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  • November 11, 2010

    • 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


    A lot went down at Oracle Open World and you are probably as tired of reading about it as I am of writing about it.  Some very good reporting and analysis has come out of it all and you can easily find it on line if you wish.  I was impressed with several things that Oracle did including making strides in sales and marketing software and in introducing two new lines of compute servers.

    First off, the company said it was beefing up its marketing software because too many customers were looking elsewhere for marketing solutions.  This is generally in line with its acquisition of Market2Lead in May.  Until now, marketing has remained a place where independent software developers could plant a flag and pretty much be left alone by the big guys.  They were too busy making sales and service suites.

    Then too, marketing has always been a suite in itself.  You don’t build marketing the way you build sales for instance.  There are many more moving parts in marketing for campaigns, for lead generation, for market intelligence and for social media inputs.  No doubt about it, marketing is a big deal and when a major vendor like Oracle says it’s putting its focus on it, it is remarkable.  Marketing also represents relative white space for Oracle, which makes it doubly interesting.

    It’s early days as far as I am concerned with Oracle’s marketing solution.  It’s even a challenge defining what is included.  For instance, Oracle’s very fine loyalty application — marketing or service or sales?  Ditto territory planning and white space analysis — sales or marketing?

    I know what you might be thinking: some of these are clearly not marketing.  But hold on, they aren’t marketing today, maybe, but what happens with the economy in the next couple of years will seriously change the CRM suite.  Consider one thing: suppose demand remains sluggish in the sense that we’re not in recession but neither are we in a robust recovery.

    Under these conditions many companies double down on their existing customers which changes the sales dynamic and necessarily the underpinnings for what software solutions need to do.  My reading of Oracle Open World is that the company is hedging its bets and building products that can prosper in the slow growth scenario.

    But the most interesting part of the show for me was observing the transition of Oracle from cloud skeptic to cloud believer.  As with any religious conversion, the newly believing are, shall we say, an acquired taste.  A year ago, CEO Larry Ellison questioned the need for the designation but this year he had cloud religion.  Of course religious beliefs span a spectrum and the Oracle version of cloud computing can best be described as Amazon EC2 Reformed.

    Simply put, Oracle’s approach is infrastructure as a service (IaaS).  Nothing wrong with that but it brings to mind something Ellison said a year ago, paraphrasing now, cloud computing isn’t new, it’s what we’ve always done.  Certainly IaaS is what we’ve been doing or what’s been done before.  It consists of selling compute time and storage made available on the Internet with a side order of your favorite licensed software.  Nothing wrong with that either except for Oracle’s other big announcement of Exalogic, a beast of a fault tolerant computer that Ellison referred to as a cloud in a box.  Rule One of selling is to sell what you’ve got and Ellison certainly did that is his conception of “Hardware. Software. Complete.”

    Marc Benioff, CEO of Salesforce.com and advocate of cloud computing as a transformative innovation that he calls Cloud 2, sold what he has too.  Benioff gave a keynote extolling the virtues of all things Cloud 2 including multi-tenancy and Chatter, a new category of collaborative tool that leverages crowd wisdom to enhance company performance.

    In the process, Ellison and Benioff each used their keynotes to one-up the other while advocating for their favorite definitions of cloud computing.  I have to say it was entertaining and a bit silly.  The publicity heat given off by the back and forth gave each company free coverage but did little to settle the argument.

    It is an argument that will rage for a long time because the market actually needs both forms of cloud computing.  For big companies with deep investments in software licenses, the Oracle cloud is a good way to lower the overhead incurred with running a data center.  Lower those costs and you’ve made computing more affordable and the details about how you achieved the results is almost immaterial — until you need something new.

    The Salesforce idea of cloud computing better fits the needs of any company looking to build net new solutions or to take advantage of new applications from other vendors and new application types.  A company is less likely to convert its Oracle general ledger to Salesforce but many are very open minded about moving to the Salesforce cloud for net new and new category applications like Chatter.  I didn’t hear any talk about the Oracle development platform because that’s Fusion and it won’t be generally available until next year.  When it becomes available things could change.

    I have seen Unix computers running converted mainframe applications complete with green screens and I see no reason why the Oracle cloud won’t look like that — i.e. a place for legacy applications — in the future.  It’s a huge market and for a long time I expect to see both forms of cloud computing to co-exist and flourish.  But eventually, the Oracle form of cloud computing will need to bend to the inevitable and begin to resemble Salesforce in the multi-tenant aspect.

    So my big take-away from Open World?  As always it’s an industry in transition and the number and kind of solutions are huge.  Oracle is doing some neat things at the application level and protecting its flank where needed.  All told, it was illuminating and fun.

    Published: 14 years ago


    Writing about the seminal event for CRM at Oracle Open World — the public cloud computing debate between Larry Ellison and Marc Benioff respective CEO’s of Oracle and Salesforce.com — is tougher than coming up with rent and alimony.  There are so many threads to pull together and I have so much history following the debate that I might need multiple posts to get it right.  As I see it there are technical, economic, social and personal threads to this.

    Technical

    Oracle Open World 2010 may be seen in retrospect as the schism-point for cloud computing.  Until now, the two main camps did a passable job of playing nice with Oracle often discussing support for so-called hybrid implementations for instance.  But that façade was wearing thin and finally cracked this week.

    On one hand Oracle introduced some important hardware that will propel its version of the cloud model for a long time to come.  On the other, Salesforce.com CEO Marc Benioff reiterated the advantages of multi-tenant cloud computing and made a strong case that cloud computing represents a new paradigm of interactive, social and highly mobile computing that supports new business models.  The debate will rage for years, but should it?

    It has been clear for a long time that conventional computing involving private data centers running licensed software will not suddenly give up the ghost.  Too much time, money and expertise is invested in the status quo for it to go away quietly.  Oracle’s Exalogic compute server introduction is aimed at extending this paradigm by reducing the cost of conventional computing.

    Oracle’s approach is to make computing resources ubiquitously available to customers for deployment at a moment’s notice.  This introduction will be seen by conventional data centers as an important advancement.  Though not the first to offer access to virtualized compute services, Oracle maintains that it has competitive advantages from owning the database, middleware and in some cases the operating systems.  It claims superiority because all systems are engineered to work together.  But implicit is this argument is the idea that the applications to be deployed already exist, an oversight that shouldn’t be ignored.

    Benioff’s vision of the cloud starts where Ellison’s leaves off.  Benioff believes the future of computing is social and mobile and his forward looking approach seeks to claim net new application customers in the same companies Oracle sells to, which brings us to economics.

    Economics

    Paradigms shift.  Sometimes they move quickly and other times they move at a glacial rate.  They also overlap with old and new coexisting during the transition and often the highest evolution of the old paradigm also turns out to be its swan song.  Forget about the IT industry for a moment and think about the revolution passenger aircraft that replaced piston engines with jets.  The jet engine was the disruptive innovation of its day but it won a paradigm debate because it offered characteristics that included lower maintenance costs, speed and performance.  But piston driven aircraft didn’t disappear overnight.

    The shift from piston driven passenger aircraft to jets took about twenty years and retired piston planes flew cargo for a long time after that.  Perhaps the highest evolution of this kind of plane was the Lockheed Constellation, a beautiful plane with numerous amenities but with piston engines, a dinosaur when it went into service.

    Back to IT.  In some ways it’s interesting that we’re placing so much attention on cloud computing because the mainframe era is still with us.  There are still over six thousand mainframes running mission critical applications in enterprise computing.  My point is that while salesforce.com might have the keys to the future, there is still a lot of opportunity left in the older business model of licensed software.  I don’t know too many people who want to start a software company based on this model nor do I know anyone interested in building a three-hundred seat piston engine driven passenger aircraft.  But I should probably get out more.

    I don’t believe the Exadata and Exalogic represent evolutionary dead ends like the Lockheed Constellation.  The industry needs the huge capacities these machines represent.  Their initial use in serving private clouds with virtualized systems is a good fit but as that paradigm sunsets I believe this technology or its successor will find a home in the larger conception of clouds.

    Oracle has a large captive market to sell these new machines to.  Selling paradigm extending clouds in a box makes perfect sense for Oracle just as selling a multi-tenant cloud makes perfect sense for Salesforce.  Larry and Marc are each playing the hands they were dealt and these guys play well.  So look for more sniping from both camps.  It will be entertaining, which is why I was recently quoted comparing this situation to a low calorie beer commercial.

    Speaking of beer, let’s get social.

    Social

    The paradigm shift that Marc Benioff and others ushered in ten years ago was about technology but if you look carefully, you can see that the paradigm is shifting again.  This time it is about computing at the user level rather than at the producer level.  That’s a good reason for why Benioff is promoting Cloud 2 and trying to distance himself from Ellison’s cloud even as the two debate who really has the secret sauce.

    We all know about the impact that social media and its use are causing in our culture.  Ironically, if you listen to the Enterprise 2.0 crowd, all this socialization was supposed to have been adopted by business ten years ago.  But top down, command and control management initially rejected the idea of decentralization instead opting for better technological controls thus extending that hierarchical paradigm.  That’s a key reason sales force automation developed as it did, i.e. as a reporting tool.

    Social media initially found a home in personal use and it is now transitioning to the enterprise as an overdue paradigm shift.  So the debate between Oracle and Salesforce can be seen in this light as a sideshow to the shift in corporate culture.  Of course, the shift has to be supported by software and so we have the debate.

    Along with social models comes the need for mobility.  This might not seem intuitive but think about it, without mobility technology to serve social software, we can only be social some of the time.  And since we can’t ever hope to synchronize our activities social becomes an all or nothing proposition dependent on mobility at least some of the time.

    The difference between the two computing paradigms comes into sharp focus over the idea of social integration.  Benioff’s cloud is fundamentally a social cloud leveraging the wisdom of crowds, which makes this cloud ascendant.  Benioff is putting a great deal of effort into socializing the enterprise.  Chatter is perhaps the best known social application in the Salesforce quiver but before Chatter there were the Sales Cloud and Service Cloud each of which leverages the wisdom of crowds to discover hidden information that enables enterprises to achieve goals faster and for less expense.

    Chatter does for the enterprise what the Cloud offerings do for departments.  Using crowd wisdom techniques, Chatter surfaces information and knowledge that is usually hidden from view in an enterprise.  By making what was previously unknown at least knowable, Chatter unlocks a new source of productivity for the enterprise.  So far Oracle’s cloud paradigm has no answer for it.

    Finally there is a personal thread running through all this.  We all know that Marc worked for Larry and that Marc credits Larry as one of his mentors.  Larry was also a very early investor in Salesforce and a member of the board.  The two appear to enjoy the rivalry and I suspect each realizes that having a foil on the other side of an argument is better than being alone in the market, even if you are the leader.  It generates press and free publicity as Benioff readily acknowledged in his keynote on Wednesday.

    None of this should be taken to mean the situation won’t change.  It may be true that past is prologue but one’s history is not one’s fate.  As a very big company Oracle has become good at being what Oracle CRM leader Anthony Lye calls a fast follower.  Conversely, Salesforce is still relatively small and continues its nimble ways.  A future iteration of the debate spawned by Open World could easily expand into social strategies within the enterprise or between it and the customer.  It could also grow to include a debate over whose platform and development strategy is best.  The possibilities are vast and the options will fuel the conversation for a long time.

    Published: 14 years ago