By Denis Pombriant, founder and managing principal, Beagle Research Group
Summit must be the secular name our species came up with when we decided that certain business meetings had to have the same weight as religious conversions.
I’m not trying to be contentious by using this vaguely religious metaphor, so please consider me a radical centrist. But after a few months of vendor meetings for the analyst community in which each took us to the mountaintop to survey — via PowerPoint — a future vision for the valley below, I am almost all summitted out.
The religious reference struck me this week at the SAP Summit, the vendor’s very good analyst gathering in Boston, because, like some religious conversions, there seems to be a necessary pain component intended to make the conversion stick. (In most analyst meetings, the pain comes from sitting still for many hours of the aforementioned PowerPoint presentations.)
So, what did I learn? Well, lots — though I’m a CRM guy and much of what was proffered involved visions of a broader valley. The biggest impression I came away with was intramural since, having been to this year’s Oracle OpenWorld and Salesforce.com’s Dreamforce, I’m in a mood to compare, contrast, synthesize, and perhaps even prescribe.
"Will It Blend?" What do you get when you puree a season's worth of vendor events?
Put everything I saw at these and other conclaves into a food processor, run it on high until something resembling peanut butter forms, and the result, to me, looks like this:
Software-as-a-service (SaaS) computing has won the battle, maybe even the war, but the victory is not enough to secure a homogeneous peace.
Translation: SaaS is important and remains the future of software, but there are multiple reasons why it will not reign supreme — not for a while at least.
By Denis Pombriant, founder and managing principal, Beagle Research Group
Market analysis firm IDC figures the market for service and support software will reach $4.2 billion before the end of the first Obama administration. That’s reason enough for software vendors to want to be all over the market like a cheap suit, like white on rice, like a junkyard dog. But as the market moves from on-premises to on-demand you can expect the revenue potential to go way down. That’s the beauty of on-demand computing — score one for the customer.
But whether there are four billion of those dollars or just one billion, that’s still real money — and enough to motivate the behavior of lots of people — so it was no surprise that both Salesforce.com and Oracle shored up their service and support offerings this week. What was fascinating to me is that, despite all the secrecy surrounding each company’s announcement, which I witnessed first hand, the two CRM titans managed to make similar announcements within a day of each other.
I attribute the coincidence to the simple logic of the situation: Each company has built out very good offerings in sales and marketing, so it was time that each gave some extra attention to service and support.
Ahh, what to make of this? Good? Bad? Creative destruction? All of the above? Probably. Of course, it’s too early to offer more than a few prognostications but that’s what’s so much fun about this.
First, Sun’s shareholders got a dime more per share than the IBM offer — $9.50 versus $9.40 – Whoo-hoo! Seriously, a dime over millions of shares is a lot of money — think about a good weekend in Vegas.
More seriously, the deal complicates Oracle’s relationship with Dell and HP, which Oracle has courted aggressively recently. Last September Larry Ellison introduced the Exadata — part storage array part computer — built in cooperation with HP to provide orders of magnitude better support for terabyte and bigger databases. A good idea. But now where does the budding relationship with HP go?
On the other hand, I wish I had one of those extra dimes for every Oracle database that was sold on a Sun box over the last three decades. Sun’s customers are Oracle’s customers — but the same can be said of HP.
Sun Microsystems, Inc. (NASDAQ:JAVA) and Oracle Corporation (NASDAQ:ORCL) announced today they have entered into a definitive agreement under which Oracle will acquire Sun common stock for $9.50 per share in cash. The transaction is valued at approximately $7.4 billion, or $5.6 billion net of Sun’s cash and debt.
“The acquisition of Sun transforms the IT industry, combining best-in-class enterprise software and mission-critical computing systems,” said Oracle CEO Larry Ellison. “Oracle will be the only company that can engineer an integrated system – applications to disk – where all the pieces fit and work together so customers do not have to do it themselves. Our customers benefit as their systems integration costs go down while system performance, reliability and security go up.”
There are substantial long-term strategic customer advantages to Oracle owning two key Sun software assets: Java and Solaris. Java is one of the computer industry’s best-known brands and most widely deployed technologies, and it is the most important software Oracle has ever acquired. Oracle Fusion Middleware, Oracle’s fastest growing business, is built on top of Sun’s Java language and software. Oracle can now ensure continued innovation and investment in Java technology for the benefit of customers and the Java community.
Props to the OpenWorld event team at Oracle for pumping out fun — and appropriate — music before and after keynote presentations. Josh pointed out how strategic the music planning must have been: Spirited and light-hearted for the opening address (think Katy Perry, whose “Hot’n'Cold” was streamed as attendees filed out)…
…but extreme and Rocky-esque for the Ellison event.
[In a later conversation Josh and I played the game, "If Larry Ellison had his own theme song, what would it be?" We ultimately decided on something to the tune of, "da na na na, da na na... X MAN!"]
So in the midst of thinking about conference music, I started to wonder what songs could define the Customer Relationship Management industry. In thinking up my own “CRM Soundtrack,” I decided it needed to be separated into “A” and “B” sides. The “A” tracks consists of what customers want and what CRM should be all about. The “B” sides come down to the sometimes realities of customer experiences and business mentalities. Basically, the lists are divided into the “Dos and Don’ts” of CRM.
View and listen to (Thanks iMeem!) both playlists after the jump. Please note: This is a work in progress. Leave a comment with any suggestions and I will add them to the CRM Soundtrack! Read the rest of this entry »
[I tried posting the iMeem player here, but I failed. Instead, you get the clickable link.] [UPDATE, 10/1/08, 10a: Now you've got the clickable link and the iMeem player. Yes, the phrase "live and learn" comes to mind.]
So not only did a week of Oracle OpenWorld pretty much max me out, but now we’re heading into production week on CRM’s November print issue. Another cycle goes by, and another opportunity to improve our offerings slides away with it. So I’m left to console myself with the knowledge that
(a) there’s always next month (these cycles are called cycles for a reason);
(2) we’re making strides (we’re better now than we were, and as long as that continues to be the case, I’ll count myself lucky if not satisfied); and
(iii) we’re working to offer the CRM community the very best content we can, delivered in the best and most sophisticated context possible.
And then I’m reminded that others often are there ahead of us. To get at what I’m getting at, check after the break…
I’m loading this for your reading pleasure, but it needs cleaning up, textwise — which I’ll be doing while it’s live. I’ve now done.
(Someone can correct me if this is inappropriate blogger etiquette. I’m also stripping out my accumulated “drinking game” of the number of times Ellison used the phrase, “Next slide, please.” For the completists out there — or the merely curious — he hit 25.)
Remember the Twitter-feed mantra: reverse chronological order. The entire thing — and I warn you, it’s lengthy — is after the break.
Meanwhile, our earlier Oracle OpenWorld coverage can be found here:
[UPDATE: 9/24, 4.30p PT - The curtain has lifted on "X" - and the answer is, Oracle's now in the hardware business, along with HP and Intel. See the Twitter-feed here, and Lauren's drafting her news story on it as we speak.]
Another new kind of blogpost for us, with a h/t to @ccarfi for inspiring its format: a Twitter-feed repost, but with the occasional annotation that 140-character tweets made tough to include.
#oow08 #X I’m eager to find out if this “X” announcement (4.15pPT, following #Ellison closing keynote) can possibly match the hype.
#oow08 #X The “Extreme Performance” banner at the east side of closed-down Howard St. might be a major clue;that’s a major ad spot for ORCL. [Its counterpart, at the western end of the Moscone Center’s Howard St—a street, btw, that Oracle takes control of each OpenWorld, much to the anger and dismay of local San Franciscans—is a massive series of LED (?) screens arranged in a manner reminiscent of NYC’s Bento-box-like New Museum. I’ll try to find images of each. UPDATE 9/25, 5.30p PT: Here they are:
The New Museum of Contemporary Art, NYC (photo courtesy of www.bdonline.co.uk)
Oracle OpenWorld 2008 sign, at Howard St. & 4th St., SF (Photo by Lauren McKay)
#oow08 #X re: “Extreme Performance”: RT @mgareth RT @chiheacho Andy Mendelsohn drops a tiny hint on mystery news “X” http://snurl.com/Xhint
#oow08 #X In clip,Mendelsohn says, “We’re calling it ‘X’ for ‘extreme performance.’ ” Can it play into cloud computing+collaboration themes? [Those have been the two recurring memes here at OOW’08; the other words that Oracle has pushed—complete, open, secure, integrated—all play in, I suppose, but those two have gotten the heat.]
#oow08 #X RT @mgareth Anticipation builds around the X announcement. read about it @alexgorbachev’s blog: http://snurl.com/Xpythian [I have to admit the folks there are clearly more well-versed than I am when it comes to database matters. (Anyone who knows me can tell you that's a very low threshold to surpass.) Someday I'll submit to a remedial course in the underpinnings of the data world—unless this X announcement is a sign that I may not ever have to? (What's that saying about "if wishes had wings..."?) At any rate, the point here is that these guys, who really know databases, and who have made clear that they expect Ellison will veer from his typical "One FusionApp to rule them all" style of closing keynote, have amassed a lot of anecdotal evidence to support the notion that it's a data-use performance announcement.]
#oow08 #X And Ellison told analysts in June of “a major database innovation that we will announce in September.”
#oow08 #X Thx 2 @alexgorbachev, we have a pulled-but-cached blogpost by Oracle’s Kevin Closson: http://snurl.com/xclosson
#oow08 #X & given the musings of Forrester’s Jim Kobielus http://snurl.com/Xjk I’m ready2believe the news is “storage and data in the cloud”
#oow08 #X #Ellison is coming on after HP’s Mark Hurd, so it’s valid to expect some kind of connection there.
#oow08 #X P.S. I also think Hurd experience at Teradata lets him add more background to intro Ellison’s announcement.
So I guess we’ll have to wait and see; check back after 3.30pPT to see what’s happened, or follow my Twitter feed during The Larry Show to get up-to-the-minute snippets as they happen.
This is an interesting development, in terms of branding.
Let’s leave aside for the moment my perpetually exploding aneurysm about Oracle’s use (and misuse) of the Siebel brand around CRM. (We covered some of that here. And here. And here.)
It’s possible no one cares about this but me — wouldn’t be the first time I got caught tilting at windmills, and almost certainly not the last — but I really do believe there’s a value in consistent marketing messages, and I’m not sure Oracle has really wrapped its head around this when it comes to the “Siebel” name. The most recent policy, as I understand it, is that “Siebel” is the on-premises CRM brand, and “Oracle CRM On Demand” is, well, the on-demand side.
So why were some demos here at OOW occasionally showing “Siebel CRM On Demand”? Beats me. Like I said, let’s leave that aside for now.
There are several folks at Oracle who seem to really get the value of social networking — I tweeted all about Anthony Lye’s wonderful perspective, and I’ll try a blogpost or news story about it before I blow town. But the introduction of a feedback function on Oracle’s Web site — it’s being called Participate now — is a sure sign the company is really making an effort to engage. But part of being transparent means letting customers and the world see the sausage get made, even when you’re not sure what to call the sausage yet.
That current Participate URL looks like this: http://www.oracle.com/participate.html
But it can also be found here: http://www.oracle.com/learnmore.html
And it’s not clear whether there’s a difference, or whether submissions at the two locations end up in the same hands.
Worse still, the concept was actually introduced earlier this month, according to this Oracle blogpost, and at the time is was branded as “Oracle Listens.” The company prebriefed a few analysts, including Charlene Li (who was one of our Influential Leaders this year), and the name seemed to take root — perhaps because, as that Oracle blogpost noted, the Oracle Marketing team has been taking the reins over the wonderful Oracle Mix social community.
So how did we get from Oracle Listens to Oracle Participate? I’m not sure, but I’m hoping someone from Oracle will comment below to let us know.
[UPDATE, 9/24, 9.24a PT (love the synchronicity there!) -- a reply tweet from Oracle's Justin Kestelyn:
@oracletechnet @kitson Same thing; "Participate" is the official name (more descriptive). ]
Whatever the answer, it’s a wonderful change — in fact, in a podcast I just did with Paul Greenberg (that is, a podcast he recorded for his site; we’re multimedia-challenged here, for the time being), I pontificated for a bit about how the shift from “listening” (passive, noncommital, an uncertain outcome) to “participation” (active, engaged, forward-moving) is an excellent metaphor for the transition being made in CRM overall, and I think it’s a sign that the people at Oracle are aware of the difference and that at least the marketing folks know the difference between a mere product name and a true branding opportunity.
Now….who wants to be definitive about this “Oracle/Siebel CRM” thing? Anyone?
Yeah, fine—a cheeky title for a blogpost, but appropriate: I started drafting it at 35,000 feet, aboard my first-ever Virgin America flight, en route to San Francisco for the weeklong marathon known as Oracle OpenWorld. (And, yes, it’s been sitting here in the drafts folder ever since. Have I mentioned I’m still grappling with the immediacy of blogging?)
The other staffers on this blog have a very different kind of fodder for their posts—dispatches from the road, backstories to their daily news pieces, interesting asides they come across while researching their pieces for the print magazine. But I tend to edit more than write these days—every word you read in CRM magazine each month or on destinationCRM.com every day passes under my bleary eyes, to the tune of about 50,000 words monthly. (Yes, we really are that prolific here.)
So my posts may touch on their writing from time to time, but I think I’m more likely to expound on subjects a bit more far afield—while hopefully maintaining a CRM-specific bent. I have the multitasking tendencies of an ADD-afflicted juggler, an insatiable appetite for information both relevant and random, and the blessing/curse of insomnia. (Depending on whom you ask, that combo’s either a creative cornucopia or a recipe for disaster. And, yes, it can be both.)
As it turns out, I’ve been on the road quite a bit more than usual lately, first at Shop.org in Las Vegas last week—my coverage is here, and here—and now OpenWorld. People tend to fall into one of two camps on this topic, and I happen to be among those (the minority?) who love tradeshows and conferences—I think they’re great opportunities to test theories and gauge the pulse of the industry. If my schedule permitted it, I’d hit a show at least every couple of weeks. (On the other hand, about 60 seconds after I register for a show, I begin getting pummeled by PR pitches from well-intentioned folks who’ve glommed my name off the event’s press list. *That* I could do without—not least because I have a serious email addiction coupled with an inability to do email quickly. Do the math.)
All of which brings me back to my current deflowering on Virgin America. And we’ll finally get to the point, after the break…Read the rest of this entry »
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