Some Northern Exposure on Software Innovation | AMR Research
We recently spent a couple of days in Toronto to meet with a leading Canadian venture firm and three software companies. While it had been years since my last trip to Canada, the combination of beautiful late summer weather and the buzz around the start of the International Film Festival made Toronto the ideal September destination.
The trip was proposed by Derek Smyth, a partner at EdgeStone Capital Partners, whom we first met when he was COO at Ironside Technologies, one of the e-commerce pioneers. Ironside was acquired by SSA Global Technologies in June 2003. While at Ironside, Mr. Smyth helped grow the company from zero to C$50M (Canadian dollars) in four years.
While many U.S. venture firms shy away from enterprise software startups, EdgeStone focuses almost exclusively on this sector. In fact, the firm’s preferred role is to be the lead investor in early stage companies by taking a healthy equity position in exchange for cash and expertise.
Best early bets: SlipStream, Taleo, and Workbrain
The EdgeStone Capital Venture Fund I raised C$104M in 2000, which as been invested in 15 companies. Key investments included Workbrain, Taleo, and SlipStream Data. Workbrain and Taleo went on to have successful initial public offerings, while SlipStream was acquired by Research in Motion (RIM) (Blackberry owners) in July 2006. To date, that fund has returned 1.6 times in invested capital to investors, ranking it near the top of all North American tech venture firms in the post-bubble period.
Four years later, EdgeStone raised C$108M for Fund II. I was struck by two differences between the portfolios of the two funds: the newer fund broadened EdgeStone’s portfolio outside of enterprise software and beyond Canada, too. To date, Fund II has been invested in eight companies. There is capital available for one or two additional investments.
The Fund II portfolio includes Solace Systems, pVelocity, Shoplogix, CiRBA, RedMere Technology, Varicent Software, MusicIP, and RapidMind. On our trip, we met with pVelocity and Shoplogix (see below). The others seem intriguing, too. Solace is in the XML routing market. CiRBA, with its virtualization software, would love to be the next VMware. RedMere is an Irish fabless semiconductor company that serves the consumer electronics and multimedia markets. Varicent provides incentive management software. MusicIP is a digital-music platform, which helps listeners discover similar types of artists that map to their favorite music. RapidMind provides development tools for multicore platforms.
Steady deal flow, fewer VCs, tighter pockets
EdgeStone has begun raising money for Fund III. The goal is to build a C$150M fund. The Canadian VC market has changed dramatically since Fund I. In 2001, there were 55 early stage Canadian VCs; now there are 12. More than C$4B was raised in 2001 compared to C$1.5B in 2006. Despite the contraction, deal flow has remained relatively constant over the same period. EdgeStone looks at 150 to 160 deals a year, before settling on the two or three best.
One advantage of investing north of the border is the R&D tax credits that the Canadian government provides for early-stage companies. This can result in a 45% lower net cash cost compared to their U.S. counterparts. In some provinces like Quebec, the net cash cost delta is even greater. On the flip side, the primary challenge for firms like EdgeStone is finding experienced CEOs to run the startups. As a result, Canada has a greater percentage of first-time CEOs.
EdgeStone is well-positioned to take advantage of gyrations in the tech market. Its parent company is GMP Capital Trust, one of Canada’s leading investment banks with a strong technology investment practice. In addition to its venture group, EdgeStone has a buyout/later stage equity team. That side of the firm has raised nearly C$1.35B for its three funds. These have gotten progressively larger. Fund I raised C$179M in March 2000. Fund II took in C$361M in October 2003. Fund III generated C$800M in summer 2006.
Meet the portfolio companies
Our journey took us to two companies in EdgeStone’s portfolio, three if you count the Shoplogix customer we also met with, and one company not in its portfolio, but with which Mr. Smyth is highly enamored. For each of their stories, click the following links:
“pVelocity: Software Plumber for Profit Leakage”
“Shoplogix: A Single Version of ‘Machine Truth’”
“Panorama: Silicon Valley Meets Toronto”.
SupplyScape Adds New CEO to Team and $10M in Financing
We also recently met with Mark O’Connell on his sixth day as CEO of SupplyScape, the fast-growing provider of software and services for the life sciences industry. If the name is familiar, Mr. O’Connell was the former CEO of MatrixOne, a leading product lifecycle management (PLM) software company. At MatrixOne, he led the company through several milestones: a successful IPO in March 2000; achieving the status as the largest independent provider of PLM software ($145M in revenue); and the successful sale of the company to Dassault Systemes for $408M last year. Mr. O’Connell joins SupplyScape as president and CEO.
On the same day, SupplyScape also announced it raised $10M in Series C financing from its existing investors: IDG Ventures Boston, North Bridge Venture Partners, Pilot House Ventures, Bethesda Partners, and Pfizer Strategic Investments Group.
SupplyScape is an interesting company to watch. The 70-person company has emerged as the software leader in the nascent e-pedigree market. E-pedigree is designed to secure the distribution channel for pharmaceuticals as finished goods move from the manufacturer to the dispensing point (such as pharmacy or hospital) and guard against counterfeit products and diversion. To date, the company has 63 customers, including many of the best-known pharmaceutical manufacturers and top retailers and pharmacies.
Coming next week: salesforce’s Dreamforce and SAP’s A1S launch
By the time you read this, we will be at salesforce.com’s annual Dreamforce user conference in San Francisco. This event has traditionally provided a sneak preview of the future of software. From there, we head to Manhattan for the official launch of SAP’s new business offering, code-named A1S, for the small and midsize market.
As always, I welcome your feedback and ideas. Is EdgeStone smart to focus on the enterprise software market? If you were a gambler and could only pick one, would you bet your retirement fund or kids’ college fund on pVelocity, Shoplogix, or Panorama? Will Benioff surprise the world at next week’s Dreamforce? Is A1S truly designed exclusively for the SMB market or will this ultimately become the R/3 replacement product? Let me know—brichardson@amrresearch.com.
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Friday, September 14, 2007
Tuesday, September 11, 2007
Bridgestream Buy Positions Oracle as a Top IAM Suite Vendor
Bridgestream Buy Positions Oracle as a Top IAM Suite Vendor
A complete identity and access management solution must include a role mining and role life cycle management capability. By acquiring the role management vendor Bridgestream, Oracle moves to the head of the IAM suite vendors.
Oracle's acquisition of Bridgestream, a Gartner 2005 "Cool Vendor," is the first attempt by a large user-provisioning vendor to enter the broader IAM market, which Gartner defines as including user provisioning, role management for enterprises (RME), identity auditing and resource administration. Three smaller user-provisioning vendors — Beta Systems, Courion and Voelker Informatik — already have their own RME capability. Other large software vendors — such as BMC, CA, IBM, Novell and Sun — have partnered with RME vendors (including Bridgestream) for some time.
A complete identity and access management solution must include a role mining and role life cycle management capability. By acquiring the role management vendor Bridgestream, Oracle moves to the head of the IAM suite vendors.
Oracle's acquisition of Bridgestream, a Gartner 2005 "Cool Vendor," is the first attempt by a large user-provisioning vendor to enter the broader IAM market, which Gartner defines as including user provisioning, role management for enterprises (RME), identity auditing and resource administration. Three smaller user-provisioning vendors — Beta Systems, Courion and Voelker Informatik — already have their own RME capability. Other large software vendors — such as BMC, CA, IBM, Novell and Sun — have partnered with RME vendors (including Bridgestream) for some time.
Friday, September 07, 2007
MCA Solutions: Weekdays With Morris… and SAP | AMR Research
MCA Solutions: Weekdays With Morris… and SAP | AMR Research
Over the last few months, we have had a series of meetings with executives from MCA Solutions, one of the pioneers in the service parts optimization space. We have also had the chance to interview four customers, including several that were among the first in their industry to use MCA, and another that qualifies as the most recent to go live.
Google “MCA” and the search engine returns lots of listing for various art museums, a club for Ford Mustang fans, the Music Corporation of America, the UK Maritime and Coastguard Agency, and a company offering “superior clay roofing tile.”
Over the last few months, we have had a series of meetings with executives from MCA Solutions, one of the pioneers in the service parts optimization space. We have also had the chance to interview four customers, including several that were among the first in their industry to use MCA, and another that qualifies as the most recent to go live.
Google “MCA” and the search engine returns lots of listing for various art museums, a club for Ford Mustang fans, the Music Corporation of America, the UK Maritime and Coastguard Agency, and a company offering “superior clay roofing tile.”
Thursday, August 30, 2007
Friday, August 24, 2007
Monday, August 20, 2007
Workday Releases Beta Of Its On-Demand Financial Applications -- Workday -- InformationWeek
Workday Releases Beta Of Its On-Demand Financial Applications -- Workday -- InformationWeek
The startup, launched by PeopleSoft founder Dave Duffield, faces growing competition in the market for subscription-based ERP software.
The startup, launched by PeopleSoft founder Dave Duffield, faces growing competition in the market for subscription-based ERP software.
Friday, August 10, 2007
Monday, August 06, 2007
Friday, August 03, 2007
The View from Oracle OpenWorld in Shanghai (AMR)
The View from Oracle OpenWorld in Shanghai
by Bruce Richardson - Chief Research Officer
It was 4:10 a.m. on Sunday when the alarm clock went off. By 5:00 a.m. I was at Logan Airport, only to find that the 6:30 a.m. flight to Chicago was delayed for an hour. Even at that early hour, Logan was pure bedlam.
We managed to make up some of that delay on the flight to O’Hare. Despite my initial concerns, we had ample time to make the connecting flight to Shanghai. We left at 10:30 a.m. central time and arrived the following afternoon just after 2:00 p.m. Despite losing a day in the air, we never encountered night. We followed the sun as the flight took us over Wisconsin, Saskatchewan, British Columbia, Alaska, the International Date Line, the edge of Russia, and northern Asia.
As we approached the airport, I was struck by how the water and the sky were the same color, a burnt reddish brown. I had been warned by a colleague about the increased pollution in Shanghai, but had not expected this. Fortunately, that color palette was confined to the airport. Shanghai, though, was in the midst of the worst heat wave in over 60 years. During the time I’ve been here, the daytime temperature has hovered around 100 degrees (38 degrees centigrade). Right now, it’s 100 degrees, with 42% humidity and a dew point reading of 77%. According to weather.com, it “feels like 113.” Nice.
While there was a bus to the conference, I preferred the six-minute walk from the Shangri-La Hotel to the Shanghai International Convention Centre. As you might surmise, this was always a bad idea. I’d arrive for a meeting looking like I had just lost a water balloon fight. Even at midnight, the city was too warm and muggy.
Outside of the initial flight delay and the hazy, hot weather, the only other disappointment was the discovery that the new Verizon BlackBerry 8830 World Edition Smartphone was hardly the global tool I was promised. Despite numerous calls to my IT department and Verizon, I could not send or receive e-mails or use the browser. The phone and text messaging worked great, but that’s not really the point of the BlackBerry. The BlackBerry issue seemed to be confined to Verizon and this particular model. Ironically, the phone had turned itself back on after I had put it away—it must have touched something inside my briefcase while flashing the “press any key to abort” message while I was turning it off. When I got to Shanghai, I had received a dozen e-mails while traversing North American airspace, but nothing after that. Maddening.
China’s economy hotter than weather: +11.9% for 2Q07, +11.5% for first half
The Shangri-La sits high over the Huangpu River. The other side of the river features a diverse mix of older European-style buildings from the first few decades of the twentieth century and new Manhattan-like skyscrapers. One Oracle executive told me that the area where my hotel sits was a rice paddy only 10 or 15 years ago. It seems hard to believe until you consider the rapid rise of China’s economy. A few weeks ago the Chinese government reported that the economy grew 11.9% in the second quarter and 11.5% for the first half of the year.
Like the architecture, the China of today is a mix of the old and the new. While the business pages of the Shanghai Daily were trumpeting the $15B invested in computer equipment and telecommunications manufacturing in the first half of this year, the front page focused on the continuing attempts to rescue 69 miners trapped in a flooded coal pit. As the paper pointed out, the Chinese coal industry is the world’s most dangerous, leading to an average of 13 deaths per day. As I write this, every few minutes a barge loaded with coal floats by on the Huangpu.
Oracle in China: 1,500+ employees, 800+ partners
I had not been to China since February 2004. Ironically, my host for that trip was Agile Software, now part of the extended Oracle family. As I said last week, I came here to get a better understanding of the Chinese software market, not to hear any new product announcements. Outside of a detailed presentation on the recently announced 11g database, Oracle made no product announcements. The primary news was the announcement of plans to open a new Oracle Asia Research and Development Center (OARDC) in Shanghai. This will be the third in China. Oracle opened the first development center in Shenzhen in June 2002 and the second in Beijing in October 2003.
Oracle OpenWorld Asia Pacific 2007 drew an estimated 8,000 attendees to Shanghai this week. This was twice the attendance of the previous event held here three years ago. About 87% of the attendees were drawn from China, Hong Kong, and Taiwan. Most were partners or employees. Oracle has more than 1,500 employees spread across 13 branch offices in China—there were eight offices a year ago. These resources are backed by more than 800 partners. The vast majority are local firms. These partners are very important to the region as the channel accounts for more than 90% of Oracle’s revenue here.
Unlike the U.S. market, it is harder to discern between independent software vendors (ISVs), resellers, and integrators in China. Often partners play multiple roles. Some also embed Oracle software into devices and other products. To draw ISVs to Oracle database and middleware products, Oracle has opened two partner solution centers that are co-located with the existing OARDCs in Beijing and Shenzhen. To date, more than 150 ISVs have been through the centers to port their applications to Oracle technologies and/or integrate with Oracle applications.
Ironically, the ISV partners include UFIDA Software and Kingdee International Software Group Company Limited. Both are fierce Oracle competitors in the ERP market for small and midsize businesses. Kingdee has been rumored to be an Oracle acquisition target.
7,000+ database customers, 700+ apps customers
One executive estimated that OpenWorld drew more than 3,600 customers and prospects. This figure may be a little low as many business partners paid for their customers and prospects to attend. Nonetheless, this would represent a sizeable number of Oracle’s 7,000 customers in China. Nearly all use its database.
It seems that the large banking, telecommunications, utilities, and energy firms use Oracle’s E-Business Suite, while smaller industrial manufacturers and energy producers and small and large engineering and construction companies deploy Oracle’s J.D. Edwards software. There are some installations of Siebel and PeopleSoft though Oracle executives said that these companies had very little presence here until after Oracle acquired them. To emphasize the point, one executive said Siebel had 16 employees here before Oracle purchased the firm.
Oracle has high hopes for Hyperion sales in China. While its classic customer has been the CIO, the bet is that Hyperion will help open up the door to the CFO’s office. Demand is building here for business intelligence and performance management software.
While walking around the convention center, I was struck by the relative youth of the attendees. Oracle’s major U.S. events tend to attract people in the 35 to 55 range. Here, most attendees appeared to be under 35. One Oracle executive confirmed that buyers tend to be younger here, even in the public sector. I viewed this as a positive indicator for the future of technology spending and deployment.
The real question: how big is the Chinese market?
Given that China has a population of more than 1.3 billion, 7,000 customers seems like a modest achievement, particularly since Oracle has had a presence here since 1989. This prompts the question, how big could Oracle China become? No one I met seemed to have a handle on the size of the potential market, especially the number of small and midsize businesses.
While SAP is acknowledged as the primary threat, custom software appears to be the real competition in the largest accounts. It’s only been in the last five years that the government has encouraged enterprises to use packaged software and offered them incentives.
As you might guess, Oracle declined to break out its revenue for China. Executives would only say that China is the “sixth biggest market” for Oracle and the third largest in Asia, presumably after Japan and India. This could change quickly—China is poised to overtake Germany this year to become the third largest economy after the United States and Japan.
The only real color Oracle provided was on the overall market for Oracle Asia Pacific. The company said that the 29 countries comprising Asia Pacific accounted for $2.499B in FY07 revenues. This was up 24% over the previous year. In the recent concluded fiscal year, Asia Pacific accounted for 14% of Oracle total revenues and 19% of new license sales. Overall, the region represents 35,000 customers out of the total 275,000 customer base.
Reaching new customers through schools and OTN
According to the Shanghai Daily (July 31), Oracle has contributed more than $200M to China’s educational system since 2002. Five years ago, it started the investment with Oracle University which provided online training and certification to 600 participants. Over time it’s expanded down to primary and secondary schools via Think.com (www.think.com) which is a global online community for learning. The focus also includes college interns, new graduates, and post-graduate learning.
During a reception, we spoke with Derek Williams, executive vice president and chairman of Oracle Asia Pacific about his college recruiting plans. So far this year, he’s added 200 new college graduates in 12 cities and has plans for 100 more. He boasted that most have at least two degrees and are tri-lingual—in addition to Chinese and English, they also speak Japanese or Korean.
The overall hiring market is tight with demand exceeding supply. Mr. Williams estimates that they get 10,000 resumes in China for every 100 people they hire. Retention of younger people continues to be a challenge though turnover has yet to approach the levels of India—which has been in the high teens for many firms. The challenge is managing the lofty ambitions of today’s graduates.
While Oracle’s commitment to education has helped build the brand, it also benefits from the growing presence of the Oracle Technology Network (OTN). There are 245,000 members in China, up from 150,000 two years ago. China’s OTN membership is the second largest base in Asia, trailing only India.
Is Pakistan the next China? Who’s the next i-flex?
During one of the receptions I asked one Oracle Asia Pacific executive his views on which Asian country will become the next big market. The next day I asked two more executives the same question. I was stunned that all three instantly responded with the same answer—Pakistan. All three added Indonesia as another market to watch. Apparently some of the Indian IT boom has carried over the border to Pakistan. Rather than pursuing a business or engineering degree, enterprising students are choosing IT for a career.
I also asked the last two executives what they see as the Chinese equivalent of i-flex solutions, the India-based financial services software firm that is majority owned by Oracle. Based on their responses, you may want to keep an eye on Taiji Computer Corp. in the utilities market and Neusoft Group in telco, insurance, energy, and other sectors. Another company to watch is Digital China, a large IT services firm. While unknown outside of its core market, Digital China has emerged as one of Oracle’s top five global partners.
Add Shanghai to your list of must-see cities
On my 2004 trip, I also visited Suzhou, renowned for its Confucian gardens. This time I stayed within a five mile radius of Pudong, Shanghai. Nonetheless, if you haven’t been to Shanghai, add it to your list of must-see cities because of how well the city appears to embrace and manage change. It’s especially impressive when you consider that Shanghai spans 2,239 square miles, or nearly 100 times the island of Manhattan (23.7 square miles). I wouldn’t visit during the summer months, though.
If you come, watch out for the drivers. In some countries, pedestrians have the right of way. Here they are viewed as potential speed bumps. On the walk over this morning, a truck and two taxis attempted to turn me into a hood ornament. It was as though they were practicing their human dodge ball moves.
Next week: Back in the USA
By the time you get this, I will have spent 17 or 18 hours flying home. That’s assuming the air gods are good to me in Shanghai and Chicago. It’s that last leg that is the wild card.
In the meantime, I welcome your feedback and ideas—brichardson@amrresearch.com. What do you think will happen in the Chinese market? Will the large software and services firms become major global players or will they be content serving the enormous domestic market? Will Pakistan be the next important global tech market? Should Human Dodge Ball be an exhibition sport at the 2008 Olympics in Beijing?
by Bruce Richardson - Chief Research Officer
It was 4:10 a.m. on Sunday when the alarm clock went off. By 5:00 a.m. I was at Logan Airport, only to find that the 6:30 a.m. flight to Chicago was delayed for an hour. Even at that early hour, Logan was pure bedlam.
We managed to make up some of that delay on the flight to O’Hare. Despite my initial concerns, we had ample time to make the connecting flight to Shanghai. We left at 10:30 a.m. central time and arrived the following afternoon just after 2:00 p.m. Despite losing a day in the air, we never encountered night. We followed the sun as the flight took us over Wisconsin, Saskatchewan, British Columbia, Alaska, the International Date Line, the edge of Russia, and northern Asia.
As we approached the airport, I was struck by how the water and the sky were the same color, a burnt reddish brown. I had been warned by a colleague about the increased pollution in Shanghai, but had not expected this. Fortunately, that color palette was confined to the airport. Shanghai, though, was in the midst of the worst heat wave in over 60 years. During the time I’ve been here, the daytime temperature has hovered around 100 degrees (38 degrees centigrade). Right now, it’s 100 degrees, with 42% humidity and a dew point reading of 77%. According to weather.com, it “feels like 113.” Nice.
While there was a bus to the conference, I preferred the six-minute walk from the Shangri-La Hotel to the Shanghai International Convention Centre. As you might surmise, this was always a bad idea. I’d arrive for a meeting looking like I had just lost a water balloon fight. Even at midnight, the city was too warm and muggy.
Outside of the initial flight delay and the hazy, hot weather, the only other disappointment was the discovery that the new Verizon BlackBerry 8830 World Edition Smartphone was hardly the global tool I was promised. Despite numerous calls to my IT department and Verizon, I could not send or receive e-mails or use the browser. The phone and text messaging worked great, but that’s not really the point of the BlackBerry. The BlackBerry issue seemed to be confined to Verizon and this particular model. Ironically, the phone had turned itself back on after I had put it away—it must have touched something inside my briefcase while flashing the “press any key to abort” message while I was turning it off. When I got to Shanghai, I had received a dozen e-mails while traversing North American airspace, but nothing after that. Maddening.
China’s economy hotter than weather: +11.9% for 2Q07, +11.5% for first half
The Shangri-La sits high over the Huangpu River. The other side of the river features a diverse mix of older European-style buildings from the first few decades of the twentieth century and new Manhattan-like skyscrapers. One Oracle executive told me that the area where my hotel sits was a rice paddy only 10 or 15 years ago. It seems hard to believe until you consider the rapid rise of China’s economy. A few weeks ago the Chinese government reported that the economy grew 11.9% in the second quarter and 11.5% for the first half of the year.
Like the architecture, the China of today is a mix of the old and the new. While the business pages of the Shanghai Daily were trumpeting the $15B invested in computer equipment and telecommunications manufacturing in the first half of this year, the front page focused on the continuing attempts to rescue 69 miners trapped in a flooded coal pit. As the paper pointed out, the Chinese coal industry is the world’s most dangerous, leading to an average of 13 deaths per day. As I write this, every few minutes a barge loaded with coal floats by on the Huangpu.
Oracle in China: 1,500+ employees, 800+ partners
I had not been to China since February 2004. Ironically, my host for that trip was Agile Software, now part of the extended Oracle family. As I said last week, I came here to get a better understanding of the Chinese software market, not to hear any new product announcements. Outside of a detailed presentation on the recently announced 11g database, Oracle made no product announcements. The primary news was the announcement of plans to open a new Oracle Asia Research and Development Center (OARDC) in Shanghai. This will be the third in China. Oracle opened the first development center in Shenzhen in June 2002 and the second in Beijing in October 2003.
Oracle OpenWorld Asia Pacific 2007 drew an estimated 8,000 attendees to Shanghai this week. This was twice the attendance of the previous event held here three years ago. About 87% of the attendees were drawn from China, Hong Kong, and Taiwan. Most were partners or employees. Oracle has more than 1,500 employees spread across 13 branch offices in China—there were eight offices a year ago. These resources are backed by more than 800 partners. The vast majority are local firms. These partners are very important to the region as the channel accounts for more than 90% of Oracle’s revenue here.
Unlike the U.S. market, it is harder to discern between independent software vendors (ISVs), resellers, and integrators in China. Often partners play multiple roles. Some also embed Oracle software into devices and other products. To draw ISVs to Oracle database and middleware products, Oracle has opened two partner solution centers that are co-located with the existing OARDCs in Beijing and Shenzhen. To date, more than 150 ISVs have been through the centers to port their applications to Oracle technologies and/or integrate with Oracle applications.
Ironically, the ISV partners include UFIDA Software and Kingdee International Software Group Company Limited. Both are fierce Oracle competitors in the ERP market for small and midsize businesses. Kingdee has been rumored to be an Oracle acquisition target.
7,000+ database customers, 700+ apps customers
One executive estimated that OpenWorld drew more than 3,600 customers and prospects. This figure may be a little low as many business partners paid for their customers and prospects to attend. Nonetheless, this would represent a sizeable number of Oracle’s 7,000 customers in China. Nearly all use its database.
It seems that the large banking, telecommunications, utilities, and energy firms use Oracle’s E-Business Suite, while smaller industrial manufacturers and energy producers and small and large engineering and construction companies deploy Oracle’s J.D. Edwards software. There are some installations of Siebel and PeopleSoft though Oracle executives said that these companies had very little presence here until after Oracle acquired them. To emphasize the point, one executive said Siebel had 16 employees here before Oracle purchased the firm.
Oracle has high hopes for Hyperion sales in China. While its classic customer has been the CIO, the bet is that Hyperion will help open up the door to the CFO’s office. Demand is building here for business intelligence and performance management software.
While walking around the convention center, I was struck by the relative youth of the attendees. Oracle’s major U.S. events tend to attract people in the 35 to 55 range. Here, most attendees appeared to be under 35. One Oracle executive confirmed that buyers tend to be younger here, even in the public sector. I viewed this as a positive indicator for the future of technology spending and deployment.
The real question: how big is the Chinese market?
Given that China has a population of more than 1.3 billion, 7,000 customers seems like a modest achievement, particularly since Oracle has had a presence here since 1989. This prompts the question, how big could Oracle China become? No one I met seemed to have a handle on the size of the potential market, especially the number of small and midsize businesses.
While SAP is acknowledged as the primary threat, custom software appears to be the real competition in the largest accounts. It’s only been in the last five years that the government has encouraged enterprises to use packaged software and offered them incentives.
As you might guess, Oracle declined to break out its revenue for China. Executives would only say that China is the “sixth biggest market” for Oracle and the third largest in Asia, presumably after Japan and India. This could change quickly—China is poised to overtake Germany this year to become the third largest economy after the United States and Japan.
The only real color Oracle provided was on the overall market for Oracle Asia Pacific. The company said that the 29 countries comprising Asia Pacific accounted for $2.499B in FY07 revenues. This was up 24% over the previous year. In the recent concluded fiscal year, Asia Pacific accounted for 14% of Oracle total revenues and 19% of new license sales. Overall, the region represents 35,000 customers out of the total 275,000 customer base.
Reaching new customers through schools and OTN
According to the Shanghai Daily (July 31), Oracle has contributed more than $200M to China’s educational system since 2002. Five years ago, it started the investment with Oracle University which provided online training and certification to 600 participants. Over time it’s expanded down to primary and secondary schools via Think.com (www.think.com) which is a global online community for learning. The focus also includes college interns, new graduates, and post-graduate learning.
During a reception, we spoke with Derek Williams, executive vice president and chairman of Oracle Asia Pacific about his college recruiting plans. So far this year, he’s added 200 new college graduates in 12 cities and has plans for 100 more. He boasted that most have at least two degrees and are tri-lingual—in addition to Chinese and English, they also speak Japanese or Korean.
The overall hiring market is tight with demand exceeding supply. Mr. Williams estimates that they get 10,000 resumes in China for every 100 people they hire. Retention of younger people continues to be a challenge though turnover has yet to approach the levels of India—which has been in the high teens for many firms. The challenge is managing the lofty ambitions of today’s graduates.
While Oracle’s commitment to education has helped build the brand, it also benefits from the growing presence of the Oracle Technology Network (OTN). There are 245,000 members in China, up from 150,000 two years ago. China’s OTN membership is the second largest base in Asia, trailing only India.
Is Pakistan the next China? Who’s the next i-flex?
During one of the receptions I asked one Oracle Asia Pacific executive his views on which Asian country will become the next big market. The next day I asked two more executives the same question. I was stunned that all three instantly responded with the same answer—Pakistan. All three added Indonesia as another market to watch. Apparently some of the Indian IT boom has carried over the border to Pakistan. Rather than pursuing a business or engineering degree, enterprising students are choosing IT for a career.
I also asked the last two executives what they see as the Chinese equivalent of i-flex solutions, the India-based financial services software firm that is majority owned by Oracle. Based on their responses, you may want to keep an eye on Taiji Computer Corp. in the utilities market and Neusoft Group in telco, insurance, energy, and other sectors. Another company to watch is Digital China, a large IT services firm. While unknown outside of its core market, Digital China has emerged as one of Oracle’s top five global partners.
Add Shanghai to your list of must-see cities
On my 2004 trip, I also visited Suzhou, renowned for its Confucian gardens. This time I stayed within a five mile radius of Pudong, Shanghai. Nonetheless, if you haven’t been to Shanghai, add it to your list of must-see cities because of how well the city appears to embrace and manage change. It’s especially impressive when you consider that Shanghai spans 2,239 square miles, or nearly 100 times the island of Manhattan (23.7 square miles). I wouldn’t visit during the summer months, though.
If you come, watch out for the drivers. In some countries, pedestrians have the right of way. Here they are viewed as potential speed bumps. On the walk over this morning, a truck and two taxis attempted to turn me into a hood ornament. It was as though they were practicing their human dodge ball moves.
Next week: Back in the USA
By the time you get this, I will have spent 17 or 18 hours flying home. That’s assuming the air gods are good to me in Shanghai and Chicago. It’s that last leg that is the wild card.
In the meantime, I welcome your feedback and ideas—brichardson@amrresearch.com. What do you think will happen in the Chinese market? Will the large software and services firms become major global players or will they be content serving the enormous domestic market? Will Pakistan be the next important global tech market? Should Human Dodge Ball be an exhibition sport at the 2008 Olympics in Beijing?
Friday, July 20, 2007
Wednesday, July 11, 2007
FT.com / Technology - E-procurement: From chaos comes the ‘eBay for business’
FT.com / Technology - E-procurement: From chaos comes the ‘eBay for business’
E-procurement: From chaos comes the ‘eBay for business’
By Andrew Baxter
Published: July 11 2007 12:23 | Last updated: July 11 2007 12:23
The rapid pace of development in consumer technology has made some enterprise IT look clunky. This is certainly the case with corporate e-procurement – the purchasing of workplace goods and services online.
At home, online shoppers buy quickly and easily from a range of websites, all of which have invested heavily in making their sites as simple and intuitive as possible. The corporate world has largely missed out. But now there is growing recognition that enhanced user-friendliness could be the key to increasing the usage of e-procurement systems and extracting more benefits from them.
“If you ask any of the e-procurement vendors today for a demonstration you can guarantee it’s going to look like an eBay shopping experience,” says Sharon Crawford, principal analyst at Quocirca. “There are going to be shopping baskets and clicks and so on – everybody has built that into their software to make it easier for any end-user to participate in purchasing.”
Because the process increasingly resembles an online consumer purchase, organisations can devolve the buying process much more effectively to end users who are not purchasing professionals. It could also mean companies can keep a closer eye on who is buying what.
One of the companies in the vanguard of this new approach to e-procurement is UK-based ProcServe, which has developed a commercial e-procurement system of the same name and also led a consortium that is delivering a programme called Zanzibar for the UK public sector.
The interface for Zanzibar, launched last year, was modelled on consumer sites such as lastminute.com and eBay, says Veera Johnson, ProcServe’s chief executive. “We tried to relate it back to what experience I would want if I was a public sector employee, so the debate was about usability and not about procurement language,” she says.
This challenges long-held assumptions about e-procurement – for example, that it requires huge amounts of training because of its complexity. “The user interface is absolutely crucial for getting people to use the system based on their own experiences,” says Ms Johnson. “Training and driving the adoption of the system become easier.”
If properly implemented, corporate e-procurement should be like “eBay for business”, says Lyn Duncan, business development director at @UK PLC, a company that works with businesses to enable them to trade online quickly with their customers. Once purchasing professionals have sorted out issues such as contracts with suppliers, and who is allowed to buy what from whom, the clicking and buying for the rest of the organisation should be simple, she says.
“There are lots of people with enterprise solutions who want to make this stuff complex, because it is expensive,” says Ms Duncan. In contrast, the @UK system uses the same interface for public sector e-procurement as it does for consumer purchases. “You can set up favourites – it works just like a Tesco [online] shopping list.”
One target market for ProcServe, a PA Consulting Group company, is schools, which need a simple e-procurement system that can be used by bursars, teachers and secretaries rather than e-marketplace professionals. By last month, 600 UK schools were using the system, and a national roll-out is planned this summer.
Another cherished assumption with e-procurement is that, to increase efficiency and control, it makes sense for organisations to restrict the number of users. But once a system becomes as simple as a home shopping website, more employees will try to use it if they can.
The UK Department of Work and Pensions, one of the earliest Zanzibar customers, will probably have 30,000 users on the system once it has reached the next stage of its implementation, says Ms Johnson. That sounds a recipe for chaos, but all the purchases are made via a central collaborative contract and the entire process is electronic, from sending the purchase order to receiving the invoice, so the number and size of orders becomes largely irrelevant, even to suppliers.
As systems such as this devolve buying throughout an organisation, however, there is a need to prevent the free-for-all that the modern, intuitive home shopping website represents. This explains why corporate attitudes to user-friendliness have often been ambivalent.
Brett Mauser, director of global procurement at NCR, recalls a comment from the company’s chief purchasing officer several years ago when the US retail systems, ATM and IT services company was considering a web-based e-procurement system: “Why would we want to make it easier for people to spend money faster? What we want is for the right people to buy the right things at the right price.”
Without wishing to make web-based procurement deliberately cumbersome, says Mr Mauser, companies need a balance between user-friendliness and control. “We’re not an L.L.Bean or a Lands’ End, which have been given awards for their usability. It’s very easy to shop and buy stuff from them – they want it that way so people spend more.”
The big fear for organisations has been that employees would use the web for “maverick spending” on items that do not conform to their standards or – as often occurs with online travel – deals that look like a bargain but result in the company losing out on a discount for multiple or bulk purchases.
“One of the challenges is that there are always nice things that people will try to find a way to buy, or suppliers will find a way to users,” says Mr Mauser.
NCR, along with many other large companies, directs its buyers of indirect materials, such as office supplies, to various approved suppliers’ websites. The supplier will host an NCR page with special prices, and everyone from the company pays the same price. The supplier will then send a summary bill electronically.
Many organisations, however, want employees to go to one online source – what Ms Crawford calls a “central backbone” – which handles all the relationships with suppliers and from which purchasers can draw down what they need. This is the approach taken by ProcServe.
As employees from across the buying organisation gain access to the catalogues that have been loaded on to the system, and make purchases, their managers achieve visibility, at a very detailed level, of what is being bought by whom.
The St Mary’s National Health Service Trust in London is one of a group of hospitals introducing the Zanzibar system and Andrew Holden, the trust’s finance director, is impressed by the greater level of control over maverick purchases that the system will give.
“In the past, a catalogue might arrive on your desk and you are a doctor in orthopaedics, and you say: ‘I like that, I’ll buy one of them,’ but now you won’t see it,” says Mr Holden. “The ability to make sure people stick to buying what you want them to is much greater.”
The hope is that a user-friendly interface will encourage more employees to go through the right channels when they buy items online at work, reducing organisations’ worries about indiscriminate web-based purchasing and ensuring that companies make the most of the deals they have made with suppliers.
“Because e-procurement systems have improved, people are less likely to do their own thing, they can browse catalogues and see pictures, and that has reduced maverick spending,” says Ms Crawford at Quocirca. “This is one place where, because of the importance of purchasing and the control of it, it is recognised that the user experience at work needs to be as good as it is at home.”
Copyright The Financial Times Limited 2007
E-procurement: From chaos comes the ‘eBay for business’
By Andrew Baxter
Published: July 11 2007 12:23 | Last updated: July 11 2007 12:23
The rapid pace of development in consumer technology has made some enterprise IT look clunky. This is certainly the case with corporate e-procurement – the purchasing of workplace goods and services online.
At home, online shoppers buy quickly and easily from a range of websites, all of which have invested heavily in making their sites as simple and intuitive as possible. The corporate world has largely missed out. But now there is growing recognition that enhanced user-friendliness could be the key to increasing the usage of e-procurement systems and extracting more benefits from them.
“If you ask any of the e-procurement vendors today for a demonstration you can guarantee it’s going to look like an eBay shopping experience,” says Sharon Crawford, principal analyst at Quocirca. “There are going to be shopping baskets and clicks and so on – everybody has built that into their software to make it easier for any end-user to participate in purchasing.”
Because the process increasingly resembles an online consumer purchase, organisations can devolve the buying process much more effectively to end users who are not purchasing professionals. It could also mean companies can keep a closer eye on who is buying what.
One of the companies in the vanguard of this new approach to e-procurement is UK-based ProcServe, which has developed a commercial e-procurement system of the same name and also led a consortium that is delivering a programme called Zanzibar for the UK public sector.
The interface for Zanzibar, launched last year, was modelled on consumer sites such as lastminute.com and eBay, says Veera Johnson, ProcServe’s chief executive. “We tried to relate it back to what experience I would want if I was a public sector employee, so the debate was about usability and not about procurement language,” she says.
This challenges long-held assumptions about e-procurement – for example, that it requires huge amounts of training because of its complexity. “The user interface is absolutely crucial for getting people to use the system based on their own experiences,” says Ms Johnson. “Training and driving the adoption of the system become easier.”
If properly implemented, corporate e-procurement should be like “eBay for business”, says Lyn Duncan, business development director at @UK PLC, a company that works with businesses to enable them to trade online quickly with their customers. Once purchasing professionals have sorted out issues such as contracts with suppliers, and who is allowed to buy what from whom, the clicking and buying for the rest of the organisation should be simple, she says.
“There are lots of people with enterprise solutions who want to make this stuff complex, because it is expensive,” says Ms Duncan. In contrast, the @UK system uses the same interface for public sector e-procurement as it does for consumer purchases. “You can set up favourites – it works just like a Tesco [online] shopping list.”
One target market for ProcServe, a PA Consulting Group company, is schools, which need a simple e-procurement system that can be used by bursars, teachers and secretaries rather than e-marketplace professionals. By last month, 600 UK schools were using the system, and a national roll-out is planned this summer.
Another cherished assumption with e-procurement is that, to increase efficiency and control, it makes sense for organisations to restrict the number of users. But once a system becomes as simple as a home shopping website, more employees will try to use it if they can.
The UK Department of Work and Pensions, one of the earliest Zanzibar customers, will probably have 30,000 users on the system once it has reached the next stage of its implementation, says Ms Johnson. That sounds a recipe for chaos, but all the purchases are made via a central collaborative contract and the entire process is electronic, from sending the purchase order to receiving the invoice, so the number and size of orders becomes largely irrelevant, even to suppliers.
As systems such as this devolve buying throughout an organisation, however, there is a need to prevent the free-for-all that the modern, intuitive home shopping website represents. This explains why corporate attitudes to user-friendliness have often been ambivalent.
Brett Mauser, director of global procurement at NCR, recalls a comment from the company’s chief purchasing officer several years ago when the US retail systems, ATM and IT services company was considering a web-based e-procurement system: “Why would we want to make it easier for people to spend money faster? What we want is for the right people to buy the right things at the right price.”
Without wishing to make web-based procurement deliberately cumbersome, says Mr Mauser, companies need a balance between user-friendliness and control. “We’re not an L.L.Bean or a Lands’ End, which have been given awards for their usability. It’s very easy to shop and buy stuff from them – they want it that way so people spend more.”
The big fear for organisations has been that employees would use the web for “maverick spending” on items that do not conform to their standards or – as often occurs with online travel – deals that look like a bargain but result in the company losing out on a discount for multiple or bulk purchases.
“One of the challenges is that there are always nice things that people will try to find a way to buy, or suppliers will find a way to users,” says Mr Mauser.
NCR, along with many other large companies, directs its buyers of indirect materials, such as office supplies, to various approved suppliers’ websites. The supplier will host an NCR page with special prices, and everyone from the company pays the same price. The supplier will then send a summary bill electronically.
Many organisations, however, want employees to go to one online source – what Ms Crawford calls a “central backbone” – which handles all the relationships with suppliers and from which purchasers can draw down what they need. This is the approach taken by ProcServe.
As employees from across the buying organisation gain access to the catalogues that have been loaded on to the system, and make purchases, their managers achieve visibility, at a very detailed level, of what is being bought by whom.
The St Mary’s National Health Service Trust in London is one of a group of hospitals introducing the Zanzibar system and Andrew Holden, the trust’s finance director, is impressed by the greater level of control over maverick purchases that the system will give.
“In the past, a catalogue might arrive on your desk and you are a doctor in orthopaedics, and you say: ‘I like that, I’ll buy one of them,’ but now you won’t see it,” says Mr Holden. “The ability to make sure people stick to buying what you want them to is much greater.”
The hope is that a user-friendly interface will encourage more employees to go through the right channels when they buy items online at work, reducing organisations’ worries about indiscriminate web-based purchasing and ensuring that companies make the most of the deals they have made with suppliers.
“Because e-procurement systems have improved, people are less likely to do their own thing, they can browse catalogues and see pictures, and that has reduced maverick spending,” says Ms Crawford at Quocirca. “This is one place where, because of the importance of purchasing and the control of it, it is recognised that the user experience at work needs to be as good as it is at home.”
Copyright The Financial Times Limited 2007
FT.com / Technology - What’s new: SMEs offered business intelligence from Oracle
FT.com / Technology - What’s new: SMEs offered business intelligence from Oracle
What’s new: SMEs offered business intelligence from Oracle
By Geoff Nairn
Published: July 11 2007 09:43 | Last updated: July 11 2007 09:43
Oracle is bringing business intelligence to the masses with Oracle BI Standard Edition One aimed at SMEs and departmental users.
Oracle did the same with its flagship database to produce a cut-down version called Oracle 10g Standard Edition One, which this lies at the heart of the new BI offering and includes tools for creating dashboards, ad hoc reporting and publishing. The BI SE One software costs $1,000 for each user, minimum five, maximum 50.
Asset management
Infor, the fast-growing US enterprise software vendor, has unveiled Infor EAM Enterprise Edition, a new version of its enterprise asset management (EAM) solution.
The product aims to help businesses in the fleet management, manufacturing, facilities and life sciences industries track their capital assets.
Future releases will include more industries. The product was previously known as Infor Datastream and stems from Infor’s 2006 acquisition of Datastream, an EAM specialist.
Searching the abstract
Xerox says its new search technology, FactSpotter, goes beyond the limitations of traditional keyword-based searches.
FactSpotter looks not only for keywords in a query but also the context of the document containing those words. It can also handle abstract concepts.
Xerox plans to target FactSpotter at the legal and regulatory compliance market and possibly other vertical applications, but there are no plans to compete with the likes of Google in consumer search.
Power saver
Hewlett-Packard offers green storage with a trio of mid-range disc arrays named EVA4100, 6100 and 8100, which improve power efficiency by up to 45 per cent over their predecessors.
HP claims a big data centre with a monthly storage electricity bill of $3,000 could save as much as $18,000 a year in power and cooling costs.
Social integration
IBM’s Lotus software hopes for a new lease of life thanks to social networking technologies such as wikis and blogs.
IBM claims Lotus Connections will make it easier for businesses to integrate social networking into their existing IT infrastructures and commonly used applications.
Lotus is best known for Notes, once the leading business e-mail application before Microsoft’s Exchange took the top slot. Lotus Connections costs $110 per user.
Google and Linux
Google has finally released a version of its popular Google Desktop search application for the Linux operating system. The free program is already offered for Windows and Mac OS X users and now there is a Linux version, although in a typical Google move, it is currently only a beta version. The software was developed by Google’s Beijing engineering team. As well as two Chinese languages, it comes in English and eight other tongues.
Copyright The Financial Times Limited 2007
What’s new: SMEs offered business intelligence from Oracle
By Geoff Nairn
Published: July 11 2007 09:43 | Last updated: July 11 2007 09:43
Oracle is bringing business intelligence to the masses with Oracle BI Standard Edition One aimed at SMEs and departmental users.
Oracle did the same with its flagship database to produce a cut-down version called Oracle 10g Standard Edition One, which this lies at the heart of the new BI offering and includes tools for creating dashboards, ad hoc reporting and publishing. The BI SE One software costs $1,000 for each user, minimum five, maximum 50.
Asset management
Infor, the fast-growing US enterprise software vendor, has unveiled Infor EAM Enterprise Edition, a new version of its enterprise asset management (EAM) solution.
The product aims to help businesses in the fleet management, manufacturing, facilities and life sciences industries track their capital assets.
Future releases will include more industries. The product was previously known as Infor Datastream and stems from Infor’s 2006 acquisition of Datastream, an EAM specialist.
Searching the abstract
Xerox says its new search technology, FactSpotter, goes beyond the limitations of traditional keyword-based searches.
FactSpotter looks not only for keywords in a query but also the context of the document containing those words. It can also handle abstract concepts.
Xerox plans to target FactSpotter at the legal and regulatory compliance market and possibly other vertical applications, but there are no plans to compete with the likes of Google in consumer search.
Power saver
Hewlett-Packard offers green storage with a trio of mid-range disc arrays named EVA4100, 6100 and 8100, which improve power efficiency by up to 45 per cent over their predecessors.
HP claims a big data centre with a monthly storage electricity bill of $3,000 could save as much as $18,000 a year in power and cooling costs.
Social integration
IBM’s Lotus software hopes for a new lease of life thanks to social networking technologies such as wikis and blogs.
IBM claims Lotus Connections will make it easier for businesses to integrate social networking into their existing IT infrastructures and commonly used applications.
Lotus is best known for Notes, once the leading business e-mail application before Microsoft’s Exchange took the top slot. Lotus Connections costs $110 per user.
Google and Linux
Google has finally released a version of its popular Google Desktop search application for the Linux operating system. The free program is already offered for Windows and Mac OS X users and now there is a Linux version, although in a typical Google move, it is currently only a beta version. The software was developed by Google’s Beijing engineering team. As well as two Chinese languages, it comes in English and eight other tongues.
Copyright The Financial Times Limited 2007
Wednesday, July 04, 2007
FTD.de - IT+Telekommunikation - Nachrichten - Imageschlacht der Software-Giganten
FTD.de - IT+Telekommunikation - Nachrichten - Imageschlacht der Software-Giganten
SAP startet im Rechtsstreit mit Oracle um die amerikanische Tochter Tomorrow Now die groߥ PR-Offensive. Es geht um Schadensbegrenzung.
SAP startet im Rechtsstreit mit Oracle um die amerikanische Tochter Tomorrow Now die groߥ PR-Offensive. Es geht um Schadensbegrenzung.
Monday, July 02, 2007
Look Behind the Numbers at Oracle's Earnings
Look Behind the Numbers at Oracle's Earnings
Oracle's earnings call for 4Q07 posted impressive gains in all segments. But clients must understand what the numbers mean for market momentum in their respective areas as they consider Oracle's solutions.
Oracle's earnings call for 4Q07 posted impressive gains in all segments. But clients must understand what the numbers mean for market momentum in their respective areas as they consider Oracle's solutions.
Friday, June 29, 2007
“Performance Transparency;” Shai Surfaces; Can Greenough Do It Again? | AMR Research
“Performance Transparency;” Shai Surfaces; Can Greenough Do It Again? | AMR Research
Listening to the earnings calls of Oracle and SAP, I only wish that they provided the same level of “performance transparency” as Tata Consultancy Services (TCS). A few years ago, SAP used to break out performance by vertical, by “pillar” or application category (such as ERP, customer management, supply chain management), and by software license and maintenance. It no longer provides that much color on the business, and the license and maintenance are combined into “software and software-related service revenue.”
The increasing levels of opaqueness make it really difficult for analysts or serious investors to get a full view. While I’m sure that’s the intent, why?
Look at Oracle: Since completing the PeopleSoft purchase in January 2005, the company has made 30 additional acquisitions, spending close to $24B in the process. But how much do investors know about the success of the acquisitions outside of some vague references to organic versus inorganic growth?
Don’t get me wrong. The have succeeded based on the strong growth in revenue, profits, cash flow, and market cap. But as a shareholder, do you know if PeopleSoft or Siebel have generated revenue or licenses anywhere near their purchase prices? Do you have a clue as to what percent of these customers renewed their annual maintenance contracts or bought more Oracle software or services?
Do you have any idea what an acquired customer is worth to Oracle, or SAP, or any of their other competitors? An Oracle sales executive once told me, “I tell my people to never lose a deal based on price because over the next five years, that customer is going to generate four to eight times the initial sales price in follow-on business with us.” Is there a model that we should be watching or building?
Contrast this with TCS
For last week’s call, Oracle provided a 14-page press release and an audio conference. On its last call, SAP arguably went one step better by providing video and hard copy of all of the presentations. In both cases, each could have provided more information.
If you have five minutes, go to the TCS’s website and click on the “investors” tab up near the top. Once on that page, open the presentations given at the May 7 analyst day in New York. Among the charts you will find are the number of clients TCS has with deals valued at $10M-to-$20M range, $20M-to-$50M, and $50M-plus, as well as the type of engagement (such as “global package implementation,” “end-to-end solutions,” and the like).
Another slide shows revenue growth for the last several years, with base revenue, organic revenue, and inorganic revenue. Later in the deck, there’s a detailed multiyear breakdown of revenue by service. This looks at assurance services, business process outsourcing, infrastructure services, asset leverage, business intelligence, enterprise solutions, and other offerings. Other slides have detailed discussions of growth strategies, cost reduction moves, and hiring plans and concerns.
I sat through a similar presentation by TCS executives when they came to Boston last spring. When it was over, you really seemed to have the sense that not only did they understand their opportunities and challenges, but also the audience did as well. This level of openness or performance transparency is not new to TCS. You will find that all of the major Indian services firms provide a lot more detail than many of their application brethren.
Calling all experts: Rob Schwartz, Jefferies & Company
Concerned that I may be overreacting to the Oracle and SAP calls, I talked to Jim Shepherd about the ever-dwindling fountain of information that flows from the largest vendors (be sure to read Shep’s in-depth analysis of Oracles Q4 and FY07 earnings in News of Note below).We talked about whether they are doing this for competitive reasons (like they don't want the other to know) or to limit comparisons from one period to the next, or has there by some other regulatory changes that is limiting a company’s ability to share more detailed information?
Shep suggested that I call an expert—Robert Schwartz, managing director of equities research at Jefferies & Company. We’ve known Rob for a long time and trust his insights. I sent him an e-mail that expressed the “why are they doing this” points from the previous paragraph. Here’s his response:
The “knife edge problem”
“Your piece is timely and your view on point.
The problem is true, especially post-acquisition in this rapidly consolidating industry. The universal excuse I hear from management teams is that the acquired organization are integrated so fast and all product lines (acquired or not) are now bundled for the customer so seamlessly at pricing, that allocation of revenue to product lines is an arbitrary exercise. But in so many cases, the field organizations run overlay or parallel sales teams by product or vertical. The parent company manages to figure out a segment revenue number for sales comp, so why isn’t that a good approximation for the Street?
We all recognize the “knife edge problem” for management from breaking out segment performance, particularly after an acquisition. If the acquired revenue is high, the company is questioned about slow growth in its traditional businesses. If the acquisition out-performs early after it is bought, the upside can be dismissed as a springboard from deals held back by the acquired company to aid the post-acquisition performance.
The same skepticism is given to business unit performance even if there is no acquisition. In a solid quarter often there is some segment that looks light. It seems some analysts and investors regularly ignore the natural variability of segment performance and focus on the lower-than-expected numbers.
Management is now eliminating the scrutiny by aggregating. They report less detail because they can, not because of competitive concerns or regulators preventing them from giving more visibility into the business. If they couldn’t really get at revenue by product line, they could give us other metrics—number of deals with a product from the vertical in the mix, number of new customers to the product. Management shouldn’t expect full credit for cross-selling and integration success if they won’t give us data. The criticism and questions comes with the territory and will be forgotten if the aggregate cash, revenue, and profit numbers keep rising.
Oracle would not quote organic license growth for Q4. The only help it gave investors was a license number for the Hyperion acquisition, which closed in the quarter. Yet, on the Q3 call, Safra Katz gave the applications license revenue growth rate estimate, excluding i-flex, MetaSolv, Portal Software, SPL WorldGroup, and even Siebel. It’s in the transcript. The explanation for the limited reporting this quarter was a “materiality” hurdle on the size of the deals—i.e., if they aren’t big enough, the accountants aren’t requiring disclosure—but it is not clear what changed for the other recent acquisitions to make them immaterial. Since Oracle’s explicit strategy is to consolidate the applications world, it is relevant to investors to know how acquisitions fare after they are brought on board.
To the point, the Q4 Q&A had questions about how long it takes to get an acquisition integrated and how we should layer them into our models.
Hope this helps.”
Yes, it does. Thanks Rob.
Shai Agassi surfaces—sort of—at Better PLC
A few days after Shai Agassi left SAP in late March, he noted on his blog (shaiagassi.typepad.com) that he had decided to take 100 days to go through the 100 or so offers he received in the first 100 hours. Well, we’re approaching the 100-day mark.
His latest post is called “Blog Interrupted.” It opens with an apology for not updating the blog in three weeks. He then adds that “we are raising money to start this new company called Better PLC. After years of fighting for budget allocations, I forgot how much fun it is to actually go convince investors that your idea has enough merit that they should put their money, and much more importantly - their trust in you.”
That got our attention so we Googled “Better PLC.” The only mention was that of a summer internship opportunity. Here is the description:
“This is the ‘Google’ opportunity of electric automotive transportation. Come be a part of an exciting project that will have an immense impact on climate change, the transportation industry, and the way we commute on a daily basis.
Located in Palo Alto, California, Better PLC is a start-up company still in stealth mode that is focused on scaling the deployment of non-hydrocarbon powered cars through a combination of infrastructure, public policy and financial frameworks. The company establishes and manages a multi-year transformation mega-project that drives complete transformation at the scale of city to country.
This summer we are looking to build a series of electric car concepts and prove technical feasibility of various ideas which will serve as prototypes for our car and battery manufacturers (we are working with various manufacturers including one of the top 5 carmakers in the world).”
I’m assuming that the company name is to be pronounced “Better Place.” We will attempt to reach Mr. Agassi to confirm this and to search for more details. Look for an update in a future First Thing Monday.
Former SSA Global CEO Mike Greenough surfaces, too
Speaking of new sightings, we received a press release that a unit of Cerberus Capital Management had acquired Torex Retail for $420M, and that the large private equity firm had named Mike Greenough as Torex’s new chairman and CEO (see the News of Note item on this below).
Mr. Greenough was formerly the chairman, president, and CEO of SSA Global. During his five years at the helm, he acquired at least a dozen software companies, including Baan, Epiphany, EXE, Infinium, and Marcam. In May 2006, he sold SSA Global to Infor Global Solutions for $1.4B in cash. While I was unsuccessful in my attempt to reach him before writing this, I am fairly confident that he will repeat his strategy of growth through acquisitions. Cerberus is a good partner for him; according to its website, the firm has $25B under management.
Listening to the earnings calls of Oracle and SAP, I only wish that they provided the same level of “performance transparency” as Tata Consultancy Services (TCS). A few years ago, SAP used to break out performance by vertical, by “pillar” or application category (such as ERP, customer management, supply chain management), and by software license and maintenance. It no longer provides that much color on the business, and the license and maintenance are combined into “software and software-related service revenue.”
The increasing levels of opaqueness make it really difficult for analysts or serious investors to get a full view. While I’m sure that’s the intent, why?
Look at Oracle: Since completing the PeopleSoft purchase in January 2005, the company has made 30 additional acquisitions, spending close to $24B in the process. But how much do investors know about the success of the acquisitions outside of some vague references to organic versus inorganic growth?
Don’t get me wrong. The have succeeded based on the strong growth in revenue, profits, cash flow, and market cap. But as a shareholder, do you know if PeopleSoft or Siebel have generated revenue or licenses anywhere near their purchase prices? Do you have a clue as to what percent of these customers renewed their annual maintenance contracts or bought more Oracle software or services?
Do you have any idea what an acquired customer is worth to Oracle, or SAP, or any of their other competitors? An Oracle sales executive once told me, “I tell my people to never lose a deal based on price because over the next five years, that customer is going to generate four to eight times the initial sales price in follow-on business with us.” Is there a model that we should be watching or building?
Contrast this with TCS
For last week’s call, Oracle provided a 14-page press release and an audio conference. On its last call, SAP arguably went one step better by providing video and hard copy of all of the presentations. In both cases, each could have provided more information.
If you have five minutes, go to the TCS’s website and click on the “investors” tab up near the top. Once on that page, open the presentations given at the May 7 analyst day in New York. Among the charts you will find are the number of clients TCS has with deals valued at $10M-to-$20M range, $20M-to-$50M, and $50M-plus, as well as the type of engagement (such as “global package implementation,” “end-to-end solutions,” and the like).
Another slide shows revenue growth for the last several years, with base revenue, organic revenue, and inorganic revenue. Later in the deck, there’s a detailed multiyear breakdown of revenue by service. This looks at assurance services, business process outsourcing, infrastructure services, asset leverage, business intelligence, enterprise solutions, and other offerings. Other slides have detailed discussions of growth strategies, cost reduction moves, and hiring plans and concerns.
I sat through a similar presentation by TCS executives when they came to Boston last spring. When it was over, you really seemed to have the sense that not only did they understand their opportunities and challenges, but also the audience did as well. This level of openness or performance transparency is not new to TCS. You will find that all of the major Indian services firms provide a lot more detail than many of their application brethren.
Calling all experts: Rob Schwartz, Jefferies & Company
Concerned that I may be overreacting to the Oracle and SAP calls, I talked to Jim Shepherd about the ever-dwindling fountain of information that flows from the largest vendors (be sure to read Shep’s in-depth analysis of Oracles Q4 and FY07 earnings in News of Note below).We talked about whether they are doing this for competitive reasons (like they don't want the other to know) or to limit comparisons from one period to the next, or has there by some other regulatory changes that is limiting a company’s ability to share more detailed information?
Shep suggested that I call an expert—Robert Schwartz, managing director of equities research at Jefferies & Company. We’ve known Rob for a long time and trust his insights. I sent him an e-mail that expressed the “why are they doing this” points from the previous paragraph. Here’s his response:
The “knife edge problem”
“Your piece is timely and your view on point.
The problem is true, especially post-acquisition in this rapidly consolidating industry. The universal excuse I hear from management teams is that the acquired organization are integrated so fast and all product lines (acquired or not) are now bundled for the customer so seamlessly at pricing, that allocation of revenue to product lines is an arbitrary exercise. But in so many cases, the field organizations run overlay or parallel sales teams by product or vertical. The parent company manages to figure out a segment revenue number for sales comp, so why isn’t that a good approximation for the Street?
We all recognize the “knife edge problem” for management from breaking out segment performance, particularly after an acquisition. If the acquired revenue is high, the company is questioned about slow growth in its traditional businesses. If the acquisition out-performs early after it is bought, the upside can be dismissed as a springboard from deals held back by the acquired company to aid the post-acquisition performance.
The same skepticism is given to business unit performance even if there is no acquisition. In a solid quarter often there is some segment that looks light. It seems some analysts and investors regularly ignore the natural variability of segment performance and focus on the lower-than-expected numbers.
Management is now eliminating the scrutiny by aggregating. They report less detail because they can, not because of competitive concerns or regulators preventing them from giving more visibility into the business. If they couldn’t really get at revenue by product line, they could give us other metrics—number of deals with a product from the vertical in the mix, number of new customers to the product. Management shouldn’t expect full credit for cross-selling and integration success if they won’t give us data. The criticism and questions comes with the territory and will be forgotten if the aggregate cash, revenue, and profit numbers keep rising.
Oracle would not quote organic license growth for Q4. The only help it gave investors was a license number for the Hyperion acquisition, which closed in the quarter. Yet, on the Q3 call, Safra Katz gave the applications license revenue growth rate estimate, excluding i-flex, MetaSolv, Portal Software, SPL WorldGroup, and even Siebel. It’s in the transcript. The explanation for the limited reporting this quarter was a “materiality” hurdle on the size of the deals—i.e., if they aren’t big enough, the accountants aren’t requiring disclosure—but it is not clear what changed for the other recent acquisitions to make them immaterial. Since Oracle’s explicit strategy is to consolidate the applications world, it is relevant to investors to know how acquisitions fare after they are brought on board.
To the point, the Q4 Q&A had questions about how long it takes to get an acquisition integrated and how we should layer them into our models.
Hope this helps.”
Yes, it does. Thanks Rob.
Shai Agassi surfaces—sort of—at Better PLC
A few days after Shai Agassi left SAP in late March, he noted on his blog (shaiagassi.typepad.com) that he had decided to take 100 days to go through the 100 or so offers he received in the first 100 hours. Well, we’re approaching the 100-day mark.
His latest post is called “Blog Interrupted.” It opens with an apology for not updating the blog in three weeks. He then adds that “we are raising money to start this new company called Better PLC. After years of fighting for budget allocations, I forgot how much fun it is to actually go convince investors that your idea has enough merit that they should put their money, and much more importantly - their trust in you.”
That got our attention so we Googled “Better PLC.” The only mention was that of a summer internship opportunity. Here is the description:
“This is the ‘Google’ opportunity of electric automotive transportation. Come be a part of an exciting project that will have an immense impact on climate change, the transportation industry, and the way we commute on a daily basis.
Located in Palo Alto, California, Better PLC is a start-up company still in stealth mode that is focused on scaling the deployment of non-hydrocarbon powered cars through a combination of infrastructure, public policy and financial frameworks. The company establishes and manages a multi-year transformation mega-project that drives complete transformation at the scale of city to country.
This summer we are looking to build a series of electric car concepts and prove technical feasibility of various ideas which will serve as prototypes for our car and battery manufacturers (we are working with various manufacturers including one of the top 5 carmakers in the world).”
I’m assuming that the company name is to be pronounced “Better Place.” We will attempt to reach Mr. Agassi to confirm this and to search for more details. Look for an update in a future First Thing Monday.
Former SSA Global CEO Mike Greenough surfaces, too
Speaking of new sightings, we received a press release that a unit of Cerberus Capital Management had acquired Torex Retail for $420M, and that the large private equity firm had named Mike Greenough as Torex’s new chairman and CEO (see the News of Note item on this below).
Mr. Greenough was formerly the chairman, president, and CEO of SSA Global. During his five years at the helm, he acquired at least a dozen software companies, including Baan, Epiphany, EXE, Infinium, and Marcam. In May 2006, he sold SSA Global to Infor Global Solutions for $1.4B in cash. While I was unsuccessful in my attempt to reach him before writing this, I am fairly confident that he will repeat his strategy of growth through acquisitions. Cerberus is a good partner for him; according to its website, the firm has $25B under management.
Wednesday, June 27, 2007
FT.com / Companies / IT - Oracle boosted by stronger sales
FT.com / Companies / IT - Oracle boosted by stronger sales
Oracle boosted by stronger sales
By Richard Waters in San Francisco
Published: June 26 2007 23:24 | Last updated: June 26 2007 23:24
The growth in Oracle’s applications business, the area where it competes most directly with German rival SAP, slowed notably in recent months, according to quarterly figures released on Tuesday.
However, stronger sales elsewhere helped the US software company top market forecasts for both revenues and earnings in the fourth and most important quarter of its fiscal year.
Oracle, which has used a string of acquisitions to mount a challenge to SAP, reported new licence revenue of $726m from its applications arm, up 13 per cent from a year ago, helped in part by the recent purchase of Hyperion. Given the much higher growth rate earlier in its fiscal year, the latest application results are likely to come as a disappointment to Oracle investors, according to Bruce Richardson, analyst at AMR Research.
Larry Ellison, chief executive, attributed the slowdown to “a very, very tough comparison” with the company’s performance in North America the year before. “It’s simply a matter of spectacular growth a year ago,” he said. Commenting on Oracle’s recent spate of acquisitions, Mr Ellison added: “I expect the pace to continue.”
Safra Catz, president and chief financial officer, said Oracle’s forecast of revenue growth of between 18-21 per cent in the coming quarter, typically the slowest in Oracle’s fiscal year, showed its confidence in a new product cycle that was driving growth in its core database business. “We are really going on all cylinders,” she added.
Overall, Oracle reported revenues of $5.8bn, up 20 per cent from a year before, though reported growth would have been a more moderate 16 per cent without foreign currency benefits. Net income rose 23 per cent to $1.6bn as Oracle boosted its margins.
Copyright The Financial Times Limited 2007
Oracle boosted by stronger sales
By Richard Waters in San Francisco
Published: June 26 2007 23:24 | Last updated: June 26 2007 23:24
The growth in Oracle’s applications business, the area where it competes most directly with German rival SAP, slowed notably in recent months, according to quarterly figures released on Tuesday.
However, stronger sales elsewhere helped the US software company top market forecasts for both revenues and earnings in the fourth and most important quarter of its fiscal year.
Oracle, which has used a string of acquisitions to mount a challenge to SAP, reported new licence revenue of $726m from its applications arm, up 13 per cent from a year ago, helped in part by the recent purchase of Hyperion. Given the much higher growth rate earlier in its fiscal year, the latest application results are likely to come as a disappointment to Oracle investors, according to Bruce Richardson, analyst at AMR Research.
Larry Ellison, chief executive, attributed the slowdown to “a very, very tough comparison” with the company’s performance in North America the year before. “It’s simply a matter of spectacular growth a year ago,” he said. Commenting on Oracle’s recent spate of acquisitions, Mr Ellison added: “I expect the pace to continue.”
Safra Catz, president and chief financial officer, said Oracle’s forecast of revenue growth of between 18-21 per cent in the coming quarter, typically the slowest in Oracle’s fiscal year, showed its confidence in a new product cycle that was driving growth in its core database business. “We are really going on all cylinders,” she added.
Overall, Oracle reported revenues of $5.8bn, up 20 per cent from a year before, though reported growth would have been a more moderate 16 per cent without foreign currency benefits. Net income rose 23 per cent to $1.6bn as Oracle boosted its margins.
Copyright The Financial Times Limited 2007
Tuesday, June 26, 2007
FTD.de - IT+Telekommunikation - Nachrichten - SAP-Gründer fürchtet Eigenkonkurrenz durch Mietsoftware
FTD.de - IT+Telekommunikation - Nachrichten - SAP-Gründer fürchtet Eigenkonkurrenz durch Mietsoftware
Mit seiner neuen Mittelstandssoftware wird sich der Walldorfer Software-Konzern SAP nach Einschätzung von Mitgründer und Aufsichtsratschef Hasso Plattner selbst Konkurrenz machen. Zuvor war das Management genau gegenteiliger Meinung gewesen.
Mit seiner neuen Mittelstandssoftware wird sich der Walldorfer Software-Konzern SAP nach Einschätzung von Mitgründer und Aufsichtsratschef Hasso Plattner selbst Konkurrenz machen. Zuvor war das Management genau gegenteiliger Meinung gewesen.
Saturday, June 23, 2007
Friday, June 22, 2007
Wednesday, June 20, 2007
Visiprise on SAP Brings Benefits But Needs a Clear Message
Visiprise on SAP Brings Benefits But Needs a Clear Message
SAP's move to partner with Visiprise in offering a manufacturing execution system will help to clarify SAP's product positioning. A consistent message is needed to make things easier for SAP customers.
SAP's move to partner with Visiprise in offering a manufacturing execution system will help to clarify SAP's product positioning. A consistent message is needed to make things easier for SAP customers.
Visiprise on SAP Brings Benefits But Needs a Clear Message
Visiprise on SAP Brings Benefits But Needs a Clear Message
SAP's move to partner with Visiprise in offering a manufacturing execution system will help to clarify SAP's product positioning. A consistent message is needed to make things easier for SAP customers.
SAP's move to partner with Visiprise in offering a manufacturing execution system will help to clarify SAP's product positioning. A consistent message is needed to make things easier for SAP customers.
Tuesday, June 19, 2007
FT.com / Home UK / UK - Supply Chain Management
FT.com / Home UK / UK - Supply Chain Management
Supply Chain Management
By Stephen Pritchard
Published: May 21 2007 12:41 | Last updated: May 21 2007 12:41
As recently as 20 years ago, the most reliable way to ensure on-time delivery of materials was to buy from companies that were close at hand.
Manufacturing businesses moving to “just-in-time” production methods ensured reliable deliveries of parts by setting up on-site supplier parks, such as those at Nissan’s UK plant in Sunderland, or Volkswagen’s commercial vehicle operations at Hanover, where supplies are fed directly into production lines by way of a 360m-long “logistics bridge”.
Supply Chain Management
By Stephen Pritchard
Published: May 21 2007 12:41 | Last updated: May 21 2007 12:41
As recently as 20 years ago, the most reliable way to ensure on-time delivery of materials was to buy from companies that were close at hand.
Manufacturing businesses moving to “just-in-time” production methods ensured reliable deliveries of parts by setting up on-site supplier parks, such as those at Nissan’s UK plant in Sunderland, or Volkswagen’s commercial vehicle operations at Hanover, where supplies are fed directly into production lines by way of a 360m-long “logistics bridge”.
Friday, June 15, 2007
Oracle Fights for its Share of Manufacturing | AMR Research
Oracle Fights for its Share of Manufacturing | AMR Research
Oracle MES by a nose
ERP vendors are once again leading the polls on manufacturing mindshare, early results from AMR Research’s latest survey shows. The survey of manufacturing operations software deployments and spending among select industries that AMR Research covers in discrete and process manufacturing indicate that, this time, Oracle is giving SAP a run for its marketing dollars. This is especially true in the mid-market, the next prime growth opportunity for Oracle and SAP. The preliminary results (and this could change quickly) show 49% of the more than 200 respondents in these industries claim to be using Oracle for manufacturing execution, while only 36% indicate they’ve deployed SAP in this capacity.
While Oracle hasn’t been matching SAP’s partnering and composite application development activities in manufacturing, this latest survey confirms that deep manufacturing functionality embedded in Oracle’s Enterprise One and E-Business Suite is recognized and broadly deployed by its customers. Oracle also seems to be giving SAP a run for its money in new manufacturing deployments; users are in fact looking beyond SAP’s partner programs, reseller agreements, integration toolkits, and manufacturing marketing initiatives. They are giving Oracle equal consideration when it comes to future manufacturing software investments. For a more detailed analysis of this horse race, see “Oracle Fights for its Share of Manufacturing”.
Oracle MES by a nose
ERP vendors are once again leading the polls on manufacturing mindshare, early results from AMR Research’s latest survey shows. The survey of manufacturing operations software deployments and spending among select industries that AMR Research covers in discrete and process manufacturing indicate that, this time, Oracle is giving SAP a run for its marketing dollars. This is especially true in the mid-market, the next prime growth opportunity for Oracle and SAP. The preliminary results (and this could change quickly) show 49% of the more than 200 respondents in these industries claim to be using Oracle for manufacturing execution, while only 36% indicate they’ve deployed SAP in this capacity.
While Oracle hasn’t been matching SAP’s partnering and composite application development activities in manufacturing, this latest survey confirms that deep manufacturing functionality embedded in Oracle’s Enterprise One and E-Business Suite is recognized and broadly deployed by its customers. Oracle also seems to be giving SAP a run for its money in new manufacturing deployments; users are in fact looking beyond SAP’s partner programs, reseller agreements, integration toolkits, and manufacturing marketing initiatives. They are giving Oracle equal consideration when it comes to future manufacturing software investments. For a more detailed analysis of this horse race, see “Oracle Fights for its Share of Manufacturing”.
Friday, June 01, 2007
Friday, May 25, 2007
Monday, May 21, 2007
Novell, SAP Offer Single Point of Contact for Linux Support
Novell, SAP Offer Single Point of Contact for Linux Support
Novell and SAP will jointly support customers running SAP applications on Novell's SUSE Linux Enterprise Server. Combining and coordinating support guarantees customers a single point of contact and responsibility.
Novell and SAP will jointly support customers running SAP applications on Novell's SUSE Linux Enterprise Server. Combining and coordinating support guarantees customers a single point of contact and responsibility.
Friday, May 18, 2007
Inside the Oracle-Agile Deal | AMR Research
Inside the Oracle-Agile Deal | AMR Research
My first meeting with Agile Software was in the spring of 1999. Bryan Stolle, Agile’s founder and former CEO, used the time to preview the IPO road show pitch that he would be presenting later that afternoon to Charles Phillips, Morgan Stanley’s star analyst. As First Thing Monday readers know, Mr. Phillips is now the co-president of Oracle. On Tuesday, Oracle acquired the product lifecycle management (PLM) vendor for $495M in cash, or approximately $8.10 per share.
My first meeting with Agile Software was in the spring of 1999. Bryan Stolle, Agile’s founder and former CEO, used the time to preview the IPO road show pitch that he would be presenting later that afternoon to Charles Phillips, Morgan Stanley’s star analyst. As First Thing Monday readers know, Mr. Phillips is now the co-president of Oracle. On Tuesday, Oracle acquired the product lifecycle management (PLM) vendor for $495M in cash, or approximately $8.10 per share.
NetWeaver CE Enhances SAP's Composite Applications Vision
NetWeaver CE Enhances SAP's Composite Applications Vision
NetWeaver Composition Environment could speed up developing and deploying composite applications in a service-oriented architecture. It reinforces SAP's strategy in this area, though it still has to prove itself in use.
NetWeaver Composition Environment could speed up developing and deploying composite applications in a service-oriented architecture. It reinforces SAP's strategy in this area, though it still has to prove itself in use.
SAP Will Add Identity Management With MaXware Acquisition
SAP Will Add Identity Management With MaXware Acquisition
By acquiring MaXware, SAP seeks to improve its identity and access management capabilities, rather than to compete against established IAM suite vendors. This move underscores a new approach to a maturing IAM market.
By acquiring MaXware, SAP seeks to improve its identity and access management capabilities, rather than to compete against established IAM suite vendors. This move underscores a new approach to a maturing IAM market.
Oracle's Planned Agile Software Buy a Good Fit
Oracle's Planned Agile Software Buy a Good Fit
Oracle's planned purchase of Agile Software will give Oracle customers richer product life cycle management functionality that deploys faster. Agile customers will get a parent company with greater long-term viability.
Oracle's planned purchase of Agile Software will give Oracle customers richer product life cycle management functionality that deploys faster. Agile customers will get a parent company with greater long-term viability.
SAP Buys Wicom to Deliver Contact Center Intelligence
SAP Buys Wicom to Deliver Contact Center Intelligence
Through its purchase of Wicom, SAP is making a statement on the central role of communications in improving business interactions. SAP must take steps to preserve the thought leadership Wicom has already displayed.
Through its purchase of Wicom, SAP is making a statement on the central role of communications in improving business interactions. SAP must take steps to preserve the thought leadership Wicom has already displayed.
Tuesday, May 15, 2007
Oracle Buys Product Lifecycle Management Leader Agile
Oracle Buys Product Lifecycle Management Leader Agile
REDWOOD SHORES, Calif. 15-MAY-2007 02:15 PM Oracle announced today that it has agreed to acquire Agile Software Corporation (Nasdaq: AGIL), a leading provider of product lifecycle management (PLM) software solutions, through a cash merger for $8.10 per share, or approximately $495 million.
REDWOOD SHORES, Calif. 15-MAY-2007 02:15 PM Oracle announced today that it has agreed to acquire Agile Software Corporation (Nasdaq: AGIL), a leading provider of product lifecycle management (PLM) software solutions, through a cash merger for $8.10 per share, or approximately $495 million.
Sapphire: SAP dementiert Probleme und feiert E-SOA - Knowledge-Center - Enterprise Resource Planning - computerwoche.de
Sapphire: SAP dementiert Probleme und feiert E-SOA - Knowledge-Center - Enterprise Resource Planning - computerwoche.de
Gerüchte um interne Spannungen bei SAP überschatteten den Auftakt zur Sapphire in Wien. Die Konzernführung ließ sich davon jedoch nicht beeindrucken: In Wien feierte SAP Abschluss der E-SOA-Roadmap und bekräftigte erneut die Ansprüche im Mittelstandsgeschäft.
Gerüchte um interne Spannungen bei SAP überschatteten den Auftakt zur Sapphire in Wien. Die Konzernführung ließ sich davon jedoch nicht beeindrucken: In Wien feierte SAP Abschluss der E-SOA-Roadmap und bekräftigte erneut die Ansprüche im Mittelstandsgeschäft.
Monday, May 14, 2007
OutlookSoft Acquisition Strengthens SAP's CPM Strategy
OutlookSoft Acquisition Strengthens SAP's CPM Strategy
SAP will extend its corporate performance management capabilities with the acquisition of OutlookSoft. This deal further consolidates the diminishing best-of-breed CPM market and focuses CPM in large application suites.
SAP will extend its corporate performance management capabilities with the acquisition of OutlookSoft. This deal further consolidates the diminishing best-of-breed CPM market and focuses CPM in large application suites.
Friday, May 11, 2007
Thursday, May 10, 2007
Invensys to Boost Enterprise Software Offering With Cimnet Buy
Invensys to Boost Enterprise Software Offering With Cimnet Buy
With its agreement to acquire Cimnet, Invensys advances its goal of providing a complete manufacturing operations management solution.
With its agreement to acquire Cimnet, Invensys advances its goal of providing a complete manufacturing operations management solution.
Wednesday, May 09, 2007
SAP Makes Performance Management Move, Acquires OutlookSoft To Bolster CPM Product Line | AMR Research
SAP Makes Performance Management Move, Acquires OutlookSoft To Bolster CPM Product Line | AMR Research
SAP was largely silent on its broader corporate performance management (CPM) messaging at SAPPHIRE last month. Sure, it reinforced the strategy management it acquired from Pilot Software and inked a profitability management software reselling relationship with Acorn Systems, an independent cost management vendor making traction in a wide range of industries. But SAP didn’t say a lot about the other two pillars of CPM: business planning and financial consolidations. We poked and prodded, and were eventually told that news would be coming. We expected to hear more at the European SAPPHIRE in Vienna in mid May.
But big news can’t wait. SAP is acquiring OutlookSoft, an independent provider of planning and financial reporting for Global-2000-class enterprises based in Stamford, Connecticut. Financial terms of the deal were not disclosed. SAP expects it to close within the next 30 days, pending regulatory approval. OutlookSoft employees are expected to be incorporated into SAP’s infrastructure upon completion of the deal.
OutlookSoft is the future of both planning and financial consolidations
When thinking of OutlookSoft, we picture an image of a solid, highly usable, prediction-focused planning, budgeting, and forecasting (PBF) system. Customers, many of which are divisions of larger organizations, have built very responsive and flexible planning systems with the product. The consolidation tool is decent, but used more for budgeting and forecasting rollups and less for complex enterprise consolidations, which is what SAP customers will need and expect. Yet SAP has indicated this acquisition will be positioned as the go-forward products for both functional components.
SAP also clearly understands its existing financial consolidations product, BCS, will be a necessary part of its ongoing portfolio for highly complex, geographic-specific requirements. However, it’s banking a large swath of its target customers will consider the OutlookSoft consolidation tool for straightforward rollups and consolidations.
The existing product for planning, SAP’s Business Intelligence Integrated Planning (BIIP), will remain the modeling infrastructure for the future planning system, and OutlookSoft will be the new user interface for that product. An integration effort will need to happen between the two, with SAP needing to communicate integration plans across the complementary products.
Office of the CFO—it’s more than traditional CPM
Expect SAP to aggressively position its strong governance, risk management, and compliance (GRC) assets as part of its move to surround the CFO and distinguish it from other competitors. When Oracle acquired Hyperion (see “Oracle Buys Hyperion for $3.3B: BI/PM Market Consolidation Begins”), SAP clearly realized it had to act quickly to shore up its credentials for CPM. Lagging meant risking even more customers to the Hyperion/Oracle juggernaut or other best-in-class competitors that deliver specific products for the CFO. In fact, GRC and the office of the CFO were a major focus of SAP executives at SAPPHIRE, with hints about this deal and other developments in the works.
Reworking OutlookSoft for the SAP architecture
OutlookSoft’s products had been tied at the hip with Microsoft’s SQL Server architecture, specifically SQL Server Analysis Services’ (SSAS) multidimensional data store. But in its latest release, it expanded its options to Oracle. As this is integrated into the SAP stack, it will be tailored for the SAP BI architecture, including SAP Business Warehouse and eventually its high-performance appliance, Business Intelligence Accelerator (BIA). Whether these products maintain a heterogeneous backbone approach remains to be seen, but customers with existing tech stacks will likely be supported.
More analysis as the details emerge
At first take, the news is positive. SAP customers have been very vocal about the limited usability of its BI/PM products, and this acquisition is a move in the right direction. But the details of what will be available when and the detailed integration plans still need to be clarified. One thing is clear—the BI/PM race is on, with winning the office of the CFO a major objective.
--------------------------------------------------------------------------------
© Copyright by AMR Research, Inc.
SAP was largely silent on its broader corporate performance management (CPM) messaging at SAPPHIRE last month. Sure, it reinforced the strategy management it acquired from Pilot Software and inked a profitability management software reselling relationship with Acorn Systems, an independent cost management vendor making traction in a wide range of industries. But SAP didn’t say a lot about the other two pillars of CPM: business planning and financial consolidations. We poked and prodded, and were eventually told that news would be coming. We expected to hear more at the European SAPPHIRE in Vienna in mid May.
But big news can’t wait. SAP is acquiring OutlookSoft, an independent provider of planning and financial reporting for Global-2000-class enterprises based in Stamford, Connecticut. Financial terms of the deal were not disclosed. SAP expects it to close within the next 30 days, pending regulatory approval. OutlookSoft employees are expected to be incorporated into SAP’s infrastructure upon completion of the deal.
OutlookSoft is the future of both planning and financial consolidations
When thinking of OutlookSoft, we picture an image of a solid, highly usable, prediction-focused planning, budgeting, and forecasting (PBF) system. Customers, many of which are divisions of larger organizations, have built very responsive and flexible planning systems with the product. The consolidation tool is decent, but used more for budgeting and forecasting rollups and less for complex enterprise consolidations, which is what SAP customers will need and expect. Yet SAP has indicated this acquisition will be positioned as the go-forward products for both functional components.
SAP also clearly understands its existing financial consolidations product, BCS, will be a necessary part of its ongoing portfolio for highly complex, geographic-specific requirements. However, it’s banking a large swath of its target customers will consider the OutlookSoft consolidation tool for straightforward rollups and consolidations.
The existing product for planning, SAP’s Business Intelligence Integrated Planning (BIIP), will remain the modeling infrastructure for the future planning system, and OutlookSoft will be the new user interface for that product. An integration effort will need to happen between the two, with SAP needing to communicate integration plans across the complementary products.
Office of the CFO—it’s more than traditional CPM
Expect SAP to aggressively position its strong governance, risk management, and compliance (GRC) assets as part of its move to surround the CFO and distinguish it from other competitors. When Oracle acquired Hyperion (see “Oracle Buys Hyperion for $3.3B: BI/PM Market Consolidation Begins”), SAP clearly realized it had to act quickly to shore up its credentials for CPM. Lagging meant risking even more customers to the Hyperion/Oracle juggernaut or other best-in-class competitors that deliver specific products for the CFO. In fact, GRC and the office of the CFO were a major focus of SAP executives at SAPPHIRE, with hints about this deal and other developments in the works.
Reworking OutlookSoft for the SAP architecture
OutlookSoft’s products had been tied at the hip with Microsoft’s SQL Server architecture, specifically SQL Server Analysis Services’ (SSAS) multidimensional data store. But in its latest release, it expanded its options to Oracle. As this is integrated into the SAP stack, it will be tailored for the SAP BI architecture, including SAP Business Warehouse and eventually its high-performance appliance, Business Intelligence Accelerator (BIA). Whether these products maintain a heterogeneous backbone approach remains to be seen, but customers with existing tech stacks will likely be supported.
More analysis as the details emerge
At first take, the news is positive. SAP customers have been very vocal about the limited usability of its BI/PM products, and this acquisition is a move in the right direction. But the details of what will be available when and the detailed integration plans still need to be clarified. One thing is clear—the BI/PM race is on, with winning the office of the CFO a major objective.
--------------------------------------------------------------------------------
© Copyright by AMR Research, Inc.
FTD.de - IT+Telekommunikation - Nachrichten - Software AG eifert SAP nach
FTD.de - IT+Telekommunikation - Nachrichten - Software AG eifert SAP nach
Die Software AG (SAG) will so profitabel werden wie SAP: In den kommenden fünf Jahren sei eine operative Rendite von 27 Prozent zu schaffen, sagte Karl-Heinz Streibich, Chef des nach SAP zweitgrößten deutschen Softwareanbieters, im FTD-Interview.
Die Software AG (SAG) will so profitabel werden wie SAP: In den kommenden fünf Jahren sei eine operative Rendite von 27 Prozent zu schaffen, sagte Karl-Heinz Streibich, Chef des nach SAP zweitgrößten deutschen Softwareanbieters, im FTD-Interview.
FTD.de - IT+Telekommunikation - Nachrichten - SAP kauft US-Finanzsoftwarehersteller
FTD.de - IT+Telekommunikation - Nachrichten - SAP kauft US-Finanzsoftwarehersteller
Der Softwarehersteller SAP übernimmt Outlook Soft, einen amerikanischen Produzenten von Finanzplanungsprogrammen. Bislang kursieren nur inoffizielle Angaben über den Kaufpreis.
Der Softwarehersteller SAP übernimmt Outlook Soft, einen amerikanischen Produzenten von Finanzplanungsprogrammen. Bislang kursieren nur inoffizielle Angaben über den Kaufpreis.
Monday, May 07, 2007
Ins Zentrum gerückt: Integration der Technischen Redaktion in SAP
Ins Zentrum gerückt: Integration der Technischen Redaktion in SAP
Aufgrund erneut hoher Nachfrage bieten SCHEMA und SEAL Systems den Informationstag "Ins Zentrum gerückt - Die Integration der Technischen Redaktion in SAP" am 12. Juni 2007 bereits als zweiten Wiederholungstermin an. Zentrales Thema der Veranstaltung ist die Einbindung der Technischen Dokumentation in die kaufmännischen Geschäftsprozesse. Als Referenten eingeladen sind Experten aus den Bereichen Business Process Management, SAP, Outputmanagement und Dokumentationserstellung, u.a. Prof. Dr. Thomas Allweyer von der Fachhochschule Kaiserslautern und Dr. Christoph Rzehorz von SAP Deutschland.
Die ersten beiden Veranstaltungen stießen auf so große Resonanz, dass ein Teil der Anmeldungen nicht mehr berücksichtigt werden konnte. Über 50 Teilnehmer, Technische Redakteure und SAP-Spezialisten renommierter Unternehmen aus unterschiedlichsten Branchen, wie Maschinen-, Geräte- und Anlagenbau und der Life Science Industrie nahmen jeweils daran teil.
Die nächste eintägige Veranstaltung findet am 12. Juni 2007 im Sheraton Frankfurt- Flughafen, in Frankfurt am Main statt und kostet 119,- Euro pro Teilnehmer.
Aufgrund erneut hoher Nachfrage bieten SCHEMA und SEAL Systems den Informationstag "Ins Zentrum gerückt - Die Integration der Technischen Redaktion in SAP" am 12. Juni 2007 bereits als zweiten Wiederholungstermin an. Zentrales Thema der Veranstaltung ist die Einbindung der Technischen Dokumentation in die kaufmännischen Geschäftsprozesse. Als Referenten eingeladen sind Experten aus den Bereichen Business Process Management, SAP, Outputmanagement und Dokumentationserstellung, u.a. Prof. Dr. Thomas Allweyer von der Fachhochschule Kaiserslautern und Dr. Christoph Rzehorz von SAP Deutschland.
Die ersten beiden Veranstaltungen stießen auf so große Resonanz, dass ein Teil der Anmeldungen nicht mehr berücksichtigt werden konnte. Über 50 Teilnehmer, Technische Redakteure und SAP-Spezialisten renommierter Unternehmen aus unterschiedlichsten Branchen, wie Maschinen-, Geräte- und Anlagenbau und der Life Science Industrie nahmen jeweils daran teil.
Die nächste eintägige Veranstaltung findet am 12. Juni 2007 im Sheraton Frankfurt- Flughafen, in Frankfurt am Main statt und kostet 119,- Euro pro Teilnehmer.
Friday, May 04, 2007
With IBM in St. Louis; Shai Agassi’s Blog | AMR Research
With IBM in St. Louis; Shai Agassi’s Blog | AMR Research
The St. Louis Chamber of Commerce wasn’t likely pleased to have its hometown crowned “America’s Most Dangerous City” by City Crime Rankings. With that as a backdrop, we expected to hear the “Bad Boys, Bad Boys” theme song from COPS as we de-planed. The closest we came to danger, though, was when a taxi nearly ran a red light as our own taxi was going through the intersection. If the other driver hadn’t jammed on his brakes, he would have hit us broadside and knocked our vehicle into another galaxy.
Instead of danger hovering on every street corner, St. Louis was eerily quiet. We arrived early on Sunday with plans to attend the Cardinals-Cubs baseball game, an event that was postponed due to the unfortunate death of Josh Hancock, a relief pitcher for St. Louis. As we walked through the city on our quest to find somewhere televising the Red Sox-Yankees game, we all commented at how empty the streets and parks were despite blue skies and the 85-degree temperature.
When the work week began, there was a slight increase in traffic, though there weren’t a lot of pedestrians milling about along the route that took us from Fourth Street to Washington Street and the convention center. It was as though the entire city had packed and moved to the suburbs, leaving only the buildings behind.
We were in town to attend PartnerWorld 2007, IBM’s annual conference for business partners. The event drew more than 5,000 attendees who came to hear a packed agenda of speakers ranging from Sam Palmisano, IBM’s chairman, president, and CEO, and other top IBM executives, to race car legend Mario Andretti and Dr. Laura D’Andrea Tyson, senior advisor to the McKinsey Global Institute and former national economic advisor to President Clinton.
After the completion of the morning’s general session, we met with Murray Mitchell to talk about some of the new Global Business Services’ initiatives for small and midsize businesses (SMBs). The first item on our agenda was to discuss the joint IBM-SAP press release from SAPPHIRE announcing IBM would be reselling All-in-One in 12 countries. The reseller relationship began last June in the United States. Since then, it has been extended to Europe and Asia.
SAP: “Significant SMB opportunity”
We talked about SAP’s plan to reach 100,000 customers by the end of the decade. While I have written that I think it’s too ambitious a target if done organically (no acquisitions), Mr. Mitchell said that SAP represented a significant part of the SMB opportunity. The challenge remains the same, though, namely building a volume indirect channel.
IBM has been recruiting resellers to market a bundle of All-in-One as well as IBM hardware, software, and services. It looks like there are three types of arrangements today. These include referrals (a partner receives a fee for passing a deal to IBM), teaming (IBM helps to close the deal), and one where the reseller does everything from identifying the lead to staffing the engagement).
It appears to be going well. While we knew better than to ask about revenue or installations, Mr. Mitchell did say that that GBS’ SMB business was enjoying “double-digit growth.” Most of the applications growth is coming from ERP, though the CRM business is growing thanks to some Siebel engagements and call center projects. IBM is also doing quite a bit of web and portal development engagements, too.
Mr. Mitchell also said that IBM has developed a new IT strategy initiative for smaller businesses. Basically, the company has condensed a typical 8-to-12 week engagement down to 2-to-3 weeks and is making it available for a flat $50K fee. The primary targets are companies with new CIOs.
Resell Oracle, too?
We did ask about Oracle. To date, IBM’s only other ERP reseller agreement is with Lawson Software. IBM has yet to sign a reseller agreement with its database and tools rival, despite the large IBM base that Oracle inherited through its various acquisitions (particularly JD Edwards). It will be more challenging to bring the Oracle relationship anywhere close to the level of the SAP partnership. IBM obviously wants to retain its database, middleware, and hardware customers, while Oracle reps want to replace the DB2 and WebSphere products with its own software. But IBM also has a lot invested in Oracle’s JD Edwards customers and says it is committed to them for the long run.
There may be a huge opportunity for IBM though as the arbiter for the growing number of joint SAP-Oracle customers. As we said last week, when Oracle completes the Hyperion acquisition, it will add 4,000 to 4,500 SAP customers to its base. Many SAP customers still have their Siebel and PeopleSoft applications, too. As SAP and Oracle battle for account control, CIOs may turn to IBM for help sorting it out. IBM will happily supply the software and services needed to link the warring parties via a service-oriented architecture (SOA).
IBM to roll out SIF to other industries
Speaking of SOA, we also met with Jan Jackman to talk about IBM’s Store Integration Framework (SIF). Built on IBM WebSphere, the framework is designed to integrate data and business processes among enterprise applications. It’s aimed at lowering total cost of ownership and streamlining customer interactions. The framework has been adopted by more than 30 retailers for deployment in close to 36,000 stores. Circuit City and Giant Eagle are among those using it.
In addition to a wide range of IBM software products, SIF has attracted 67 validated business partners offering software for order management, point of sale support, loss prevention, RFID tracking, workforce and task management, deli management, and dozens of other uses.
As Ms. Jackman described it, IBM is now looking to roll SIF to other industries—“anything with distribution outlets that are customer facing.” First on the list appears to be branch banking. Retailers often use SIF to link POS systems to kiosks, handheld devices, and the like. Banks could use it to market tailored products and services to customers through automated teller machines. Other potential verticals include automobile dealers, cell phone stores, and healthcare facilities.
If it’s an IBM event, Axentis must be nearby
We last saw Axentis CEO Bob Hoyt at IBM’s fall symposium for the venture community. Sure enough, he was in St. Louis for PartnerWorld. He was there to pick up a Beacon Award for his company’s achievements, one of several IBM awarded to its top business partners.
Axentis provides software to manage governance, risk, and compliance (GRC), and makes it available in on premise and on demand modes. In the past four months, the company has brought 70,000 users live, bringing the total customer base to 740,000 seats. Implementations can be completed in 2 to 6 weeks.
The GRC market is heating up, attracting entrants from the large ERP vendors, like SAP and Oracle, to content providers and content management firms. Look for more GRC coverage in an upcoming First Thing Monday and in our upcoming book, Risk! Navigating an Uncertain World.
Shai surfaces in digital media
Last week at SAPPHIRE we joined the multitudes asking SAPers, “What is Shai going to do next?” Shai Agassi, former president of SAP’s Products and Technology Group, resigned on March 28. According to friends, Mr. Agassi plans to take 100 days off before deciding what to do next. He will not be lacking for opportunities.
In the meantime, he’s started a blog, “The Long Tailpipe,” which can be found on http://shaiagassi.typepad.com. The title is part homage to “The Long Tail” by Chris Anderson. In an early posting, Mr. Agassi refers to “long tail business processes” enabled by NetWeaver and the Business Process Platform. The title also references the future electric car market and the connection of the “virtual tailpipe” to electric power.
Readers hoping to get the “what really happened” inside story will be disappointed. He does offer good insights on enterprise software and alternative energy, though.
Next stop: Austin and Boston
The week starts with a quick flight back from Churchill Downs and the Kentucky Derby, and quickly shifts back to business. First stop is a Wipro conference in Austin, TX. Last stop is a Tata Consultancy Services briefing in Boston. I wonder if they will have Mint Juleps, too.
In the meantime, what do you think? Can IBM and Oracle be partners in the field? Is there a role for IBM in joint SAP-Oracle accounts? What will Shai do next? Please let me know—brichardson@amrresearch.com.
--------------------------------------------------------------------------------
© Copyright by AMR Research, Inc.
AMR Research® is a registered trademark of AMR Research, Inc.
The St. Louis Chamber of Commerce wasn’t likely pleased to have its hometown crowned “America’s Most Dangerous City” by City Crime Rankings. With that as a backdrop, we expected to hear the “Bad Boys, Bad Boys” theme song from COPS as we de-planed. The closest we came to danger, though, was when a taxi nearly ran a red light as our own taxi was going through the intersection. If the other driver hadn’t jammed on his brakes, he would have hit us broadside and knocked our vehicle into another galaxy.
Instead of danger hovering on every street corner, St. Louis was eerily quiet. We arrived early on Sunday with plans to attend the Cardinals-Cubs baseball game, an event that was postponed due to the unfortunate death of Josh Hancock, a relief pitcher for St. Louis. As we walked through the city on our quest to find somewhere televising the Red Sox-Yankees game, we all commented at how empty the streets and parks were despite blue skies and the 85-degree temperature.
When the work week began, there was a slight increase in traffic, though there weren’t a lot of pedestrians milling about along the route that took us from Fourth Street to Washington Street and the convention center. It was as though the entire city had packed and moved to the suburbs, leaving only the buildings behind.
We were in town to attend PartnerWorld 2007, IBM’s annual conference for business partners. The event drew more than 5,000 attendees who came to hear a packed agenda of speakers ranging from Sam Palmisano, IBM’s chairman, president, and CEO, and other top IBM executives, to race car legend Mario Andretti and Dr. Laura D’Andrea Tyson, senior advisor to the McKinsey Global Institute and former national economic advisor to President Clinton.
After the completion of the morning’s general session, we met with Murray Mitchell to talk about some of the new Global Business Services’ initiatives for small and midsize businesses (SMBs). The first item on our agenda was to discuss the joint IBM-SAP press release from SAPPHIRE announcing IBM would be reselling All-in-One in 12 countries. The reseller relationship began last June in the United States. Since then, it has been extended to Europe and Asia.
SAP: “Significant SMB opportunity”
We talked about SAP’s plan to reach 100,000 customers by the end of the decade. While I have written that I think it’s too ambitious a target if done organically (no acquisitions), Mr. Mitchell said that SAP represented a significant part of the SMB opportunity. The challenge remains the same, though, namely building a volume indirect channel.
IBM has been recruiting resellers to market a bundle of All-in-One as well as IBM hardware, software, and services. It looks like there are three types of arrangements today. These include referrals (a partner receives a fee for passing a deal to IBM), teaming (IBM helps to close the deal), and one where the reseller does everything from identifying the lead to staffing the engagement).
It appears to be going well. While we knew better than to ask about revenue or installations, Mr. Mitchell did say that that GBS’ SMB business was enjoying “double-digit growth.” Most of the applications growth is coming from ERP, though the CRM business is growing thanks to some Siebel engagements and call center projects. IBM is also doing quite a bit of web and portal development engagements, too.
Mr. Mitchell also said that IBM has developed a new IT strategy initiative for smaller businesses. Basically, the company has condensed a typical 8-to-12 week engagement down to 2-to-3 weeks and is making it available for a flat $50K fee. The primary targets are companies with new CIOs.
Resell Oracle, too?
We did ask about Oracle. To date, IBM’s only other ERP reseller agreement is with Lawson Software. IBM has yet to sign a reseller agreement with its database and tools rival, despite the large IBM base that Oracle inherited through its various acquisitions (particularly JD Edwards). It will be more challenging to bring the Oracle relationship anywhere close to the level of the SAP partnership. IBM obviously wants to retain its database, middleware, and hardware customers, while Oracle reps want to replace the DB2 and WebSphere products with its own software. But IBM also has a lot invested in Oracle’s JD Edwards customers and says it is committed to them for the long run.
There may be a huge opportunity for IBM though as the arbiter for the growing number of joint SAP-Oracle customers. As we said last week, when Oracle completes the Hyperion acquisition, it will add 4,000 to 4,500 SAP customers to its base. Many SAP customers still have their Siebel and PeopleSoft applications, too. As SAP and Oracle battle for account control, CIOs may turn to IBM for help sorting it out. IBM will happily supply the software and services needed to link the warring parties via a service-oriented architecture (SOA).
IBM to roll out SIF to other industries
Speaking of SOA, we also met with Jan Jackman to talk about IBM’s Store Integration Framework (SIF). Built on IBM WebSphere, the framework is designed to integrate data and business processes among enterprise applications. It’s aimed at lowering total cost of ownership and streamlining customer interactions. The framework has been adopted by more than 30 retailers for deployment in close to 36,000 stores. Circuit City and Giant Eagle are among those using it.
In addition to a wide range of IBM software products, SIF has attracted 67 validated business partners offering software for order management, point of sale support, loss prevention, RFID tracking, workforce and task management, deli management, and dozens of other uses.
As Ms. Jackman described it, IBM is now looking to roll SIF to other industries—“anything with distribution outlets that are customer facing.” First on the list appears to be branch banking. Retailers often use SIF to link POS systems to kiosks, handheld devices, and the like. Banks could use it to market tailored products and services to customers through automated teller machines. Other potential verticals include automobile dealers, cell phone stores, and healthcare facilities.
If it’s an IBM event, Axentis must be nearby
We last saw Axentis CEO Bob Hoyt at IBM’s fall symposium for the venture community. Sure enough, he was in St. Louis for PartnerWorld. He was there to pick up a Beacon Award for his company’s achievements, one of several IBM awarded to its top business partners.
Axentis provides software to manage governance, risk, and compliance (GRC), and makes it available in on premise and on demand modes. In the past four months, the company has brought 70,000 users live, bringing the total customer base to 740,000 seats. Implementations can be completed in 2 to 6 weeks.
The GRC market is heating up, attracting entrants from the large ERP vendors, like SAP and Oracle, to content providers and content management firms. Look for more GRC coverage in an upcoming First Thing Monday and in our upcoming book, Risk! Navigating an Uncertain World.
Shai surfaces in digital media
Last week at SAPPHIRE we joined the multitudes asking SAPers, “What is Shai going to do next?” Shai Agassi, former president of SAP’s Products and Technology Group, resigned on March 28. According to friends, Mr. Agassi plans to take 100 days off before deciding what to do next. He will not be lacking for opportunities.
In the meantime, he’s started a blog, “The Long Tailpipe,” which can be found on http://shaiagassi.typepad.com. The title is part homage to “The Long Tail” by Chris Anderson. In an early posting, Mr. Agassi refers to “long tail business processes” enabled by NetWeaver and the Business Process Platform. The title also references the future electric car market and the connection of the “virtual tailpipe” to electric power.
Readers hoping to get the “what really happened” inside story will be disappointed. He does offer good insights on enterprise software and alternative energy, though.
Next stop: Austin and Boston
The week starts with a quick flight back from Churchill Downs and the Kentucky Derby, and quickly shifts back to business. First stop is a Wipro conference in Austin, TX. Last stop is a Tata Consultancy Services briefing in Boston. I wonder if they will have Mint Juleps, too.
In the meantime, what do you think? Can IBM and Oracle be partners in the field? Is there a role for IBM in joint SAP-Oracle accounts? What will Shai do next? Please let me know—brichardson@amrresearch.com.
--------------------------------------------------------------------------------
© Copyright by AMR Research, Inc.
AMR Research® is a registered trademark of AMR Research, Inc.
Thursday, April 26, 2007
FTD.de - IT+Telekommunikation - Nachrichten - SAP kanzelt Rivalen Oracle ab
FTD.de - IT+Telekommunikation - Nachrichten - SAP kanzelt Rivalen Oracle ab
Der deutsche Softwarekonzern SAP wirft dem Wettbewerber Oracle unsportliches Verhalten vor. SAP-Vorstandssprecher Henning Kagermann wehrte sich in einem Gespräch mit FTD und Financial Times zudem gegen den Eindruck, eine Klage von Oracle wegen Verletzung des Urheberrechts zwinge SAP in eine Verteidigungshaltung.
Der deutsche Softwarekonzern SAP wirft dem Wettbewerber Oracle unsportliches Verhalten vor. SAP-Vorstandssprecher Henning Kagermann wehrte sich in einem Gespräch mit FTD und Financial Times zudem gegen den Eindruck, eine Klage von Oracle wegen Verletzung des Urheberrechts zwinge SAP in eine Verteidigungshaltung.
Wednesday, April 25, 2007
FT.com / Companies / IT - SAP criticises Oracle for aggressive style
FT.com / Companies / IT - SAP criticises Oracle for aggressive style
SAP criticises Oracle for aggressive style
By Francesco Guerrera and Michael Gassmann in Atlanta
Published: April 25 2007 22:09 | Last updated: April 25 2007 22:09
The chief executive of Germany’s SAP, the world’s biggest maker of business software, has hit out at its arch-rival Oracle, attacking the US group’s aggressive style and criticising its acquisitive strategy.
The comments by Henning Kagermann come a month after Oracle sued the German company, alleging “corporate theft on a grand scale” and will escalate an increasingly bitter war between the two companies.
Mr Kagermann rebuffed suggestions that SAP was too defensive and said it would not follow Oracle’s aggressive tactics, which have included attacks on the company’s performance by Larry Ellison, the US group’s chief executive.
“They ask me why we are not adopting the same style in talking and sometimes not delivering; why should I? [...] We are never defensive, we just have our style,” he said in an interview with the Financial Times.
Mr Kagermann declined to comment on the lawsuit, which centres on the activities of a Texas-based arm of SAP, reiterating the company would “aggressively defend” it in a formal response due out in a few weeks.
The competition between SAP and Oracle has intensified in recent years as the German group made a push into the US market, where it has experienced strong growth. Oracle responded with a $19.5bn takeover spree to expand outside its core database business and into software for large businesses, where SAP remains the market leader.
Mr Kagermann said that organic growth remained SAP’s preferred strategy. He added that Oracle’s acquisitive streak would force the US company to spend time and money integrating products and people.
Mr Kagermann sought to quash recent rumours of a buy-out of SAP, saying he had “no indication of interest from private equity”. He stressed that the company’s three founders were committed to retaining their 32 per cent stake.
He deflected questions over whether he will stay on after his contract expires in 2009.
Copyright The Financial Times Limited 2007
SAP criticises Oracle for aggressive style
By Francesco Guerrera and Michael Gassmann in Atlanta
Published: April 25 2007 22:09 | Last updated: April 25 2007 22:09
The chief executive of Germany’s SAP, the world’s biggest maker of business software, has hit out at its arch-rival Oracle, attacking the US group’s aggressive style and criticising its acquisitive strategy.
The comments by Henning Kagermann come a month after Oracle sued the German company, alleging “corporate theft on a grand scale” and will escalate an increasingly bitter war between the two companies.
Mr Kagermann rebuffed suggestions that SAP was too defensive and said it would not follow Oracle’s aggressive tactics, which have included attacks on the company’s performance by Larry Ellison, the US group’s chief executive.
“They ask me why we are not adopting the same style in talking and sometimes not delivering; why should I? [...] We are never defensive, we just have our style,” he said in an interview with the Financial Times.
Mr Kagermann declined to comment on the lawsuit, which centres on the activities of a Texas-based arm of SAP, reiterating the company would “aggressively defend” it in a formal response due out in a few weeks.
The competition between SAP and Oracle has intensified in recent years as the German group made a push into the US market, where it has experienced strong growth. Oracle responded with a $19.5bn takeover spree to expand outside its core database business and into software for large businesses, where SAP remains the market leader.
Mr Kagermann said that organic growth remained SAP’s preferred strategy. He added that Oracle’s acquisitive streak would force the US company to spend time and money integrating products and people.
Mr Kagermann sought to quash recent rumours of a buy-out of SAP, saying he had “no indication of interest from private equity”. He stressed that the company’s three founders were committed to retaining their 32 per cent stake.
He deflected questions over whether he will stay on after his contract expires in 2009.
Copyright The Financial Times Limited 2007
Tuesday, April 24, 2007
SAP United States - SAP and Microsoft Deliver Extended Road Map for Duet™ Software
SAP United States - SAP and Microsoft Deliver Extended Road Map for Duet™ Software
Continued Commitment to Empowering Information Workers with Simplified Access to Key Business Data and Processes Through Microsoft Office
Continued Commitment to Empowering Information Workers with Simplified Access to Key Business Data and Processes Through Microsoft Office
Monday, April 23, 2007
FT.com / Companies / IT - SAP boosted by strong sales growth in the US
FT.com / Companies / IT - SAP boosted by strong sales growth in the US
SAP boosted by strong sales growth in the US
By Gerrit Wiesmann in Frankfurt
Published: April 23 2007 15:27 | Last updated: April 23 2007 15:27
SAP, the world’s biggest maker of software for business, took a first step to restoring investor confidence by announcing strong growth in the first quarter of the year while pledging to face down a lawsuit from a rival.
The stock traded 2.5 per cent higher at €37 per share late on Friday after the German company said sales of software and related services hit €1.52bn early 2007, a 15 per cent rise when adjusted for currency effects.
Henning Kagermann, chief executive, said strong sales growth in the US helped push SAP’s market share to 25.1 per cent, up 0.6 points from late last year, and again vowed to raise software sales by 12-14 per cent 2007.
The Walldorf-based group that started with programmes to help big businesses manage inventories or customer details twice last year missed quarterly growth targets, raising fears it was failing to lure smaller companies.
SAP in February said profitability would suffer 2007 as it earmarked €400m over two years for a new web-based software service for small companies – a segment being contested by US rivals such as Oracle and Microsoft, too.
The German company’s share price fell by more than one fifth from €42 at the start of the year, a slide compounded by a lawsuit filed by arch-rival Oracle alleging SAP had stolen software ideas from its computer systems.
Mr Kagermann said SAP would “aggressively defend” itself against claims a subsidiary misused Oracle customer gateways. “We have no intention to settle,” he said when asked if SAP might see a quick resolution.
At the same time, he brushed off the recent departure of chief software developer and possible successor, Shai Agassi. He noted US success was the work of sales boss Léo Apotheker, now deputy chief executive.
Investors seemed so cheered by positive news and robust words from Walldorf that they appeared largely to forgive first effects of the investment programme for the “AS1” project announced two months ago.
Building computer centres to “host” customer data took €20m off earnings last quarter, SAP said. Operating income still rose 6 per cent to €433m as total sales climbed 6.1 per cent to €2.2bn, just shy of forecasts.
Copyright The Financial Times Limited 2007
SAP boosted by strong sales growth in the US
By Gerrit Wiesmann in Frankfurt
Published: April 23 2007 15:27 | Last updated: April 23 2007 15:27
SAP, the world’s biggest maker of software for business, took a first step to restoring investor confidence by announcing strong growth in the first quarter of the year while pledging to face down a lawsuit from a rival.
The stock traded 2.5 per cent higher at €37 per share late on Friday after the German company said sales of software and related services hit €1.52bn early 2007, a 15 per cent rise when adjusted for currency effects.
Henning Kagermann, chief executive, said strong sales growth in the US helped push SAP’s market share to 25.1 per cent, up 0.6 points from late last year, and again vowed to raise software sales by 12-14 per cent 2007.
The Walldorf-based group that started with programmes to help big businesses manage inventories or customer details twice last year missed quarterly growth targets, raising fears it was failing to lure smaller companies.
SAP in February said profitability would suffer 2007 as it earmarked €400m over two years for a new web-based software service for small companies – a segment being contested by US rivals such as Oracle and Microsoft, too.
The German company’s share price fell by more than one fifth from €42 at the start of the year, a slide compounded by a lawsuit filed by arch-rival Oracle alleging SAP had stolen software ideas from its computer systems.
Mr Kagermann said SAP would “aggressively defend” itself against claims a subsidiary misused Oracle customer gateways. “We have no intention to settle,” he said when asked if SAP might see a quick resolution.
At the same time, he brushed off the recent departure of chief software developer and possible successor, Shai Agassi. He noted US success was the work of sales boss Léo Apotheker, now deputy chief executive.
Investors seemed so cheered by positive news and robust words from Walldorf that they appeared largely to forgive first effects of the investment programme for the “AS1” project announced two months ago.
Building computer centres to “host” customer data took €20m off earnings last quarter, SAP said. Operating income still rose 6 per cent to €433m as total sales climbed 6.1 per cent to €2.2bn, just shy of forecasts.
Copyright The Financial Times Limited 2007
Friday, April 20, 2007
SAP Surprises; Salesforce’s Naked Platform; JDA Takes on i2 and Manhattan | AMR Research
SAP Surprises; Salesforce’s Naked Platform; JDA Takes on i2 and Manhattan | AMR Research
SAP Surprises; Salesforce’s Naked Platform; JDA Takes on i2 and Manhattan
by Bruce Richardson
Coming into this week’s earning announcement, I fully expected SAP to announce lower than expected revenue and earnings. Here were my reasons:
- The company had had a relatively weak fourth quarter.
- Unlike past quarters, there was no pre-announcement of results.
- In late March, the company was hit with a lawsuit by Oracle and the sudden resignation of Shai Agassi, one of its top executives.
- Most of our current client conversations focus on dealing with the cost and time of upgrades versus the benefits of must-have new products.
- SAP had scheduled the earnings call for a Friday, and it had never done this before. Were executives hoping to get the bad news out quickly and then offset it with more positive news at SAPPHIRE, which starts today?
SAP Surprises; Salesforce’s Naked Platform; JDA Takes on i2 and Manhattan
by Bruce Richardson
Coming into this week’s earning announcement, I fully expected SAP to announce lower than expected revenue and earnings. Here were my reasons:
- The company had had a relatively weak fourth quarter.
- Unlike past quarters, there was no pre-announcement of results.
- In late March, the company was hit with a lawsuit by Oracle and the sudden resignation of Shai Agassi, one of its top executives.
- Most of our current client conversations focus on dealing with the cost and time of upgrades versus the benefits of must-have new products.
- SAP had scheduled the earnings call for a Friday, and it had never done this before. Were executives hoping to get the bad news out quickly and then offset it with more positive news at SAPPHIRE, which starts today?
FT.com / Home UK / UK - Licence sales bolster SAP
FT.com / Home UK / UK - Licence sales bolster SAP
Licence sales bolster SAP
FRANKFURT, April 20 (Reuters) – Germany’s SAP met analysts’ forecasts for sales of new software licences but missed expectations for earnings after a difficult first quarter in which it lost a top manager and faced a lawsuit from a rival.
The world’s biggest maker of business software said on Friday licence sales, which tie customers into lucrative maintenance and service deals, rose 10 per cent to €564m ($767m), in line with a Reuters poll.
Licence sales were driven by 11 per cent growth in the Americas, allaying fears of weakness in the world’s biggest software market raised by IBM this week and reassuring investors spooked by two profit warnings last year.
Operating income rose 6 per cent to €433m, missing the poll average of €448m, although SAP said it had spent only €10m-€20m in the quarter of the €300m-€400m it plans to spend on developing new software.
SAP traded up 1.1 per cent on Instinet and up 0.4 percent at brokerage Lang & Schwarz ahead of the 0700 GMT market open in Frankfurt. The shares have recently been trading close to an all-time low in terms of earnings multiples.
”In light of what happened in Q4, I’d say this is a positive result. Being in line is good. They made a 20-per cent operating margin which was fractionally below expectations but I think they’ll be forgiven that,” said WestLB analyst Jonathan Crozier. ”I’d say this is exactly the kind of in-line quarter the company needed to start rebuilding confidence.”
SAP is fighting an increasingly bitter battle against US database specialist Oracle, which has been buying up peers to compete more directly with SAP and last month said it was suing its German rival for stealing its software.
The company was also forced to reshuffle its top management at the end of March after the unexpected departure of software development expert Shai Agassi, its top product strategist.
SAP, whose software helps companies manage their finances, personnel and operations, said business was strong across all regions and said its market share for the year to March 31 was 25.1 per cent, up from 24.5 per cent a quarter earlier.
”On a constant currency basis, we achieved a strong increase in software and software related service revenues and reported double digit growth rates in each region,” Henning Kagermann, chief executive, said in a statement.
Software and software-related service revenues, which SAP says will become the key figure to watch as it starts to sell software over the internet and by subscription, rose 9 per cent or 15 per cent at constant currencies to €1.52bn.
SAP stuck to its target of raising these software-related revenues by 12-14 per cent, adjusted for currency fluctuations, over the full year. The first-quarter result was in line with market consensus.
Total sales rose 6 per cent to €2.17bn, missing market expectations, and net profit rose 10 per cent to €310m. The operating margin, which SAP says will dip to 26-27 per cent this year, was 20.0 per cent.
Shares in SAP are more expensive than Oracle stock, due to SAP’s generally strong execution of an organic growth strategy. They currently trade at 20 times 2008 earnings, according to Reuters data, well below their historical average of about 29 times earnings and only a slight premium to Oracle’s 17 times, after the company missed targets twice last year
© Reuters Limited Click for restrictions
Licence sales bolster SAP
FRANKFURT, April 20 (Reuters) – Germany’s SAP met analysts’ forecasts for sales of new software licences but missed expectations for earnings after a difficult first quarter in which it lost a top manager and faced a lawsuit from a rival.
The world’s biggest maker of business software said on Friday licence sales, which tie customers into lucrative maintenance and service deals, rose 10 per cent to €564m ($767m), in line with a Reuters poll.
Licence sales were driven by 11 per cent growth in the Americas, allaying fears of weakness in the world’s biggest software market raised by IBM this week and reassuring investors spooked by two profit warnings last year.
Operating income rose 6 per cent to €433m, missing the poll average of €448m, although SAP said it had spent only €10m-€20m in the quarter of the €300m-€400m it plans to spend on developing new software.
SAP traded up 1.1 per cent on Instinet and up 0.4 percent at brokerage Lang & Schwarz ahead of the 0700 GMT market open in Frankfurt. The shares have recently been trading close to an all-time low in terms of earnings multiples.
”In light of what happened in Q4, I’d say this is a positive result. Being in line is good. They made a 20-per cent operating margin which was fractionally below expectations but I think they’ll be forgiven that,” said WestLB analyst Jonathan Crozier. ”I’d say this is exactly the kind of in-line quarter the company needed to start rebuilding confidence.”
SAP is fighting an increasingly bitter battle against US database specialist Oracle, which has been buying up peers to compete more directly with SAP and last month said it was suing its German rival for stealing its software.
The company was also forced to reshuffle its top management at the end of March after the unexpected departure of software development expert Shai Agassi, its top product strategist.
SAP, whose software helps companies manage their finances, personnel and operations, said business was strong across all regions and said its market share for the year to March 31 was 25.1 per cent, up from 24.5 per cent a quarter earlier.
”On a constant currency basis, we achieved a strong increase in software and software related service revenues and reported double digit growth rates in each region,” Henning Kagermann, chief executive, said in a statement.
Software and software-related service revenues, which SAP says will become the key figure to watch as it starts to sell software over the internet and by subscription, rose 9 per cent or 15 per cent at constant currencies to €1.52bn.
SAP stuck to its target of raising these software-related revenues by 12-14 per cent, adjusted for currency fluctuations, over the full year. The first-quarter result was in line with market consensus.
Total sales rose 6 per cent to €2.17bn, missing market expectations, and net profit rose 10 per cent to €310m. The operating margin, which SAP says will dip to 26-27 per cent this year, was 20.0 per cent.
Shares in SAP are more expensive than Oracle stock, due to SAP’s generally strong execution of an organic growth strategy. They currently trade at 20 times 2008 earnings, according to Reuters data, well below their historical average of about 29 times earnings and only a slight premium to Oracle’s 17 times, after the company missed targets twice last year
© Reuters Limited Click for restrictions
Thursday, April 19, 2007
FT.com / Companies / IT - Software sages of Newcastle
FT.com / Companies / IT - Software sages of Newcastle
Software sages of Newcastle
By Chris Tighe
Published: April 19 2007 03:00 | Last updated: April 19 2007 03:00
Ambitious young accountant arrives for life-changing job interview at small software company, and finds the boss has forgotten the meeting and gone to lunch.
Had Paul Walker been more pompous, and his forgetful interviewer David Goldman less charming, their reconvened meeting might never have happened. As a consequence, millions of businesspeople worldwide would today carry out their work somewhat differently.
Fortunately, Mr Walker's enthusiasm for the job - "Software sounded a bit more sexy than being in a firm of chartered accountants" - outweighed his consternation at the shabby industrial estate location of Mr Goldman's main business, a printer's.
Fortunately too for north-east England's economy, Mr Goldman was not only an entrepreneur but a judge of character. He assembledand inspired a team that transformed his Newcastle start-up, Sage Systems, into a FTSE 100 company.
Today, Mr Walker is chief executive of the Sage Group, the FTSE 100's only technology stock, and earns a basic salary of £700,000 a year, plus the same in bonuses for hitting annual targets. He travels globally for Sage but his home is just a stone's throw from the head office. "I can leave the house at 8am and be here for 8.15 - it's a big plus," he says, speaking at the company's headquarters.
Sage, still headquartered in Newcastle but in stunning new premises, now employs 13,000 people in 19 countries, and last year made pre-tax profit of £221m on turnover of £936m. Its marketcapitalisation is around £3.38bn.
From grotty industrial unit to purpose-built £70m HQ, where blue skies shimmer through the glass roof and massive boardroom doors glide back like a stage set: if economic development officers dream, it is surely of transformations like this. It parallels the journey the region's economy has taken from traditional industries to, increasingly, white collar activities.
The company's contribution to its home area has been substantial, through the wealth generated, the jobs created and the kudos of having spawned and retained a FTSE 100 company (see below).
Today, Sage sits alongside Microsoft, Oracle, SAP and Intuit as one of the world's top five suppliers of business management software and support to small and medium sized businesses.
It has 5.2m customers worldwide; every day, 30,000 people call it for help with business transactions. Products range from back office applications - one in four people in the UK arepaid using Sage Payroll - to front office activities suchas payment processing.
Yet of the big Newcastle HQ's 1,350 head count, just 21, plus five PAs, make up the group executive team; the rest work for Sage's UK and Ireland business.
Sage is heavily committed to decentralisation. It has four regional managers, who have great autonomy, covering the UK and Ireland, North America, mainland Europe and Asia, and South Africa and Australia.
"One of our key strategies continues to be that, while we are a global business, having local personnel, local autonomy, is our big differentiation," Mr Walker says. "The products in France are French; they aren't UKproducts shoehorned into French."
The devolved structure gives Sage a more entrepreneurial flavour, he says. "I have a team of entrepreneurs helping to run the business rather than people carrying out procedures from the centre." But, he adds: "Ultimately, the auth-ority rests with me".
He is friendly, down to earth and, by FTSE 100 standards, informal. At lunchtime, he saunters down-stairs with Paul Harrison, the finance director, to queue for a snack at Chill, one of the HQ's food outlets, run by a local entrepreneur. Mr Walker looks less smartly dressed than some of the nervous recruits touring the building.
The genesis of Sage's remarkable growth story was Mr Goldman's inkling in 1981 that computers could help automate his printing business's estimating.
Well before universities were seen as a resource for growing businesses, he and Paul Muller, an ex-Nasa mathematician who had moved to Tyneside, paid Newcastle University students to develop softwarefor estimating and basic accounting.
The next step was selling software to other companies. One of the students, Graham Wylie, joined Sage after graduating and became UK managing director; he left in 2003 with a shareholding of more than £100m.
Sage moved to better premises and won £320,000 venture capital backing but the company nearly went bust in 1985. Then came, says Mr Walker, "a defining moment". Mr Goldman spotted the potential of the new Amstrad computer as a software platform. Sage took off and floated in 1989.
Growth has been helped by 104 acquisitions since 1982. A devolved structure helps assimilate such acquisitions. But, as Sage grows, potential predators, whether industry rivals or private equity, will inevitably evaluate whether decentralisation spells strength or weakness.
The belief in being close to local markets, however, is unshakeable. "We mustn't centralise to the extent we start to generalise," MrHarrison says. There is in Sage "this intense desire to preserve entrepreneurial spirit".
Mr Goldman, who diedin 1999, would have understood this. "A lovely man - my mentor," Mr Walker says.
Mr Goldman, sage indeed, spotted the transforming power of software. Sage grew from that vision. Ten years from now, Mr Walker anticipates, transactions will be seamless, with less human intervention. But he cautions: "Thinking about the future, you have to leave behind today."
Spin-off benefits to home region
*TSG. Founded by north-east miner's son Graham Wylie, who left Sage with £100m in 2003. Newcastle headquarters,
12 offices across the UK and 440 employees. Claims to be the UK's fastest growing medium-sized IT company. Provides and supports IT services for SMEs. Forecast 2007 turnover of £38m. Also has leisure and retail interests and a stable of race horses in County Durham, trained by Howard Jones.
*Tom's Companies. Founded by Tom Maxfield, Sage sales director who left in 1998. County Durham HQ; top-class hotels/spas and restaurant in the north-east and Lake District, including Seaham Hall and Serenity Spa. His facilities have helped improve the region's image, offer top facilities and attract high spenders. Maxfield has said he is worth £40m-£50m.
*Substantial endowment by David Goldman's family to Newcastle University. This funds, at its business school, the David Goldman Chair of Business Innovation, a visiting professorship, research and annual young business person's award.
*A £6m contribution to the Sage Gateshead Music Centre, the UK's biggest single contribution to the arts by a private sector company. A landmark £70m Norman Foster building; part of Newcastle/ Gateshead's cultural resurgence.
*Prestigious FTSE100 headquarters located in Newcastle; 1,350 direct jobs, including higher level R&D and managerial/executive, contributing salaries, aspiration and expertise to local economy. Sage uses, wherever possible, local suppliers.
*Building private sector strength: Paul Walker chairs Newcastle Science City and the Entrepreneurs' Forum. These aim to strengthen, respectively, the area's science and entrepreneurial bases.
Copyright The Financial Times Limited 2007
Software sages of Newcastle
By Chris Tighe
Published: April 19 2007 03:00 | Last updated: April 19 2007 03:00
Ambitious young accountant arrives for life-changing job interview at small software company, and finds the boss has forgotten the meeting and gone to lunch.
Had Paul Walker been more pompous, and his forgetful interviewer David Goldman less charming, their reconvened meeting might never have happened. As a consequence, millions of businesspeople worldwide would today carry out their work somewhat differently.
Fortunately, Mr Walker's enthusiasm for the job - "Software sounded a bit more sexy than being in a firm of chartered accountants" - outweighed his consternation at the shabby industrial estate location of Mr Goldman's main business, a printer's.
Fortunately too for north-east England's economy, Mr Goldman was not only an entrepreneur but a judge of character. He assembledand inspired a team that transformed his Newcastle start-up, Sage Systems, into a FTSE 100 company.
Today, Mr Walker is chief executive of the Sage Group, the FTSE 100's only technology stock, and earns a basic salary of £700,000 a year, plus the same in bonuses for hitting annual targets. He travels globally for Sage but his home is just a stone's throw from the head office. "I can leave the house at 8am and be here for 8.15 - it's a big plus," he says, speaking at the company's headquarters.
Sage, still headquartered in Newcastle but in stunning new premises, now employs 13,000 people in 19 countries, and last year made pre-tax profit of £221m on turnover of £936m. Its marketcapitalisation is around £3.38bn.
From grotty industrial unit to purpose-built £70m HQ, where blue skies shimmer through the glass roof and massive boardroom doors glide back like a stage set: if economic development officers dream, it is surely of transformations like this. It parallels the journey the region's economy has taken from traditional industries to, increasingly, white collar activities.
The company's contribution to its home area has been substantial, through the wealth generated, the jobs created and the kudos of having spawned and retained a FTSE 100 company (see below).
Today, Sage sits alongside Microsoft, Oracle, SAP and Intuit as one of the world's top five suppliers of business management software and support to small and medium sized businesses.
It has 5.2m customers worldwide; every day, 30,000 people call it for help with business transactions. Products range from back office applications - one in four people in the UK arepaid using Sage Payroll - to front office activities suchas payment processing.
Yet of the big Newcastle HQ's 1,350 head count, just 21, plus five PAs, make up the group executive team; the rest work for Sage's UK and Ireland business.
Sage is heavily committed to decentralisation. It has four regional managers, who have great autonomy, covering the UK and Ireland, North America, mainland Europe and Asia, and South Africa and Australia.
"One of our key strategies continues to be that, while we are a global business, having local personnel, local autonomy, is our big differentiation," Mr Walker says. "The products in France are French; they aren't UKproducts shoehorned into French."
The devolved structure gives Sage a more entrepreneurial flavour, he says. "I have a team of entrepreneurs helping to run the business rather than people carrying out procedures from the centre." But, he adds: "Ultimately, the auth-ority rests with me".
He is friendly, down to earth and, by FTSE 100 standards, informal. At lunchtime, he saunters down-stairs with Paul Harrison, the finance director, to queue for a snack at Chill, one of the HQ's food outlets, run by a local entrepreneur. Mr Walker looks less smartly dressed than some of the nervous recruits touring the building.
The genesis of Sage's remarkable growth story was Mr Goldman's inkling in 1981 that computers could help automate his printing business's estimating.
Well before universities were seen as a resource for growing businesses, he and Paul Muller, an ex-Nasa mathematician who had moved to Tyneside, paid Newcastle University students to develop softwarefor estimating and basic accounting.
The next step was selling software to other companies. One of the students, Graham Wylie, joined Sage after graduating and became UK managing director; he left in 2003 with a shareholding of more than £100m.
Sage moved to better premises and won £320,000 venture capital backing but the company nearly went bust in 1985. Then came, says Mr Walker, "a defining moment". Mr Goldman spotted the potential of the new Amstrad computer as a software platform. Sage took off and floated in 1989.
Growth has been helped by 104 acquisitions since 1982. A devolved structure helps assimilate such acquisitions. But, as Sage grows, potential predators, whether industry rivals or private equity, will inevitably evaluate whether decentralisation spells strength or weakness.
The belief in being close to local markets, however, is unshakeable. "We mustn't centralise to the extent we start to generalise," MrHarrison says. There is in Sage "this intense desire to preserve entrepreneurial spirit".
Mr Goldman, who diedin 1999, would have understood this. "A lovely man - my mentor," Mr Walker says.
Mr Goldman, sage indeed, spotted the transforming power of software. Sage grew from that vision. Ten years from now, Mr Walker anticipates, transactions will be seamless, with less human intervention. But he cautions: "Thinking about the future, you have to leave behind today."
Spin-off benefits to home region
*TSG. Founded by north-east miner's son Graham Wylie, who left Sage with £100m in 2003. Newcastle headquarters,
12 offices across the UK and 440 employees. Claims to be the UK's fastest growing medium-sized IT company. Provides and supports IT services for SMEs. Forecast 2007 turnover of £38m. Also has leisure and retail interests and a stable of race horses in County Durham, trained by Howard Jones.
*Tom's Companies. Founded by Tom Maxfield, Sage sales director who left in 1998. County Durham HQ; top-class hotels/spas and restaurant in the north-east and Lake District, including Seaham Hall and Serenity Spa. His facilities have helped improve the region's image, offer top facilities and attract high spenders. Maxfield has said he is worth £40m-£50m.
*Substantial endowment by David Goldman's family to Newcastle University. This funds, at its business school, the David Goldman Chair of Business Innovation, a visiting professorship, research and annual young business person's award.
*A £6m contribution to the Sage Gateshead Music Centre, the UK's biggest single contribution to the arts by a private sector company. A landmark £70m Norman Foster building; part of Newcastle/ Gateshead's cultural resurgence.
*Prestigious FTSE100 headquarters located in Newcastle; 1,350 direct jobs, including higher level R&D and managerial/executive, contributing salaries, aspiration and expertise to local economy. Sage uses, wherever possible, local suppliers.
*Building private sector strength: Paul Walker chairs Newcastle Science City and the Entrepreneurs' Forum. These aim to strengthen, respectively, the area's science and entrepreneurial bases.
Copyright The Financial Times Limited 2007
Thursday, April 12, 2007
FTD.de - IT+Telekommunikation - Nachrichten - Gerüchte drücken SAP-Aktie
FTD.de - IT+Telekommunikation - Nachrichten - Gerüchte drücken SAP-Aktie
Gerüchte um eine angeblich bevorstehende Gewinnwarnung des Walldorfer Softwarekonzerns SAP haben dessen Aktienkurs unter Druck gesetzt. Eine vorzeitige Veröffentlichung der Zwischenbilanz für die ersten drei Monate des Geschäftsjahres sei Händlern zufolge denkbar.
Gerüchte um eine angeblich bevorstehende Gewinnwarnung des Walldorfer Softwarekonzerns SAP haben dessen Aktienkurs unter Druck gesetzt. Eine vorzeitige Veröffentlichung der Zwischenbilanz für die ersten drei Monate des Geschäftsjahres sei Händlern zufolge denkbar.
Tuesday, April 10, 2007
SAP's 'Perfect Plant' Initiative Close but Not Perfect Yet
SAP's 'Perfect Plant' Initiative Close but Not Perfect Yet
SAP's initiative emphasizes integration of plant operations and asset management. This will enable manufacturers and asset-centric enterprises like utilities to focus on improving their operating units' performance.
SAP's initiative emphasizes integration of plant operations and asset management. This will enable manufacturers and asset-centric enterprises like utilities to focus on improving their operating units' performance.
Thursday, April 05, 2007
Gartner: SAP richtet Strategie neu aus - Nachrichten - computerwoche.de
Gartner: SAP richtet Strategie neu aus - Nachrichten - computerwoche.de
Gartner: SAP richtet Strategie neu aus05.04.2007 um 14:18 Uhr
Der Weggang von Kronprinz Shai Agassi verdeutlicht SAPs Strategiewechsel, meinen die Analysten von Gartner. Künftig werde der Softwarekonzern mit mehreren parallel geführten Produkten eine mehrgleisige Geschäftsstrategie fahren.
Über sechs Jahre lang sei Agassi der Visionär und Treiber des internen Wandels bei SAP gewesen, ziehen die Marktforscher von Gartner eine Bilanz der Ära Agassi. Ein Satz gemeinsamer, austauschbarer Techniken und Services, die sich anpassen ließen, um in verschiedenen Märkten angeboten und von einem Partner-Ökosystem erweitert zu werden, seien das Kennzeichen des Ex-SAP-Vorstands gewesen. Zentrale Bausteine seien die Middleware-Plattform rund um "Netweaver" und ein Portfolio aus Enterprise Services.
Gartner zufolge hat sich im vergangenen Jahr die SAP-Strategie jedoch geändert. Der Konzern werde sich künftig darauf konzentrieren, ein Produktportfolio statt eines Einzelprodukts mit einer fokussierten Strategie zu entwickeln. Netweaver werde jedoch die technische Basis bleiben. Die Anwender sollten in ihre Planungen mit einbeziehen, dass Mysap nicht mehr das einzige Produkt der SAP sei, sondern zunehmend von neuen Angeboten für verschiedene Märkte flankiert werde. Als Beispiel nennen die Analysten SAPs erneute Avancen in Richtung Mittelstand (siehe auch: SAP macht ernst im Mittelstand). Gartner geht davon aus, dass SAP erste Produktinitiativen noch im Laufe des Jahres ankündigen wird.
"Wir sind der Meinung, dass der strategische Wechsel zusammen mit den Streitigkeiten um die Nachfolge an der unternehmensspitze Agassi dazu bewogen haben, SAP zu verlassen", heißt es in einer Analyse der Marktforscher (siehe auch: Neues SAP-Mittelstandsprodukt "A1S" setzte Agassi unter Druck und SAP-Personalie: Agassis Aufgaben werden aufgeteilt) Seine Rolle als Treiber für den Wandel sei nicht mehr gefragt gewesen, da sich die neue SAP-Strategie zunehmend gefestigt habe. Die jüngsten Entwicklungen würden SAP in eine eher konservative Richtung lenken. Gartner geht davon aus, dass die Rolle des Visionärs einem anderen Vorstandsmitglied zufallen wird. Wer die Rolle ausfüllen werde, sei jedoch noch nicht abzusehen. Die Marktforschergehen davon aus, dass nach den anstehenden Kundenveranstaltungen "Sapphire" in Atlanta und Wien mehr Klarheit herrschen wird. (ba)
Gartner: SAP richtet Strategie neu aus05.04.2007 um 14:18 Uhr
Der Weggang von Kronprinz Shai Agassi verdeutlicht SAPs Strategiewechsel, meinen die Analysten von Gartner. Künftig werde der Softwarekonzern mit mehreren parallel geführten Produkten eine mehrgleisige Geschäftsstrategie fahren.
Über sechs Jahre lang sei Agassi der Visionär und Treiber des internen Wandels bei SAP gewesen, ziehen die Marktforscher von Gartner eine Bilanz der Ära Agassi. Ein Satz gemeinsamer, austauschbarer Techniken und Services, die sich anpassen ließen, um in verschiedenen Märkten angeboten und von einem Partner-Ökosystem erweitert zu werden, seien das Kennzeichen des Ex-SAP-Vorstands gewesen. Zentrale Bausteine seien die Middleware-Plattform rund um "Netweaver" und ein Portfolio aus Enterprise Services.
Gartner zufolge hat sich im vergangenen Jahr die SAP-Strategie jedoch geändert. Der Konzern werde sich künftig darauf konzentrieren, ein Produktportfolio statt eines Einzelprodukts mit einer fokussierten Strategie zu entwickeln. Netweaver werde jedoch die technische Basis bleiben. Die Anwender sollten in ihre Planungen mit einbeziehen, dass Mysap nicht mehr das einzige Produkt der SAP sei, sondern zunehmend von neuen Angeboten für verschiedene Märkte flankiert werde. Als Beispiel nennen die Analysten SAPs erneute Avancen in Richtung Mittelstand (siehe auch: SAP macht ernst im Mittelstand). Gartner geht davon aus, dass SAP erste Produktinitiativen noch im Laufe des Jahres ankündigen wird.
"Wir sind der Meinung, dass der strategische Wechsel zusammen mit den Streitigkeiten um die Nachfolge an der unternehmensspitze Agassi dazu bewogen haben, SAP zu verlassen", heißt es in einer Analyse der Marktforscher (siehe auch: Neues SAP-Mittelstandsprodukt "A1S" setzte Agassi unter Druck und SAP-Personalie: Agassis Aufgaben werden aufgeteilt) Seine Rolle als Treiber für den Wandel sei nicht mehr gefragt gewesen, da sich die neue SAP-Strategie zunehmend gefestigt habe. Die jüngsten Entwicklungen würden SAP in eine eher konservative Richtung lenken. Gartner geht davon aus, dass die Rolle des Visionärs einem anderen Vorstandsmitglied zufallen wird. Wer die Rolle ausfüllen werde, sei jedoch noch nicht abzusehen. Die Marktforschergehen davon aus, dass nach den anstehenden Kundenveranstaltungen "Sapphire" in Atlanta und Wien mehr Klarheit herrschen wird. (ba)
Wednesday, April 04, 2007
Tuesday, April 03, 2007
Alles über Netweaver: Was die Plattform wirklich bietet - Knowledge-Center - Enterprise Resource Planning - computerwoche.de
Alles über Netweaver: Was die Plattform wirklich bietet - Knowledge-Center - Enterprise Resource Planning - computerwoche.de
SAPs Netweaver ist Dreh- und Angelpunkt für die Enterprise Service-oriented Architecture (E-SOA). Vielen Anwendern ist jedoch nach wie vor nicht klar, welche Möglichkeiten die Integrationsplattform bietet.
SAPs Netweaver ist Dreh- und Angelpunkt für die Enterprise Service-oriented Architecture (E-SOA). Vielen Anwendern ist jedoch nach wie vor nicht klar, welche Möglichkeiten die Integrationsplattform bietet.
CW-Schwerpunkt "Alles über Netweaver" - Knowledge-Center - Enterprise Resource Planning - computerwoche.de
CW-Schwerpunkt "Alles über Netweaver" - Knowledge-Center - Enterprise Resource Planning - computerwoche.de
CW-Schwerpunkt "Alles über Netweaver"03.04.2007 um 14:44 Uhr
Noch wissen viele SAP-Anwender nicht genau, was Netweaver leistet. Zudem fragen sie sich, welche Rolle die Integrationsplattform in ihrer IT-Strategie spielen soll. Antworten darauf liefert der Computerwoche-Schwerpunkt "Alles über Netweaver".
Derzeit nehmen einige SAP-Kunden eine Migration von R/3 auf Mysap ERP 2005 vor oder planen ein solches Vorhaben. Welche Bedeutung Netweaver dabei hat und wie die Plattform mit der ERP-Lösung zusammenspielt, darüber informiert der Beitrag "Was die Plattform wirklich bietet".
Nach Ansicht der SAP lassen sich mit Hilfe von Netweaver unter anderem die IT-Betriebskosten reduzieren. Den Beweis dafür zu liefern ist jedoch schwierig, allenfalls Erfahrungswerte können Hinweise liefern, auf welche Art Firmen mittels Portal- und Integrationstechnik Geld sparen können. Allerdings muss hier immer ein Zeitraum von zwei Jahren beobachtet werden, meinen die Autoren des Fachbeitrags "Ersparnis oder zusätzliche Kosten?".
Bevor Firmen sich für eine IT-Plattform - sei es nun Netweaver, Websphere oder .NET - entscheiden, sollten sie sich eine Strategie zurechtlegen. Dabei muss definiert werden, welche Infrastrukturlösung für welche Aufgaben im Unternehmen in Frage kommt. Das ist jedoch nicht immer ganz einfach, hier Anbieterunabhängig zu planen: Sowohl IBM, Microsoft und SAP liefern ihre Softwareplattformen beispielsweise mit Portalen aus, wie der Artikel "Plattformen verändern IT und Business" erläutert.
Neben der Integration unterschiedlicher SAP-Komponenten soll Netweaver auch Drittsysteme mit ERP-Umgebungen koppeln können. Wie das technisch am Beispiel von Business-Intelligence-Software geht, steht in "Anwendungsschranken überwinden". (fn/ba)
CW-Schwerpunkt "Alles über Netweaver"03.04.2007 um 14:44 Uhr
Noch wissen viele SAP-Anwender nicht genau, was Netweaver leistet. Zudem fragen sie sich, welche Rolle die Integrationsplattform in ihrer IT-Strategie spielen soll. Antworten darauf liefert der Computerwoche-Schwerpunkt "Alles über Netweaver".
Derzeit nehmen einige SAP-Kunden eine Migration von R/3 auf Mysap ERP 2005 vor oder planen ein solches Vorhaben. Welche Bedeutung Netweaver dabei hat und wie die Plattform mit der ERP-Lösung zusammenspielt, darüber informiert der Beitrag "Was die Plattform wirklich bietet".
Nach Ansicht der SAP lassen sich mit Hilfe von Netweaver unter anderem die IT-Betriebskosten reduzieren. Den Beweis dafür zu liefern ist jedoch schwierig, allenfalls Erfahrungswerte können Hinweise liefern, auf welche Art Firmen mittels Portal- und Integrationstechnik Geld sparen können. Allerdings muss hier immer ein Zeitraum von zwei Jahren beobachtet werden, meinen die Autoren des Fachbeitrags "Ersparnis oder zusätzliche Kosten?".
Bevor Firmen sich für eine IT-Plattform - sei es nun Netweaver, Websphere oder .NET - entscheiden, sollten sie sich eine Strategie zurechtlegen. Dabei muss definiert werden, welche Infrastrukturlösung für welche Aufgaben im Unternehmen in Frage kommt. Das ist jedoch nicht immer ganz einfach, hier Anbieterunabhängig zu planen: Sowohl IBM, Microsoft und SAP liefern ihre Softwareplattformen beispielsweise mit Portalen aus, wie der Artikel "Plattformen verändern IT und Business" erläutert.
Neben der Integration unterschiedlicher SAP-Komponenten soll Netweaver auch Drittsysteme mit ERP-Umgebungen koppeln können. Wie das technisch am Beispiel von Business-Intelligence-Software geht, steht in "Anwendungsschranken überwinden". (fn/ba)
btexx - The Portal Experts
btexx - The Portal Experts
Die Wacker Chemie AG hat mit SAP NetWeaver durchgängige und integrierte Kommunikationsprozesse zu Kunden implementiert und den Grundstein für eine Enterprise Service-Oriented Architecture (Enterprise SOA) gelegt.
Als global operierender Chemiekonzern stellt das Unternehmen unter anderem chemische Produkte für die Halbleiterindustrie sowie Beschichtungen und Füllstoffe für Druckfarben und Klebstoffe her. Hinzu kommen maßgeschneiderte Lösungen für die Feinchemie und Biotechnologie. Ein wesentlicher Grund für die rasche Implementierung war die Unterstützung durch btexx business technologies, einen Special Expertise Partner für SAP NetWeaver Portal. Dabei brachte btexx business technologies seine Erfahrungen aus zahlreichen Portalinstallationen ein. Weiter lesen...
Die Wacker Chemie AG hat mit SAP NetWeaver durchgängige und integrierte Kommunikationsprozesse zu Kunden implementiert und den Grundstein für eine Enterprise Service-Oriented Architecture (Enterprise SOA) gelegt.
Als global operierender Chemiekonzern stellt das Unternehmen unter anderem chemische Produkte für die Halbleiterindustrie sowie Beschichtungen und Füllstoffe für Druckfarben und Klebstoffe her. Hinzu kommen maßgeschneiderte Lösungen für die Feinchemie und Biotechnologie. Ein wesentlicher Grund für die rasche Implementierung war die Unterstützung durch btexx business technologies, einen Special Expertise Partner für SAP NetWeaver Portal. Dabei brachte btexx business technologies seine Erfahrungen aus zahlreichen Portalinstallationen ein. Weiter lesen...
SAP - SAP Empowers Small Businesses to Thrive in Evolving Marketplace with Quick Innovation Delivery
SAP - SAP Empowers Small Businesses to Thrive in Evolving Marketplace with Quick Innovation Delivery
In a continued display of its commitment to enabling small businesses to thrive in the fast-changing global marketplace, SAP AG announced enhancement packages for SAP Business One, a new series of downloadable packages as part of SAP standard support that provide SAP Business One customers with faster and more frequent access to new functionality, best practice tools and maintenance updates.
In a continued display of its commitment to enabling small businesses to thrive in the fast-changing global marketplace, SAP AG announced enhancement packages for SAP Business One, a new series of downloadable packages as part of SAP standard support that provide SAP Business One customers with faster and more frequent access to new functionality, best practice tools and maintenance updates.
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