Thursday, April 22, 2010

Even SAP is offering SaaS ERP

Few years ago I participated in a strategic CRM consulting. The customer was using  Siebel and SAP ERP. He considered  other alternatives for CRM. My role in the consulting team was to analyze the CRM market and trends. CRM as a SaaS or on Demand was one of the major  trends I mentioned. I wrote on transforming the CRM market.

I wrote on Seibel on Demand as well as on other SaaS style CRM solutions. Sap was an exception. It was the only vendor with no On Demand CRM strategy or solution.

According to SAP, CRM should be integrated with ERP components and database, therefore it is not possible to properly implement CRM as a Service, together with Data Center based ERP.
I explained to the client, that sooner or later we will find SaaS CRM solutions by SAP.

However, about two days before we completed our paper Oracle announced Siebel acquisition.
The most important questions were: Is the acquisition is due to Installed Base or product features?  will Oracle stop developing Siebel? What CRM product will be  Oracle's strategic CRM product: Oracle CRM?, Siebel? PeopleSoft CRM?

My First Take was that Siebel will be the strategic CRM product.
Few months ago, I published a post titled: Future applications SaaS or Traditional? . The topic was the difference between SaaS ERP e.g. Workday or NetSuite and traditional ERP e.g. SAP and Oracle.
I recall these activities while reading Don Fornes's post titled:SAP’s SME Solutions – A Guide to the Product Portfolio.  

Don's article described four types of SAP's ERP solutions related to enterprise size.
The most interesting product is SAP Business ByDesign. Yest, it is a SaaS style ERP suite.
Finally, SAP's product's portfolio includes not only CRM as a Service but also ERP as a Service.   Don's observation of limited functionality in comparison to SAP's flagship SAP Business Suite is in accord with my conclusions as described in my post.
My other conclusion is that SaaS ERP products Agility is their advantage over Traditional ERP products.  It should be remain seeing how agile is Sap's Business ByDesign product.  

Thursday, April 15, 2010

STKI Summit 2010: The effects of Infrastructure Complexity

Complexity was one of the issues presented by Dr. Jimmy Schwarzkopf's STKI summit Keynote presentation.
My Take in a previous post glanced at Complexity and the topic of a comment to my post was Complexity.

Pini Cohen's Architecture and Infrastructure EVP & Senior Analyst's presentation in the STKI Summit included many slides on the same topic. 
The key point was that In Israel  2009 was a year with record downtime dew to Complexity.
Storage was a major cause for not good enough service due to under staffing.
According to Pini's presentation the complexity is driven by three factors:
1.    The total number of entities
2.    Their degree of heterogeneity
3.    Their degree of interconnectedness

The solutions to the Complexity problem according to Pini's presentation are:
1.    Industry in a Box is Consolidation which reduces the total number of entities and could also reduce the degree of heterogeneity.
2.    Automation e.g. by using Business Ready Infrastructure and CMDB driven processes.
3.    Cloud Computing by reducing the total number of entities and by providing Elasticity, Horizontal Scalability, Resources sharing etc.
4.    Other methods for reducing Complexity especially Service Oriented Infrastructure (SOI).

MY Take
  •      Complexity growth is driven by Heterogeneity, rapidly growing Functionality, new non standardized hardware and software types and even by too many competing standards.
  •      The immaturity of the IT industry is also increasing complexity. The Spiral Model depicted in the figure above. Instead of continual paradigmatic and technological evolution, IT is evolving by extreme transformations and disillusions. The result of this evolution style is collection of systems build upon variety of technologies and concepts and additional significant Complexity.   
  •     It is difficult to tell what increases Complexity and what reduces Complexity. For example Pini Cohen identified Cloud computing as a way to reduce Complexity. On the other hand according to Einat Shimoni's comment to my previous post, Cloud Computing increases Complexity due to more complex integration requirements between SaaS and Data Center applications.
My conclusion is that Cloud Computing is a trade off, which reduces some Complexities and enhances other Complexities. The overall effect will be Enterprise dependent: for some enterprises External Cloud may significantly reduce Complexity and for others it will increase Complexity.

  •    It should also be remembered that Complexity depends upon perspective. For the Infrastructure manager of an enterprise external Platform as a Service (PaaS) may reduce Complexity. He does not care how complex it is for Amazon or other Cloud Services Providers Infrastructure Managers.Hiding Complexity is reducing it from those who are less capable to handle it, by increasing it for those who are more capable to cope with it. For example SOA hides technological aspects from Business users, however additional Service Layer increase Complexity for the Enterprise Architect.   Infrastructure Vendors decrease Complexities of software products for users by packing several products as a single product. The packaging may increase Complexity for those products developers.
  •   Some complexities are even too complex for the most capable professionals. The solution for that problem is Automation. Nothing is changed in the complexity level, but an automated system is more capable than any human for handling it. That is why, Pini Cohen's presentation included slides referring to Automation in the context of resolving Complexity issues.You can also read my previous post titled: The end of Load Balancing? The use of Application Delivery Controllers (ADCs) instead of traditional Load Balancers is an example of increasing Automation in order to handle Complexity.

Wednesday, April 7, 2010

STKI Summit 2010: When do we need to find the right balance?

On March 16th I participated in the STKI summit by the local analysts company STKI.
The company headed by Dr. Jimmy Schwarzkopf is focused on the Israeli market. The theme of this year conference was: Finding the Right Balance: Standardize vs. Innovate.
Presentations were based on an Israeli market survey performed by the company.
The company's analysts' presentations topics were Infrastructure Trends, Applications Trends, Office of the CIO trends and Infrastructure Services Trends, followed by wrap-up IT Trends presentation by Jimmy.

Jimmy's Keynote presentation included two parts: The first topic (and the more interesting topic in my opinion) was directions and trends. This part was not Israeli market centric.
The second topic summed up the surrey's results and was limited to the Israeli market. The local companies in each category (e.g. Storage Hardware, Integration Software), were ranked by Revenue and Client's Mind Share.
I was surprised to find myself appearing in 11th place in the Infrastructure related Consulting/Analysts.             

The most important changes according to Jimmy and according to IT leaders (Microsoft's CEO Steve Balmer, SAP's co-founder Hasso Plattner, Steve Jobs) and Academy researchers (Andrew McAfee, Zygmunt Bauman, Rakesh Khurana) quoted by him are:
  •     Mobile world with emphasis on new sophisticated devices (e.g. iPhone, iPad etc.)
  •     Home User Centric IT – The home users are Beta "site" for new software instead of organizations.
  •     Enterprise 3.0 focused on Competitive advantage in addition to Enterprise 2.0 focused on Business Processes transformation.
  •   Event Driven IT systems

The result of the combination of all these changes will be a very dynamic and flexible (Liquid) IT World with almost no boundaries between Private Life and work activities.

The theme of finding the right balance implies loosing the balance found few years ago. The first part of the Keynote presentation describes a fundamental change taking place following last year's recession.
No doubt, that the predicted change is a radical change. A new world will necessarily require a new balance. Finding the new balance is not an easy task. The new balance will not be limited to IT, because the new world implies change in organizational and cultural issues in addition to the IT changes.

My Take

  •     The New IT implies higher degree of Complexity.
The illustration copied from Jimmy's presentation depicts this problem.
Enterprise with large variety of End User Devices, Events handling mechanisms in addition to Processes, Services, Components and programs, and deploying some Core Systems in its Data Center and other Core Systems in the Cloud will be more complex than current enterprises. 

Handling the growing Complexity is a must. Complexity could be handled by hiding it (e.g. by using Abstraction in SOA or Virtualization implementations) or by actually reducing it by less heterogeneous platforms and applications.
  •     Perceptual Adaptation is the key for competitive advantage.
The adaptation required in 2010 is very different from the adaptation which was required when Forrester Research coined the term Adaptive Organization.
  •     Mobility is a significant trend. The effects of lack of time or place separation between Work related activities and other activities are beyond computing or IT.
  •     In my opinion the other significant trend is Event Driven. Reality is Event Driven. Until the last years IT systems modeled Systems and Processes, but did not model systematically events processing.
 Event Driven is closely related to SOA, Mobility and Real Time Enterprise.
The second generation of SOA implementations includes concurrent implementation of Event Driven Architecture (EDA).

Implementing Real Time Enterprise requires Event Processing, because in many cases business events processing take place immediately after an event (or State Transition) occurred.
Mobility, enables alerting a consumer or an employee immediately after an event occurs.

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