Sapphire 2012

I have been in Orlando for the Sapphire event and while I missed day 1 I did take in the full experience yesterday. With no particular narrative here is a summary of thoughts I collected.

Sapphire is huge, the main pavilion is easily 3-4x the size of Dreamforce and the energy is studious and focused. Walking the show floor revealed a lot of SAP people in every area demo’ing and talking about SAP products and technologies, and as @pgreenbe noted there wasn’t a lot of chaos and noise. It’s actually very pleasant to be on the show floor.

The morning keynote featured co-CEO Jim Hagermann Snabe and Lars Dalgaard, formerly the CEO of Successfactors, which was acquired by SAP about 3-4 months ago. Snabe is engaging and confident, I can see how he compliments Bill McDermott nicely, being able to go deep on any product or technology topic while also engaging customers at a business level.

There was a nice retrospective of SAP’s 40 years, paralleled to that of the technology industry in general. It became a little bit much when Snabe attempted to insert SAP into the narrative by joining unrelated technology advances, like NASA’s technology program and how SAP used hardware in the early days. The history is important but trying to use the trajectory of history to predict the future is a strategy fraught with peril and SAP should be mindful of the fact that history reveals a continuing series of disruptive developments that upend incumbents with increasing speed and violence.

Snabe laid out the major tech themes for SAP, which I will sum up as Data (Hana), Mobile, and Cloud. There were others but they roll up into these larger themes and for the most part represent long running investments that SAP has been making. Overall, it was logical and confidence inspiring to hear him walk through this.

Ron Dennis from McLaren Group came on stage for a fantastic one-on-one talk with Snabe and I really enjoyed the video that opened this as well as the conversation. McLaren connects the physical world with the digital world in a very interesting way, combining technology innovations and high performance computing to deliver the cutting edge that sets the direction for entire industries. McLaren is an SAP customer (the relationship is a lot deeper) and something Dennis said resonated with me, which is that for the scale of McLaren the investment in SAP was hard to justify.

This is the pivotal issue for SAP, the scaling of price-to-value for businesses of all sizes. The fact that McLaren called this out while on stage with Snabe should cause pause for everyone in SAP who is plotting the future of how applications are packaged and priced.

The focus on cloud computing has been impressive and Snabe made a good point when he commented that in the not too distant future people won’t talk about the cloud vs. on premise because it will be all cloud. And all mobile. The challenging part of this is squaring it with Snabe’s emphasis on “consolidating the core” because customers don’t want disruption; it’s hard to imagine anyone successfully delivering leapfrog innovations while insisting on an incremental path for customers.

Migration paths are a reality for SAP, as would be the case for any company with a large customer base, and it’s not just about on-premise to cloud but also a major factor in moving from relational databases to integrated OLTP+OLAP in memory systems and user experiences that meet users in a desktop and on a mobile device. Everything that SAP delivers must have a migration strategy attached to it, which means they will take longer to deliver products and the cost to develop will be higher.

Lars Dalgaard came to SAP through the Successfactors acquisition and in a very short period of time he has established himself as a disrupter as well as consolidator of power. Lars is solely responsible for overseeing some of the most critical deliverables in SAP’s application strategy, primarily in cloud apps Business By Design and Business One. In fact I was shocked to see Business One getting as much attention as it is getting this week (Business One is the result of an acquisition in 2002 of a company called TopManage).

Dalgaard presented an organizational model of applications around Customers, People, Money, and Suppliers. This is a great way to approach applications, far more appealing than the old acronym heavy approach of ERP, CRM, FICO, HCRM, PLM, etc. While enthusiastic about this approach I was disappointed that Lars spent about half of the talk on People and gave just brief mentions to the rest.

SAP has been self-conscious about user experience from my earliest days with the company, and in all fairness it is appropriate to highlight that SAP applications are often complex because the problem sets they are delivering on are complex… try to do production planning or order-to-cash without having some complexity. Having said that, SAP has failed to deliver compelling user experiences for people who are casual users of their systems (e.g. submitting expense reports) and I think SAP deliberately conflates the notion of UI and UX with less than optimal results. A new HTML5 UI will not by itself deliver a better user experience… full stop.

For Lars to say that it’s about time SAP delivers great UX was an insult to all the people who have been laboring to deliver better user experiences since the late 1990s. This is not trivial stuff and SAP deserves credit for investing in this area consistently over a long period of time and Lars on stage demoing his dream app, which is little more Flipboard, doesn’t reflect the considerable experience in how business applications work in the real world (e.g. would you really just discover you don’t have enough people in Europe and then move people from the U.S. over to fill the gap?). It’s also worth pointing out that Successfactors didn’t have a great UX either… 15.6m users and only 29m reviews doesn’t suggest a high degree of interaction.

The segmentation of solution sets according to customer size is logical but also illustrative of a problem that SAP continues to struggle with, which is how to serve millions of businesses instead of 10s of thousands. Business by Design is enterprise and large mid-market focused, Business One is SMB; this is an extension of how SAP has gone to market but the challenge is how do you serve millions of businesses versus 10s of thousands with this model? It’s not just SAP, all business software providers are challenged by packaging/pricing within the context of a business model.

I was very surprised to hear little about social technologies, especially when covering CRM topics, or in the new parlance of Customers. Surprised but not disappointed because I think a lot of vendors are reflexively reaching for social because it is necessary for the news cycle not because they have a clear strategy for delivering customer value. I have seen SAP CRM apps that have social capabilities so I know this is not out focus for them. I suspect the omission of social as a theme reflects a prevailing view that this is just expected to be part of your offering so why focus on it at the risk of diluting the primary messages you are delivering.

The Hana technology is a legitimate game changer technology and while I doubt Oracle is overly concerned they probably should be. What SAP has developed, over a long period, is substantial and the innovations that will be possible as a result of a single image column store database will lead to leapfrog benefits for customers and technology vendors alike. It’s important to recognize that SAP is not an interloper in the database world, the core development teams at SAP are steeped in database expertise and in terms of core database engineering SAP has had a foot in this world for many years, from the MaxDB open source database to the acquisition of Sybase. SAP knows databases.

Hana has clear performance benefits but it is not yet a utility grade service and has capacity limitations (albeit 100TB is pretty frickin big) but the capacity issue is probably less constraining because column store databases are much more efficient (you pack much more stuff into the same sized box) and over time the upper limit will increase. Evolving Hana the extent that it goes to market like Amazon DynamoDB is not clear to me, nor when the question was asked was the answer clear…

Lastly, SAP continues with a high degree of self-consciousness about appealing to startups, but to their credit they are reaching out to developers with free licenses and talking about a pricing model that is not solely based on data volumes (small companies can generate a lot of data). Time will tell but it’s always reassuring when SAP doesn’t just focus on the largest companies in the world as the core customer segment they are targeting.

Full Disclosure: SAP paid for my travel and hotel while in Orlando, I covered all my other expenses.

Utility at What Cost?

Dan Gillmor is critical of the NYTimes decision to require Facebook login for verified identity, which brings with it greater access to services in their online offerings.

News organizations that use Facebook for login to comments and other features are unbelievably short-sighted. Which, of course, is absolutely nothing new.

Normally I would be at the front of the line when it comes to criticizing the NYTimes but in this case I think their decision is calculated and reasonable. What they are getting is a real name identity system without the substantial obstacles that would otherwise not be overcome… people won’t verify their identity en masse for websites but for reasons I cannot explain have few reservations about doing so when the convenience of Facebook’s identity system is presented to them.

Identity is an issue that enables and infects the web, we benefit from having relative anonymity yet few people would suggest that anonymity improves the quality of discourse online. Media site commenting systems reveal this to an absurd extreme… the things people say to each other online would not remotely be considered in the course of actual conversation in the physical world. Anonymity brings out the worst in people but that fact alone is not a reason to ban it from the web, which would be impractical to say the least.

Media sites are not public utilities, they are hosted conversations that have real cost as well as opportunity costs associated with them for the companies that host them. If the NYTimes decides that linking up with Facebook is a tradeoff that brings an increase in the quality of discourse while trading off information about people to Facebook then that is their choice and their subscribers, real or in the abstract, will take the offer or reject it like they have with other initiatives from the Grey Lady (e.g. TimesSelect).

If your issue is focused on Facebook and the increasing power that they are accumulating, then that is a different issue not related to what the NYTimes does with them or not.

Ideally the NYTimes would present multiple choices for identity to be connected to their online profiles, and give their readers the opportunity to opt-out of features like recommendations but truthfully I don’t know enough about what they are doing or not doing in this regard to comment. What I do like about their strategy is that they are giving you the choice to not use Facebook and in exchange for using Facebook they are increasing your access to features that you may find valuable, in other words they are giving you something in exchange for whatever you are giving Facebook… and while Gillmor and others will criticize this as having nothing in it for the NYTimes the fact remains that the NYTimes has a strategic interest in improving the quality of comments attached to content and that isn’t trivial.

Customer Service 2012 – Just Get to the Point

I have had the need to contact 3 different companies today through their call center numbers and I’m done… I simply don’t have any more time to give these companies with all the other stuff I have to do.

  • First there is the IVR system…
  • Then there is the obligatory customer/account/confirmation number dance, I punch it in then I have to say it and then I have to confirm it…
  • Then we go through the recital of problem/need and a repeating of that that for posterity….
  • Then my issue gets solved after some back and forth, and “can I put you on hold” (as if I have a choice)…
  • Then we are done and I get the closing statements along with, always, “is there anything else I can do for you?”…

Time is precious and I don’t have enough of it, which is probably the case with most people these days. If I could change anything about customer service it would be to ditch the IVR systems and have agents talk faster without all the reciting of facts back to me. In other words, can we just get to the point and get on with it so I can get on to the next thing I have to do?

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What Kind of Fear Owns You?

“Fear defeats more people than any other one thing in the world.”
– Ralph Waldo Emerson

I have two experiences that have taught me more about the human condition than all other things in life combined, being a parent and being an integral part of a small company. What I have concluded is that fear is an unavoidable component in most of the decisions we make, whether conscious or not, and that the opposite of fear is not courage, it is love.

Not all fears are equal when it comes to the paths that people take in life. Some are ruled by fear of failure while others fear success, fear of losing something seems to rise in proportion to the number of things that one can lose, fear of unrealized ambition is distinct, fear of relationships and self-exposure seem to go hand in hand, there is a prominent fear of conflict in most people, and lastly, being ruled by a fear of being discovered as being in over one’s head leads to a range of very bad outcomes.

Fear itself is nothing more than a warning mechanism that exists within us, it is something that is constructive in our decision making process by slowing down our mental responses in order to capture more detail about the thing that fears us, and taken to an extreme fear crosses a line and become debilitating. People fail when they are unable to overcome the fear dimension they hold and become locked, and they give up fighting the thing they fear and shrink from it.

This opposite of fear is not courage, and people who are referred to as courageous in the face of fear are actually reacting to something that is fear itself, the failure that comes from letting down people who count on you, the mastering of fear that accepts it is still present. The opposite of fear is not courage, it is love… love that is expressed through a compelling desire to face any challenge not for the reward it brought me but because someone was counting on me to do it. Being a parent has taught me this more than any other lesson.

The fear of being discovered as incompetent is the most destructive of all fears when it comes to a leadership team because this fear leads to isolation and incompetent decisions as well as the inability to make a decision that is not unnecessarily restricted in the pursuit of risk mitigation.  Very bad things happen when people fear being discovered as an impostor, for the person at the center and all those around them.

Fear is part of the human condition and in order to understand the people who are close to us we have to first accept the things that we fear the most. I say accept not in the benign manner but rather in the context of facing and then overcoming fear in order to be a better person and to serve those close to us in the best possible way.

“.. almost everything – all external expectations, all pride, all fear of embarrassment or failure – these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.”
– Steve Jobs