Implementing Enterprise SaaS: If it’s Easy, it’s Because You’re Not Trying

Back in the early stages of the SaaS market, so many months ago, it seemed obvious that the SaaS market would one day undergo a major transformation as the easy wins based on taking on-premise capabilities and flipping them to the cloud – pretty much the business model of in the early days– gave way to an era of greater complexity and value. At one time it was the value-added cloud capabilities of business networks and the like that were supposed to lead the SaaS world to the promised land by using the cloud to conduct business in ways that simply hadn’t been possible in the on-premise world.

Wrong. So far, anyway.

But while we wait for the business network opportunity to reveal itself at scale – a bet that SAP in particular has made in the last few years with acquisitions like Ariba, Concur, SuccessFactors, hybris, Fieldglass, and other cloud properties – a new SaaS complexity is emerging, and its advent has begun to reconfigure how SaaS is implemented in the enterprise. And with that reconfiguration has come the demise of one of the most sacred tenets of the SaaS world: simplicity.

What has become obvious is that enterprise-class SaaS as a strategic implementation option is more and more dependent on the ability of the vendor and implementer to integrate SaaS services with the on-premise world. That integration isn’t just a nice-to-have afterthought, it’s becoming the core of the business case for implementing enterprise SaaS, and that business case is making SaaS a much more complex undertaking than it was in the glory days at the turn of the century.

The easiest way to tell that the game is afoot is to track how the global SI crowd, the ones that made cost and complexity the watchwords of on-premise implementations, are now showing up at the SaaS feeding trough, talking about business transformation, value-added services, and pretty much anything else that will replace the easy body-shop dollars that SaaS is definitively killing off.

Not that this is necessarily a bad sign – there are many competent practitioners of the implementation arts who possess the mental fortitude to do well by the new SaaS implementation imperative. But for the most part the global SI crowd comes to the SaaS table with their on-premise methodologies – pitched like the devil in order to get the business, and then honored mostly in the breach when it comes to the actual project – and are finding that their methodologies more of an anchor than a sail.

The smarter SaaS vendor execs are sanguine about how well these on-prem SIs will do: I was told in no uncertain terms at a recent SuccessFactors analyst event that savvy customers are turning more and more to the boutique SIs, who, as one exec told me, “are unencumbered by their on-premise methodologies.” (For those who haven’t tracked the relationship between methodologies and long-term project value, on-prem methodologies are like teaching to the test – you might actually end up with a smart kid when you’re done, but your odds may be even better that you’ll end up with high-scoring fool.)

The other way you can tell that complexity and SaaS are now synonymous is the growing quantity of deals gone bad. SuccessFactors has spent a tidy seven-figure sum of late remediating troubled implementations, and to be fair, the offending SIs have run the gamut from boutiques to the global SIs.

SuccessFactors is hardly alone in this regard, as evidenced by the increasingly universal requirement for vendor audits of SaaS implementations done by third parties, even the biggest and baddest of the global SIs. While SuccessFactors is relatively new to this, Workday has required these audits for some time.

The mandatory vendor audit is a significant departure from the status quo ante of the on-premise world, where vendors, like a couple of shocked parents at their first hearing in front a juvenile court judge, would one day rudely awaken in mid-project to find out that they are the first to be blamed and the last to know. The revelation that what should have been a poster child implementation had become a den of iniquity that had been hiding in plain sight all this time has strained the mental fortitude of enterprise software vendors since the dawn of time. The fact that it took the combined incompetence of the SI, the customer, and, often the overselling vendor sales rep, to create another major or minor catastrophe offers scant comfort.

Been there, lived with that. What’s different about on-premise vs cloud catastrophes is that, in the former, the vendor’s profit margin on the license sale remains largely intact. There may be a hit on the services side – post-hoc remediation services are expensive – and the brand takes a beating, and the customer is pissed, but that sacred license margin is still there to boast about when the quarter is done.

Bad implementations in the cloud have a very different impact on the vendor’s margins. A bad implementation, no matter who is to blame, still has to be run in the vendor’s data center, and supported by the vendor’s support staff. Meeting the data center’s service level agreements for a poorly implemented SaaS app means more effort and support costs. These brittle implementations are more likely to break at upgrade time, and in general letting them into the data center threatens to kill off the recurring revenue margin that the whole SaaS industry is built on.

This problem becomes even more acute when the cloud implementation has significant integrations, which as I stated above, is more and more the case. Hence SaaS vendors like SuccessFactors and Workday are not only requiring that their own teams audit the implementation, but they’re also requiring the customer to pay for the audit.

This is definitely a move in the right direction – customers have a degree of culpability and responsibility that has been traditionally papered over in the rush to judge the vendor and let the SI get off scot-free (unless the failure ends up in court, and then the lawyers labor hard to ensure that the allegations of blame are fairly and equitably distributed among all three parties, and the devil take the hindmost.)

What’s the final evidence of complexity from the world of SaaS implementations?’s rather convoluted usage limits for API calls. What’s easy to understand is that high-end customers running Enterprise Edition or Professional Edition (“with API access enabled”), have a limit of 1 million API calls in a 24-hour period. That’s a boatload of integration and complexity.

What’s also easy to understand is that is working hard to make sure customers don’t use more API calls than they pay for, as in this little note in the fine print from’s API usage limit guide: When an organization exceeds a limit, all users in the organization may be temporarily blocked from making additional calls. Calls will be blocked until usage for the preceding 24 hours drops below the limit.

Take that, API user deadbeats.

What this new cloud complexity means is that cost savings in SaaS, like the famous peace dividend that was promised following the end of the cold war, may turn out to be more mythological than real. The requirement for integration and the maintenance of those integrations will very likely keep services revenues for SaaS chugging away for quite some time.

And don’t think that going all SaaS will solve the problem – silos of SaaS functionality can be even more complex to integrate, and keep integrated, than an on-prem/SaaS hybrid environment. SaaS vendors treat frequent upgrades as a virtue (which always sounds so good on paper, until something changes that you didn’t want changed). So imagine, like one relatively small company I know, having a cloud backoffice consisting of 80 cloud apps. Each one upgrades on its own schedule, with little or no awareness of what the other 79 are up to. The company in question was actually considering getting a DNA graft and moving a ton of functionality to a single on-premise ERP system. That is until a severed horse’s head appeared under the sheets in the CIO’s bed one morning. (Metaphorically speaking, of course.)

It’s clear now that we’re waking up from a cloud cost-savings binge that was a little too good to be true. True, lots of the grunt work that went into implementations is gone, and good riddance too. But expecting that the end of the low-hanging fruit of the implementation business would mean that less money would be spent on services overall is a bit of a pipedream. Implementing enterprise SaaS is hard – even if you’re doing payroll in the cloud, by the time you “configure” your SaaS payroll to take into account the many countries and currencies you do business in, the different pay structures and pay grades in your company, union work rules, the deductions, and on and on, you’re not really configuring, you’re implementing.

SAP knows, they did this themselves, using SuccessFactors to replace a sprawling, global HR mess with 100s of redundant processes and disparate, unintegrated systems spread all over the world with a single, unified SaaS system. You don’t just configure a system that size and then flip a switch.

And if you want to tie that into your finance system, your HR and talent management system, throw in some succession planning, add your contingent labor to the equation, tie talent management into maintenance and service scheduling  – well, you just did a big fat, complex implementation. With all the attendant costs and risk.

So if you’re doing enterprise SaaS because you want your IT life to be more simple, think again. The game is rigged against simplicity, and always has been, for the simple reason that business is complex, and always has been. To paraphrase President Eisenhower’s famous admonition to the nation as he left Washington politics for good: when  it comes to enterprise SaaS, beware the implementation complexity complex.


For good measure, Ike also said “If you want a friend in Washington, get a dog.” I’ll work that aphorism into my next post. Promise.


S/4HANA: It’s not R/3, and it’s not 1992 either (part II)

(Bloggers note: I was informed yesterday that the proper spelling for SAP’s new suite is S/4HANA. I was also told that a large tech manufacturer with a propensity for suing over IP issues owns a trademark for S4. I just checked my budget for protracted lawsuits and decided to go with S/4. Don’t tell Edward Snowden, he’ll drop me from his Xmas list like a hot potato.)


So, smooth sailing for S/4HANA?– Not likely, certainly nothing like the good old days when R/3 was the biggest and the baddest modern, client/server, enterprise software product on the market, marauding through the global economy like a rum-soaked buccaneer.

But if SAP has to create its own tailwind, there’s a few things it can do to fill its sails a bit. Some of this should have been mentioned at the launch, other aspects need to be developed quickly – but all are in the realm of the possible, as well as, IMO, the extremely necessary.

The S/4 HANA Sandbox: SAP chose to forget to mention, not that they weren’t told to, that SAP can load a copy of a customer’s ECC 6.0 production system into the S/4HANA cloud and let the customer run their existing system on S/4HANA in a “try before you buy” mode. This is the best way to overcome the pointless marketing hype about S/4HANA speeds and feeds, not to mention promises of how Fiori changes everything, and just let the software do the talking. I think every customer thinking about S/4HANA should demand this, and should demand it at no charge.

SAP’s risk is pretty much nothing, and everything, with the Sandbox. If reality meets or, dare they hope, exceeds the hype, the deal is done. When and how much still needs to be negotiated, but the why S/4HANA question will be settled. It’s also a great way for SAP to highlight the value-add of its cloud-services capabilities: platform-based cloud services are going to be one of the ways in which all the platform/enterprise software vendors compete, and SAP is going to have to fight it out with Microsoft and the services it’s bundling in Azure, as well as what native-cloud vendors are already doing by default. And if the Sandbox doesn’t make a customer desperate for some S/4HANA, then, well, SAP is toast. (Hey, don’t just take my word for it, Chairman Plattner thinks so too.)

Take care of the DB Migration ROI problem: Okay, maybe not take care of it. But one of the big mistakes SAP can make is to wait until customers reach a contract end-of-life situation, particularly with their DBMS and associated hardware and data center services, before SAP tries to influence the customer’s decision to switch to S/4HANA. Maybe SAP could get a couple thousand new customers a year by just waiting, but that’s assuming that all the other platform/enterprise software competitors will just let these customers roll over to SAP. They won’t, and SAP should assume that by the time the contracts are up for renewal it’s too late.

Instead, SAP should be hard at work making the case for why it’s worthwhile to consider switching now: are there hard and soft cost savings to consider even if it means walking away from a strategic database contract and paying the penalty? Even if there are no real cost-savings, and I’m not expecting there would be in every case, putting some numbers on the table about the value of switching now versus waiting for an Oracle or IBM contract to expire allows SAP to play offense, instead of playing defense. It may be that many companies will be willing to eat some of the cost of running the clock down on their existing contracts if SAP can show them how much better life and business will be with S/4HANA – and that means real numbers, not just platitudes like “100 times” improvements in this, and “250% improvement” in that.

Show the way: The other thing I wish SAP would have done last week is talk explicitly about how customers can get there from here. A roadmap would have been nice, and based on what they were talking about at TechEd Berlin last year, there’s something to say about when the S/4HANA follow-ons to Simple Finance, like Procurement, Manufacturing, Supply Chain, HRMS, etc., will be available.

But more importantly, SAP needs to tell the story about how a customer running ECC 6.0 becomes a customer running S/4HANA. They should approach it like a recipe – take one enhancement pack 7 update, add a database migration service, sprinkle in some Fiori upgrades to ECC 6.0, do a HANA RDS implementation, switch to Simple Finance, bake until well-done. Then start on the second course – be it manufacturing, HR, whatever. And along the way answer some tough questions: What’s the process? What’s the complexity? What tools and services will SAP provide? How long will it take? What’s the cost? What’s the value? If SAP wants to get S/4HANA on the strategic planning agenda, it needs to give strategic planners something to go on.

Of course, all of this advice will really just allow SAP to begin to put its best foot forward in a complex and highly competitive market. It really isn’t 1992 anymore, nor is it 1999 (Y2K time) either. SAP has some great assets, like a helluva fast DBMS and the tools and services to make it easy to use. SAP is also the most successful purveyor of software that embodies business processes in the market today, and that position can only be good for S/4HANA.

But as so much of what S/4HANA can do isn’t available in packaged software, not from SAP or anyone else, SAP has to create an amazing, partner-lead innovation wave, based on S/4HANA, that will close the manifold last-mile gaps that are widening all over the business world. That means SAP has to partner with ISVs and VARs in a way it never has before (hint: partnering should be for the benefit of the partner and the customer, not just the vendor). It has to take ownership of the success of the customer, not just act as though the job is done once the license deal is signed (a situation One Service is intended to address). And SAP has to stop talking about how cool HANA is and start talking about how cool businesses that run S/4HANA are.

Because perhaps the biggest difference between 2015 and 1992 is that the buyer is orders of magnitude more savvy, more jaded, and more desperate than ever before. Customers need the kind of change that S/4HANA is proposing – real time functionality with blazingly fast support for existing and new business processes, all running in whatever cloud configuration the customer wants. But customers aren’t going to just write a check to SAP because they say so. SAP has to show why it it’s the biggest and baddest, and then go out and prove it.

Because if SAP can’t get the customers to ultimately lead the charge – not the SIs, not market forces, not the pain of legacy systems – it’s not clear who, if anyone, will be around in 2035 to write the next chapter.

S4 HANA: It’s not R/3, and it’s not 1992 either (part I)

There’s a lot to unpack from SAP’s S4 HANA announcement of last week, but if I could only highlight the essence of what the announcement means for SAP and its customers, it’s this: SAP needs to make sure every customer understands how the versions of SAP they are running today will lead them to S4 HANA, in what time frame and at what cost. And SAP has to make sure every new customer understands what it means to run existing processes at significantly greater speed, as well as run net new processes they never were able to run before, before they’re asked to sign on.

If it wasn’t for these very customer-centric issues – in other words, if the exigencies of the real world didn’t exist – then I would say unequivocally that S4 HANA is at least as monumental a moment in the evolution of enterprise software as R/3 was back when it was released in 1992, and that’s saying a lot.

But much has changed in the ensuing 22 years, and things will have to be very different before it would be safe to give S4 HANA the kind of odds of raging success that R/3 had in its day. The old days of moribund mainframe systems and antediluvian mainframe software, a pending Y2K hoax, the lure of client/server computing, a desperate need for CIO’s to recapture control before the distributed data center obviates their power and budgets, and a consulting/SI channel equally desperate for something real to sell alongside the business process re-engineering hype of the early 1990s – none of these are around to give S4 HANA the kind of tail winds that R/3 enjoyed.

Which means that SAP is in charge of the tailwind, as well as the sail, the rigging, and everything else required to get S4 HANA the attention, and uptake, that it, at least on paper, deserves.

Of course, SAP is a vastly different company than it was 22 years ago: bigger, more complex, more embedded in the global economy, more of pretty much everything. Which augurs as well for S4 HANA as SAP could hope with such a monumental new offering. But there are still a fair number of issues that will conspire to make S4 HANA as challenging as it is promising for SAP.

Software then and now: Back in the R/3 days, SAP’s competition, to be blunt, sucked. Old, tired, unintegrated, mainframe-dependent, the enterprise software of the 1990s was a field ripe for disruption. And while R/3 had its share of issues, the bar was set pretty low for a successor to the likes of D&B Software and Cullinet.

Today, S4 HANA has to compete against a wide range of worthy opponents –, Workday, Microsoft AX, Infor 10X, Oracle – that are setting the bar pretty high for success. These companies also enjoy significant incumbency benefits in their installed bases, which SAP has to attack vigorously at the same time that SAP has to defend its installed base from the enemy. The implicit ROI of incumbency means that proving that S4 HANA is a better choice than any of these companies’ offering makes SAP’s job all the more difficult.

Platforms then and now: There were really two platforms available at the time of the R/3 launch – the dominant mainframe platform of IBM, and the up and coming platform defined by Unix and client/server computing. The latter had a particular characteristic that almost made it the un-platform: open standards for hardware and software, implemented as an explicit challenge to the lock-in of IBM’s mainframe systems, made the platform switching costs between the upstarts systems relatively low, at least in theory. Vendor lock-in, so the smoke and mirrors of the time went, was IBM’s bailiwick. The openness and standards of Unix and client/server were the domains of the new guys in town.

Today, platform vendors, and every one of SAP’s erstwhile competitors is selling a platform strategy, are paying lip-service to openness, but no one is fooled as they were in the 1990s. A platform is the key to the IT budget for many years to come, as well as a way to not-so-surreptitiously guide and influence customer behavior. C-level execs are a lot more savvy about this issue than they were in the days of R/3, and that means SAP has to make the case that S4 HANA is both the very best long-term choice for a platform shift, as well as the most open choice for continuing to leverage other platform investments that can’t be just summarily decommissioned.

Databases then and now: Along with the Unix and client/server openness myth came the myth of database choice. Again, decoupling the database from the mainframe and its operating system, and thereby decoupling enterprise software from writing directly to either of these two systems, was a virtue that propelled IT budgets across the industry. SAP embraced database openness by effectively making all databases equal – and thereby marginalizing performance equally – in a way that the market embraced willingly. If a company was a DB2, Oracle, or SQL Server shop – and the keepers of these database standards in the enterprise were a powerful lot – nothing had to change in order to embrace R/3. And there was much rejoicing in IT land.

The end of that embrace is perhaps the biggest change in S4 HANA. By writing directly to the database, not a least-common-denominator layer, S4 HANA gets even more functionality out of one of the fastest transactional/analytical systems on the market today. This is great for the business user, whose applications can now do things applications could never do before. And this is good for the conscientious CIO who sees an opportunity to limit the oversized influence that the relational database keepers continue to wield. But doing so, ironically, means that SAP must both tout the superiority of HANA at the same time that it says that the database layer is no longer relevant, precisely because it is no longer a separate “layer”, but part and parcel of the applications that impart the true value of S4 HANA to the enterprise.

If that sounds a little confusing, you get the point. The End of the Database may be a little too much for SAP’s next slogan, and The database is dead, long live HANA is a bit of a stretch as well. But it’s going to take a lot of market education to overcome a few decades of open database thinking and RDBMS hegemony before the HANA part of S4 HANA reaches its apogee.

SIs then and now: R/3 rode in on a wave of SI hype called BPR, for business process re-engineering, which I at one point re-christened “bad practice repair”, which was what was really going on in a lot of companies. The SIs loved BPR because it gave them an entrée into the CEO’s office to talk strategy and CIO’s office to implement new software. SAP was all about both kinds of BPR, and it was the start of a beautiful friendship.

Today, the SIs are scrambling to understand what S4 HANA, particularly its implementation-light, cloud-base functionality, means for the implementation side of the SI business. No SI in the SAP partner world is laboring under the misapprehension that S4 HANA is anything but bad for the implementation side of the equation. While they all pay homage to the conceit that their real value lies in strategic services, they’re secretly waging a Sisyphean battle against the erosion of a core revenue stream for them. Which means, quite simply, that the SIs won’t carry SAP’s water the way they did in the 1990s. All the more so because there’s no great Y2K hoax to galvanize ignorant execs into doing a lot of new implementations in order to make sure the world doesn’t come to an end. (Though, have you read the news lately? I’m beginning to wonder….)

What can SAP do about this? I’ll publish my suggestion in my next post on Wednesday.

Enough Consumer Coolness: It’s Time to Make a Case for Windows 10 in the Enterprise

I’ll start by saying that I came home after having watched the Windows 10 launch (on video, not live, more on that later) all excited to show my kids the demos of HoloLens, particularly as I was sure I saw a little Minecraft in there, a serious favorite of the underage crowd in my house. Too late. My son, in perusing YouTube for the latest in Minecraft music videos, announced as I walked in that he had already seen the HoloLens demo, and wondered when he was going to be able to play 3D holographic Minecraft.

If ever anyone was wondering why Microsoft bought Mojang, the maker of Minecraft, just search “Minecraft video” on YouTube: The results (37 million hits) infinitely outstrip searching “Windows enterprise” (232,000 hits) by more than 100 to 1. And therein lies the crux of this post.

I mention this not just because it’s another example of how hard it is for the older generation to keep up with the newer one, but also as an example of how the Windows 10 launch, despite the use of the word “enterprise” a dozen times or more, was as much a showcase of how much the Windows team has an uphill battle to fight in creating buzz for enterprise computing as it was another example of how cool Microsoft can actually be when it puts its mind to it, as long as it’s not in the enterprise.

Can Microsoft afford this version of coolness, particularly when it comes to the enterprise? Hardly. This week’s earnings announcement was credited with killing the Dow Industrial Average on Tues., and in most categories there were a lot of disappointing results. But Dynamics, the enterprise little brother of the Microsoft Commercial division, put in a relatively stellar 13 percent growth rate. (Which parts of that were Dynamics CRM, AX, and the rest is never disclosed, unfortunately.) So, ignoring a solid growth opportunity, albeit a relatively small one, seems a little short-sighted. Particularly as Dynamics is the place where all of Microsoft (minus Minecraft, at least for now :) ) is best highlighted.

There were some enterprisey tidbits in the announcement – the free upgrades from Windows 7, 8, and 8.1 are sure to make corporate IT folks happy. A new browser to replace Internet Explorer 11, the bane of developers and users with its anomalous script handling and other defects, will surely be welcome in IT shops that haven’t just shrugged their shoulders and shifted to Chrome. And the seamless interaction of Office and Skype across the full panoply of devices on stage was enterprisey enough, sort of – if you’re one of those people who think Office and Skype are enterprise apps (which, considering that the Minecraft generation in my house also uses them, sort of makes its enterprise cred highly suspect.)

But sort of isn’t what’s going to light the enterprise on fire. And here’s my problem with the Windows 10 launch: While the biggest selling point of Windows 10 – a single code base for building apps that run across every possible device – was definitely part of the messaging of the event, the evidence that Microsoft knows what this really means for the enterprise, or even what makes enterprise users tick, was missing in action. Again.

HoloLens certainly has some serious enterprise potential, as does Cortana, and the demo of Surface Hub, a giant wall-sized touch screen, which is right up there with jet packs and teleportation in the futuristic coolness category, certainly had something to make enterprise execs salivate. But none of that coolness is enough to get enterprise developers who build the new business apps, and the business decision makers (to use a Microsoft term) who spec out those apps and write the checks for them, to go all-in with Windows 10.

Microsoft finds itself once again caught falling down that classic chasm between offering coolness and offering solutions to practical business problems. What the Windows 10 launch showed is another example of how tech companies try to sell technology the same way they develop it. The tech dev cycle that starts with specifying a new feature, and then building, debugging, rewriting, testing, and demoing it at events like last week’s Windows 10 launch party leaves out the last mile that a business user is looking for: how does this change my business process and move my KPIs into the success zone? Importantly, coolness isn’t necessarily a virtue in the enterprise. Who the hell has the time to be just cool?

Or, to rephrase that last thought: what’s cool in the enterprise is something that solves a real, and important, problem right now. Not sometime down the road, as in when virtual reality will become a tool for enterprise success, once we’ve figured out how and why.

So I’ve asked for, and have yet to see, any evidence that Microsoft knows what that killer enterprise app looks like. It may be that they honestly don’t know, or even care. Both of which are bad mistakes to be making at this juncture. On the contrary, Microsoft has to up its enterprise game ASAP, before it loses an opportunity to define the next generation business app platform for an enterprise audience increasingly assaulted by more incumbent vendors pitching competing platforms that have a more definable enterprise edge.

Three key factors are making the clock tick faster and louder on getting the enterprise case for Windows 10 out in front of the market.

The Platform Wars. Two really big and really important competitors are pushing their enterprise platform strategies a whole lot more effectively than Microsoft is right now – and SAP. Their customers – virtually all of which overlap with Windows – are being pushed by aggressive direct sales and marketing campaigns to get on program with each companies’ respective platform strategy. HoloLens and free Windows upgrades aren’t enough to combat this push. Windows 10 could be the leading edge of a comprehensive enterprise platform strategy (along with Azure and .NET) that could give Microsoft something to say to and HANA cloud. If only….

The Enterprise Phone Wars. As I have written previously, Microsoft is in serious danger of losing the US market for Windows Phone before it has even gotten started, and, most ironically, just when it has a new OS, Windows Phone 8.1, that is rated as good or better than IOS or Android. The cross-platform capabilities of Windows 10 won’t be nearly as impressive if Windows Phone isn’t one of the platforms enterprise developers think is important – and right now they don’t: few if any enterprise developers are developing for Windows Phone.

Pushing the cross-platform capabilities of Windows 10 in the enterprise could, just maybe, light a fire under the enterprise dev community, which right now is stuck worrying about how to build and maintain interfaces between mobile, desktop, and tablet environments. While HTML5 is a good workaround, running an app in the native mobile environment is acknowledged to be the truly optimal choice. But if the app has to go to a different device, it’s interface time, and Microsoft loses.

(A follow-up to my post on Windows Phone 8.1 and Verizon cited above: a week after that post appeared, Verizon quietly pushed an update to my phone. During the last month of playing with it, I think it is truly superior to IOS. Too bad Verizon still isn’t really on-board with Windows Phone 8.1. But thanks, anyway.)

The Business Process Innovation Wars. Business users need innovations that solve business problems, as noted above. This requires the innovation provider to demonstrate in-depth knowledge of existing business processes in order to propose – and then deliver – ways in which the processes can be innovated. Delivering proof that this process knowledge is baked into their offerings is becoming job #1 for enterprise software companies, and everywhere I turn there’s an increasing clamor from customers to show how a given innovation matters in terms of vertical and micro-vertical functionality, preferably cross-indexed with geographical or regional requirements. In other words, business innovation is increasingly about defining, and then delivering on, that last mile of innovation that matters most to the customer, particularly the business customer. Windows 10 so far has no real story to tell in that regard.

Can Microsoft pull out of its self-inflicted Windows tailspin before all that’s left is Minecraft and virtual reality? Yes, but that means it has to be ready to take a very different – or maybe parallel –route to market with Windows 10. This means connecting Windows 10 to the aspirations of enterprise users, and toning down some of the gee-whiz in favor of the get-it-done. This means, as I have said already, showcasing that killer enterprise app that makes the case for Windows 10. Or making the case that the Cortana, Skype, Office, and the new IE, Spartan, will have a huge, direct impact on day-to-day enterprise processes and their users. This also means taking some of the really awesome innovations going on in Microsoft Dynamics, such as its Lifecycle Services offering, a cloud-based enterprise software tool unlike anything in the industry, and connecting its capabilities to Windows 10 (if possible, and I think it is.)

In other words, it means stopping something I’ve railed against for a long time: pretending that the Windows team, and its traditional gang of influencers, really gets the enterprise. They don’t, full stop. And instead of pretending, the Windows gang need to acknowledge this lacuna and get started with reaching out to the enterprise, both internally and externally. Internally, there’s this group called Dynamics, who were also missing in action during the Windows 10 event, that actually get the enterprise and would be more than willing and able to lend the Windows team some legitimate enterprise cred. Externally, there’s a few thousand partners who could also play that role, also willing and able to step up to the plate.

And finally, there are the enterprise influencers, myself included, who seem to be consistently excluded from the dialogue. I tried to attend the Windows 10 event, and was rebuffed, however nicely. And having seen how sparse the real enterprise message was at the event, it was probably for the best that I stayed in the office and watched the event on line.

Until the enterprise story is told about Windows 10, by people who really get the enterprise, Microsoft will be leaving one of its best assets sitting on the sidelines at an increasingly critical moment in the enterprise software market. And judging by the market’s reaction to last quarter’s numbers, it’s a pretty critical moment for Microsoft overall. I think Windows 10 can make a difference in Microsoft’s enterprise software competitive profile, but convincing Microsoft continues to be a Sisyphean task.

If Microsoft will be content with Xbox, Minecraft and office productivity success, then no harm, no foul. But if there are aspirations for greatness in the enterprise, it’s time to show what Windows 10 can do. Or we’ll all be running watching Minecraft videos on our iPhones and Chromebooks, instead of running our enterprises on Windows phones, tablets, and desktops. While that’s just what Apple and Google want to see and hear (and , SAP, Oracle, Infor, and others), I’m pretty sure that’s not what Satya Nadella had in mind when he took the job. Right?


SAP and Culture Clash: Marshaling Weapons in the “War of Business”

SAP’s annual sales kick-off meeting season, FKOM, is under way, with the North American and European versions kicking off this week. FKOM is where the new strategies, products, alliances, and services are all pressure-tested on the that thin, white-shirted line of sales people who have the unenviable job of syncing the year’s marketing strategy with the desperate desires of SAP’s customers, and then getting them to actually write a check. It’s a mating ritual that is equal parts science and art, and its quarterly execution is one of the software industry’s greatest and most mystical natural wonders.

SAP is marching into FKOM in great shape, having pre-announced a top notch quarter and riding high on its raft of cloud purchases. It’s also marching into FKOM with a lot of change in the air, change that began with the abrupt resignation of Vishal Sikka last spring and continues with the absorption of another massive acquisition, Concur, as well as a raft of management changes, plans for a suite to succeed R/3, dubbed s-innovations, and a new focus, called One Service, for SAP’s increasingly critical Services group.

But nothing is ever simple, or completely as it may seem, in the software world, and SAP’s 2015 is going to be another year of running, jumping, shooting, pivoting, and head fakes as CEO Bill McDermott tries to keep up the momentum in an almost too dynamic market.

Job number one, as it always is for companies of SAP’s size, is internal: keep the myriad centers of power and influence inside SAP focused on the singular goal of cranking out great quarters like the most recent one. SAP’s sheer size makes this a daunting task, and it’s only gotten harder over the years. But this need for a single lodestar to focus on, a singular target to point the arrow at, one that makes sense to its partners and customers, has never been more essential. And if there is one issue that both exemplifies this internal challenge, and at the same time holds the keys to success, it’s interplay between SAP the German company, SAP the US company, and SAP the global company.

It’s hard to sugar coat it, but the fact is that SAP continues to struggle with reconciling its German roots with the American and international branches now flourishing around the world. Evidence of the balancing act is everywhere: on the one hand there’s CEO Bill McDermott’s very public statement about living in Germany, and on the other hand his hiring of Quentin Clark to be the new CTO based in Palo Alto, a move clearly intended to shore up the company’s Silicon Valley cred. On the one hand SAP the German company is being asked by Chancellor Merkel’s government to be as German as possible when it comes to data privacy – an understandable request considering the divergence in law and practice between the US and Europe on these issues. And on the other hand, SAP the US company is being asked, not by the government but by the financial markets – one of our proxy governments, to be sure – to be as American as possible, which means entrepreneurial, consumer-like, all-cloud, low-margin and low-cost, and to be as open as possible to the wave of new technologies and business practices that mean mining the exabytes of data of the world in the service of commerce. Which of course sets up a perfect collision-course with its German/European data privacy mandate.

The cultural issue goes even deeper: the problem with cultural stereotypes is not that they tend to be insultingly false but that they can’t help –at times – to be shockingly true. Germans are control freaks, Americans are sloppy and miss the details. Germans take too much time making decisions, Americans jump in too soon without due consideration. Germans think it’s all about great engineering, Americans think it’s all about getting a product out as fast as possible. Germans think it’s about profitability, Americans think it’s about market share. Germans think the technologist knows best, Americans think the customer knows best. Germans think no product should be released before it’s ready, Americans think it’s okay to release buggy “beta” software as GA. The list goes on and on….

Adding to the cultural issue is that this isn’t just about the US/German divide, though that appears to be the biggest culture gap in the company. SAP is also an Indian company, a Chinese company, an Israeli company, a Brazilian company, an Argentinian company, a French company – and on and on. And as any student of world cultures will tell you, or anyone who’s seen the UN in action, this cultural bouillabaisse isn’t as easy to digest as its culinary namesake. Getting all these different people to work together takes a Herculean effort. And don’t forget that when Hercules wasn’t running around performing his labors he was running around Greece stark-raving mad. Which means it helps to be a little crazy too if you’re going to play the hero.

But wait, there’s more. SAP is also a federation of business cultures, the result of an aggressive acquisitions strategy that has been marred, to be blunt, by a haphazard merger strategy. By this I mean that SAP has been pretty good at buying companies (leaving out the issue how much they paid for some of their recent acquisitions) but not as good at bringing them into the fold. While two of the founders of the latest acquisition, Concur, have basically made one of the speediest founders’ exit in the history of SAP’s acquisitions, the standard has been to maintain the acquired company’s autonomy (and it’s executive leadership) well beyond what would appear to be a reasonable shelf-life.

And so we’ve seen the Business Objects culture war, the Sybase culture war, the SuccessFactors culture war, the Ariba culture war – in each case there’s been no shortage of smart, well-connected people inside SAP who, judging by how the acquired company comports itself, have wondered whether SAP was the acquirer or the acquired. And while there’s some hope that Concur will be the smoothest acquisition of all –perhaps because at least two of the founders aren’t trying to squeeze their round start-up souls into SAP’s square management culture – the fact that Concur, Ariba, SuccessFactors, Fieldglass, and hybris, among other assets, will be lumped into a single massive “cloud” business that will be a huge part of SAP’s “American culture” strategy will make the job of whoever takes the helm of the cloud business daunting to say the least.

The problem with the culture wars at SAP is not that they will never go away, because they won’t and shouldn’t. While SAP needs to be refocused to ensure that it doesn’t consume itself in internecine battles, creating a monoculture SAP would be a huge mistake. While it’s clear that the infighting, elbowing, and stereotyping needs to disappear, the “dynamic tension” that is endemic to a multi-cultural company like SAP is actually a huge asset that, while already in play across the SAP empire, should be embraced and nurtured even more.

SAP can no more afford to have a single, predominant culture than it can afford to have a single product line or sales channel. The branding needs to be universal, but like SAP customer Nestle’s uber-brand, Nescafe, the packaging, the taste, and even the manufacturing, must be as local as possible. This can only happen in a multi-cultural company selling into a global world culture: to pretend that there could be a single culture selling to a single world market is to be ignorant or utopian. Either way, it’s a sure path to failure.

How can SAP fix this? Nothing is ever simple, as I just said a few paragraphs ago. Keeping the best of the cultural dynamic tension while losing the worst of the internecine fighting isn’t going to be easy. Some of what needs to happen is window-dressing – like having Bill McDermott take up residence in Germany, and some of it is about real cultural sensitivity – like banning the use of any language during internal SAP conference calls that isn’t spoken by all the people who are on the call. (As someone who lives in a multi-lingual extended family, I can assure you that, while it’s easy to lapse into one’s native language without intending to be exclusionary, it’s even easier to feel excluded when the conversation shifts to a language one can’t understand.)

Perhaps most importantly, SAP has to build that single lodestar point of reference for the company and make it stick. Run Simple is a good start, but it doesn’t yet have the cache of an Intel Inside or the IBM On Demand slogan that Sam Palmisano used to resurrect IBM following its crash in 2002. Run Simple simply hasn’t been embraced by all of SAP – nowhere near the embrace that HANA has had – and, more importantly, the SAP ecosystem and customer base hasn’t gotten on board with Run Simple either. The importance of a lodestar cannot be overemphasized: Palmisano’s use of On Demand as IBM’s lodestar was the main reason he was able to turn the company around after the crash. IBM’s successful resurrection in the beginning of the century is a powerful example of what a focused internal campaign can do for a company’s external execution.

The reason that SAP still isn’t as simple as it would like sets up a discussion of the second big issue facing SAP in 2015 and beyond: how do customers, partners, and the rest of the world engage with SAP? The answer, right now, doesn’t come in under the rubric Run Simple.

As Run Simple has evolved there’s been some clarifications and a better sense that, with Fiori, s-innovations, and other new capabilities on the way, SAP and Simple may not turn out to be mutually exclusive at all, which was definitely how many customers and influencers felt following the debut of Run Simple at last year’s SAPPHIRE. The early s-innovations certainly look a whole lot simpler to use, though using them will require running the HANA platform, which for many customers will entail a migration and/or upgrade that won’t be at all simple.

Regardless, the bottom line is that SAP needs Simple to be a slogan not just for its products, but for its interactions and interfaces to its ecosystem and the myriad developers, programmers, and startups that SAP wants, no, desperately needs, to embrace its HANA platform and associated technologies. Because, today, Simple is not the way to describe how SAP engages with the partner and customer world around it. The main, glaring problem is that there isn’t a single, Simple answer to the question: “If I want to engage with SAP, whether it is to build a killer app or service for the SAP market, or buy SAP’s products and services, where do I start?”

While SAP has made great strides in fixing these problems, the fact remains that the external face of SAP is too complex, with too many points of interaction for would-be partners and too many potential barriers along the way. Coupled with the continued perception, even among SAP’s most loyal customers, that the internal SAP journey is also too complex, means that Run Simple is simultaneously a helluva of a good idea and a helluva big challenge for SAP.

My understanding is that a lot of what FKOM will focus on this year are the new ideas, products, and services that will attempt to address this Run Simple problem. One key lodestar that I believe will be broadly transformative for SAP is One Service, which will be rolled out at FKOM and to the world this week. One Service basically makes all of SAP’s myriad services, from implementation to support to cloud and mobile services, as well as education and training, available from a single sales and support organization. This is part of an effort to close the complexity door on the services side, and, frankly, make the customers’ interactions with Services as Simple as possible.

I think One Service is an excellent beginning for SAP, not just because it solves the problem of not-very-simple engagement with SAP, but also because it could serve as a model for providing that single lodestar that can both transcend the culture wars and provide a focal point that can help SAP leverage the cultural diversity that is simultaneously one of its biggest problems, as well as one of its most important legacies and most powerful weapons in the dynamic, global business world of today.

A certain Karl Marx, not known necessarily for his love of capitalism, once said that “a second language is a weapon in the war of life.” I’m pretty sure he didn’t mean to provide a rationale for embracing multiculturalism in the 21st century global economy, but his words were a prescient reminder that life, like business, whether we like it or not, can be a fight. Being armed with the tools to transcend one’s own culture and succeed in battle should be high on the must-have list of every executive and global citizen of today.

SAP is lucky that is has these weapons at its disposal. The trick is to make sure to minimize the “friendly fire” and maximize the synergy that a German/American/Global company can provide. If SAP can do this, and put the focus on simplicity and single points of contact like One Service, it’s going to have a helluva good year.



Windows Phone Looks Doomed: Does this Mean Trouble for Windows 10?

I think it’s pretty fair to say that counting Microsoft out in a market it has made a commitment to is a classic rookie mistake that serves as the epitaph for too many forgotten companies. If at first you don’t succeed, try try again is a time-honored mantra in Redmond. And it’s pretty evident that Windows Phone is one of those areas where Microsoft has made big commitments – including but hardly limited to its $7.2 billion purchase of Nokia’s phone business – and where the company is on the record as committed to try try again.

But I think it’s time to call Windows Phone for what it is, a failed experiment, at least in the US market, that will have huge repercussions across the company. And the biggest impact may be on Windows 10 and one of its main selling points: a single platform that spans mobile, desktop, server, and cloud. Without a strong mobile phone offering from Microsoft, it may be hard for Windows 10 to take advantage of one of its strongest competitive advantages against Apple’s and Google’s platform dreams.

The death of Windows Phone won’t necessarily dent demand for Windows 10 on the desktop, but maintaining market share in PCs isn’t what the Windows 10 offering is all about. It’s a platform play, one that Microsoft hopes will help make up for the fact that monopolizing the PC market isn’t going to cut it anymore. Indeed, Satya Nadella and company have to grab a much bigger prize: Microsoft needs the next generation apps that span mobile, desktop, server and cloud to run on Windows 10, or the company’s dreams of future glory will evaporate – which, unfortunately, is what the Windows Phone market is doing as we speak.

This is, ironically, a failure that isn’t about technology or user experience – Windows Phone meets or exceeds the current competition in both categories, and its technological prospects as a key mobile device in the Windows 10 strategy are undeniable. (And I say this as a current, but soon to be former, Windows Phone user who genuinely likes the phone and thinks many aspects of its usability are far better, or at least theoretically far better, than iPhone and Android.)

But, technology and user experience can only take you so far. If Windows Phone has lost the carrier and user acceptance battle to IOS and Android, and I think it definitively has, then the Windows Phone saga is another rare, cautionary tale about how many second chances even Microsoft can get before it’s time to pack it in and call it a day.

So how dead is Windows Phone in the US? Let me count the ways.

Perhaps the most damning factor against Windows Phone comes from the #1 US carrier, Verizon, which as far as I can tell, is largely exiting the Windows Phone market. The evidence is pretty compelling: Verizon has basically stalled any plans for updating its Windows Phones, including my year-old Nokia 928, and while there are four Windows phones for sale on its website, only one is offered with the latest operating system, Windows Phone 8.1, and its very compelling and competitive voice system, Cortana. (Ed Bott of ZDNet takes aim at Verizon as well for its unsupport of Windows Phone.)

This isn’t about time, it’s about focus: The new OS has been out for six months, more than time enough to get it into the hands of customers. (By contrast, IOS has had two upgrades in the same time, and a third, IOS 8.2, just entered beta last month.) Verizon clearly couldn’t be bothered about upgrading Windows Phone.

As a survivor of the two previous Windows Phone incarnations (I know, fool me once, shame on me, fool me three times….), this is another case of déjà vu all over again. For those of you smart enough to stay away from Windows Phone, the worst, by far, of the many reasons why Windows Phone 6.5 and Windows Phone 7 were a marketing and technological mess was that there was no upward compatibility from Windows Phone 6.5 to 7, or from 7 to 8. Microsoft effectively stranded owners of these previous phone operating systems, offering their new functionality to new customers (often at a discount), and punishing those foolish enough to have been existing customers by forcing them to pay the piper to break their contracts and get the new functionality.

That lack of compatibility, and the unreliability of Microsoft as a purveyor of modern cell phone operating systems that this evinced, was one of many reasons Windows Phone 8 started its journey trying to crawl its way out of a self-inflicted death spiral. The fact that that the biggest carrier in the U.S. (with 44 percent market share) is repeating the past and leaving its Windows Phone 8 customers high and dry puts the reliability of Microsoft as a smart phone supplier further in question. (And even if there were a compelling reason for not upgrading six months after Windows 8.1 was released to carriers, it’s clear that Verizon doesn’t think it necessary to tell its Windows Phone customers what is happening and when, if ever, they should expect an upgrade. They instead tell customers to ask Nokia, even though technically Nokia can’t release an OS upgrade to a carrier’s customers without going through the carrier. Can you say Catch-22?)

Meanwhile, the evidence that the answer from Verizon about when Windows Phone 8.1 will be available is never, or least some distant unforeseeable point in the future, can be seen in a recent Sunday newspaper insert from Verizon(the Winter, 2014 edition). The insert is notable for the fact that there is nary a Windows phone in it. (Nor are any of the tablets in the insert Windows tablets either.) So no Windows phones for the big holiday season from the #1 carrier? That’s gotta hurt.

More evidence? Last month Verizon stopped selling the Nokia Lumia 1050 (to the surprise of the call center rep I spoke with recently, who was sure it was still being offered.) Nokia/Microsoft, meanwhile, still thinks Verizon is selling three of its phones to customers, including the Icon and the 822, at least according to the Nokia website. Not.

The rest of the US carrier market is barely any better. Sprint is offering has a single Windows phone, but it doesn’t run Windows Phone 8.1, and TMobile has two, both of which run Windows Phone 8.1. AT&T is the biggest supporter, with four Windows Phone offerings, all of which run the new operating system (something tells me AT&T has the corporate contract with Microsoft in the US.)

Nokia has similar delusions about how many Windows phones these US carriers are selling. The website shows that T-Mobile is selling four of its phones, and AT&T seven. At least it doesn’t list any Sprint phones (the Sprint Windows 8 phone is an HTC.)

This inability of Microsoft/Nokia to cover even 50 percent of US market is, of course, a reflection of an intractable problem with Windows Phone – the app gap. As of last summer, there were over 202,000 Windows Phone apps, as opposed to over 900,000 iPhone apps and over 850,000 for Android, a pretty glaring gap. This isn’t just about having compelling apps in volume and variety, it’s also about the regular humiliation of arriving at conferences and other events and not being able to download the conference apps, which are never offered for Windows Phone except at Microsoft events. The app gap, unfortunately, seems at this point to be completely insurmountable.

The Impact on Windows 10

So, with the carriers exiting Windows Phone or largely uninterested, and the app gap accelerating beyond the point of no return, the question of what happens to Windows 10 comes into question. There is no doubt that all enterprise software development is in full mobile first mode, it’s a mantra you hear from every vendor, Microsoft included. But if the main mobile platform for Windows can’t be relied upon to have a decent market share (which it clearly doesn’t have, having scraped up a little over 3 percent market share recently, putting it in a statistical dead heat with Blackberry, emphasis on dead) as well as a critical mass of carriers who will actively support the operating system and its users, the native mobile advantage of Windows 10 goes by the wayside.

This is more important than it may seem. While HTML5 and various mobile development platforms offer developers the ability to run their apps on any device, native development in the phone’s OS is emerging as the gold standard for mobile app development. This is even more critical in the enterprise, where key usability, security, and privacy issues are increasingly seen as best handled in native mode.

That’s where the Windows 10 promise potentially meets its doom, particularly in the enterprise, which I once thought was the last great hope of Windows Phone. Once upon a time. If I’m developing a killer app for my company, one that has to span mobile and desktop and server and cloud, Windows 10 looks pretty compelling until I factor in the problem of Windows Phone.

My killer app certainly won’t have a BYOD user base on Windows Phone, and it’s hard to imagine a US company standardizing on Windows Phone if there’s really only one carrier who is effectively supporting it. At which point, considering all development is mobile-first, I as a developer would have to ask myself why I’m using a platform – Windows 10 – that requires me to break out of its monolithic development model and start coding for IOS and Android. If I’m not able to build an app on a single code base, because that code base doesn’t give me access to the mobile phones my users are using, then maybe I don’t need to look at Windows 10 at all. It certainly takes a key advantage of Windows 10 off the table before it even gets started.

Microsoft could always offer to run Android apps on its phone, an idea that has been floated before (Mary Jo Foley wrote about the notion, however farfetched, this earlier this year.) But that would just allow the developer trying to reach the greatest number of users to opt for the Android platform and let some compatibility option handle the few Windows Phone users in the market.

It’s a sad moment when a truly great technology is put out to pasture, but, heck, the mobile phone market is one big lesson in the vagaries of technology leadership and failure. Remember Symbian, the dominant market leader of 2009? Palm? Blackberry? Can you believe that iPhone is only four years old?

The bottom line is that technology sh*t happens faster in mobile than almost any other market, and so far there’s never been a second act. I wish there was one for Windows Phone, and maybe some non-US market may be the place. But for now, and for the foreseeable future, Microsoft and Windows 10 are going to have to make it without a strong mobile phone product. That’s only going to make Satya Nadella’s already tough job that much harder.


Net Neutrality – Confusion, Content, and the Meaning of Free

There is perhaps no contemporary issue at the intersection of technology and public policy that is more contentious and conflicted than net neutrality. The issue itself has probably accounted for its own increase in Internet traffic over the last couple of years as opinions, jeremiads, official proclamations, and even HBO’s John Oliver, have weighed in on the issue.

One of the interesting parts of this complex and confusing issue is that content plays a central role in the debate. Even more interesting, however, is that unfettered access to content – a right I firmly believe in, alongside an equally vigorous right to the privacy and security of personal data – is conflated with the right of Internet service providers to charge different rates for different access speeds. I believe these are two separate issues, and by separating them (and understanding what free really means) it’s possible to see where a more reasoned compromise may actually be constructed.

To condense way too much of the polemic into a couple of paragraphs, the basic issue is that a wide range of stakeholders – from Internet activists to 1st Amendment liberals to some of the wealthiest and most influential technology companies on the planet, like Netflix, Google, and Amazon, among many others – believe that doing away with net neutrality will stifle freedom of expression, entrepreneurship, and a host of other evils too numerous to count.

On the other side are the major service providers – companies like AT&T, Verizon, and Comcast – who believe it is their capitalist economy-given right to make as much money as possible by selling their Internet pipes at different rates depending on who’s using what.

At least one of these companies – Comcast, one of the least popular corporations in the US – have definitely been caught by regulators impeding Internet traffic from “content providers”, and that impedance has set the stage for what I believe is a poorly constructed argument that goes like this: the ability of service providers to charge differential access rates threatens the free flow of content. Therefore, in the spirit of protecting content, there can be no differential pricing for access to the Internet.

In other words, without a level playing field for Internet traffic, the sanctity of content is in question. And that’s where I start scratching my head.

Let’s start with the content providers. Right now they do pay for differential access. Netflix, for example, agreed last year, most unwillingly, to pay Comcast, Verizon, and other service providers for fast lane service. Netflix’s CEO is on record as saying these fees are unfair. The service providers say that if Netflix wants a big Internet pipe, it should pay for it. And, they add, if Netflix doesn’t pay more, the cost of supporting the Internet infrastructure (and the profitability of the service providers) will be borne by the rest of the user community.

While it is true that Comcast was caught in 2007, and later sanctioned, for deliberately impeding Internet traffic, mostly to stop peer to peer networks such as BitTorrent from sucking up too much bandwidth without appropriately compensating Comcast, I don’t believe we have to have price neutrality in order to ensure access and keep a service provider from misbehaving.

The United States Code of Federal Regulations is replete with regulations that are intended to prevent predatory pricing, monopolistic control, and restraint of trade without the simultaneous requirement that all players in a given market provide an identical level of service at an identical cost.

Pharmaceutical manufacturing regulations are perhaps the simplest example. The same rules for safety – safe drugs is to pharma users what unfettered access is to Internet users – apply whether a manufacturer makes aspirin at fractions of a penny per dose or a new treatment for hepatitis that costs over $80,000. Playing fair – in this case making sure drugs work and consumers aren’t poisoned – is separate from what price the producer is allowed to charge.

Similarly, we should consider an option for the net neutrality issue that allows the movement of content to be priced differently, as long as that movement is not impeded or otherwise blocked. In this way Netflix would pay a proportionately large fee to stream millions of movies to millions of customers, while enterprises and consumers that move relatively smaller quantities would pay commensurate with their usage requirements, and not be asked to effectively pay for Netflix’s disproportionate use of Internet resources.

(I should add that the argument that this kind of price regime would stifle competition is largely disingenuous: Netflix’s stock price did take a dive in in the quarter following reports of its deal with Comcast, but that stock shortfall was attributed to increased competition and an ill-considered price hike by Netflix, not the supposedly onerous and competition-stifling cost of paying a premium to the likes of Comcast. The cost of having Amazon, Google, HBO and other competitors enter the streaming video market is a much bigger deal than paying off Comcast.)

If we strip content access away from the net neutrality debate, and just focus on differential pricing, what we end up with is a powerful set of companies on one side – content providers – and another powerful set of companies – the broadband suppliers – on the other side arguing what is really a business problem: how much does it cost for the former to use the latters’ services?

These issues are resolved all the time without resorting to government-sanctioned price controls: logistics providers, manufacturers, distributors, and retailers sort out similar business questions without crying foul or stirring the pot. While some would argue that access to the Internet is not a privilege, but a right that must be protected at all costs, I would believe, in the case of the food business, ensuring public access to the food supply is arguably a much more fundamental need on Maslow’s hierarchy than watching Game of Thrones in HD. There are ways around this without giving some very big corporations a government-mandated price break I’m not sure they deserve or even need.

There is one final argument for price neutrality, which is the potential negative impact that unregulated pricing will have on start-ups, that I’d like to address. First, startups dream big but always start small. Even if I was stupid enough to start a company to compete directly with Netflix (John Oliver refers jokingly to a company he wants to start called Nutflix, which I hope will be the final incentive you need to watch his brilliant analysis of the topic, even if we do disagree), it would take me years to approach the usage levels of Netflix, or HBO, or any of the other competitors in the market.

And if my startup ever did get to the big leagues, there would be other, more fundamental issues I would have to deal with (like the bone-headed idea that I would ever want to compete with these companies in the first place) than what my startup was paying for Internet access.

Secondly, and this is really basic: entrepreneurs don’t let anything stop them if the idea is good enough. We here in California are routinely treated to diatribes about how our taxes, housing costs, and wages are stifling competition, and yet, as all three continue to climb year in and year out, California-based start-ups are blossoming and VCs are spending more than ever.

So, as the debate swirls around net neutrality, let’s keep some perspective on the content side of the issue. Content isn’t all the same, its uses aren’t all the same, and the quantity and quality of content needed for a given purpose varies significantly from use case to use case. There is really no technical or business case for treating all content identically: if I’m archiving last year’s invoices, I need a very different speed and quality of service than if I’m tracking a major retailer’s e-commerce transactions in real time in order to detect fraud – or streaming Orange is the New Black, for that matter.

In fact, the threat of limiting access to content isn’t half as serious as the threat to unlimited access to content. Just whisper the words Snowden and hacking Chancellor Merkel’s cellphone around European IT executives and government regulators and you’ll see what I mean. What’s really needed is highly differentiated, nuanced, and carefully regulated access to the flow of content, which hardly lends itself to the one size fits all mentality of many net neutrality advocates.

Indeed, building Internet infrastructure to support providing identical services – and prices – for all possible content use cases would either result in too much or too little bandwidth for one or the other. The size of the water pipe going into a single family home is vastly different than the one going into an apartment building or a pulp mill, and each user class pays a different price in accordance with its water use. But all users get safe, drinkable water, at the risk of regulatory sanction. Similarly, we could come up with a regime that prevents the “poisoning” of content access without requiring it to be the same no matter the use case.

Finally, for the benefit my mono-lingual English readers, one of the biggest problems with the whole issue boils down to the word “free.” English may be the only language in the Indo-European family (and that’s includes pretty much half of the world’s population) that has a single word that denotes “no cost” and “unrestricted”. All too many arguments across both sides of the net neutrality divide have failed to carefully distinguish between these two very distinct meanings, and the polemic around the issue has been all the poorer for it.

I say we need to make sure that data moves as freely as it legally can, and keep that notion separate from what a company can charge for moving those data from one place to another. Information and content, contrary to the old saw, don’t want to be free, whatever that means, they just want to move where they are the most useful. So let them do so thoughtfully, carefully, and with appropriate speed and accessibility, and keep the issue of who pays what on a completely separate track.



Women of the Supply Chain: Responsibility, Collaboration and Bathroom Lines

Hanging out with Kinaxis, the relatively small and always interesting supply chain vendor from Ottawa, Canada, never fails to be an eye-opening experience. It’s not just that I get to meet with a vendor and a loyal cadre of customers who are collectively pushing the envelope on all things supply chain, it’s that sometimes they’re pushing an envelope I hadn’t seen before in my peregrinations in the supply chain world.

This year’s Kinexions user conference was no different. What I heard from Kinaxis about taking Rapid Response, its in-memory supply chain planning product, further into the realm of collaboration by pushing users to self-identify their areas of responsibility represented an excellent strategic direction on the part of Kinaxis.

I also learned something from observing the lines forming outside of the bathrooms, which, if you’ll bear with me, I promise will actually reveal one of the reasons I like where Kinaxis is heading with Rapid Response.

I feel obliged to state unequivocally that I don’t usually pay much attention to plumbing and people, except when it comes to pure self-interest. But I couldn’t help noticing that the queue for the women’s room at Kinexions was one of the longest I had ever seen at a tech conference, other than my recent visit to Workday ‘s user conference.

Of course, what I’m really talking about is the proportion of women in attendance at Kinexions relative to both the number of men at Kinexions and the gender ratios found at most tech conferences. And while the lines outside the women’s room at the recent Workday conference that I attended were even longer, there’s an important difference between the disproportionate presence of women at a supply chain conference and the even greater disproportionality at a HRMS conference.

HRMS has always been, to be blunt, a comfortable domain for women in an otherwise all-male corporate world – comfortable perhaps more for the men than the women. This phenomenon is identical to the way minorities studying in the era of affirmative action were often shunted toward the social services – in order to serve their “people” – instead of being directed towards more challenging and intellectually rewarding careers in pure research, medicine, or, God forbid, the humanities. Similarly, HR was the woman’s track in business schools back when the women of my generation were getting their MBAs. This bias towards HR as a women’s field has continued, with a Forbes article from 2011 noting that 70 percent of HR jobs were held by women at that time. Judging by the lines at Workday’s conference, that ratio looks like it still holds.

When I started looking for data to back up bathroom line observation at Kinexions, I was surprised at how much women are represented in SCM, considering that the bias towards women in the HRMS world was never at play in SCM. One data point, from the National Center of Women in Technology (NCWIT), pegged the percent of women in operations research – the nerdy upper echelon of the supply chain world – at 55 percent in 2012, the highest percentage of the eight tech professions cited (#2 was database administrators, a profession where 37 percent of the positions are held by women.) This is a lot better than the percent of CIOs that are women – 24 percent – or the overall percent of women in high-tech – 26 percent – also according to the NCWIT.

So why are there so many women in supply chain roles? Maybe there is a natural bias, though one that speaks to women’s genuine strengths and not men’s discomfort. One interesting article in SCM World cited a survey of global supply chain companies in which 74% of men and 96% women surveyed believe women possess the special skills – labeled in the article as emotional intelligence, empathy and self-awareness – that are useful in managing supply chains. (This same article also claimed that only 10 percent of the senior leadership roles in the Fortune 500 were women – which means there may be a glass ceiling for the NCWIT 55 percenters who want to move up to executive positions.)

So it’s interesting to note that the number of women at Kinexions came in at 23 percent, according to the company, a number more in line with overall tech industry averages, but still higher than the percent of women who work at Google, for example (17 percent, according to IEEE Spectrum), and higher than what appears, anecdotally, to be the average at most tech conferences.

I asked Trevor Miles, Kinaxis’ resident deep-thinker, why there were more women at supply chain conferences like Kinexions, and his response dovetails nicely with those special skills I noted above. According to Trevor, women appear to be better at cooperation and collaboration and to be more open to alternative points of view, all skills that are valued in the supply chain world.

I know I’m riding a fine line between stereotyping and arm-chair sociology, but I don’t think the notion that women on average possess these characteristics in greater percentages than men is too far-fetched. What is certainly true is that supply chain planning and management don’t lend themselves to absolute truths and command and control hierarchical management. In the world of supply chain planning there are relatively few irrefutable numbers and an over-abundance of options and alternatives that need to be weighed carefully in order for an optimal decision to be made.

This means that trade-offs, compromise, collaboration, and a whole host of people skills tend to matter a lot in getting the job done. It takes teamwork, and not just individual initiative, to consider multiple and even opposing or non-obvious alternatives in order to run a supply chain. And that teamwork doesn’t just include fellow employees: Myriad stakeholders, sometimes working across multiple companies simultaneously, must be marshalled in the service of supply chain excellence.

The fact that there is rarely, if ever, a “one true number” or single, irrefutable way to solve a supply chain problem dovetails nicely with the value of tool like Rapid Response, which makes modeling and sharing different scenarios particularly easy and efficient . Indeed, the fact that Kinaxis’ Rapid Response enables a high degree of collaborative decision-making – its use practically demands collaboration, the consideration of alternatives, teamwork, and consensus-building – makes it less surprising that Kinaxis, like the supply chain world in which it lives, can draw a disproportionate number of women to its conferences.

Which leads me to Kinaxis’ plans for Rapid Response. The company has been putting a lot more emphasis on a feature that allows stakeholders to identify – in a social collaboration-lite function inside Rapid Response – the areas that they are individually responsible for and, therefore, willing to help with when a problem in supply chain planning and management arises. What this means is that when a constraint appears, or an order suddenly changes, Rapid Response is able to connect the different stakeholders who share responsibility for a particular product, supply, region, customer, partner, or what have you, and get them working collaborative on a resolution. It’s a way to take the natural collaborative tendencies of supply chain planners and managers – regardless of their gender stereotypes – and enhance those tendencies with a collaboration tool.

The other reason I like this approach is that it serves as a justification for my position on why general-purpose collaboration tools haven’t really set the world on fire, despite the incessant hype around these tools. What Kinaxis is offering is the opposite of a general-purpose tool: the company has picked an essential and well-known business process and injected a new, relatively simple, and highly valuable form of collaboration. Of course you could do this with a general-purpose collaboration tool, but it makes much more sense to have the collaborative process function in the context of the business process and its tool, in this case Rapid Response.

This responsibility function will have a lot of applicability to other areas where Kinaxis wants to take what is fundamentally a superlative planning tool. Areas like capital equipment planning, asset management, project management, and the like are ripe for the things that Rapid Response does best: to go where planning is hard and help manage the path to compromise.

Whether Kinaxis will simultaneously drive an even greater participation for women outside the supply chain world remains to be seen. But it’s important to note, considering the current sturm und drang about diversity in high-tech, particularly gender diversity, that there are domains like supply chain and tools like Rapid Response that seem to attract more than the usual number of women, for all the right reasons.

In an industry that liberally festoons itself with the trappings of hipness, the de facto status of women as a minority borders on the absurd, as do the excuses, even in companies with female CEOs, for the lack of women in decision-making positions. I doubt Kinaxis set out to upend traditional gender norms and favor women and their unique skills when it developed Rapid Response, but it’s nice to note that moving the needle in the supply chain world can also move the needle in the larger society in which we live. For the better.



Microsoft Hones Its Enterprise Position

There’s always a lot to say about Microsoft, and, like any big company, it’s usually a mix of good or bad. Having spent two days last week at the Microsoft Dynamics analyst event, I think that when it comes to the enterprise, most of what there is to say about Microsoft isn’t just good: Microsoft’s enterprise story just gets better and better, and while there are holes and issues abounding, the old maxim that Microsoft eventually gets it right was very much in evidence last week (with one notable, and important exception).

Perhaps the best sign that Microsoft is focused on getting it right for the enterprise was the presence of CEO Satya Nadella on day two of the analyst event. Satya once ran Dynamics, but he wasn’t there for old time’s sake. Satya was there to clearly articulate the role of Dynamics as one of the three key pillars in Microsoft’s strategy: Azure provides the necessary cloud services and infrastructure, Office 365 provides the productivity apps, and Dynamics provides the business processes that light up the other two.

There are many many more parts of Microsoft than just those three – Windows 10 is coming, SQL Server and Power BI are taking their place in the world of big data and big analytics, Sharepoint is starting to recover from the file and sync crowd’s attempts at usurping it. (And then there’s Windows Phone, still screwing things up for Microsoft as a whole. I’ll save the details for a separate post.) But the fact that Satya did something his predecessor never did – take a seat at a Dynamics analyst event as CEO to talk about the enterprise – highlighted the commitment he has for the success of Dynamics and its role in the overall success of Microsoft.

And as anyone who has studied organizational dynamics in companies the size and scope of Microsoft will tell you, CEO-level commitment is what makes – or breaks – any individual business unit. With Satya’s support, Dynamics is positioned better than it ever has been inside Microsoft from both a political and technical sense.

It was that technical sense that was the other key theme from the analyst event. I’ll take my favorite among many important new offerings, Lifecycle Services. LCS, as Dynamics calls it, is a cloud-based set of tools and services that are designed to provide support for customers as they implement and run their cloud-based and on-premise apps.

LCS runs in Azure, of course, but just living in the cloud is only the beginning. Running Dynamics AX or CRM in Azure means being able to also run test and dev environments in the cloud – a huge advantage from a deployment standpoint – regardless of whether the customer is ultimately running on premise or in the cloud. (Are you listening SAP? Wouldn’t it be nice if Solution Manager could do this?)

LCS takes this functionality a step further by allowing a customer to stand up a test environment that can be used to debug a functional or technical problem, and then, once the fix has been found, to install that fix directly from the test environment into a cloud or on-premise system. This effectively creates a simulation environment that leverages Azure to do a whole lot more than just provide elastic cloud services á la Amazon’s AWS.

This capability is one of the reasons Satya called out the intersection of Dynamics and cloud services in his remarks to the analysts. Doing this kind of lifecycle support in someone else’s rented cloud – which is pretty much what SAP, Infor, and other competitors are doing – is hard and/or impossible, and making it possible would entail a closer embrace than these vendors might be willing to engage in.

Doing this with Azure is also hard, though definitely not impossible, and the expected results clearly give Dynamics a leg up in the crucial, though poorly appreciated, issue of managing the full lifecycle of an enterprise system. LCS has other advantages, including project management, business process modeling, customization and upgrade analysis, diagnostics, and other desirable features of a life-cycle management tool that are made all the more desirable because of Azure.

The Office 365 connection was also front and center at the analyst event. The use of O365 as the user experience for Dynamics CRM and AX is a key asset for Microsoft as its competitors – particularly SAP and Infor – scramble to provide new user experiences to run on top of tired, old legacy software. While all three companies have been part of a de rigeur revamping of the user experiences that they inherited from their respective on-premise systems, the ubiquity of Office 365 and Outlook gives Dynamics an instant advantage by virtue of the familiarity that O365 provides.

These advantages and successes don’t just look good in a roadmap slide. The contributions of Dynamics to Microsoft’s recent quarter, which generally exceeded financial analyst expectations, could be seen in the numbers Dynamics’ head Kirill Tatarinov shared with the analysts. Dynamics overall grew 13 percent in the last quarter, with AX growing 21 percent and CRM registering major growth and customer wins. Dynamics now counts 375,000 customers and 6 million users, not too shabby at all.

Also looming in the background of Dynamics and its role in the greater Microsoft – though it was hardly mentioned at the analyst event – is the pending availability of Windows 10. This is the cross-platform version of Windows that will, at least in theory, offer a single development environment for apps that can span the full range of devices Microsoft supports, from wearables to the cloud, with all points in between.

The promise is nothing less than stunning from the enterprise software developer’s standpoint: a single code base that can be used to build an app that not only spans all possible devices required to support a given business process, but also has device or platform-specific functionality built-in. This is Microsoft’s answer to the artificial distinction that Steve Jobs made between consumption (the iPad) and creation (Mac) – mostly as a way to justify selling more hardware – which has succeeded in making business process innovation a matter of living in two or more device worlds simultaneously.

In Windows 10 land, this distinction will be gone, which will go a long way towards shoring up Microsoft’s strategy of making the industry’s only multi-platform touch experience available to creators – and office workers – as well as casual content consumers. As a user of a Windows 8.1 touchscreen laptop, the superiority of touch in a traditional productivity environment is not to be denied.

There are, however, three problems with this strategy that Microsoft has to overcome. The first is a built-in bias on the part of the Windows team against the enterprise as personified by Dynamics. The Windows 10 announcement wasn’t billed or promoted as an enterprise apps event, and the people who were in the room listening to Satya talk about the role of Dynamics in Microsoft’s enterprise strategy last week weren’t invited to the Windows 10 launch party. Does Microsoft think the desktop crowd is going to be able to articulate the value of Windows 10 in the enterprise, and then go out and build those apps? Really?

This is all the more short-sighted because of the next problem, which is that, even among the Dynamics crowd, the definition of a killer Windows 10 enterprise app was AWOL at the analyst event. I have a few ideas about what that killer app could look like, but it’s clearly going to take a village: Leading the market, and Microsoft, with a clear vision of what Windows 10 will do for the enterprise – if for no other reason than to help justify the leapfrogging from Windows 7 to Windows 10 that Microsoft will be pushing its enterprise customers to do – is going to have to be up to Dynamics, its partners, and their developers (and we enterprise software analysts J). No other set of stakeholders in the Microsoft family will get that enterprise, cross platform vision right.

Certainly not the Windows Phone gang, who deserve being singled out as the spoilers in this grand scheme. I’ll go through all the gory details in my next post, but suffice to say that Windows Phone is so primed for failure that even a fan like myself – and I own one of these misbegotten phones – can’t see how Microsoft gets out of this one.

That pending failure of Windows Phone, at least in the U.S. market, puts the unified development platform strategy behind Windows 10 in question. There is no doubt that enterprise software development is in full mobile first mode across the entire industry. It’s a mantra you hear from every vendor, Microsoft included. But if the main mobile platform for Windows can’t be relied upon to have not just critical market share (which it clearly doesn’t have, having scraped up a little over 3 percent market share recently, putting it in a statistical dead heat with Blackberry, all puns intended) but also a critical mass of carriers (#1 U.S. carrier Verizon is clearly exiting the Windows Phone market, having removed several Windows phones from its online store and having decided not to offer Windows 8.1 upgrades to existing customers) who will actively support the operating system and its users, then I have to wonder what the fate of Windows 10 will actually be?

That collateral damage that Windows Phone will inflict on Windows 10 isn’t Dynamics’ responsibility, though in the spirit of the One Microsoft strategy that Satya inherited from Steve Ballmer and has willingly embraced, Dynamics will feel some of that collateral damage as well. This is far from a fatal error, though Microsoft will spend a lot of time scrapping the egg of its face if this proves to be true. It’s going to hard to push Microsoft as a devices and services company if one its main devices gets left behind.

From an enterprise standpoint, Windows Phone aside, there’s still enough strategic assets on the table to make the next few years important ones for Dynamics. As I wrote before, there’s a lot of opportunity in the market for what Dynamics has to offer. Grabbing a chunk of the 70,000 Infor laggards would be a nice prize, as would sopping up the users who are tired of a tired old UX and a lot of hidden costs. SAP and Oracle are also vulnerable, particularly as Dynamics continues to court the global SIs who have helped over the last 20 years to create the market for the enterprise software product categories now being offered by Dynamics.

The bottom line is that Dynamics continues to grow, and in particular grow into the cloud, in a number of important ways that sets it apart from its competitors. Just having the same code base for both cloud and on-premise is pretty impressive. Doing so with a superior UX and a market-leading cloud platform is even more impressive. And being more and more focused on a solutions sales, like the newly announced Sales Productivity solution, which bundles Dynamics CRM, O365, and Power BI in a single product set for $65 per user per month – is all the more impressive.

And while there’s no shortage of obstacles for Dynamics, in the end the enterprise software market isn’t a zero sum game. While the large enterprise space is still more of an Oracle or SAP opportunity, at least today, the rest of the market is prime territory for Dynamics. If you’re a vendor and Dynamics isn’t on your radar, you’re making a mistake. And if you’re a prospective customer and Dynamics isn’t on your short list, you may also be making a mistake. Dynamics may not be for every enterprise software customer, but the exception list grows shorter every day.



Dreamforced: Can Deliver the Complex Business Processes it Aspires To?

It’s hard to slog through mega-conferences like Dreamforce, and not just because 135,000 people are way too much for San Francisco and its Moscone Center to handle. The sheer girth of is also a factor: the company has become an immensely complicated and multifaceted company, maybe too much so for a single conference. Regardless, Dreamforce reminds me of why I don’t see my favorite bands in a coliseum setting: The volume needed to fill a coliseum washes out the undertones and overtones that make music a rich and complex listening experience, instead leaving the listener to sort through a lot of random, washed out noise.

And so it seemed with this year’s Dreamforce, and yet there were a number of powerful undertones and overtones worth trying to pay attention to, despite the distracting chatter generated by the likes of Tony Robbins, Eckhart Tolle, Hillary Clinton,, Al Gore, and others non-techies adding to the cacophony at Dreamforce. (Even if I try, with the utmost equanimity my cynical analyst’s brain can muster, my mind still reels at the quantity of lucre, clean, filthy, or otherwise, that went into paying the speaker fees that a set of bold-faced names like that commands. Wow.)

Perhaps the most powerful undertone playing in the background – in particular as seen through the lens of the enterprise and its requirements, and’s relative market position as a provider of solutions for those requirements — came ringing through in a number of presentations I attended and discussions I had with customers and partners. And as I listened carefully, and filtered out the waves of white noise, a cluster of functionality, technology, and aspirations came into view that together will define the future of in its battle against the likes of Microsoft, SAP, Infor, and Oracle.

The battleground that best defines the future for, and its competitors, as I have alluded to previously, lies in the requirement to support complex business processes that span the silos of functionality (CRM, ERP, SCM, HRMS, etc.) and the deployment options (public cloud, private cloud, hybrid and on-premise) that make up the present and future of the modern enterprise. While’s continued growth in CRM, marketing automation, and the like are of course interesting, particularly for the short-sighted investors who have bought into’s hyperbolic forward P/E ratio of 70+, the company has some important mountains to scale if that ratio is ever going to remotely come true.

Those mountains have less to do with the company’s core customer and marketing automation messages and much more to do with a future defined by’s ability to be the go-to vendor for supplying the infrastructure, connectivity, and business context that can support the complex business processes that define enterprise innovation today. Salesforce has more than just aspirations in this regard – it is moving to provide as many of the pieces of the solution as possible: that undertone rang in my ears load and clear. And, like every other vendor in this race, Salesforce has some obvious strengths and a few major lacunae to overcome before those undertones are going to become a major motif.

A good example of this complex business process opportunity lies in next generation enterprise asset management. EAM is poised for a revolution that will take the best of the industrial internet, and combine it with the latest in talent management, operations analysis, direct materials procurement, and customer service management, and by orchestrating these elements, deliver an integrated, complex business process that will be, compared to the fragmented state of the art today, a thing of beauty.

In this future that is about to happen, the maintenance process for a jet engine or wind turbine or subterranean drilling platform will take an alert generated by a sensor and turn that into a customer service event: maintenance will be scheduled so as not to interfere with core operations, the right repair people will be identified and positioned to effect the maintenance request, the right parts will be ordered from the ERP system and tracked through logistics to ensure they are on site at the time scheduled, and of course, the customer will be kept in the loop as the service request moves from alert to scheduled to complete. This is just an archetype: the examples of complex business processes that span horizontal technologies and vertical industries stretch on and on into perpetuity.

It’s a given that delivering this kind of complex process will change the world of enterprise software and business in fundamental ways, just as it’s a given that no single vendor’s applications will be able to orchestrate this kind of complex process by themselves. It’s also a given that the business opportunities for new and unheard of levels of service will entice the stakeholders in this complex process dance to find out a way to do this by cobbling, kludging, or otherwise stitching the different software assets together – internally and across business partner networks – that are needed to make this new opportunity hum. No one has to time or inclination to wait for a single suite or a single data model to deliver this vision.

The big prize on the table for every vendor that aspires to the simultaneous platform and application superiority – both of which that seem to be the twin focal points of all the top enterprise software vendors today – is to be the go-to supplier for as much of this complex process vision as possible. At a minimum, success will require credibility in infrastructure, applications, and vertical industry knowledge, plus some serious analytical prowess to support the monitoring and predictive analytics upon which this near-term vision is based.

And while has one of the core applications for my archetypical EAM complex process (and many others) in the Service Cloud, the beginnings of the analytical component in its recently announced Wave Analytics Cloud, and a modicum of orchestration components in its Platform Cloud, there’s a fair amount of territory to cover before can challenge competitors like SAP, Oracle, Microsoft, and Infor in filling out the rest of the requirements. No talent management, no ERP, a very nascent vertical focus – the gaps in’s ability to tackle complex business processes are telling. has one other key element that it could bring to the table – a focus on communities that, when they are one day synchronized with the company’s forthcoming vertical offerings, could form an important nexus for vertical industry processes. One day.

But wait, there’s more. One of the problems for pure cloud companies tackling this complex process opportunity is the ability to support a hybrid environment that includes not just on-premise applications, but legacy, way-behind in the upgrade process, on-premise applications. This is a non-trivial exercise for the vendors who own these legacy apps, it’s even more complicated for a pure cloud company like (and Workday, while we’re casting aspersions) to make a credible play in this corner of the market.

It’s important to stop and acknowledge that no single vendor has a lock on delivering on the promise of these complex processes. Every hybrid vendor has major challenges to overcome, much of which center around the complexities of orchestrating the broad set of on-premise and cloud apps these vendors own or are accumulating. Microsoft may be the furthest along in blending its on-premise and cloud offerings, but its dependency on partners for its vertical and geographically-specific offerings, plus the need for Microsoft to continually orchestrate with non-Microsoft products that are often running headquarter operations, continues to present challenges in terms of scale and support for the global customers that are most likely to lead the charge in rolling out these complex business processes.

I believe is aspiring to this complex business process opportunity, though those aspirations were hard to hear over the noise at Dreamforce. I saw glimpses in the Wave demos – where the SAP logo was prominently on display as one of the data sources that Wave Analytics can target – but that too was largely aspirational. While partner Informatica stands poised to deliver the connectivity Wave will need to hook up to SAP, it’s clear from my conversations with’s analytics execs that the real goal today is analytics for data, with third party data integration coming later.

The fact that complex process messaging wasn’t front and center isn’t the problem. Like Successfactor’s conference earlier this year, there wasn’t necessarily the right audience in place for this conversation – the focus on CRM and marketing is what draws that massive crowd to San Francisco, and, frankly, it’s what’s core business is really about anyway.

But it’s clear that has to move in the direction of supporting a more complex business process world than it supports today, and I don’t believe relying on partners from will cut it. There may be partners like Kenandy trying to pitch in to help, but Sandy Kurtzig 2.0 has a long way to go before it can match up to the functionality that Sandy Kurtzig 1.0 – a.k.a ASK – could offer. – like Workday – will one day have to acquire its way into being able to offer a critical mass of functionality beyond its core product line, relying on partners or organic growth won’t be enough.

I think it’s clear that is a contender in the complex process market, and it has the money, market clout, and people to make its dreams more than just aspirational. But instead of having Tony Robbins exhorting the crowd on Day One to do something – was it walking on hot coals, or has that gimmick finally run its course? – that has nothing to do with enterprise greatness, should start focusing more of its consider market voice on moving its customers forward to where they need to be – building and running the complex business processes that will define the enterprise of tomorrow – instead of making them feel good about where they are today as users of the CRM market leader’s current product line.

It’s fun to party at the Moscone Center, but, I think those 135,000 people also need to know how to stay relevant in a world that is heading their way, and for which neither they, nor, are probably ready for. Maybe that’s a separate conference – slightly smaller, no walking on coals, less music – that discusses how will stay competitive, and help its customers stay competitive, as supporting the sales force, the marketing team, and the customer becomes increasingly less important than supporting the entire enterprise and its partner and industry-specific ecosystem, of which sales, marketing and customer are only a few of many key components.

It’s a harder message to sell, it’s definitely a harder path for to take, and it might not lend itself to the party-hardy atmosphere that permeates Dreamforce. But it’s as necessary for to begin the discussion in earnest as it is necessary for its customers to begin thinking this way. The party doesn’t have to stop completely, but maybe it needs to get a little more serious. There are some important business challenges on the horizon, and it’s time to tone down the noise, put away the party hats, and get a little more serious.