All right! Recess is over! If you went to Dreamforce last week you can be forgiven for taking a kind of victory lap in your head today because it was a truly great experience, besides if you are like me you are still tired. One reason I think so many people like Dreamforce is its relentless focus on the future and on what will likely become standard practice in the not too distant future. But also, if you went to the keynotes from M.C. Hammer to Colin Powel to Richard Branson to Tony Robbins, you left San Francisco with a certain “lightness of being.”
However, if you are an analyst you need to put all of that behind you and get ready for Oracle OpenWorld (OOW), which promises to be a barn burner for its own reasons. Same city, same Moscone Center, same closed Howard Street, similar large crowd — where Dreamforce was all about the social enterprise, OpenWorld is about a lot that might not be so clearly connected. There’s hardware and operating systems and then software for the back office, front office, databases, middleware, and development tools. There are things I’m leaving out too like the America’s Cup. At OOW Oracle will provide a glimpse of its own into what the future looks like for the enterprise and in some ways it’s very different from what Salesforce is talking about and in some ways they are similar.
This is not to say that one vision is less good than the other, far from it. The competing visions reflect different world views and different realities. For instance, while Salesforce approaches things from a clean slate perspective, Oracle takes the view that what it introduces has to work with what delivered before. You can see this in its disciplined approach to supporting customers of the companies it bought way back in 2005.
Companies like Siebel and PeopleSoft whose products are getting long in the tooth and are prime targets for Oracle’s new offerings that are based on its platform called Fusion. You may recall that Fusion went GA (that’s general availability, not the mid-night train), more or less, at last year’s OpenWorld but it hasn’t exactly set the world on fire and there are persistent rumors that the stuff doesn’t work very well or that it requires a phalanx of consultants to make it do its tricks.
The big hurdle for Oracle therefore will be to convince the assembled multitude that Fusion is real and that the path to the future goes through the intersection of Fusion and Big Iron.
Speaking of big iron, last year the company rolled out some additional gear to complement its Exalogic computing devices. It seems this family of hardware is built and optimized for very big jobs involving terabytes of data gazillions of users. That’s exactly the kind of stuff the growing cloud computing movement might gobble up. Currently data centers are masses of commodity servers in racks running feverishly but without a layer of sophisticated management that would optimize their utilization and reduce costs.
There has been an interesting series of articles by James Glanz here and here in the New York Times over the last few days focusing on the power consumption and pollution caused by data centers. The pollution comes from diesel generators periodically fired up to test the centers’ ability to withstand a power interruption. The consumption is gargantuan.
But a bigger question, for which there are ready answers, asks why so much power demand? Part of the answer lies in how many companies are avoiding the necessary virtualization that will make the cloud much more efficient and sustainable. According to the Times and backed up by McKinsey & Company, which did the analysis, conventional data centers run many CPUs and disks at much less than capacity in part to cater to the urban myth of the need to keep one company’s data separate from another’s.
You’ve heard me on this before using the metaphor that we comingle our funds in banks and overlay the pool of deposits with metadata like account numbers and statements. Why are we resisting do this with data? Companies like Salesforce are already doing the same virtualization in the cloud and Oracle has an opportunity to strongly support virtualization and point to a more sustainable future.
I’m going out on a limb to say yes. Maybe it won’t happen right away but keep in mind that two or three years ago Larry Ellison ridiculed the cloud and now that he has modern hardware and software he’s a big proponent. The next logical step would be to endorse the Exa-hardware as a sustainability tool for a power hungry planet. I’m looking for some sustainability messaging from Oracle and it could even happen.
This is not a digression. Sustainability is not alien to ideas like mobility, cloud, social and analytics, you can’t separate them. I think if Oracle wants to maintain its leadership position with many of the largest companies in the world, it needs to put a stake in the ground and become a thought leader here. The next decade in IT won’t be like the one that preceded it and if Oracle simply comes out with a grocery list for replacing old hardware and applications with more modern stuff it will be missing a great opportunity. At the end of the day people go to these conferences looking for new ideas and things they haven’t seen before. That’s what I’ll be watching for.
Using emerging technologies to foster more sustainable front office business processes.
Sustainability might be the next big thing in CRM. I’m betting it is and Beagle Research is initiating an award for sustainability in CRM. Today. Now.
Everywhere we look we see not just an industry but also a civilization straining under the demands of growth. Now, growth is generally a good thing for an economy but one of its hidden characteristics is that it periodically forces us to change the way we do things. What is affordable and practical one day can become expensive and cumbersome overnight. We’re living in one of those times. The solution to such challenges is to find ways to make what we do more sustainable, to substitute, change and innovate new and better ways of doing things. In business that means our processes and then some.
The things we take for granted in our business dealings are becoming less constant. Customers are tapped out, the new product engine has stalled and travel is becoming so expensive that it may soon squeeze margins and affect our ability to meet with people. Some of this is blowback from the recession but other aspects may be a long-term trend forming. Regardless of the causes, as business people we need to discover and develop solutions that mitigate these influences so that we can continue doing business.
We’ve given these issues considerable thought and in response, today, Beagle Research introduces a new award and report focusing on sustainability and the things that CRM can do to help every business to become more sustainable.
The award and report are called ThinkForwardä. We borrowed the idea of “think” from Thomas Watson, Sr. of IBM fame and from Steve Jobs each of whom asked us to think and then think differently at critical points in the evolution of our industry.
We believe it’s time to think again but this time we need to think ahead about a world that will be resource constrained in many dimensions. The conditions we watch and write about in the report show slower growth and rising transportation costs coupled with a customer-base that is growing less interested in absorbing more goods.
Just in time, we also see a market brimming with front office technologies that help vendors and customers to identify opportunities and satisfy them with maximum efficiency, using resources wisely. We think sustainability provides the organizing principle for the next phase of CRM, a phase filled with opportunity if we focus on crowdsourcing, social media and strategies for substituting intelligent technologies for travel.
We see numerous front office software companies bringing products to market that by themselves may not garner a great deal of attention from the mainstream market but we also see these solutions as keys to a more sustainable business environment.
The ThinkForward report identifies seven companies whose solutions typify the kinds of solutions that, in some cases, may not be core to CRM today but which will be essential in the future. In one way or another these companies evidence solutions that help vendors better understand and target opportunities, marshal resources and engage customers in new and more sustainable ways.
The award winners include Brainshark, Cloud9 Analytics, Communispace, iCentera, Kadient, Salesforce.com, Unisfair and Zuora. As our report documents, each of these vendors offers solutions that help their customers to do business in more sustainable ways either by treating customers more like renewable resources, reducing the travel and energy requirements of many front office processes, or by capturing and leveraging crowd wisdom to enable companies to better hone products and messages.
We salute these pioneers and encourage you to consider how making your businesses more sustainable can help drive new revenues and profits as the world continues to change around us.
As long as we’re talking about sustainability we should try to tease apart just what that term means for CRM. To me, sustainability is about business processes that are repeatable and, more to the point, processes that both sides readily engage in. But in addition to the processes being repeatable — the easier part — the customers must have a stake in wanting to repeat them, which is way different from readily engaging the first time.
Now, I realize that the definition I have just provided has some basic flaws. First, it is utopian — it implies that a sustainable business process can run by itself, like a perpetual motion machine. No business process is sustainable by that definition; they all need new blood, fresh recruits to work. In fact, the simple capitalist requirement that an economy grow must be satisfied. So the sustainable business process must provision for new customers coming in and older customers leaving, for whatever reasons. In the sustainability era we also need to be very good at recruiting.
We are a long way down the trail on sustainability in some of our business processes but often the trail changes from four-lane highway to dirt road. We have highways within departments — sales, marketing service — but the pavement is more rugged when we go between those departments even today, many years into the CRM experiment. That’s fine with me, I am interested in progress over a longer term and there’s plenty if you look for it.
So, for example, we well understand the desirability of a sustainable or repeatable sales process but not so much the importance of sustainable service processes, in many situations. Old thought habits die hard and service is still seen as a money-losing proposition. Too often we compete on price and hence there are insufficient profits to enable first-rate service and support processes. But if you take another cut at the problem, for an existing customer, service and support are often the on ramp for repeatable sales. In the sustainability era, service quality (not just the experience) will be the product so efforts to enhance service will be well rewarded.
While we’re at it, marketing is too often viewed as a money-losing proposition on performance enhancing drugs. It’s marketing’s job to spend money after all and too many of us can cite John Wannamaker’s — or was it Marshall Field’s? — famous dictum that half of his marketing budget was wasted but, alas, he didn’t know which half. However, as an aside, why are we still relying on some nineteenth century encomium to influence our twenty-first century marketing thinking? In medicine, law, the sciences and many other areas, the nineteenth century is a footnote with a few nuggets we point to as the progenitors of the knowledge we now have.
Nonetheless, marketing in the twenty-first century is also an on ramp for sales, but also for research that will drive current and future product development, messages, and of course sales. Indeed, in a sustainability era, no group will have its core function rearranged more than marketing. Sales will have to cope with smaller margins, travel restrictions and the demand to be more accurate in forecasting with resulting cascades of other demands. Service and support, as we have seen with the introduction of social media into those processes, will be relieved of some of the volume that makes it so hard to do well.
On the other hand, making other processes more sustainable will require much more data and information. Marketing is ideally suited to data gathering, at least in cases where the right tools are brought in. As marketing becomes more of a research hub it will become more accurate and reliable, finally retiring Wannamaker and/or Field.
Doing that will require concerted effort and a good dose of social media. To do that we need to explicitly focus on the differences between inbound and outbound social media and work out the business processes that harmonize the two. We are only at the stage where all social media is cool and the point where we can be selective and apply the right medium to the right business problem is still in the future. When we get all the way there — in force — we will be well on our way to sustainability.
Plenty of people like to quote a line that was attributed to Bill Gates and many other people that we over estimate what we can do in a year and underestimate what we can do in ten. With that as a guide, welcome to the decade of sustainability.