Chatter

  • June 13, 2011

    • Someone recently asked me why collaboration is important in the enterprise.  To be specific, they were asking about the kind of collaboration that products like Yammer and Chatter enable.  This collaboration consists of enabling people to share thoughts, ideas and micro news bits in a social context without the usual institutional overhead of email or a meeting.  Collaboration more resembles Twitter than email and I suspect, but have not collected the data to prove it, that a typical collaboration emission is shorter than a tweet.

    But the question got me thinking about other times and situations when the same kinds of questions were asked about the latest technology.  No matter how the question is posed, the heart of it is frequently something like this: Are we wasting time and money doing this or is it the real deal?

    It’s a fair question.  We all live with limitations — so much time in a day, so much money in the budget and so many more demands on both that we can fulfill so what does a sane person do?  Well, history might be a guide though it is not infallible.

    Throughout my career the big theme has been converting the economy from one that manages and produces things to one that manages and produces ideas and information.  We all know this and if we take a moment to consider it, this means our recent history is also about finding better, faster and less costly ways to share information.

    I compiled the attached table from data served up by the World Bank.

    Year US GDP (Trillions)
    1975 $1.623
    1985 $4.185
    1995 $7.359
    2005 $12.58
    2009 $14.119

    It shows the U.S. Gross Domestic Product by selected years, which I picked for specific reasons.  In 1975, we were in the early days of the mini-computer revolution and GDP was a healthy $1.623 trillion, a lot of money to be sure but puny in comparison to things to come.  Ten years later GDP had jumped about two and a half times to $4.185.

    That’s because by 1985 we were enjoying the benefits of not only minis but desktops.  During those days I can distinctly recall people asking if it was really necessary to have a computer or terminal on every desk top.  That was about the era when company phone systems became popular and just about every company had bought a fax machine.  The phone system replaced those awful black receivers with multiple lines and made it possible to forward calls, have three way calling and whoa! voice mail.  No more coming back from lunch to pick up those cute little pink messages.  Phone, fax and computer formed a powerful trio for information sharing.

    By 1995 GDP had grown again nearly doubling to $7.359 trillion.  I remember economists like Alan Greenspan trying to explain what was going on in the economy.  Testifying before congress they looked like C students who were trying to explain why they were suddenly getting A’s in Physics.  That’s because by 1995 the economy was growing like a proverbial weed but in a different way than anyone had witnessed before.  The economy was growing with little inflation, the amount of work produced by the average worker was climbing without any noticeable additional input of capital.  That’s called productivity and we were better at it than anyone else who had ever lived on the planet.  The productivity was driven by our new technologies.

    The bigger the economic number the harder it is to double but by 2005 with the evolution of the Internet well under way the U.S. still managed a very healthy $12.58 trillion GDP.  And even with a recession and an unnecessary financial economy meltdown driven by stupidity, by 2009 U.S. GDP was a lofty $14.119 trillion.

    So when people ask me about the goals and measures they should apply to tools that get information to employees so that they can work better and smarter I am tempted to say something flip.  The truth is that the improvements we all crave in business are accretive — they build up over time.  You might not even notice an improvement in the first year but you will.

    A better question might be, is social media within the enterprise the real deal?  And I think that answer is yes.  It’s yes because it follows in a long line of tools that have enabled us to work with information in surprising and creative ways and those ways have spurred significant economic growth over more than thirty years.

    There are names for this like paradigm shift and names for the people and companies that make the change.  Some are called early adopters others are laggards and where you come down in all of this determines how much benefit you receive from the transition.  Be early to the party and you reap rewards that are disproportionate your meager investment.  Arrive late and you are at best playing catch-up.

    Published: 13 years ago


    One of the more revealing things I heard from Marc Benioff at Cloudforce 2011 in New York last week was his idea about how his company will continue to build out its product line.  Marc’s never been super secretive about his general direction though product specifics have always been closely kept.  But in our conversation, he reiterated a long held belief that makes more sense than ever.

    For a long time the natural assumption has been that a software company needs to balance out its offerings.  So, a company focusing on back office financials should build or buy CRM and a CRM company should build or buy ERP.  But the number of companies that succeeded at this approach is small.  Only a few companies I can think of actually succeeded in this and they were all back office software companies to start with.

    SAP, Oracle and Microsoft come to mind and you can add Sage too if you also add the caveat that Sage buys everything.  NetSuite built everything at once, more or less, but started as an ERP company and its DNA remains squarely in the back office.  Ask CEO Zach Nelson about his approach and he’ll tell you that ERP is the system of record, period.  I am not saying any idea is good or bad.  The companies I’ve named have been very successful and they are long lived.  But past performance is no indicator of the future, as they keep telling me in the mutual fund industry.

    Siebel was a successful front office company that never expressed interest in developing back office technology.  Siebel’s expressed strategy was to be a good integration partner.  They might have pursued a strategy like what I think Salesforce is pursuing but they ran out of runway.  The product had issues and there were reputation issues that may or may not have been their fault and the investors grew impatient.  At any rate, Siebel became an asset of Oracle and continues to be the backbone of Oracle’s CRM platform and it is integrated well with Oracle Financials at this point.

    The other day at a lunchtime Q & A in New York, Benioff was asked directly if Salesforce would turn more attention to the back office.  It was a logical question for many reasons.  We are in the midst of a replacement cycle in ERP for one thing.  The systems in use today were put there a decade ago or longer largely by companies looking to beat the millennial clock.  Ten years is a long time in the software business and those ERP systems are ripe for replacement.  Indeed many vendors are staking their strategic lives on the replacement cycle.  But not Benioff.

    At the Cloudforce 2011 lunch in New York, Benioff patiently explained that Salesforce has a budding ERP system in FinancialForce and the company has a strong partner base and that its products are open allowing for easy integration with any products including ERP.  But he resisted the idea of becoming a back office company saying that Salesforce would not build an ERP system and instead questioned the logic of the front to back office product line approach today.

    According to Marc, with partners and integration capabilities and openness the primary reason for integrated front to back office solutions looses steam.  What was once received wisdom just a few years ago, that customers ought to buy all their software from the same source — products already integrated — no longer holds in the modern cloud economy.  As important a statement as that is though, it was not Benioff’s major point.

    Marc’s big idea and strategic vision is that the front office is still being built out and Salesforce intends to continue leading the charge into what it sees as fertile, if still undiscovered, new territory.  One might think that sales, marketing, service, support, help desk and field service filled up the available niches and for a long time there was little argument with that idea.  But the application of social technology to conventional systems has raised everyone’s sights.

    The introduction of Chatter and the less well appreciated (as social applications) Sales Cloud and Service Cloud indicate that Benioff might be right.  The biggest part of the front office might still be awaiting invention.  This idea motivates Salesforce and Benioff’s belief that his company is building a customer information system.  The final form of the customer information system may still be years in the making and it might not come to fruition or Salesforce might not be the company to accomplish the task.  But as things look today, it’s hard to argue with — and hard to find a company with a better front office vision.

    So as the rest of the industry’s suite vendors pursue a front and back office strategy Salesforce is pursuing a market whose outlines may be clearly defined as social but their forms still need filling in.

    In addition to social aspects there is also the multi-tenant cloud computing imperative.  In a world of increasing energy and transportation costs and increasingly mobile computing the future looks less like a front to back hierarchy and much more like a mashup governed by openness and standards based API’s.  In that world Benioff’s strategy makes very good sense.

    Published: 13 years ago


    Brad Wilson is the general manager of Microsoft CRM for the Product Management Group at Microsoft Corp. (I know that sounds redundant, but it isn’t).  He was kind enough to sit down with us a couple of weeks ago to talk about Microsoft CRM and its future both as a major product line for his company and as a part of a greater vision that integrates with all of the company’s offerings from Office to unified communications to green approaches.  He’s an interesting guy with a lot to say.

    Ever think Microsoft CRM might work with Chatter?  Read the interview to find out.

    Published: 13 years ago


    With the introduction of Sales OnDemand at CeBIT today, SAP has made plain its strategy for moving its customers to the cloud or whatever you want to call it.  SAP is fundamentally offering a hybrid strategy that enables its customers to dip a toe in the water and migrate over time.  Most major vendors with a legacy customer base are doing likewise.

    So Sales OnDemand is made to work with both the SAP Business ByDesign base platform and to look and act somewhat like Facebook and Twitter.  There are some nice touches in Sales OnDemand and some interesting marketing.

    Nice touches

    The product looks and acts like its social progenitors and it uses the concept of a feed — as in each member of the group by default generates a feed that others in the group can subscribe to.  I think the same is true for important inanimate objects like the sales forecast but I don’t recall if that was part of the briefing.

    The briefing did spend a decent amount of time focusing on the idea that selling is less about the exploits of a lone wolf today and more about the success of a group but not necessarily a group of co-equal people doing the same thing in different territories.  The new model is more like the hybrid selling model I have reported espoused by Anneke Seley and others where inside and field sales people, product specialists and possibly with a few marketers, work together to bring in deals.

    That SAP sees this as a new and important style of selling as well as computing is important.  We in the industry generally see the introduction of new products like this as the continuation of a paradigm but I think that would be a misreading of the reality.

    There is no doubt that the marketplace has changed in the last few years — buffeted by a global recession and a slow recovery.  But other important factors are playing on the market as well such as the continuing rise in transportation costs and slack demand.

    There is no shortage of supply, which ought to warm the hearts of the most ardent supply-siders but demand is down in key areas due to demographic shifts — e.g. we are older and less prone to buy things.  But also, demand is shifting to a more globalized emerging world where a young and aspiring middle class is arising.

    In this scenario, the confluence of social networking, analytics and traditional CRM is necessary.  Selling in this scenario is much harder than the original selling that captured the customer base in the first place.  SAP is not the only vendor to see this but they should still be saluted for moving in that direction.

    So SAP sometimes refers to the style of selling that it is gravitating towards with a reference to “it takes a village” and I suppose that’s a good analogy.  A village raises a child in the big picture though each member of the village may never have more than a momentary influence.  I get it and it makes sense, the village is the medium that enables everyone to contribute.  Selling needs a similar medium.

    Long ago there was an organizational philosophy that everyone in the organization sells.  Of course, it wasn’t literally true but today it can be.  With a social SFA product like Sales OnDemand the people who need to know about and who can influence a deal can have access to the information that enables them to contribute.  As I said above, I get it.

    Now for the interesting marketing

    Why does SAP feel a need to compare its SFA product to Facebook and Twitter.  I understand the connection and having used the product briefly, I can say that the comparison is apt.  My quibble is that the comparison has already been made by others and it does nothing for SAP or any vendor to arrive later with the same message.

    The important point about a product like Sales OnDemand or Salesforce and Chatter is that they harness Wisdom of Crowds techniques to, and please pay attention to this, generate or capture intellectual property for a company.  You might find it a stretch to call this IP, but what is it if it is not part of the knowhow, wherewithal, designs and patents that any company generates for the purpose of making money?

    The information that pops out of a social tool that is tethered to a corporation for business purposes is unique and part of what that company can use to generate revenue.  If you think it’s not IP or valuable, ask yourself how many of your competitors would like to know what you know about your customers’ needs and preferences.  I thought so.

    So any vendor that casually sticks a Facebook or Twitter tag on its products with less thought than a NASCAR team painting its car should take note.  Your product might have feeds and it might have a user interface that mimics a social networking tool but it is way more important than that.

    It’s my understanding that SAP will spend the next few months in a rolling thunder campaign for Sales OnDemand and make a big splash at Sapphire.  I hope by then they find a way to communicate that Sales OnDemand is a new tool for a changed world.  Other vendors are moving this way and SAP’s offering appears to be a credible addition to the flock.

     

    Published: 13 years ago


    Well that was interesting, 2010 that is.  When I started doing a year in review column there was an emphasis on quantifying accomplishments—tangible things that somehow added up to the year in review.  But with the economy still lurching and not many major accomplishments, I thought I’d try something different this year.

    Rather than attempting to identify all or most of the events of 2010 I am focusing only on what I think is the most important thing to happen in the front office this year.  There’s a lot of risk in doing this because it’ bound to be controversial.  My idea of what was important, or most important, might not be yours and our criteria will certainly be different.

    Ironically, that this happens all the time, for instance, Adolph Hitler was Time Magazine’s Man of the Year in 1938 and a year later, well, you know.  So with a gulp, let me say what I think was the most important thing to happen in the front office space in 2010 and then explain why.

    The most notable event to happen in 2010, in my humble opinion, was the release of Chatter by salesforce.com.  Releasing this product did several things.  First, it created or certainly solidified a new market niche for collaboration technology.  Second, it was another proof point for the robustness of the cloud computing model and Force.com in particular.  And finally, it domesticated social media.  Let’s take them in order.

    Collaboration

    The idea of collaboration has been around for a long time.  Seminal thinkers like Erik von Hippel have been researching, thinking about, writing and talking about it for a long time.  In Democratizing Innovation for instance, von Hippel lays out significant evidence that people in business value being asked to contribute ideas and they appreciate being heard.  But the analog ways of collecting input do not scale very well and early social media, while a step forward, have too many idiosyncrasies to be truly useful in a business setting.

    One of my new favorite statistics is that 84% of the people on Facebook are women.  That’s fine, but it doesn’t provide the kind of balanced, scientifically useful population you need for research into many situations.  Chatter avoids many of the pitfalls seen in other social media in part because it is aimed at a population that is expected to use it as a condition of employment and that appears to be working well from the stories I’ve seen.  The result is a proof point for social technology in the enterprise, something that was lacking.

    Cloud computing

    Like all of Salesforce’s products Chatter shares a common heritage, it was built in Force.com.  Importantly, it was a new kind of application, designed with plenty of end user input.  It was also delivered on schedule.  I don’t know how many people toiled late into the night for months on end nor do I know what the effort cost, but I do know the result.  From this vantage point a good-sized IT project got done and delivered to specification as planned.  I think we overlook this aspect of Chatter but it is a strong endorsement for cloud computing and the Force.com approach to building applications.

    Domestication

    Yes, Chatter was the product that showed how an organization can leverage social ideas, methods and technologies to achieve a business end.  Prior to Chatter there was a good deal of trial and error and anecdotal evidence on a more or less one off basis of an organization doing something useful with social media.  Chatter swept through the Salesforce customer base with impressive speed.  Sixty thousand customer organizations have adopted it in some degree and large implementations like Dell with over thirty thousand users are not uncommon.  Those kinds of numbers suggest to me that we can now put out the fire and call in the dogs.

    Observation

    It’s not over.  Chatter showed one way to derive business value from social technology but it is not the only application that will do so.  It focuses on organizational productivity but there are many other areas and business processes that can be improved by applying social technology.  But it is a start.

    Chatter, at least pre-Dreamforce Chatter, is aimed at the enterprise’s internal workings; there is no Chatter for customer relations (B2C Chatter?) or between enterprises (B2B Chatter?) yet.  That will likely change though we don’t know when.  Nonetheless, Chatter’s deployment and rapid adoption in the last year place it in a unique place in front office computing and enterprise software generally.

    So chatter takes the prize in my book but I hope many of you will have ideas of your own.  I’d like to know what they are.  If the response is significant I’ll write another column on your ideas.

     

    Published: 13 years ago