Wednesday, October 23, 2013

Ein Fuß auf dem Friedhof?

That is, of course, German for "one foot in the Graveyard"... much confusion and conflicting information about what SAP is and is not doing with its much-discussed BusinessByDesign offering.

Are they pulling the plug on new development?  Maybe.  But as Cindy Jutras noted in a post last month, rumors have been swirling about the product for many months.  But things have picked up - and it kind of feels like the moment where the President says he's got total confidence in the Secretary of Screwups, right before he throws him/her under the bus.

Has ByDesign been successful?  Well, not by most peoples' definition of success.  Ben Kepes over at Forbes faults the SAP culture, which strikes me as fair.  This is, after all, the company who gave us a product called All-in-One.

Typical of the coverage are these posts by AllThingsD and Accounting Technology, which cite original reporting by the German business mag WirtschaftsWoche.  Among the widely-repeated and uncontested factoids therein:

  • 7 years of development work, at a cost of 3 billion Euros (that's $4.1 billion)
  • a grand total of 785 customers to date
  • annual revenue of 23 million Euros ($31.6 million)

So that works out to $5,257,834.39 cost per customer.  Far from groovin'.

Tuesday, October 08, 2013

Qureshi out at Epicor, Graveyard veteran takes over

After claiming to have shepherded the combined Activant-Epicor over the $1 billion yard line (has anyone seen this verified anywhere?), CEO Pervez Qureshi is "stepping down to pursue new opportunities," according to the company.  Here's the dynamic young upstart who's going to provide transformational leadership for the next decade at Epicor:

Just kidding!  That's Joseph L. Cowan, who, as the Epicor PR notes, most recently "served as President and CEO of Online Resources, a leading provider of online banking and full-service payment solutions, until its acquisition by ACI Worldwide in March 2013. Previously, he served as CEO of Interwoven, Inc., a global leader in content management software, until its acquisition by Autonomy Corporation plc in 2009."

Here are some other places where he's "served as CEO...until its acquisition" by somebody:
  • Manugistics
  • EXE Technologies
  • Invensys
  • Wonderware
Anyone want to guess what his marching orders from his private equity overlords are?  I'm guessing the following "invite" went out in the past 24 hours:

Join my network on LinkedIn

To: Charles Phillips, CEO Infor
Date: October 8, 2013
I'd like to add you to my professional network.

- Joseph L. Cowan

Thursday, May 02, 2013

Deconstructing Sage

Or is it decomposing?

The latest news in the, ahem, turnover in the Sage corner of the ERP Graveyard relates to the business unit formerly known as Sage Construction (based in the UK), now trading as something called "Eque2."  Does this involve horses in some fashion?  Are they building glue factories?

Apparently, management - backed by a UK-based private equity group called ISIS Equity Partners - bought out the business from their formerly acquisitive overlords, including all ongoing product development for Sage ERP EVision, Sage ERP Intuita, Sage Estimating, Sage Housebuilding, Sage 50 Construction and Sage 200 Construction.

Freed of their corporate shackles, the new owners wasted no time before declaring their dual citizenship:  "As well as being a Sage Business Partner, Eque2 will continue to offer solutions with Microsoft at their core."

Friday, April 26, 2013

Now those guys, they know how to squeeze customers!

Some delightfully straight talk from Dell's software chief, John Swainson, in an interview with IDG.   He's talking about their challenges rationalizing all the (largely IT admin) products they've acquired, notably through their buyout of Quest Software.  That specific field is a little out of our wheelhouse here, but the general observations he makes are dead-on for ERP Graveyard readers:

IDG News Service: Having that many products is a blessing and a curse. Have you done much paring back? You have a few different data protection products, a few virtualization platforms.
Swainson: We had four data protection products, several virtualization, a bunch of performance management. The first time we did the count we decided we had something like 200 products in Quest alone, and after we went through in gruesome detail and eliminated the obvious overlaps. We've got about 40 or 50 products.

IDG News Service: That's a big paring back. 
Swainson: A lot of this was features that were masquerading as products. So things that should never have been products, like utilities, we'd merge back into the performance management product and have a suite instead of trying to sell it separately. Some of it was straight overlap. In storage management, we really did have four data protection products, so now we're going through the technical process of taking the best of each product and putting it together, on a common framework. That's the long hard way to do it but sometimes it's worth it because there's a $200 million revenue stream and it's worth protecting.

IDG News Service: Which one wins, the one with the most customers?
Swainson: The one that's the best architected and the most flexible and modern and that has the most features usually wins, because it's the one you can take back to that customer set and make it the upgrade. And you can usually modify it enough so that the upgrade is seamless.

IDG News Service: So then you end-of-life those products?
Swainson: Only maybe five of them have been literally end-of-lifed. You converge them, you sell them as packages. They're not discrete products any more, that's the big difference. The reason you don't want to [end of life them] is because in the software industry, all the profitability comes from the tail. You're better off putting it on maintenance. Even though it'll attrition away over time, it'll still be profitable. Exhibit A on this are people like Oracle.

I do think he meant it as a compliment :)  Also of note, he mentioned earlier in the article that Dell hadn't quite figured out what to do in the area of hosted business applications:  "The challenge is that it's a different customer, it's a different selling cycle, it's quite heavily fragmented, and the only real way to make money out of it I think is to own your own IP [intellectual property], and the IP is very expensive."

He's probably right about that last point.  Remember the Application Service Providers of the 90's?

So if you're a company looking for a next-generation business solution, but want to retain control over your software investment, what are your options?  SaaS and The Cloud are only partial solutions; without the ability to pack up and move your private cloud anywhere else you want (try doing that with NetSuite), you've just traded one form of vendor lock-in for another.

Here's a hint:  Look into open source ERP.  Not only do you have access to the full source code, you can host your application wherever you want - and have full portability, from one cloud to another, or even back to onsite if that's what you decide.

Thursday, April 04, 2013

Has Oracle lost its Graveyard magic?

Whew.  Brad Peters, a former Siebel exec, lays into the much-discussed Oracle quarterly miss:

Oracle thought it could have it both ways – that is, capture this new SaaS (software as a service) world without having to abandon its aging and hugely successful business of selling expensive servers. And at the heart of this strategy was Oracle’s long-standing practice of upgrading its customer offerings by buying up fast-growing small enterprise software companies and adding their high-profile products to Oracle’s catalog.
This technique has worked brilliantly for many years, despite the fact that Oracle, once it bought these hot companies, typically lost all of their talent and rarely integrated or upgraded their products. The key was taking these new products and leveraging a sales army to get them into the hands of many more customers. ...
Whatever the cause, the reality as those numbers suggest, is that those recent acquisitions should have resulted in a direct improvement in both Oracle’s revenues and profits. Instead they seemed to have subtracted from them. In essence, 1+1 is supposed to equal 2; right now at Oracle it equals .99. That suggests that Oracle’s legendary genius for absorbing acquisitions is starting to break down, or maybe they need a new playbook for cloud. The company’s traditional infrastructure of sales, marketing and legal may no longer be empowering these new arrivals, but rather acting as antibodies trying to destroy or expel incompatible intruders. That’s a recipe for disaster.
Of course, Brad is now the CEO of ... you guessed it, a cloud company, Birst, which delivers analytics in a SaaS model.  So activate the same filter you use when you see me inveighing against proprietary closed-source software, or Matt Asay making similar points as Brad and finding opportunities for MongoDB ;-)

Regardless of where one sits, though, the magnitude of the Oracle miss is pretty striking.  Is it really as much of a harbinger as Brad and others have written?  Or will Larry take the appropriate people out behind the barn, and fix the problem?  I'm inclined to agree with the general principle that old-school enterprise software vendors are having their business models challenged from multiple fronts.  Oracle, so far, has been among the more successful at holding off the barbarians at the gates.  But maybe the gates of Mordor are more easily breached than we thought...

Dang, there I go mixing sci-fi/fantasy metaphors again.  Are they the Death Star?  Or Mordoracle?

Friday, February 15, 2013

Sage - Carrion Relationship Management

(Carving off Rotten Meat?)

(Couldn't Rationalize Marketing?)

Ah, the fun we can have with the news that Sage Group is selling off certain of its older CRM acquisitions, notably ACT! and SalesLogix (no exclamation point) to a former Sage development partner called Swiftpage.

Swiftpage, which does "white label marketing services," is financing the acquisition with a slug of capital from - you guessed it - a private equity firm, Accel-KKR.

All kidding aside, the press release doesn't say how much capital - but the 451 Group is reporting "250 employees are expected to join Swiftpage."  That's a lotta headcount.  Good on 'em, I guess.

UPDATE: Leonard Klie at Destination CRM puts the pricetag for these two, plus a CRM suite for nonprofits, at $101.2 million.  Four additional "non-core" products are also getting the heave-ho across the pond:  "In Europe, Sage will sell its C&I, ATL, Automotive, and Aytos product lines to Argos Soditic, a private equity firm based in Paris, for roughly $44 million."

The Destination CRM piece also includes quotes from Sage execs about how they're focusing on their core CRM product, just not these CRM products.  Makes you wonder about the long-term viability of the rollup model, doesn't it?  Will Infor, Epicor, or Aptean follow suit?

Thursday, February 14, 2013

Fused to the Graveyard

Antone Gonsalves over at Readwrite has a good writeup of a new Forrester report on Oracle.  Apparently, its acquired customers from JD Edwards, Peoplesoft, Siebel, etc., aren't lining up to spend more money and take more risk on upgrading to the new Fusion Apps:

Forrester's numbers are sobering. The survey of Oracle clients found 65% had no plans to move to Fusion Applications and another 24% were on the fence.

Dang, an 11% success rate.  Well, at least the customers are happy with the value they're getting from their beloved vendor.  Oh, wait:

Making matters worse, Oracle is in danger of losing business from some of its customers. Forrester found 29% of the companies it polled were planning to move to another vendor's SaaS product or packaged application. The main reasons for their unhappiness with Oracle were high licensing costs, high maintenance costs and difficulty in upgrading.

What to do, if you're Oracle?  Keep buying.