SAP releases ByDesign 2.5

HP sees an abrupt CEO change.

Netsuite is one of the few SaaS/Cloud money makers.

Boy, did I choose a wrong week to go on vacation.

Have a big trade event coming up, crank up the nodes. Expecting a big splash with your successful twitter campaign just add n servers on demand. Now that’s got to be a blessing, it cannot possibly be a curse. So what’s up with the title of this post?

Animoto was able to scale from 50 to 5k nodes in 5 days. And then it trailed off to 1k nodes (before gradually growing back up).  Using cloud (amazon/right scale) infrastructure, they were able to enjoy the fruits rather than becoming the victim of their own success. Without this elasticity, Animoto would probably have note been, well Animoto (as we know them). As consumers of this awesome technology, this never before seen flexibility, gives us the ability to be aggressive and scale with the payoff.

This is from a consumption point of view. Now lets flip the coin around and see how this fares on the providers side. As a provider, you go from a demand of 50 to 5k nodes in 5 days. Thank god for that buffer capacity coupled with the ending of the other mega clients promotions. You just had to actually provision 1k nodes. Now few days later, the demand has dipped down to 1k nodes. What do you do with the excess capacity? Do you always have to have an ever expanding consumption base to soak it up, so that all that’s left is your target buffer?

I am going to diverge a little bit into supply chain territory to illustrate my point. At the onset of VMI/SMI which is essentially inventory management by the suppliers (if you see a coke delivery guy stocking the soda aisles of your favorite grocery chain, they most probably have a SMI setup), customers aggressively pushed down the inventory costs lower in the chain. It did help them a little initially, but when their strategic and dependable suppliers started to suffer and had an impact on quality, the challenges of this paradigm shift began to sink in. Essentially, in order to be successful, the entire chain had to be a success.

Now how does this supply chain example relate to this post? Well, if you are investing heavily in a cloud provider, and I am talking about enterprise clouds (not base technology clouds like azure and aws), and are using the cloud, the app platform and the apps for your business critical needs, then you are fully invested into that cloud provider. its in your best interest that the cloud provider does not ever flirt with insolvency and it’s operational margins ride the elastic waves and don’t sink in them.

Its really important to analyze stuff like how smartly does the cloud provider scale, how stable are its finances, does the cloud provider adhere to any cloud standards (which are fairly nascent at this point), which would help you move over to another provider in case things don’t workout.

Elasticity is most certainly a blessing.
Nothing in this world is infinite.
Everything comes with a price.

If you agree with me and treat your cloud provider as a partner, crucial to the success of your business, then before you select this partner, make sure to ask the right questions.

Here are some:
Q. How well funded is the cloud provider?
Q. Since majority of the cloud providers are barely making money, what is the plan and time line for profitability?
Q. How smartly does the cloud provider manage and scale?
Q. How do I move my solutions out of the cloud, in case the provider folds?

As the global economies tanked in 2008 and visibility into one’s own business retracted from fiscal quarters to days, a lot of IT projects started to get the axe. The business, who ever more so, wanted their solutions, had no way of funding them. This was certainly true for the small and midsized corporations, they could not afford to wage wars on different fronts. But even the biggies were not spared, and in some some cases, depending on the type of business they were in, were more impacted than their smaller counterparts.

In this period of turmoil, when the traditional enterprise software providers suffered, and sometimes heads rolled, interestingly the clouds were enjoying their day in the sun! The cloud (SaaS/ondemand/multitennant) vendors were selling faster than they could count. Not only was the small and midsized market completely mesmerized by the cloud players but the large enterprises also started to look at the cloud more seriously and even started to move a lot edge functions over to the cloud providers. So much so that the large players have aggressively started crossing over into the cloud territory making the cloud players just a tiny bit nervous.

Would we have such a level of commercialization of the air travel and advancement of airplane technology, had it not been for the world wars?

Would all of us sill be with coco if NBC had not goofed it up so bad?

leading up to:
Would we have the rapid levels of cloud acceptance and adoption had it not been for the recession?

Profound questions.

Now that the economic bottoms have bee reached (hopefully, I am still a little bit nervous about Greece and like) have we emerged with a sense of confidence in the cloud? Are we, by we I mean small/mid and large sized corporations more willing to place more confidence in having our data outside our firewalls?

I think so.

Do the CTO and CIO functions (even if they are under the same person) change? Maybe.

Further more, does how much does the commoditization of the hardware (case and point google’s public cloud and google’s private infrastructure) reduce the need for specialization on the hardware side? Does the move by major Software providers (like SAP) to focus on virtual appliances for the cloud accelerate this shift?

A lot of interesting questions do come up when you delve deeper into the cloud. And in my humble opinion, the outcome cannot be foretold at this point, we have to wait and see.

1) Closed loop actionable Spend Analysis
2) Visibility into risks associated with strategic Supplier and categories, and impact on score carding
3) Supplier negotiations based on score carding
4) Tighter control on off-contract spend
5) Integration of Procurement functions into the overall Supply Chain

A recent IBM survey of 2500 CIO’s lists BI as one of their top priority. This is not surprising at all. Now that all of the transactions have been digitized, and everything is “in the system” for all organizations (beyond a certain size) the next logical step is to be able to find patterns of opportunities in all of that data for being effective, efficient and agile. The same extends into the procurement domain. Having a global view on all of your procurement data (with a unified and normalized supplier and category/item master view) and being able to take business actions based on that analysis is priceless.

Ever had a supplier, who couldn’t supply a critical sub assembly because of a fire in the Supplier’s plant that you were not aware of. The reason could be fire, bankruptcy, unionized strike, natural disasters… on and on. But the impact on your business is the same – devastating. Would you have been able to neutralize or atleast lessen the impact if you had the right info as soon as the event occurred?
Well, there are ways to stay on top. There are text analytical services which trap events like your supplier’s fire/strike/bankruptcy from the unstructured data heap of public news domain. There are structured info providers like Coretra and DnB which can feed with you all kinds of risk information. This information can not only be used to feed into proactive decision making but also as a +/- ve input into the Supplier’s score card.

The remaining three are not really new, but nevertheless they still round up the top 5. Some of these can get operational and a tad bit boring making it easier to lose focus on them. There needs to be an investment in continued and persistent focus.

/this is an unfinished posting/

Now, beyond it’s laugh factor, I am not sure what else to make of it. The whole argument from the NetSuite guy goes something like cloud, cloud, cloud and more cloud. Cloud by itself has no intrinsic value to the customer. Please allow me to explain. The “cloud” no doubt allows for a lot of wonderful things that the customers would ultimately benefit from, these are already well known. Some examples are the on demand model with no set up investments, pay for usage, no upfront costs, no maintenance/upgrade headaches, potentially unlimited expansion etc. But all of the aforementioned benefits need to enable the business solutions, inorder for the customer to see any benefits from the cloud. The cloud is a means to an end and not the goal itself (unless you are the Amazon or the Google cloud). As a consumer of the ad I don’t get any info on how their magical cloud by itself will  help solve business problems.

It kind of reminded me of another statement I had heard about 8/10 years back or so at a javaone conference in San Francisco “EJB is going to kill SAP” (I am paraphrasing). The premise of that argument was that the EJB with all of its technical advantages would compete with SAP and ultimately lead to its demise. That hasn’t exactly panned out (and that was not the intended goal of the old java owners, although I am not so sure of the new ones). Technology by itself does not help the customers. Customers are helped by the solutions that the technology enables. And those solutions (that are brought about by the cloud) are not discussed at all.

Another interesting twist is that SAP has stated firm support for the cloud, unlike Larry Ellison’s stand on NetSuite’s water vapor. If anything, it should have been a Oracle guy in place of the SAP guy. Ofcourse, this decision to mock SAP instead of Oracle had nothing to do with Larry owning 51% of NetSuite .

They even choose and interesting original to “innovate” upon, Apple vs Microsoft ads. They probably don’t realize that both of these industry giants use SAP to run their businesses.

I guess the part that I had the most issues with were the portrayal of the SAP guy. It’s a German accent all right but that’s not at all how Germans behave. I should know, I have interacted closely with Germans for over a decade.

So NetSuite, I am looking forward to more ads from you which showcase what you really have to offer, in terms of solutions, instead of an endless harp of the cloud mantra.

This is Hasso interviewing Hasso on in memory databases. Link