Posts Tagged ‘ERP’

Event Report: Microsoft Convergence 2014 Day 1 Demonstrates Solid Momentum and Mindshare ( #CONV14 )

Microsoft Convergence Kicks Off In Atlanta

The annual Microsoft Convergence customer event kicked off on March 4th, 2014.  Far from the days of the Stampede in Fargo, North Dakota, the event shows how far the Microsoft Dynamics customers, partners, and products have progressed.  Over 12,000 attendees including customers, partners, staff, and prospects gathered in Atlanta, GA for the largest Microsoft Enterprise Applications conference.  The sold out event featured a volunteer program on Day 0 and a good number of partner meetings the weekend before.  Analysis from four key announcements on Day 1 include:

  • Microsoft Dynamics gaining momentum on the large enterprise and divisions of large enterprises. Key customers presenting in the opening keynote include Chobani, City Harvest Inc, Delta Airlines, Lotus F1 Team, New Belgium Brewery, and Weight Watchers.  These presenting customers share a key theme of customer centricity and a Microsoft enterprise backbone.  Moreover, many showcase the devices and services theme set by former CEO Steve Ballmer.

    Point of View (POV):
    Constellation sees a growing trend where organizations and brands move to Dynamics for both CRM and ERP.  The ability to integrate back to other Microsoft technologies such as SharePoint, Office 365, and Azure Services provides both a pull and a push.  As organizations think about consolidating vendors and moving to the cloud, the Microsoft Dynamics team provides some compelling options in manufacturing, retail, distribution, public sector, professional services, and travel and entertainment.  The launch of a Microsoft Dynamics CRM Online Enterprise License at $200 per user per month show cases the move upmarket.
  • Dynamics CRM users gain key marketing and social capabilities. Microsoft announces the next release of Dynamics CRM in Q2 of 2014.  Microsoft Dynamics Marketing, which was formed from the Marketing Pilot acquisition , debuts to assist with campaign management.  The service and support offering gains new features such as Unified Service Desk along with closer integration to recently acquired Parature.  Newly launched Microsoft Social Listening launches at no additional charge for Dynamics CRM Online professional license holders.

    (POV):
    The rewrite of acquired entity Marketing Pilot provides some improvement to the original product.  Parity at the Exact Target and Hubspot level will take at least two to three more releases.  Release of unified service desk paired with Parature, provides a powerful combination in customer service and support.  Microsoft Social Listening finally provides customers with a social tool that has been sorely missing in the line up.  More importantly, in CRM and customer experience, the mobile access options have not forced customers onto Windows Phone and instead have provided native support of iOS and Android..
  • Dynamics ERP users prepare for new releases. Dynamics GP gets a release for Q1 2014 that includes identity management, workflow, and self service companion apps.  Dynamics NAV shoudl receive an update in Q4 2014.  More importantly, the team announced the availability of Microsoft Dynamics AX 2012 R3 for May 1st 2014.  Key themes include mobile enablement, support for deployment on Windows Azure in the Infrastructure as a Service (IaaS) layer, and an end to end apps and services framework.  .  The cross offering with the Windows Azure team is the Microsoft Dynamics Lifecycle Services which improve implementation times and enable agile updates.

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News Analysis: FinancialForce.com ERP Arrives To Signal The Era Of Best Of Breed Cloud Suites

FinancialForce Debuts Its Full ERP Suite


On February 19th, San Francisco headquartered, FinancialForce.com announced the launch of its full suite of ERP offerings built on the Salesforce1 platform.  Backed by investments from UNIT4 and Salesforce.com, the cloud based vendor began as a single ledger financial management system built on the Salesforce.com Force.com platform.  The announcement and product launch shows how FinancialForce:

  • Delivers a full ERP suite on the Salesforce1 platform. The platform brings together a series of organic products and recent acquisitions in HR, supply chain, and project management (see Figure 1).  The December 2010 acquisition of Appirio’s professional services automation assets form the Professional Services Automation offering.  The 2013 acquisitions of Vana Workforce and Less Software brought the human capital management (HCM) and supply chain management (SCM) capabilities.

    Point of View (POV):
    The management team at FinacialForce.com was smart to bring in acquisitions built on the original Force.com platform.  Post merger integration was greatly simplified as the products shared a common architectural base.  More importantly, the acquired solutions were easily upgraded to the Salesforce1 platform to create an end to end ERP cloud based ERP suite.  Customers gain the full advantages of the Salesforce 1 platform and integration with the core Salesforce CRM offerings.
  • Demonstrates focus on long term growth and viability .  FinancialForce.com showed 80% year over year growth in revenue run-rate compared to 2012.  Headcount grew 62% year over year with over 260 global employees.  Furthermore, customers represent a global base with 27 countries and users in 45 countries.

    (POV):
    Cloud has gone mainstream and customers now expect their cloud companies to demonstrate viability.  The mergers and acquisitions required to build a full cloud ERP suite signal a maturity by FinancialForce.com and the market.  Early customers of the full suite provide positive references on both the synergies of the ERP offering and the flexibility of the Salesforce1 platform for extensibility.

Figure 1. FinancialForce.com Launches A Full Integrated ERP Suite

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News Analysis: Acumatica Raises $10M In Series C Funding, Aims For 1B In Revenue By 2023

New Funding Round Fuels Road Map And Geographic Expansion


On November 18th, privately held Acumatica announced Series C funding from Runa Capital and Almaz Capital.  The  Kirkland, WA based Acumatica, has been quietly providing its partners a customizable, cloud-based ERP and CRM development platform for the SMB market.  Acumatica’s previous rounds were funded by Visma (a KKR company) and Almaz Capital (backed by Cisco).  The announcement is significant because Acumatica intends to:

  • Expand its partner base into new markets. Acumatica currently has offices in Washington DC, Singapore, and Moscow.  Through affiliates, resellers, and partners,  Acumatica is present in the US, Canada, Mexico, UK, Nordics, The Netherlands, Africa, Middle East, India, and Southeast Asia.  Sales come exclusively from partners.  Thus, the company intends to recruit more partners for high growth markets such as Asia and Latin America.  European expansion will focus on a replacement ERP market of aging systems

    Point of View (POV):
    Early success with Acumatica has come from the ease of use and functional footprint that accelerates a partner’s ability to take a solution to market.  However, future growth will require the leadership team to increase its investment in brand awareness and partner enablement.  Expect key hires in partner sales, support, and R&D.  Given the limited number of qualified partners in the market, Acumatica will have to convince partners from competitors to switch.  Early indications show this market traction.  In fact, since August 2013, Acumatica has added 50 partners, bringing the total to 270.

Tuesday’s Tip: Putting the Kibosh On ERP Vendor Sales Reps Who Troll For Indirect Access

Constellation Sees An Alarming Increase In Inquiries

Constellation has received an alarming increase in inquiries about an unethical vendor sales practice coined as “trolling for indirect access”. Indirect access is when a vendor claims that a client is accessing their perpetually licensed software in an unintentional manner or inappropriately licensed manner.

One vendor uses a definition of, “any individual or machine that accesses the computing capabilities of the software must be a licensed user”.

Another vendor sees it as “any time a system is accessed by a non-vendor system, a license is required to access that data”

In fact, a rash of inquiries over the past two quarters has raised the alarm bells among software customers.

Unethical Sales Leaders Endorse This Practice To Make Their Numbers

While this practice is nothing new, the pickup by vendors raises serious issues as to why this practice remains in their sales play books. Constellation identifies five reasons why vendors continue this practice:

  1. Open up dormant accounts. After pleasant introductions, new sales reps will use this technique to further deals.  Former sales reps agree this is a shake down for cash technique.
  2. Drive sales through fear of audits. Audits are used to start the discussion.  Unsuspecting customers who no longer have context about the original contract may fear breach of contract.
  3. Scare customers into making additional purchases. Threats are used to set expectations.  The vendorsoften waives the issue if the customer buys additional licenses as a “compromise”
  4. Force compliance into new licensing policies. Vendors use this as a way to drive conformity to new license models.  The move from concurrent usage to named users was one example.
  5. Meet territory sales goals. Unscrupulous sales managers suggest this technique to meet their numbers.  Sales reps are told they are defending the vendors license rights.

It All Starts With An Innocent Sales Call From A New Sales Rep

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

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

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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Event Report: Microsoft Dynamics Convegence 2013 (#conv13)

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

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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

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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.
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Event Report: #InforSummit Reveals More Than A Redesigned Infor

Changes at Infor More Than Cosmetic

Analysts and tech watchers gathered on Valentine’s Day, February 14th, 2013, for Infor Summit, a progress check on Infor, the third largest independent applications vendor in the market.  While many customers may not have heard of Infor, most have heard of the brands it has acquired over the last 20 years.  These venerable brands include Baan, BPCS, Epiphany, Hansen, Intentia, Lawson, MAPICS, NXTrend, SoftBrands, and Syteline.   Since industry veteran Charles ‘Chuck’ Phillips took over Infor, the software vendor has grown revenue from $2.2B to $2.8B.  More impressive, for the past 5 quarters, Infor demonstrated double digit license revenue growth.  Infor is now the third largest private firm in Business Insider’s Digital List witha $16B valuation.  The management team emphasized three key tenets of the Infor strategy:

  • Focus on microverticals. With over 2151 possible market micro verticals, Infor intends to go deeper than the 21 sectors often classified as verticals.  For example, in the wholesale distribution sector, Infor supports micro verticals such as electrical, building materials (BMAT), industrial supply, heating ventilation air conditioning (HVAC), and auto.  For the auto sector, micro verticals include interiors, fixing elements, and  plastics and moldings.

    Point of View (POV):
    Infor’s strategy to go deep on micro verticals comes at a time when SAP and Oracle are no longer substantially investing R&D in deep vertical functionality.  By going deeper and more specialized in micro vertical industries, Infor can differentiate on features and functionality desired by customers.  Infor’s hired over 800 developers since Charles Phillips joined.  The delivery and support of micro verticals is accomplished as Infor’s support folks are co-located with the developers and many key folks are still in their original on-shore development centers.  With 4000 developers just focused on apps, Infor has the economies of scale to focus on micro verticals.
  • Investment in internet architecture. Infor’s design principles begin with architecting software for the internet and embracing a world of heterogeneous apps.  Support for the Open Applications Group Integration Specification (OAGIS) standards allows Infor to standardize on a canonical business language for information integration.  Infor requires its legacy applications to communicate with each other via XML as the common alphabet for identifying business processes and for defining business messages.   Infor has made significant technology investments including updates to the core technology framework Infor ION, the mobility framework Infor Motion, social software platform with Mingle, and analytics via Infor BI.  Infor currently generates $100M in cloud revenues.

    (POV):
    The overall support for OAGIS standards allows Infor’s legacy apps to communicate with newer applications and avoid duplicate creation of common components.  This standardization marks the culmination of the original work initiated by Soma Somasundaram, EVP Global Product Development in 2010.  With Infor ION in place, Infor now has an integrative fabric using loosely coupled architecture.  Customers can run legacy apps and also take advantage of new products and solutions.  Moreover, this enables Infor a platform for rapid integration of future acquisitions.  Customers should pay close attention to see what acquired product families have been enabled to take advantage of Infor Ion and what upgrade paths should be made to take advantage of future innovation.  Expect Infor to nudge customers to the cloud as the margins are higher and the pace of innovation is faster.
  • Creation of a consumer design experience. Infor took advantage of their New York City location to hire designers focused on user experience.  As part of this transformation, they created their own internal agency called Hook & Loop.  Marc Scibelli, VP of Hook & Loop is in charge of the 40 person team behind the design thinking transformation.  From mobile apps to branding, Hook & Loop provides the creative services for Infor (see Figure 1).

    Point of View (POV):
    Duncan Angove, President at Infor’s talk about Beauty as a Competence reflected the deep transformation throughout the organization.  Infor’s new user experience was first revealed to customers at the 2012 Inforum customer conference.   Users will notice a stark difference between the new apps and the old apps.  When apps begin with user design instead of engineering, the end users benefit.  Customers can expect to see the difference in the new apps but will have to wait for the old apps to catch up.

Figure 1. Flickr Feed Scenes From The Infor Summit

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Photos: R Wang & Insider Associates, LLC. All Rights Reserved.

Market Momentum Shows A Shift In Customer Preferences For Outcomes Not Technology

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News Analysis: New SAP Customers Face Maintenance Hike

SAP Plans A Standard Support Maintenance Fees Hike Of 5.5%For New Customers

For new customers, SAP announced its intent to raise its standard support maintenance fee from 18% to 19% effective July 15, 2013.  The standard support option was reintroduced in January 14, 2010, after much pressure from user groups.  A few key takeaways:

  • Price hike follows original plans. SAP has provided a six month advanced announcement to raise maintenance for new customers.  SAP has noted that “the adjustment does not apply to any existing maintenance contracts for SAP Standard Support closed before July 15, 2013″

    Point of View (POV):
    The announcement follows the original plan for existing customers to bring Standard Support in line with Enterprise Support by 2015 (see Figure 1).  SAP appears to be harmonizing the price increases for both existing and new customers.  While average support and service contracts are between 18 and 21% in the enterprise software world, SAP’s price increase will still keep it within the norm.
  • SAP raises maintenance rates under the guise of quality. SAP claims that the maintenance fee hike is related to “maintaining the same high level of quality support in the future.  Key features include access to support packages, new releases of standard support solutions, enhancement packages, technology updates, ABAP source code for SAP software applications, and software change management.  SAP also requires customers to use Solution Manager.

    (POV):
    SAP’s tried hard to justify the price increase by offering message handling, remote services, SAP Solution Manager Enterprise Edition, and access to SAP Service Marketplace as additional value added benefits.   Unfortunately, most customers find Solution Manager to be a mile wide and an inch deep, the remote services to be minorly useful, and the SAP Service Marketplace to be immature at best.   The result – customers are not getting much value for the price increase. (Fellow Constellation Analyst Frank Scavo provides a list of four questions every new SAP customer should ask.)

Figure 1. SAP Enterprise Support and SAP Standards Support Schedule circa 2010

screen-shot-2010-01-14-at-74603-am

The Bottom Line: SAP Wants To Eliminate Standard Support And Competitors to Solution Manager

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News Analysis: Aptean Six Months After The CDC Software And Consona Merger

Mergers Continue In The Enterprise Software Space

On August 7th, 2012, CDC Software and Consona Corporation merged to form Aptean.  Over the past six months, Monte Ford, the president of Aptean has made key executive hires, committed to new product investments, and rationalized overhead.  Key points in the acquisition include:

  • Merger creates economies of scale. The merger brings 1500 employees and over 9,000 customers together from CDC Software and Consona Corporation.  Both CDC and Consona have grown through acquisition over the years.  Headquarters will center in Atlanta, GA.

    Point of View (POV):
    The acquisition provides greater scale required to compete with Epicor, Infor,  Microsoft Dynamics, and Syspro in product development, distribution reach, and overhead savings.  Greater scale provides Aptean the means to service both SMB and Global 2000 companies.  Aptean must also find means to move its intellectual property assets into the cloud in order to drive cost reduction and increase innovation delivery.
  • Acquired products provide a large functionality footprint. The acquisition brings together 32 product lines in ERP, CRM, Supply Chain, eCommerce, supply chain, and public sector.  Key product lines include 4-Gov Fund Accounting, Catalyst WMS, Compiere, Ecompix, IMI Supply Chain, Intuitive ERP, Knova KM, Made2Manage, MarketFirst Market Automation,  Onyx CRM, Pivotal, Ross, Saratoga, and Trade Beam GTM.

    (POV):
    Aptean’s broad product portfolio has a strong CRM/Front Office portfolio with Pivotal, Onyx, and MarketFirst.  ERP solutions go deep into micro verticals and broad into both discrete and process manufacturing.  Key solutions include Compiere, Intuitive ERP, Made2Manage, and Ross.

  • Focus on micro-verticals will create a differentiator. Aptean targets key vertical markets such as  financial services, manufacturing, distribution, medical, high tech, and professional services.

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News Analysis: SAP Business Suite on HANA

Next Stop On The Road To HANA: SAP Business Suite

In a global announcement in Palo Alto, New York and Frankfurt, SAP’s top executives Dr. Vishal Sikka, Rob Enselin, Jim Haggeman Snabe, and legendary founder and chairman Dr. Hasso Plattner announced availability of SAP’s Business Suite powered by SAP HANA.  SAP has rewritten the Business Suite to work on SAP’s HANA platform and believes that customers will benefit for four reasons:

  • Smarter. The embedding of intelligence at the transactional level opens up new business models and process transformation.  SAP’s customer Derek Dyer, Director of Global SAP Services for Deere and Company, emphasized that SAP ERP powered by SAP HANA has “revolutionized” how products and services are introduced to the market, especially in the MRP world.  They see some transformational innovation as a result to faster MRP runs.

    Point of View (POV):
    Embedded intelligence has been a key failure in today’s existing transactional applications.  Customers have sought access to not only real time reporting, but also prediction.  The goal is to get to smarter decisions at all levels of the organization. Customers will benefit from embedded intelligence.  However, this will require people and technology training of the system to identify the patterns and algorithms required to serve up insight on demand.  This will require intelligence at every vertical and micro vertical business process.  Moreover, right-time requirements for in-context computing will turn out to be the surprise benefit as relevancy becomes more important through time, location, role, relationship, sentiment, and intent.  Relevancy and context provide the smartness that is missing in today’s systems.
  • Faster. SAP Business Suite powered by SAP HANA addresses the need for speed.  The in-memory columnar database reduces the input/output (I/O) time and allows for fast access to information.  The result – faster processing and faster scenario evaluation.  Fast transaction management times lead to faster decision making.

    (POV):
    The analytics and crunching capabilities is what’s driving organizations to seek faster speed.  Speed is the difference between a five day drug recall and a five minute drug recall.  Speed is the difference between a 30 day supply chain plan versus the ability to reroute 2 iPhones to your store in 30 seconds.  The impact is huge for customers if SAP does succeed.  SAP’s not the first to do this as Workday has already done this for HR and Finance.  However, for the entire SAP suite and given SAP’s market share, this is a big deal as this reduces the need for separate business intelligence systems.  The performance difference will create a huge competitive advantage for those who adopt versus those who do not.
  • Simpler. SAP Business Suite on HANA delivers consumer grade user experiences.  The goal is to embed live insight into business processes to drive immediate action.  Today, people expect consumer-grade user experiences and the power to translate their live insight into immediate action. Enzo Bertolini, CIO, Ferrero Group expects to improve the trade promotions and supply chain planning process through both better simulation and mobile access.

    (POV):
    SAP Business Suite on HANA provides SAP an opportunity to rethink how information is created, consumed, and shared.  The push to a design thinking focus within SAP has led to significant improvement of the user experience throughout their portfolio of products.  SAP Business Suite on HANA will be an opportunity to show case this new user experience.
  • Open. SAP plans to support database technology and vendor choice for its customers.  Many database partners have committed to work with SAP support in-memory optimizations and provide the necessary support to ensure that customers will succeed.  SAP is providing rapid deployment solutions, trained implementation consultants, and a comprehensive set of services to help clients make the migration to SAP HANA.

    (POV):
    SAP has the opportunity to drive down database costs and improve performance.  While the pricing model will be based on the percentage of application value, SAP must find a way to drive down overall costs if it is serious about improving adoption.  This licensing requirement must be addressed as it will emerge as the most significant barrier to adoption.

SAP Faces A Challenge of Adoption Not Because of Technology, But Because of Customer Vision

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

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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