Is Microsoft the New Safe Harbor?

The following is a guest post from Ray Wang of Altimeter Group. I wrote a different title, but otherwise this is as it appears on his blog.

Clients Now See Microsoft As The Neutral Vendor, Hence All The Questions

Just less than 3 years ago, Microsoft was still perceived as part of the “evil” empire.  Business leaders worried about the complicated and expensive licensing and pricing structures.  IT leaders bemoaned the lock-in and proprietary and often buggy software.  But in a reversal of fortune, customers now worry about Google lock-in, fret over Oracle’s quest to dominate IT through M&A, wonder how hardware vendors will become software providers and vice versa, and remain in shock as Apple’s proprietary and closed approach over takes Microsoft’s market cap.

In conversations with 71 business and IT leaders, the perception on Microsoft has definitively shifted.  In fact, more than 74.6% (53/71) see Microsoft as the neutral and trusted supplier.  With an aging and retiring workforce that grew up on IBM and SAP, the next generation of IT leaders increasingly will exert their leadership and run to their comfort zone of Microsoft and Oracle.  (Note: Don’t expect this to last as the next generation of IT leadership comprises of millennials and digital natives who will try to move everything to open source and the cloud.)  Consequently, Microsoft’s technology offerings receive a renewed interest and reinvestment among customers, partners, and critical OEM’s.  Among this group, many are attending TechEd 2010 in New Orleans, LA.  Key questions they will be asking include: Read more of this post

Sybase Database Value to SAP – Long Term and Short

It’s not what you think – the hidden jewel for the near term may just be SQL Anywhere. Read on. Disclosure: I worked at Sybase in the last millennium, when it hit the wall at $1B the first time and bounced. Over the next few years, Oracle dramatically outdistanced itself, in large part, as it turned out, because of the massive opportunity presented by SAP. Thousands of huge installs atop the Oracle DBMS, and not one with Sybase. Why? Because of a technology disagreement. SAP wanted row-level locking. Sybase’s answer: “Let us tell you why you’re wrong to want it.” Leaving aside the lesson to be learned from that one, let’s talk about how much the newly acquired Sybase database portfolio does for SAP. I’m leaving the best for last, because all the chatter has been about ASE and IQ, but read to the end.

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SAP – Sybase: Synergies? Suspect So.

SAP announced today that it will acquire Sybase for $65.00 per share, representing an enterprise value of approximately $5.8 billion. The announcement says that “customers will be able to better harness today’s explosion of data and deliver information and insight in real time to business consumers wherever they work so they can make faster, more informed decisions.” But the vision goes beyond that: the combined companies will be able to deliver the ability to act on those decisions, anywhere. The combination of SAP’s substantial share of its customers’ transactional systems with Sybase’s mobile expertise in messaging and application development tools for mobile devices affords extraordinary opportunities that are not lost on management. Following the public press event, I chatted with Vishal Sikka, SAP’s CTO, and Dr. Raj Nathan, EVP and CMO of Sybase. We covered some of the opportunities on the table and SAP’s plans for its new assets. Read more of this post

Rimini Street Slashes Maintenance Costs For Big Apps

Many SAP and Oracle apps customers would rather leave stable products alone than continually change, or “upgrade,” as it is called. For these customers, the cost of maintenance, also known as “buying it all over again every 4 years,” seems excessive. The slow pace of innovation from the mammoth firms, and the even slower uptake of those innovations, amplifies this. (For a recent discussion of this problem, see video highlights from Ray Wang’s keynote speech from the SAP UK and Ireland User Group. I discussed the resounding thud heard from Oracle’s “wait till next year” non-announcement of its Fusion apps here.)

With this backdrop, Rimini Street, one of the pioneering 3rd-party maintenance firms, recently announced stellar Q3 results: revenue up 200% year over year, and sequential quarter-over-quarter growth continuing: it claimed Q3 invoicing doubled the prior calendar quarter. Rimini Street’s value proposition has steadily attracted customers willing to try a different way. The company claims hundreds of customers since inception, all over the size spectrum. The offer is simple: their base price is 50% of the vendor’s maintenance price. Read more of this post

Workday and Vertica: Cracking the 100 Customer Mark

Workday announced today that it has passed the 100-customer mark, and the milestone struck me as another important rite of passage. Such milestones are especially important in emerging markets that have not yet achieved mainstream recognition. In Workday’s case, this arguably represents a substantial step forward in the enterprise-class SaaS-based application market. Following in the successful footsteps of salesforce.com, NetSuite and others, Workday is extending the new SaaS paradigm into human resources and financial applications, with marquee customers such as Sony Pictures Entertainment and the Valspar Corporation  helping them get to this new level of customer success.

Workday is doing this by focusing on delivery; it touts a 120-day average phase-one implementation timeframe. The economic leverage of SaaS solutions, which turn the old “implementation is a multiple of acquisition cost” model on its head, works to Workday’s advantage, but only if it can deliver. In its press release, Workday points to a 38-day implementation cycle for Stone River as an example of its nimble deployment model. While it’s unlikely that this happens often, it’s an impressive benchmark nonetheless.

The note reminded me of recent conversations with Vertica, a firm attempting to help drive a similar mainstream status for the emerging ADBMS market. My conversations with Dave Menninger and others at Vertica have given me a perspective not unlike that of AMR’s Jeffrey Freyermuth, who recently concluded that Workday was about to crack the barrier. With its own big name wins like JP Morgan Chase and Verizon, and a steady cadence of product releases, Vertica has been on a roll. As Q3 began, they were approaching 90 customers, and I’m aware of several wins in recent weeks, which leads me to believe that they are rapidly approaching a similar moment in their growth. And the hill Vertica must climb is steeper: they are a more traditionally licensed, high-cost enterprise software platform without some of the built-in advantages of Workday’s SaaS approach.

I’ve talked elsewhere about Vertica’s technical innovations; its 3.5 release added substantially to a growing list of features. But the true test of credibility for a company in an emerging space is its ability to deliver those features to customers, and keep them happy. Vertica has invested steadily and wisely to ramp up sales and marketing efforts. Marketing is a critical component, but punchy campaigns and flashy web sites mean nothing unless companies buy and keep investing in a technology. As it approaches the 100-customer mark, Vertica has proven that it is delivering what enterprises want – fast database technology that solves real-world business problems. Like Workday, it may be following some larger pioneers, but it’s carving out a leadership role for itself at a rapid pace. I’m watching with interest to see how well it holds its momentum in Q4 and beyond.

Oracle, Sleeves Rolled Up, Flexes EPM Muscles

It’s been a while since Oracle made the series of acquisitions that redrew the map on applications software, and they have been fairly successful there. The broadening of the portfolio created considerable challenges for the rationalization of Oracle’s BI strategy, and I recently had the opportunity to sit down with Paul Rodwick and Bill Guilmart, VPs of Product Management, to catch up on the Enterprise Performance Management (EPM) story so far. We analysts are quick to criticize the pace of integration, the level of detail, and the timing of the roadmap from companies with enormous portfolios like Oracle’s. Personally, I’m glad I don’t have to live every day with the consequences of my brilliant ideas about how to rationalize all those moving parts. (Remember those ads? “We don’t do. We just advise.”) Paul and Bill must live with theirs, and I was impressed with the clarity and consistency of the model they described to me. It’s a good story, with emerging successes in abundance, and the best may be yet to come. Read more of this post

Oracle, Tone Deaf No Longer, Scores a Hit on SAP

Oracle, from the top down, has always been thought of as a take-no-prisoners marketing organization. Feisty, aggressive, even combative – and often tone-deaf when it comes to PR messages. But last week, they made an unexpected decision to waive extended support fees for a series of their products (official release here.) Against the backdrop of a raging software industry debate over maintenance costs, this was a sweet and pleasing note to Oracle’s customers, and stands in stark contrast to, say, SAP’s ongoing battle to defend its price hike for maintenance. Read more of this post