America’s Cup

  • October 3, 2013
  • The ghost of Anthony Lye presided over Oracle OpenWorld’s third-day customer experience, or CX, keynote. For CRM and related things, it was the moment I’d been waiting for. Lye is in robust health as far as I know, but he has been gone from Oracle for about a year. He was the architect of Oracle’s CRM strategy that resulted in the acquisitions of RightNow Technologies, ATG, Endeca, and other brands that the company spent billions on and consolidated into its CX operations.

    Lye’s fingerprints were all over the keynote script, ably presented by David Vap, who made a kind of case for why social media embedded in CRM has become or is becoming standard equipment for any company aiming to access 21st century marketing and sales.

    Vap updated some concepts about customers deserting vendors when vendors can’t meet their needs — 26 percent now post negative comments about vendors, 86 percent stop doing business after one bad experience, and 69 percent of employees are not actively engaged with their jobs.

    While Vap’s effort was intended to present a brief for social’s inevitability, I felt it was more of an indictment of business as usual — of simply trying to apply social Band-Aids to what are fundamentally cultural problems in many corporations today. It was like looking through the wrong end of the telescope.

    The corporate culture is still too mired in a manufacturing age — the build-it, ship-it and collect-the-money model untouched by things like subscriptions and mobile technology — and Oracle’s approach to it all seemed to me to be a social overlay on fundamentally broken business processes. As a strategy it works because it offers sinners salvation without asking them to repent. Unfortunately, they keep sinning.

    What was missing, to my way of thinking, was the customer. There was little acknowledgement that amending the corporate culture and the business model starts with asking the customer — not once, but throughout the lifecycle — what do you want and how are we doing? It was alluded to in Vap’s talk, but presumably Oracle doesn’t have an app for that, only a methodology, so it didn’t get the attention it deserved.

    A big tell for me was Oracle’s reliance on what I think is one major analyst firm’s infinite loop customer lifecycle. The parts of the lifecycle include Need, Research, Select, Purchase, Receive, Use, Maintain and Recommend, which brings us back to Need. I much prefer the lifecycle promoted by GetSatisfaction and some other social vendors, which uses only six stages: Discovery, Evaluation, Purchase, Use/Experience, Bonding and Advocacy.

    The first lifecycle aims to provide vendor side solutions for every step — with the possible exception of Advocacy, which is inherently customer side. It is neatly contained by the vendor and its presumed use of customer experience notions.

    The reason I like the alternative better is that it admits that the vendor is not in control and actually puts the customer in the center of the model. It admits that the customer is in control from the beginning, leveraging the information resources of the Internet and social media to conduct a purchase process largely free of vendor influence.

    It’s the second half of the lifecycle, the back nine of the relationship, where social shows its stuff in this model. Rather than deliver a product and wish the new owner luck, the second approach continues to leverage social leading up to the most critical part of business today, bonding.

    Vendors may mourn the fact that they can’t control customers as they did back when they controlled information flow, but they’ve made too little progress on the back nine in understanding that bonding is not only the new black, but also the new everything.

    Without bonding you never get to recommendation, which is a tepid form of advocacy, and without either you spend more than you should attracting and maintaining customers at a time when the costs of those activities eats into margins in a nontrivial way.

    For all that, it seems that Oracle might be doing well enough with its customer experience strategy, at least in Europe. It was interesting that the major use stories came from Tesco, a large retailer and grocer — and everyone’s favorite Lego. The presenter from Lego showed that he really gets it and told several stories about customer engagement, about being in the moment with the customer, and ultimately about customer bonding. Oracle needs more of that.

    Had Lye stuck around, I wonder if he would have been able to turn the ship from a culture of layering technology on old business processes to one that embeds a customer culture into the technology. That’s not a fair question, because everyone moves on and what remains ought to be the culture that drives the organization forward.

    Oracle has some amazing tools and the ears of very powerful people in IT across the world, so I am not concerned about it getting its social messaging right eventually. They haven’t been at it very long, after all.

    There were many bright spots at Oracle OpenWorld — don’t let this rat hole I’ve fallen into give you the wrong impression. Nearly everyone I interact with said it was the best run thing in years, and much credit for my little part of that experience goes to Susie Penner for her tireless efforts to give us access to Oracle executives.

    There was also the little matter of the America’s Cup, which I wrote about last time with regard to analytics. I have had a ringside seat to some of the comings and goings behind the scenes over the last couple of years, and I have to say that while many people were miffed that Larry Ellison played hooky from a keynote to root, root, root for the home team, I think he made the right move. OpenWorld happens every year; America’s Cup on your boat and in your backyard — not so much.

    Published: 10 years ago

    Like any major trade show of long standing, OpenWorld has been in planning for a long time.  But this OpenWorld might be the most planned show of its kind ever because in addition to the extravaganza taking place in the Moscone Center, many of the hotels in the area and even in closed-off streets, an important sideshow and object lesson — America’s Cup — is happening in San Francisco Bay.

    You might wonder about the connection between the America’s Cup races and OpenWorld.  Everyone knows that Oracle is a sponsor of the American Boat and that CEO Larry Ellison has poured significant personal wealth into the cup over many years.  The reason the cup is being contested right now is due to the fact that Ellison’s boat won it last time and the defender has its choice of when and where for the defense.  So what does this have to do with CRM?  Keep reading.

    The races, which have been going on all summer if you include all of the qualifying heats have not all gone Oracle’s way for the most part.  If you’ve been following events, Oracle started the finals against the New Zealand entry, with a penalty of two races.  As always, the Kiwis have a well sailed and skippered ship and it only needs one more win to take the cup home.  Now comes CRM.

    At OpenWorld many of the breakout sessions start with a short video of CEO Ellison looking right into the camera and intoning, “They don’t call this the PC Age,” along with several other tropes and then, “They call it the Information Age.”

    Oracle is making the most of this conference to cement its place as a cloud computing leader, not only in applications but also in hardware and infrastructure software that makes the cloud run.  So they’ve introduced some big and very powerful machines and software to run them, that put the whole database in memory and run it from there without the latency you get every time you run to a disk to get more data.  Ellison’s keynote introduced the newest version of the database, 12c, which is the in-memory version, plus a new device prosaically called the M6-32 to run it even faster.

    All the details will take some time to leach out of this meeting, but in-memory is supposed to improve database performance by a factor of 100 times for some operations and even greater performance has been achieved over the last few years as Oracle’s Sun Microsystems division has repeatedly introduced machines that follow the same script.

    But now back to the races.  We all know this is not simply the information age but the age of Big Data and that information is only acquired by crunching it.  The Oracle boat is bristling with sensors, as have been most America’s Cup entries for decades.  But no team has ever been able to crunch data and model boat performance quite the way this year’s contenders have.  Team USA has been trailing the Kiwis for the whole series having started with that two race penalty, but then a funny thing happened.  Over the weekend the American boat started winning consistently.  Indeed they have to because another win ends the competition.  It was almost as if the boat had a motor bolted to its stern.

    A better explanation, though, is simply that after the first four races the team had enough data to model its boat’s performance and, through the power of analysis, they’ve been able to figure out how to sail the thing a bit better.  As I write this, New Zealand has a two race lead and just needs to win one more.  But the American boat is sailing different and better, and obviously faster thanks to whatever machinations they’ve been able to figure out, and it’s working.

    If the Americans pull a rabbit out of their hat, it will be a stunning demonstration of good sailing but also of the power of analytics paired with Big Data.  And even if they fall short, the impressive role reversal on display since late last week will still be enough to fuel endless discussions and possibly end the debate, once and for all, of the importance a disciplined approach to data and information — and modeling — will play henceforth in business and, yes, CRM.

    As I wrote earlier, this show has been in the works for a long time, in some respects, you could say since the beginning of the information age.  It is rare that you can put your finger on a moment in time when everything changed and the moments when the change is actually good are even more rare.  Yet here one is apparently playing out in San Francisco on land and even on the sea.

    Published: 10 years ago