Wednesday, June 17, 2015

Please Sell

Oracle's financial results for Q4 of their fiscal year 2015 came out a few minutes ago.  Seems they missed targets on license revenues and earnings per share.  So the stock may be headed for the professional investor's dog house.  I've even read of an analyst or two publishing a "sell" rating on Oracle stock.

Geez, please sell.  Drive the price down.  I can buy some more shares on the cheap and laugh all the way to the bank.  Let me explain.

First, license revenues shrank.  Gee, no kidding?  Oracle is transitioning away from licensed software to cloud and license revenues shrank?  (insert sarcasm tag here) Better dump the stock before the bottom falls out! (end of sarcasm)

Second, Oracle (like every other tech firm recently) was theoretically dinged by exchange rates.  The dollar fell against the yuan, peso, ruble, ducat, yen, etc.  But currency rates average out...even over the short run.  Take a snapshot after the Greeks and the European Union work out their issues in a few weeks...regardless of how they work it out, bet that exchange rate issue becomes less of an issue.

Third, the name of the game in measuring success in providing whatever-as-a-service is recurring revenue.  You'll compromise margins on new subscriptions to grow share, then work hard to minimize churn...which maximizes very high margin recurring revenue.  So the telling numbers for Oracle's future as a cloud provider:  subscription revenue growth, recurring revenue growth, and recurring revenue margins.  Which I do believe were the high points in the results.

Fourth, the technical fundamentals...which is really the most important factor...are very good.  Solid products with lots of functionality.  I'm not too concerned about Oracle's financial viability as long as they keep producing great products.

So only am I not worried, I'm actually pretty enthusiastic about the results and what they really mean.

So please sell...I'd like to increase my minuscule Oracle holdings.  If enough folks sell, I'll be able to do so on the cheap.

Tuesday, June 16, 2015

Integration Is Hard

If you know me at all, you know I love services-based integration.  The whole idea of interfacing, moving and exchanging data, guided by industry standards...I'm an enthusiastic supporter.  The appeal of this idea made me an ardent supporter of Oracle's Fusion Applications.  And I still believe it's an important part of the potential for today's SaaS offerings.

So I'll share a secret with you...I really hate services-based integration.  It's hard.  Packaged integrations rarely work out of the box.  SaaS integrations are tough to implement.  Integration platforms are still in their infancy.  Data errors are frequent problems.  Documentation is either inaccurate or non-existent.  Building your own - oy!  Even simple integrations require large investments of blood, sweat, and tears.  And orchestrating service integrations into a business process...agony on a stick.  I personally believe that the toughest aspect of enterprise software is services integration.  SaaS, hybrid, on-premise, packaged applications, middleware...it does not matter, services integration is hard regardless of context.

I see SaaS integration as "hero ground":  there is nowhere to go but up, and even simple wins will create heroes.  Service integrations that really work, simple and easily understood documentation, design patterns, data templates and useable tools... I think we have a ton of work to do.  Because, even though it shouldn't be, integration is hard.

Sunday, June 14, 2015

Sticker Shock

A little off-subject, but still felt this experience was worth sharing.  I'll get back on track next post.

My smart phone is an iPhone 5.  My carrier is ATT.  It's been a great relationship since the iPhone first came out.  Sadly, I think it's coming to an end.

My two-year contract expired on June 1st...ATT informed me immediately that I was eligible for a phone upgrade and a new contract.  Exciting news, as I've had my eye on an iPhone 6-Plus.

Last week, I decided it was time to grab that new iPhone and renew my contract.  My wife came with...we're on the same plan and she is also upgrade eligible right now.  The local AT&T store is right around the corner, so we dropped by on the way out to lunch, figuring this would be about a 20-minute deal: cool new phones, new contract, and then off to lunch.

The experience did not quite work out as planned.  As you're probably aware, subsidized phones and 2-year contracts are on the way out with the wireless phone carriers.  More on that here.  So we were hit square between the eyes with sticker shock.  We were told we could buy new phones outright or pay in installments (including about $100 in fees...aka interest...over a two-year period).    Pretty significant bump in hardware out-of-pocket costs.

To add insult to injury, the price of carrier service has gone up around 33% for the same service levels as our own contract.  Regardless of whether we opted for a "Next" plan or not, the monthly outlay came out to the same amount.  And I thought data access was getting less expensive...

We left ATT in pretty short order and decided to try the Verizon store next door.  No help there...the numbers played out exactly the same.  The only difference was the branding of "Edge" rather than "Next".

Sprint tried to do better...they actually matched the level of service and price of our old plan.  For the first year.  Then they recovered that cost in the 2nd year.  So, over a 24-month period, the three major providers came out with the same price for service.  Contract, no contract, "Edge", "Next", or whatever...prices up 33% regardless.

We checked out Best Buy's $1 phone deal too.  I won't bore you with the details, other than to mention that the deal would not have saved us a dime on hardware or service over a two-year period.

Where I live, we have two more options.  T-Mobile and Boost Mobile.  Having checked T-Mobile, I've learned that they're leading this trend in higher service costs.  And their coverage map for my area is really spotty.  Boost Mobile, on the other hand, is offering substantially better pricing on service...which leaves me wondering how they do that, considering that they're leasing infrastructure and air time from Sprint in order to provide those services?

So, to sum up, I've learned two important things:  1) subsidized phones are now a thing of the past, and that smart phones (especially Apple smart phones) are expensive; 2) carrier providers are raising costs pretty substantially.  I suppose this is the cost to the consumer of finally converting perceptions of smart phones from a "cool new thing" to a necessity of modern life.

A few days have passed and I've now managed to talk my wallet down from jumping off a ledge.  We've made the decision in our house to hold the line on cell phone costs.

The sticker shock has made my old iPhone 5 look much, much better in my eyes.  I may just keep it until it dies. Or perhaps switch to the much lower-priced 'Droid-based OnePlus?

As far as increased provider costs, I imagine I'll be lowering my data plan and depending on the ever-increasing availability of free wifi.  Once that becomes less practical, I'll have to consider options...maybe switch back to a "dumb phone" and reconsider carrying a wifi-enabled tablet?  Yuk, that even sounds ugly :(

I suppose I've known for years that cell phone sticker shock was coming...but that doesn't make it any easier to deal with now that it's here.

Friday, June 12, 2015

Selling SaaS

Read a great article on the vendor-customer SaaS sale sdynamic  - Mike Vizard wrote the article at "Talkin'' Cloud".  Anthony Anzevino, Director of America Sales for AWS, describes selling cloud customers.  And Mr. Anzevion nails it.  Rather than summarize, I'll just quote the gist of it:
Speaking this week at a Marketplace LIVE event sponsored by Telx, a provider of hosting services, Anthony Anzevino, director of America sales for AWS, says the cloud giant focuses its own inside sales efforts on some 3,500 named accounts, which is then supplemented by some 5,000 systems integrators.
Most of those customers, says Anzevino, are looking to find a more agile way to deliver IT services using a cloud service provider that is committed to innovate across a wide depth of product offerings. After all those factors are considered it's only then that the conversation turns to cost and pricing models, said Anzevino.
The single biggest deterrent to making that sale, said Anzevino, is the internal IT organization. Unless there is some plan in place regarding how the skills of the internal IT staff will be reapplied to add value to the business Anzevino said most internal IT organizations will go to significant lengths to prevent application workloads from moving out to the cloud.
Counterbalancing that influence, says Anzevino, is usually a chief financial officer that wants to outsource everything that is not core to the business. More often than not the CFO does not see IT as being strategic to the business and the real costs of delivering IT to any line of business inside that organization are generally poorly defined.
For the most part AWS became the largest cloud provider by targeting independent software vendors (ISVs) that didn’t want to invest in IT infrastructure to deliver a software-as-a-service (SaaS) application. To fuel continued growth AWS is now targeting traditional enterprise IT organizations, many of whom are eager to at least move application development activities into the cloud. The battle comes when it’s time to move those applications into production environments. More often than not because of security, performance, compliance and total cost of ownership issues the internal IT organization will make a strong case for deploying production applications inside a private cloud or in a managed hosting environment.
Yup.  See this very situation play out every day in the "whatever as a service" market.  I could not have described the situation better myself...
You can read the entire article for yourself here.

Sunday, June 07, 2015

The State of SaaS

I've been reading quite a bit lately about the maturation of SaaS...how the market is transitioning away from the "early adopter" phase into more of a mainstream marketplace.  With all due, respect to those making such claims, I must offer a dissenting opinion.  While a big fan of SaaS, I still recognize at least three factors that must be addressed before SaaS can be considered a mature offering.  These three areas represent the soft underbelly of SaaS: integration, data state, and fear of losing control.

Integration


Perhaps your experience is different, but I have yet to see a service integration for enterprise software that works reliably out-of-the-box.  Pick your vendor:  Oracle, Workday, Amazon, Microsoft, Salesforce, Infor...it just doesn't happen.  There are too many variations amongst various customer applications.  And, in all honesty, enterprise software vendors just don't seem to be all that good at writing packaged integrations.  That's part of the reason we see integration as a service players like MuleSoft and Boomi making a play in the market.  It is also why so many technology companies offer integration implementation services.  We're still a far cry from easy, packaged integration.


Data State


After spending years in the enterprise software market, I'm firmly convinced that everyone has loads of "dirty data".  Records that poorly model transactions, inconsistent relationships between records, custom data objects that have worked around business rules intended for data governance.  Every closet has a skeleton.  The most successful SaaS implementations I've seen either summarize all those records into opening entries for the new system or junk customer data history altogether.  Both these approaches work in the financial applications, but not so well in HCM or Marketing.  Until we can figure out automated ways to take figurative steaming piles of waste and transform them into beautiful, fragrant rose beds of clean data, SaaS will continue to be a challenging transition for most enterprise software customers.

Fear of Losing Control


Certain customer departments are resistant to SaaS, mostly out of a fear of losing control.  Some is borne of a genuine concern over data security.  Some is over fear of losing job security.  

For those concerned over data security, consider that data security is critical for SaaS vendors.  Without the ability to secure data, they're out of business.  It's a core function for them.  So they hire armies of the best and brightest security people.  And they invest heavily in security systems.  And most customers can't match that, either in terms of talent or systems.  Result:  the SaaS vendors provide security solutions that are simply out of the reach of enterprise software customers.  There is a greater risk in keeping your data in-house than in utilizing a SaaS vendor to protect your data.

For those fearing the loss of job security, they're correct...unless they're willing to change.  The skills of maintaining large back-office enterprise software systems just don't apply in a SaaS world (unless you're working for a SaaS vendor).  I'd lump database administrators and database developers into this category.  However, there are new opportunities for those skills...developing and maintaining software that enables strategic in-house initiatives.  There are also opportunities to extend SaaS applications to support unique in-house needs.  Both scenarios require a change - working more closely with business as a partner rather than as a technology custodian.

Overcoming the fear of losing control will require significant in advocacy and evangelism...most customers need information, training, and assurance in overcoming these fears.  But we can't really say that SaaS is "there" until we see a significant turn in perceptions here.


So there you have it.  Is SaaS up-and-coming? Absolutely.  Is the SaaS market transitioning to a mainstream, mature marketplace?  No...lots of maturing needed in the areas of integration, data state, and fear of losing control before we can get there.

As always, your thoughts are welcome in the comments...

Tuesday, June 02, 2015

Old Folks Boogie

And you know
That you're over the hill
When your mind makes a promise
That your body can't fill...
             - From Little Feat's "Old Folks Boogie"

I think I'm must be over the hill...a grumpy old man.  There was a time when, faced with an app that failed to work as promised, I would fuss and fight with that app to make it work.  No more.  Now, in the event that an app doesn't work as promised, I delete it and move on try something else.  No patience anymore.  I continually tell myself that I'll put the "fixer" hat back on my head, but I just never get to actually do so.

Mobile apps are the best example of my impatience.  There are many mobile apps for any outcome I care to achieve:  mobile meetings, tracking my heart rate, listening to music, taking notes... Plenty of alternatives.  So, when I run into an app that fails to work (or even fails to meet my expectations), I immediately junk it and move on to the next choice.  No effort, no feedback to the app developer, no nothing.  Just junked.  As my newest daughter-in-law would say: "ain't nobody got time for that".

In today's market, there is an expectation that apps just work.  Buggy apps die quick deaths in the market.  Reliability is not something special now...it's simply a requirement to get a seat at the table.

Classic example.  Last week, I was in Kansas visiting my new granddaughter.  Having taken our pet dogs on the trip, I wanted to find the local dog park.  Google Maps failed to find the dog park recommended by my son...the town in Kansas is just too small for Google Maps to fuss with.  Waze took me right to it.  Any guess as to which app is still on my smartphone and which one got junked on the spot?

Of course, there is a downside.  If everyone took my approach, the developers would never get feedback on their app from the field.  So their app would never improve.  But I have a "grumpy old man" response for that too.  So what?  Why should I be the beta tester?  Build something that works in the first place.

So yeah, I have that grumpy old man attitude when it comes to apps...especially mobile apps.  It either meets my expectations or gets kicked to the curb without further thought.  If I don't immediately get the outcome I'm expecting, I move on.

What about you?  Are you another member of the figurative "grumpy old man" or "grumpy old woman" club (no gender bias here - we accept everyone)?  Or are you willing to provide feedback and work with an app to help make it better?  Respond in the comments.

Wednesday, May 20, 2015

The Long Goodbye

I'm in the process of saying a long goodbye to my iPad 2...and tablets in general, at least for now.  I'm losing my tablet for a couple of reasons.

First, I've pushed the limits of my iPad's usability.  I really have...for a couple of years.  But I just don't find myself using it for any kind of serious work.  My MacBook Air has really taken over for both premise-based and cloud-based work.  Even with a keyboard of the tablet, I find myself much more productive on the Air.

Second, I'm finally upgrading my iPhone 5 next month.  The most likely upgrade candidate is the iPhone 6 Plus.  Yes, the Samsung Droid offerings look really great - even better in many respects.  But I'm invested in the Apple platform and there's not enough extra benefit in other platforms to justify a transition in my mind.  So it's likely the 6 Plus...with a very large screen.  And I see the 6 Plus taking over the few functions I now perform with my iPad.  So the iPad would become just another weight to lug through the many airports I visit every year.  I'm actually looking forward to cutting back on the amount of tech gear carried when I eliminate the iPad.

In all fairness, I think I would have come to this conclusion with any tablet.  I still consider the iPad to be the best of the bunch.  I have just come to the conclusion that the tablet format just does not provide enough value for me...at least, not right now.

What's to become of the iPad?  It may become a third screen in my home office.  Or it may become a media viewer on a planned treadmill.  I mean, it's nice and all...but, at least for me, I've discovered the iPad concept to be much more of a nice to have than a got to have.  Cool but not necessary.

What about you?  Different view or experience?  Sound off in the comments.