Curve Jumping and Oracle
I spent the better part of last week either traveling to or participating in Oracle Analyst World, an annual meeting of analysts and influencers that the company briefs twice annually en mass (Oracle OpenWorld is the other opportunity). Throughout the year, Oracle, and most other vendors, provides spot briefings on announcements and the like. This meeting offered a fire hose full of information about the company’s complete infrastructure stack and a bit about business applications.
At a gut level, I didn’t quite understand Oracle’s insistence on its engineered systems strategy. Conceptually, it makes some sense and it will probably make more sense in the future. The idea of hardware and software engineered together to produce a 1+1=3 situation is alluring but going into the meeting it had two obvious issues.
First, I was skeptical that enough time has passed since Oracle bought Sun to make the claim credible. There’s a lot of complexity involved in hardware, operating systems, databases, middleware and applications also, IT is mediated by standards so that multiple vendors can compete in the same space. However, going in I agreed there is money to be saved on the TCO front by reducing the time and effort required to integrate systems on a customer site.
But second, and perhaps most important, the universe of companies that really need solutions built together (let’s call this the “way better” solution for reasons that will become apparent momentarily) is much smaller than the universe of companies that need commodity systems mediated by standards (call this the “good enough” market). This sets up a two peaked bell curve in which there’s a luxury peak (for lack of a better term) and a commodity market peak.
If I wanted to violate my two issues stance, I would offer a third, which is that despite the rhetoric about systems engineered to work together, the company spends a lot of time assuring the world that its products can and do run on many configurations of hardware and middleware from other vendors. This is only appropriate given that Oracle operates in a heterogeneous world.
But even with all this in mind, Oracle executives brought out several proof points that are hard to dispute.
Point one — far better performance from hardware.
Point two — far better performance in database and analytics.
Point three — software becoming embedded in silicon for far, far better performance.
That said, it’s still a standards based, heterogeneous world and many sophisticated customers are quite happy to roll their own when it comes to their data center needs. A case in point is Salesforce.com, possibly Oracle’s largest customer. Salesforce CEO, Marc Benioff, is happy to tell you that his configuration is made up of commodity servers running some open source software as well as the Oracle database. Salesforce’s secret sauce is its own middleware that makes its systems so highly available and multi-tenant.
But the new solutions that Oracle is rolling out, especially in hardware and the middle of the stack suggest that those days are ending — at least for huge enterprises that need to squeeze every drop of performance out of their systems and supply rigorous security and unfailing up time.
These customers are the ones that need way better performance and can afford to spend a million bucks or more on a compute or data server or an analytics box. That’s the luxury peak alluded to earlier. Commodity used to be a bad word but the quality and sophistication of the good enough peak is so compelling these days that it’s quite good for most needs and Salesforce is only one example.
On the other hand, you have to like and respect the Oracle’s scrappy pursuit of business especially in older traditional markets like database and hardware.
This is important because Oracle isn’t simply offering a few percentage points of improvement, they are truly setting a new paradigm by providing hundreds of percent performance increases and that moves the needle for markets and customers. I lost count of the times we were told in the briefings that a new device or version of software drives two to seven times better performance. When that happens, you aren’t improving within the paradigm, you are inventing a new paradigm and a new performance curve. This is curve jumping. And when that happens you are hitting the reset button on the entire market.
For Oracle, this means a new 24 second clock, a new set of downs, extra innings. Whatever the metaphor, the practical effect is the same and all this comes along at an opportune time. The Big Data and Cloud Computing revolutions have made it essential for vendors to offer new performance levels. But given all this, I think there is now an ethical concern that we all have to deal with, a concern that has never existed in any of the other paradigm shifts or curve jumps that we have yet seen in IT. That’s the subject of my next post.
The New Analytics Wave
I can’t tell you how many emerging analytics companies have contacted me since January. Every day it seems there is another company — smelling blood in the proverbial water — wanting to brief me.
I know why. Now that Big Data questions have transitioned from “how do we store all this stuff?” and “what’s valuable in this pile?” to “how can we slice and dice this raw material,” everybody wants a piece of the action.
I’ve been preparing you for this for the last couple of weeks. You may recall my recent post about the relentless doubling of Moore’s Law and a new book, Race Against the Machine that discusses how our world is changing now that we have significant computing power.
You may also recall my last post about how knowledge is doubling at a ridiculous rate — by 2014 it’ll be doubling every 11 hours, as forecast by IBM. It’s no surprise, then, that analytics companies are as numerous as chocolate bunnies at Easter.
Here’s the tricky part: A typical early market starts out with messaging about the technology. It lets you do this or that with the data. Later on the messaging includes real quantifiable benefits that you can literally take to the bank in the form of ROI.
Then the ultimate validation numbers start rolling in and they are usually in the form of double-digit percentage increases and they don’t depend on return on investment because they are so fundamental that they stand on their own.
From what I see, this isn’t going to happen for this analytics wave. I suspect that there might never be a roll out like that again.
Analytics have been around for a long time and there have actually been several false starts. There have been times when analytics looked like a sure solution to many company ailments.
Some analytics vendors did quite well in that era — keep in mind that SAS is a multibillion-dollar company and it is still privately held. Did I mention that it’s about 30 years old?
Analytics, however, failed to break through because there was always something sexier and easier to understand coming out at the same time.
Back then, analytics suffered from the reality that you needed a Ph.D. in statistics to really appreciate the stuff. Most companies have very limited supplies of doctoral candidates. They have many more sales people who need leads, so in the showdown between analytics and CRM, analytics always won.
Then you should consider ROI and what SaaS computing has done to it. SaaS turns big investments into small numbers, so the division calculating savings per dollar invested no longer gets the attention it deserves. That means ROI as a driver just isn’t what it used to be.
For analytics to be successful this time — and we really need it to be successful — several things have to fall into place.
It has to be dead solid easy for mere mortals to use analytics. That means each of us needs to up our game. The jobs of tomorrow will be based on the ability to make sense of metrics and probability. That’s not a hard lift.
We also have to get the messaging down, all the way to the fundamental numbers that define it as worth having — period. We need to do that post haste.
Most vendors I’ve seen don’t have that picture in mind yet. They talk about their products like they are ends in themselves, instead of being means to the ends of profit and cost abatement. The best way to get the messaging right is to quit talking about ROI and begin talking about metrics — specifically the metrics that are germane to my business processes.
By implication that also means getting comfortable enough with the idea of metrics — that each of us can easily come up with our own now and then because we are the ones closest to the reality that needs to be described.
Again, that means we both need to be able to punch up an analysis, but we have to be fearless enough to take command and roll our own. Analytics won’t be mainstream until you can do this.
I think some emerging vendors are going to do that and then we’ll have a horse race.
This reminds me of the early days of SaaS computing and CRM. Back then there were multiple companies bringing SaaS SFA to market. Most thought about SaaS as simply another delivery method. One company, however, saw SaaS as a revolutionary approach to software and knew in its bones that it would disrupt the whole industry.
Today there’s only one company from that era still standing and you know who it is.
Analytics is at a similar tipping point because it’s no longer the thing that the data scientists use to discover interesting things about the business. Analytics is a seminal technology that harnesses Big Iron to digest Big Data to give us the insights we need to compete.
As Brynjolfsson and McAfee write in Race Against the Machine, it’s one of the things that enable us to play on the second half of the chessboard. It’s what we have to do — because that’s inevitably where we are going.
Salesforce Social.com, So Not Like Mad Men
It’s only Tuesday but announcements are flying around San Francisco like electrons around a Uranium nucleus. I am here for a few days as a guest of Oracle to receive a comprehensive briefing on the company’s products and directions (more on that soon) and if that was the only thing going on it would be substantial. But today, Salesforce is making announcements that extend its marketing cloud with the addition of Social.com.
Social.com further extends the company’s growing franchise in things named dot.com like Desk.com, Work.com, Data.com and, of course, Salesforce.com. And while you’d expect the company that has led the social business revolution to eventually come out with something like this, you will be surprised to learn that Social.com is a social advertising platform that leverages the strengths of Radian6 for social listening and Buddy Media for social campaigns all integrated with the company’s flagship CRM to produce an advertising paradigm that stands Mad Men on its head.
Where the ancient and honorable advertising paradigm has been unsolicited, one to many and relatively untargeted, the Salesforce Social.com approach is pretty much its opposite — engaging, transparent and targeted. Just what the doctor ordered in an era when broadcast media in all its forms is in an economic death spiral (keep the media, FF the ads) and too many companies are still dipping a toe in the social waters rather than splashing around and learning to swim.
This changes that. Salesforce has an impressive array of customers already piloting the products, which are scheduled for GA in the Summer 2013 Release including Ford, General Electric, HP, Caterpillar, Burberry and Unilever.
As I look at this, it strikes me that social advertising is nice but what still needs to be fleshed out is fulfillment. It’s one thing to stoke demand with better targeting but it’s another to close the deal — otherwise, why bother? This announcement alludes to the importance of integrating CRM to the process and I suspect this is not the end of the story. There has to be a fulfillment piece that extends through CRM and ultimately connects with ERP and logistics — perhaps an alternative channel to ecommerce? So this is an important announcement but it sets up additional announcements that could be even bigger.
Over and out.
Data Center Revamp in Full Swing
I saw an ad for a webcast the other day and it said in part:
“The scope, scale and complexity of enterprise data centers is rapidly rising due to increased use of virtualization, cloud, big data and mobility. Applications and workloads are becoming more dynamic and volatile and IT staff are being asked to become more efficient and responsive. Automation across physical, virtual and cloud data centers is vital for effective operations and consistent service levels.”
Did you catch the change? Today it’s virtualization, cloud, big data and mobility the new four horsemen of business advance. In case you’re wondering they replace social, SaaS, mobile and cloud. Small difference? Yeah, but big change. If you were hip over the last five or so years you did the social, SaaS, etc. thing but if you missed the onramp, virtualization and big data give you a chance to save face. You weren’t being overly conservative. No, no, NO! You were being prudent, waiting for the technologies to mature into a coherent whole.
Really? After all this time and all the disruptive innovation cycles, you were waiting? Coherent?
In case you were wondering, virtualization and cloud made SaaS acceptable to those who worried obsessively that their data, the same data they couldn’t find an elephant hiding in would suddenly reveal golden nuggets to hackers. Big Data gives us all a way to accept social without ever for one minute admitting that our employees were not simply “playing” with social media at work — you can and should thank analytics for that. And mobility is mobility because your customers and employees are walking — some away from you and some towards you and you need to know and use it.
I was in The Valley the other day talking with a guy who is sometimes a client but always a friend. He’s a young guy who has already worked at Salesforce back in the day, did another startup with a Salesforce alumnus and is on his third company, this time running the whole marketing shebang. His take? Companies are looking to form data centers of excellence around analytics.
My take? It’s IT’s way of preserving itself. Remember Gartner’s forecast that the CMO would soon be spending more on technology than the CIO? This is IT’s response and I think it’s a good one because it potentially shows both groups reaching out to create greater value for the enterprise.
As commodity servers take hold of the world, it becomes less and less rational for a company to run its own IT so virtualization and cloud here we come. But what’s left behind is very interesting. IT might be buying the commodity farm but the secret sauce is still information and how you use it. So the IT data center of excellence is both a way to keep IT employed and more or less in house and an important way for IT to save some serious coin on commodity processing.
Larry Dignon of ZDNet put his finger on it about a week ago when he examined the possibility that IBM might sell off its x86 server business to new pal Lenovo. Servers are not going away but they are going to the farm and with that change comes greater focus on management systems overlaying everything because server farms are becoming quite huge. This opens up opportunities for companies like Oracle/Sun. Despite the catcalls from critics calling advanced servers the new mainframes, they have an important purpose and a growing niche, not to mention a new and as yet unstated goal of nine nines of reliability to achieve the promise of true utility computing.
So, yes, the scope, scale and complexity of data centers, wherever they’re located and whatever they’re called, is rapidly increasing and as the economy continues its rebound I will remain interested in finding
AppExchange eBook
We’ve compiled a group of posts on notable success stories from the AppExchange into an eBook that you can download here. Alternatively, if you don’t want to fill in the form, you can simply search on each company’s name to read the original posts. The companies are listed in the last paragraph below.
Nine Years ago I wrote The New Garage. It was a thought piece that tried to peer into the future of Software as a Service (SaaS) and make some predictions from a business and economics perspective. Salesforce had recently started promoting its platform in the making (then called S-Force) and encouraging third parties to develop applications that complemented and extended the basic Salesforce CRM solution so there was reason to speculate about the impact this new approach would have.
But also, the history of business and industry is a long story of better, faster and cheaper and at that moment all three were all in the driver’s seat. Back office software had already demonstrated many business process improvements leveraging automation and the Internet, and I thought it was time to turn some of these techniques on software. SaaS was a good start but it had further to go, I thought.
Early impacts lead to tipping point
I saw S-Force as a tool and an economic system that could revolutionize software, making it possible to create and deploy it in a just in time fashion. At that time you almost had to be nuts to think that. After all, even after the initial success of SaaS, software was still something you installed and slaved over for a long time before you got it right, not something you could just plug in like an appliance. And integration? Don’t ask! What was I thinking?
“We’re at a tipping point,” that’s what I was thinking.
The cold, hard truth of the matter was that you couldn’t expect to sell software subscriptions for a few bucks a month and encumber yourself with all the overhead of a traditional software company because you’d go broke. Something had to give. Either software would forever be something you sculpted from a block of marble or you had to figure out how to stamp out perfect copies that plugged in and just ran — no excuses.
My bet was that we could do the stamping but it wasn’t based on any hard economic data. It was based only the conviction that commoditization would have to continue and that something like what’s now the AppExchange would be the result. In truth, there were predecessors to the AppExchange. Steve Jobs opened an online store at NeXT in 1997 and six years later in 2003 Apple set iTunes in motion and today you can buy tens of thousands of apps at the AppStore for all your Apple devices.
All in a name
It’s hardly remembered today but the AppStore (name and domain) were originally Salesforce properties and that CEO, Marc Benioff, gave them to Apple. According to a 2008 Benioff interview with Bloomberg, Jobs had met with Benioff and his team in 2003 to offer advice on the Salesforce online store and the gift was a gesture of gratitude by Benioff to Jobs.
A store for enterprises
But those were consumer sites; there had never been an online application store for enterprise grade software until salesforce.com launched the AppExchange in January 2006. This year marks the seventh anniversary for AppExchange an odd anniversary to celebrate perhaps, but a good chance to look at the AppExchange to see how well it is living up to the original vision. Here are some of my observations.
- The partners have built a long list of useful solutions including HR systems, field service, accoun
