The majority of 22 publicly traded software vendors demonstrated solid year-over-year (YoY) quarterly growth from Q2 2009 (see Figure 1).   Every SaaS vendor in the Software Insider Index® drove 14% to 26% growth (see Figure 2) despite the pick up in on-premises license sales.  Highlights for the 2010 CY Q2 2010 results:

On-Premises Trends

• JDA Software (59.19%) and Manhattan Associates (32.93%) continue to ride the CPG, retail, and supply chain investment wave.  Manhattan solidified a significant turnaround in 2 quarters of growth.
• Large mega vendor bellwethers Oracle (12.95%) and SAP (12.34%) showed significant double digit growth.  SAP’s license gains of 17.31% demonstrate a turnaround in the sales team.  All indications point to BOBJ and the non-EMEA regions driving sales growth.
• The SMB vendors shared mixed results with Epicor (8.68%), Lawson (5.81%), and CDC Software (3.92%) continuing to grow key license revenues.  While IFS total revenue gains were low in the 1.40%, IFS grew license revenue by a whopping 19.77%.
• Unfortunately, other SMB vendors Exact (-4.99%) and Deltek (-7.07%) showed negative revenue momentum.  These vendors not only lost ground in license revenue but also saw declines in traditionally stable maintenance revenue.
• Maintenance fee growth remains healthy for most vendors as new programs to show value to customers gain traction.

SaaS Trends

• SaaS vendors continue to grow in mid to high double digit growth rates for subscription revenue. SuccessFactors (26.81%), Salesforce.com (24.78%), and Concur (20.49%) moved past 20% year over year quarterly growth.
• Ariba ($93.2M) nears the $100M per quarter revenue benchmark as Blackboard ($101.5M) continues to grow from this achievement in Q1 2010.
• RightNow (19.58%), NetSuite (16.83%), Ultimate Software (15.67%), and Taleo (14.63%) all showed solid quarters of growth, though these growth percentages show slight declines.

Figure 1.  Software Insider Index® On Premise Vendors: Q2 CY 2010

(Right click to view full image)

Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

Figure 2. Software Insider Index® SaaS Vendors: Q2 CY 2010

Despite the rocky recovery and potential for double digit recession, pent up demand drives the current on-premises vendor revenue growth.  Organizations continue to invest in technology despite the lack of job creation.  However, on-premises vendor gains have not impacted SaaS vendor growth.  In fact, most organizations continue to adopt Scenarios 1 to 3 in their Cloud/SaaS strategies. As hybrid models reach tipping points, successful apps strategies must focus on SaaS integration, SOA adoption, and information governance.

Welcome to a part 2 of a multi-part series on The Software Insider Tech Ecosystem Model.  Part 2 describes how the cloud fits into the model.  Subsequent posts will apply the model to these leading vendors:

• Overview
• Cisco
• Dell
• HP
• IBM
• Microsoft
• Oracle
• Salesforce.com
• SAP

The aggregation of these posts will result into a research report available for reprint rights.

Cloud Computing Represents The “New” Delivery Model For Internet Based IT Services

Technology veterans often observe that new mega trends emerge every decade.  The market has evolved from mainframes (1970′s); to mini computers (1980′s); to client server (1990′s); to internet based (2000′s); and now to cloud computing (2010′s).  Many of the cloud computing trends do take users back to the mainframe days of time sharing (i.e. multi-tenancy) and service bureaus (i.e cloud based BPO). What’s changed since 1970?  Quite plenty — users gain better usability, connectivity improves with the internet, storage continue to plummet, and performance increases in processing capability.

Cloud delivery models share a stack approach similar to traditional delivery.  At the core, both deployment options share four types of properties (see Figure 1):

1. Consumption – how users consume the apps and business processes
2. Creation – what’s required to build apps and business processes
3. Orchestration – how parts are integrated or pulled from an app server
4. Infrastructure – where the core guts such as servers, storage, and networks reside

As the über category, Cloud Computing manifests in the four distinct layers of:

• Business Services and Software-as-a-Service (SaaS) – The traditional apps layer in the cloud includes software as a service apps, business services, and business processes on the server side.
• Development-as-a-Service (DaaS) – Development tools take shape in the cloud as shared community tools, web based dev tools, and mashup based services.
• Platform-as-a-Service (PaaS) – Middleware manifests in the cloud with app platforms, database, integration, and process orchestration.
• Infrastructure-as-a-Service (IaaS) – The physical world goes virtual with servers, networks, storage, and systems management in the cloud.

Figure 1. Traditional Delivery Compared To Cloud Delivery

Cloud Computing Encourages Users And Vendors To Focus On Value Added Solutions

Applying The Software Insider Tech Ecosystem Model to Cloud Computing highlights where buyers, sellers, and partners can deliver value (see Figure 2).  As cloud computing adoption increases, users can expect that:

• Solution providers and partners will invest in value added solutions over commoditized infrastructure. The continued commoditization of technology results in richer and more relevant Cloud stacks.  As a result, a handful of larger players will emerge to drive down the costs of computing while encouraging ecosystems to deliver value added solutions.  Buyers can expect packaged apps, vertical apps, last mile solutions, and implementation partners, to invest in specialized and higher value intellectual property (IP).
• Customers will care more about service level agreements than the brand name of technology components. The cloud commoditizes the infrastructure components for both tools for creation and tools for distribution.  Users shift their priority for brand components in favor of outcomes based delivery.  Consequently, users will not care about the brand name of hardware, database, middleware, and even business intelligence systems in use.  Client success shifts to the monitoring of pre-agreed upon service level agreements (SLA’s)
• Integration will emerge as the key enabler and choke point. End users need an enterprise apps strategy for cloud computing that addresses the “I” word – Integration.  SOA principles must be enforced including support for canonical data models and business process haromonization.  Integration must focus on data mapping, business process orchestration, quality of service, and master data management.

Figure 2.  The Software Insider Tech Ecosystem Model For The Cloud

The Bottom Line For Buyers  – Use The Tech Ecosystem Model To Build Out Your Technology Roadmap And Procurement Strategy.

The Software Insider Tech Ecosystem Model can provide a key tool in mapping out the long term apps strategy.  Use the suggested five step approach to determine how cloud computing can support existing and future business requirements:

1. Start by listing the vendors in each category. Jot down the names of every vendor you own into each category (see Figure 3.)
2. Identify the key business processes supported. Place business processes at the high level and line them back to the vendors.
3. Evaluate the application portfolio.  As consolidations occur, business strategy should align with applications strategy.  Applications strategy will then align with procurement strategy to optimize the Business Technology Value equation.
4. Build out your solution ecosystem plan. In some cases, you will consolidate vendors. In others, you will acquire new solutions.  Sometimes, the last-mile will require custom development.  Take a balanced approach to the portfolio.  Keep in mind how you sunset legacy applications and solutions.
5. Apply model to the contract strategy. This model applied to Seven Simple Steps To Successfully Negotiate Software Contracts will drive business value in technology projects.

Figure 3.  Sample Solution Providers Across The Four Layers Of Cloud Computing

The Bottom Line For Sellers (Vendors) – Use The Tech Ecosystem Model To Plan Partnerships and M&A Strategies

Use the Software Insider Tech Ecosystem Model  to determine when to partner, build, or acquire a capability. Determine which category to invest in Cloud Computing based on R&D budget and organization’s size.  Evaluate each category by:

1. Examining the current footprint. Fill in the model to see what you own (see Figure 3).
2. Identifying adjacent profit pools. Look at potential install base up-sell, cross-sell, and attach rate opportunities.
3. Determining potential profit margins and ROI. Look at average profit margins.  Identify and rank the top categories.
4. Ranking opportunities by competitive threat. Determine which piece to commoditize next in the value added solutions.  Figure out which areas are high growth value added solutions to invest.
5. Put together 3 year strategy. Face it, 3 years is too long but you need a time frame.  Identify acquisition prices and partnership criteria.

Your POV.

Buyers, do you need help with your Cloud and SaaS strategy?  Ready to put the expertise of over 1000 software contract negotiations to work?  Give us a call!  Sellers and vendors, want to expedite your ability to effectively partner or test your M&A idea?  You can post or send on to rwang0 at gmail dot com or r at softwaresinsider dot org and we’ll keep your anonymity.

Please let us know if you need help with your next gen apps strategy, overall apps strategy, and contract negotiations projects.  Here’s how we can help:

• Designing a next gen apps strategy
• Providing contract negotiations and software licensing support
• Demystifying software licensing
• Assessing SaaS and cloud
• Evaluating Cloud integration strategies
• Assisting with legacy ERP migration
• Planning upgrades and migration
• Performing vendor selection
• Renegotiating maintenance

Resources And Related Research:

20100621 A Software Insider’s POV – R “Ray” Wang – “Research Report: How SaaS Adoption Trends Show New Shifts In Technology Purchasing Power”

20100322 A Software Insider’s POV – R “Ray” Wang -”Understanding The Many Flavors Of Cloud Computing/SaaS”

20091222 A Software Insider’s POV – R “Ray” Wang “Tuesday’s Tip: 10 Cloud And SaaS Apps Strategies For 2010″

20091208 A Software Insider’s POV – R “Ray” Wang – “Tuesday’s Tip: 2010 Apps Strategies Should Start With Business Value”

20091012 A Software Insider’s POV – R “Ray” Wang – “Research Report: Customer Bill of Rights – Software-as-a Service”

20090714 Sandhill.com – R “Ray” Wang – “Opinion: Moving to a SaaS Offensive”

20090602 A Software Insider’s POV – R “Ray” Wang ” Tuesday’s Tip: Now’s The Time To Consider SaaS Software Escrows”

20081028 A Software Insider’s POV – R “Ray” Wang “Tuesday’s Tip: SaaS Integration Advice”

Next In The Series

• Overview
• Cisco
• Dell
• HP
• IBM
• Microsoft
• Oracle
• Salesforce.com
• SAP

Reprints

Reprints can be purchased through the Software Insider brand or Altimeter Group.  To request official reprints in PDF format, please contact r@softwareinsider.org.

Disclosure

Although we work closely with many mega software vendors, we want you to trust us.  For the full disclosure policy please refer here.

Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.



SAUG Summit Delivered Great Networking Opportunities And Information Exchange

Over 550 attendees converged on Sydney August 3rd to 5th, 2010 for the annual SAP User Group Summit.  Members were treated to 28 session, 7 keynotes, and 4 SAP 101 educational sessions.  The smart design of the conference gave attendees ample opportunities to connect and share ideas between sessions.  Kudos to Kim Salter and team for a great event! In conversations with over 100 attendees, four trends emerged:

• Excitement in putting Business Intelligence (BI) to work. A combination of pent up demand, SAP marketing of Business Objects, and early adopters of BW led to many interesting conversations about the future road map.  Users sought clarity on the future direction and for the most part received it around BEX support and future investments.  Many continued to wonder if SAP would clean up its master data management strategy and address the need for a stronger next generation BI platform.

• Considerable interest in how the Cloud can be used with existing SAP investments. Several sessions on the cloud were given.  Jeff Word, President of SAP Product Strategy provided an SAP Session on Cloud Computing.  The 6th  keynote on “Ready for the Cloud and SaaS?” provided users with 10 strategies to use Cloud Computing with or without SAP.  With so much confusion on Cloud terminology, attendees wanted a reset on the definitions and categories of cloud computing.  In each conversation, cost savings and flexibility drove the interest to consider cloud options.  A good mix of both technology and business leaders instigated the conversations.  Considerable disappointment emerged when they found out Business by Design would not be available to Australia until late 2011.

• Concern about negotiating leverage in SAP contracts. In both the CIO session and in passing conversations, the majority of attendees expressed a concern about waning leverage in contract negotiations for the acquisition of new licenses or dealing with maintenance fees.  A few attendees expressed frustration that the SAP Australia head office ignored them when their contracts were written by the corporate entities in countries abroad.  They felt that SAP should act with one face to the world.

• Questions on when to upgrade. Many attendees expressed concern on when to upgrade.  A large number on 4.6 and 4.7 saw no need to make the shift yet despite a few key features in Enhancement Packages.  In fact, many of these users augmented the gaps with SaaS solutions today in expense management, CRM, business intelligence, and strategic HCM.

A photo collage of the event can be seen below (see Figure 1):

Figure 1. SAUG Summit 2010 Flickr Feed

Source:Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

The Bottom Line For Users (Clients) – Get Active In The User Group To Gain Influence On SAP

SAP users and their user groups have a unique opportunity to put in the right infrastructure to engage in productive partnership with SAP.   SAP management is now more willing than ever to hear customer feedback.  Customers seeking to innovate within their SAP investment should ask hard questions about what is in the SAP Labs portfolio.  User groups will play a key role in helping to prioritize future SAP product road map investments.  Users and their user groups should push for frameworks that monitor customer requests  and increase transparency in the prioritization process. Customers can not allow SAP to squander any more of the 10’s of billions in maintenance fee and license fees “invested” with SAP.  It’s time to partner and user groups provide a great vehicle and catalyst to begin and continue the conversation.

Your POV

SAP users, are you feeling the same concerns in your region?  What are your other concerns that you wish to hear SAP address?  Add your comments to the discussion or send on to rwang0 at gmail dot com or r at softwaresinsider dot org and we’ll keep your anonymity.

Please let us know if we can be of assistance in an advisory capacity.  Here’s how we can help:

• Crafting a next gen apps strategy
• Short listing and vendor selection
• Contract negotiations support
• Market evaluation
• Implementation partner selection
• Connecting with other partners
• Sharing best practices
• Designing a next gen apps strategy
• Providing contract negotiations and software licensing support
• Demystifying software licensing

Related resources and links

20090803 A Software Insider’s Point Of View – R “Ray” Wang “Monday’s Musings: Users Now Expect More Advocacy From Their User Groups”

20100518 A Software Insider’s Point Of View – R “Ray” Wang “Event Report: Sapphire 2010 Brings Customers Back To A Sense Of Normalcy”

20100512 A Software Insider’s Point Of View – R “Ray” Wang – “News Analysis: SAP Bets On Innovation With $5.8B Sybase Acquisition”

Reprints

Reprints can be purchased through the Software Insider brand or Altimeter Group.  To request official reprints in PDF format, please contact r@softwareinsider.org.

Disclosure

Although we work closely with many mega software vendors, we want you to trust us.  SAP is currently a  client of Altimeter Group but not a client of Insider Associates, LLC.  SAUG is a client of Insider Associates, LLC.  For the full disclosure policy please refer here.

Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

Welcome to a multi-part series on The Software Insider Tech Ecosystem Model.  Subsequent posts will apply the model to these leading vendors:

• Cisco
• Dell
• HP
• IBM
• Microsoft
• Oracle
• Salesforce.com
• SAP

The aggregation of these posts will result into a research report available for reprint rights.

Business Models Converge During Recessions

Is your technology provider a hardware vendor or a software vendor? Does your System Integrator now provide solutions in the cloud? These questions will continue as models converge.  Hardware, software, and system integration vendors must reinvent new models of revenue.  The economic recession has forced business model shifts at the major technology companies.  The goal – own the largest share of both the business and IT technology budget,  As these sellers attack new profit pools, buyers can expect continued convergence of business models because:

• Hardware companies seek higher margins. Most hardware vendors face single digit margins in their core business.  To bolster margins, many vendors acquired system integration firms.  For example, HP purchased EDS and Dell acquired Perot Systems.  The next logical step requires the hardware vendors to get into software.  Software margins hover from 10% to 50% depending on the market.  Expect a hardware vendor such as Cisco, Dell, or HP to acquire a SaaS based company to move into the software business.
• Service providers build differentiated intellectual property (IP) using the Cloud. Service providers should go on the SaaS/Cloud offensive if they want to deliver rapid innovation to customers and break the cycle of dependence on packaged apps vendors.  Service providers can take market share through SaaS by investing in white spaces in the solution road map with verticals and other pivot points that have not been well served.  In addition, expect forms of SaaS BPO to emerge as clients seek best of breed SaaS and hybrid deployments.
• Software companies use Cloud to transform into information brokers. SaaS and Cloud deployments provide companies with hidden value and software companies with new revenues streams.  Data will become more valuable than the software in the Cloud.  Three areas of growth will include benchmarking, trending, and prediction.
• Companies by-pass software vendors for competitive advantage. Roper Industries acquisition of iTrade Networks on July 26th, proves a key point.  Smart and innovative companies will put custom development in the cloud to meet last-mile solution needs that packaged apps vendors or system integrators fail to deliver.  Companies may also acquire software vendors if they can’t build the solution.

Budget Authority Shifting From IT To Business

A recent survey of 23 companies shows that while the IT budget appear to have shrunk, the overall technology spend has increased.  Key findings:

• IT budgets trending down. CIO’s focused on cost savings and efficiency.  Among the 23 CIO’s, few IT budgets have increased and most have decreased between 3 and 8 percent.  IT departments must do more with less.
• Business technology spending up. Growing SaaS and cloud adoption improve the outlook by business units to procure their own solutions.  Among the 23 organizations surveyed, most line of businesses grew technology spend by 5 to 7%.  Business leaders now call the shot on more and more technology decisions
• IT to BT spending ratios nearing 50-50. Survey showed that the average percentage of tech spend for IT was 53.7%.  The average percentage of tech spend for business reached 47.3%.  Expect the business technology budgets to surpass IT in 2012.

The Tech Ecosystem Model Provides Multi-dimensional Insights

The Software Insider Tech Ecosystem Model examines technology solution categories on 4 dimensions (see Figure 1):

• Tools for creation. This category describes technologies that can be reused to create new solutions.
• Tools for distribution. This category describes channels and distribution models to deliver client value.
• Value added solutions. This category describes high margin, high value solutions for clients.  A plethora of vendors by industry, geography, market size, and role populate this category
• Commoditized infrastructure. This category describes technologies that should be optimized.  A handful of vendors typically dominate this category.

Figure 1.  The Software Insider Tech Ecosystem Model

The Bottom Line For Buyers  – Use The Tech Ecosystem Model To Build Out Your Technology Roadmap And Procurement Strategy.

The Software Insider Tech Ecosystem Model can provide a key tool in mapping out the long term apps strategy.  Use the suggested five step approach:

1. Start by listing the vendors in each category. Jot down the names of every vendor you own into each category.
2. Identify the key business processes supported. Place business processes at the high level and line them back to the vendors.
3. Evaluate the application portfolio.  As consolidations occur, business strategy should align with applications strategy.  Applications strategy will then align with procurement strategy to optimize the Business Technology Value equation.
4. Build out your solution ecosystem plan. In some cases, you will consolidate vendors. In others, you will acquire new solutions.  Sometimes, the last-mile will require custom development.  Take a balanced approach to the portfolio.  Keep in mind how you sunset legacy applications and solutions.
5. Apply model to the contract strategy. This model applied to Seven Simple Steps To Successfully Negotiate Software Contracts will drive business value in technology projects.

The Bottom Line For Sellers (Vendors) – Use The Tech Ecosystem Model To Plan Partnerships and M&A Strategies

Use the Software Insider Tech Ecosystem Model  to determine when to partner, build, or acquire a capability. Evaluate each category by:

1. Examining the current footprint. Fill in the model to see what you own
2. Identifying adjacent profit pools. Look at potential install base up-sell, cross-sell, and attach rate opportunities.
3. Determining potential profit margins and ROI. Look at average profit margins.  Identify and rank the top categories.
4. Ranking opportunities by competitive threat. Determine which piece to commoditize next in the value added solutions.  Figure out which areas are high growth value added solutions to invest.
5. Put together 3 year strategy. Face it, 3 years is too long but you need a time frame.  Identify acquisition prices and partnership criteria.

Your POV.

Buyers, do you need help with your apps strategy and vendor management strategy?  Ready to put the expertise of over 1000 software contract negotiations to work?  Give us a call!  Sellers and vendors, want to expedite your ability to effectively partner or test your M&A idea?  You can post or send on to rwang0 at gmail dot com or r at softwaresinsider dot org and we’ll keep your anonymity.

Please let us know if you need help with your next gen apps strategy efforts.  Here’s how we can help:

• Providing contract negotiations and software licensing support
• Evaluating SaaS/Cloud options
• Assessing apps strategies (e.g. single instance, two-tier ERP, upgrade, custom dev, packaged deployments”
• Designing end to end processes and systems
• Comparing SaaS/Cloud integration strategies
• Assisting with legacy ERP migration
• Engaging in an SCRM strategy
• Planning upgrades and migration
• Performing vendor selection

Next In The Series

• The Cloud
• Cisco
• Dell
• HP
• IBM
• Microsoft
• Oracle
• Salesforce.com
• SAP

Reprints

Reprints can be purchased through the Software Insider brand or Altimeter Group.  To request official reprints in PDF format, please contact r@softwareinsider.org.

Disclosure

Although we work closely with many mega software vendors, we want you to trust us.  For the full disclosure policy please refer here.

Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

Clients Now See Microsoft As The Neutral Vendor, Hence All The Questions

Just less than 3 years ago, Microsoft was still perceived as part of the “evil” empire.  Business leaders worried about the complicated and expensive licensing and pricing structures.  IT leaders bemoaned the lock-in and proprietary and often buggy software.  But in a reversal of fortune, customers now worry about Google lock-in, fret over Oracle’s quest to dominate IT through M&A, wonder how hardware vendors will become software providers and vice versa, and remain in shock as Apple’s proprietary and closed approach over takes Microsoft’s market cap.

In conversations with 71 business and IT leaders, the perception on Microsoft has definitively shifted.  In fact, more than 74.6% (53/71) see Microsoft as the neutral and trusted supplier.  With an aging and retiring workforce that grew up on IBM and SAP, the next generation of IT leaders increasingly will exert their leadership and run to their comfort zone of Microsoft and Oracle.  (Note: Don’t expect this to last as the next generation of IT leadership comprises of millennials and digital natives who will try to move everything to open source and the cloud.)  Consequently, Microsoft’s technology offerings receive a renewed interest and reinvestment among customers, partners, and critical OEM’s.  Among this group, many are attending TechEd 2010 in New Orleans, LA.  Key questions they will be asking include:

1. When will Azure have a viable business model for partners, OEM’s, and customers?
2. Is Silverlight really ready for prime time or should organizations still leave one foot in the door with HTML 5 or Adobe Flash?
3. What true social features will Microsoft deliver in Sharepoint, UC, and Office?
4. After wasting a decade with Windows Mobile can Windows Phone 7 really beat out iPhone?
5. What will the rise of NoSQL databases and in memory computing mean for SQL Server?
6. Will Office Web Apps emerge as a significant challenger to Google’s App strategy?
7. How quickly can Microsoft convince other apps vendors to adopt the STB platforms?
8. Will Internet Explorer ever become W3C compliant?
9. What’s Microsoft doing to win over the Web 2.0 crowd?
10. What partner ecosystems will Microsoft have to rely on to gain leadership in the Cloud?

What’s your question?

The Bottom Line For The Buyer – Advances In Cloud Computing Force Organizations To Reevaluate Bets On Technology Platforms

Today the bulk of the market rests with IBM, JBOSS, Microsoft, and Oracle for technology platforms or middleware.  As cloud platforms emerge, expect new competitors such as VMForce to vie for market leadership against the legacy providers.  While most attendees at TechEd represent the faithful, attendees who are prospects, OEM’s, or mixed shops should take the time to ask the key questions.  A shift has occurred and organizations need to make the bet on how they will address hybrid deployment models and the different flavors of cloud computing.  Moreover, organizations need to place bets on next gen technologies.  One time honored technique – stay focused on the ratio of business impact and cost of delivering IT services.   The result – achieve improved alignment with business and IT.

Flickr Photo Stream From TechEd 2010

Source: © 2010 R Wang and Insider Associates, LLC. All rights reserved.

Your POV

Are you becoming more and more a Microsoft shop? If so, why? If not, what’s keeping you from making the transition?  What’s your cloud strategy for development?  Do you have a question you want to ask at TechEd but won’t be there?  Add your comments to the discussion or send on to rwang0 at gmail dot com or r at softwareinsider dot org and we’ll keep your anonymity.

Please let us know if you need help with your Microsoft and overall apps strategy and contract negotiations strategy.  Here’s how we can help:

• Providing contract negotiations and software licensing support
• Demystifying Microsoft licensing
• Assessing SaaS and cloud
• Evaluating Cloud integration strategies
• Assisting with legacy ERP migration
• Planning upgrades and migration
• Performing vendor selection
• Renegotiating maintenance

Disclosure

Although we work closely with many mega software vendors, we want you to trust us more.  Microsoft is currently a retainer client of Altimeter Group but  not a client of Insider Associates, LLC.  For the full disclosure policy please refer here.

Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

Acquisition Consolidates Two Market Leaders In The Project Based Solutions Market

Deltek announced on June 3rd that they would acquire Maconomy for  $72.7M ($3.39/share (DKK 20.50)).  Maconomy is a leading project based solutions (PBS) software company with ~35.6M in revenues (2009) based in Copenhagen, Denmark.  Deltek is a 265.8M revenue (2009) PBS software vendor based in Herndon, VA.   This acquisition is significant because the combined companies:

• Improve geographic coverage. Maconomy employs over 220 employees with 600+ customers in 58 countries.  eltek reaches 12,000 customers around the world across its portfolio of product lines that includes Costpoint, GCS Premier, Vision, and its Enterprise Project Management suite. Deltek also offers govWin, an online network dedicated to solving common business problems for government contractors.
  
  Point of View (POV): Maconomy’s customers mostly originate from EMEA.  Less than 12% of Maconomy’s revenues come from the US.  Maconomy built good partnerships in Eastern Europe. South Africa, Canada, and India.  Meanwhile, Deltek has a strong base of business in the US public sector and was beginning to move towards greater international expansion.

• Address a range of PBS vertical industries. Maconomy’s products focus on professional service organizations with about 46% of its revenues coming from consulting and 26% of its revenues coming from marcomm.  Deltek dominates the architecture and engineering space along with government contracting.  The company has shown success in key verticals such as construction services, public sector, and transportation services.
  
  POV: Deltek can boast that 80% of the Engineering News Record 2009 Top 500 Design Firms are customers.  Maconomy’s products X1 and PeoplePlanner demonstrate a strong professional services focus.  Together, they have an opportunity to expand into research organizations, legal services, and audit/tax firms.

The Bottom Line For Buyers (Customers) – Maconomy’s Assets Go Beyond Customer Base

Deltek’s primarily acquiring Maconomy for its success in the EMEA market and for its strong professional services focus.  However, Maconomy’s solution set, technology architecture, and design flair will prove to be key assets for Deltek.  The X1 and People Planner products deliver cutting edge user experience and business intelligence that demonstrate key characteristics of next gen apps (see Figure 1).  The technology direction and leadership could give Deltek a foundation for future development platforms and at least a stronger Java based platform.

As with all mergers and acquisitions, customers should stay vigilant about retaining key service and support staff, providing input into product direction, and maintaining favorable software licensing and contract terms.  Maconomy and Deltek customers should use this opportunity to seek clarity on future product direction, interoperability of acquired assets, and long term SaaS/Cloud strategy.  Overall the merger makes sense and could be a sign of more acquisitions by Deltek to come.

Figure 1.  Maconomy’s Products Demonstrate Many Elements of Next Gen Apps

Source: Maconomy

The Bottom Line For Sellers (Vendors) – Ignore The $10B Project Based Solutions Market At Your Own Risk
Software Insider forecasts that the Project Based Solutions (PBS) will grow from today’s $6B addressable market to $10B by 2015.  IFS’ acquisition of MultiPlus Solutions in August 2009, NetSuite’s acquisition of QuickArrow in July 2009, Oracle’s acquisition of Primavera in October 2008, and NetSuite’s acquisition of OpenAir in June 2008  highlight an emerging trend in PBS consolidation.  Strong growth by PBS companies such as IFS, key vertical focus by SAP’s Business by Design product, and the macro shift from products to services all indicate a burgeoning market opportunity.  Key micro-verticals in this market include accounting services, advertising and public relations, architecture and engineering, construction, design, financial services, general consulting services, high tech software and hardware, IT services, legal services, life sciences and healthcare, marketing communications, market research services, media and entertainment, non-profit, professional staffing services. public sector, real estate and facilities, research an higher education, retail and hospitality, transportation services, and utilities.

As companies start to organize their work around projects, sellers can expect significant demand for integrated business processes that support project accounting, compliance, resource allocation, task management, and billing.  These solutions can not be reverse engineered and will require software vendors to begin the design point around projects in order to succeed.

Your POV.

Are you a Maconomy customer?  Do you see the synergy with Deltek ?  If you are Deltek customer, will you look at Maconomy’s solution?  Does this merger make any sense to you?  Do you advocate a purpose built solution for project based businesses. You can post or send on to rwang0 at gmail dot com or r at softwaresinsider dot org and we’ll keep your anonymity.

Please let us know if you need help with your apps strategy efforts.  Here’s how we can help:

• Evaluating project based solutions (PBS) options
• Assessing apps strategies (e.g. single instance, two-tier ERP, upgrade, custom dev, packaged deployments”
• Designing a perfect order process and system
• Evaluating SaaS/Cloud integration strategies
• Assisting with legacy ERP migration
• Planning upgrades and migration
• Performing vendor selection
• Providing contract negotiations and software licensing support

Related resources and links

• 20100603 Washington Business Journal – Tucker Echols “Deltek Offers $73M for Maconomy”
• 20100603 Michael Fauscette – “Deltek announces intention to buy Maconomy”
• 20090817 Software Insider – R “Ray” Wang “News Analysis: MultiPlus Solutions Acquisition Expands IFS’ Investment In Project Based Solutions”
• 20090721 Software Insider – R “Ray” Wang “News Analysis: NetSuite Acquires QuickArrow To Expand PBS Presence”
• 20081008 Software Insider – R “Ray” Wang “Initial News Analysis: Oracle Buys Primavera”
• 20080602 Software insider – R “Ray” Wang “News Analysis: NetSuite’s Acquisition of OpenAir Signals Importance of Services and Project Based Businesses”
• 20070507 Software Insider – R “Ray” Wang “IPO Watch: Deltek Files S-1″

Disclosure

Although we work closely with many mega software vendors, we want you to trust us more.  Deltek and Maconomy are not currently retainer clients of Altimeter Group and also not clients of Insider Associates, LLC.  For the full disclosure policy please refer here.

Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved

The tech sector continues to expand.  Significant job moves in May and June highlight the emerging  number of career opportunities.  As always, thanks for your emails and alerts.  If you’ve got a change or know of a promotion, keep dropping me a line! If you need a referral, and we’ve worked together in the past, don’t hesitate to reach out to me via Linked In.

Lynn Anderson is now CEO at Coaching4Abundance. She formerly ran the Oracle Services Group for Capgemini US, LLC and served in various roles over 11 years. Prior roles include work at Southern Companyand as a Scientific Analyst/Captain in the US Air Force

Diana Benedikt became Managing Director at Scale Business Group in February 2010.  Prior roles include a 3 year stint at Venture Insight Advisors.

Kelly Berkley became Sr. Marketing Manager at USIS in January 2010.  Prior marketing roles include Research Associate at New Media Strategies: A social media marketing agency and market researcher at Robbins-Gioia.

Gerard Corbett, APR, Fellow, PRSA became Blogger and Thought Leader at Career Thought Leaders Consortium in January 2010.

Jim Deters is now Board Member Deming Center for Entrepreneurship at University of Colorado at Boulder.  Jim’s startup and entrepreneurial experiences include President & Co-Founder at Ascendant Technology and the software company CONET USA.=

Carl Doty became Vice President, Enterprise Strategy at Merkle in January 2010. Carl’s research experience comes in hand with positions as VP and Research Director at Forrester Research and Director at Stratgic Solutions Group, LLC

Sharath Dorbala is now Vice President, Technology Strategy at Amdocs.  He’s served various roles over his 5 year career including Vice President, Product Management and Strategy and Director of Product Management and Strategy.  Previous product roles include Group Manager, Product Management and Strategy at Oracle Corporation.

Kersten Geiger became Global Head of Industry Solutions at SAP. She formerly served in various roles including Executive Vice President of Industry Solution Management at SAP.

Jason Mah became Product Manager at Aol Advertising in January 2010.  Prior to this, Jason built his program management and product development experiences as a Product Manager at Aol Advertising, owner at Novo Sandbox LLC, Business Architect at Advertising.com, Senior Consultant at Sagepointe Solutions, and Manager at Accenture

Miko Matsumura has joined Servo Software as their VP of Products at Servo Software.  Prior to his current role, Matsumura served as Vice President and Chief Strategist at Software AG, where he was responsible for product and technology strategy. He holds 12 years of experience in Enterprise Software and Middleware technologies.  He came to that position through several acquisitions in which he served as vice president of SOA product marketing (at webMethods) and vice president of worldwide marketing (at Infravio).

Andrew McCaskey is now Marketing Director at Linuxcare LLC.  Previous roles include President at Review Communications, Inc, Business Development EDA Consulting at Agilent Technologies, and R&D Market Segment Channel / Account Manager at Agilent Technologies / Hewlett Packard.

Jennifer Neves is now HR Consultant at ScanScout. She puts over a decade of HR and recruiting experiences for technology, health, and life sciences organizations to use.  Previous roles includ work at K-Factor, Firefly Health, Novartis Institutes for BioMedical Research, Viximo, Sonos, Inc., Soliya.net, Brightcove.net, VistaPrint, StratBridge, Forrester Research, and others.

Michael Ni became Vice President CRM Product Management and Strategy at Amdocs.  Mike brings decades of General Management and CRM experiences leading product management, development, and marketing teams at Oracle, PeopleSoft, OnePage, NetSuite, MyWire, and Verafirma.

Soma Somasundaram became Senior Vice President of Software Development at Infor in January 2010.  He previously served as Vice President, Software Development at Infor Global Solutions and VP of Software Development at Agilisys.  Other roles include General Manager at SCT Corporation and Senior Systems Analyst at Tata Unisys, Ltd.

Bernard Slede is now Managing Director at Hewlett-Packard for startup ecosystems.  Previous roles include roles in Corporate Venture Capital at HP, CEO at Nucleonet, Director Strategic Alliances at MetaTV, Broadband services at Intel, and other tech vendors.

Got a scoop or something to share? Please post or send on to rwang0 at gmail dot com and we’ll keep your anonymity.

* Not responsible for any factual errors or omissions.  However, happy to correct any errors upon email receipt.

Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

The majority of 21 publicly traded software vendors managed to show year-over-year (YoY) gains over the dismal beating from calendar year (CY) Q1 2009.  SaaS vendor maintained their double digit gains while on-premise vendors mostly showed positive traction (see Figure 1) and (see Figure 2).  Highlights for the 2010 CY Q1 2010 results:

• Big gains in YoY license revenue for on-premise vendors such as Manhattan Associates (188.64%) and  JDA (87.43%) reflect the investments being made in retail and supply chain.  Manhattan’s gains are the greatest across the board as they demonstrate a turnaround from last year.
• Meanwhile, SMB bell-weathers Lawson (28.10%), Deltek (24.75%), and Epicor (23.21%) signal return of key license sales in on-premise.  Concurrently, Oracle (20.45%) and SAP (11.oo%) demonstrate a strong recovery in enterprise license revenue growth in on-premise.
• Maintenance fee growth for on-premise vendors hold steady with mostly single digit YoY gains except JDA Software (32.71%) and SAP (11.34%).
• SaaS vendors kept steady growth in the double digits for subscription revenue. UltimateSoftware (27.80%), RightNow (26.80%), Salesforce.com (24.47%), and SuccessFactors (24.29%) led the charge.
• Overall growth rates on a YoY revenue basis have stabilized for most SaaS vendors at the mid teens to twenties.
• Of interesting note, professional services fees for on-premise vendors match or double the license revenue. SaaS vendor professional services revenue are well below 1x license revenues, closer to 10% or less.

Figure 1.  Software Insider Index® On Premise Vendors: Q1 CY 2010*

(Right click to view full image)

Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

Figure 2. Software Insider Index® SaaS Vendors: Q1 CY 2010*

Good news – new license sales indicate a recovery!  Bad news – recovery will mean less discounting in non-competitive renewals.  Recent deals indicate that competitive deals in both Enterprise and SMB show that vendors will continue to compete for business.  Pricing pressures from the SaaS vendors drive most of the discounting in renewal deals.  However, should the recovery continue, expect less concessions in maintenance fee discounts, financing options, maintenance fee price increases, and flexibility in contract policies.

(Credit: R “Ray” Wang, Insider Associates, LLC)

Co CEO’s Stabilize The Company

Both SAP Co-CEO’s Bill McDermott (Orlando) and Jim Hagemann Snabe (Frankfurt) took stage on May 18, 2010, in a simulcasted keynote.  While Bill highlighted SAP’s future vision and commitment to customers, Jim focused on communicating the SAP product strategy to match the corporate vision.  Customers, partners, and influencers sought an understanding of their road map 100 days into their jobs.  The two leaders demonstrated good synergy and gained confidence among the attendees.  In addition, CTO, Vishal Sikka took stage throughout many sessions and asserted his role as the key technologist.  Some of the main messages from the keynote include:

• Articulating acquisition strategy in key themes.  Bill McDermott discussed three key themes for SAP: real time, unwired, and sustainable.  Each of the themes tied back to a changing shift in industry trends on business requirements and shifts in customer adoption.  Each of the themes reflected a revenue stream for SAP.  A global energy concern CIO expressed, “We’ve been waiting for SAP to get mobility to work.  We can’t wait to see mobile field service become a reality in our sustainability initiatives”
  
  Point of View (POV): While the themes accurately describe SAP’s direction, the crafting of this strategy seems reactive.  In fact, it appears that this strategy builds on past acquisition decisions not concerted proactive strategy.  The good news – each of these trends represents the hot issues of the day and have finally been articulated together.   For example, real time addresses Business Objects, unwired ties back to Sybase, and sustainable supports Clear Standards.  Despite whether the strategy makes sense reactively or proactively, it does set the future direction for SAP.

• Providing choice in deployment options.  SAP plans to offer customers choice in on-premise, on-demand, and on-device.  On-premise remains the same with new enhancement packs (EhP) adding additional capabilities.  On-demand offers both a suite offering in Business By Design (ByD) and point solutions in the On-demand offerings.  On-device will include the Sybase capabilities such as mobile CRM.  The ERP director of a large high tech manufacturer noted, “We’ll be deploying a two-tier ERP strategy for subsidiaries and SAP now makes the short-list with ByD”
  POV: Jim Hagemann Snabe’s demonstration of Sales On Demand through the iPad highlights the convergence customers face going forward.  Choices in deployment options and platforms will guide customers on what to buy from SAP.   Users may face SAP to SAP scenarios, SAP to heterogeneous SaaS environments and complex hybrid deployments. For SAP on-premise to SAP on-demand scenarios, users will find a dependency requiring an upgrade to EhP 5 for more seamless integrations.  Others will turn to SaaS integration players such as Boomi, Informatica, SnapLogic, and Pervasive.

• Communicating cloud strategies. Jim Hagemann Snabe announced delivery of the latest version of Business by Design (ByD) in July 2010.  Feature pack 2.5 includes additional features.  More importantly, ByD FP2.5 provides multi-tenancy, enabling cost effective provisioning features.  Conversations with key executives hint at point solution On Demand offerings to include include expense management, procurement, people management, and sales in 2011.  The Director of Consulting Services at an EMEA regional professional services firm noted, “We’re waiting for ByD FP 2.5 because we need a project accounting and professional services solution but required a multi-tenant option.”
  
  POV: With OnDemand, SAP can now take a SaaS offensive and offer a solution that could compete with best of breed point solutions.  At some point, SaaS solutions will be bundled into suites and customers will seek a core SaaS suite offering and additional point solutions.  SAP customers will need more details on this road map before pursuing such a strategy.  SaaS integration will play a key role.

• Battling Oracle with ecosystem strengths. Both Co-CEO’s made inferences to their view that Oracle has a closed ecosystem.  They also tried to position SAP as partner friendly in working with technology platforms and technology stacks.  Hence, SAP reemphasized the importance of key partnerships such as RIM, Sybase, Syclo, Intel, Cisco, VM Ware, and EMC.  The Partner Alliance Manager for a high tech partner noted, “We have to work more closely with SAP because we need a counter-weight to Oracle”
  
  POV: Oracle’s acquisition of Sun has shown other competitors the importance in partnering to compete against Oracle.  Those who seek a large apps partner will turn to SAP for access to a large base of apps users and potentially a large base of mobile customers.  Expect more alliances to emerge by industry and by value chain.

Figure 1.  Flickr Photostream From Sapphire 2010

Credit: R “Ray” Wang, Insider Associates, LLC

The Bottom Line For Users – First 100 Days Show Signs Of Progress, Customers Still Need More Details

SapphireNow (2010) raised overall confidence among customers, prospects, partners, and influencers.  SAP articulated the why, the what, and the where.  However, SAP must now highlight how they will deliver and execute and when they will meet expectations.  Open questions still remain including:

• Could $5.8B have been spent to deliver on the functional requests customers have sought over the past 5 years?
• How Sybase will be integrated with SAP technologies?
• What time frame will NetWeaver be ready to support social business?
• What will the on demand Go To Market strategy look like?
• When will SAP resolve its master data management strategy?

Customers and partners will await the next 180 days with much interest.

Your POV.

Are you a SAP customer?  How do you feel about SapphireNOW?  Will you have more confidence in SAP’s ability to innovate?  Do you feel more confident about SAP’s ability to execute?  Take the poll here.  You can post or send on to rwang0 at gmail dot com or r at softwaresinsider dot org and we’ll keep your anonymity.

Please let us know if you need help with your apps strategy efforts.  Here’s how we can help:

• Assessing apps strategies (e.g. single instance, two-tier ERP, upgrade, custom dev, packaged deployements”
• Optimizing your SAP costs
• Evaluating SaaS/Cloud integration strategies
• Assisting with legacy ERP migration
• Planning upgrades and migration
• Performing vendor selection
• Providing contract negotiations and software licensing support

Related resources and links

• 20100512 SoftwareInsider – R “Ray” Wang – “News Analysis: SAP Bets On Innovation With $5.8B Sybase Acquisition”

Disclosure

Although we work closely with many mega software vendors, we want you to trust us more.  SAP is currently a non-retainer client of Altimeter Group and not a client of Insider Associates, LLC.  Oracle Corporation is a retainer client for Altimeter Group but not Insider Associates, LLC.  For the full disclosure policy please refer here.

Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

Collaborative Research Process At Work

I’m pleased to say, that I’ll be joining fellow Enterprise Irregulars – Michael Cote, Larry Dignan, Michael Krigsman, and Vinnie Mirchandani; SAP Mentors – Dennis Howlett and Jon Reed, along with esteemed journalist Thomas Wailgum from CIO magazine to gauge the sentiment of SAP users.  We may be adding a few others on the ground. But mainly, we’ll be asking a range of questions that include:

• Confidence in the leadership team
• SAP Innovation
• Upgrade sentiments
• Cloud and ByD
• Certification of ecosystem partners
• SAP Sybase
• NetWeaver Adoption
• In Memory
• Third party maintenance.

The Poll Questions

Take the poll at: http://www.surveymonkey.com/s/Sapphire2010

or Click here to take the survey

Your POV.

Ready to rumble at Sapphire 2010!  Look forward to seeing you.  You can post or send on to rwang0 at gmail dot com or r at softwaresinsider dot org and we’ll keep your anonymity or better yet, join the community!

Please let us know if you need help with your apps strategy efforts.  Here’s how we can help:

• Assessing apps strategies (e.g. single instance, two-tier ERP, upgrade, custom dev, packaged deployments”
• Optimizing your SAP costs
• Evaluating SaaS/Cloud integration strategies
• Assisting with legacy ERP migration
• Planning upgrades and migration
• Performing vendor selection
• Providing contract negotiations and software licensing support

Related resources and links

• 20100516 ZD Net: Irregular Enterprise – Dennis Howlett “Sapphire: The Prequel”

Disclosure

Although we work closely with many mega software vendors, we want you to trust us more.  SAP is currently a non-retainer client of Altimeter Group and not a client of Insider Associates, LLC.  For the full disclosure policy please refer here.

Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

Move Signal Seriousness To Acquire Key Innovation Driven Technologies

SAP announces a $5.8B acquisition of Emeryville, CA, based Sybase.  The acquired entity will remain a stand alone company.  At first customers, prospects, and casual observers will wonder why SAP has agreed to acquire what is perceived as an aging, legacy database company.  However, industry watchers will realize the fit in technology innovation for three main reasons:

• Sybase is a leader in mobile platforms.  Over the past decade, Sybase has transformed its company to succeed and lead in the mobile space and has extended its BI and analytics capabilities.  Sybase delivers the complete value chain in managing, analyzing, and mobilizing information.  A key solution is Sybase’s Uwired Platform, which provides a mobile development platform, supports heterogeneous deployments on most devices and operating systems, extends back end data, and ensures security and mobility management.  Sybase also brings strong capabilities with real time decision support, predictive analytics, dynamic reporting, and high performance BI.
  
  Point of View (POV): SAP and Sybase already cemented their partnership at CeBIT.  Enabling SAP CRM to work on mobile devices with ease, put some life back in the staid SAP CRM product.  The ability to deliver the same capabilities in the rest of the Business Suite will help SAP achieve a key part of its innovation strategy in mobile.  On the analytics and BI front, SAP will need to provide a clear road map on how the analytics integration will work with the BOBJ teams and NetWeaver architecture.  Customers will want a road map on 90 day, 180 day, and 1 year integration milestones.

• Massive data volumes require in-memory databases for rapid access.  Sybase brings a high performance in-memory database (IMDB) to the table. The proliferation of information, devices, and delivery platforms require reduced response times.  Sybase delivers an integrated approach to IMDB.  The offering shares the same SQL language, drivers, and admin tools.  The result – limited code changes, reduced bugs, and quicker time to market.
  
  Point of View (POV): IMDBs represent a key component in both future on-premise based applications and SaaS/Cloud based applications.  While SAP had an offering called Max DB, the product did not appeal to financial services and insurance customers who remained skeptical on its application in massive workloads.  However, Sybase has proven itself with its IMDB offerings and financial services pedigree.  Another key reason for moving to IMDB – SAP resells an estimated $1B of Oracle Database every year. (Clarification 5/14/2010:  The SAP install base buys $1B in Oracle databases every year.)  Any effort to stop funding SAP’s largest competitor is a proactive and perfect reason to move to IMDB.

• Cloud technologies bring SAP into the future. Sybase has built a strong relationship with Amazon’s Elastic Compute Cloud (EC2), storage, and  virtualization vendors required to support cloud technologies.  Sybase products for mission critical data management, embedded and mobile database, column based analytics, and data movement and synchronization already work in the Cloud.
  
  POV: SAP can take advantage of the advances made from the Sybase team to support both private and public cloud environments.  The private cloud capabilities deliver a must have requirement to meet strict European privacy laws and mitigate concerns of public sector customers.  Sybase is unique in being able to provide the same database management technologies in both the private and public cloud.

The Bottom Line – Sybase Brings Three Critical Technologies Required For Next Gen Apps And More

SAP has broken its promise of no more big acquisitions after the BusinessObjects deal.  However, these acquisitions make sense toward the path of next generation applications.  Mobile, cloud, in-memory provide the tools required to support the 10 elements of next generation applications.  More importantly, they also gain access to the financial services and public sector markets.  On the geographic front, Sybase has strong presence in the China market, an area where SAP sees future growth.

Your POV.

Are you a Sybase customer?  Are you an SAP customer? How do you feel about the acquisition? Will you have more confidence in SAP’s ability to innovate after this acquisition?  Does this allay your feels on SAP innovation?  You can post or send on to rwang0 at gmail dot com or r at softwaresinsider dot org and we’ll keep your anonymity or better yet, join the community!

Please let us know if you need help with your apps strategy efforts.  Here’s how we can help:

• Assessing apps strategies (e.g. single instance, two-tier ERP, upgrade, custom dev, packaged deployements”
• Optimizing your SAP costs
• Evaluating SaaS/Cloud integration strategies
• Assisting with legacy ERP migration
• Planning upgrades and migration
• Performing vendor selection
• Providing contract negotiations and software licensing support

Related resources and links

• 20100512 MarketWatch – John Letzing “Sybase shares surge on SAP buyout reports”
• 20100512 IDG News Service – Chris Kanaracus “SAP to buy Sybase for $5.8B in all cash deal”
• 20100512 Bloomberg Business Week – Rochelle Garner, Joseph Galante and Ian King “SAP to Buy Sybase for $5.8 Billion to Vie With Oracle”
• 20100512 ZDNet: IrregularEnterprise – Dennis Howlett “SAP acquires Sybase for $5.8 billion, but why?”
• 20100513 TechQQ – 责任编辑 “SAP 宣布58亿美元收购Sybase 溢价幅度达56%”
• 20100512 Wall Street Journal – Ben Worthen and Justin Sheck “SAP Buys Sybase for $5.8 Billion”
• 20100512 ZDNet: Between The Lines – Sam Diaz “SAP announces $5.8 billion acquisition of Sybase”
• 20100512 Merv’s Market Strategies For IT Suppliers – Merv Adrian “SAP – Sybase: Synergies. Suspect So?
• 20100513 GigaOm – Om Malik “Analysis: Why SAP Bought Sybase For $5.8 Billion”
• 20100513 People Over Process – Michael Cote “Acqiuiring, everyone’s doing it – SAP buying Sybase – Quick Analysis”
• 20100513 Observations From Hong Kong – Alan Tan “Software Arms Race Continues”
• 20100513 TMCnet – Alice Straight “SAP AG and Sybase Inc. to merge”
• 20100513 IDG News Service – Chris Kanaracus ” What Sybase Customers Should Expect From SAP”
• 20100514 Wall Street Journal – Ben Worthen “SAP Other Tech Firms Vie To Add Product Lines”

Disclosure

Although we work closely with many mega software vendors, we want you to trust us more.  SAP is currently a non-retainer client of Altimeter Group and not a client of Insider Associates, LLC.  Sybase is not a client of either Altimeter Group or Insider Associates, LLC.  For the full disclosure policy please refer here.

Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

Workday Continues To Pioneer SaaS Success In The Enterprise

Founded by Dave Duffield and Aneel Bhusri in March 2005, Workday has grown the company to over 135 customers with 80+ companies in production, 17 enterprise payroll companies, and over 400 employees in 50 countries worldwide.  Key industries include services, technology, financial services, manufacturing, healthcare, and others.  Unlike other ERP pure play True SaaS vendors (e.g. NetSuite, Intacct, and Ultimate Software), Workday uniquely serves the mid-size to very large enterprise clients.  Large production clients range from 26,000 employees at Chiquita to 200,000 employees at Flextronics.  Workday’s roots began with HR but Release 10 bolsters key financial and spend management capabilities, highlighting aspirations to be the SaaS option for Oracle, PeopleSoft, and SAP ERP replacements over the next 3 to 5 years.

Design Points Reflect The Principles Of Social Enterprise Apps

With the business user in mind, Workday incorporates 8 of the 10 essential elements for social enterprise apps.  These include (see Figure 1):

1. Role-based design. Software designed around how users perform work including applicable security models.
2. Consistent experience across channels & deployment options. Software that is agnostic to where or how that software is deployed and accessed.
3. Contextual & relevant delivery of information. Software which understands what information to provide users at a point in time
4. Configurable & adaptive. Software that can be modified to meet changing conditions.
5. Outcome-focused & results-oriented. Software that tracks key metrics across an end to end process.
6. Proactive, predictive, & actionable. Software that anticipates requests and supports decision making.
7. Engaging for all stakeholders. Software that opens up the system to new types of users, collaborators, networks, and communities.
8. Secure & safe. Software that meets security and disaster recovery thresholds.

Figure 1.  Workday’s Design Incorporates 8 Of The 10 Elements of Social Enterprise Apps

Software Insiders Point of View Photo Stream (click image for details)

(Source: Workday)

Release 10 Features Move Users Closer To An ERP Suite

• HCM adds Succession Planning and expands geographic reach. HR managers gain new functionality with succession planning by candidate names and positions.  Succession profiles track potential, achievable levels, and retention risk.  Improved enhancements touch absence, benefits, compensation, performance management, and staffing.  Cuba and Guernsey are added as 2 new countries.   Global personal data already supports 297 countries and all UN member nations.   Employee contracts now support Chinese and EMEA requirements.
• Financials expands horizontal capabilities. Key updates include improved customer contracts, scheduled billing, revenue recognition, and milestone recognition.  New financial reporting features allow cost center and regional managers to run reports.  Users receive new project billing, basic VAT, sales tax, and customer statement capability.
• Payroll augments existing capability.  New features include new off cycle calculations, worker history enhancements, gross-up, and off cycle billing.  Payroll remains focused on primary processing.  Multiple job processing is not available yet but planned for future releases.
• Spend management adds a supplier invoice workbench. Additional enhancements span procure to pay, contingent worker procurement, resource tracking, and purchase order review.
• User experience focuses on role based designs. Worker and talent profiles receive new looks that build off of the design elements in the “All About Me” and “My Team” pages in Release 9.   Multi-currency display for compensation now displays local and preferred currencies.
• Analytics and reporting simplify data creation and consumption. Simple enhancements such as default values for report inputs, report tags for categorizing and search, and data creation from any source accessible by the user improve the ability to turn data into information.  Export now supports CSV, XML, and GData formats.
• Ecosystem integration expands to new partners. New linkages include MrTed TalentLink, 15 new providers to the Workday Benefits Network (WBN), and improved integration security in the Enterprise Interface Builder

The Bottom Line – Consider Workday In Shortlists For HCM Upgrade/Replacement And Two Tier ERP

With the bulk of most HCM solutions deployed prior to Y2K, many organizations now actively consider upgrade/replacement strategies.   Most users expect upgrades to result in expensive replacement scenarios.  Hence, organizations must determine whether or not to continue with incumbent vendors or pursue a two-tier ERP apps strategies using SaaS deployment.  For mid-sized to large enterprises, Workday provides a unique option to take a phased approach with HCM and grow into the full suite as the product matures.

Your POV

Are you considering an ERP replacement? Will Workday 10′s new features compel you to migrate from your existing apps?  If you are a Workday customer, how’s your experience been with the SaaS vendor?  Add your comments to the discussion or send on to rwang0 at gmail dot com or r at softwaresinsider dot org and we’ll keep your anonymity. Please let us know if you need help with your apps strategies.  Here’s how we can help:

• SaaS/Cloud strategies
• Crafting your next gen apps strategy
• Short listing and vendor selection
• Contract negotiations support
• Market evaluation

Related resources and links

20100316 The Enterprise System Spectator – Frank Scavo “Workday pushing high-end SaaS for the enterprise”

20100324 InformationWeek – Doug Henschen “Workday 10 boosts HR capabilities”

Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

Title: SAUG Summit 2010
Location: Sydney Convention and Exhibition Centre Darling Harbour, Sydney
Link out: Click here
Start Date: 2010-08-03
End Date: 2010-08-05
Description: Learn: Collaborate: Innovate

The SAUG Summit is the largest SAP event in the Asia-Pacific region and 2010 promises to be no different. This gathering for SAP professionals attracts a wide range of attendees from all levels within the organisation.

This year will include a full day CIO Forum, 26 exhibitors, the SAP Partner/Customer Awards of Excellence, a BusinessObjects specific stream, new SAP products, technology gurus and mentors and a steady procession of customers sharing their learnings with attendees.
The agenda is in the process of being built by SAUG Committee, customers and SAP experts. A glimpse of what is to come is below.

Keynotes for 2010 will include:

Ray Wang
Enterprise Strategist and Disruptive
Technologies Expert
Altimeter Group

Martin Riedel
Head of Global Upgrade Office
Global Head of Maintenance Portfolio
Solution Management, SVP
SAP AG

Scheduled Topics:
Business Intelligence
Travel Management
Testing tools
Cloud computing
Business Process Consolidation
Virtualisation
SaaS and SAP
Workforce automisation
GRC & Risk Management
Sustainability
SAP Support
Upgrades & Enhancement packs
and more…

Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

2009 Results In Major Revenue Declines For On Premise And Officially The Year Of SaaS

A review of last year’s financial performance should erase any doubts about the viability of SaaS as a deployment option and a business model.   Traditional on-premise business apps vendors took the brunt of the beating earlier in the year but have slowly recovered.   This year’s Software Insider Index™ (SII) highlights two major themes:

• Legacy On-Premise Vendors Retain Operating Margins But Lose Revenue Share. Almost every on-premise software vendor lost revenue on a year-over-year (YoY) basis in 2009 (see Figure 1).  IFS (3.87%) and SAS Institute (2.21%) grew in the midst of the financial onslaught.  SAP is still double the size of Oracle in apps revenue!  Vendors such as QAD (-31.42%) and Manhattan Associates (-26.84%)saw the worst YoY declines (see Figure 2).  Most vendors relied on their maintenance and support to bolster their revenues. For example, CDC, Epicor, Exact, Lawson, Manhattan, Oracle, QAD, and SAP exceeded a 1:2 ratio in new license to maintenance revenue.  Why?  Customers chose not to upgrade, purchase new licenses, and expand their footprint.   Despite the downturn, most vendors survived with operating margins between 10% an 50%, well above those achieved by SaaS vendors.   Traditional vendors clearly felt pressure from SaaS/Cloud.
• SaaS Models Prove Themselves In 2009. Meanwhile, every SaaS vendor grew, from Ariba with the lowest YoY revenue growth (0.44%) to SuccessFactors with the highest (38.73%). Overall the SaaS vendors tracked in the 2009 SII grew 7.98% in YoY revenue. SaaS deployments expanded in all areas from CRM to HCM to spend management. Of note, Salesforce.com exceeded the $1.3B mark, a milestone for the SaaS industry.

Figure 1. Software Insider Index^TM (SII) Top 35 Enterprise Business Apps Vendors^TM (Calendar Year Revenue)

Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

Figure 2. Software Insider Index^TM (SII) Top 35 Enterprise Business Apps Vendors^TM (YOY Revenue Growth)

Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

Your POV.

What’s your read on the market?  Do you feel the SaaS model has added pressure to your traditional vendors?  Will everyone have a  SaaS option in 2010?

Am I missing a vendor?  Got the numbers wrong? Feel free to post your comments here or send me an email at rwang0 at gmail dot com .

Disclaimers

* Not responsible for any math errors or erroneous revenue information.

1. Calendar year estimates based on the quarter nearest the calendar year.

2. Why these vendors than others?  Easy – because I cover them.

3. Exchange rates as of February 25th, 2010 for vendors who have not published quarterly conversions.  Not responsible for currency flux.

4. Estimates created for privately held vendors.

Not sure? Please read the quarterly filings yourself =)

Related resources and links

Take the new and improved survey on 3rd party maintenance

2009 Calendar Year Q4

2009 Calendar Year Q3

2009 Calendar Year Q2

2009 Calendar Year Q1

Software Insider Index™ (SII): 2008Software Insider Index^TM (SII): SII Top 30 Enterprise Business Apps Vendors^TM & SII Top SaaS Business Apps Vendors^TM SII Top 30 Enterprise Business Apps Vendors™

2008 Calendar Year Q4

2008 Calendar Year Q3

2008 Calendar Year Q2

2008 Calendar Year Q1

Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

As always, thanks for your emails and alerts. If you’ve got a change or know of a promotion, keep dropping me a line! If you need a referral, and we’ve worked together in the past, don’t hesitate to reach out to me via Linked In.

Paul Alessi is now a Buyer at Universal Orlando.  Paul brings decades of purchasing and procurement experiences including work at Reed Elsevier.

Nenshad Bardoliwalla has an updated current title: Co-Founder, Products at PROFERI. The Co-Author of “Driven To Perform: Risk-Aware Performance Management From Strategy Through Execution”, he last served as the Vice President, Technology, EPM & GRC, Office of the CTO at SAP

Ivan Chong has an updated current title: Executive Vice President, Data Quality Product Division at Informatica Corporation.
Ivan’s been a veteran of Informatica, NetGravity, and Oracle.

Oliver Claude has an updated current title: Program Director, InfoSphere MDM Product Strategy / Product Management at IBM. Oliver brings significant MDM/CDI experiences from IBM and Siebel Systems.

Donna Goodwin returns to Bank of America as a Senior Architect.  Donna’s a crackshot at data modeling, SOA, and master data management with stints at IBM, COMSYS, and Check Solutions.

Mick Gunter has an updated current title: Senior Vice President, Operations at Primo Water Corporation

Matthew Halliday has an updated current title: Producer / Creative Director / Tech at CPC Live

Alp Hug has an updated current title: SVP Products & Chief Marketing Officer at The Frayman Group. Alp was formerly the Senior Vice President for ECM Suite Technology Group at Open Text.

Karla Rose Hanson has an updated current title: Business and Communication Manager, Customer Service & Support / Commercial Technical Support at Microsoft. Karla’s a 12 year veteran at Microsoft.

Dawn Habgood has an updated current title: Vice President, Global Shared Services at Forrester Research

Alex Kao is now Managing Director at Stravantage LLC.  Former roles include a stint a tStrategy & Portfolio Management for Global Information Systems at Kraft Foods, Director, Enterprise IT Strategy at Sears, Roebuck and Co, and management consulting work at KPMG.

Jim Kaskade is now Chief Of Cloud at SIOS Technology, Inc.

Koshy ALEX is now Business Development Consultant at Oracle Corporation.  Koshy brings ERP experiences as a Business Development Executive atSynaptris, Pre-Sales Consultant for MS Dynamics ERP at Mahindra Satyam, and Resource Lead for Microsoft Dynamics Competancy at Mahindra Satyam.

Ed Maguire has an updated current title: Managing Director at CLSA Asia-Pacific Markets /Credit Agricole Securities (USA) Inc.

Bill McDermott has been named Co-CEO at SAP.

Jeff Onesto has an updated current title: Director of Product Management at OptionEase, Inc.

Anil Patrick R has an updated current title: Chief Editor – India Operations at TechTarget. Prior to his new position, Anil served as an Editor for Online Initiatives & Special Projects at Saffron Media Pvt Ltd’s Travel Division, and an Assistant Editor at Indian Express.

Jeff Ralyea has an updated current title: Senior Software Executive at Apex Charter Management. Ralyea brings software product management expertise from Infor, FrontStep, and MAPICS.

Anshu Sharma has been promoted to Vice President, Product Management at Salesforce.com. A fellow Enterprise Irregular, he was the Founder & Group Product Manager of Oracle’s SaaS Platform and Senior Development Manager/Technical Staff at Oracle.

Jim Hagemann Snabe has been named Co-CEO at SAP.

Brian Swift has an updated current title: Integrated Workforce Experience – Enterprise 2.0 at Lowe’s Companies

Jozsef Terenyi has an updated current title: IT Manager – SAP Systems at NuStar Energy. Jozsef brings a strong Energy IT background with similar experiences at Valero.

Katharyn White has an updated current title: Marketing Vice President, Global Business Services at IBM. Kathryn has served in various marketing roles over her 13 year career at IBM and has also worked at HP and DuPont.

David Anthony Wilkins has an updated current title: OSS /BSS Contracting Director, EMEA at ICI – the technology people

The Year Of SaaS Shows… And Yes, In This Economy.

The recession continued to take its toll on software sales with a slight impact to the SaaS vendors.  Growth rates have come down from the high 30′s to the low 20′s.  But with “flat” the new growth metric in this down economy, SaaS vendor results remain impressive.  On the other hand, traditional on-premises vendors see some light at the end of the tunnel.  License revenues have started to stabilize on a year-over-year basis.  Major events in the 2009 Calendar Year (CY) Q4 include:

• In YoY quarterly revenue growth, Taleo (23.29%) led the pack followed by SalesForce (22.26%), and Blackboard (17.66%) (see Figure 1).
• Salesforce.com achieves $1.4B in revenues for CY 2009.  As the biggest SaaS vendor in the market, Salesforce.com is bigger than Microsoft Dynamics, Lawson, and Unit 4 (Agresso).  To put this in perspective, Salesforce.com’s revenue alone is at the size of all the other public SaaS vendors listed in the Software Insider Index.
  
• Most on-premises vendors stabilized declines in new license revenue (see Figure 2).  Keep in mind that on-premises vendors have remained profitable in this downturn.  Maintenance continues to provide a cash cushion for most on-premises vendors.
• License revenues versus maintenance revenues for some vendors such as Deltek, Epicor, Exact, JDA Software,  Lawson Software, Manhattan Associates, and Oracle reach or exceed 1:2 ratios.  The result – lagging growth in acquiring new customers on latest releases.
• IFS leads with a (21.38%) gain on YoY license revenue with Manhattan (3.21%), Epicor (2.32%), and Oracle (1.92%) following with positive license revenue for calendar year Q4

Figure 1.  Most SaaS Vendors Continue Break Neck Growth

Figure 2. Many On Premises Vendors Rely On Maintenance To Bolster Sagging License Revenues

The Bottom Line – Clients Now Expect On-Premises Vendors To Have A “SaaS” Option

As we tally up the winners and losers for 2009, SaaS vendors have shown to the industry what’s required for success in today’s tough economic condition.  The secret to their success transcends subscription pricing, cloud services, rapid levels of innovation, and point solutions.  In fact, the success in SaaS comes from the attention to the relationship and the willingness to take a customer friendly stance.  On-premises vendors who have delivered on a partnership with their customers have known this for years.  However, they risk being consumed by the new business models of SaaS and Cloud.   Customers expect their vendors to deliver hybrid options; and private and public clouds.  Expect on-premises vendors without a Cloud deployment option to fade away in this decade as they become the legacy vendors they replaced in the client/server and Internet eras.

Your POV.

As an end user, have you seen the pace of SaaS adoption increase in your organization?  Do you continue SaaS solutions with the same level of comfort as on-premises.  As a software vendor, do you feel you have the right go-to-market cloud strategy for 2010? Please let us know if you need help with your enterprise apps strategy by:

• Develop your SaaS apps strategy
• Assist with SaaS contract strategies and the Customer Bill of Rights: SaaS
• Improving innovation via SaaS and other deployment options

You can post or send on to rwang0 at gmail dot com or r at softwaresinsider dot org and we’ll keep your anonymity.

* Not responsible for any math errors or erroneous revenue information.  Calendar year estimates based on the quarter nearest the calendar year.  Exchange rates as of February 24th, 2010.  Not responsible for currency flux.  Please read the quarterly filings yourself =)

Related resources and links

Take the new and improved survey on 3rd party maintenance

2009 Calendar Year Q3

2009 Calendar Year Q2

2009 Calendar Year Q1

2008 Calendar Year Q4

2008 Calendar Year Q3

2008 Calendar Year Q2

2008 Calendar Year Q1

Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

Apps Users Seek Third Party Maintenance For Cost, Value, and Service

Updated surveys from inquiries, client conversations, and user group meetings show a 113.8% increase in interest in third party maintenance (3PM) services from Q3 2009 to Q1 2010 (see Figure 1).  Key factors stem from (see Figure 2.):

• Continuing cost pressures. Budgets continue to be at flat or have been reduced.  Organizations must do more with less.  Add pressures to innovate, CIO’s must find fat without trimming bone.
• Gaining minimal value in maintenance services. Most felt they were paying too much for too little.  An 8 point jump reemphasized the issue with a lack of tiered offerings.
• Declining plans to upgrade. Worsening economic conditions from Q3 2009 to Q1 2010 led a 27 point increase in interest in 3PM.  Expect many respondents to change their point of view (POV) as economic conditions improve.
• Expecting better service. Service continues to play a key factor in decisions to go to 3PM.  Over 60% of respondents had experienced poor levels of service.
• Slowing pace of vendor innovation. Greater than half of respondents believe their vendor has been too slow to deliver new capabilities. These include SaaS deployment options or key functionality in areas such as strategic HCM and social CRM.
• Disliking the vendor. About 1/3 of the survey respondents have bad experiences with their vendor.  Many times it comes from sales person or support rep experiences.
• Delivering self support. Almost 30% of respondents already provide their own support.  These organizations have no need to pay maintenance when they are doing all the work.

Figure 1. Interest in 3PM grows 113.8% over 2 quarters.

Figure 2. Cost Pressures, Value, And Decision Not To Upgrade Drive Current Trends to 3PM

Limited Options Exist For Most Enterprise Apps Customers

Of the 101 respondents in Q1 2010 interested in 3PM, Oracle (88.1%) and SAP (76.2%) users expressed the greatest interest in seeking independent services (see Figure 3).  Over 80% of the users were from large companies greater than 1000 employees across the globe.  Most SAP users surveyed have mixed environments with Siebel, JD Edwards, and PeopleSoft joint installations.  Unfortunately, very few public options exist for sole SAP users (see Figure 4).  For example, SAP customers can only turn to Rimini Street.  Oracle customers on PeopleSoft, JD Edwards, and Siebel also have limited choices with Rimini Street, netCustomer, and Spinnaker among the options.  IBM, Infor, Lawson, Computer Associates, Epicor, Microsoft Dynamics, Oracle E-Business Suite and database customers have no options.  (Note: This data may not be completely statistically significant given the sample size of 240, but hopefully it provides some directional input.)

Figure 3. Oracle And SAP Users Drive Interest In 3PM

Figure 4. Very Few Public Options Exist For Customers

The Bottom Line For Users – Users And User Groups Must Band Together To Guarantee 3PM Rights. Don’t Take These For Granted!

Although the latest surveys show a 17 point increase in the belief that 3PM is a right, this right is under fire by big vendors such as Oracle who have taken legal actions against 3PM providers for improperly (i.e. TomorrowNow) and allegedly (i.e. Rimini Street) violating intellectual property rights.  If providers have violated such laws, Oracle rightfully should defend its positions and those providers be punished.  However, there’s a lot of money at stake.  For most vendors, maintenance represents 50% to 80% of their revenue stream.  Consequently, users and user groups have a responsibility to:

• Demand that their contracts include provisions that protect their right to 3PM
• Require vendors to work out rules on how 3PM providers can deliver services without violating software IP provisions
• Seek anti-trust class action with the US DOJ (i.e. Christine A. Varney) and the EU Compeition (i.e. Joaquín Almunia) against software vendors who hinder 3PM providers from providing services

Users and user groups must vigorously defend their positions in contracts and legal action or lose this right.  Failure will result in a continued software maintenance monopoly.  Success will ensure market competition and renewed innovation.  Attention: OAUG, Quest, and SUGEN leadership your members need your help!

Figure 5.  A Growing Body Of Users Believe 3PM Is A Right

The Bottom Line For Vendors – Proactively Address The Issue Or Expect A Groundswell Of Activism

SaaS, subscription pricing, 3PM, and the economy provide a confluence of forces that will continue to attack maintenance revenue streams.  Many legal cases have been fought over this issue including IBM vs Amdahl and Geac vs Grace Consulting.  SAP’s failed attempt to convince customers on the value of Enterprise Support led to a public relations disaster and a factor in the resignation of their CEO.  The result – many vendors considering price hikes held back.  In fact, some savvy software vendors retooled and restored the client -vendor relationship by:

• Offering more entry points and tiers to support options. The three pillars of software maintenance and support policies still apply.  However, several vendors are now offering more tiers of support as lower entry points.  Two vendors have finalized plans to offer just the bare bones legal and regulatory updates.  Other vendors have made it easier to come back with maintenance amnesty plans.
• Providing flexible maintenance policies. Vendors who change rigid policies have experienced success among customers.  Some Both Infor through Infor Flex and Micrsoft Dynamics allow like for like swap credits to migrate between existing products.
• Renegotiating existing terms. Some vendors are helping clients meet the realities of the current market conditions. Big on the list is helping clients address shelf ware without repricing of contracts.  For clients who paid full maintenance on software that’s at least 4 years old, some vendors are offering to reduce up to 20% of the overall licenses not in use.  This leads to lower maintenance revenue but engenders good will among key clients.  Further, several vendors have allowed clients to apply credit towards another module as an alternative.
• Delivering amnesty programs. Several vendors have allowed customers to return to maintenance programs after years of not paying.  Such programs play a key role in helping customers upgrade but should be used sparingly as customers may become accustomed to this practice.
• Creating better peer forums to share information. Almost every vendor surveyed has a program to improve the online support capabilities.  Applying Social CRM use cases,  user generated content in peer forums tops the list of initiatives.  Other plans focus on sharing data on benchmarks, operational metrics, and best practices.
• Assisting with vendor financing. Clients seek access to financing, especially many in the mid-market who’s credit lines have been zapped.  Microsoft has led the charge by providing 0% financing for its Microsoft Dynamics ERP and Microsoft Dynamics CRM Customers.  Other vendors such as IBM, Infor, Oracle, SAP, Sage also offer vendor led financing programs that include hardware, implementation, training, and other services.
• Lowering cost of usage and ownership. Though tops on the list as a conceptual practice, most vendors will need to roll out such initiatives over the next 24 months.  A few notable exceptions include Agresso with its VITA architecture which allows customers to rapidly make business and UI changes, Microsoft Dynamics customers who report back significantly lowered implementation and training costs compared to most vendors, and Epicor customers who report significant productivity gains with Service Connect.  SaaS customers already experience such gains.

Your POV

Take the new and improved survey on 3rd party maintenance and let us know if you need help with your enterprise apps strategy by:

• Conducting an ROI on 3rd party maintenance options
• Identifying cost reduction opportunities
• Renegotiating your software contracts
• Improving innovation via SaaS and other deployment options

Please post or send on to rwang0 at gmail dot com or r at softwaresinsider dot org and we’ll keep your anonymity.

Related resources and links

20091008 Deal Architect – Vinnie Mirchandani “Third Party Maintenance Is Really 4 Decades Old”

20071120 News Analysis: Too Early to Call the Death of Third Party Maintenance

20090210 Tuesday’s Tip: Software Licensing and Pricing – Do Not Give Away Your Third Party Maintenance And Access Rights

20090709 Tuesday’s Tip: Do Not Bundle Your Support and Maintenance Contracts!

20090622 News Analysis: Infor Flex Reflects Proactive Maintenance Policy

20090516 News Analysis: Rimini Street Launches Third Party Maintenance for SAP

20090504 News Analysis: Oracle Waives Fees On Extended Support Offerings

20080909 Trends: What Customers Want From Maintenance And Support

20080215 Software Licensing and Pricing: Stop the Anti-Competitive Maintenance Fee Madness

20090428 News Analysis: SAP and SUGEN Make Progress on Enterprise Support

20090405 Monday’s Musings: Total Account Value, True Cost of Ownership, And Software Vendor Business Models

20090330 Monday’s Musings: It’s The Relationship, Stupid! (Part 2) – Stop Slashing The Quality Of Support And Maintenance

20090324 Tuesday’s Tips: Five Simple Steps To Reduce Your Software Maintenance Costs

20090223 Monday’s Musings: Five Programs Some Vendors Have Implemented To Help Clients In An Economic Recession

20081012 Monday’s Musings: 5 Steps to Restoring Trust in the Vendor – Customer Relationship

20100114 News Analysis: SAP Revives Two Tier Maintenance Options

20091012 Research Report: Customer Bill of Rights – Software-as-a Service

20090912 News Analysis: Siemens Cancels SAP Maintenance Contract

20090910 Tuesday’s Tip: Note To Self – Start Renegotiating Your Q4 Software Maintenance Contracts Now!

20090602 Tuesday’s Tip: Now’s The Time To Consider SaaS Software Escrows

Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

Apotheker’s Contract Not Renewed.  SAP Puts Snabe and McDermott In Co-Ceo Roles.

Rumors began circulating early this weekend that Léo Apotehker’s contract would not be renewed.  The highest level sources had confirmed this early in the morning and the afternoon press release provided confirmation of the details.  A few key facts:

• SAP moves back to Co-CEO management structure. Bill McDermott, head of field organization and Jim Hagemann Snabe, head of product development become Co-CEO’s. Point of View

  (POV): For undisclosed reasons, Leo’s contract was not renewed. Both Bill and Jim have extensive experience at SAP and have been hard at work revitalizing the organization from both the sales and product sides.  Many observers may be surprised not to see former Business Objects CEO John Schwarz in the running.
  
  

• Executive Board elevates role of products and technology. Vishal Sikka, chief technology officer (CTO) now appointed to the SAP Executive Board.

  POV: Vishal has the trust and ear of Hasso Plattner and Jim Snabe.  The net result may be more unified road maps, better prioritization of R&D assets, and less issues with product development.

The Bottom Line – Timing Is Everything, But SAP’s Inflection Point Is Good News For Customers

Though a seasoned executive with over 20 years with SAP, Leo was in the wrong place at the wrong time.  He was responsible for doing a bang up job in sales when Henning Kagermann (i.e. the former CEO) was around.   In fact, he made Henning look good despite the difficulties in launching mySAP ERP 2007, SAP ByD, and a host of other failed projects.  Unfortunately, he entered a down market while in charge of a sinking ship.  Low morale among the Walldorf engineering team, the issue with Enterprise Support and maintenance, and uncontrollable poor quarterly performance proved to be factors beyond his control.  Customers over the past 2 to 3 years began to wonder how to tap SAP’s innovation.  A clear need emerged for having more technologists at the helm.

Putting McDermott as Co-CEO makes sense.  He is an excellent sales guys but the issues is not sales.  It’s products.  Snabe and Vishal will need strong product vision to right SAP and point it in a forward direction.   Engineering and products need more attention to bring out trapped innovation at SAP.

Your POV

Are you an SAP customer?   How do you feel about the transition?  Would you like to learn more about:

• Building a next gen SAP roadmap?
• Improving your SAP apps strategy?
• Augmenting SAP with SaaS?
• Putting third party maintenance and optimization to work?

Please post or send on to rwang0 at gmail dot com or r at softwaresinsider dot org and we’ll keep your anonymity.

Related Links And Resources

Here’s a list of related reports.

20100114 News Analysis: SAP Revives Two-Tier Maintenance Options

20091211 Event Report: 2009 SAP Influencer Summit – SAP Must Put Strategy To Execution In Order To Prove Clarity Of Vision

20091125 Speaker Notes: Keynote – SAP UK & Ireland User Group Conference 2009

Here’s a list of related links of news during Léo’s tenure.  They will be added on an ongoing basis and updated as appropriate.

• 20100208 Computer Weekly – Warwick Ashford ” SAP admits enterprise support plan was a mistake”
• 20100208 DestinationCRM – Lauren McKay “After CEO Ouster, Plattner’s Plea: “Please Trust SAP. We Have Not Forgotten You.” “
• 20100208 SearchSAP.com/TechTarget – Courtney Bjorlin “SAP’s new CEOs need to show vision, clear product roadmap to customers, observers say “
• 20100208 Bloomberg – Ragnhild Kjetland “SAP Upheaval Pits Plattner Against Ellison in Market-Share Spat”
• 20100208 ReadWriteCloud – Alex Williams “Will SAP CEO Shakeup Lead to a Unified Cloud Computing Strategy?”
• 20100208 Wall Street Journal – Vanessa Furhmans ” SAP Chief Quits; Co-CEOs step in”
• 20100208 Associated Press – Matt Moore “Shares slip on CEO’s ouster; questions”
• 20100208 Computerworld UK – Elizabeth Heichler and Mike Simons “SAP CEO Leaves”
• 20100208 LeMag IT – Reynald Fléchaux “SAP : Apotheker évincé, Plattner place la jeune garde sous surveillance”
• 20100208 Wall Street Journal: All things digital – John Paczkowski “SAP Board to CEO: Auf Wiedersehen, Sweetheart”
• 20100208 IDG News Service -  Joab Jackson and Chris Kanaracus “SAP Hits Reset Button With CEO Change”
• 20100208 ComputerWeekly – Warwick Ashford “SAP moves to restore customer and employee trust”
• 20100208 Information Age – Pete Swabey “SAP CEO Steps Down”
• 20100207 Wall Street Journal – Archibald Preuschat “SAP Returns to Co-Ceo Leadership, Apotheker resigns”
• 20100207 Information Week – Doug Henschen “SAP CEO Apotheker Resigns; Co-CEO’s Named”
• 20100207 Managing Automation – David Brossell “SAP CEO Resigns Suddenly”
• 20100207 ZDNet Irregular Enterprise – Dennis Howlett “SAP: Apotheker gone, Co-CEO’s in place”
• 20091203 IDG News Service – Chris Kanaracus ” No quick resolution likely for SAP KPI saga”
• 20091201 Computerworld UK – Mike Simons “SAP users wait for vital support announcement”
• 20091201 InformationWeek: Global CIO – Bob Evans “Global CIO: Will SAP Move To Tiered Maintenance Fees?”
• 20091201 Managing Automation – Jeff Moad “SAP postpones maintenance hike”
• 20091127 IDG News Service – Phil Sayer “SAP Enterprise Support KPI Project Leader and Sponsor Resign”
• 20090429 ComputerWorldUK – Mike Simons “SAP Maintenance Fee Reversal is Big Win for Customers”
• 20090429 The Enterprise System Spectator – Franck Scavo “SAP postpones its maintenance fee price hike”
• 20090403 ZD Net Enterprise Irregulars – Dennis Howlett “Zut alors! the French are revolting”
• 20090402 Computerworld UK -Peter Sayer “Update: SAP users get tough about Enterprise Support KPIs”
• 20090402 LeMagIT – David Castaneira “Tarifs de maintenance : les utilisateurs haussent le ton face à SAP”
• 20090401 IDG News Service – Chris Kanaracus “SAP: KPIs coming soon for Enterprise Support”
• 20081210 ZD Net Irregular Enterprise – Dennis Howlett ” We Made A Mistake”
• 20081209 IDG News Service – Chris Kanaracus “SAP Makes Support Contract Concessions In Austria, Germany”
• 20081209 SearchSAP.com – Courtney Bjorlin “Many German and Austrian SAP users delay Enterprise Support contracts”
• 20081209 ZD Net Irregular Enterprise – Dennis Howlett “Breaking:SAP Maintenance Price Hike: Partial Victory”
• 20081127 IDG News Service – Chris Kanaracus “SAP User Group CEO Leaves”
• 20081126 Information Week – Mary Hayes Weier “SAP User Group Fires President”
• 20081125 ZD Net Irregular Enterprise – Dennis Howlett “Breaking: SAP User Group Fires CEO”
• 20081111 Computer Weekly – Warwick Ashford “SAP Enterprise Support dominates User Event”
• 20081110 ZDNet – Dennis Howlett “SAP’s UK users don’t get it – yet”
• 20081110 IDG News Services – Mike Simons “SAP users: we won’t pay higher prices “
• 20081110 Computing – Phil Muncaster “SAP customers told to bargain hard”
• 20081109 Information Week – Mary Hayes Weier “SAP Outlines Updated Maintenance Fee Plan”
• 20081106 IDG News Service – Chris Kanaracus “SAP tweaks support offerings”
• 20081105 IDG News Service – Chris Kanaracus “Top SAP executive grilled on support hike at software conference”
• 20081029 SearchSAP.com – Editorial Team & Axel Angeli, “SAP: What Went Wrong? Blame Marketing, NetWeaver”
• 20081024 SearchSAP.com – Courtney Bjorlin, “SAP and Oracle vs Third Party Support”
• 20081021 CIO.com – Thomas Wailgum “7 Ways to Get More For Your Increased SAP Maintenance Fees”
• 20081020 CIO.com  – Thomas Wailgum “Why SAP’s ERP Maintenance Prices Should Be Going Down — Not Up”
• 20081015 SearchSAP.com – Courtney Bjorlin “SAP Customers Should Push for Added Value in Enterprise Support, report says”
• 20081010 IDG News Service – Chris Kanaracus “Update: Forrester: Discontent persists over SAP maintenance hike”
• 20080923 ComputerWoche (ComputerWorld Germany) – Frank Niemann “AP macht in Sachen Wartung keine Zugeständnisse” Translated version courtesy of Babelfish
• 20080825 IDG News – Chris Kanaracus “SAP users seek proof of support plan’s benefits”
• 20080821 Compuerworld UK – Mike Simons “SAP extends maintenance deal to thousands of R/3 customers”
• 20080820 IDG News Service – Chris Kanaracus “SAP, user group to shed light on enterprise support”
• 20080813 IDG News Service – Chris Kanaracus ” SAP users: Support debate isn’t over”
• 20080801 IT News.com – Rosalie Marshall “SAP refuses to budge on hikes in support costs”
• 20080731 Computing – Tom Young and Janie Davies, “Fury as SAP raises support costs”
• 20080730 Enterprise System Spectator – Frank Scavo “Mad As Hell: Backlash Brewing Against SAP”
• 200807289 Enteprise AntiMatter’s Joshua Greenbaum, “Friendly Fire: SAP Flubs the Maintenance Business”
• 20080728 The Register – Chris Williams “SAP Defends Forced Price Hike”
• 20080728 MyCustomer.com – Stuart Lauchlan “UPDATED: SAP customers furious at 29% hike in support costs
• 20080728 Irregular Enterprise – Dennis Howlett “More dissent on SAP Maintenance Price Hike”
• 20080728 Information Age – Pete Swabey “SAP support costs to jump 30%, says user group”
• 20080728 IDG News Service – Chris Kanaracus “SAP, Oracle price hikes open door for license optimization”
• 20080728 CIO Magazine – Thomas Wailgum “As SAP Support Costs Spike, Users’ Group Leader Preaches Collaboration — Not Rebellion”
• 20080725 IT World – Mike Simons “SAP maintenance backlash grows in UK and Germany”
• 20080725 ITPRO – Nicole Kobie “UK SAP user group slams support pricing increase”

Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

• Official SAP Press Release
  

IBM Adds A Leading Customer Data Integration/MDM Pioneer To Its Master Information Management Arsenal

With arguably 10 master information management acquisitions since 2003, IBM continues to push towards its goal of adaptive master data management (MDM) (see Figure 1).  The recent acquisition of Initiate Systems comes after the heals of Oracle’s purchase of SilverCreek Systems in January 2010 and Informatica’s purchase of Siperian in January 2010.  Rapid consolidation in the MDM market has effectively removed 3 of the 4 leading vendors in MDM.  The Initiate Systems acquisition brings IBM key benefits such as:

• Strong and proven customer data integration platform. Initiate Systems brings best-in-class data de-duplication, security and privacy, and strong data acquisition capabilities to IBM.  A key hallmark of the solution is the rapid real-time matching capabilities and hierarchy management.  Among all the MDM vendors, Initiate brings the most number of productive, live customers – about 100 of its estimated 200 customer count.

  Point of view (POV): As with rival Oracle, IBM must take steps to harmonize the different MDM solutions in its portfolio.  Today, IBM offers Infosphere MDM Server for PIM based on Trigo product information management (PIM) and Infosphere MDM Server 9 based on DWL for customer data integration (CDI).  Initiate Systems adds a third and capable product into the line up that’s optimized for customer data.

• Deep healthcare and public sector experience. Initiate Systems made its mark in health care and public sector.   Today, Initiate serves over 2400 health care sites and over 40 health information exchanges (HIE).  Key clients include Alberta Ministry of Health and Wellness, BMI Healthcare (UK), Calgary Health Region, CVS/Caremark, Humana, Ochsner Health System, the State of North Dakota‘s Department of Health and Human Services and the University of Pittsburgh Medical Center.  In the past years, the Chicago, IL based vendor has branched out to other verticals such as financial services, high-tech, manufacturing, and retail.  However, its gained the most ground in B2C public sector industries such as health care, law enforcement, governmental agencies, and intelligence.

  POV: Expect IBM to augment Initiate’s strengths with IBM’s InfoSphere Identity Insight and InfoSphere Global Name Recognition to address the B2C public sector industries.   In health care, IBM Global Services already serves as a key reseller and this will ease the integration of this practice area into Big Blue.  Expect Initiate to continue its lead in EMPI and role in public sector projects.  Consequently, IBM will have to address how they will work with rival partners such as Raytheon, Informatica, Carefx, Healthvision, Agfa, and dbMotion.
  

• Strong management team. Bill Conroy (CEO) and his capable management team drove an estimated $100M in revenues with a 4 year CAGR of 50% and zero debt. On top of this, they secured a $31M Series E round of funding from EMC, Informatica, Dunruth Capital, BCBS Capital, and Paladin Capital.

  POV: With arguably one of the most capable management teams in the industry and one of the sharpest sales minds, Greg Shaw, IBM adds some key assets to its management ranks.  How they navigate the Big Blue bureaucracy will be a test of how well IBM conducts integrations of high performing companies.  Given the improved collaboration culture within IBM Software Group and the rest of IBM, the future bodes well.

Figure 1. IBM’s MDM Acquisition Road Map

The Bottom Line For Users – IBM Brings Stability To Initiate’s Customers And Adds A Series Of Big Blue Capabilities

Initiate customers gain access to the assets of IBM.  Customers can expect IBM to integrate the product line over 2 years but benefit immediately from synergies with other IBM Information Management products such as its knowledge base of industry models, governance, BI & performance management tools, and identity and management tools.  As with most IBM acquisitions, key personnel in product development, support, and sales will be incentivized to stay for at least 2 years, providing enough time for knowledge transfer and account transitions.  In general, non-IBM customers will gain new resources.  Existing IBM customers will find business as usual.

The Bottom Line For Vendors – MDM Moves From Best Of Breed To Foundational Software Stack Component

Given the foundational nature of MDM in any vendor’s software stack, expect more rapid consolidation in the MDM market with very few independents by the end of 2010.  Potential acquirers include EMC, HP, IBM, Microsoft, Oracle, and SAP.  Potential targets for EMC, SAP, and HP include Datactics, Kalido, Talend, and Visionware.   With Initiate Systems in IBM’s hands,  Microsoft’s most likely target would be VisionWare or Kalido as they are the only two vendors optimized on the Microsoft stack.  SAP, EMC, and HP may be better off looking at Kalido for its strong pharma, insurance, and data governance capabilities for MDM.  MDM will move more and more vertical as domain specific issues become paramount.

Informatica Enters The Battle For Master Data Management Dominance

As with any best of breed market, only a few will survive and even fewer will succeed.  Despite a leading offering, Siperian’s faced a rocky financial situation over the past 12 months.  Many suitors pursued Siperian but in the end Informatica’s $130M acquisition of Siperian took one of the best products off the table.  Customers breathed a sigh of relief as the $500M revenue software vendor brings not only stability of product investment and expertise, but also a complementary set of related MDM technologies to market.  Key benefits include:

• Full spectrum of MDM offerings. Informatica’s Data Integration and Data Quality products combine with Siperian’s for a comprehensive master data platform.  Siperian brings some of the best data acquisition, data cleansing, relationship and hierarchy management, event management, reference data management, data stewardship, and architecture to market.  Usability and rich graphical interface are other strong points. In addition, the Identity Systems match engine and AddressDoctor postal validation already serve as best of breed solutions in many data quality initiatives.

  Point of View (POV): Informatica has been slowly tip-toeing in this market with 6 acquisitions in 4 years for almost $400M. Consequently, the Redwood City, CA vendor has assembled the key components for a comprehensive MDM offering (see Figure 1).  Informatica can now offer a wide range of entry points from smaller data quality projects to larger identity management projects enabled by a series of data integration flows.  Siperian is the crown jewel that takes Informatica directly into the MDM market and puts competitors such as Oracle, IBM, Initiate Systems, and SAP on guard.

Figure 1. Informatica’s MDM Acquisition History

• Attractive, referenceable, customer base. Informatica gains over 60 forward thinking MDM customers.  Key customers include big names in financial services and life sciences such as Bank of America, Pifzer, Shire, State Street Bank, Johnson & Johnson, and Lexis-Nexis.  These early adopters have pioneered some of the latest MDM success stories.

  POV: While the press release focuses on the financial services and life science customers, Sipeiran has taken big deals away from SAP, Oracle, and IBM in high tech and retail players in North America.   A very loyal Informatica base will most likely consider the Siperian offering in short lists, as it is now part of the family.   Many of these customers also run Oracle and SAP in the back office.

• Improved data governance. Siperian’s Business Data Director was one of the first tools in the market to address the issue of data governance.  Working with Lombardi’ s Teamworks BPM software, Siperian allowed customers to quickly manage assignment, workload distribution, state management, and event routing.

  POV: Data governance capabilities will provide a clear differentiator in the success of MDM implementations. Organizations often struggle with managing the Information Supply Chain (i.e. what data, to whom, for when, how often, and where).  Given IBM’s acquisition of Lombardi, expect Informatica to consider other BPM tools in the future.
  

• Synergies with Cloud strategy and Social CRM. The Informatica Cloud and related data integration heritage provide the pipes critical to cloud strategies.  Informatica delivers data partitioning support, data processing latency, and hybrid data integration.  Siperian provides the mechanism to manage multiple sources of information, maintain the golden record, and accommodate multiple domains.

  POV: As information continues to move into hybrid deployments and public/private clouds, MDM plays a critical role in harmonizing information across various cloud strategies.  In order to prioritize and monetize social initiatives, organizations will need to match social profile information with critical customer account information

The Bottom Line For Users – Expect More Stability And Investment From Informatica

(Source: Informatica)

Conversations with Ivan Chong, Senior Vice President and General Manager of Data Quality confirm Informatica’s commitment to invest in the Siperian offering.  From an organizational perspective, the Siperian product teams will remain in tact with the Toronto development and St. Petersberg offshoring offices in place.  Incoming product teams will function as a business unit within Informatica and the Siperian Release X (10) solution remains on track for launch in 2010.  Sales teams will stay as overlay subject matter experts augmenting the considerably larger Informatica sales force.  Siperian customers should find a good home at Informatica.

The Bottom Line For Vendors – Acquisition of Siperian Hastens MDM Market Consolidation

Expect more acquisitions to occur as the market consolidates.  Potential acquirers include EMC, HP, IBM, Microsoft, Oracle, and SAP.  Potential targets include Datactics, Initiate Systems, Kalido, and Talend.  SAP, despite the Business Object acquisition, still needs a strong MDM solution to complement its 4 or more point specific solutions.  Meanwhile, expect Oracle to spend the next 12 months finding ways to rip out any dependencies with Informatica in its vast number of MDM offerings.  Microsoft, EMC, and HP have been looking at entering this market for some time. Maybe now’s the time to act!

As always, thanks for your emails and alerts. If you’ve got a change or know of a promotion, keep dropping me a line! If you need a referral, and we’ve worked together in the past, don’t hesitate to reach out to me via Linked In.

Roger Bottum became VP of Marketing at SpringCM, a SaaS content management player this past November.  Roger formerly served as Acresso Software’s SVP of Marketing. Other senior marketing roles include work for companies such as Axentis, Endeavor Information Systems, and Arrowsight.  Other companies include  System Software Associates, Accenture, and Pansophic Systems.

Michael Corkery was appointed as CFO for Deltek.  Previous roles include serving as the CFO and Acting CEO for ICO Global Communications.  Corkery’s experience reflects a telecommunications technology background with other executive roles at Current Group, LLC; Nextel Communications; Berliner Communications, XO Communications, and AT&T Wireless

Stephen DePooter is now Chief Information Officer at Illinois Department of Veterans’ Affairs. He brings significant IT and healthcare experience from serving as a System Director, Applications at Memorial Health System, IT Security Analyst at Horace Mann, IT Security Consultant at MSF&W, and various roles at Emory Healthcare.

Justin Floyd became the CEO and Co founder of RedCloud Bank in October 2009.  Former roles include serving as an Investor at CCL Group plc and Investor and Chairman/CEO at Vecta

Bill Geist became President at Turning Point Management LLC in October 2009 after serving as COO, Global Services at  CDC Software.com.  Other former positions include CEO at Application Partners LLC; Senior Vice President at Headstrong, Inc.; Partner, Southeast Region at Wavebend Solutions, LLC (BDO Seidman consultancy); Partner, Branch Manager at Whittman-Hart; Director, Group Manager at Cambridge Technology Partners; VP, Information Technology & Services at Scientific Atlanta; and VP, Information Services at Reichhold.

Glenn Gruber is now AVP, Market Development, Travel Technologies at Ness Technologies.  Glenn has served many marketing roles including AVP, Strategic Marketing at Symphony Services Corp.; Product Line Manager at Parlex Corporation; Director of Marketing – RFID/Smart Cards at Power Paper, Inc.;VP, Sales and Marketing at Golden Screens Interactive; and Director of Marketing and Business Development at Kyocera Electronics, Inc.

Alexis Karlin is now Digital Marketing Specialist at Neolane. Prior to Neolane, Alexis served as Web Producer from 2007 to 2009.  Former roles include work as an Interactive Developer at Feinstein Kean Healthcare and Web Adminstrator at Cognos

Tamara Mendelsohn was promoted to Director of Marketing at Eventbrite.   She brings tech marketing experiences from Apple and her work as an Senior Analyst at Forrester Research.

Michael O’Kelly rejoins as IT Director at International Aid in December 2009.  Please make donations if you care to.

Jessie Paul is now CEO at PaulWriter.  After a 5 year career as CMO of Wipro and 15 years in the corporate environment, Jessie’s teamed with Paul Writer to start her new venture.  The new concern will build on her deep marketing experiences that include Head of Worldwide Marketing at iGATE Global Solutions; Global Brand Manager at Infosys Technologies; and account executive at Ogilvy & Mather Advertising

Pascal Sero has updated his current title to VP Oracle Asia R&D Centers.  He’s been with Oracle for more than 2 decades.

Joseph Stanhope is now Senior Analyst at Forrester Research.  Stanhope brings various experiences from Alterian where he served as VP of Platform Strategy, Director of Global Product Marketing, and Director of Marketing.  Other roles include VP of Marketing at MarketerNet, LLC and Senior Product Manager at Experian

Bob Suh is now Founder and CEO at OnCorps.  Bob brings heavy technology expertise with past roles such as Chief Technology Strategist at Accenture; President, Consulting and SI at Perot Systems Corporation; and Managing Director at CSC Index

Jari Tavi became Head of Operations and Innovation at Loyalty Agent Ltd. ,a stealthy startup, in October 2009.  Past roles include CEO and Partner at Hotelzon Technologies and Development; Head of Technology at Berling Capital; and CTO at BasWare. Jari brings a passion for new ideas and crucial startup thinking.

Mitch Wagner is now Principal at Mitch Wagner Communications. Mitch brings over 25 years of tech media experiences including many of the initial web and social initiatives at United Business Media/CMP.

Zia Yusuf is now an Entrepreneur in Residence (EIR) at both Sutter Hill Ventures and  Norwest Venture Partners. Zia brings a wealth of experiences including a 10 year career at SAP and experiences at the WorldBank.

Standard Support Returns After Much Deliberation

SAP announced today that they would be reintroducing their Standard Support offering.  Customers now gain choice with a 2-tier maintenance offering. Here are the details between standard support and enterprise support.

• Standard Support Offering reintroduces at 18%. Customers seeking core bug fixes, support packages, risk mitigation, and related new functionality will have choice in staying on standard support.  The program is designed for customers who seek to keep their systems up and running.  Customers with CPI clauses in their contracts will want to take note – the first set of consumer price index (CPI) price increases will begin January 1st, 2012.
• Enterprise Support remains at 22%. SAP will continue to offer Enterprise Support at 22% for new customers and a ramp up for existing customers (see Figure 1).  Enterprise support includes features such as best practices for IT operations, proactive monitoring and reporting, and transparency for business process performance.  Customers who choose to go with Enterprise Support prior to March 15th, 2010 will be eligible for ramp up.
• Supplemental offerings still available. Other programs such as Max Attention, Safeguarding, and Product Support for Large Enterprises (PSLE) will continue to be available by choice and invitation.

Figure 1. SAP’s New Support Pricing Scale

(Source: SAP)

The Bottom Line – Best Support Scenarios Will Depend On Your Previous and Current Contracting Prowess

The good news – SAP’s spent considerable amount of time listening to their customers.  The result – customers do want choice and there are plenty of choices to be made.  Decisions on which option is best can be best summarized by asking a few key questions:

• Are you expanding your use of SAP in the next 3 to 5 years? Determine your pace of adoption for SAP products.  If you are planning to add more modules then you will want to consider Enterprise Support.  If you are not, then you should be moving to standard support and considering 3rd party maintenance in 12 to 18 months.
• Do you have a CPI increase in your contract? If you do, then you’ll want to see if the total is above the inflation rate or the enterprise support ramp up of 6% per annum.  The best case is to have negotiated CPI + 0% but most SAP customers have CPI +5% as standard, well over the 6%.
• What’s your overall SAP apps strategy? How will you harness innovation within and around SAP?  What’s your plan in the next 12 to 18 months?  What will you be doing with SaaS?  How will you be incorporating portals such as Sharepoint?
• Can you make a decision on Enterprise Support by March 15, 2010? Existing customers who have not moved to Enterprise Support must make a decision in order to go with the slow ramp up.  Those who wait after March 15, 2010 will start at 22% maintenance.

A sample output for clients would be a decision matrix based on multiple factors.  Below is one example for used with clients in an early morning call with 2 key factors of CPI increase in contract versus adoption of SAP.  Other factors will include when your contracts began and what lifecycle of adoption your organization are in. (See Figure 2):

Figure 2.  Sample SAP Support Decision Matrix

Copyrighted © 2001- 2010 R "Ray" Wang and Insider Associates LLC.

Your POV

Need help with your contract negotiations?  Tap into the experience of thousands of contract negotiations.  Have a story to share about SAP contracts? Please post or send on to rwang0 at gmail dot com and we’ll keep your anonymity.

* Not responsible for any factual errors or omissions.  However, happy to correct any errors upon email receipt.

Other Useful Software Contract Negotiations Links

Tuesday’s Tips: Five Simple Steps To Reduce Your Software Maintenance Costs

Tuesday’s Tip: Do Not Bundle Your Support and Maintenance Contracts!

Tuesday’s Tip: Software Licensing and Pricing – Do Not Give Away Your Third Party Maintenance And Access Rights

Tuesday’s Tip: 3 Approaches To Return Shelfware

Tuesday’s Tip: Software Licensing and Pricing – Now’s The Time To Remove “Gag Rule” Clauses In Your Software Contracts

Related Blogs, Press, and Links

MUST READ – 2010017 Irregular Enterprise – Dennis Howlett “SAP’s Maintenance Cost Sleight of Hand”

News Analysis: SAP Moves All Customers Onto More Expensive Enterprise Support

News Analysis: SAP and SUGEN Make Progress on Enterprise Support

20100115 SearchSAP.com/TechTarget – Courtney Bjorlin ” Choosing Standard or Enterprise support more difficult for SAP customers with no KPIs ”

20100114 IDC – Amy Konary at IDC “Guest Post: Back by Popular Demand, A Basic Maintenance Offering from SAP”

20100114 Forrester Blogs – Paul Hamerman “SAP’s Tiered Support Announcement Diffuses a Contentious Issue”

20100114 IDG News – Chris Kanaracus “SAP shakes up support structure, executive organization”

20100114 Enterprise System Spectator – Frank Scavo “Flash: SAP backs down on 22% maintenance fees”

20100114 Information Week – Doug Henschen “SAP Reintroduces Tiered Maintenance”

20100114 ComputerWorldUK – Mike Simons “Update: SAP does U-turn on Enterprise Support”

Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

High Cost Of Ownership And Changing Requirements Drive SAP Users To Seek Optimization Solutions

As users await SAP to regain its mojo (see Dennis Howlett’s post) and implement it’s “Voice of the Customer” strategy in 2010, users must continue to reduce their cost of ownership and complexity (see Figure 1).  In addition, rapidly changing business requirements require some users to seek SaaS alternatives, additional point solutions, and extensions.

Figure 1.  Cost Reduction Top of Mind for SAP users

Consequently, vendors providing SAP optimization and extension solutions represent one of the fastest growing parts of the $78.7B (2009 Altimeter Group estimate), 850,000 person strong SAP service partner and developer ecosystem.   SAP users already embrace many of the solutions from vendors on this inaugural SAP Optimization List as part of their business value oriented apps strategy. The living list covers seven areas including:

1. application extension and usability;
2. application life cycle management;
3. archiving, storage, and data management;
4. license management and optimization;
5. Microsoft Office integration;
6. third party maintenance; and
   
7. virtualization

1. Application Extension and Usability

Users often complain about the poor usability of SAP solutions.  These solutions allow users to change their user experience with SAP.  In some cases, the solutions provide composite app creation capabilities in other tool sets to inter-operate with SAP.

• Adobe – provides interactive forms for the SAP environment in both an off-line and on-line deployment.  Submitted forms are then entered into SAP.  Forms can include validations and other secure features.
• ERP-Link – allows users to extend the SAP environment for business intelligence, document management, content management, and composite application creation using Microsoft tools.  The i_Net platform creates SAP-Microsoft interoperability.
• GuiXT – provides users with the ability to deliver customized user interfaces in SAP applications.  GuiXT is often used by clients to simplify screens and user flows without impacting SAP code.

2. Application Life Cycle Management

Whether it may be instance consolidation, upgrades, test data management, or performance planning, these vendors ease the process of managing the SAP application life cycle.

• Hayes Technology – assists customers with replicating production application data for dev, testing, and training environments.  Gold Client allows organizations to replicate the data sets they need in SAP configuration, master data, and transcational data.
• Hyperformix - builds on SAP internal monitoring capability.   Organizations gain a performance monitoring tool that identifies hardware, infrastructure, and architecture optimization opportunities.
• Intellicorp – provides an artificial intelligence based optimization solution called Live Compare that compares version of SAP for use in testing, upgrade planning, and other life cycle activities. The solution helps clients understand their pre and post environment.
• Panaya – delivers a SaaS based optimization tool for SAP upgrades, enhancement packages, and ABAP code cleansing.  Customers generate a code analysis to determine differentials between versions.  The tool proactively tells user what will break, how to fix it, and where to test.
• Tidal Software – optimizes the allocation of SAP support resources through a root cause analysis methodology.  Performance, IT Process, and Workload automation solutions address both day to day and upgrade scenarios such as a system refresh.
• West Trax – uses a benchmark tool based on over 300 clients in 13 industries to determine system optimization opportunities for upgrades and  consolidations.  KPI Scan, KPI Optimizer, and KPI QA help organizations identify opportunities, make suggestions, and assist with compliance.

3. Archiving, Storage, and Data Management

• EMC – provides content management and archiving solutions to support compliance requirements.  Other capabilities include cloning, backup, and recovery, and information protection.
• IBM Optim – delivers a suite of integrated data management solutions that includes data privacy, test data management, archiving, retention and E-discovery, and upgrade consolidations.

4. License Management and Optimization

Solutions in this category focus on helping clients manage their license usage.  Many large enterprises lack the understanding of how much shelfware may be in production.  In addition, the used software market provides users with opportunities to unload or acquire older releases of software.

• Flexera (formerly Acresso, Macrovision) - helps clients with a software solution to understand usage, ensure compliance, centralize updates, predict future demand, and improve contract negotiation leverage.
• SUSEN Software – provides a market place to buy and sell used software or shelfware.
• UsedSoft - supports a market place to buy and sell used software or shelfware.

5. Microsoft Office Integration

Organizations require easy ways to leverage Microsoft Office as an interface into SAP.  Common scenarios include Outlook, Excel, Access, and Word integration.

• SAP Duet – represents a solution in joint partnership between Microsoft and SAP to provide interoperability.  Current users complain about the slow pace of innovation and high cost.  A new version addressing these issues will be out in 2010.
• Winshuttle – facilitates data exchange between SAP and Microsoft Excel or Access.   Winshuttle’s data management tools automate data entry, data download, and reporting tasks for the entire SAP BusinessSuite 7.

6. Third party maintenance

Customers seeking relief from maintenance choose solutions that provide maintenance, tax updates, and regulatory changes for often half the cost of existing SAP maintenance prices.  The clear leader in the market is Rimini Street though some other system integrators have been quietly providing such services.

• Rimini Street- delivers maintenance options for SAP customers who do not seek to upgrade but would like to keep their existing systems up to date with tax, compliance, and other break-fix issues.  Rimini Street’s charter program has met significant success with over 100 client cases for SAP customers.
  
• Your System Integrator of Choice – The recent Siemens SAP maintenance contract negotiations revealed that other vendors such as IBM and HCL were bidding for the maintenance business.   Many SoftwareInsider readers have shared with us that many system integrators, especially those in Europe provide such services.

7. Virtualization

Virtualization allows organizations to consolidate server infrastructure costs for development, testing, training, and production environments.

• EMC – provides virtualization solutions that include high availability (HA), backup and recovery (BR), and cloning.
• VMWare -  reduces an organizations physical infrastructure footprint with its solutions.  VMWare provides additional solutions that deliver high availability (HA) and disaster recovery (DR).  In addition to cost savings, many Software Insider readers report performance improvements.

The Bottom Line – Lots Of Proven Solutions, Expect More Details In Future Friday’s Features

Over the course of the next 6 months, we will be profiling many of these vendors.  Key questions that will be answered:

1. What’s the appropriate use case?
2. What other customers have used these solutions?
3. What are sample ROI’s achieved?

Meanwhile, let’s see what news, programs, and innovations develop at SAP’s Field Kickoff Meeting (FKOM 2010) the third week of January.

Your POV.

Have you worked with any of these vendors?  Feel free to share your experiences.  Am I missing anyone?  This list will be continuously updated so please share with us your thoughts.  Feel free to post your comments here or send me an email at rwang0 at gmail dot com or r at softwareinsider dot org.

Copyright © 201o R Wang and Insider Associates, LLC. All rights reserved.

Keep In Mind Basic Rules Still Apply Regardless Of Deployment Option

The proliferation of SaaS solutions provides organizations with a myriad of sorely needed point and disruptive solutions.  Good news – business users can rapidly procure and deploy, while innovating with minimal budget and IT team constraints.  Bad news – users must depend more on their SLA guarantees and deal with a potential integration nightmare of hundreds if not thousands of potential SaaS apps.  Though the 7 key benefits of SaaS outweigh most downside risks, organizations must design their SaaS apps strategies with the same rigor as any apps strategy.  Just because deployment options have changed, this does not mean basic apps strategy is thrown out the window.  Concepts such as SOA, business process orchestration, and enterprise architecture will be more important than ever.  Here are 10 strategies to consider as organizations take SaaS mainstream:

1. Begin with the business process and desired business value. Understand the desired business value and outcome.  Map back the key performance indicators (KPI’s) to the business processes. Identify what processes will be covered by the SaaS solution.  Determine overlaps and hand-offs between on-premise and SaaS to SaaS that are required to measure the desired KPI’s.
2. Engage stakeholders early and often. Today’s apps strategies must constantly evolve. Change is happening so fast that line of business leads and IT leaders must collaborate in real time.  The result – an ever changing list of requirements.  While SaaS allows business leaders to make go-it-alone decisions, success will require close collaboration on short term and long term requirements, dependencies, and strategy.
3. Bet on future suites, SaaS platforms or PaaS (Platform-as-a-service). Winners and losers will emerge in this wave of Cloud computing.  Vendors such as Netsuite, Workday, Zoho, Epicor, and SAP have built or will be building suites.  They provide safe bets as more and more functionality will be rolled into their offerings. Concurrently, organizations should also choose vendors who bring a vibrant and rich ecosystem to the table because those vendors will win in the market.  Salesforce.com and NetSuite already provide users with a platform to build on apps.  Other vendors such as as Google Apps Engine, Microsoft Azure, IBM, and Zoho provide rich developer communities.  Partner and customers will drive innovation which is why platform adoption (i.e. today’s middleware) makes a difference.
4. Augment with best of breeds, but avoid best of breed hell. No one platform can provide every solution, but choose wisely.  Best of breeds provide deep vertical capabilities and rich last mile solutions.  However, no one wants to manage hundreds of vendor relationships.  Create frameworks that allow business users to work with vendors which support open standards, integrate well with your existing integration strategies, and follow the bill of rights.   Reduction in the number of vendors will become a priority in 2010 going on into 2011.
5. Assume hybrid will be the rule not the exception. Prepare for hybrid deployments throughout the decade.  Despite the benefits of SaaS and broad adoption in 2010, legacy apps will not go away.  Just count the number of mainframe and client-server apps still in use today.  Many on-premise apps will take time to migrate to SaaS. In some cases, legal requirements will prevent data from being stored off-site.  Software plus services offerings from companies such as Infor, Lawson, Microsoft Dynamics, and SAP may become the norm in 2010 as companies seek private and public cloud solutions.
6. Design with good architecture. Keep your enterprise architects (EA’s) or hire some more.  Inevitably, more and more SaaS solutions will enter the organization.  EA’s will proactively plan for new scenarios and account for future business requirements.  Organizations should keep some rigor in terms of standards for solution adoption while accounting for the need to rapidly innovate.  Business leaders will need some frameworks on which solutions to adopt.
7. Choose the right integration strategy for the right time. SaaS integration strategies will evolve based on the organization’s SaaS adoption maturity.  The first set of solutions will probably require point to point integration of data.  Over time, users often migrate to centralized integration services that account for process.  Some will go full enterprise service bus (ESB) and look at business process orchestration as well.  Consider solutions from CastIron, Boomi, Pervasive Software, Informatica, and SnapLogic.  Going forward customer data integration and master data management will be more important than ever.
8. Minimize long-term storage costs with archiving. Storage represents a significant long term SaaS cost.  Savvy clients can reduce the cost of SaaS storage with a myriad of technologies such as EMC, IBM Optim, and RainStor.  By archiving, organizations will experience faster transaction times, maintain compliance, and reduce storage fees.
9. Hedge risk with SaaS escrows. Most SaaS vendors will require 5 to 7 years to achieve profitability.  End users often demand software escrows in the on-premise world when they are concerned about vendor viability, takeover threats, and other related breaches to performance or service level agreements.  Software escrows vendors serve as the trusted third party independent organization which holds a copy of the software code.  This often includes user data, source code, documentation and any application executables. SaaS escrows work in a similar way.  Vendors such as EscrowTech, InnovaSafe, Iron Mountain, NCC Group. and OpSource can provide such services.
   
10. Protect your rights. Client – vendor relationships in SaaS are perpetual.  Organizations have one shot to get the contract right and begin the relationship with the right tenor.  Apply best practices from The Customer Bill of Rights: SaaS. Work with vendors to find the right balance in approach.
    

The Bottom Line For Customers – Build Frameworks That Support Easy Line Of Business Adoption

The broad adoption and trajectory of SaaS solutions requires organizations to rapidly replace edicts and 5 year plans with guidelines and policy frameworks.  The goal – enable anyone in the organization to procure a SaaS solution that meets key guidelines and standards.  The result – flexibility, security, and scalability that allows solutions to be used on-demand and in concert with existing applications.

Your POV.

As you work out your SaaS apps strategies, drop us a line and let us know how you are deploying, what challenges you’ve faced, and what successes have you achieved.  We’re happy to weigh in.  Feel free to post your comments here or send me an email at rwang0 at gmail dot com or r at softwareinsider dot org.

Copyright © 2009 R Wang and Insider Associates, LLC. All rights reserved.

(Photos by R Wang & Insider Associates, LLC.   Copyright © 2009 All rights reserved.)

Re-innovation Now At The Heart Of SAP’s Focus And Strategy

SAP has faced a rough two years.  From the continuing market pressure on new license revenue, false-start launch of Business By Design (ByD), management restructuring, and issues with user groups and Enterprise Support, one could kindly say its been a brutal period.  Looking forward to a fresh start in 2010, senior executives and key personnel have been hard at work “re-innovating” SAP at both the product and marketing level.  As intended, many of the 275 analysts, bloggers, customers, influencers, and media attendees of this year’s SAP Influencer Summit left Boston with the perception that the company is in the midst of such transition. However, the clarity of that message and the perception of innovation depended on the topic at hand.

Five key themes drove most formal and informal conversations throughout the event:

• SAP continues to be innovative. John Schwarz, SAP Executive Board Member, keynoted on stage that ” We are not your grandmother’s SAP” and addressed SAP’s aspiration to become more customer focused and innovative.  Jim Hagemann Snabe, Executive Board Member in charge of Business Technology and Solutions, touted the product vision.  Vishal Sikka, SAP’s Chief Technology Officer (CTO) focused his conversation on Timeless Software and SAP’s cloud orientation.  He emphasized the size of future data volumes and the case for why In-Memory applications would provide the access speed and key meta-data required to draw inference for usage in business intelligence and analytics.  Meanwhile, John Wookey, who leads SAP’s OnDemand for Large Enterprise effort commented on the Cloud by stating, “SAP sees On-Demand as the next major change in computing models and we’re very serious about on-demand. Innovation in on-demand (deployment options) is still largely in front of us.”

  Point of view (POV): SAP’s working hard to highlight its innovations.   With €1.6B spent a year in R&D, innovation exists in SAP Labs but management and tribal politics often keep good ideas from becoming productized.  Users will need to work closely with SAP to identify needs and requirements and help SAP prioritize what should go to market.  Cloud strategy remains hazy in specifics. In-memory approach will benefit customers but will take time to develop across all products.  OnDemand for Large Enterprises could slow in-roads by pure-play SaaS vendors.

• Business analytics and intelligence play a key role in the platform. Executive Vice-President and General Manager, Marge Breya spent much time talking about SAP’s support for heterogeneous data sources.  As the BOBJ assets integrate into NetWeaver, her emphasis would be to deliver information across new platforms and use cases.  Project Kona for business intelligence (BI) OnDemand in mobility would play a key role in changing how users access SAP information.

  POV: Customers need better information in order to make key decisions.  BI plays a significant role in delivering such value to customers and the Business Objects acquisition provides the enabler.  However, SAP users still find data quality and data governance to be a key hole in the SAP information strategy.  SAP will need to address the different approaches in master data management (MDM) and help customers understand which set of tools should be applied in each customer scenario.

• Future growth rests with success in small and medium enterprises.  With most of the large enterprise saturated with packaged apps such as ERP, SAP’s future growth rests on its ability to move down market.  The SME team led by Hans-Peter Klaey shared progress on their 3-prong product strategy with Business One (B1), Business All in One (BAiO), and Business by Design (ByD).   B1 continues to gain traction in the small end of the market and SAP has published a product road map well past 2014.  The key issues remain the future of ByD and how SAP plans to scale growth.

  POV: With hopes of getting ByD to scale, Feature Pack 2.5 promises to bring in-memory analytics, multi-tenant support, mobile device enablement, Microsoft Silverlight UI’s, and a software development kit based on Microsoft Visual Studio.  Scaling remains a big issue but now becomes technically feasible.  Conversations with Rainer Zinow, Senior Vice President for SME Strategic Solution Management; Christoph Behrendt, Senior Vice President for Midsize Enterprises; Peter Lorenz, Senior Vice President, SME Solutions; Jeff Stiles, Senior Vice President for SME Marketing; and others, highlight the advanced progression in SAP’s SME thinking.   Early indications show promise that they will eventually approach the market with the right scaling, go to market plan, and cost structure to succeed. Movement towards more Microsoft technologies will help attract B1 partners, especially many at Sage who may be disgruntled but technically competent and customer service oriented.
  
  

• Sustainability is more than a trend.  Building on its Clear Standards acquisition, SAP continues to drive mind share in the field of sustainability tracking.  Key topics include the usual suspects of carbon emissions, energy consumption, and compliance. The Business Objects Sustainability Performance Management offering showcased new areas such as product and workplace safety.  Its recent Sustainability Report highlights how SAP uses its own software to achieve its corporate objectives.  Sustainability shows growth as a board-level topic and issue of concern.

  POV: More than just buzzwords, SAP’s making a considerable investment in sustainability.  By providing the right templates and KPI’s for external reporting, SAP will transform social responsibility aspirations to reality for its interested customers.   Peter Graf, SAP’s Chief Sustainability Officer, has harnessed the do-good spirit of SAP’s employees in building out SAP’s offerings.  Expect sustainability to be a key area in repairing SAP’s current image.  Conversations with customers indicate that sustainability may not be a primary reason to choose SAP today, but SAP’s investment and commitment in this arena brings SAP into conversations with key business leaders and has led to deal flow.  However, long term success in sustainability will require good master data management (MDM) and SAP must rapidly address this issue or face the prospect of false promises.

• Partners and ecosystems matter. The partner ecosystem team continues to evolve and innovate with new programs that not only attract new partners, but also improve partner readiness.  SAP currently works with 7000 go to market partners and the SAP Developer Network boasts 2.5M developers.  Efforts such as the SAP Mentor program, SAP Partner Edge, SAP EcoHub, and SAP Community Network by Zia Yusuf and his successor, Singh Mecker, Senior Vice President of GEPG provide proof points of progress and success.
  
  POV: The EcoHub provides customers, partners, suppliers, and internal employees with a collaboration point for subject matter experts, trouble shooting, and fostering community.  SAP’s partner ecosystem remains its strongest asset.  In order to capitalize on their success, SAP must make the necessary investment in revamping the technology platforms partners build on.  Should they fail in providing an easier platform, they will lose traction and adoption.  Partner-led innovation will move to easier platforms to work with and business models that sustain profitability.

SAP’s Efforts In Strategy To Execution Rates A “B-” For Now

Applying a quick Vendor Scorecard grading system, here is a subjective evaluation of SAP’s 2009 efforts to date*:

• Leadership: “B-”. Leo Apotheker and Bill McDermott failed to show up again at a key event.  While this was Q4 and a tough quarter, customer and influencer perceptions remain low on Leo given his decision to push Enterprise Support and the lack of clarity into his vision and approach to date.  To be fair, he has faced a tough hurdle in cleaning up mistakes from his predecessor, Henning Kagermann, and has had to streamline research and development as well as a sprawling bureaucracy.  The good news – their absence highlighted the emerging bench strength of talent within SAP.  This brought some confidence to many in attendance that SAP may have the right stuff to emerge. The bad news – rumors abound on when a successor (Co-CEO) would be announced as Leo’s contract expires in June 2010.
• Product strategy: “B+”. Sustainability, integration of Business Objects componentry, Enhancement Packages (EhP), and In-Memory apps receive praise.  Meanwhile, adoption of ERP 6.0, remains slow.  SAP cites 50% of all product instances on to ERP 6.0.  However, actual customer counts may be less given the fact some customers have 25 to 50 instances of SAP.   Only 3500 customers have used Enhancement  Packages.  Customers remain confused on the value of Business Suite 7, upset with paying twice for BW and Business Objects, and disappointed with SAP’s slow approach to SaaS and onDemand.  Successful relaunch of ByD in 2010 may help SAP gain traction.  Customers await delivery on OnDemand offerings for Large Enterprise but can not wait much longer.  InMemory Apps planned for 2014 must be delivered on-time to compete with Oracle’s Fusion Apps.  Despite the lack of clarity, SAP still has the richest set of business functions and ability to handle the greatest set of complex scenarios.
• Technology strategy: “C+”. Middleware strategy remains murky at best.  SAP should revamp NetWeaver or junk it.  NetWeaver is to Blackberry as Salesforce.com’s Force.com is to iPhone.  It’s so much easier to build apps on Force.com and iPhone than it is for SAP’s NetWeaver and RIM’s Blackberry.  The decision to emphasize the NetWeaver ABAP stack over the NetWeaver Java stack will leave customers and partners confused despite how much more efficient it is to build on ABAP.  In addition, the lack of good business process orchestration at both run time and design time remains a critical hole for investment and gives vendors such as IBM and Cordys opportunities to sit on-top of SAP apps.  Mobile strategy at first seems less emphasized with the rare mention of native apps development on Blackberry and other platforms.  Nevertheless, SAP’s decision to leave mobile platform integration of Blackberry and others at the NetWeaver Mobile layer may prove to be the most efficient and effective approach.  The move to in-Memory will help with future development, yet customers lack confidence in SAP’s execution of the Timeless Software argument, despite its best intentions.  It appears that SAP will have 2 OnDemand strategies.  Lighter applications will be built on Java.  More complex applications to be built on the OnDemand stack.
• Go to market strategy: “B+”. “Best Run Now” packages deserve credit for bringing business value from analytics into core business processes.  Slow adoption can be blamed on a sales teams who treated this as a new license sales opportunity instead of an entry point to showcase SAP value.  Customers could see the sales reps salivating with each interaction for a new sale.  Kudos go to SAP for finally admitting failure with ByD and working hard with customers and partners to revamp efforts.  SAP’s marketing team remains the most innovative and effective.  Just wait till they get products that keep up with their marketing.
• Innovation agenda: “B-”. SAP’s making in-roads in the right areas.  Project Constellation, integration with Google Wave, and social networking investments highlight some movement towards disruptive technologies.  SAP must rapidly productize innovations from the SAP Imagineering team, worldwide SAP Labs, SAP COIL, and its consulting partners.   SAP needs to tap into its ecosystem and bring out innovation.
• Service and support: “C+”. Customers continue to self-support and question SAP’s value.  As more customers consider third party maintenance, SAP will have to fight harder to demonstrate value.  On the positive front, SAP’s Value Academy shows promise in helping customers optimize their SAP investments.  Initial discussions with Chakib Bhoudary, SAP’s Chief Value Officer, indicate the deep level of experience and data provided.  Customers will want to see how to access these services with minimal investment or redirected maintenance investment.
• Customer satisfaction: “C+”. Conversations with over 400 customers in 2009 highlight severe disappointment with their SAP relationship.  Sales reps compensated on net new license sales no longer invest in guiding customers through the SAP offerings.  Customers fail to adopt due to lack of knowledge.  They no longer trust their SAP sales reps nor do they have high confidence in the system integrators to guide them to the most cost effective solution.  SAP sales reps need to understand their products better.  Those customers who are able to make a trip to Walldorf (WDF), find solace that the old SAP still exists with passionate and dedicated engineers.  Customers appreciate the honesty in WDF about what can or can not be accomplished with SAP.  However, this is not a scalable model for SAP.  SAP will need to retrain and reincentivize its sales reps.  Applying social enterprise methods to the great SAP ecosystem may prove to be fruitful in scaling out more personalized approaches.
• Execution to date: “C-”. Failures abound in execution in Enterprise Support, NetWeaver adoption, ByD roll-out, Duet usage, and Solution Manager capabilities.  SAP’s current state is similar to Microsoft’s prior to the launch of Bing and Windows 7.  SAP needs a success story soon to not only raise morale, but also gain customer confidence in its ability to deliver.  Jim Hagemann Snabe’s efforts at streamlining and centralizing development provides at least a positive indicator.
• Partner ecosystem: “A”. The team has built one of the best technology partner ecosystems in the market.  The emphasis on community outreach, influencer participation, and investment in a partner’s success continues to be a differentiator.  SAP’s ecosystem strategy should be credited with saving SAP during this round of crisis.  A move towards Microsoft technologies such as SharePoint and Silverlight will help in gaining developer traction and adoption.  Fix NetWeaver and the ecosystem will have a tool they can innovate from.
• Overall reputation: “B”. SAP carries significant brand presence in emerging markets and the SME space.  Many companies equate ownership of SAP as a sign of success in their markets.  Yet, existing customers have soured on the brand and continue to wonder when SAP will innovate in their requirements and not be distracted by other pursuits.  In general, SAP still carries considerable brand equity which will buy it time as it reinnovates.

* A=4.0, A-=3.7., B+=3.3, B=3.0, B-=2.7, C+=2.3, C=2.0, C-=1.7, D+=1.3, D=1.0, D-=0.7, F=0

The Bottom Line  – SAP’s Turning The Corner

Credit must be given to SAP for charting a new course.  A shift in the management philosophy and product direction will take years to realize, however, its not too late for change.  SAP must remember its roots and become more German and less American.  The renewed focus must put customer requests and priorities ahead of SAP’s bureaucracy.  The emphasis must focus on the relationship.  When that reemerges in how SAP works with customers, partners, influencers, and its own employees, SAP will be back in good graces.  In the meantime, it’s  time to get to work and deliver.  Oracle’s Fusions Apps are coming soon and competitors such as IBM, Microsoft, Epicor, IFS, and SalesForce.com will not relent.

Your POV.

If you get a chance, let us know:

• Which SAP products do you use?
• What do you think about the progress with SAP?
• Are you considering alternatives to SAP?
• Do you feel SAP is innovating fast, ok, or slow enough?
• What do you think of SAP’s new reinnovation strategy?

Feel free to post your comments here or send me an email at rwang0 at gmail dot com or r at softwareinsider dot org.

Other related links and good resources

SPECIAL: Video clips from the SAP Influencer Summit from SAP

20091211 ZDNet Software & Services Safari – Brian Sommer “SAP Business ByDesign Update: Multi-tenancy, In-Core Memory DB and More”

20091211 MichaelFauscette.com – Michael Fauscette “SAP Coming Out From the Clouds”

20091210 ZDNet Collaboration 2.0 – Oliver Marks “SAP: The clear path forward for the supertanker…”

20091209 ZDNet IT Project Failures – Michael Krigsman “Is on-premise ERP obsolete?”

20091209 ZDNet Social CRM: The Conversation – Paul Greenberg “SAP Business Influencers Summit: A Clear Path Forward?”

20091209 Spend Matters – Jason Busch “SAP Influencer Summit, Dispatch 1: On-Demand Differentiation and Vision”

20091209 Monkchips – James Governor ” SAP: Out with the Old, Shrugging off the Tag”

20091209 Merv’s Market Strategy For IT Suppliers – Merv Adrian “SAP Promises Acceleration on a “Clear Path” – Will it Be Enough?”

20091209 CIO Reinvented Blog – Prasanth Rai “Interesting Data/Statistics About SAP…(Influencer Summit)”

20091209 DealArchitect – Vinnie Mirchandani “SAP and The Boston Park Plaza”

20091209 Cloud Avenue – Zoli Erdos “Twitter in the Enterprise – Round 56745327″

20091208 ZDNet IT Project Failures – Michael Krigsman “SAP Influencer Summit: First Impressions”

Copyright © 2009 R Wang and Insider Associates, LLC. All rights reserved.

DSAG project team and project leader departure could signal disagreement with methodology not SUGEN

SAP embarked on an ambitious program to prove value in its Enterprise Support fee hike last year.   As planned, SAP should announce the results for the first set of SUGEN KPI’s in early December.  However, two key SUGEN KPI project sponsors (revised 11/30/2009) team members have left from the German SAP user group (DSAG).  Confirmed by a spokeswoman to IDG News Service on November 27th, 2009, both project leader Andreas Oczko and project sponsor Otto Schell resigned from their roles on November 18th.  Several outcomes may potentially have led to this departure:

1. The methodology used by the auditing firm (Gartner Consulting) could be quite inconsistent
2. Teams may not have had enough time to review the data to check for statistical errors.
3. The KPI’s measured were only the first set, not the complete set.
4. A few months does not provide enough trending data
5. SAP’s attempting to announce results prior to when 90%+ of its maintenance renewal occurs in Q4

To be clear, DSAG remains a SUGEN member and has not pulled out of the group or project.  The leadership members have just left the project and have been active with the SUGEN group on other projects and issues.

SAP Should Still Be Given Credit For Undertaking A Huge Endeavor

Despite attempting to raise get away with a large (revised 11/30/2009) maintenance fees hike in the middle of one of the worst global recessions, the SUGEN agreement with SAP is a good faith gesture and a step in the right direction.  While this is not a legally binding agreement, the deal calls for SAP to limit increases until demonstrable results from the KPI’s have been achieved.  This is not an easy challenge but a few props should go out to SAP because:

1. SAP’s embarking on a risky but unique program to show value
2. Benchmarking 100 global customers against 10/11 KPI’s creates data consistency challenges
3. Agreeing to present results in the face of public opinion takes courage

The Bottom Line For Users -  Remain Vigilant And Compare SUGEN Results With Your Own

SAP customers should work with their user groups to understand the methodology used and gain access to the underlying data with these 100 customers.  Keep in mind SAP’s Value Academy already has benchmarking data for a broader set of customers.  The result – selection of the 100 customers by the user groups will significantly impact the outcome.  Users should see how their situation fares compared to the benchmarks to gauge their own potential value achieved from SAP’s Enterprise Support

The Bottom Line For Vendors – Provide Customers With Tiered Maintenance Plans

Pressures from SaaS deployments and mid-market competitors will erode the 70 to 80% margins in maintenance fees.  Customers will begin to demand third party maintenance options and include such protections in future contracts.  Those vendors who keep tiered maintenance based on the life of the product in production will engender the most loyalty by providing customers with the right balance between sustaining maintenance and incentives to upgrade.  At the end of the day, customers have to migrate on their own terms.  Maintenance fees should reflect the value that customers receive and not be an impediment in the client – vendor relationship.

Your POV.

If you get a chance, let us know:

• Which SAP products do you use?
• What do you think about the progress on SUGEN KPI’s?
• Are you considering alternatives to SAP?
• Do you feel SAP is innovating fast, ok, or slow enough?

Feel free to post your comments here or send me an email at rwang0 at gmail dot com or r at softwareinsider dot org.

Copyright © 2009 R Wang and Insider Associates, LLC. All rights reserved.

SAP users in UK and Ireland remain equally skeptical about SAP

(Photos by R Wang & Insider Associates, LLC.   Copyright © 2009 All rights reserved.)

The SAP user group hosted its annual event.  Conversations with 37 clients reflect the following broad trends in the UK and Ireland:

• SAP users remain skeptical about benefits promised by SAP due to lack of delivery over the past 5 years (See Figure 1.)
• SAP has spent more time reaching out to customers to understand pain points
• Knowledge gaps continue to exist between what SAP users know about SAP and what SAP sales people communicate to clients
• A show of hands in the audience validates conversations that SAP users have not adopted NetWeaver, Duet, ByD, Solution Manager, and Enterprise Support.
• Many customers have budget but need trusted advice as to what is possible in including SAP in their future roadmaps
• Customers seek innovation from SAP but find a difficult time understanding what SAP has to offer
• Many customers have turned to other providers for innovations via SaaS or cost optimization

Figure 1. What SAP Customers Want

The bottom line.

SAP users and their user groups have a unique opportunity to put in the right infrastructure to engage in productive partnership with SAP.  The management team has shifted their outlook.  Early signs indicate a more customer focused approach may be on the way.  Customers seeking to innovate within their SAP investment should ask hard questions about what is in the SAP Labs portfolio.  User groups will play a key role in helping to prioritize future SAP product road map investments.  Users and their user groups should push for frameworks that monitor customer reuqests and increase transparency in the prioritization process. Customers can not allow SAP to squander any more of the 10′s of billions in maintenance fee and license fees “invested” with SAP.

Your POV.

If you get a chance, let us know:

• Which SAP products do you use?
• When will you migrate to BS7 or ECC 6.0?
• What do you think about the progress on SUGEN KPI’s
• Are you considering alternatives to SAP
• Do you feel SAP is innovating fast, ok, or slow enough?

Feel free to post your comments here or send me an email at rwang0 at gmail dot com or r at softwareinsider dot org.

Purchasing in Q3 reflected both economic downturn and summer doldrums.  While on-premise vendors continued massive double digit declines in year-over-year new license revenue, SaaS vendors faced some pressures in keeping up with tremendous growth.  However, long term economic outlook still favor SaaS players and early indications on Q4 budget flush indicate that SaaS and Cloud are top of mind.  Major themes in the 2009 Calendar Year Q3 include:

• On the SaaS front, Salesforce.com (19.55%) continues to lead the pack followed by Blackboard (18.44%) and Concur at (12.94%) (see Figure 1).  While SaaS vendors still experienced growth, Concur (12.94%), Ultimate Software (9.76%), and Taleo (8.77%), NetSuite (3.22%) experienced drops in rate of growth.  Taleo and NetSuite faced the biggest drops in Q3.
• Tracked publicly traded SaaS vendors represented $756.2M in Q3 software revenues.
• On-premise vendors showing gains in EPS despite revenue drops (see Figure 2).
• Specialty on-premise vendors JDA Software (-2.63%) and IFS (-5.07%) reversed license growth and lost year-over-year quarterly gains.
• Lawson Software reversed a license free fall showing growth in Q3 (22.77%). Healthcare and HCM continued to bolster its license growth and come back.
• Maintenance revenues continue to float losses in license revenue for on-premise vendors.  Growth in maintenance continues to slow.

Figure 1. SaaS Vendors Face Q3 Headwinds And Growth Slows Vs Q2

2009 Q3 Calendar Year SaaS Revenues

2009 Q3 Calendar Year SaaS Revenues - Copyright © 2009 R Wang and Insider Associates, LLC. All rights reserved.

2009 Q2 Calendar Year SaaS Revenues

2009 Q2 Calendar Year SaaS Revenues - Copyright © 2009 R Wang and Insider Associates, LLC. All rights reserved.

Figure 2.  On-premise Vendors Face Continued Market Brutality

2009 Q3 Calendar Year On-Premise Revenues - Copyright © 2009 R Wang and Insider Associates, LLC. All rights reserved.

The Bottom Line For Users – Expect Continued Discounts in Q4

A poor Q3 will bring good news to buyers in Q4 as vendors will continue to heavily discount licenses and professional services while delivering more value to retain maintenance margins.  Conversations with 41 CIO’s indicate that a Q4 budget flush is in the works.  The conditions favor end users as poor economic conditions, realization by vendors, and need to invest will yield a great buying season.

The Bottom Line For Vendors – Start The Subscription Revenue Model Shift

It’s time to go on a SaaS offensive.  The train has left, but its not too late.  Expect hardware vendors, telecom providers, and other companies looking to gain software multiples to enter the market via SaaS.  2010 will bring significant acquisitions in this space as well as more proliferation of SaaS offerings and PaaS delivery models.  Best of breed solutions delivered via SaaS will cut into on-premise market share.  Cloud computing will not be an end all be all.  Hybrid deployment will continue to be the norm.

Your POV.

Ready for some great renewal conversations in Q4?  Feel free to post your comments here or send me an email at rwang0 at gmail dot com for any assistance in contract negotiations with your vendor or the development of a software licensing and pricing strategy for 2010.

* Not responsible for any math errors or erroneous revenue information.  Calendar year estimates based on the quarter nearest the calendar year.  Exchange rates as of November 189th, 2009.  Not responsible for currency flux.  Please read the quarterly filings yourself =)

Rapid SaaS Adoption Will Lead To A Repeat Of 1990′s Best Of Breed Integration Challenges

The proliferation and rapid adoption of SaaS solutions stems from 7 key benefits: richer user experience, rapid implementation, frequent cycles of innovation, minimal upgrade hassles, always on deployment, subscription pricing, and scalability (see Figure 1). Despite these benefits, organizations head full circle towards the same best of breed dilemma they faced in the late 1990′s.  In that era, organizations sought innovation from more nimble and agile competitors.  The result – a concerted effort to deploy a number of on-premise, point solutions.  Willing to sacrifice not having a single instance for functionality, they invested heavily in integration.  Almost a decade later, organizations will encounter similar challenges with harmonizing a plethora of SaaS entry points in the next 2 to 3 years. Given the growing number of SaaS solutions at cost-effective price points and easy adoption, today’s organizations face problems in a geometrically larger scale.

Figure 1. Seven Benefits of SaaS Deployments

Modeling How To Make A Peanut Butter And Jelly Provides Key Insights Into The Integration Challenge

Today’s integration challenges move beyond data integration to include process level and meta-data requirements that span across a range of business processes and relevant key performance indicators (KPI’s).  As more solutions are added, organizations will want to model their end to end business processes as web services and support synchronous and asynchronous communication protocols across hybrid deployments.   Organizations can expect canonical data models play a key role in harmonizing business objects.  To put this in real world terms, imagine describing how to make a peanut butter and jelly sandwich using a hodgepodge of solutions.  Let’s take a look:

Example 1:  Modeling in a .NET application

1. Bread: take 2 slices of bread
2. Peanut butter: spread peanut butter on one slice
3. Jelly: spread jelly on the other slice
4. Assembly: put the bread together
5. Assembly: slice down the middle
6. Delivery: serve on plate

Example 2:  Modeling in Force.com

1. Bread: take 2 slices of bread
2. Bread: determine whether or not to toast the bread
3. Peanut butter: choose chunky or creamy
4. Peanut butter: spread peanut butter on one slice
5. Jelly: choose type of jelly
6. Jelly: spread jelly on the other slice
7. Assembly: put the bread together
8. Assembly: determine if the slices is in half or diagonal
9. Assembly: slice down the middle
10. Delivery: choose type of plate (e.g. paper or plastic)
11. Deliver: serve on plate

Example 3:  Modeling in NetWeaver

1. Bread: take 2 slices of bread
2. Bread: determine if the bread is organic or not
3. Bread: determine whether or not to toast the bread
4. Bread: determine how light or dark the bread should be toasted
5. Peanut butter: determine if the peanut butter is organic or not
6. Peanut butter: choose chunky or creamy
7. Peanut butter: spread peanut butter on one slice
8. Peanut butter: determine thickness of spread
9. Jelly: choose type of jelly
10. Jelly: determine if the jelly is organic or not
11. Jelly: spread jelly on one slice
12. Jelly: determine thickness of spread
13. Assembly: put the bread together
14. Assembly: determine whether you want the crust or not
15. Assembly: determine how to slice the bread (e.g. diagonal, half, 4 cubes, etc.)
16. Delivery: choose type of plate (e.g. paper or plastic)
17. Delivery: determine garnishes with the sandwich
18. Delivery: serve on plate

In these examples, notice how they granularity of processes become deeper and deeper within more complex solutions.  How would you take the peanut butter web service from the .NET example and harmonize this with the NetWeaver example?  Now take this real-life example at a hypothetical global pharma:

• SAP financials (on-premise)
• Oracle JD Edwards manufacturing (on-premise)
• Salesforce.com CRM (SaaS)
• Workday HR and Payroll (SaaS)
• Concur Expense Management (SaaS)
• Xactly Incentive Comp (SaaS)
• NetSuite OpenAir Project Management (SaaS)
• Ariba Spend Management (SaaS)
• Gmail and Google Docs(SaaS)
• Jive Community Platforms (SaaS)
• SocialText (SaaS)
• WebEx (SaaS)

Recommendations

As organizations consider SaaS adoption they must put into place an integration framework to support the competing forces of innovation and harmonization.  These integration frameworks must consider not only data, but also process, metadata, and business intelligence.  Key suggestions include:

• Begin with the end in mind. Identify the key performance indicators.  Determine how to measure business value
• Understand your key business processes. Classify your business processes into 3 buckets: commoditized, mission critical, and innovative.  This way you’ll know which processes can be put into an outsource, shared service, or internal ownership.
• Map the granularity of the business processes.  Group similar processes across different solutions and understand the levels of granularity.  Identify points for harmonization.
• Determine the data integration requirements. Identify the key business objects associated with the business process.  Ensure that the right data arrives to the right process at the right time for the right person.  Map key meta data to process and business objects.  Build out your canonical data models.
• Build loose frameworks for evaluation of SaaS solutions. Give line of business teams guidelines to determine how SaaS solutions fit into existing processes.  Use this to jump start integration and proactively identify integration challenges.
• Determine approach and SaaS adoption policies. In some cases, point to point will make more sense. In others, greater levels of integration and control may be required.  Avoid a one-size fits all methodology in setting up policies.  Consider the business case first and foremost.

The Bottom Line – SOA’s Not Dead And Integration Is Key To Successful Hybrid Deployments

Given these scenarios, CIO’s and line of business apps will need to rely on stronger enterprise architecture and integration in hybrid deployments.  In fact, au contraire on the death of SOA!  Introduction of next generation social enterprise apps will only accelerate the need for good architecture and services design. Expect solutions from Boomi, Cast Iron, Informatica, Pervasive, SnapLogic, and Talend to play a key role going forward.

Congratulations to all!  Good to see that the job scenarios continue to improve in software/tech as a number of individuals made organizational changes and promotions.  As always, thanks for your emails and alerts. If you’ve got a change or know of a promotion, keep dropping me a line! If you need a referral, and we’ve worked together in the past, don’t hesitate to reach out to me via Linked In.

Rose Aulik was recently promoted from strategic business development manager to Outsourcing Business Solutions Manager for Epicor.

Jim Bozzini has been promoted to Senior Vice President, Operations and Services for Workday.

Jim Dellamore joins Deltek as Executive Vice President for Global Services from GXS where he served as a Senior Vice President of Global Solutions Delivery.  Prior to working at GXS, Mr. Dellamore was Group Vice President, Consulting, at Oracle Corporation, where he managed the $450 million PeopleSoft consulting business.

Ned Desmond became Advisor at Silent Cal Productions in July 2009.  Former roles include serving as President at Time Inc. Interactive, President and Editor at Business 2.0, and a Vice president at Infoseek.com.

Phil Fehrst left AMR Research to become an AVP for strategy with Cognizant Technologies. The former star analyst brings significant experience in the IT BPO and outsourcing contract space and will be reporting directly to the CEO.

Tim Fortier named IFS North America Vice President of Sales.  Fortier brings 20 years of sales management experience from J.D. Edwards, PeopleSoft, AFS Technologies and most recently Borland Software.

Chuck Gillespie is now Adjunct Professor at IUPUI.  Chuck was responsible for HR technology at Peoplebase and served as President of Vigor.

Simon Griffiths joined SYSPRO as a Product and Industry Marketing Consultant.  Griffiths previously served as a SYSPRO reseller in South Africa.  Other roles include stints at JD Edwards and a Microsoft Dynamics NAV partner.

Ray Grigsby joins Rimini Street as Vice President of Global Support Services Delivery for JD Edwards Software Products.  Grigsby’s served previous roles as a Vice President for JD Edwards Support services.  Grigsby was the executive overseeing the implementation, upgrade, and support of a full range of World and OneWorld (EnterpriseOne) releases for the largest and most complex domestic and global implementations.

Brian Haven became Vice President, Strategy at iCrossing in July 2009.  Brian brings social computing and customer engagement experiences from Forrester, Catapult Thinking, and InnoVentry.

Tony Kender rejoins SAP as a National VP Sales at SAP America.  Tony served roles as a Senior VP at Oracle, Director at SAP, and Senior Director at ADP.

Alex Koshy is now Business Development Executive at Synaptris.  Koshi served previous roles as a Pre-Sales Consultant for MS Dynamics ERP and Resource Lead for Microsoft Dynamics Competancy at Mahindra Satyam.

Kirk Laughlin became Founder/ Editorial Director at Nearshore Americas in June 2009.  Kirk’s served senior roles as Managing Director/ VP of Live Events, Senior Editorial Director, Custom Media at Ziff Davis Enterprise, Editor in Chief at America’s Network Magazine, and Editor-in-Chief at Cygnus Business Media

Leighanne Levensaler joins Workday as Vice President, HCM Strategy.  She formerly served as a principal analyst covering Talent Management for Bersin & Associates.  Prior to joining Bersin & Associates, she led the Learning Consulting Practice at SystemLink Enterprise Solutions. Leighanne has also held positions at SmartForce, Edutrek International/AUI and Deloitte Consulting.

Emily Marchant is now Cofounder | Investor Relationship Manager at the FundingPartnership.  Previous roles include a stint as Global Business Development Manager FLB at Forrester Research, Business Development Manager at Dianomi, Sales Manager at Emedia, and various roles at Informa Telecoms and Media.

Jeff Onesto is now Director of Product Marketing at OptionEase. Jeff’s brings industry experiences from his various positions as Director of Sales & Marketing at Advanced Systems Integration, Business Development Executive at Collins Computing, and Business Development Manager at Jefferson Wells International

Milind Padalkar has updated their current title to Global Practice Head – Oracle at HCL America.  Padalkar previously served as the Senior Vice President & Head of Enterprise Applications at Patni Computer Systems.

Mahesh Rajasekharan is now Chief Operating Officer at SumTotal Systems.  He served 12 years at i2 with roles ranging from Vice President of High Tech Industry Group, Senior Director Operations and Solution Sales, and Senior Director for High Tech Industry Marketing.

Norman Scobie is now SAP Project/Integration Manager at HP Enterprise Services. Previous work includes Aerospace & Defense Industry Solution Expert at SAP, Program Manager at Eurofighter, and Software Manager at BAE Systems

Mike Stankey joins Workday as president and COO from Greylock Partners.  Mike spent five years as chairman and CEO of PolyServe, a storage virtualization software company. Prior to PolyServe, Mike was senior vice president of North American sales for PeopleSoft, driving more than $1 billion in sales and services revenues.

Laurene Stevens became Product Strategy Analyst at Ultimate Software in May 2009.  Laurene’s served as a senior applications consultant for Sage Software.

Jason Zintak became the Executive Vice President for Sales and Marketing at JDA Software on August 18th, 2009. Zintak most recently served as the executive vice president of sales at HCL Axon.  Other senior-level software sales executive and management includde roles at Capgemini, SAP and Blue Martini Software.