Aberdeen Group Report on Leadership of Oracle SaaS Platform

The Aberdeen Group has issued a research note evaluating the Oracle SaaS Platform. The Insight report talks to the leadership and momentum of the SaaS Platform for ISVs looking to build on-demand applications. I will let Aberdeen Group's report do the talking, so here is a short excerpt from the conclusion section:

Oracle has indeed established a leading position in the market for SaaS platforms. Independent Software Vendors are attracted to Oracle's product for its scalability, security, and productivity inducing development environment. The functionality of this SaaS platform is further augmented by its ability to manage and meet Service Level Agreements, a vital facet of the product for most SaaS vendors. [Read full report here (PDF)]

In a section titled, "Oracle Achieves Leadership in SaaS hosting", the report goes into the rationale behind the strength of our platform. You can also read my earlier post on the leadership we have in this space.

All I can say is, I agree!

(I currently lead product management for Oracle SaaS Platform, and my opinions expressed here may be therefore biased. Also, the blog and the views expressed here are personal.)

Oracle SaaS Platform - Gaining Momentum as a Leader

This was an exciting week for Oracle & SaaS - SaaS was a prominent topic of discussion by key executives whether it was Larry's keynote featuring Social CRM demo by Anthony Lye, or the blogger-analyst discussions with Charles Phillips.

Oracle and several partners outlined the leadership position of Oracle SaaS Platform as platform of choice for SaaS ISVs, especially mission-critical on-demand application vendors.

• Oracle: Oracle SaaS Platform is Leading Choice for Growing Number of Companies Offering Software as a Service (Nov, 2007)
• OpSource: OpSource Adopts Oracle SaaS Platform to Deliver OpSource On-Demand (Nov, 2007)
• Sympony Services: Symphony Services Helps ISVs Adopt Oracle SaaS Platform (Nov, 2007)
• SPS Commerce: Leading SaaS EDI Service Provider SPS Commerce Leverages Oracle's Software As a Service Platform (Nov, 2007)
• Patni: Patni announces Enablement Services based on Oracle SaaS Platform (Nov, 2007)

You can read the full post on my Oracle SaaS blog at Oracle SaaS Platform is Leading Choice for SaaS ISVs.

Charles Phillips meets with Bloggers and Discusses Fusion, SaaS, SAP and more

Today, Oracle took a significant positive step in blogger relations and reached out to Enterprise Irregulars - arranging a sit down with Oracle President Charles Phillips shortly after his keynote where he announced Oracle VM - Oracle's entry into the multi-billion dollar virtualization market. The blogger meet up was twice as much fun for me since I am proud of my affiliation with both Oracle and Enterprise Irregulars. The meeting lasted 45 minutes as Charles took questions on several topics that included - innovation, Fusion, SaaS, SAP and Cognos.

Irregulars with Charles Phillips

I found the session very interesting - Charles clearly had great command of Oracle's business strategy, the rationale behind acquisitions and posited interesting perspective on issues facing Oracle customers. For example, he emphasized that Oracle has more than 1.8 million users of its SaaS applications - but also took issue with multi-tenancy being narrowly equated with SaaS which he argued was a vendor strategy for keeping costs down and not a customer requirement.

Charles also talked about how he learned from GE's success in acquiring companies and retaining and growing top talent. Oracle keeps acquired software businesses as intact teams creating "business units" allowing the acquired management teams to continue to run the business.

In response to another question, Charles mentioned Oracle has now surpassed SAP to become #1 practice for Deloitte in North America. On the topic of Cognos being acquired by Oracle, Charles said "Not surprising, it would have been hard for Cognos to float around by itself. This is good for us – IBM does not have a good record of retaining talent from acquisitions and SAP is also struggling."

Here are the key posts that resulted from this meeting (which I will update over the next 2-3 days).

Dan Farber (ZDnet Editor-in-Chief and fellow Irregular) posted Oracle’s Charles Phillips: Fusion on track and SaaS for all. Here are some excerpts, I find interesting:

Phillips said he modeled managing different businesses within the Oracle business on GE’s structure. “We give them autonomy and enough authority so they feel like they are running the company,” he said.

...

Oracle has acquired companies large and small over the last several years to fill out is product portfolio. In some sense the strategy is about acquiring innovation, and talented developers, via smaller companies, but it is more directed toward acquiring market share with the larger acquisitions.

...

“We will make sure all of our products are able to run as software-as-a-service,” Phillips said. “We give them choice, and we think we can run it better than customers.” Oracle is looking at providing hosted applications for financial and retail customers with point-of-sale systems.

Jeff Nolan writes Into the Lion’s Den: Oracle OpenWorld. He has an interesting perspective as a former SAP executive and a leading voice in Enterprise 2.0.

Today was a milestone day for me in my professional life. After nearly a decade of SAP, culminating in my stint with the “attack Oracle” team, I ended up at Oracle OpenWorld as their guest sitting across the table from co-president Charles Phillips. BTW, OOW is frickin huge… I thought the Sapphire events were impressive but OOW is much larger and goes for the full week.

...

Phillips echoed sentiments I heard at SAP that customers don’t want end-to-end multi-tenant hosted solutions. In fact, he argued that because Oracle offers a private database option that they are uniquely able to capture government and other accounts that are prohibited from allowing their data to be on hosted datacenters. Quite honestly, I found this hard to believe but was unwilling to argue the point absent of factual data to support my own position.

One comment that he made about subscription pricing caught my attention, he said (to paraphrase) “if you look at the numbers you will find that saas subscription models are more lucrative after 2 1/2 years than perpetual licenses”. I would like to see that data, but tend to agree with him even absent of the data.

...

Karen (Senior Director, Corporate Communications) is definitely not what I expected from someone with Oracle Marcom… no taser strapped to her hip, no brass knuckles at the ready… just a competent hard working professional.

I am looking forward to see what other blogger attendees Michael Krigsman, Brian Sommer, Josh Greenbaum, Sadagopan and Vinnie have to say about this update.

Summary

This was overall an exciting step forward for Oracle in working with the blogger community. Even though the opinions on this meeting will be diverse, there was near unanimity amongst the attendee bloggers that we need more of this - interaction with vendors that our readers (and software customers and users) care about.

Kudos: Special thanks to Irregulars Jeff Nolan and Vinnie Mirchandani that worked with Karen Tillman, Jake and others at Oracle to make this a reality.

(Disclaimer: Please read full disclaimer below. All opinions expressed here are my own personal views.)

Oracle Webcast: Web2.0 in the Enterprise

Oracle is hosting a chat with Andrew McAfee of Harvard Business School and Thomas Kurian, Senior Vice-President, Oracle Fusion Middleware. I encourage you to register for the event. Oracle's guest Andrew is a well-known Web2.0 advocate on how businesses can leverage Web2.0 for internal and external communications and automation of processes. This should be an exciting session.

Event Details:

Web 2.0 in the Enterprise—Separating Myths from the New Realities of Collaborative Business Processes
October 2, 2007, 9:30 a.m. PT

Join Oracle for a live, multi-channel online event featuring Andrew McAfee, Associate Professor, Harvard Business School, and Thomas Kurian, Senior Vice President, Fusion Middleware, Oracle, to hear about the Web 2.0 technologies that make sense for the modern enterprise, and how to create Web 2.0-enabled business processes that leverage your existing IT systems and create a richer user experience.

• Register now

SaaS Event: Software Business Online Conference (Discount Code Included)

I will be giving a keynote the Software Business Online Conference in Santa Clara on Oct 2nd on the SaaS Ecosystem. In my role of working with Oracle SaaS Program partners, I have learned some lessons on where the SaaS ecosystem is headed, what mistakes to avoid, how to pick the right partners and ecosystems - and I will share this insight.

Some of the other speakers include:

Keynote and General Session speakers for the event include:

• Theodore Forbath, Chief Strategist Software Development, Wipro Technologies
• Thomas Lindeman, Group Product Manager Software Licensing & Protection Services, Microsoft
• Grant Bodley, VP, High Tech Sector, SAP
• Reza Sadeghian, VP, Strategic Operations, SAP
• Ross Mayfield, CEO & Founder, Socialtext
• Colleen Smith, VP of Software as a Service Programs, Progress Software
• Anshu Sharma, Senior Manager, Oracle SaaS Program Office
• Vladimir L Pavlov, Chairman and Chief Strategy Officer of the International Software and Productivity Engineering Institute
• Chris Schin, Director of Product Management, Symantec
• John Ciacchella, Principal, Deloitte Consulting LLP

You can register and receive a $400 speaker referral discount at http://www.infowebcom.com/speaker_reg.php

If you want to learn about Oracle's SaaS Program for ISVs and hosters, do visit http://www.oracle.com/technologies/saas/index.html.

SaaS lovers want it both ways - a short rant

A lot of SaaS proponents take great pride in distinguishing the new Software as a Service era from the hosted applications or ASP model - and insist that there is only one right way of doing SaaS. This is in direct contrast to what I am seeing a lot of ISVs do in real life - which is, adopt a range of delivery model options to fit the customers need and economics of their particular business. But, every time an established software company talks about its success in SaaS by pointing to the wide range of options in the SaaS business, the SaaS purists go up in arms. This would be perfectly fine if their definition of SaaS was consistent when it came to only including shared everything multi-tenant services with its much hyped poster child Salesforce.

The problem is that when they tout the growth and size of SaaS and its wide adoption, they refer to billions of dollars in revenue which includes all variations of SaaS.

So here is my point - either go with a "purist" SaaS definition and accept SaaS as a relatively small niche market today with limited adoption or expand your definition to include different SaaS models. Don't mix and match.

Related posts:

• Stuart Launchlan on Oracle & SaaS
  
• Phil Wainewright on Oracle & SaaS (SaaS momentum)
  
• Vinnie Mirchandani on Charles Phillips and SAP
  
• Dennis Howlett on SaaS momentum

Update:

Mukund makes an excellent point in the comments that multi-tenant model of SaaS delivery is a preferred architecture - and I agree that it is, for many applications. I don't argue in my rant that multi-tenancy is unimportant or irrelevant- in fact, quite the contrary, I am of the opinion that it is the most suitable model for many ISVs and has several architectural and business beneefits. My argument is with the attempt to restrict the definition of SaaS to only one model and yet continue to conveniently include other models when it helps SaaS puritanism proponents make their point.

Update 2:

The post has elicited a series of responses. Phil Wainewright asks "So who exactly is trying to have it both ways?" in his post on ZDNet and argues against my viewpoint - even though I think that he and I agree on a lot of things as I mention in my comment on his blog including the importance of multi-tenancy. Bob Warfield doesn't take sides but points to what he considers the more important issue of economics (than architecture) . Sinclair Schuller follows up with his post asking Are there REALLY multiple strategies for SaaS ISVs?

This is turning out to be pretty interesting conversation. What do you think about the so called purist vs. realist SaaS debate? Do you think that there is only one true blue SaaS architecture that qualifes as SaaS?

Charles Phillips discusses Oracle SaaS Leadership

Charles Phillips recently emphasized Oracle's SaaS leadership in an interview to Datamonitor:

Always on the look out for growth, Oracle believes the SaaS movement will provide it with two revenue opportunities, one from additional database sales and the other from direct income from services.

As far as databases are concerned, president Charles Phillips believes the very nature of SaaS will drive demand for on-premise databases. "SaaS is very database intensive. Normally people do not want all their data resident on an on-demand product. So if Salesforce.com is hosting data for a large company, they are forcing them to create a replicated database behind the firewall, which means that companies are creating more and more databases," he said.

Charles also discusses the fact that Oracle was early in adopting the On-Demand model and has been doing it successfully for over 9 years. In another interview with AccountingWeb, Charles Phillips brings out Oracle's successes in SaaS and in competing with SAP.

Dennis Howlett of AccmanPro called the claims outrageous leading to a debate on Enterprise Irregulars - and Josh Greenbaum who writes a ZDNet blog, in a rare feat, wrote the following response arguing for the facts in favor of Oracle and I quote him (with permission):

Rising to the defense of Charles in a disagreement with Dennis almost sounds crazy, but here goes:

The only really outrageous statement comes in the first graf:
We're not trying to preserve something from the 1970s like SAP is. As a company, we were in infrastructure first, then we moved into applications.

Correction: SAP is not preserving anything from the 70s (except some of its founders, who ARE relatively well-preserved. And Oracle was NOT an infrastructure company first: they started in database, moved to applications (in 89) and then went into infrastructure.

But the rest of it is actually not too outrageous.

Statement: We could not be reporting those numbers without competing among SAP customers. A significant proportion of our new customers are also SAP customers who we can now add value to.
Fact check. They are competing among SAP customers: The overlap has always been huge, (DBMS), and now it's bigger with PSFT, SEBL and Hyperion on board. If he didn't have SAP customers to sell (DBMS and middleware and appliactions) to he'd be out of business.

Statement: I know for a fact that there are far more SAP customers calling me now than there were three or four years ago.
Fact check: see above. He's just bought into more overlap.

Statement: We have entire sales territories that are now just based on SAP accounts, our salespeople can make a living out of just selling to SAP accounts.
Fact check: Yup on that one too. Guess what, SAP has territories that are all ORCL too.

Statement: SAP doesn't want that co-existence so they haven't made it easy for their customers.
Fact check: I was only one of several analysts who discussed this issue with Henning earlier in the year. Field sales hasn't been open to ceding CRM to SEBL and completing the rest of the sale with SAP, so they've been losing accounts that want SEBL and care less about the rest of the system.

Statement: SaaS is very database intensive," acknowledges Phillips. "Normally people don't want all their data resident on an on-demand product. So if Salesforce.com is hosting data for a large company, they are forcing them to create a replicated database behind the firewall, which means that companies are creating more and more databases."
Fact check: The first part of this doesn't wash with me, though I would love to hear Phil's comments when he gets back. The idea that SaaS generates net greater DBMS sales seems bogus. But the very last statement is true regardless: companies are creating more and more databases.

Statement: Oralce is going to be the on-demand leader, seemingly using the terms on-demand and SaaS interchangeably.
Fact check: until very recently, ORCL and SFDC were the only two companies that stuck with the on-demand market, and, while the numbers were small, ORCL was a leader in number of customers doing OD. If you define leadership by number of users, no way. If you define leadership by vision, ORCL was definitely a leader in OD. As for mixing OD and SaaS, at the risk of annoying the purists, they are interchangeable, except by lexicographers and semanticists intent on splitting hairs.

Statement: We continue to make progress (on fusion).
Fact check: True. Can't say more, or the NDA police will draw and quarter me.

Oracle is not only a leading SaaS provider but is also the database and middleware platform of choice for well known leading SaaS ISVs and several others that are not so well known.

(Note: Cross posted on http://blogs.oracle.com/zen also.)

Security continues to be a key challenge for SaaS vendors

Jon Oltsik of CNet Blogs had an insightful post titled - Software as a Service needs a strong foundation of security. And I could not agree more. This is a key theme that is brought up in our discussions with ISVs and end customers.

Jon mentions three key points and I quote:

1. "SaaS vendors must become security beacons to succeed. These demands go beyond information and physical security; service providers will have to be familiar with their customers' business processes in order to understand where their services are most vulnerable. In my mind, "business process security" is the new frontier and SaaS vendors must blaze the trail.
2. Data privacy is tantamount. Strong authentication, proactive auditing, and encryption must be a part of the SaaS design in order to restrict access to private and confidential data. The SaaS providers must assume liability for the cost and damages associated with any data breaches.
3. SaaS vendors find security partners from the get-go. Managed service providers like IBM, VeriSign, and Symantec have a huge opportunity to be the Good Housekeeping seal of approval on SaaS offerings. As part of these big deals, SaaS vendors must transfer risk to security experts, use these partnerships for marketing advantage, and maintain their focus on solving business problems."

In addition, I would add the following:

• It is not sufficient for the SaaS vendor to take a 'trust me' approach - they must be able to show the mechanisms and technologies they have put in place to ensure data security and privacy. For example, with Oracle Data Vault a SaaS vendor can ensure that the DBA will not be able to see the data and only manage and administer the database. This becomes even more important when the SaaS vendor relies on a 3rd-party managed hosting provider. The more the number of people one must trust, the less trustworthy the system is likely to be without using specific tools or methodologies.
• User de-provisioning is very important. The truth is that the majority of data breaches take place by insiders or ex-employees. It is therefore important that the SaaS vendor be able to quickly disable (or de-provision) the user accounts when an employee leaves the company. This can be done in at least two different ways. First, the SaaS vendor can choose to use federation and rely on the customer to authenticate the user. Since each user is now authenticated for only a single session and the SaaS vendor does not have to explicitly disable access. The other approach is to put in place an Identity Provisioning system (such as Oracle Identity Manager) that allows SPML based provisioning of remote systems.
• Think about auditing requirements upfront: It is important to be able to document the processes used for security and identity management for various compliance requirements. A system that allows you to explicitly model the business processes associated with security tasks such as user provisioning can help meet these requirements. Implicit processes cannot be seen or audited. BPEL is emerging as a standard language for modeling business processes.

It can cost a lot of time and money to bolt on security as an after thought to your SaaS solution. Customers have repeatedly mentioned security as one of the key hurdles to adoption of SaaS. A SaaS platform that is designed for secure computing, such as Oracle, can help save on costs and provide your customers with the confidence that Jon talks about.

What are the security challenges you face as an ISV? If you are a user of SaaS, what concerns do you have?

(This blog post is cross posted from The SaaS Plug-In Report on Oracle Blogs).

IBM invests in Kingdee of China (while everyone waits for Google to buy Salesforce)

While a lot of buzz has been generated about some Google-Salesforce announcement including speculations on Google acquiring Salesforce (and dismissals), the important news of the day seems to have been missed - IBM made a significant investment and acquired equity in Kingdee one of the local ERP vendors in China with global ambitions. Under the terms of the agreement, IBM will end up with 3.85% of Kingdee - an equal investment being made by Lehman Brothers.

I have previously written on some of the regional software vendors such as Ufida, Kingdee, Tally etc. and the fact that as India and China grow rapidly, the software consumption in those economies is expected to jump significantly. Gartner has made predictions on rise of atleast one disruptor in ERP from China/India.

So while Google-Salesforce may make for a great copy for industry press, they are missing out on something that may just be the beginning of an emerging trend- software leaders fighting for the future leadership in China/India (BRIC).

Let the real China games begin... ahead of the Olympics next year.

(Please read the disclaimer at the bottom of this page.)

New Meme: Software is Free, Service is Not (Book Review)

I recently received a complementary copy of the book, "Software is Free, Service is Not: The Dawn of Service Networks" written by ex-Oracle executives and co-founders of OpenWater - Mike Rocha and Tim Chou. The authors make the argument that most proprietary software used by businesses today is already paid for, and that the open source movement reflects the reality that software is (relatively) free. So, most of the value added by software vendors is in providing service for the software. However, the service business is treated as a poorly run cash cow rather than the core of the business as it should be. The authors drive a lot of their arguments from their experience at Oracle where Tim claims growing the advanced services business by a whopping 61% from 2000 to 2004 while other lines of business shrunk or stayed flat.

The business problem that Tim and Mike set out to solve is as follows: Businesses are spending $2.7 Trillion (yes with a t) per year to support software. And the authors have figured out a way to substantially lower these costs while dramatically improving the service.

The core thesis of the book is that support is run poorly today due to fragmentation of information and people. They envision a world where software support would be as easy to use as consumer oriented services like Google, Ebay and Amazon. The technological breakthrough that they plan to leverage for defragmenting people and information to provide this new level of service is semantic web. The contention is that although semantic web has had limited success in the broader internet, by confining the problem space to software support it would be possible to tag (add metadata to) the existing information currently trapped inside vendor portals, community forums, etc. and then be able to run sophisticated queries that return meaningful results.

The other aspect of the new service networks would be to leverage social computing - think MySpace meets Dell dude (support guy). In addition to tagging the knowledge base, the service network would create comprehensive profile of individuals in the service network. The idea being that you shouldn't have to go through layers of people to get to that one person that already knows the answer to the question.

In all, the book makes for a very compelling read and I recommend you obtain a (complementary) copy by going to their site. The vision of the future they paint seems highly desirable and plausible in not so distant future. The question is how soon can we get there - the challenges are rather significant and I am not sure (semantic) technology can overcome some of these barriers. Here is a few:

• Lack of incentives for some players: It is not clear what incentive software vendors have in plugging into this new service network. The valuable service that ISVs provide and revenues generated from this source would incent them to improve their service but not necessarily plug into an uber network.
• Dependency on semantic tagging: I am always skeptical of businesses that require the world out there to be tagged. I do agree with them that this problem is somewhat simplified from the technology perspective due to domain-specific nature. I personally think that they could also leverage a service like the Amazon Mechanical Turk to get human beings to tag what machines cannot.
• Competing with free: From where I sit, there are two kinds of customers - one that want a single throat to choke, global, around the clock support and are willing to pay for it; and the other that wants free software, is willing to spend time putting it all together and relies on free support (in terms of dollars spent directly) by accessing help forums and search engines. The service network envisioned by Mike Rocha and Tim Chou may end up competing with free rather than enterprise support by established vendors. Yes, that market is probably big (even bigger) but it is hard to compete with free.

All in all- the book makes for a fascinating read and even if you don't believe in a new era of service networks, the facts and anecdotes shared by the authors and their insight into the software and support businesses is worth a read.

The authors have formed a startup(OpenWater) to bring their vision to reality. The fact that they are willing to put their money (or convince someone else of putting their money) where the mouth is makes this an even more interesting book to read. Its not just a theory - we will find out over next few years how right or wrong they are.

What do you think about the upcoming revolution in support? Is it plain old outsourcing with a web2.0 pitch? Is semantic web for real?

(See disclaimer at the bottom of the page).

Predicting the end of Salesforce?

Fellow Irregular, Joshua Greenbaum has posted this excellent note entitled Siebel 2.0: The end of Salesforce, and it follows up on an earlier post by Phil Wainewright How is AppExchange really doing? I recommend you to check both of these out.

Here is a quote from Josh:

The parallels (with Siebel), unfortunately, regarding Marc’s claims for App Exchange, his one strategic ticket out of his current mess, are a little too similar. Marc has been making lots of exaggerated claims about App Exchange, the value of the VC money that has been thrown into App Exchange, and other issues regarding how well his company is really doing. I’ve written some about this, others like Phil Wainewright have weighed in, and a few more in the blogosphere (Sinclair Schuller in particular) have also noted the credibility gap that Marc is building for himself.

In my not so humble (and probably biased) opinion, the following are the key flaws of Salesforce's current strategy:

• The move from SMB to Enterprise helps them target some big fish but in the medium to long run they end up competing with Enterprise software experts.
• Along the same lines, the move to Enterprise results in bringing on-board the DNA of large enterprise software companies and thereby destroying the innovator's edge.
• AppExchange technology is new, untested and despite the best marketing it takes many years, sometimes decades to build out a real platform.
  
• No VC I know would bet their company's future on another company's future success as a platform. The law of conditional probability and risk management principles makes it an unattractive move. This is not to dispute that some companies are glad to have free 'ads' posted on Salesforce's website.
  

None of this is to say that some niche players are not building customized screens and integrations to Salesforce but that is true for all applications that are somewhat successful, be they on-demand or otherwise. By way of example, check out the solutions page for most AppExchange vendors like Business Objects and you will notice that they have integration solutions for SAP, Oracle, Siebel, PeopleSoft in addition to Salesforce.

(See disclaimer at the bottom of the page.)

Sun winner as IDC validates Jonathan Schwarz's Bus Metaphor

As I wrote in a recent post The comeback story of Sun, Sun seems to have made some good solid bets in hardware and they seem to be paying off. Jonathan Schwarz recently wrote a post on the move towards bigger servers entitled The Glamor in Mass Transit. The latest IDC report on servers confirms his core arguments. Here are some excerpts from the IDC release:

According to IDC's updated forecast, multicore and virtualization will cost the x86 market more than 4.5 million shipments and $2.4 billion in customer spending between 2006-2010. Overall, x86 shipments that were once projected to increase 61% by 2010 are now facing just 39% growth during that same period.

Other highlights from this study include;

• Server revenue growth rates will be lower in comparison, but are reduced to a lesser extent than shipment growth rates as customers deploy more richly configured systems in terms of memory, disk, and I/O to balance the increase in processing and server utilization.

• Despite the decline in the number of physical shipments, over the forecast period, growth in the number of effective processors continues to climb at a 25% annual rate due to multi-core technology advances.

• The number of virtual servers rises dramatically at a CAGR of 40.6% during 2005-2010 so that by the end of the forecast period, more than 1.7 million physical servers will be shipped for virtualization activities resulting in 7.9 million logical servers. This represents 14.6% of all physical servers in 2010 compared to just 4.5% of server shipments in 2005.

The big winners of this trend would be companies like Sun and VMWare. Software vendors for database and storage servers could also benefit as the number of effective processors continues to grow at 25%. This is one reason per core pricing may be here to stay.

Launching The SaaS Plugin Report: Are you plugged into the grid yet?

I have started a new blog hosted on Oracle Blog network, it is called The SaaS Plugin Report and will focus exclusively on Software-as-a-Service. I recently switched roles at Oracle from Identity Management to work on a new initiative focused on Software as a Service primarily working with on-demand ISVs and hosting companies.

Here is the first blog post..

Are you plugged into the grid yet?

SaaS is the modern day grid. Decades ago businesses, small and large, started discarding their electric generators and plugged into the electric grid. Businesses that were rich enough or had higher requirements (SLAs) relied on captive on-premise or near-premise generation. This pattern repeats for other infrastructure that today is part of various grids- the railway network, the roads, etc. In similar vein, the computing is going through a generational shift from on-premise services to services grid or SaaS.

In this blog, we will discuss why is SaaS important? How is it changing our daily lives and impacting the decisions of CIOs? What can you as a developer for an ISV, a consultant for an SI or an end-user take advantage of this shift?

As with all generational shifts, this is not going to happen overnight. Every now and then you will notice glimpses of how the world around you is changing- your E-mail moves to Gmail from your local POP server, your CRM moves to a hosted model, your day to day work starts involving logging into sites- and one day a majority of your computing needs are served by SaaS.

Oracle is intimately involved in this transition from several vantage points. Oracle Siebel CRM On-Demand is one of the leaders in CRM SaaS, Oracle On-Demand provides hosting services for technology and applications, and leading ISVs run their SaaS applications on Oracle Database and Middleware.

I hope to have an active engagement with our readers on these topics. Feel free to leave your comments and email me.

Do you think the move to SaaS is real? Are you asking your ISVs about SaaS option? What do you think?

Click here to leave comments.

Please note that all opinions expressed on this and The SaaS Plugin Report are mine and do not in any way reflect opinions of my employer.

The comeback story of Sun

Many in the tech world including myself had written Sun off as a real player. They were a dieing company selling ever decreasing number of expensive boxes to people that still had to because they were locked in. Java, a distribution success, never contributed financially to Sun's bottom line in any meaningful way.

Over the last 2 years, things seem to have changed slowly and now we may be getting close to the Tipping Point- as Jonathan Schwartz points out on his blog. The increasing stock price, still low from 5 years ago has shown some strength lately. But it is the re-appearance of Sun into the dialog on future of computing especially for the customers with large infrastructure that has me most optimistic. In addition, the company has embraced open source, perhaps out of necessity, but has finally open sourced key components such as Solaris and Java. The hardware business is still the meat and potatoes of Sun, and it is not yet clear if their software strategy will work.

On the plus side, Jonathan Schwarz's blog is probably the best CEO blog in town toay. He is not just marketing the latest widget (Blackbox!) but actually talks about substantiative issues facing the company and its customers.

I think we may be seeing another Apple like comeback story here. The focus on identifying big trends (hosted computing, power issues) and focusing the vast resources of a tech giant will result in some very interesting products over the next many quarters and years. And the fact that Sun already has revenue exceeding $13 billion would make it a very compelling turnaround when it tips over. The fact that KKR has invested $700 million is perhaps an indication that the good times are close. The large cash balance and the additional cash raised certainly makes one think that Jonathan may be looking to make some big acquistion moves. This is surely an interesting time to follow Sun- a company I had given up as dead many years ago.

Welcome back, Sun.

What do you think about Sun's comeback? Is it real? Do you think they will buy other companies?

Organic growth story is now just a story

Organic growth works for human beings and cows. Not so well for large enterprise software companies. After beating up on its competitor for pursuing an acquisition-led growth strategy, SAP failed to meet its numbers this quarter.

Message to Waldorf, Germany- let's leave organic to California's Yoga-loving Hybrid-driving meditation-praciticing vegans. For growth, you need to eat some beef.

On a more serious note, the two areas where SAP showed weakness may also be leading indicators:

North America: Is it possible that SAP is getting beat by its arch-rival Oracle?

Asia (outside Japan): SAP had made claims of making great inroads and betting on the emerging market economies. Here, the issue could be either local software companies or custom built software. In either case, it does not portend well for the SAP strategy.

(Another Infosys, India building: by reidmix)

It is my (very personal) opinion that the large enterprise vendors may have to look into acquiring companies that are focused on mid-market and/or emerging economies. It is nigh impossible to take your first-world overly complex software requiring massive infrastructure and compete with local vendors selling low-priced limited functionality software. In fact, some analysts have predicted that at least one large software vendor will emerge from India/China over the next few years on the global scene. Kingdee is one such aspirant that InfoWorld talks about here in "China's Kingdee wants to take on Oracle/SAP".

Jeff Nolan wrote an excellent piece "SAP, Oracle under the SOA, On-Demand gun" highlighting the issues facing enterprise software leaders. Vinnie Mirchandani (or Microchandani, his tech name) wrote on similar theme in "Oracle and the 29.2 factor". With the coming IPO of NetSuite, the focus will once again be on mid-market and SaaS (Software-as-a-Service).

(Disclaimer: As is the case with all my posts, this reflects my personal views and does not in any way reflect the opinions of my employer or anyone else. See profile for detailed disclaimer.)

Dear Workday, Citibank called!

Dear Workday, Citibank called. They want their logo back.





Dave Duffield's team launches Workday on Monday. Dave walked away with billions of dollars when Oracle acquired PeopleSoft. Since then, he and his team have been busy creating the 'next generation' of applications starting with HR (or HCM) using the On-demand model (Software-as-a-Service). Much will be written in coming days about Workday, so I will not review details of Workday and in stead point out the obvious about SaaS!

1. SaaS is here to stay: If you have been living under a rock, here is the news. SaaS will account for 25% of all new software revenue by 2011, according to Gartner.
2. Just do it: If you are looking to build a new software company, you don't have to solve a new business problem. Just re-implement any software (CRM, HR, Financials) using SOA to deliver it on-demand.
   
3. Build on SaaS: A lot of opportunities exist to build services that help customers use these SaaS applications- how do I integrate Salesforce with Workday? how do I get Oracle|Siebel On-demand contact data work with my Skype or Jajah applications? how do I consolidate and report across multiple applications without writing SQL queries because I can't? how do I provision and de-provision users?
   

Irrespective of individual successes or failures of Salesforce, Siebel On-Demand, Workday - 5 years from now, the game would have changed. This is no smaller a shift then that from Mainframes to Client-Server.

Looking for Red Hat?

A picture is worth a thousand words. Money can't buy you love but it sure can buy you some clicks.

You may want to read my earlier post on Open source business dynamics where I suggest that there is little money to be made as an open source vendor.

Identity Management Maturity Model

The Sarbanes-Oxley Compliance Journal published my piece on a maturity mdoel for identity management. You can read the full article here.

Achieving Compliance Through Identity Maturity
2006-10-27 12:00:00.0 CDT

Where do you want to be and how do you get there?

By Anshu Sharma

Security and identity management have become an important issue on the radar of CFO’s and CIO’s as wave after wave of regulations in the areas of financial controls, privacy protection, and identity theft prevention are adopted in various countries. US companies will spend upwards of $15 billion on technology products and professional services this year alone in order to adhere to new compliance regulations, according to AMR Research, Boston.

The initial response by organizations to these regulations has been to adopt a piecemeal approach but a duct-tape approach to fixing every possible identity and security loophole results in high expenditure without a sense of how close the business is getting to its end goal. The end goal is to be a secure, well-managed organization with optimized processes for employee on-boarding and off-boarding, and efficient controls that prevent fraud and detect problems in a timely manner. The path to this goal traverses through various levels of maturity.

...read full article

Oracle OpenWorld by kumasawa (Creative Commons license)

Nishan Kaushik who is an identity management guru and architect for the Oracle Identity Management products has written some excellent pieces on provisioning and role management at Talking Identity Blog.

Oracle OpenWorld is here to dominate San Francisco

Did I say dominate San Francisco? I meant Software!


Yes, Oracle is taking over San Francisco for the next week with its annual gala that has grown to over 40,000 attendees this year. I will be attending as a member of the Oracle Identity Management team- we have a signficant presence with demo booths and over 10 sessions. I will be presenting on "Managing Security in the World of Web2.0 and SOA". The aim of my presentation is to bring out the key common themes between Web2.0 and SOA, and at then address some of the common security concerns around web services. Another key enabling technology for Web2.0 and SOA is Federation that allows businesses and consumers to collaborate across organizational and network boundaries. I will also touch upon what is Enterprise2.0 and how do you apply mashups to enterprise services.

The event this year will include a much larger audience interested in applications with Siebel (Oracle|Siebel) and Peoplesoft (Oracle|Peoplesoft) having joined the ranks over the last 2 years. Fusion Middleware and Fusion Applications with emphasis on standards-based open architecture of SOA will be one of the key focus areas.

And yes, Sir Elton John will be performing. This should be fun. If you are attending, you should visit our Identity Management booth and say hello. And if you are not, visit the website to read material and watch the webcasts. And yes, Larry Ellison will be giving a keynote in addition to technology development leaders Chuck Rozwat and Thomas Kurian (his debut keynote at OpenWorld), and applications head John Wookey.

CNET's News.com has some nice pictures.

Ever heard of UFIDA, KingDee, Tally?

Well, you may never have heard of these enterprise software vendors but they are the giants from China and India. KingDee and UFIDA are #1 and #3 vendors in China and Tally is the top local vendor in India. Gartner recently predicted that a large vendor will emerge from China and India over the next 5 years. These 3 could well be the favorites for that spot. Tally is the QuickBooks of India with ambitions in mid-market ERP.

These homegrown wonders have the advantage of deep knowledge of the local markets, ability to develop software that fits the unique infrastructure of these countries. For example, connectivity to the Internet is far from ubiquitous in India. These limitations box these vendors allowing them to innovate in a space that is unique and disconnected from the global enterprise software world. And believe it or not, this is actually an advantage (see The Innovation Sandbox by C.K. Prahlad) as it prevents easy co-option by global vendors. We have already seen this play out in the consumer internet world with the success of Baidu.

Race to the top?
(by Bruno Girin)

So while we all look to climb the ladder of features and architecture and race to take advantage of Web2.0 and SOA in the enterprise software universe, we are also increasingly distancing ourselves from a market that cares about simple software that meets the most basic needs, can run in a sometimes connected world and on previous generation computers. And this market at the bottom of the pyramid is probably many times larger than the top we are all running towards. What do you think?

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