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Monday’s Musings: The Controversy Surrounding Gartner’s CRM Market Share Analysis

Published on May 6, 2013 by R "Ray" Wang

The Gartner Market Share Analysis:CRM Software Report Raises Questions On Accuracy of Market Sizing Reports

The recent Gartner report “Market Share Analysis: Customer Relationship Management Software, Worldwide, 2012” has generated some controversy among the enterprise software set. The report and other reports such as these, are often used for bragging rights by vendors and for buyers to gauge vendor viability.

This specific report attempts to rank CRM software spending by vendor using total software revenue worldwide. The good news – the numbers are directionally correct with Salesforce.com claiming the top mantle from SAP this year with $2.525 billion in CRM revenue (see Figure 1). The bad news – many question the accuracy of the actual revenues numbers as listed in the press release, especially for the Microsoft Dynamics CRM business.

As Scott Bekker at Redmond Magazine reported, “Gartner put Microsoft’s CRM revenue at $1.1 billion, up from $900 million in calendar-year 2011. That’s a sizable bump. As of May 2012, Microsoft was only claiming that all of Dynamics, which includes Microsoft’s established ERP products as well as CRM, amounted to $1 billion in annual revenues.”

Mssr. Bekker makes a polite but astute point. The 26% bump in CRM revenue is significant. However, the total revenues are questionable. In any modest observation, that kind of overall growth in the Microsoft Dynamics unit would have Microsoft CEO, Steve Ballmer, shouting from the tops of Mount Ranier and probably have Kirill Tatarinov next in line to be Microsoft’s CEO.

Figure 1. Gartner’s Recent CRM Software Spending by Vendor, Total Software Revenue Worldwide, 2012 (Millions of Dollars)

Not to violate any copyright laws, despite fair use laws, here’s a link to the full table found in their press release. A recreated table below shows the rankings.

Bottom line it shows Microsoft in 4th place for CRM with over 1.1B in revenue.

Organization 2012 revenues 2012 marketshare (%) 2011 revenues 2011-2012% growth

salesforce.com 2,525.6 14.0 2,004.6 26.0

SAP 2,327.1 12.9 2,325.1 0.1

Oracle 2,015.2 11.1 1,870.0 7.8

Microsoft 1,135.3 6.3 900.9 26.0

The Market Sizing Game For Vendors And Legacy Analyst Firms Flawed With Faulty Methodology

In reality, the market sizing game for enterprise software is both an art with some science. Having played this role as a vendor in an Analyst Relations capacity in a past life, one knows that executives can not disclose such financial information directly to a research or market sizing firm. The research analysts must play a guessing game with the software executive and ask 100 questions to zero in on a number. Unlike hardware, where individual counts are more obvious, software revenue sizing requires analysts to dig deep into financial statements and any conversation where growth rates have been discussed. Revenues are hidden in bundling, suite sales, discounting schemes, channel revenue deals, OEM arrangements, and inter-company transfers. To complicate matters, SaaS revenue calculations can differ from how on-premises revenues are calculated. Analysts must also determine the truthfulness of vendors who are trying to indirectly guide analysts to the “right” numbers. In short, this is hard work.

As assumptions are built on previous numbers, one false guess in a previous year, cascades and geometrically inflates or deflates a set of future numbers. In the case of these CRM numbers, one may speculate that past executives may have provided a higher number than actually generated, resulting in the current alleged inaccuracies. Another speculation may come from previous and current analysts who may only focus on one area of the business and not have the total picture on the Microsoft Dynamics overall business. There are many points of inaccuracy that can occur with software revenue market sizing and every legacy analyst and market sizing firm works hard to avoid these situations. For market analysts, dissecting revenue from vendors such as SAP and Oracle is often difficult as these numbers and break outs are masked with multiple acquisitions and product lines.

To be clear, the SAP and Oracle numbers also seem inflated. These numbers have been inflated over decades. Given that these vendors also have many other lines of revenue aside from CRM, it’s hard to gauge the accuracy of their numbers without some digging. Now one would assume a market sizing firm should be doing this right?

The Microsoft Dynamics CRM Revenues Do Not Meet The General Sniff Test

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Executive Profiles: Kirill Tatarinov, President Microsoft Business Solutions

Published on April 22, 2013 by R "Ray" Wang

Welcome to our series of market maker 1:1 interviews with business leaders in the world of enterprise software The interviews provide insightful points of view from a customer, industry, and vendor perspective.

Kirill Tatarinov, President of Microsoft Business Solutions (@KirillTatarinov)

Kirill Tatarinov is president of the Microsoft Business Solutions Division (MBS) with responsibility for MBS research, development, sales, marketing, and operations. MBS develops and markets a portfolio of Microsoft Dynamics products and services covering a broad range of functions including financial, customer relationship and supply chain management (ERP and CRM) that bring simplicity, value and agility to organizations of all sizes.

Prior to joining MBS in 2007, Tatarinov led the Management and Solutions Division at Microsoft, where he was in charge of the Microsoft Windows management technologies and products, including Microsoft System Center, Systems Management Server, Microsoft Operations Manager and Microsoft Application Center, as well as Windows Server solutions, including Microsoft Small Business Server.

Tatarinov joined Microsoft in 2002 with 15 years of experience in the software industry. Before joining Microsoft, Tatarinov was senior vice president and chief technology officer for BMC Software Inc. While at BMC he also had responsibility for corporate development and for Patrol Software business. Before that, Tatarinov was co-founder, chief architect, and head of R & D for Patrol Software, the developer of innovative software solutions for systems and network management acquired by BMC in 1994. Before co-founding Patrol Software, Tatarinov worked in several systems, networking and consulting companies in Russia, Israel and Australia.

In January 2002, Computerworld named Tatarinov one of the business world’s 2002 Premier 100 IT Leaders. This award honors individuals who have had a positive impact on their organizations through the use of technology.

Tatarinov grew up in Moscow, Russia, and holds a master’s diploma in systems engineering from Moscow University of Transport Engineering (MIIT) and an MBA from Houston Baptist University. He serves on the Seattle advisory council of the U.S. Fund for UNICEF, whose mission is to help the world’s children.

Tatarinov lives in the Seattle area with his family. Outside work, he spends his time skiing and is a Level-1 ski instructor, certified by the Professional Ski Instructors of America.

The Interview

Constellation sat down with Kirill Tartarinov in New Orleans, LA during the 2013 Microsoft Convergence Conference to discuss the changes since 2007 and to take a look forward for the Microsoft Dynamics product line.

1. Customers don’t always associate Microsoft with innovation in the enterprise side. What are some milestones that counter that perception Dynamics?

Kirill Tartarinov (KT): While our roots as a company have been on the consumer side, make no mistake, enterprise is hugely important for what we do. People overlook the fact that Microsoft has been providing mission-critical solutions for over 20 years. We achieved significant milestones across the entire product portfolio from Windows and SQL Server to Office, the Cloud both public and private, and Dynamics. We have seen significant innovation from consumer to the enterprise. Innovation that helps Microsoft serve as the trusted advisor between consumers and business customers. But as far as milestones, what is most important is what we see here at this event (Convergence). Convergence is a reflection of our success in the enterprise. Every single one of our customers and partners are proof points. It is their path, their story of how they are innovating using both our enterprise and consumer technologies and making them better at what they do. As we move forward, we see the complete power of Microsoft coming together in the enterprise across Windows Server, Azure, Office 365, and Dynamics.

We are in the business of transformation. We are privileged to wake up every day and get the chance to help businesses unlock their potential by uniting the tremendous innovation across Microsoft and delivering it to people in business in specific scenarios, really helping every person be the best at what they do and helping businesses succeed by uniting their people, processes, and technology with their customers. That’s our mission. It is our differentiator and something Microsoft is in a unique position to deliver.

2.Let’s take a look at over the past 6 years since you joined MBS in 2007, what did you set out to achieve for across the division and across Microsoft?

(KT): There were three things I set out to achieve on behalf of our customers and the company. First, I set out to unite all MBS employees from Fargo to Hyderabad to Copenhagen to Moscow and Sao Paolo. Second, I had to turn Microsoft Dynamics into a profit engine for our shareholders and third, I had to create a sustainable, long-term growth strategy to ensure our prominence in the enterprise business applications long into the future.

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Research Summary: Constellation Cosmos – Cloud Bill of Rights for SaaS Apps, Actian and Netsuite Achieve Epic Status

Published on April 17, 2013 by R "Ray" Wang

Constellation Certifies Vendors On How Well They Perform To The Cloud Bill Of Rights

The Enterprise Cloud Buyer’s Bill of Rights provides a tool for clients and vendors to change the tenor of contract negotiations from user subservience to an equal and collaborative long-term partnership. This Constellation CosmosCertification for the Cloud Buyer’s Bill of Rights: SaaS Applications is intended to help buyers and prospective buyers of enterprise cloud applications identify the vendors that meet the spirit of the Cloud. The certification applies four of the six Cosmos categories and includes ownership experience, use case support, corporate vision and ecosystem feedback. Constellation rates vendors on a 0- to 5-point scale. Constellation’s goal is to recognize vendors for honoring these rights upfront in their existing contract language and throughout the buyer and ownership experience.

Behind The Scenes On How The Cosmos Works

Constellation CosmosTM is Constellation’s flagship quantitative and qualitative product and solution comparison tool. A typical Cosmos contains 50 to 150 exception-based criteria used to help buy-side clients with product and solution selection across the galaxy of choices. The evaluation comprises of six major categories on a 0 to 5 point scale where Constellation evaluates key criteria in:

Ownership experience. Criteria evaluated include assessments on vendor executive advocacy and accountability, timely and meaningful interactions, professional customer support, overall sales cycle and buying process, quality of product and service, and ongoing transparency.
Solution offering. Criteria evaluated include assessments of functional requirements, technical requirements, architectural considerations, and deployment options pertinent to the category.
Use case support. Criteria evaluated include assessments on the ability to support anywhere from 3 to 12 popular use cases requested by end user clients. Use cases typically align with a business process. Considerations include geographical requirements, market size requirements, and industry requirements.
Market execution. Criteria evaluated include assessments of the total number of live customers, total number of customers including prospects, total number of customers over 1B in revenue, funding raised to date (if a startup), total annual revenues, total number of external trained professional service staff, total number of internal trained professional service staff, number of updates per year, and geographic penetration
Corporate vision. Criteria evaluated include assessments of the strength of management team, product direction, level of innovation, market leadership, community stewardship, and investment in R&D.
Ecosystem feedback. Criteria evaluated include assessments of vendor-supplied references (at least 3), direct customer feedback from inquiries and interactions, and partner feedback.

The final ratings place solutions into 5 categories

Epic. Composite scores typically above 4.25
Stellar. Composite scores typically between 3.25 and 4.24
Emerging. Composite scores typically between 2.25 and 3.24
Nascent. Composite scores typically between 1.25 and 2.24
Laggard. Composite scores typically between 0 and 1.24

The Constellation Cosmos^TMgraphic is a three-dimensional visualization tool built from three axes:

Capability represents the X-axis. Capability includes the use case support and solution offering categories.
Strategy and execution drives the Y-axis. The score comprises of market execution and corporate vision.
Reputation forms the Z-axis. The scores come from the ownership experience and ecosystem feedback categories.
Weighted score defines the radius of the sphere. The scores are the composite from capability, strategy, and reputation.

Constellation updates Cosmos’ periodically as client demand dictates. Some reports may be deprecated over time based on lack of market interest. Constellation reserves the right to determine when reports are updated and in what manner.

NetSuite and Actian Corp Achieve Epic Status In the First Of Many Certifications Of Cloud Companies
For the Cloud Bill of Rights: SaaS Applications, the application and the vendor contract were evaluated on 61 criteria. Constellation evaluated the vendors based on the experience of over 1500 software contract negotiations.

Netsuite provides an end-to-end cloud business application suite and was certified against the 61 criteria listed in Constellation’s Cloud Bill of Rights and the Constellation Cosmos methodology. Netsuite achieved a 4.48 weighted score and achieved the highest certification – Epic for its achievement in meeting the 61 requirements of the Cloud Buyer’s Bill of Rights category

Actian Corporation was certified against the 61 criteria listed in Constellation’s Cloud Buyer’s Bill of Rights and the Constellation Cosmos methodology. Actian Corporation’s acquired Pervasive Software on April 11, 2013. Constellation evaluated Pervasive Software prior to the merger. The cloud based integration application known as Actian DataCloud and its contract were evaluated on 61 criteria in the Cloud Buyer’s Bill of Rights: SaaS Applications.. Actian DataCloud achieved a 4.77 weighted score and achieved the highest certification – Epic for its achievement in meeting the 61 requirements of the Cloud Buyer’s Bill of Rights category.

Report Links

Download a snapshot of the reports at the Constellation Research website:

Constellation Cosmos – Cloud Bill of Rights: Saas Apps Actian Corp.

Constellation Cosmos – Cloud Buyer’s Bill of Rights: SaaS Apps – Netsuite, Inc.

Your POV.

How’s contract negotiations with your Cloud Vendors? Let us know your experiences. Add your comments to the blog or reach me via email: R (at) ConstellationRG (dot) com or R (at) SoftwareInsider (dot) com.

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact sales (at) ConstellationRG (dot) com.

Disclosure

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy, stay tuned for the full client list on the Constellation Research website.

Event Report: Customers Very Happy At Ultimate Connections 2013 (#ulticonnect)

Published on March 29, 2013 by R "Ray" Wang

Partnership Announcements Enhance Ultimate Software’s Offerings

Amidst a crowd of 1500 customers, partners, and attendees, Ultimate Software held their annual gathering from March 12th to March 15th, 2013 in Las Vegas. Geared towards the medium sized to enterprise markets, Ultimate Software has steadily taken market share from ADP for payroll and expanded out into operational and strategic human capital management (HCM) capabilities. New mobile access, generation 4 cloud architecture, and timeline features for employee’s highlight Ultimate’s growing ambitions and customer requirements.

At the event, Ultimate announced two strategic partnerships that bode well for customers and prospects facing an increasing level of customer complexity and growing need for global capabilities:

Celergo partnership adds global payroll capabilities to internationalization efforts. Celergo’s founder and CEO, Michele Honomichl, and Adam Rogers announced on stage global payroll services support for 110 countries and the ability to process payroll in over 150 countries. In addition, Ultimate’s Spring and Fall 2013 release of the flagship UltiPro includes support for 28 country specific localizations such as Australia, Brazil, China, France, Italy, Japan, Korea, Spain, and Thailand. Other key features include, global compensation management, localized compliance for data and employee privacy rules, and additional language translations.

Point of View (POV): Ultimate’s customers operate in 144 countries. As organizations follow the growth overseas, the global payroll connector and Celergo partnership gives mid market and enterprise customers a competitive option as they expand their presence abroad and usage of UltiPro. These proactive steps to address global capabilities now, provide a key differentiation among potential competitors and places Ultimate Software in a potential position of international expansion.

Informatica partnership paves the way for future cloud partnerships. At the conference, Informatica announced a self-service solution for HCM data connections. Built on top of UltiPro Carrier Network (UCN), customers have access to over 100 packaged connectors to benefits carriers and third party solutions.

(POV): Customers and prospects do not want to worry about integration of their employee records or people management solutions with medical, dental, vision, and other benefits providers. In the long term, customers seek worry free integration platforms to third party applications, cloud ecosystems, and mobile ecosystems. The partnership with Informatica solves the needs of complex integration scenarios and Ultimate customers do not pay for the integration tool. However, customers who are looking for a lower cost integration solution for non-UCN endpoints may want to consider more cost-effective offerings for more point to point integration scenarios.

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Event Report: Microsoft Dynamics Convegence 2013 (#conv13)

Published on March 19, 2013 by R "Ray" Wang

Customer Success, Acquisition, And New Features Drive Day 1 Headlines

Almost 12,000 Microsoft faithful converged in New Orleans for the flagship Dynamics event. Wayne Morris (@WayneMorrisOz), CVP kicked off the event reiterating the theme of “A World Ahead”. Meanwhile, Kirill Tatarinov (@KirillTatarinov), President of Microsoft Business Solutions Division, led the session with a series of impressive brands and compelling customer success stories. Highlights from the day include:

Impressive Global 2000 customer wins. Kirill hinted at wins at SpaceX and followed with live customer presentations from ShockDoctor, Chobani, Weightwatchers, and Revlon. Dennis Goetz (CFO) of Shock Doctor shared how they grew their business moving away from spreadsheets to Microsoft Dynamics GP. Maureen Hurley (VP of IT) and James McConeghy (CFO) explained how Chobani installed Microsoft Dynamics AX in their main New York plant in less than a year and then implemented Dynamics AX at a new plant in less than 27 days. Christine Butler (VP of CRM and Business Development, and Loic Vienne (VP of Systems) at WeightWatchers discussed how they put in Microsoft Dynamics CRM to manage with 500 million customer touch points a year. David Giambruno (SVP and CIO) and Steven Berns (Executive VP and CFO) of Revlon, made the impressive move to consolidate 21 ERP systems into one on Microsoft Dynamics AX.

Point of View (POV): The Microsoft Dynamics team has successfully moved up market from a previously SMB centric message. The rise of global 2000 customers in the $500M to $5B revenue range shows the growing presence, success, and scalability of Dynamics AX and Dynamics CRM. Though the business is estimated to bring $1.4B in revenue, Microsoft Dynamics still represents a small fraction of Microsoft’s overall revenue ($73.72B 2012). However, success in the Microsoft Dynamics business improves attach rates and cross-sells into Sharepoint, Office, SQL Server, and Azure. Microsoft’s small investment in Dynamics reduces customer fragmentation and plays a key role in long-term growth.

Acquisition of Netbreeze for social analytics. The Netbreeze acquisition brings data mining, natural language processing (NLP), and text analysis to social signals such as Twitter, Facebook, YouTube, 6,000 online news websites, 500,000 message boards, and 18M blogs. The system supports 28 different languages including Arabic, Chinese (Simplified), Chinese (Traditional), English, French, German, Japanese, Russian, and Spanish. Direct language translation beats translation back to one language.

Point of View (POV): Netbreeze and Marketing Pilot address a growing need among the customer base for marketing automation and management. Netbreeze is key to merging both the structured CRM information and the unstructured social signals. As the CMO role continues to reclaim its technology destiny, we are moving away from transaction integrity and moving towards surfacing insights. Netbreeze provides insight into marketing spend effectivity.

Announcement of Marketing Pilot 15. MarketingPilot 15 adds improved user experience and analytics. In addition, the long awaited connector to Microsoft Dynamics CRM arrives on March 2013. International general availability is planned for later 2013.

(POV): Marketing Pilot provides core marketing capabilities that were missing in Microsoft Dynamics CRM. Customers seeking an integrated marketing solution should consider Marketing Pilot. However, the technology platform is dated. For those customers seeking a cloud based approach, Silverpop, InfusionSoft, Aprimo, and Marketo may serve as better alternative today. Compared to CMS marketing products like SiteCore or Adobe CQ, Marketing Pilot remains a distant second in features, but a top contender when cost is considered.

Windows Azure partner hosted offerings for ERP. Partner hosting for Dynamics GP 2013 and NAV 2013 will be available in June 2013. Dynamics AX will see an Azure hosted version in 2014.

(POV): Among the Dynamics ERP customers, partner hosting remains a popular option for dipping their toes into cloud ERP. A key barrier to Azure hosting has been the performance issues with SQL Server for Azure. Resolution of those issues will free Dynamics to deploy more of its capabilities in Azure. The go forward architectural model for Dynamics AX resembles Dynamics CRM where a VM is assigned per tenant but all management is done by Microsoft.

New mobile applications for Microsoft Dynamics AX 2012. New mobile apps will address key horizontal functions such as expense management, time tracking, and approvals. The expense management offering will capture and reconcile expenses, time allows the completion of time sheets, and approvals allows managers to complete business requests. Microsoft intends to support Windows 8 and Windows RT tablets, Windows Phone 8, Android phones, and iOS phone devices

(POV): Customers are increasingly asking for a mobile experience. The move to address mobility focuses on “in-between time” tasks that improve productivity for employees and bolsters offerings for services based industries and public sector.

Figure 1. Ongoing #Conv13 Flickr Stream

The Bottom Line: Progression In The Dynamics Product Line Results In A Competitive Alternative For Customers

On December 21, 2000, Microsoft announced the intention to acquire Great Plains. In July 2002, Microsoft bought Navision A/S, the foundation of Dynamics NAV and AX. Until 2007, Microsoft Business Solutions had struggled to find and grow beyond its SMB niche. Over the past seven years, the team has focused on deepening vertical capabilities, improved integration with Microsoft components, expanding partner programs, and making strategic acquisitions for product and technology features. The process has been slow but steady but increased investment in Dynamics AX and Dynamics CRM has paid off.

Fast forward to 2013, Microsoft now has a strong portfolio of solutions that Global 2000 organizations can deploy with confidence. The MBS team is not afraid of tuck in acquisitions nor purchasing common IP from trusted partners. The rearchitecture efforts and gradual hosted capabilities have helped move the product forward. Consequently, customers and prospects seeking a newer architecture, Microsoft footprint, and deeper micro-vertical capabilities now consider the core Dynamics products for both ERP and CRM in short lists. Key use cases include the consolidation of ERP, move to Two-Tier ERP, and primary CRM system of record. However, customers should be cautioned that success will require selection of the right Microsoft Partner. Selection of the right partner is never an easy process as many partners exist and validation of capabilities still remains a challenge for prospects and existing customers.

Your POV

Are you Microsoft Dynamics customer? Do you plan to invest more or less with them in 2013? What do you think about their strategy? Are you ready to consolidate on Microsoft? Add your comments to the blog or send us a comment at R (at) SoftwareInsider (dot) org or R (at) ConstellationRG (dot) com

Please let us know if you need help with your apps strategy. Sign up for a Constellation Academy Workshop or let us assist with:

Assessing readiness
Designing your strategy
Assessing integration capability
Vendor selection
Connecting with other pioneers

Resources and Related Research

Event Report: The Sentiment At Microsoft Convergence 2011

Friday’s Feature: Microsoft Dynamics GP 2010

Research Report: Microsoft Partners – Before Adopting Azure, Understand the 12 Benefits And Risks

Monday’s Musings: The Hidden Value In SaaS Deployments

Trends: 2011 Cloud Computing Predictions For CIO’s And Business Technology Leaders

Research Summary: Best Practices – The Case For Two-Tier ERP

Tuesday’s Tip: When To Go With A Two-Tier ERP Strategy

Strategy: 5 Lessons Learned From A Decade Of Naught

Tuesday’s Tip: 10 Cloud And SaaS Apps Strategies For 2010

Tuesday’s Tip: 2010 Apps Strategies Should Start With Business Value

Best Practices: Lessons Learned In What SMB’s Want From Their ERP Provider

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales .

Disclosure

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy, stay tuned for the full client list on the Constellation Research website.

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

Copyright © 2001 – 2013 R Wang and Insider Associates, LLC All rights reserved.
Contact the Sales team to purchase this report on a a la carte basis or join the Constellation Customer Experience!

Event Report: Informatica Analyst Day Reveals A Growth Strategy

Published on March 18, 2013 by R "Ray" Wang

Informatica Sets The Stage For A New Chapter In Its History

Informatica held its annual industry analyst day February 26th to 27th, 2013 at the Rosewood Sandhill in Menlo Park. The event showcased Informatica’s go-forward strategy and road map for growth over the next three years. Key highlights include:

Capturing a $6.5B market opportunity in license and subscription revenues. Marge Breya, Informatica’s new CMO, set the stage with a vision of how Informatica is poised to capture a $6.5B addressable market. Key use cases include analytics, operational integration, cloud integration, master data management, and data governance. Achieving these results will require $3.6B in installed base plays, $1,9B in new logo plays, and $1B in geographic expansion. Key markets for geographic expansion include replacing hand coding in Brazil, China, Japan, Mexico, and Russia.

Point of View (POV): Constellation estimates a $300B enterprise software market for 2013 with $130B in applications and $170B in infrastructure software. Informatica intends to go after a $6.5B addressable market that includes analytics, cloud data integration, operational data integration, master data management, and messaging. Success will require an expansion in focus from the traditional IT leaders and developer buyers to the emerging needs of business leaders.

Supporting a world of Hybrid IT. Juan Carlos Soto, SVP & GM for Informatica Cloud, discussed how clients now see Hybrid IT as the new norm. In fact, cloud based adoption has shifted from line of business (LOB) owned to IT led adoption of cloud over the past three years. Soto sees three pillars of success that include delivery of a platform for hybrid IT, cloud services for all, and Informatica inside. Key features for 2013 include data masking, process automation, integration with Microsoft Dynamics AX, integration with NetSuite, integration with Workday, integration with Oracle CRM On Demand, integration with Amazon RedShift, and integration with Ultimate Software (which was announced March 13th).

(POV): In a world of Hybrid IT, Constellation expects integration to be a core requirement for success. Consumerization of IT has led to a proliferation of mobile and cloud endpoints that require sophisticated data integration capabilities among all possible connections, data flows, business processes, and access. Informatica’s success depends on its ability to attract the cloud integration decision makers and users for basic cloud integration for enterprise and those seeking more complicated enterprise cloud integration use cases. The platform for a Hybrid IT play via a Virtual Data Machine (VDM) has the most potential for success in creating new business models. Informatica Inside will succeed so long Informatica is seen as “the Switzerland” for integration in cloud stacks and solutions.

Providing the integration and quality requirements for a big data world. Ash Kulkarni, SVP & GM for Data Integration and Data Quality, addressed the analytical integration, operational integration, and data governance strategy. Informatica’s themes for next generation data integration include agility in development, flexibility for deployment, and confidence in management. New features in analytical data integration include built-in data virtualization, complex event processing, support for decision making, and big data integration for Hadoop customers. The data governance features include improved inference for data domain discovery, automated enterprise data discovery, business friendly glossaries with rich metadata lineage, streamlined workflow and task management, data masking, visual exception auditing, audit data retention policies for production and legacy apps archiving,
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Trends: Seven Priorities In The Shift From CMO to Chief Digital Officer

Published on March 6, 2013 by R "Ray" Wang

Shift From CMO to CDO Is In Progress

Today’s marketing strategies increasingly depend more on digital and on data than in the past. With more data, marketers can measure against a new set of metrics that matter including:

calculating return on promotional investment (ROPI),
performing multivariable testing (beyond A/b)
driving conversion rates and optimizing efforts,
fine tuning customer segmentation, and
managing omni-channel diversity

Unfortunately the shift to digital requires a greater reliance on technology. Historically, CMOs relied on IT for help on the database or CRM system or even the website. However consumerization of technology and the cloud have now given marketers more control on their technology destiny. In fact, a recent post by fellow analyst Gavin Heaton on “CMO to CIO, It’s time we talked” highlights many of these new challenges.

Expect Seven Strategies To Emerge In The Shift To CDO

Consequently, many marketing leaders are making the shift from CMO type roles to Chief Digital Officers as marketing leaders align technology closer with strategy. This shift from analog marketer to a Chief Digital Officer role will result in seven trends for 2013 (see Figure 1.)

Figure 1. 2013 Trends Signal Shift From Classical CMO to Digital CMOs or Chief Digital Officers

Drive relevancy with context not content. Context trumps content as relevancy required to break channel fatigue. Relevancy will improves engagement metrics.
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News Analysis: Adobe Behances The Creative Class With $150M Community Acquisition

Published on February 11, 2013 by R "Ray" Wang

Behance Empowers The Creative Cloud To Make Ideas Happen

On December 20th, 2012, Silicon Valley based Adobe Systems announced the acquisition of Behance, a digital portfolio and community site for creative professionals. Constellation sources estimate the purchase price north of $150M. Founded in 2006, the SoHo, New York based company raised 6.5M in May 2012 from Union Square Ventures prior to the acquisition. The acquisition expands two key areas for the Adobe Customer Experience set of offerings:

1. Empowers the creative class through connetivity. CEO and Founder of Behance, Scott Belsky noted that, “The creative industry has always been plagued with inefficiency and disorganization. But when we come together, we can use connectivity and transparency to our advantage. The prospect of using Adobe’s reach to connect the entire creative community is a once-in-a-lifetime chance to empower the creative world.”

Point of View (POV): Behance is LinkedIn meets Pinterest for the creative class. Since 2006, this people to people (P2P) driven creative community showcases and celebrates over 3 million projects and 30 million images. A host of curated galleries, smartly designed iPhone apps, online store, and rich developer API power the community platform. Among the design community, Behance is the dominant independent resource to showcase past projects.

2. Expands creative and design market leadership. Adobe provides the creative tools for design through Creative Suite. Behance focuses on discovery, inspiration, and collaboration. Scott Belsky stated “If the tools we use to create are connected with how we showcase and discover creative work, we can help usher in a new era of idea exchange and collaborative creation. It’s about time our tools integrated with the way we discover, inspire and collaborate. For too long, the creative world has struggled with a disconnected creative process. Creation should be inherently collaborative – and must evolve more frequently than typical software upgrade cycles.”

(POV): At this point in time, Creative Cloud has not enabled public sharing between clients and teams. Yet, Behance changes this approach and supports public sharing. Users will expect Adobe to integrate Behance with Adobe’s Creative Cloud starting with easier content sharing from Creative Cloud and Adobe apps. If Adobe successfully integrates the two products, customers will win as the synergies should lead to the empowerment and enablement of creative meritocracy.

The Bottom Line: Adobe Ups The Ante In The Battle For Customer Experience

Adobe, IBM, and Oracle are in a three way horse race to dominate the customer experience management space. Today Behance acquisition widens Adobe’s lead in the creative tools and communities space. As Adobe expands in the marketing and design side of customer experience equation, IBM and Oracle focus on the process automation, analytics, and traditional execution areas of marketing and commerce. Fortunately for the vendors and unfortunately for most customers, one can not purchase a complete suite from within one vendor. Hence, customers will be working with a patchwork of solutions in order to deliver end to end customer experience and digital marketing transformation for the foreseeable future. Early adopters and fast followers will pave the way while cautious adopters will wait or vendors to acquire and integrate the suite.

Your POV.

How are you showcasing your creative portfolio? Where do you look for design inspiration? Do you have an idea what tools are more effective than others? Will you still stay with Behance post More…

Market Maker 1:1: Steve Miranda, Oracle Fusion Applications Update – The Inside Story

Published on December 31, 2012 by R "Ray" Wang

The Inside Story On Oracle Fusion Apps At The End of 2012

Constellation sat down with Steve Miranda, Oracle’s Executive Vice President of Oracle Applications Product Development to discuss the state of Oracle Fusion Apps in a no-holds barred honest conversation about what’s working, what’s not, and what to look forward to in 2013.

R “Ray” Wang (RW): Steve Miranda is Executive Vice President of Oracle Applications Product Development. He is responsible for leading all aspects of product strategy, product development, and product delivery for Oracle’s applications and related cloud services. This includes Oracle Fusion Applications and Oracle’s newest products for customer service and support, commerce, and talent management.

Mr. Miranda joined Oracle in 1992 and has held a variety of leadership positions within the development organization. In 2007 he was asked to lead the engineering of Oracle’s next-generation suite of software applications, Oracle Fusion Applications. Under Mr. Miranda’s leadership, Oracle has continually delivered on its promise to help its applications customers innovate and remain competitive while leveraging their existing IT investments and increasing the value of those investments with new Oracle products and services.

Prior to Oracle, Mr. Miranda worked at GE Aerospace. He holds degrees in mathematics and computational sciences from Stanford University.

CATCHING UP ON ORACLE FUSION APPLICATIONS TRACTION

(RW): As 2012 is coming to an end it is a good time to reflect on how Oracle Fusion Applications has been doing this year. It would seem that Oracle’s been quite quiet about Oracle Fusion Applications throughout the year. Is the product selling? What’s the state of the Oracle Fusion Applications product lines?

Steve Miranda(SM): Oracle Fusion Applications is doing very well. We’re actively selling the product. In fact, we already have over 400 customers on Oracle Fusion Applications. We’re doing better than Salesforce.com when they started. Keep in mind, we have a rich customer base looking for innovation.

RW: When you say “Oracle Fusion Applications is selling well”, is that the whole suite or components of Oracle Fusion Applications?

SM: We are actively selling the product. More than 400 customers are on Oracle Fusion Applications, that’s any part of Oracle Fusion Applications, not including RightNow, Taleo, Oracle Business Analytics, or Oracle Fusion Middleware. Two thirds of the customers have chosen to deploy in a SaaS model. Then the second largest deployment model but far below are on-premise and the rest are hosted in our managed services.

RW: Does “managed services” means they own their own license, right?

SM: That’s correct. What’s powerful about these deployments patterns is that customers are accessing innovation faster than before. We are at over 100 live customers and are averaging one go-live a day right now.

RW: I understand that Oracle deployed Oracle Fusion Applications internally? How was that experience in “drinking your own champagne”?

SM: Ray, that’s correct. We did drink our own champagne and we are now using Oracle Fusion CRM internally instead of Siebel.. We have a global single instance for the business. When we deployed, we started out with 2 instances to show case a co-existence approach and an end-to-end Oracle Fusion Applications approach. As of June 1, 2012, Oracle Fusion CRM was up around the world. All the territories, forecasting, quotas, sales force automation, and contacts are in Oracle Fusion CRM globally.

RW: Is it one instance now?

SM: Yes. We also went live w/ Oracle Fusion Financials Accounting Hub on the back end. We replaced Hyperion and Oracle E-Business Suite GL and also went live June 1, 2012. We’ve already done several month-end closes and we also have Oracle Fusion Talent Performance Management up live. Employees and managers are now doing goal setting and appraisals.

RW: To be honest with you Steve, we aren’t seeing Oracle much in head to head competitive new deals. We don’t see big press releases about new wins. Where are the customers? Who’s buying what and why?

SM: Well, first of all, many of our existing customers are coming to us about Oracle Fusion Applications. Second of all, and you may not believe this, we’re not focused on publicity, but rather we want to ensure customer success.. Each go-live is very important to us. In our first set of go-lives, we have 10,000 customers who want to talk to the first 10 go lives. We also don’t want to overwhelm our initial customers.

Let me give you some details and examples so you understand the breadth and depth of what the Fusion Apps base looks like and so there’s no confusion. Here’s a selected slice:

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Monday’s Musings: Understand The Four Organizational Personas Of Disruptive Tech Adoption

Published on December 2, 2012 by R "Ray" Wang

Pace of Innovation Exceeds Ability To Consume

Rapid innovation, flexible deployment options, and easy consumption models create favorable conditions for the proliferation of disruptive technology. In fact, convergence in the five pillars of enterprise disruption (i.e. social, mobile, cloud, big data, and unified communications), has led to new innovations and opportunities to apply disruptive technologies to new business models. New business models abound at the intersection of cloud and big data, social and mobile, social and unified communications, and cloud and mobile.

Unfortunately, most organizations are awash with discovering, evaluating, and consuming disruptive technologies. Despite IT budgets going down from 3 to 5% year over year, technology spending is up 18 to 20%. Why? Amidst constrained budgets, resources, and time limits, executives are willing to invest in disruptive technology to improve business outcomes. Consequently, successful adoption is the key challenge in consuming this torrent of innovation. This rapid pace of change and inability to consume innovation detract organizations from the realization of business value.

Organizations Fall Into Four Personas Of Disruptive Technology Adoption

A common truism in the industry is “Culture trumps technology”. As organizations apply methodologies such as Constellation’s DEEPR Framework in improving adoption, leaders must first determine which of the four personas best fits their organization’s appetite for consuming and innovating with disruptive technologies.

The personas of disruptive technology adoption assess organizational culture in two key axes (see Figure 1). The first is how incremental or transformational an organization looks at applying disruptive technology to business models. The second assesses how proactive or reactive an organization is in carrying out new initiatives. Based on these dimensions, the four personas include:

Market leaders. Market leaders prefer to drive transformational innovation. They look at technologies as enablers in disrupting business models. They see competitive differentiation in delivering outcomes to customers. Market leaders accept failure as part of the innovation process. They fail fast and move on.
Fast followers. Fast followers prefer to react to the success of market leaders and their experiments. When they sense success, they tend to jump in. Fast followers do not like to fail and rapidly apply lessons learned from market leaders into their road maps. Fast followers tend to deliver scale in the markets as a counter balance to arriving later in the market.
Cautious adopters. Cautious adopters proactively deliver incremental innovation. They tend to take a more measured approach and spend more time studying how they can improve an existing success than creating a transformational change. Cautious adopters often come from regulated industries where security and safety are paramount objectives.
Laggards. Laggards tend to procrastinate on applying innovations to their business models. They prefer not be bothered by trends and will only react when the trends have moved beyond mainstream. They see value in waiting as prices will drop over time as success rates increase over time. Laggards enjoy waiting.

During the interviews and discussions with the 2012 Constellation SuperNova award participants, key questions emerged in the decision process on whether to adopt or pass on a disruptive technologies. These questions aligned well with the four personas of disruptive technology adoption.

Figure 1. Organizations Should Understand Which Persona Of Disruptive Tech Adoption Describes Them Best