social

  • March 9, 2011

    • 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


    This week we profile one of the less well known pioneers of the social revolution, Diane Hessan, CEO of Communispace.  From the beginning Communispace took a different path from conventional social vendors.  Rather than using community as an opportunity to broadcast information, Commuinspace led a revolution in listening to customers.  Listening to customers is underrated according to Hessan.  In her characteristic style she says, “It’s just unbelievable what happens from a marketing point of view if you just shut up and listen…There’s magic to doing that.”

    I don’t under rate her and I invite you to read the whole interview at our Website.

    Published: 13 years ago


    “Call rewrite!”  That’s what they said in the olden days on movie sets when the script needed doctoring.  It’s also what the technology industry metaphorically does about every ten years.  We rewrite much of what we’ve been relying on for information processing because the accumulation of new technologies over the previous decade has made our current batch of gear and applications uncompetitive and relatively expensive.  So say Larry Ellison, Marc Benioff and many others.  So the cycle begins again though when exactly is a tricky thing.

    By the looks of this economy the new cycle couldn’t arrive soon enough and thoughtful people are asking what the new world might look like.  Some of us may have been lulled into believing that the ten year replacement itch applied to other departments but not CRM.  After all, haven’t we been steadily accumulating changes all along?  And haven’t new technologies like SaaS, pretty much eliminated this cycle?  Well yes and no.

    On-demand, SaaS or Cloud Computing—call it what you will—has done a lot to flatten the technology replacement curve but the reality is that new stuff finds a way to creep into the world and our existing infrastructures don’t always handle the newbies smoothly.  The case in point is Cloud 2.

    Cloud 2 is as significant a departure from the norm as CRM or SaaS computing were when they were first introduced.  Driving Cloud 2 are three technologies that we are all very well versed in but which, taken together, add up to the call to rewrite.  Let me explain.

    The three technologies aren’t even new.  They include mobility, social media and analytics and they’ve been around for decades in some cases.  The convergence of these three technologies within the CRM suite is driving us to rethink CRM and they have the potential to drive the next economic cycle.

    Social media is transforming CRM but so is analytics though we are earlier in that deployment curve and while mobility has been a factor for a long time, the convergence of these factors is something special.  It reminds me of the 1990s.

    The ‘90’s saw a wave of productivity enhancement and a long period of growth with low inflation and the two are rarely seen together.  It caused Alan Greenspan, chairman of the Federal Reserve, to speculate that we had entered a new economic era of permanently lower inflation and higher productivity.  With so much evidence around him, Greenspan could be forgiven for this thinking but the laws of economics had not changed and, in fact, they were working as advertised.

    Under normal economic conditions, increased productivity—i.e. getting more output from workers—required more input.  More production translated into more people, more machines and more raw materials.  But that didn’t happen in the 1990’s as knowledge workers leveraged technology to increase their output.

    The computer automation boom of the previous decade—the 1980’s—was largely responsible for the aggregate productivity improvement.  While individual companies might have been hard pressed to provide a valid ROI calculation for their technology investments, many decision makers knew that without those technology investments, they would surely be left behind.  It wasn’t until the 1990’s that this infrastructure buying spree aggregated forming the productivity boom.

    The same kind of situation may be forming right now as three new drivers—social media, mobility and analytics—converge, especially in front office business processes.  As in the prior example, these technologies have been accumulating in our culture and they have become more robust in each passing year.  Social media may be new but its adoption has been significant.  With half a billion Facebook users alone social technologies have become ubiquitous, a key requirement in deploying any new networking technology.

    Today mobility benefits from investments in infrastructure by the carriers and in devices by individuals that provide the essentials for using social media.  Finally, analytics have existed for decades but their coupling with social media is a critical turning point.  Social media generate mountains of data that must be analyzed to be useful and studies show that analytics adoption is shadowing social media adoption in business.

    So here is the critical point for me—your investment in mobility will be enhanced and your investment in social media will be justified by how well you adopt social analytics.  That’s right, analytics is the last mile in this journey and analytics, if implemented appropriately, will make the other investments look shrewd because analytics alone will give you insight into the data churned up by the other technologies.  Analytics along with the other drivers provide the essentials for Cloud 2 and for a new round of prosperity.  Most importantly, analytics and Cloud 2 move the discussion from the hardware and software to the business process, which is where we’ve been trying to get for decades.

    Published: 13 years ago


    David Nour, the founder of Relationship Economics, publishes an interesting and articulate newsletter.  I don’t always agree with him but even when I don’t we aren’t that far apart.  His latest post on “Tomorrow’s Social CEO” is an example.

    Nour correctly observes (and laments) that few of the current batch of corporate leaders is socially connected.  According to his post, “Eric Schmidt (Google) is an infrequent Twitterer and not a blogger; Steve Ballmer (Microsoft) does not blog or have a Twitter account; Michael Dell is on Twitter but is not an external blogger.  It is also remarkable that neither Steve Jobs (Apple) nor Larry Ellison (Oracle) have a Twitter, Facebook, LinkedIn or blog presence that we could find.”

    My facile observation: Yes, and look where it’s gotten them.

    Seriously, though, I agree that the executive of tomorrow will be much more of a social animal but as they say in court rooms from time to time, absence of proof is not proof of absence.  What I mean, and this is almost pure hypothesis, is that organizations are becoming more social but perhaps the right application hasn’t come along yet to enable a CEO to be more social in a professional setting.

    To borrow a regrettable phrase, the CEO is the decider.  He or she spends the day making decisions for the organization so that it can continue on its mission of maximizing shareholder value and serving the customer.  Other people in the enterprise do the social work for the organization for a very obvious reason—doing it right requires capturing a mountain of data, analyzing it and only then taking action.  CEOs don’t have the time.

    CEOs are great at analyzing data once it’s captured and presented to them.  I once knew a guy who could scan a balance sheet, no matter how complex, and in a matter of moments begin making cogent observations and recommendations.  He was murder on finding misspellings on a lunch menu too.

    I think the blog might be the natural social medium for today’s CEO.  Since Reagan, even U.S. presidents have made weekly radio broadcasts—a social outreach, albeit one way—a standard part of the job.  My preference would be to change that to a weekly newspaper column though.  Written words are more accessible and longer lasting and enable you to elaborate a complex idea but that’s a subject for another time.

    So, why aren’t CEO’s more social?  If it’s because the right social medium hasn’t come along yet, there’s good news on the horizon in the form of a new generation of collaboration software and I think of Chatter from salesforce.com as the example.  Though currently only available as a tool for filtering the social stream within an enterprise, I can see a day when that restriction is lifted.

    A collaboration product like Chatter does the necessary work of filtering the social stream so that only what’s most important to the decider gets in front of him or her.  That makes socializing the CEO possible.

    Eric Schmidt is on friendly terms with Marc Benioff, who is very much socially adept, and I don’t know if Schmidt has tried Chatter.  Michael Dell already has a Chatter deployment measured in the tens of thousands at Dell, which is a big Salesforce customer.  It’s hard to say if there’s a possibility of Steve Jobs adopting Chatter and, of course, Larry Ellison and Steve Ballmer will likely have their own brands of collaboration software before they’d use Salesforce.

    So my mild disagreement with Nour is really one of timing.  Yes tomorrow’s CEO will need to be social and maybe collaboration software is the way they’ll get there.

    Published: 13 years ago


    It’s often hard to maintain high visibility in the marketplace if you happen to be a private company and for good reason.  Private companies tend to be small and they often do not attract the attention of the financial press precisely because the financial press thrives on the transparency and numbers that small companies prefer to keep to themselves.

    But some of the most interesting large companies can also be privately held and while they might be known to the press and analyst community they give the finance guys little to write about.  Too bad too, because you can miss a lot if all you’re looking for is numbers for the shareholders.

    Take SAS Institute for example.  Founded in 1976, SAS is a pioneer of the analytics market, has a thirty four percent share—more than any other vendor—generates about $2.3 billion in revenues, never had a down year and has always made a profit.  But they’re private so the numbers don’t get the same attention a public company’s numbers would get because you can’t buy the stock.

    According to the company, SAS spends about twenty-four percent of its considerable revenues on research and development, and their eleven-thousand plus employees in over four hundred global offices treat customers like customers think they should be treated.  This alone should be enough to draw some attention but then if you add in the recent award from Fortune magazine for being the best company in the U.S. to work for you get serious wow factor.

    James Goodnight co-founded the company with three other people, two of whom left the party early, too bad for them.  Goodnight is the CEO and technical soul of the operation and this week I had the good fortune to attend an analyst and media briefing at their headquarters in Cary, NC.  That was followed by something called the Premier Business Leadership Series event in Las Vegas, a business conference presented by SAS that brings together more than 600 attendees from the public and private sectors to share ideas on critical business issues.

    I know what you’re thinking, but it’s been more than three hardware generations since I’ve been to Vegas and I routinely avoid conferences there but I went this time because SAS had some interesting things to say.  First off, they made two product announcements that I can resonate with because they involve social media and more importantly, they make great strides in helping people use social technologies for business purposes.

    I’ve been a fan of social networking since 2003 when I wrote about the the Kevin Bacon game and the original research by Harvard University psychologist Stanley Milgram in the 1960’s that began it all.  But social networking and its enabler, social media, entered a lag period at about that time and they didn’t emerge from it until Facebook overtook MySpace.  Meanwhile blogs became popular and we learned to wiki, which begat an orgy of tweeting and the rest as they say is history.

    Lost in the social frenzy, in my humble… is the idea that social technology is a good listening tool, or ought to be.  Social technology after all is a surrogate for an interaction with someone, a way to be present when you are not.  In short it is a way to gather input from other people before launching our latest discourse about our favorite subject—us.  SAS gives me hope that this might actually happen.

    Exhibits A and B come in the form of two SAS product announcements—SAS Conversation Center and SAS for Customer Experience Analytics.

    SAS Conversation Center most interests me.  The conversation center measures the level of influence that a Tweeter has by analyzing the volume of content the person generates as well as how often the person is included in conversations.  It then compares this information with a company’s taxonomy of topics to determine which area of the business the tweet is aligned with.

    This analysis can help a company to determine what’s being said about it and determine which topics to pay attention to and to address.  It may not be as good as a direct conversation but doesn’t have to be.  It need only filter out the majority of tweets that are not relevant and it will be a powerful tool.

    I would like to see the conversation center quickly evolve to track other social media, especially Facebook and it would be nice if a control center evolved with it so that a single interface could monitor the social sphere.  We’ll see.

    The second announcement, SAS for Customer Experience Analytics is a cloud based application aimed at providing predictive analytics to help companies present customers with the best offers at the right time.  That sounds easy but it is not. Customers, especially when surfing have short attention spans and one chance may be all a vendor gets so the stakes are high.  While other companies have similar offerings, one that has the SAS analytics engine behind it will be an interesting addition.

    SAS for Customer Experience Analytics is the latest addition to the SAS cloud suite which includes 19 other analytic applications including SAS Social Media Analytics and SAS OnDemand: Campaign Management.

    These products come along at a good time for the evolution of social technologies.  In addition to new products SAS announced the results of a significant study it sponsored.  Conducted with Harvard Business Review Analytic Services, the study’s findings are too long to list here so check the company’s web site.  One example will have to suffice till the next time.  Despite social media’s potential to enable companies to listen to and understand their customers, 75 percent of the companies surveyed did not know where their most valuable customers were talking about them, or what was said.

    More than anything, these results show that social media is still clearly still in its infancy but solutions like these may be the killer apps that turn social curiosities into the tools we always believed they could be.

    Published: 13 years ago