Archives for 2006

SAP Without SAP – Duet

Posted on May 21, 2006 ·

(Updated)
More than a decade ago as Project Manager implementing SAP solutions I could not understand why the Client’s PM showed absolutely no interest in getting SAP-trained, or even attempting to log on to the SAP system. The only software product he ever touched was email. Years passed, and as I climbed the ladder, I found myself in a similar situation: locked in to Office products most of the time – just like millions of corporate employees whose daily life does not involve actively conducting transactions in their Enterprise system (SAP). They need to occasionally review/approve an item or react to an exception alert though. They are the (often management-level) employees who will not directly use SAP, even though timely access to SAP data is critical to their decision-making process – or to somebody else’s daily job.

Thanks to Duet they can now have the SAP data at their fingerprints without touching SAP itself. The long-awaited (and often promised ) SAP-Microsoft Office integration has finally arrived.

What was announced at last years’s SAPPHIRE in Europe as the Mendocino Project became a product, the second preview of which was released a week before SAPPHIRE 06 under the name Duet. Considering Microsoft’s role, just having a friendly name is a major achievement itself – it could have been something as friendly as Microsoft Office Extension to mySAP ERP 2004, Enterprise Version, Release 1.0. (read Microsoft Uber-Blogger Robert Scoble on product naming…)

I’ve seen a presentation of some of the current features as well as the roadmap for the next year, and also had a chance to sit down with Dennis Moore, GM of Emerging Solutions, who provided the blogger group with additonal insight.

Currently Duet (which is a boxed product) supports MS Office 2003 and mySAP ERP 2004, and there are 4 business scenarios available:

Leave Management
Time Management
Organization Management
Budget Monitoring

The final release is due in June 06 and will soon be followed by two value packs.

Value Pack 1 is due in Q3 06, new scenarios will include recruitment and travel management, enhanced analytics and support for mySAP ERP 2005, the current platform which, per Shai Aggassi will stay for years to come.

Value Pack 2 is expected in Q4 06 with some line of business functionality becoming available, e.g. Sales contacts, activity, Purchasing. MS Office 2007 will be supported.

It’s important to clarify that Office will not become the primary user interface of the “transactional worker”, i.e. you will not be creating product masters, running a shop-floor, etc. What Duet is, is a natural fit for a workflow (think of roles, limits ..etc) -based processing of messages and underlying data triggered by events, rules and exceptions.

Duet’s importance by far exceeds what the limited number of currently available scenarios might imply: for SAP it means potentially tripling / quadrapling their user base, even if indirectly, and for Microsoft it’s another way to lock users into their Office suite.
Duet is a step in SAP’s declared strategy of opening up access to their data and processes via a number of user interfaces, including Office, Portal, Mobile devices ..etc. It also fits in the “Sap Simplified” philosophy of owning the Business Processes and letting go of the user experience.

I tend to disagree with AMR’s concern on the large number of prerequisites: mySAP ERP 2004 or 2005, MS Office, Exchange server, and specific applications for some scenarios, e.g. E-Recruiting 6.0 for Recruitment Management, mySAP SRM 5.0 for purchasing management and CRM 4.0 for sales activity management. Yes, these are prerequisites, but the point is that even though Duet is a boxed shrink-wrapped (thanks for the comment!) product (I’ve seen a white box at SAPPHIRE, whether real or mock-up), it is not expected to sell as a standalone product on it’s own merits. It will expand access to additional users within corporate customers already using both SAP and Microsoft products, i.e. likely to already have the prerequisites.

Talk about prerequisites, pricing for Duet, and specifically the underlying SAP access will be an interesting challenge, since SAP’s model is typically charging $$$$ a smaller user base, while MS relies on $ from a large number of users – there has to be a model in between.

Not everyone in Microsoft welcomes Duet: the folks at MS Dynamics are clearly unhappy. They even produced a so-called White Paper comparing Duet to their own solution, Snap. “So-called”, because it does not even attempt to be unbiased. It praises Dynamics and Snap, while listing the dry facts about Duet, completely forgetting the fact that as Enterprise systems Dynamics and SAP are really apples and oranges… or I should say Ford vs. Rolls Royce.

IBM isn’t sleeping either: IBM to sing in Harmony with SAP to match Duet. IBM’s Harmony, which I haven’t had a chance to see, claims to play a similar role with Lotus Notes. It clearly is a competitive product, as far as Duet (which is jointly owned by MS and SAP) is concerned – but from SAP’s point of view, it’s just one more user interface, exposing more knowledge workers to SAP. The more the merrier.

Cold Cash – Literally

Posted on May 21, 2006 ·

Now we know the real meaning of “cold cash“:

A congressman under investigation for bribery was caught on videotape accepting $100,000 in $100 bills from an FBI informant whose conversations with the lawmaker also were recorded, according to a court document released Sunday. Agents later found the cash hidden in his freezer. (story by AP)

Tags: coldcash, corruption, bribery, congress, politics, zoliblog

Filed Under: Politics ·

SAP’s Vision on the Changing Role of CIO’s

Posted on May 21, 2006 ·

(Updated)
SAP is not a technology company, it’s the world’s leading business process company – says Shai Agassi, President of SAP’s Product and Technology Group.

Niel Robertson, one of the SAPPHIRE bloggers (or the Brotherhood as we’re often referred to) thinks through the consequences in an excellent article, The New Corporate World Order. It’s a very deep, thoughtful post, simply too good to summarize, please just read it. I was trying to find where I heard Shai express similar thoughts, and I realized it wasn’t at SAPPHIRE 2006, but at Software 2006, just a few weeks earlier. Here’s the relevant slide:

The entire presentation, titled Business Process Co-Innovation; “Enterprise 3.0” is available in PDF format here.

Update (5/23): Niel’s original posts created quite a debate, so he reposted the comments here. Wow, comments take over.. this is the real conversation!

Filed Under: Business, Enterprise Software, ERP / CRM · Tagged: bpel, bpm, businessprocess, chiefprocessofficer, cio, cpio, cpo, sap, SAPPHIRE06, shaiagassi, software2006, workflow, zoliblog

Graduation Day – Class of 2006

Posted on May 21, 2006 ·

Anywhere I go I see graduation gift commercials, so I thought this would be a timely post:

The embedded video will likely not work in feeds, so here’s the video link.

Tags: graduation, graduationday, headautomatica, education

Filed Under: Misc ·

Open Source Hotel Rooms

Posted on May 19, 2006 ·

I’ve just checked out of my hotel at SAPPHIRE 06 and am shocked looking at the bill:

You can click to view the original Zoho Sheet.

Since I am still in a “software state of mind” (and btw, will return to SAPPHIRE posts soon), I can’t help but draw the analogy to the software industry: Support and Maintenance charges in the Enterprise Software business are in the 20-25% range. There is an ongoing debate about the viability of Open Source as a business model but several companies are experimenting with giving away the product and focus on additional revenue sources, i.e. support, maintenance, training ..etc.

Since the hotel industry is up to 18% in surcharges, why not make a dramatic move, “opensource” the rooms and make their numbers on all these other (bogus) fees? (OK, before I get ripped apart, yes, I do realize running hotel rooms has actual material costs vs. downloading software, and that the Open Source model is a bit more complex … in other word, my analogy is far from perfect, but hey, it’s Friday afternoon, I am waiting for my plane and can have a little fun, can’t I?)

I see a lot more potential surcharges (on top of the free rooms), like: clean hotel fee, airconditioning surcharge, towel fees at the pool, hot water fee in the bathroom, warm water fee at the pool, low-noise airconditioning surcharge, no-cigarette-smell fee in the nonsmoking rooms, Broadband fee (yes, I know they already have it, but this would be extra for connection that actually works vs. trickles), private room fee (that is when you don’t get the keys to a room already occupied like it happened to me), fast or medium service surcharges at the restaurant..etc. Of course when you can’t sleep at night because the damn airconditioning is so noisy, or when your nonsmoking room smells.. .etc, you don’t have to pay. This could become the feedback / QA mechanism for the hotel industry, a’la the Open Source community support / QA in software.

The opportunities are tremendous, and we should not stop at the hotel industry. Open Source the World!

Filed Under: Business, Humor, Open Source · Tagged: business model, Enterprise Software, hotels, Humor, Open Source, resort, Software industry, surcharges, zoho sheet

S-type at SAPPHIRE 2006

Posted on May 17, 2006 ·

No, this is not my car…but there is a reason why it’s here .. hold on tight … for the news ..

Update: Since the news is out, the Jaguar S-type was obviously a reference to SAP’s announcement of CRM 2006s-release – of which I’ll write more soon.

Tags: sapphire2006, sapphire06,s-type, s-release, SAP, zoliblog

Filed Under: Enterprise Software, ERP / CRM ·

SAP’s New On-Demand SRM Offering through Acquisition of Frictionless Commerce

Posted on May 17, 2006 ·

Quick news from the press conference at SAPPHIRE 2006: Shai Agassi has just announced the all-cash acquistion of Frictionless Commerce, a leading Supplier Relationship Management (SRM) software provider. As a result of the acquistion, On-Demand SRM will be the second SaaS offering by SAP, following the recent introduction of On-Demand CRM. Second, but certainly not last, as Leo Apotheker clarified during the Press Conference, over time all SAP’s offering will be made available in the “hybrid” model.

Update: See initial analysis by AMR Research.

Filed Under: Business, Enterprise Software, ERP / CRM, SaaS, Software · Tagged: crm, frictionlesscommerce, Ondemand, SaaS, sap, SAPPHIRE06, sapphire2006, SRM, zoliblog

TiEcon 2006: Software Luminaries Panel : The Software Richter Scale: 1, 3 or 7?

Posted on May 16, 2006 ·

Liveblogging the Software Luminaries Panel at TiEcon 2006. (Note: I am obviously publishing this, as well as other TiEcon posts after the Conference, but will only do very basic editing, and some linking, essentially posting my original notes. I’ve also deviated from the role of passive note-taker here, as this is a subject where I am somewhat competent, and can’t help but insert my own comments here and there – you will see those in italics. I invite Panelist, participants to feel free and correct / add to my notes in the form of blog comments. Thanks).

There were parallel sessions run with industry luminaries in ballrooms next to each other. Moderator M.R. Rangaswami opened on the humorous side: the audience picked the right session, as he peeked into the next room where the Semiconductor luminaries session would take place, and saw a sign there saying “semi-luminaries” 🙂 M.R. is Co-Founder of the Sand Hill Group and host of the recent Software 2006 conference (an annual event). .

As introduction he uses his Software 2006 slides about Software’s quiet revolution. Three major realities:

Changes represented by SaaS , Open Source, while CIO’s indicate increased spending on software.
Real business is in the Enterprise (but consumer technologies find their way into the Enterprise)
Thriving ecosystem critical

Panelist(s)

Larry Augustin , Angel Investor, Founder VA Linux, SourceForge …etc.
Amit Chatterjee , VP Strategy SAP
Mark Gorenberg , Partner Hummer Winblad Venture Partners
Jason Maynard , Research Analyst Credit Suisse
Zach Nelson , President and CEO Netsuite
Sanjay Parthasarathy , Corporate Vice President Microsoft Corp. (Chief Evangelist of Microsoft Church)

Starting with a few canned questions for warmup, then taking audience questions.

Question: Will there be a billion-dollar software company in SaaS?

Jason: Yes, Salesforce, NetSuite to begin with.. Client-server, on-premise screwed customers, overpromised, underdelivered. SaaS will be huge, it has barely scratched the surface so far.

Mark: Agrees. Hummer Winblad did 12 pure-play SaaS investments. SaaS is most disruptive. Siebel was the uncontested market leader and the appearence of Salersforce.com killed it. (I can’t help but insert my own opinion here: Sure, Salesforce squeezed Siebel from the bottom up, but two other factor were just as significant in their demise: the “overpromise, underdeliver” syndrome, i.e. customer dissatisfaction after expensive and lengthy projects; and the fact that SAP that already owns the Enterprise market significantly improved their own CRM offering, and the integrated approach offers a better value proposition to their customers then the standalone Siebel CRM-only solution).

Sanjay: We’ve already seen billion-dollar SaaS companies: eBay and Google, just not in Enterprise.

Amit: SaaS by itself is not a business model… for larger organizations hybrid models work better …with increasing process complexity and integration requirements there is a need for a mix of on-demand and on-premise solutions.

Question specifically to Zach: Larry Ellison (Oracle CEO, owns over 50% of NetSuite, which is expected to pull off a billion-dollar IPO this year) stated that SaaS is only for SMB’s not for large corporations. Is that so?

Zach: He is generally trying to avoid speaking for Larry. (They clearly have an interesting relationship, Larry has to be somewhat anti-SaaS, and Zach can’t really get into a public debate with his absolute majority owner. It seems to me that Larry is betting on two horses at the same time) Nobody will switch software because they want to, or because SaaS ismore fashionable. First and foremost customers have a functionality challenge, which the software company has to meet.. Functionality is the primary consideration, and the delivery model supports it.

Sanjay: We shouldn’t be talking about software as a service, it’s actually software + service.

Mark: A number of companies are selling to both small and large organizations. What’s exciting is that this is the very first time when medium sized companies can get the same functionality as the large guys! ( I tend to think the same is true for small businesses, in fact that may be an even more radical change, and it’s a mistake that analysts often only think of the midsize market when they speak SMB )

Jason: Disagrees with SAP’s Amit on the notion of need for hybrid. Software needs to become a utility. There is no room for innovation in most corporate IT budgets, 80% of which is spent on running the infrastructure. Let go of thee server! I know it’s hard …it’s your baby … you may get visitation rights at your SaaS provider:-) (huge laughter at audience)

MR makes a comment/question on recent high-profile outages in the industry, largely at salesforce.com but elsewhere, too.

Zach: Not all delivery models are created equal. Sforce runs on “big iron”, (find article here) while Netsuite opted for a grid-like system based on cheap boxes. When a salesforce.com server goes down, it effects the majority of customers, when NetSuite loses a box, a maximum of 50 customers are effected. This setup also helps rolling out new versions smoothly, in a phased fashion, while Salesforce.com has to do it in “big bang” style. Zach predicts Salesforce moving to a grid-like environment soon.

Larry: It’s about ease of adoption. Software has become a lot easier to create, it’s acquisition is a painful process, and that’s the part that SaaS improves.

Sanjay: Service orientation helps picking best-of-breed solutions, mix and mach. The current trend of consolidation in the industry is actually contrary to it.

Amit: SOA is critical, some services in the cloud, others in the enterprise.

Zach: Picking composite applications to mix and match is difficult, especially as business processes get more complex.. Composite transactional applications are a fantasy – far to difficult to synchronize. Example: Microsoft CRM and Great Plains are hard to synchronize, even though MS owns the code for both. Integrated transactional systems are unbeatable – that’s why SAP owns the Enterprise.

Question: Consolidation, Oracle acquisitions .. getting bigger and bigger – is there room left for innovation?

Larry: Oracle is buying since it’s not doing a great job of innovation itself. Startups have the benefit of new distribution mechanisms, SaaS, Open Source, user base helps them.

Amit: Lot of room for innovation by partners id they participate in verticals. He “only” has 6000 developers, cant cover the whole world.(audience laughter) Larry interrupts: I’d like that problem, I have 12. With 6000 how can you NOT cover the world? (even bigger laughter). Amit: Citibank has more developers then SAP.

Question about data privacy, Security.

Zach: Especially for small, midsized businesses NetSuite’s security is better than running on local server next to coffee machine.

Larry: Security is still a huge unsolved issue.

Sanjay: The real data challenge is mashing structured and unstructured data. 80% of corprate data is unstructured without business processes: xml is the glue.

Larry: Html amplified the problem of huge amount of unstructured data, the future will be to move to have data in xml and html is just the presentation.

Question: Are there profitable SaaS companies?. Sforce is barely profitable.

Mark: Salesforce.com is barely profitable, .Rigthnow is making decent profit, employees (?_) is largely profitable.

Jason: Many are profitable, SaaS lowers the cost of distribution – there is price elasticity in the market. SaaS also helps reducing R&D, support costs – salesforce only needs to support one version, SAP, Oracle multiple ones.

Zach: When he joined NetSuite their sales model was direct. Now with success ecosystem develops. Typically start with direct, build customer base, then ecosystem develops.

MR‘s comment/question: Software 2006 had a panel: Open Source: money machine or money pit?

Larry: Open Source is a young model, there can not be a lot of profitable companies yet, Red Hat beng an outstanding example. On $10M in R&D Salesforce.com spends 100M in Sales & Marketing.. It’s cheaper to create software then sell it > Open Source helps eliminating the huge sales costs.

Jason concurs, sales is 80% of cost. Enterprise Software companies don’t make a lot of profit on software sales, their profit comes from maintenance. Smart Open Source companies jump out of this expensive sales cycle and focus on support only. They will increase botttom line while reducing top line.

Larry: There is also a culture change: people did not understand software, they had to be educated and had to pay for that education. Now everyone is computerized, carries a PDA, cellphone ..etc. This means the education need is reduced, good opportunity for Open Source’s pull model.

Question: SAP , MSFT will you be giving away your products free?

Sanjay: Fuzzy answer on giving away software and promoting distribution.

Amit: Support, explore Open Source, but not fully embrace. SAP does not have the distribution channel that MS has. SAP needs to build ecosystem.

Question: Will MS look into buying SAP? Tried. Jason: pragmatic approach: it won’t happen, if for no other reason, the fight with the EU..

Question: What Open Source opp’s exist?

Mark: Recently made two investments into companies that develop applications for the lamp stack. Issue: IP ownership, integration. Sales issue: agree with the Open Source effect on lead generation, but how to close sales? What happens when you move to markets that people don’t understand?

Question: any Open Source companies to go public?

Jason: Potentially MySQL. Markets pay 10-times sales, 30-times cashflow. Fewer, but better , more sustainable companies.

Question (more a remark) on SAP’s new compensation plan. Hasso Plattner recently announced he is aiming at doubling the market, if they achieve that, the top 100 execs will make 100’s of millions. Is that a realistic objective?

Amit: The announcement certainly helps: -) but the true driver for growth is product innovation.

MR askes the panelists for their final remark

Mark: We’re in the greatest disruptive times. Hummer Winblad invested more in the past few years than in the previous 17..

Sanjay: Software industry does not spend enough time with users.

Larry: Fantastic time to be a software entrepreneur. Small team , little $, reach to market – not possible 10 years ago

Zach: It’s a great time to start a software company, when you do it, remember you need a great application to run the business. (audience laughter; good plug for NetSuite …possibly the last one before going into pre-IPO silent period?)

Amit: Customers matter. SAP needs to focus more on the ecosystem.

Jason: MS announced spending additional $2B on emerging areas. Look at areas they are spending… go in those “white spaces”, since they are good in seeing the opportunities, but can’t exploit them properly.

Tags: tiecon, tiecon2006, conference, entrepreneurship, technology, innovation, venturecapital, vcfunding, startups, forum, paneldiscussion, netsuite, salesforce.com, SAP, Oracle, Siebel, software2006, CRM, ERP, enterprisesoftware, SaaS, opensource, SMB, SME, Microsoft, zoliblog

Filed Under: Bay Area, Business, Enterprise Software, ERP / CRM, Open Source, SaaS, SMB / SME, Software, Startups, Technology ·

Archives for 2006

SAP Without SAP – Duet

Cold Cash – Literally

SAP’s Vision on the Changing Role of CIO’s

Graduation Day – Class of 2006

Open Source Hotel Rooms

S-type at SAPPHIRE 2006

SAP’s New On-Demand SRM Offering through Acquisition of Frictionless Commerce

TiEcon 2006: Software Luminaries Panel : The Software Richter Scale: 1, 3 or 7?

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