Comments on: The Emergence of the Brand Platform http://jeffnolan.com/wp/2006/07/13/the-emergence-of-the-brand-platform/ Jeff Nolan's take on investment, innovation, entrepreneurship and the technology industry Mon, 06 Feb 2012 06:44:37 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Venture Chronicles http://jeffnolan.com/wp/2006/07/13/the-emergence-of-the-brand-platform/comment-page-1/#comment-12026 Venture Chronicles Fri, 21 Jul 2006 14:13:10 +0000 http://jeffnolan.com/wp/2006/07/13/the-emergence-of-the-brand-platform/#comment-12026 [...] In response to my post last week about the emergence of the brand platform, Jeff Weinberger argues that I have the right analysis but the wrong conclusion. Okay, I subscribe to Bob Sutton’s “strong opinions, weakly held” (via Ross) so I’m not above asking myself whether or not I should reconsider, however, in reading Jeff’s post I am not unsure that we are actually arguing the same point… that NetWeaver, Fusions, .Net, and Websphere are plumbing and that just doesn’t matter to enterprise buyers as much as we think it does. [...] [...] In response to my post last week about the emergence of the brand platform, Jeff Weinberger argues that I have the right analysis but the wrong conclusion. Okay, I subscribe to Bob Sutton’s “strong opinions, weakly held” (via Ross) so I’m not above asking myself whether or not I should reconsider, however, in reading Jeff’s post I am not unsure that we are actually arguing the same point… that NetWeaver, Fusions, .Net, and Websphere are plumbing and that just doesn’t matter to enterprise buyers as much as we think it does. [...]

]]> By: Den’s Enterprisey Foghorn / Brand platforms http://jeffnolan.com/wp/2006/07/13/the-emergence-of-the-brand-platform/comment-page-1/#comment-12022 Den’s Enterprisey Foghorn / Brand platforms Fri, 21 Jul 2006 14:00:47 +0000 http://jeffnolan.com/wp/2006/07/13/the-emergence-of-the-brand-platform/#comment-12022 [...] Jeff Nolan at SAP has a spirited defence of a thought stream where he argues for the omnipotence of what he terms the Brand Platform. This followed a detailed argument where Jeff says in reference to a basket of companies including Oracle, Sage and Infor: In each of the above examples, the technology component of the platform equation is not significant, what is meaningful is that significant brands are attaching themselves to a best-of-breed strategy in the realization that their customers are satisfied with a mixed bag approach to applications as long as their is a consistent, stable, and unified support infrastructure underlying them. [...] [...] Jeff Nolan at SAP has a spirited defence of a thought stream where he argues for the omnipotence of what he terms the Brand Platform. This followed a detailed argument where Jeff says in reference to a basket of companies including Oracle, Sage and Infor: In each of the above examples, the technology component of the platform equation is not significant, what is meaningful is that significant brands are attaching themselves to a best-of-breed strategy in the realization that their customers are satisfied with a mixed bag approach to applications as long as their is a consistent, stable, and unified support infrastructure underlying them. [...]

]]> By: Jack Jones http://jeffnolan.com/wp/2006/07/13/the-emergence-of-the-brand-platform/comment-page-1/#comment-11301 Jack Jones Wed, 19 Jul 2006 18:22:16 +0000 http://jeffnolan.com/wp/2006/07/13/the-emergence-of-the-brand-platform/#comment-11301 I think this is a question of timing -- any aggregator with sufficient market presence can create efficiencies and value through a branding or integrated GTM in the short-term. Over the long haul, no ammount of clever marketing can overcome technological hurdles unless one assumes that "as of today" XML and Web Services are the de facto platform and hence ensure complete interoperability (BTW, if you believe that I have a slightly used bridge to sell you). When Microsoft rolled-out Word, Excel, and PowerPoint they built these applications, had the brand, but the killer app in my opinion was OLE DB which gave Microsoft somethign no other pure-play had. So, in my opinion, branding platform emerge around strong/leading/monopolies but over time technology must catch-up or else you end-up with CA. I think this is a question of timing — any aggregator with sufficient market presence can create efficiencies and value through a branding or integrated GTM in the short-term. Over the long haul, no ammount of clever marketing can overcome technological hurdles unless one assumes that “as of today” XML and Web Services are the de facto platform and hence ensure complete interoperability (BTW, if you believe that I have a slightly used bridge to sell you). When Microsoft rolled-out Word, Excel, and PowerPoint they built these applications, had the brand, but the killer app in my opinion was OLE DB which gave Microsoft somethign no other pure-play had.

So, in my opinion, branding platform emerge around strong/leading/monopolies but over time technology must catch-up or else you end-up with CA.

]]> By: AccMan Pro / How Sage gets killed http://jeffnolan.com/wp/2006/07/13/the-emergence-of-the-brand-platform/comment-page-1/#comment-10483 AccMan Pro / How Sage gets killed Mon, 17 Jul 2006 04:13:47 +0000 http://jeffnolan.com/wp/2006/07/13/the-emergence-of-the-brand-platform/#comment-10483 [...] Sage doesn’t have a Hasso Plattner. Instead, it has adopted the ‘brand means all’ strategy. That’s a management theory play which is ultimately flawed because all management theories evolve or fail. I recall Sage co-founder Graham Wylie telling me with some pride that 75% of its first year revenue was thrown at marketing. Sage still plays that game though the numbers have changed. And let’s give them credit because the boys’ done well. Fast forward to today. [...] [...] Sage doesn’t have a Hasso Plattner. Instead, it has adopted the ‘brand means all’ strategy. That’s a management theory play which is ultimately flawed because all management theories evolve or fail. I recall Sage co-founder Graham Wylie telling me with some pride that 75% of its first year revenue was thrown at marketing. Sage still plays that game though the numbers have changed. And let’s give them credit because the boys’ done well. Fast forward to today. [...]

]]> By: Solomon Folks http://jeffnolan.com/wp/2006/07/13/the-emergence-of-the-brand-platform/comment-page-1/#comment-10106 Solomon Folks Sun, 16 Jul 2006 02:03:16 +0000 http://jeffnolan.com/wp/2006/07/13/the-emergence-of-the-brand-platform/#comment-10106 Don't forget about Platinum Equity and what they are doing(Tom Gores who runs Platinum is the brother of Alec Gores of Gores Technology Group). They are essentially doing the same thing on the IT Services side by aquiring both CompuCom and GE ITS and integrated them to form one unit. Don’t forget about Platinum Equity and what they are doing(Tom Gores who runs Platinum is the brother of Alec Gores of Gores Technology Group). They are essentially doing the same thing on the IT Services side by aquiring both CompuCom and GE ITS and integrated them to form one unit.

]]> By: Nuggets » Brand Platform or just platform reality http://jeffnolan.com/wp/2006/07/13/the-emergence-of-the-brand-platform/comment-page-1/#comment-9770 Nuggets » Brand Platform or just platform reality Sat, 15 Jul 2006 03:32:54 +0000 http://jeffnolan.com/wp/2006/07/13/the-emergence-of-the-brand-platform/#comment-9770 [...] Venture Chronicles [...] [...] Venture Chronicles [...]

]]> By: Naveen http://jeffnolan.com/wp/2006/07/13/the-emergence-of-the-brand-platform/comment-page-1/#comment-9720 Naveen Fri, 14 Jul 2006 20:43:18 +0000 http://jeffnolan.com/wp/2006/07/13/the-emergence-of-the-brand-platform/#comment-9720 Creating a global codebase is a risky proposition. At least with wrappers we know the individual modules (best of breed) work. Increased machine power should mitigate the performance hit still as Jeff pointed out, debugging on integration points remain. Software modules take time to mature, all the years time spent on bug fixes that go into performance and functionality improvements don't magically migrate because some powerpoint says global codebase. No amount of user tests captures all scenarios. The entire cycle of learning has to be repeated across this new codebase, debugging which is messier given the interactions across the components. This will lead to increase in R&D (to write new code, handle integration and communication). Compared to the global codebase approach the brand platform is a stabler proposition. Get some economies of scale in Sales and marketing. Probably Nothing saved on the R&D. But at least you know individual modules work. Customers don't really care about how the integration happens whether using some netweaver, fusion magic or some perl/SQL scripts. The IT guys will cry a river, but the business owners really wont understand why moving to a newer technical platform with increased risk - migrating old data, immature technologies, newer machines etc - and similar functionality is worthwhile. One reason why the technical platform story is so compelling is marketers want to recreate the microsoft windows/office magic. However one critical reason which enabled windows and office to become a standard was the exponential increase of PC sales in the late 80's through mid-90s. By controlling the default/pre-installed OS and office applications on new PCs microsoft was able to grab huge chunks of market share (purely new PC sales). No legacy to handle! Also, people were doing things that were never done before on a personal computer - word processing, email, graphics, databases etc. Contrast this with its trouble trying to get people to migrate to newer version of Windows where most functionality already exists and the biggest competition is previous version of windows. The problems facing most enterprise vendors are - there are no killer applications on the order of Adobe Graphics or Excel, it is the same Order Entry, Inventory Control, Plant Maintainance, Distribution, Warehouse Handling etc stuff. Also a ton of old information exists in enterprises. So why would enterprise customers be jazzed about moving to a new platform with the same applications but with more risk and dollars. Nick Carr might be right after all, this type of IT doesn't matter. Buying such software is a matter of risk management and having a brand platform offers lesser risk. Creating a global codebase is a risky proposition. At least with wrappers we know the individual modules (best of breed) work. Increased machine power should mitigate the performance hit still as Jeff pointed out, debugging on integration points remain. Software modules take time to mature, all the years time spent on bug fixes that go into performance and functionality improvements don’t magically migrate because some powerpoint says global codebase. No amount of user tests captures all scenarios. The entire cycle of learning has to be repeated across this new codebase, debugging which is messier given the interactions across the components. This will lead to increase in R&D (to write new code, handle integration and communication).

Compared to the global codebase approach the brand platform is a stabler proposition. Get some economies of scale in Sales and marketing. Probably Nothing saved on the R&D. But at least you know individual modules work. Customers don’t really care about how the integration happens whether using some netweaver, fusion magic or some perl/SQL scripts. The IT guys will cry a river, but the business owners really wont understand why moving to a newer technical platform with increased risk – migrating old data, immature technologies, newer machines etc – and similar functionality is worthwhile.

One reason why the technical platform story is so compelling is marketers want to recreate the microsoft windows/office magic. However one critical reason which enabled windows and office to become a standard was the exponential increase of PC sales in the late 80′s through mid-90s. By controlling the default/pre-installed OS and office applications on new PCs microsoft was able to grab huge chunks of market share (purely new PC sales). No legacy to handle! Also, people were doing things that were never done before on a personal computer – word processing, email, graphics, databases etc. Contrast this with its trouble trying to get people to migrate to newer version of Windows where most functionality already exists and the biggest competition is previous version of windows. The problems facing most enterprise vendors are – there are no killer applications on the order of Adobe Graphics or Excel, it is the same Order Entry, Inventory Control, Plant Maintainance, Distribution, Warehouse Handling etc stuff. Also a ton of old information exists in enterprises. So why would enterprise customers be jazzed about moving to a new platform with the same applications but with more risk and dollars. Nick Carr might be right after all, this type of IT doesn’t matter. Buying such software is a matter of risk management and having a brand platform offers lesser risk.

]]> By: Anshu Sharma http://jeffnolan.com/wp/2006/07/13/the-emergence-of-the-brand-platform/comment-page-1/#comment-9683 Anshu Sharma Fri, 14 Jul 2006 18:44:16 +0000 http://jeffnolan.com/wp/2006/07/13/the-emergence-of-the-brand-platform/#comment-9683 This information on Oracle Fusion strategy is available publicly. So from publicly available sources, I can tell you- 1. Oracle will provide lifetime support for many of the acquired products and continue to enhance these product lines 2. Oracle will build out new Fusion Applications So customers can choose to stay on existing products and receive support and enhancements. At some time in the future, if they choose to, they can move over to Oracle Fusion Applications. Frankly, this is not much different from how R/3 and MySAP were rolled out by SAP. (Disclaimer: The opinions expressed here are personal.) This information on Oracle Fusion strategy is available publicly. So from publicly available sources, I can tell you-
1. Oracle will provide lifetime support for many of the acquired products and continue to enhance these product lines
2. Oracle will build out new Fusion Applications

So customers can choose to stay on existing products and receive support and enhancements. At some time in the future, if they choose to, they can move over to Oracle Fusion Applications. Frankly, this is not much different from how R/3 and MySAP were rolled out by SAP.

(Disclaimer: The opinions expressed here are personal.)

]]> By: Andrew http://jeffnolan.com/wp/2006/07/13/the-emergence-of-the-brand-platform/comment-page-1/#comment-9490 Andrew Fri, 14 Jul 2006 06:39:52 +0000 http://jeffnolan.com/wp/2006/07/13/the-emergence-of-the-brand-platform/#comment-9490 Hey Anshu, Can you explain the Fusion riddle for us? Is Oracle really, as Jeff suggests, proposing to maintain its codebases "as disparate and distinct products", or is it still proposing to build a new, single unified codebase, to which all existing users will migrate? Cheers, Andrew Hey Anshu,
Can you explain the Fusion riddle for us? Is Oracle really, as Jeff suggests, proposing to maintain its codebases “as disparate and distinct products”, or is it still proposing to build a new, single unified codebase, to which all existing users will migrate?
Cheers,
Andrew

]]> By: Andrew http://jeffnolan.com/wp/2006/07/13/the-emergence-of-the-brand-platform/comment-page-1/#comment-9488 Andrew Fri, 14 Jul 2006 06:35:24 +0000 http://jeffnolan.com/wp/2006/07/13/the-emergence-of-the-brand-platform/#comment-9488 I'm not sure I completely follow your arguments, Jeff, but if you are saying what I think you are saying, then I am somewhat surprised. Certainly, it is acceptable (and logical) to treat the very distinct functions of software R&D and selling as being separate. So, an acquiring software company can seek efficiencies in selling, whereas these will be harder (if not impossible) to find on the R&D side. But, where are the branding and other marketing efficiencies through an acquisition (i.e. beyond mere selling)? Sage is the best example of the limited scope for efficiencies to be gained through an acquisition strategy. The “Sage” brand is powerful and well-maintained in the UK, but that’s because it started there with this name. Elsewhere? I don’t think so: users and prospects look more to the brands they originally bought, and which are still supported today (Peachtree, Accpac etc). In fact, Sage has only had the rights to the “Sage” name in the US for the past year or so. Same with its channels (the company’s greatest asset): yes, they can cross-refer, but can they cross-sell very different products? A company doesn’t need to acquire another to achieve cross-referring benefits, mere partnerships will achieve this. Did Microsoft achieve marketing and sales efficiencies through buying the 5 or so codebases/brands/channel networks amongst Great Plains, Navision, Solomon and Damgaard? Or did they create a mess: unhappy, frustrated channel partners and confused marketing? I would argue the latter, and I think MS has conceded as much. Have any of these companies achieved efficiencies in the support function? How many staff can support multiple codebases? Of course, the R&D side will always offer close to zero scope for efficiencies through acquisition. I think you say the same. Hence, I am surprised at your interpretation of what Oracle was and is doing with Fusion as Larry Ellison has always felt that a single integrated codebase was the only way to succeed in the long-term (see some of his great lines in <a href="http://www.amazon.com/gp/product/074322504X/102-2842825-3557746?v=glance&n=283155" rel="nofollow">Softwar</a>, by Matthew Symonds, p.125: “I don’t think [Oracle colleague] ever understood the unbelievable difficulty of building this magical integration technology…it was like, wouldn’t it be nice to have flying cars? All we need to do is interface the wings to this Oldsmobile and it will be phenomenal. We just need really good glue. Brilliant”.). Sage doesn’t even try to achieve codebase efficiencies. Hell, I’m not sure they even try to achieve marketing/branding efficiencies! Its really best seen as an old-style conglomerate, where each division is set specific financial goals, and where head office focuses on what to buy next. So, I don’t have any confidence in the long-term prospects of a “brand platform strategy”. Nor do I think users and channels will put up with best-of-breed products (codebases) that need to be stuck together by someone, IF there are better alternatives around. The beauty of Sage is that it built a multi-billion dollar business when there weren’t such competitors in the SME space out there - but there are now. Who are you going to back in this increasing competitive global SME market? SAP, Oracle, Microsoft, Salesforce, NetSuite….or Sage? They all have a product platform vision, except Sage. How can Sage cope once Microsoft gets its act together, and it drives prices radically downwards, though its Small Business Accounting-Office suite? Surely Sage’s best bet is to wait until Oracle and SAP realize that the cheapest and quickest way to satisfy their SME ambitions is to buy Sage for its global customer base and channel network….as long as they can figure out a way to move both categories across to a new, single platform. Looked at in this way, maybe Sage’s strategy is incredibly logical: instead of facing up to a nightmare task (could you think of a worse job than being the guy Sage hires to fix its disparate codebase mess?), they decide to leave it to their acquirer! So, I’ll back a (single codebase) Product Platform Strategy to win against a Brand Platform Strategy, every day of the week. In that sense, I think you guys are 100% right: the way to win is to build a flexible, global codebase and offer it up to the world of ISVs to build upon to solve specific niche markets. I also think Oracle is doing this. I’m not sure I completely follow your arguments, Jeff, but if you are saying what I think you are saying, then I am somewhat surprised. Certainly, it is acceptable (and logical) to treat the very distinct functions of software R&D and selling as being separate. So, an acquiring software company can seek efficiencies in selling, whereas these will be harder (if not impossible) to find on the R&D side.

But, where are the branding and other marketing efficiencies through an acquisition (i.e. beyond mere selling)? Sage is the best example of the limited scope for efficiencies to be gained through an acquisition strategy. The “Sage” brand is powerful and well-maintained in the UK, but that’s because it started there with this name. Elsewhere? I don’t think so: users and prospects look more to the brands they originally bought, and which are still supported today (Peachtree, Accpac etc). In fact, Sage has only had the rights to the “Sage” name in the US for the past year or so. Same with its channels (the company’s greatest asset): yes, they can cross-refer, but can they cross-sell very different products? A company doesn’t need to acquire another to achieve cross-referring benefits, mere partnerships will achieve this.

Did Microsoft achieve marketing and sales efficiencies through buying the 5 or so codebases/brands/channel networks amongst Great Plains, Navision, Solomon and Damgaard? Or did they create a mess: unhappy, frustrated channel partners and confused marketing? I would argue the latter, and I think MS has conceded as much.

Have any of these companies achieved efficiencies in the support function? How many staff can support multiple codebases?

Of course, the R&D side will always offer close to zero scope for efficiencies through acquisition. I think you say the same. Hence, I am surprised at your interpretation of what Oracle was and is doing with Fusion as Larry Ellison has always felt that a single integrated codebase was the only way to succeed in the long-term (see some of his great lines in Softwar, by Matthew Symonds, p.125: “I don’t think [Oracle colleague] ever understood the unbelievable difficulty of building this magical integration technology…it was like, wouldn’t it be nice to have flying cars? All we need to do is interface the wings to this Oldsmobile and it will be phenomenal. We just need really good glue. Brilliant”.). Sage doesn’t even try to achieve codebase efficiencies. Hell, I’m not sure they even try to achieve marketing/branding efficiencies! Its really best seen as an old-style conglomerate, where each division is set specific financial goals, and where head office focuses on what to buy next.

So, I don’t have any confidence in the long-term prospects of a “brand platform strategy”. Nor do I think users and channels will put up with best-of-breed products (codebases) that need to be stuck together by someone, IF there are better alternatives around. The beauty of Sage is that it built a multi-billion dollar business when there weren’t such competitors in the SME space out there – but there are now. Who are you going to back in this increasing competitive global SME market? SAP, Oracle, Microsoft, Salesforce, NetSuite….or Sage? They all have a product platform vision, except Sage. How can Sage cope once Microsoft gets its act together, and it drives prices radically downwards, though its Small Business Accounting-Office suite? Surely Sage’s best bet is to wait until Oracle and SAP realize that the cheapest and quickest way to satisfy their SME ambitions is to buy Sage for its global customer base and channel network….as long as they can figure out a way to move both categories across to a new, single platform. Looked at in this way, maybe Sage’s strategy is incredibly logical: instead of facing up to a nightmare task (could you think of a worse job than being the guy Sage hires to fix its disparate codebase mess?), they decide to leave it to their acquirer!

So, I’ll back a (single codebase) Product Platform Strategy to win against a Brand Platform Strategy, every day of the week. In that sense, I think you guys are 100% right: the way to win is to build a flexible, global codebase and offer it up to the world of ISVs to build upon to solve specific niche markets. I also think Oracle is doing this.

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