers plan to upgrade within the next 12 to 18 months (see Figure 2).  Many plan to upgrade ERP (18.0%) and CRM (13.1%) in the next 6 to 12 months.
  • Cloud adoption remains partly cloudy. While there are numerous benefits to cloud adoption for clients,  34.4% of ERP customers showed no interest.  Most CRM customers expected to make the shift to the cloud (see Figure 3).  As for the shift to office in the cloud, 18.0% planned to make the shift 24 months from now.
  • Attendees seek to leverage Microsoft investment. Informal conversations highlighted interest in mobile development, greater sharepoint adoption, and interest in Power Pivot.  Most customers felt Microsoft had turned the corner and began to innovate as of the Windows 7 launch.
  • Large customer prospects explore Two Tier ERP. In speaking with 13 divisions of large enterprises at the event, most attended to explore the option of adding Microsoft Dynamics ERP into their subsidiaries.  Eight of the ten companies ran SAP while three ran Oracle, and another two ran custom legacy systems.  Surveyed prospects believe that Two-tier ERP strategies will dominate future apps strategy.

Figure 1.  Flickr Feeds From Microsoft Dynamics Convergence 2011

(Tag your images with #softwareinsider or #rwang0 to include into the feed)

Figure 2. Most Microsoft Dynamics Customers Plan To Upgrade ERP & CRM In 12 to 18 Months

(Right click image to expand)

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Vendor Event: Microsoft Dynamics CRM 2011 – The Power Of Productivity Vancouver, BC Launch

Published on April 9, 2011 by R "Ray" Wang

Title: The Power Of Productivity – Microsoft Dynamics CRM

Start Date: 2011-04-19  12:30 am PST
End Date: 2011-04-19   5:30 pm PST

Location:

Vancouver Convention Centre
West Building, 2nd Floor
1055 Canada Place
Vancouver, BC, V6C 0C3

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Monday’s Musings: Mastering When and How High End Brands Should Use Daily Deal Sites Such As Groupon

Published on April 4, 2011 by R "Ray" Wang


Daily Deal Sites Claim To Bring New Customers

Chicago, Illinois based Groupon, is a consumer oriented commerce site that brings consumers looking for the ultimate deal to businesses seeking new customer bases.  Local based targeting, fun cheeky copy, and a reach in almost 600 cities powers the frenzy behind the “daily deals”.   Customers pay upfront.  Groupon takes 40 to 50% of the deal.  Businesses  supposedly gain new customers.  Other start-up competitors in the digital coupon “daily deal” space include Bloomsot, BuyWithMe, LivingSocial, Scoutmob, and Tippr. Established brands Google, Facebook, Microsoft, OpenTable, Yahoo!, and Yelp all have similar offerings in play or planned.  The idea makes sense at first on a few counts for businesses with:

  • Immediate inventory items. Perishable food items, overstocked goods, closeout merchandise.
  • Unused service capacity. Unbooked hotel rooms, open spa appointments, down time at a bar.
  • Instant gratification offers. Quick promotions, fast deals, quick foot traffic.

However, Most Orgs Face Massive Pricing And Brand Dilution

After talking to over 50 high end, high profit customers, we’ve unveiled a growing resentment with how the current model works.  Despite the advertised 95% of merchants who’d use Groupon again stats, the numbers fail to tell the story.  In fact, the top three complaints we personally heard in our informal 51 high end organization survey include:

  • Brand value dilution. The novelty and brand promise not appreciated by new customers.  Brand value not fully communicated or achieved by customers.
  • Downward price pressure. Overall perception on pricing trends downward due to lack of scarcity.  Customers now see a new price for an existing luxury service.
  • Loss of profitability among existing customer base.  Existing profitable customers wait for deals instead of pay full price.  Loyal customers feel cheated.

The Bottom Line:  Use The Customer Profitability Matrix To Determine Your Strategy

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Vendor Event: Create and Deliver a Single Customer View at the Customer Data Forum

Published on April 3, 2011 by R "Ray" Wang

Title: Create and Deliver a Single Customer View at the Customer Data Forum

Location:
Grand Hyatt Washington (Map)
1000 H Street NW
Washington, D.C. 20001

Start Date: 2011-04-14  8:00 am EST
End Date: 2011-04-14   12:00 pm EST

Register here.

———-

Are you…

  • A sales or marketing operations executive who’s struggling to get a single customer view across divisions or channels to make relevant cross-sell offers and increase revenue?
  • A customer service or support manager who’s struggling to get a complete view of your customer’s relationship with your company to speed response times and boost customer retention?
  • An IT director who’s struggling to deliver trusted and complete customer data that the business needs—faster and at lower cost?

Let’s face it. Your customer and prospect data is incomplete and inconsistent. It’s stored in multiple systems located both on premise and in the cloud. You’re spending way too much time and effort pulling all this data together and not enough time on customer engagement.

You need a 360-degree view of customer relationships—one that takes into account all the products or services your customers own as well as their household/account relationships—and augment that view with all interactions they’ve had with your company.

Join Informatica at the Customer Data Forum to learn how to create a single, complete, and trusted view of your customers to drive revenue, increase profits and improve efficiencies. Learn how a single, complete and trusted customer view can help you…

  • Grow revenue by attracting new customers and by increasing the wallet-share of existing customers
  • Increase profitability by retaining current customers through better customer service
  • Improve operational efficiencies and reduce costs of delivering appropriate levels of service to current customers and acquiring new ones.

Customer Data: The Missing Link to Strategic Success

R “Ray” Wang, Constellation Research Group

Customer data needs to be managed as a strategic corporate asset. As programs like “Voice of the Customer” become priorities and Social CRM enters the conversation, business executives now understand that customer data can make or break corporate strategies.

When it comes to customer data, all parts of the company—the business and IT alike—need to get on the same page and speak the same language. IT organizations need to transcend platforms and buzzwords to persuade the business to invest in the customer data projects that deliver real business results.

Learn how to…

     

  • Determine if your company’s data is really valued as a corporate asset
  • Position high-quality data as central to your company’s customer-facing initiatives
  • Map master data management (MDM), data quality, and data governance initiatives to your corporate strategy
  • Communicate effectively with business and IT executives to gain traction on your customer data projects

    •  

Register here.

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