June, 2012

  • June 27, 2012
  • Microsoft buys Yammer is either the worst kept secret in the Valley in some time or the slowest simmering headline waiting for life to come out of tech.  Rumors of the deal as well as escalating estimates of its cost have been rampant for weeks so I am glad to put this one to bed.

    In light of this deal and of Oracle’s first broadside in the customer experience wars, I think it’s safe to call an inflection point.  Why not?  We don’t call enough inflection points in my humble opinion.  We simply sit back and say remember when…? long after all the shooting is done.

    So here are several inflection points I see.  We have crossed from a monolithic “social is everything” era into an era where social is applied to various solutions in the front and even back office.  This is a good thing because it also signals at least the winding down of the social hype cycle and the beginning of the social is the new way of life cycle which will be much more productive.

    Yammer and Jive and Chatter signal the nucleus of a market in corporate collaboration, an inherently social effort within the enterprise and especially outside of the four walls.  This is goodness.  Yammer plus Microsoft yields a solution with a bank account big enough to do battle with Salesforce’s Chatter.  But product and bank account might not be enough if, for instance, Microsoft decides to keep Yammer and SharePoint separate for the simple reason that social is a network not a hierarchy.

    So that’s enterprise collaboration but there’s also customer experience that Oracle made a big deal about claiming for its own this week.  Where we had a more or less homogeneous social concept of capturing social data, analyzing it and using the resulting information, we now have all that with separate foci on customer experience (selling and marketing), product development (or product marketing) and service (sentiment).  This is all good in that it sharpens focus and makes more niches.

    At the same time, cloud technologies have about reached the end of their hype cycles too.  No one, even Larry Ellison, disputes the utility or inevitability of cloud computing any longer.  There are now simply solutions that make inevitability more or less proximate in time.

    So, for example, if you need to replace an aging COBOL CICS application (yes, there are still such things in the wild) your first step might be moving it to a Unix emulator in a cloud, a perfect example of infrastructure as a service (IaaS).  On the other hand, if you’re interested in deploying business applications, a website and mobile applications all running off the same data and business rules without having to develop everything three or four times, platform as a service (PaaS) is your game.

    And even all this is not the full extent of the inflection points we’re seeing.  In ERP the emerging consensus is that old ERP is still under amortized, too entrenched and vital to replace so we’re seeing a variety of two tier strategies promoted by the leading ERP vendors as well as by emerging cloud ERP guys like FinancialForce and NetSuite.

    All this results in market fracturing and meta-stability.  I say we’re in meta-stable states in numerous markets because each point represents a situation that could be better, faster and cheaper but each also represents the reality that customers are only going to go so far in chasing nirvana.

    I was just a little boy ten years ago when the paradigm shifted this dramatically but today I can see it all with fresh eyes.

    Published: 12 years ago


    Oracle launched its customer experience push this week with an announcement by co-president Mark Hurd.  The new direction begins to pull together the results of Oracle’s latest buying spree in which it purchased ATG for e-commerce, RightNow Technologies for customer service and other technologies for analytics in cyberspace.

    While Oracle will always draw skeptics the way a dog finds fleas, I think at least some of the new direction makes good sense but not necessarily for the reasons stated.

    The big push into customer experience leaves much unsaid, especially the idea that customers are increasingly turning off vendors and their messages and seeking out indirect approaches to getting the information and products or services that they need.

    The push into social media and especially analytics for gauging customer sentiment is a case in point.  People have a natural reticence about revealing too much to a vendor correctly assuming that anything they say in a sales conversation might be later used against them.  Fair enough.  But people are still remarkably unguarded about what they reveal to their peers and hence the boom in all things social.

    However, if you look at the quotes recently put out by Oracle executives they’re really still selling old style CRM with the new label of customer experience.  They’re still talking about costs saved and calls avoided because those are the things that make vendors buy and it’s the vendors who are Oracle’s customers — end users not so much.

    The strategy is smart because we are in an era of severe cost cutting and not simply for the usual economic reasons.  First off, and I have been saying this since 2007, companies like Oracle have to deal with the fact that energy and transportation costs are escalating making it harder for vendors to visit customers at a profit as well as more difficult for consumers to visit the mall.  This is the age of indirect selling for both these reasons.

    But add on the idea that the economy has not grown in real GDP terms since 2008 and you see another dynamic.  A whole generation of people is trying to launch into life and finding it very difficult to form households.  Without household formation things like carpets, refrigerators, sofas and maybe even cars are not being bought in the numbers they would be under other circumstances.

    In this age of austerity and stagnation, increasing profits to produce the illusion of growth comes from reducing overhead and avoiding margin gobbling expenses like conventional selling.  So you get things like this strategy of customer experience.  It makes sense to me and positions Oracle and a few other companies in a leadership position so good for them on that.

    I also noticed though this curious line in a fine article by Chris Kanarkus of IDG News discussing the Oracle announcement; “Larger companies such as IBM, Adobe and Salesforce.com are also building out CEM portfolios.  None of them can compete with Oracle’s breadth of technologies, [Anthony] Lye maintained.”  Of course, Anthony Lye is senior vice president of CRM at Oracle and the architect of the CEM or CXM strategy.  He was the guy buying up the CEM companies last year.

    I found it interesting that Salesforce was lumped into the “larger companies” rubric with IBM and Adobe.  Oracle and Salesforce sometimes act like two Tomcats in a cage but keep in mind that Salesforce has yet to crack the Fortune 500 though it is making strides.  At any rate, this looks to me like an attempt by Oracle to set up some competitors for easy knockdown rather than something more substantial on the product front.  I don’t really understand the Adobe reference and while IBM has lately made strides in CRM and analytics the efforts seem directed elsewhere.

    As for Salesforce, their efforts are in the enterprise with collaboration and highly socialized applications that are increasingly penetrating new niches.  The Salesforce strategy resembles Apple’s and both riff off the idea of a “Blue Ocean Strategy” that was subject of a book by the same name.

    If I had to sum it up, and I do, I’d say we’re at a point in time when the market is splitting up and rather than the monolithic approach to social that we’re seen since the middle of the last decade, companies are developing specialization.  So we see Salesforce focusing on enterprise IT in the true cloud, and Oracle focusing on the vendor-customer transaction while others are carving out their own niches.  Yes, Oracle has a cloud strategy too as well as a hardware division.

    So it’s the age of austerity, of reduced personal outreach and increasing relationships with and through machines and we now have the technologies to support the zeitgeist   Eventually, growth will be back on the menu.  Even Lent only lasts a short time.

    Published: 12 years ago


    I spent most of last week in Boston at the Enterprise 2.0 conference where I was honored to be the sales and marketing track chairman.  Next year it will be called E2 Social and will bookend the other conference that has been held in Santa Clara and will become known as E2 Innovate.  There’s good symmetry here.  I can’t think of another purely social show or one focused on innovation.  Most shows today are vendor sponsored which is good but different.

    Our track had some cool presentations on social marketing from IDC mavens Gerry Murray and Joe Farentino, revenue performance management from Phil Fernandez, CEO of Marketo, and an intriguing discussion from Pam Kostka, a fellow Crusader and CMO of VirtuOz, a company that makes virtual agents.

    If you are wondering, a virtual agent is a software robot that you can talk to regarding sales, marketing or service issues just like a person.  These agents are a happening thing and promise to do away with wait times and improve service.

    There were also two panels, one on M&A activity that we put together last minute with the able assistance of Sameer Patel, Josh Greenbaum and Louis Columbus.  As is so often the case with these things, serendipity played a role and caused more than a few people to walk away with the idea that this kind of thing ought to happen again.  Thanks guys, the panel was outstanding and a good example of the talent pool that lurks in the Enterprise Irregulars a group with a low profile (that ought to be greater) and an inversely proportional IQ factor.

    The other panel, which I want to focus on, was illuminating to me for an unexpected reason.  I invited some of my brain trust including Thor Johnson, Cary Fulbright, Derek Peplau, Columbus and Murray mentioned above.  Toward the end we had a discussion of big data and someone mentioned a large company that had converted from one CRM system to another and had deleted many years of sales data in the process rather than bring it along and try to figure it out.

    Initially I thought throwing away all that data was folly but I came to see it as smart but for reasons that I think are different from the consensus of the panel and audience.  One audience member got the analysis right, in my opinion, when he said simply, “There’s nothing in it,” by which he meant there was a great deal of data but that it was devoid of information content.  How could this be?

    Very simply, most CRM systems either have fields or enable you to create them to capture important data like product interest, deal size, projected close date and much more.  All of this is valuable but CRM’s point of failure is that these fields can be overwritten and there is no provision for storing historical information.

    Now, you’ve heard my sermon on historical data before most likely.  But at E2.0 I had an insight about the difference between sales and marketing that reflects the difference in the data we collect and analyze in each space.

    In marketing we collect data once from a large sample.  If you run a program against a list you collect data from a large number of people one time.  You analyze the data and perhaps discover people who are interested in a product now or in the future and you process accordingly.

    Sales is different.  The universe of data sources is smaller but the sources give off data constantly through a sales cycle.  Sales reports — pipelines and forecasts — show a single cross section of the data and they are equivalent to the individual frames of a movie.  Most of the time it’s hard to say much about how a film ends by examining a random frame.  Sometimes you get lucky and the random frame shows the butler with a knife in the in the library etc. and you can make a deduction.  But most of the time you aren’t that lucky.

    Unlike the movie, which is a succession of stills projected in rapid succession to give the illusion of movement, the sales forecast is a one and done thing.  Worse, making the report necessarily destroys the old frames.  So, getting back to the company that threw away old data, I would throw it away too.  The old data was simply the last frame depicting the end state of a deal and usually the end state is a loss.

    There’s almost nothing you can discover from the end state but if you have all the frames that led to the end then you can apply analytics to it and find out things you didn’t know.  Analytics lets you play the movie back and forth to find the aha! moment.  But you need to keep all the frames.  The point is that in marketing you can apply analytics to a single state of the market but if you try to do the same with sales you’re toast.  Sales data is different from marketing data and so are the ways we analyze it.

    In the panel I moderated last week that idea was not in evidence and it shows how we need to re-think and maybe find new people who think differently about selling and sales data.  Without new thinking we’re liable to not be able to figure out the importance of social tools and selling will continue to be a hard nut to crack because it remains more art than science.  It doesn’t have to be that way.

    Published: 12 years ago


    The Enterprise 2.0 brand got a good and strategic retrofit this week in Boston when the show’s guiding light Paige Finkelman announced some changes.  As you might know, the show has been a twice-annual affair with events in Boston and Santa Clara spaced roughly six months apart.  The new arrangement keeps the two shows but focuses them in slightly different and complementary directions.

    The Boston event will remain focused on all things Social and will be held in my fair city in June (great place once the snow melts) and it will be called E2 Social.  The Santa Clara event will become E2 Innovate and that can use some discussion.

    E2 Innovate is located in Silicon Valley, one of the greatest places in history for innovation after the Tigris and Euphrates River valleys circa 10,000 BC.  There they invented the wheel, farming and beer (you can look it up), not too bad if you ask me.

    As you’ve heard me say many times before, there’s more innovation than CRM or Social going on and E2 Innovate will be the place where these disparate birds of a feather congregate.  This will reduce the burden for venture capitalists who will only need to drive a little bit south on California route 101 with their car trunks full of money to dispense.  It will continue providing a venue for new ideas and be accessible to the likes of people like me, so it’s all good.

    In the early years of a trend like the social conquest of business, two shows a year provides some needed momentum to get ideas percolating.  Much like the first stage of a moon rocket, the early years are dedicated to getting moving, but with that accomplished it’s time for stage two and insertion into orbit.  That’s what this move does.

    Aside from vendor sponsored shows like Oracle OpenWorld, Salesforce Dreamforce, Sage Summit, Microsoft Convergence, SAP Sapphire and many others, there are very few events today that offer a startup the chance to test the waters especially if they are sprouting a new niche.  E2 Innovate will do this and at the same time serve as a feeder to E2 Social or something beyond.

    I like these ideas.

    Now you also need to know that I was the sales and marketing track chair for this year’s Boston event and this did not influence my thinking or writing.  I just write about the things I see and understand.  A limited universe to be sure.

    Published: 12 years ago


    The Enterprise 2.0 conference comes to Boston next week.  I am working the event as the chair of the sales and marketing track, so consider this full disclosure.

    The idea of E2.0 has long made me wonder about its place in the market versus CRM.  Is it a competitor or another way of saying much the same thing?  Or perhaps is it the anteroom to CRM?  Is it the thing that takes in and civilizes ideas before they hit the more mainstream CRM world?

    My first experience with E2.0 a few years ago was that it was more social than Paul Greenberg or certainly CRM in general.  Every kind of social tool and vendor was there but significantly none of the vendors I saw thought of themselves as a CRM vendor.  They felt they were different.  But with the rapid uptake of social by CRM in the last few years, it will be interesting to see how much of that attitude still prevails or whether more mainstream CRM vendors have taken up the E2.0 idea.  Will major CRM companies have booths, for instance?

    There is certainly good reason to think that the two ideas are moving together.  In my estimate E2.0 came out of the seminal work of the Cluetrain Manifesto whereas CRM was simply the brainchild of pragmatic software developers who wanted to make a buck rationalizing backward front office business processes.  And maybe that’s it — the intellectual inquiry into the future of business against a relentless effort to normalize and economize work in the front office.

    Both needed to happen and it was a bigger job than a single industry could perform.  But is it time for them to come together?  It is clearly one of the greatest “your chocolate got into my peanut butter” moments in technology.  And more important, outside of CRM Magazine’s CRM Evolution show in August, there are precious few CRM shows outside of vendor conferences and hence few places to sample ideas not previously vetted by a vendor.

    So in our track we will have sessions on business-to-business social marketing from Gerry Murray, Research Manager and Joe Ferrantino, Research Analyst both from IDC; a discussion of revenue from the marketing side by Phil Fernandez, CEO Marketo; plus a session on leveraging the social graph to attract and select new customers by Jerek Sygitowicz, CEO Smartupz; and a session on how virtual agents will revolutionize eCommerce from Pam Kostka, CMO of VirtuOz.

    It looks interesting to me, but I picked the agenda so what do you expect I’d say?  Seriously though, the sessions are a bit heavy on marketing and its increasing reach and influence but that’s to be expected.  In a socialized world, where everything quickly reduces to communication and analyzing its output, marketing becomes the go-to idea center almost by default.  That also means that selling is an extension of marketing and service becomes a way to capture customer input and a true marketing opportunity.

    There are nine tracks in all including one on unified communications, which I hope to attend in my spare time because I think it has a huge future.  For my money if you want to get an inkling of what to expect coming into the CRM suite or front office computing over the next few years you won’t do better than to take a look at Enterprise 2.0.

    And no one paid me to write this.

    Published: 12 years ago