December 2006


Today, in Potsdam,  some serious  German Government heavyweights, academics and business types are getting together to talk about the future of IT in Germany.  I’ve written before (It was my very first post)  that the US software industry has benefitted tremendously from state support, and it is about time that the governments in Europe started to invest in the future of IT rather than just  subsidizing cows.

Check out this book Martin Campbell-Kelly, From Airline Reservations to Sonic the Hedgehog: A History of the Software Industry, MIT Press, Cambridge Mass., 2003.   

The likely prime reason for U.S. software supremacy is a paradoxical one –government support for the industry. The paradox arises from the fact that, although the United States is non-interventionist in principle, in practice it promoted the early industry massively by creating a market for computers and software through programs such as the SAGE project, the Department of Defense’s ADP program, and the NASA program, to mention only the largest..”

Anyway, back to Berlin.

Potsdam/Berlin. The German federal government will hold its first national IT Summit on Monday, December 18, 2006 at the Hasso Plattner Institute (HPI) in Potsdam. Under the leadership of Chancellor Angela Merkel (CDU), eight working groups of high-ranking participants will develop suggestions and approaches aimed at improving the quality and international competitiveness of Germany’s information technology (IT) sector. Merkel will also discuss current topics with HPI students and scientists. The IT Systems Engineering Program at the Hasso Plattner Institute, which is the only university-affiliated educational institute in Germany financed entirely by private means, transforms talented young computer science students into IT engineers. The National IT Summit will function as a discussion forum for business, science and politics, and it marks the first time that the current government will hold a summit outside the Chancellor’s office.

The German Chancellor has a podcast message here talking about the plans for the Summit.  She requests that “Made in Germany” also develops into the quality symbol for IT-products.   This will take more than just a summit, but it is good to see the government listening and getting engaged. (BTW The chancellor’s website is pretty good, podcasts and so on…)

It is symbolic that this meeting is taking place in a private university, rather than in some government building, and it is great to see SAP’s founders investing in Germany’s IT future. 

You can listen via livestream this afternoon or get the podcasts on the HPI site. (In German only)   I’ll listen tonight, and I’ll let you know what went on, although government German is a challenge. Actually most government speak is rather opaque.

Sir Humphrey: “Well Minister, if you ask me for a straight answer, then I shall say that, as far as we can see, looking at it by and large, taking one thing with another in terms of the average of departments, then in the final analysis it is probably true to say, that at the end of the day, in general terms, you would probably find that, not to put too fine a point on it, there probably wasn’t very much in it one way or the other. As far as one can see, at this stage.”

 

 

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if I had a euro for every post written about Google’s business model, I would be very rich.  Actually, if I had a euro for everytime Nick Carr writes about Google I’d be well off.  Writing about Google and Wikipedia seem to be occupational hazards of blogging. 

Anyway, his latest post made me jot down something I’d been thinking about for a while.  He talks about Google’s model revolutionising the IT industry.

 

It’s pretty amazing to think about what a company can now get for $10 a year:

A complete, web-based IT infrastructure for its business

A custom corporate portal/intranet for its employees

Corporate e-mail service

Corporate instant messaging

Calendar software and services

Web-site design software

Web-site hosting

And, by incorporating some other free Google services, the company also gets:

Word-processing software

Spreadsheet software

Web-site analytics

All the necessary storage, data backups, security, maintenance, and related services are included in the $10 price.

This is surely enough to strike fear into anyone wanting to “sell” software?

But Google  isn’t free.  The company is on track to do about 10 billion dollars in revenue this year, and someone is paying for it.  I have never written a cheque to Google, yet somehow as one of the 1 billion Internet users,  I’m  paying for the pleasure of using their search tool, although very indirectly. Actually I’m paying whether I use the tools or not.

Google’s money comes almost entirely from advertising. Advertising is paid by those companies selling stuff to you. Google’s fees are now clearly part of the cost of bringing a product or service to the market, and you end up paying for it.

It is a brilliant business model.  The more “free” applications we use, the more exposure the adverts get, and the more Google can charge the buyers of advertising.  The more applications we use, more information Google has to provide even more targeted services, again at a higher price.  

In an earlier post, Nick discusses how Google manage a float.

Better than any other company on earth, Google knows the power of very small amounts of money. Collect enough nickels and dimes and quarters and dollars, and you can make billions. The $100 AdSense hurdle may seem like a little thing, but it’s making Google some serious money. At the very least, I bet it pays for the cafeteria at the ‘Plex.

Google’s model depends on the advertisers continuing to believe that they get value for money. As long as that continues, Google will continue to impress. Funny, I don’t ever remember clicking on an adsense advertisement and then buying something, but someone must be.

At the moment Google is a tax I’m happy to pay.  If we spread Google’s revenue over all the internet users, it works out about 10$ each.

 

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 I took this screen print from the SAP Germany internal portal a couple of years ago. Who says English grammar is easy?

 

I thought this was the Pope’s job. 

Anyway, tonight,  the SAP Arena in Mannheim, normally the home of ice hockey,  will party to the sound of thousands of birkenstocks on the  dance floor.    It is the SAP Christmas party.  Lots of thought and effort goes into this, so praise is due to the organisers. Things kick off with the SAP Chamber Orchestra (we also have a full Symphony Orchestra and a Sinfonietta)  and then various bands will rock the night away.  It will be great to catch up with  SAP mates from different departments. 

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Yesterday I mentioned YouTube as a marketing channel, and the day before I wrote about simplicity.  Someone in the press release department is reading my mind.  This press release arrived in my inbox  this evening. I quote….

The second annual Developer Challenge brought together a select group of SAP developers from around the world to collaborate and compete to solve a creative problem. The topic of this year’s challenge, “Creating Simplicity: Innovation’s Great Paradox,” challenged contestants to develop new software based on, or extending, an existing SAP product that addresses one of four dimensions of simplicity: user interface, technical design, consumption or overall product experience.

This morning, I saw this post on SDN from SDN’s resident Austrian Comedian, Mario Herger.

The loudest sound you normally hear in the Silicon Valley is the buzz of the thousands of computer processor coolers in the Garage startups or the counting of the billions of venture capital money thrown at soon-to-rule-the-internet companies. But that past weekend, 42 of the meanest SAP developers and 6 UI designers flocked tgether, split into gangs of 8, saddled their horses and spent Saturday and Sunday sweating over their laptops to churn out real cool stuff.
Under the overall theme “Simplicity” – What do you need in the Wild West? A horse, a pistol and a sunset to ride into – top SAP developers and designers made that reality.
Stop, stop, hold your gun: SAP & Simplicity? How does this go together? Tar and feather the impostor telling us that this is possible.
Well, I tell you: It is possible. Over 48 hours without sleep, the 6 gangs just did, what the simplicity bandits at SAP tend to “featurize”. But we had the Simplicity Sheriff Aliza Peleg, in her more mundane life the general manager of SAP Labs, who took care of the simplicity bandits.

This is the slightly odd video introducing the weekend’s Challenge.

The winning entry

The eight members of team “Mission Simplicity” took the top prize with a demo that connected an SAP back-end system running an online store to the Second Life virtual world, which is regularly visited by more than one million users. The Second Life client program provides its users (known as Residents) with tools to view and modify the virtual world and participate in its virtual economy, which concurrently has begun to operate as a “real” market.

Here it is:

The second place went to  Team “S.W.A.T.7.D.”  with an RSS system that aggregates data from SAP and non-SAP systems and the Internet, enabling end users to personalize and “pull” information into customized widgets running on the desktop. 

 This may interest the RSS guru, Charlie Wood.

The third-place demo, presented by team “Abracadabra,” showed a sticky-note application that stores data contextually within SAP and non-SAP screens.

I wonder what the licensing implications  of SAP in Second life  will be? Vinnie will need to set up an Avatar  to beat us up on the Linden Dollar licences.

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SAP has some advertisements out on TV. Dennis mentioned that he had seen some on Sky Sports, and I’ve read that they are on the box in the US too. 

Dennis commented:

But then it has to get through the public perception of SAP as a player for the large company alone. At least that’s what it thinks it has to do. You may have noticed its recent TV advertising, which I first saw on late night Sky Sports.

Personally, I think it’s a waste of money. Do the general public care about SAP? I doubt it very much. The people who really care are other vendors, their distribution channels, industry observers and blog readers. SAP would be far better served connecting to ‘on the ground influencers’ who could tell the SAP story for it.

I have no idea whether it makes sense to have SAP advertisements at half-time in an American Football game  ( John  would tell me that at this point I should say Go Packers!)  But I think Dennis is dead right about the “on the ground influencers”…

According to the SAP  marketing folks the TV ads are working.

“I can tell you that just based on historical data, we are very, very pleased with the results of this campaign so far, not only in terms of the number of folks that are coming to the page in general but also the amount of time they are spending on the landing page and looking at the different customer success stories,”

The feedback from the punters is mixed, some pro some against. “I can think of a 100,000 ways to spend that money far more effectively.” vs “I see this campaign as a complement to their efforts in the IT and Finance trade magazines and shows”

I’ve watched the adverts on internal SAP TV. I think they are  mildly funny.  I especially enjoy this one.

Did I hear that right?

SAP has affordable software business management software for a midsize company like ours?

I’d give you a hug right now

If I wasn’t so afraid of HR

I’ve seen lots of banner ads, and the new SAP UK small and medium sized business  website is really rather neat from an aesthetic point of view. Nice design, videos etc….

I received  an email the other day (first mail in weeks that wasn’t spam)  saying that Vendorprisey  was becoming a bit of a “isn’t SAP great fest”, and that in order to remain “real” I should take off the ABAP coloured spectacles….or some thing to that effect… so herewith a mildish rebuke… 

What I don’t see

I understand that SAP  should run a traditional media campaign at the SME companies in manufacturing.  The CEO’s and CFO’s  of mid-size companies in Greenbay  watch Football. (By the way  Miller runs SAP,  if positive association helps) 

 But SME  doesn’t just mean small manufacturer building high precision compressors, or fast growing niche pharma companies. Yes, that is a market SAP should win and absolutely dominate. The manufacturing  and supply chain demands of those companies should be SAP’s bread and butter.  

Yet there is more to the SME than the global middelstand.  If SAP wants  more cool, hip fast-growing  companies like Timeout and Yak Pak  running SAP and then I think the marketing approach needs to be  fundamentally different.

Jonathan Schwartz at Sun makes the point that today’s start up are tomorrow’s fortune 500 companies. He realises that Sun needs to do a better job at targetting them, so he ran some sessions aimed at startups and small companies.

But there was a troubling, and consistent message. It usually went like this, “wow, this is a great idea… thank you, Sun. But hey, why are you guys here? I thought you built big expensive stuff that ran in banks?”

That is SAP’s challenge too.

When your 2.0 startup goes for a couple of million post seed  funding, I’d like your VC to be saying that  you need to get in place some basic systems so that you manage your cashflow better.  SAP has something we recommend. 

SAP could be the software that runs  the business of 2.0.   But if we are going to get the traction with the next eBay or whatever it is, we need to be talking the right language.  Conversations, not lectures.  

A simple example:  I would have  liked to embed the advert here, in this post,  but I can’t find it anywhere on the SAP site with an  external access. hmm. Where is the YouTube version?  Come to think of it,  If the ads were really good, I know plenty of pro-sap bloggers would have them on a side bar.  

And while we are at it I’d like to see an SAP  channel 9 and channel 10.  We have masses of interesting and passionate people, and great  engaging content  but so much of it remains buried or hidden behind the firewall.  Almost everyday there is a clip  about customer x,y or Z, or cool project abc  on the internal TV,  but this doesn’t seem to seep out beyond the confines of starship enterprisey.   

Zoli picked up on the Microsoft SME marketing campaign, he knocks it for poor execution, but it is at least an innovative approach.

I wonder if we could get a couple of  solution managers at SAP  to what the X-box folks have done. As  Scoble puts it:

Ahh, the future of tech evangelism is Laura Foy doing her shtick for Microsoft’s On10 YouTube style (she works in the evangelism group, same group I worked in).

The enterpriseyest of the them all, IBM, is in second life. And jokes about the mainframe on YouTube. 

Craig and the SDN guys get  community and conversation,  but we need a lot more of that sort of thinking.

Think  Gapingvoid, and re-read the cluetrain.

 I don’t just want to see SAP mentioned more on Techcrunch. I would like TechCrunch runnning  SAP.  And Vinnie,  how about this poster in Frankfurt airport?

 

 

Complexity is uncool.  Everybody keeps telling me that. 

I’ve just read an interesting post over at Parallax.  In this post  Niel discusses how some clever chaps in the consumer space have developed some really simple tools to do neat photo manipulations.

I noted that this was like taking 0.1% of the functionality of Photoshop and making it understandable by 99.9% of the population.

He comments.

When it comes to Web 2.0, providing less features to a broader audience may actually be more valuable

He suggests that the same may  happen in the enterprise space…

I’d just finished that when  serendipity arrived in my inbox.  Mike Tschudy, a colleague of mine based in Palo Alto, forwarded me this post from Joel  Spolsky of  Fog Creek Software.

long time ago, I wrote: “A lot of software developers are seduced by the old ‘80/20’ rule. It seems to make a lot of sense: 80% of the people use 20% of the features. So you convince yourself that you only need to implement 20% of the features, and you can still sell 80% as many copies.

“Unfortunately, it’s never the same 20%. Everybody uses a different set of features. In the last 10 years I have probably heard of dozens of companies who, determined not to learn from each other, tried to release ‘lite’ word processors that only implement 20% of the features. This story is as old as the PC.

He goes on (actually just go and read the whole post..)

Devotees of simplicity will bring up 37signals and the Apple iPod as anecdotal proof that Simple Sells. I would argue that in both these cases, success is a result of a combination of things: building an audience, evangelism, clean and spare design, emotional appeal, aesthetics, fast response time, direct and instant user feedback, program models which correspond to the user model resulting in high usability, and putting the user in control, all of which are features of one sort, in the sense that they are benefits that customers like and pay for, but none of which can really be described as “simplicity.”

If you’re using the term “simplicity” to refer to a product in which the user model corresponds closely to the program model, so the product is easy to use, fine, more power to ya. If you’re using the term “simplicity” to refer to a product with a spare, clean visual appearance, so the term is nothing more than an aesthetic description much in the same way you might describe Ralph Lauren clothes as “Southampton WASP,” fine, more power to ya. Minimalist aesthetics are quite hip these days. But if you think simplicity means “not very many features” or “does one thing and does it well,” then I applaud your integrity but you can’t go that far with a product that deliberately leaves features out. Even the iPod has gratuitous Solitaire game. Even Ta-da List supports RSS.

Somehow I need to reconcile this with the complexity culture discussion.

I guess I’ll use this again…

 Einstein said it best, “Everything should be made as simple as possible, but not simpler.” 

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I’ve written about SAP GRC in the past, but figured it was time for an update.

At the recent analyst meeting, Doug Merritt covered SAP’s GRC story. It is well worth a watch.  He clearly articulates SAP’s strategy and progress to date. Slides here.  Doug looks after GRC, Analytics and Usability, an important job indeed.  He came from PeopleSoft a couple of years ago and has done a great of job of balancing “I’ve got a whole lot of great new ideas” and respecting our weird Walldorfivian ways. 

Business is good, strong Q3, product development on track, strong road map and the go-to-market is going well. Since  launching GRC, the analyst firms have picked up on term, so rather than play catch up I think  there is an element of (and I hate this term), shock, horror, thought leadership.  This GRC  market is growing rapidly, and it not just about SOX.  Risk Management, in the longer term, will be very significant.  (see demo here)

 The SAP site for GRC  took me to a Deloitte podcast with Lee Dittmar from Deloitte ,  Robert Worrall, CIO, Sun Microsystems; Holly Roland, Senior Director, SAP GRC Solutions Marketing, SAP; and Steve Taylor, CEO, Resolver Inc. You need to register on the Business Trends Quarterly site to listen. 

IBM’s purchase of Consul vindicates SAP’s  Virsa purchase, does this mean that the compliance space is consolidating already?

IBM to acquire Consul risk management, Inc. “Auditor-in-a-Box” Software Deal To Help Protect Clients From Internal Users Accessing Unauthorized Information

ARMONK, NY — December 5, 2006: IBM today announced it has entered into an agreement to acquire Consul, a privately-held software company headquartered in Delft, Netherlands with a principal office in Herndon, Virginia. Financial details were not disclosed. The acquisition is subject to regulatory approvals and is anticipated to close in the first quarter of the 2007 calendar year. Upon approval, Consul will become part of IBM’s Tivoli software unit.

I haven’t seen the Consul product.

I’m suprised that Oracle haven’t bought something in this space.  I would have thought a cool compliance product that could connect across dozens of products orginally from different vendors  would be just what the doctor ordered. 

 

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