Category Archives: Lens360

Dell Marketplace Opens for Business Beta-style

Dell hosted its Dell World 2014 conference in early November at the Austin Convention Center. And while in previous years Dell rolled out the high-tech star power – Elon Musk and Steve Ballmer delivered past keynotes – this year’s model was all business. Michael Dell hosted and made multiple appearances, and the opening panel featured McKinsey Global Institute’s Michael Chiu, Cloudera CEO Tom Reilly and Palantir Technologies’ President Shyam Sankar.

One reason why things are different this year is the leveraged buyout.

A little over a year ago, Michael Dell and Silver Lake Partners completed a nearly $25 billion buyout of Dell shareholders and took Dell private. The stated reason for going private was to enable Dell, formerly publicly traded for 25 years, to accomplish its shift beyond personal computers to the diversification, synergy and higher profit margins provided by software, services and other networking tools – without the scrutiny or interference of Wall Street.

The underlying themes haven’t changed though. Dell still trumpets the mantra of Transform, Connect, Inform, Protect and still links its products and services directly to that powerful messaging.

One of the most impactful announcements at Dell World 2014 was made by Nnamdi Orakwue, vice president, Software Strategy, Operations and Cloud: Dell Marketplace has opened its public beta phase. Orakwue hopes that Continue reading

Six Frequently Asked Questions (6FAQ) About Digital Business

1. How would you define a Digital Business?

  • A Digital Business or Enterprise is built upon digital technologies to create value for customers via innovative business strategies and interactive experiences that leverage an easy-to-use-and-access platform on demand.
  • Internally, Digital Business empowers knowledge workers through data and collaboration, 1) enabling analytics-based insights and behaviors and 2) the ongoing enhancement of digital offerings.
  • The foundation of Digital Business is the Boundary-free Enterprise, which is made possible by an array of time- and location-independent computing capabilities – Cloud, Mobile, Social and Data Analytics plus Sensors and APIs — with Integration as the glue to enable synergy and leverage business value.
  • Digital Business should not be thought of in isolation, but rather as an ecosystem of the enterprise from 1) suppliers to buyers, embracing 2) business partners and technology partners and empowering 3) employees to serve their 4) customers and address their markets more effectively.

2. Why does having a digital business strategy matter for staying competitive?

  • There is always a faster gun, a sweeter smile, a more convenient offer. Continuous enhancement of digital offerings is essential.

3. What are the main drivers requiring businesses to adapt by developing digital strategies?

  • Better, faster, cheaper is just table stakes. We are talking about more innovative, more effective solutions that engage and retain customers. For two disruptive examples from the travel industry, consider Uber and airbnb. Uber, for example is a location-aware and pre-paid. The nearest car finds you, and the fare and tip are already paid automatically. An airport trip I took in Tampa was cheaper than the bus. airbnb is personal and intimate, but discreet and a bit of an adventure. Not too much, of course, because there are reviews, but it’s definitely not a manufactured hotel/motel experience.

Continue reading

Docker versus DevOps – A Shortcut to Nirvana or Hype?

Saugatuck attends and participates in a large number of vendor conferences around the globe and a Saugatuck analyst recently was present at a New York City conference hosted by a leading Infrastructure provider. During the festivities, we were astonished to hear that “With Docker all you really need is coders. It effectively eliminates the need for DevOps.”

We should first say it was not Docker making that claim. We are certain that no one at the Cloud technology vendor, least of all Solomon Hykes, Docker’s Founder & CTO, would make that claim. Nevertheless, Docker does change the way Digital Businesses will develop and deploy Cloud solutions. Hykes makes the analogy of the shipping container and how it has eased moving cargo from place to place.

One of the capabilities that organizations long have needed to ensure their investment in the Cloud is the easy migration of workloads. Docker solves this problem by providing a multi-language, agile, and cost-effective containerization solution. Furthermore, Docker delivers an open platform for developers and IT operations to build, ship, and run distributed applications, and enables the continuous delivery and integration of solution components.

On the other hand, Docker doesn’t wash your windows, cut your grass or walk your dog. And, for the moment, it runs only on Linux. However, before long we expect to see Docker available for Windows and for Continue reading

Apple Pay Rolls Out, MCX stonewalls, and PayPal Cringes

The recent rollout of Apple Pay has precipitated some behind-the-scenes machinations among competing efforts in the marketplace, most notably MCX (see 1438MKT, Digital Business Models and Monetization, Part 2 – Mobile Payments, 12 September 2014, for background information).

While Apple has negotiated partnerships for Apple Pay with credit and debit card companies (American Express, MasterCard, and Visa) and with several leading US banks (American Express, Bank of America, Capital One, Chase, Citi, Wells Fargo), the MCX consortium steers clear of the credit and debit card companies and NFC and goes direct to customer bank accounts and loyalty programs, using bar codes and QR readers for its CurrentC platform.

So while Apple has 800 million customer credit/debit cards already on iTunes, and signing up for Apple Pay is simple and painless, Apple Pay’s success still depends Continue reading

Progress Buys UX Tools and Customers: Modernizing the Base

Progress has entered into a definitive agreement to acquire privately-held Telerik AD – a leading provider of application development tools – for $262.5 million. Telerik is headquartered in Sofia, Bulgaria, but has over 200,000 paying developer customers worldwide, including over 450 of the Fortune 500. Telerik tools enable developers to create compelling cross-platform user experiences across Cloud, web, mobile and desktop applications.

Approximately 50 percent of Telerik’s sales are currently generated through a self-service, web-based platform, making it possible for the tools provider to price extremely competitively and still achieve profitability. Telerik’s revenue for the last twelve months was over $60 million, with annual bookings growth of over 20 percent. Progress expects the addition of Telerik to be slightly accretive on a Non-GAAP basis in the first year following the acquisition.

More than 4 million users and 47,000 businesses in over 175 countries run applications on the Progress OpenEdge platform and Continue reading

Large-Enterprise Financials – A Less Scary Path to the Future

Most people are risk-averse. Growing up, my parents certainly were. And it has long been clear that most large-enterprise CFOs are. So it has not been that surprising that the Office of the CFO has been cautious in adopting Cloud-based solutions, regardless as to whether any of their fears are substantially justified or not.

No doubt, pockets of next-gen solution adoption have been occurring for some time throughout Finance, although mostly around the periphery. Cloud players such as Adaptive Insights, Host Analytics and Tidemark are having strong success in the business planning and budgeting space. Niche players such as Avalara and Kyriba are likewise enjoying strong demand in the Sales / Use Tax and Corporate Treasury segments respectfully. And providers of Cloud-based core Accounting / Financials targeting SMBs and mid-market firms have likewise seen some solid success, including firms such as Intacct, Kenandy, FinancialForce and especially NetSuite – as well as newer next-gen versions from Sage, Epicor and Infor, all of whom have been heavily investing in / reinventing their solution sets.

For the largest of enterprises, though, we still haven’t yet seen the explosive growth in core financials anticipated only a couple of years ago. To some degree we have viewed this as a “chicken or the egg” issue – as until the last year or two, large enterprises lacked robust / fully fleshed out / credible financials / accounting offerings to evaluate and choose from.

However, that has been changing – as four options are now available to serve the unique needs of this high-end market segment. NetSuite has been having some success going upmarket with its two-tier financial consolidation play for a couple of years now. Oracle has come to market with its Fusion Financials Cloud Service, and both Workday (see recent Lens360 blog post) and SAP now have much richer and more powerful solutions that can support the needs of the largest of enterprises.

As part of our focused 2014-2015 research program on Cloud Financials, last Continue reading

The Curious Incident of the HP Announcement

The immediate fallout from this week’s big #HPbreakup announcement reminds me of one of the great bits of dialogue in the Sherlock Homes story “Silver Blaze.” The scene goes like this:

  • Gregory (Scotland Yard detective): “Is there any other point to which you would wish to draw my attention?”
  • Holmes: “To the curious incident of the dog in the night-time.”
  • Gregory: “The dog did nothing in the night-time.”
  • Holmes: “That was the curious incident.”

In short, while something important and influential happened, the dog gave no alarm. It provided an extremely important clue in the case.

As I write this, we are more than one business day after founding titan of the IT industry HP announced that it would split itself into two separate, but related, provider firms. Each will deliver $50B-plus in annual revenues; each will be publically traded; each will address a large segment of a rapidly-shifting IT marketplace.

Tens of thousands of employees are being directly affected. Thousands if not tens of thousands of channel partners, developers, and other ecosystem members will be affected; as will millions of users within thousands of customer firms.

Yet, after a flurry of blog posts and business news articles immediately before and after the announcement, there is significant quiet in the industry. One telling factor: HP is not listed among the top ten topics in either Google Business or Technology Continue reading

HP’s New Mantra: Divide and Conquer

After intermittent speculation going back almost a decade, Hewlett-Packard Co. (HPQ) has announced that it will split into two separate companies: Hewlett-Packard Enterprise, and HP Inc. The split is projected to be completed by the end of HP’s fiscal 2015, which is 31 October 2015.

Hewlett-Packard Enterprise is expected to “build upon HP’s leading position in servers, storage, networking, converged systems, services and software as well as the company’s OpenStack Helion cloud platform,” while HP Inc. will be built around the more commodity-oriented PC and printer groups. In short, HP Inc. will retain the company’s current logo and continue the company’s legacy cash-cow business (albeit with planned expansion into 3D printing and various “creative” efforts focused on portable computing devices), while Hewlett-Packard Enterprise will be the large customer-oriented, Cloud-catalyzed, integrated services provider enterprise Master Brand.

Current HPQ CoB and CEO Meg Whitman will be President and Chief Executive Officer of Hewlett-Packard Enterprise; Pat Russo has been named as Chairman of the Hewlett-Packard Enterprise board. Interestingly, Whitman will also be the chair of the HP Inc. board, with Dion Weislerto to be President and Chief Executive Officer of HP Inc. The two companies will each be publicly traded, and are being positioned as being “independent” from one another despite the strategic, C-level-plus-board-level overlap with Whitman.

Saugatuck sees this split as significant in two ways: One, obviously, because it is a significant strategic move by one of the oldest and most influential Master Brands in IT. The other, because it shines a brilliant spotlight on how the IT business has changed in very sweeping and fundamental ways over the past several years, and how much Continue reading

IBM Needs to Learn the “Other” Software Business

A recent IBM briefing for Saugatuck helped to clarify the breadth and depth of IBM’s Cloud / SaaS portfolio, business strategy, approach, and results. We came away with two key net takeaways:

I.         IBM certainly has a broad, deep, useful, and valuable SaaS portfolio. Almost quietly, it’s long-standing positioning as a provider of software, but not applications, has shifted. Mostly through SaaS acquisitions, IBM today is a very significant and competitive business applications provider. One big example: the $1.3 billion acquisition of HCM / Talent Management SaaS provider Kenexa in 2012 (see Forbes article).

According to our recent briefing, IBM’s SaaS portfolio now includes over 120 busienss applications – across a range of functional roles (e.g., customer service, finance, human resources, marketing, procurement, sales) and solution categories (e.g., advanced analytics, BPaaS, Smarter Cities, Watson). By our estimates, IBM is already realizing more than $1B in annual revenues from this portfolio, and we expect Big Blue to at least double their current SaaS revenues within the next 18 months as this portfolio continues to grow (by acquisition and internal development) reach 150-200 by YE2015.

II.         But given the acquired nature of much of that portfolio, IBM still faces substantial needs for, and challenges in, organization, coordination, integration, and go-to-market approaches for the assembled Continue reading

SAP Concur Acquisition Illustrates the New Digital Business Enterprise Model 

SAP has agreed to acquire Cloud-based travel and expense management provider Concur Technologies.  When completed, the deal will be the most expensive acquisition ever for SAP, ranking above SAP’s 2010 $7.1 billion acquisition of Sybase Inc. It will also be a Top 10 all-time software or Cloud / SaaS acquisition in terms of total price paid. Concur shareholders will receive $129 per share, a 20 percent premium over Wednesday’s closing price of $107.80. The 21-year-old, Bellevue, WA-based Concur had been known to be shopping for a buyer, with most rumors indicating SAP or Oracle as the most likely acquirers. The publicly-traded firm posted fiscal-year 2013 losses of $24.4 million on revenue of $546 million.

Saugatuck’s first take is that, while buying Concur may not improve bottom-line profits immediately, SAP does get another significant stream of Cloud-driven revenue; Cloud-based providers’ revenues are growing increasingly faster than traditional software providers. SAP also adds more Cloud expertise and presence overall, especially expertise in marketing and supporting Cloud-based financial software. With 23,000 clients and 25 million users through 150 countries, SAP also gains a business transaction network similar to its 2012 acquisition of Ariba. According to SAP CEO Bill McDermott, the addition of Concur would mean Continue reading