microsoft

  • January 24, 2018
  • Announcements may be playing the role usually reserved for M&A activity in the CRM world right now. Generally a company purchases another when it wants to capture the benefits of another business’ R&D or established market base. But at the moment it appears that the desirable partners are too big to swallow and the result is more partnering between the big guys and the really big guys. Salesforce has been pursuing this strategy for most of the last year with Amazon, Google, and IBM. This says a lot about the state of the marketplace on several fronts.

    First Salesforce and Amazon announced a partnership in which Amazon and its AWS infrastructure service would become Salesforce’s strategic infrastructure partner when Salesforce absolutely had to deploy a data center in a foreign land.

    This makes perfect sense. As I have often said, it makes no business sense to build (in this case a datacenter) when you can purchase the solution at a reasonable price on the open market. As a competitive issue, Salesforce’s choice of Amazon is a direct challenge to Oracle because it offers a safe haven enabling Salesforce to diversify its partner portfolio while keeping Oracle and Microsoft at arms length. Given the rumors of salesforce being acquired by a big tech firm over the last few years, this seems a good way to help preserve its independence.

    Much the same can be said of the alliance with Google. This is primarily a play for more SMB business and it’s a good one. Salesforce and Google announced their partnership around G Suite, Google’s free office apps. A while ago Salesforce and Microsoft created an integration with Outlook effectively making Outlook another UI for Salesforce. This parallels Microsoft’s own integration with its CRM and Outlook. So this partly neutralizes Outlook as a differentiator in any CRM decision.

    Google integration gives Salesforce access to all those G Suite users who need CRM, especially in the SMB space. It also gives Salesforce another way to compete against Microsoft CRM. But, of course, they didn’t stop there. Salesforce also now has an integration with Google Hangouts too, an effective counter to Skype which is now owned by Microsoft.

    Away from the SMB space in the Enterprise market Salesforce also forged a relationship with Google Analytics. Not that they need more analytics but the two partners have developed plausible processes that use Google Analytics to surface macro trends and Salesforce Einstein to go the last mile, a model that works with IBM too.

    Last week Salesforce and IBM got closer with Salesforce naming IBM a preferred cloud services provider and IBM calling Salesforce its preferred customer engagement platform for sales and service. The agreement leverages IBM’s Watson analytics and its cloud as well as Salesforce Quip (more office software) and Service Cloud Einstein.

    In all of this we can see that Salesforce is working to maintain its independence by linking with anything that can enhance its CRM and make it less desirable as an acquisition target. But of greater importance, it’s these relationships and others like them that will help Salesforce reach its goal of $20 billion in revenues in a few years. When your revenue needs are this big, you need to leverage the market penetration of similar companies. And while all of the companies named are bigger than Salesforce, they each need the bragging rights of working with the most popular CRM in the world.

    Another question in all this is what’s happening with M&A activity, which seems to lull while partnerships blossom. The merger market is notorious for running hot and cold and right now it seems tepid, like there’s more opportunity for large companies like Salesforce crafting relationships with bigger partners. It’s not clear if this means there are few attractive acquisitions out there or simply that the times require different approaches to the market.

    More than once in talks since Dreamforce in November Marc Benioff has used the logic, my enemy’s enemy is my friend. This logic is being played out in the partnerships his company is spawning. On one level it’s just smart business but in the back of my mind, I see the information utility of the 21st century forming. It will resemble the current electric utility in that no single provider will dominate and a high degree of interoperability will be needed. Standards like 120 volt and 60 Hertz electricity are what give us the impression of a continental electric utility grid but in reality, the grid is made up of smaller vendors adhering to the standards.

    Likewise there’s no single vendor capable of dominating the information utility market and standards will be vital. That’s why it’s so important when a company like Salesforce announces partnerships. These incremental agreements have more significance that the press releases might allude to. They are steps on the road to something bigger.

    Published: 6 months ago


    Denis-PombriantI swear I was getting through this and trying to move on. She wasn’t my favorite candidate but when you consider the alternative she looked like George Washington in a pantsuit. Like many people I had moved on from denial and anger to Elizabeth Kubler-Ross’ next stage in the grief pyramid called bargaining. He can’t be that bad…they can tame him…I’m going back to work, he can’t chase me there…I’ll be okay.

    But noooo! A brief story in the New York Times today says Donald Trump, incipient POTUS is planning to hold a technology conference next week. It’s right here under this headline, “Trump Plans Technology Conference With Silicon Valley Executives.” The article by David Streitfeld, Maggie Haberman, and Michael D. Shear covers a lot of ground what with Trump also seeming to have cancelled the next generation of Air Force One today, which is also in the piece.

    Says the article, “The list of those being invited was not immediately clear, but they could include Mark Zuckerberg of Facebook, Timothy D. Cook of Apple and Sundar Pichai of Google.” Sure, that’s right, Silicon Valley CEOs have nothing scheduled that far out so of course they’ll all trudge over to Trump Tower. Whatever it is, when a president asks for your time, he’s doing it in the name of all the American people so you more or less have to attend.

    The one saving grace in all this might be (and we really don’t know all the details yet) the fact that these are all consumer technology mavens so far. Maybe Trump has a punch list of social media enhancements to go over or maybe he intends to build a wall between our electrons and the rest of the world. Or maybe Trump just wanted to call a fly-in for rich guys to compare private aircraft. His is bigger, you know.

    Regardless, I’ll withhold judgment on Trump’s tech chops until I know if this is just show and tell for social media or if he really wants the skinny on what to expect in areas like machine learning, AI, the IoT, and a half dozen other techno-wizbangs that will rock his world soon. I’ll begin to worry when Ellison, Benioff, and Gates get summoned.

    Published: 2 years ago


    thMicrosoft recently rebranded its business software offerings and the effect is largely positive though it must be emphasized that in performing the exercise, deck chairs moved though the cumulative effect remains to be seen. One of the effects is surely that the ERP and CRM solutions are now all offered online as the Dynamics 365 moniker implies.

    Straight off, the re-branding takes Microsoft somewhat away from directly competing in CRM or ERP with the likes of Salesforce, Oracle, and SAP. But as a practical matter this hasn’t changed except that they can now absent themselves from some of the chest pounding these vendors have occasionally engaged in. The new bundling comes in two flavors—Business Edition with financials, sales, and marketing, and Enterprise Edition with operations, sales, marketing, customer service, field service, project service, something called power apps, and [work]flow.

    This new packaging appears to be aimed at Salesforce because the other vendors Microsoft is likely to be compared with all have conventional ERP solutions as well. So with this move, Microsoft highlights the distinction between Salesforce and the rest of the industry.

    But this only goes so far. As a practical matter Salesforce has the largest and most robust ecosystem in the business with a raft of ERP providers including Financial Force, IntAcct, Kenandy, and others like Sage, which offers a hybrid solution for small business. NetSuite is also well integrated with Salesforce and with Oracle so the rebranding might be most effective as an internal approach to streamlining offerings. It might also suggest the company sees good opportunity selling CRM to its ERP base and vice versa.

    Regardless, the increased emphasis on AI and machine learning industry-wide may be more telling. The last few years have seen a quiet move from transaction orientation in business to more agile relationship building. To be effective at this you need two things. First, and most obviously, you need an integrated solution set that can easily share process data across a range of platforms including desktops, tablets, and hand-held devices. Second, the applications need to do some of the work identifying opportunities once left only to people.

    For instance, apps that can understand email well enough to schedule an appointment, send information, or take a next step in a process are being highly prized for good reasons. All major vendors are making strides in this direction so Microsoft’s direction is congruent.

    In an October 10 posting on his site, CRM Search, old friend Chuck Schaeffer observes,

    At this point Dynamics 365 is little more than a change in branding, bundling and roadmap. Microsoft is making a [conscious] decision to do away with the ERP and CRM monikers in favor of business process labeling. While the messaging is understandable, the industry at large has tried multiple times over to do away with the three letter acronyms. Yet decades later we still identify these business applications as ERP, CRM, SCM, HCM, MRP, MEP and so on. Maybe this time will be different. But I doubt it.

    It’s the idea of process that has my attention. We live in a process centric world and as I’ve written in my books vendors might want transactions but they’ve come around to the idea that transactions come at the end of well-designed processes. So we might want to still consider discrete blocks of functionality like ERP and CRM but at the end of the day, their value is directly proportional to the value they deliver to the customer.

    And guess what? The game is about to change again from uni-dimensional process orientation to something more dynamic called Business Agility. Watch this space.

     

     

     

     

    Published: 2 years ago


    Denis-PombriantThe platform land rush is definitely on. You can’t swing a dead cat, as the saying goes, without finding an announcement about some new platform or some established vendor’s attempt to enhance its existing platform. Some sorting out seems to be in order.

    What’s not a platform these days?

    Well, if you can easily substitute the word application for platform, then use application because it will be more accurate. We’re suffering from word inflation all over the place and application has been split into apps, those things you run on your phone, and applications which vendors shy from preferring platform when they should know better. For the record, an app is still and application and a platform should be more. A lot more.

    Platforms don’t grow on trees.

    Building a platform takes work. It is doubtful to me that you can declare a platform into existence as a startup. Chances are good that a new platform is really a standalone application whose investors don’t want to see it become orphaned. But platforms take time and effort to build. If you look at the majors—Oracle, Microsoft, Salesforce, and SAP, they’ve been in the business for decades acquiring and integrating solutions to make something with a large footprint that they call a platform.

    But it’s not just about quantity of functionality, there’s quality to consider too. For instance, in addition to all of the integrated apps, a platform ought to have a really good tool set that enables users to maintain what they’ve got and build new things including simple database apps as well as sophisticated processing apps that incorporate the social, analytic, integration, workflow, mobile, and other capabilities that make a platform real.

    To be sure, there’s more than a casual difference between the majors and their offerings, but generally speaking, each is trying to become the one-stop-shop for customers needing software technology. Each also differentiates itself through emphasis on different aspects of deliverables while hewing to the cloud mantra.

    Is it too late to become a platform?

    Well, quite possibly it is too late. It takes a very large amount of investment and the time and talent of scarce and very smart people to make a platform, and while all that development is going on the market is not standing still. So recently we’ve seen some successful companies being acquired by large platform providers and I suspect the rationale for the sellers was that it was time to join rather than attempt to compete.

    Microsoft bought LinkenIn recently but they’ve also bought large numbers of other technology companies that more or less fit their vision of platform. Oracle has bought more companies than I can count and continues to fold them into its platform or suite of clouds. Same for Salesforce, which just completed its acquisition of Demandware an ecommerce product.

    What’s next?

    As large as these collections of applications or platforms are, they can easily get bigger. We’re already at the point where very few businesses would likely use all of any vendor’s platform offerings because there’s just too much stuff. Many of these vendors have provided multiple tracks such as SMB and enterprise offerings, which would seem to automatically disqualify an organization from taking on everything on offer. Still there’s the grey area where an emerging business has one foot in each camp so hybridization is a definite possibility. It’s in the hybrids that the true value of a platform emerges.

    Hybrids can also mean mixing offerings from multiple vendors and the gob smacking reality of today’s platforms is that as huge as they are, they are still not big enough to crowd out the competition. That’s a tough reality because part of the reason for embarking on the platform trail is to help lock out competition. But no such luck.

    All vendors know they have to provide an elegant approach to integrating whatever is on a customer’s site. Of course, this goes double for the legacy systems every business runs. The legacy systems might have analogs on every vendor’s platform but legacy systems also go by the name of foundation systems, responsible for a business’s bread, butter, and profits. Businesses are thus naturally cautious about upsetting the apple cart so integration is a critical need.

    Ecosystems come into focus

    The platform wars are in full swing but the outcome seems assured. There will be several major competing platforms and we know which providers have them. Resistance is futile, announcing a new platform today is spitting into the wind. But at the platform level the group of applications made by third parties, commonly called the ecosystem, there’s plenty of opportunity.

    In the bad old days, third parties couldn’t commit to a single vendor because markets were not big enough. Today though, committing to one vendor’s platform is smart business. Committing means abandoning the need to maintain source code tuned to this or that operating system, database, hardware, and even language. With that, it seems to me that smart startups should begin life with a commitment to an ecosystem and thus a platform. It also means figuring out a useful offering in a market that seems to have everything, that’s a story for another time.

     

    Published: 2 years ago


    types-of-innovationA couple of weeks ago Allison Arieff wrote a piece in the New York Times titled “Solving All the Wrong Problems” that gets to the heart of the technical times we live in and its focus is not what you might think. She includes a long list of things we can buy or subscribe to such as:

    A service that sends someone to fill your car with gas.

    A service that sends a valet on a scooter to you, wherever you are, to park your car.

    An app that analyzes the quality of your French kissing.

    A “smart” button and zipper that alerts you if your fly is down.

    A sensor placed in your child’s diaper that sends you an alert when the diaper needs changing.

    It goes on but you get the idea and you can always read the article here.

    All of these things have in common the idea that just because we have the ability to make them doesn’t mean we should. Presumably the ones that got venture capital financing had someone asking, how does this make money and receiving an acceptable answer.

    At about the same time this article ran, I needed a water heater so I went to a big box store and searched for—wait for it—someone to wait on me, to answer a few questions in other words. There were three models on display but in a perversion of good, better, best, there was standard, deluxe, and WiFi. The top of the line water heater could send information to my smartphone about, oh, I don’t know what really.

    In my long life I’ve noticed that water heaters either work or they don’t. When they don’t work, I take a cold shower and summon a plumber to rectify the situation. The idea of having a water heater that I could interrogate through my smartphone seemed importantly like a moment in history when a new neurosis is proclaimed—hydrothermia gondii, perhaps.

    But I have an explanation or actually two that seem to pacify my mind. The first harkens back to Linus Pauling, a two time Nobel Prize winner who once famously said that if you want to have good ideas, you need to have a lot of ideas. Translation, it’s a numbers game and most inventions don’t make the cut. Of the long list in the Times article, most if not all but the one that evaluates the quality your French kissing, are bound for history’s ash heap.

    But Pauling’s point was that you never know what’s going to hit so you take the risk of ridicule and ruin for the chance of success and all that attends it. Still, some of these inventions up to an including the WiFi water heater strike me as over the top science fair faire.

    The other reason in my mind might be closer to the truth. It’s that we’ve reached the end of the current paradigm. By paradigm, I mean the thing that frames our economic and social lives, the technology boom. According to the late Russian economist, Nicolai Kondratiev, a paradigm animates our economic lives and lasts between 50 and 60 years before another replaces it. Within a paradigm you can have trends and business cycles but the paradigm is ascendant.

    You can know when the end is nigh because it gets really, really hard to innovate around the core tenets of the paradigm without bumping into something else that does pretty much the same thing. In other words, all of the niches are full. When that happens people try to invent niches which is why you get online water heaters and French kissing apps.

    Eventually Kondratiev’s wheel turns again and we start anew with a different paradigm. But new paradigms are expensive; they result in what another economist, Joseph Schumpeter, called creative destruction in which some of the earlier and perfectly good established economic order is trashed. So, not surprisingly, the establishment will resist change which brings on a period of stasis.

    You know you’re there when someone invents something equivalent to a sensor placed in your child’s diaper that sends you an alert when the diaper needs changing. Come to think of it, that’s a perfect metaphor for the times we live in. We’re waiting for change.

     

    Published: 2 years ago