(Cross-posted @ CloudAve)

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Enterprise Irregulars is sponsored by Salesforce.com and Workday.

I ran across this rather interesting press release this morning from TMCNet saying: “FinancialForce.com Announces Out-of-the-Box SAP Integration for Sharing Financial Data.”

All I have to say in this case is kudos to a. salesforce.com b. and especially FinancialForce.com.

This is not an insignificant integration when it comes to the evolution of salesforce.com in particular.  Thus, a brief look is in order.

What Does It Actually Do?

First, it is one of the first out of the box back office integrations of substance that started with force.com that wasn’t a complete customization – such as the excellent supply chain application/service developed by the folks at Vetrazzo.  This one is a pure and simple integration that comes prebuilt that will can take FinancialForce.com data a.k.a. salesforce.com generated data and put it into SAP Financials.  It actually can take financial data being generated through salesforce.com and pass it from the cloud to SAP Financials which of course is on-premise. Actually solving a problem that has been vexing SAP for quite awhile.  Apparently, there is a German company called SKYVVA which specializes in integrating cloud and on premise applications and in particular salesforce.com and SAP, which certainly made for a fortuitous partnership with FinancialForce.com.

SKYVVA seems to be a pretty interesting company who seem to at least say and possibly do all the right things. They are focused primarily on pre-built integration objects emanating from the cloud and designed to hook into on premise applications. Essentially they are the successors to what were the EAI – enterprise application integration – purveyors of the 90s and early millennium.  They are a company that I’m going to be keeping my eye on.  There are others in the SAP ecosystem who do similar things but they for the most part integrate SAP into the more amorphous “cloud.”  So for example, SAP All-in-One is integrated with cloud services.  But what SKYVVA and FinancialForce.com did is unique – at least as far as I can tell

What Does It Mean?

This is probably a bigger step forward for salesforce.com than it is for SAP though I won’t underestimate the value of it for SAP either…

(Cross-posted @ Social CRM: The Conversation | ZDNet)

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Enterprise Irregulars is sponsored by Salesforce.com and Workday.

Sometimes it seems that we miss the most obvious things with all our buzzword discussions about cloud computing and social media. The essential change enabled by these technology artefacts is quite simply that we can all communicate and collaborate with each other while we’re on the move. So here’s a simple message to understand and act upon: businesses that can harness that essential change will outcompete their rivals because they will be able to react much faster while operating with much lower costs.

This was brought home to me when I had a preview of the new Chatter-enabled FinancialForce.com — an accounting application that incorporates Salesforce.com’s Twitter-like notifications stream — ahead of its announcement last week [disclosure: Salesforce.com is a recent consulting client]. In fact, the vendor has gone further than simply Chatter-enabling its application (easy enough, as it is built on Salesforce’s Force.com platform, which incorporates Chatter). It has released an application called Chatterbox, which can be used to build rules to initiate a Chatter stream around any Salesforce or Force.com object.

But what struck me was how the vendor is using its creation internally. The joint venture company that develops and sells the application is a geographically dispersed team of 55 staff working in six locations spread across the US, UK and Spain — on top of which, many are often homeworking or on the road — and they are all in constant contact with each other. Imagine how overstretched such a small organisation would have felt just a few years ago with such a dispersed operation. See how agile and efficient it can be using today’s Internet-enabled collaboration technologies.

Of course there’s a culture change that organisations have to undergo to make effective use of these tools. My initial reaction to the notion of putting Chatter technology into the accounts office was that you can’t just graft this kind of interactive, collaborative infrastructure onto an organisation in which Clive and Doris in accounts just want to get the books closed and frankly would rather be skinned alive than have to try and exist on the same wavelength as Dave and his circus in sales. To reap the benefit of real-time collaborative technology, an organization needs to have a culture that’s comfortable with open, quickfire dialog.

As a young, Web-savvy technology company, FinancialForce.com is a clear example of such a company…

Read the complete article @ The Connected Web

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Enterprise Irregulars is sponsored by Salesforce.com and Workday.

As many of you probably know, salesforce.com acquired Jigsaw a few days ago for an incredible (incredible for Jigsaw that is) $142,000,000. If you don’t know what Jigsaw is, be patient, grasshopper, all will come clear in a minute or two.  But  it’s an acquisition that seems to have an actual context – not just a way for salesforce.com to spend some of that half billion that they put together earlier this year (or was it late last year?).

Think “partnership with VMWare.”  The combination of the two tells me that salesforce.com is making an effort to become not just a PaaS provider, born a CRM provider, but now a complete cloud offering.  They are seemingly the classic components of the cloud to customers.

1. Platform as a Service – salesforce.com has been in this business for a few years – and has planned this since 2003. Force.com has been the first result of that strategy – with the CRM application that gave them their name the opening gambit.
2. Infrastructure as a Service – I have to think that the partnership with VMWare is what’s going to provide this. Cloud infrastructure is virtual though as Larry Ellison said in his actually very funny monologue at at the Churchill Club last fall, there’s a real server somewhere. I guess we’ll find out something more on this April 27 or 28 when salesforce.com announces “VMforce.” – the name of whatever the partnership of VMWare and salesforce.com is going to deliver.
3. Storage as a Service – This is still a missing component – though I suppose to some degree its the multi tenant architecture of salesforce.com that provides this – e.g data is stored on the salesforce.com side of the house.  However, what about apps that may be cloud based or data that doesn’t reside in a salesforce.com data store?  A document for example? A gazillion lines of code waiting to be compiled?
4. Cloud Services – The acquisition of Jigsaw is a perfect example of salesforce.com being able to provide an important cloud service – data services.
5. Cloud Applications – no dearth of cloud applications that’s for sure – Service Cloud 2, Sales Cloud 2 and everything that partners are providing on the AppExchange are examples of this.

This seems to be an attempt by salesforce.com to do what they’ve been promising since 2003 – to be the “Business Web,” the cute term which seems so archaic and arcane now, for the place where a business would run all of its business needs. Their vision then was to be the underlying foundation that all business applications would run on – courtesy of salesforce.com  They are continuing to do that – right along the path they defined then – in an extraordinarily focused way, given the ups and downs, crazy veering of most of their competitors as they’ve attempted to understand and respond to the new social business world.

This is far more serious than their continued announcements of Sales Cloud 2, Service Cloud 2, Custom Cloud 2 and Chatter as the 1st, 2nd, 3rd, and 4th “clouds” as recently as Dreamforce 2009 when in fact, in the context of a cloud they are 2 applications, a platform and a layer in the platform. None of them were “clouds.”

What about Jigsaw?

First, I want to congratulate Jim Fowler, CEO of Jigsaw. He’s such a good guy, I can’t help but be happy for him personally. Sometimes I forget these aren’t just business moves that affect “a market” but moves that affect the lives of the people involved. This isn’t (and I think shouldn’t be) a dispassionate analysis of things that will drive stock prices and impact abstract institutions or forces.  There are human beings involved in this and when they are good human beings I think we (at least I, since that’s all I can speak for) should acknowledge how its going to affect them – good or bad. In this case, I have to assume good and thus, once again, congratulations to Jim Fowler…

(Cross-posted @ Social CRM: The Conversation | ZDNet)

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Enterprise Irregulars is sponsored by Salesforce.com and Workday.

Listen to my conversation with Adam Gross, senior vice president of marketing and sales at cloud storage and synchronization service Dropbox.

In this podcast, find out how file-sharing between users and across devices is helping people adapt to new Internet-enabled ways of working and learn about the measures organizations should be taking to protect their data from Internet security breaches.

Listen to or download the 9:28 minute podcast below:

Download file

—Transcript—

PW: Well Adam, we’ve probably known each other for about, I don’t know, it must have been almost ten years now. And actually, most of that time you were at Salesforce.com, working on the Force.com platform — compared to which, I guess, Dropbox is a much simpler proposition to get across.

AG: Well, certainly, Dropbox is a more broad-based service, less developer-focused as Force.com was. One of the things that was exciting for me about Dropbox is that it is such a universally applicable service, in that we have customers and users in pretty much every kind of walk of life and type of organization. So it’s very exciting.

And it’s very individual-focused, rather than marketing to businesses as you were doing at Salesforce.

Well, one of the interesting things about Dropbox — and I think a lot of the next generation of Internet services, whether it’s things like Skype or Gmail — is they have this interesting hybrid role. So at Dropbox, we now have over four million users of our service, as of mid-January when we last updated that number. And you can imagine how we have people in schools, we have people — individuals — sharing photos and personal documents. And we also have a lot of users within organizations of all sizes. So again, just like these other kind of, half-consumer, half-business technologies, they have a way of naturally introducing themselves into pretty much all of the different places that you find the Internet.

Well yeah, I think a lot of these services these days, people actually take them on as individuals and they use them for both personal and professional, irrespective. And the boundaries of course between work and home life are getting quite fuzzy these days anyway.

I think it’s certainly right that a lot of the most interesting new technologies I think that we’ve seen in the past couple of years have had that kind of adoption pattern — where they start as individual use, and then they become more broadly adopted in the enterprise, I think. Even most recently, you could take a look at things like the iPhone, which started off as a very consumer-oriented product but obviously was quickly adopted by businesses and now is a mainstream business platform in addition to being a consumer platform.

Right. And of course, you’ve got a lot of people, because they’re moving from working from home, to working on the road, to working in the office — something like Dropbox, which of course is totally cloud based, it’s very useful for that environment, because it does mean that the files are accessible everywhere.

Yeah, it’s interesting. If you think about the core computing model that we have today, it’s really, for better or worse, centered around this piece of plastic and all your stuff living encased in this physical box that either lives under your desk or on your lap. And of course, that stands in contrast to how we really work, which tends to be across lots of different kinds of devices — whether that’s a computer at home, a computer at work, an iPhone, maybe an iPad in the future, a Blackberry device, whatever the case might be.

And equally as important, across different people; whether it’s something like you and I working on this conversation, to a creative services agency working on a marketing campaign, to a finance organization working on a budget. Whatever the case is, the idea of this multi-device, interpersonal computing is much closer to the natural mode of how people work today. And of course, the way that the fundamental desktop paradigm was built — and still largely operates — was before that model existed, when computing was a much more isolated experience.

So I think one of the reasons we’ve seen a lot of good response with Dropbox is because we’re able to transition the older world of traditional desktop computing with this newer, more multi-device, multi-person world that we all experience every day.

Of course, there is this nervousness that people still have of putting their data in the cloud. And I guess, partly because you know where your hard disk is; even if it’s less secure you’re going to notice if someone takes your hard disk, whereas in the cloud, you don’t know if the provider’s going to get hacked or your password has been stolen. And I know that you have quite a few users asking you for an on-premise option. How do you answer those issues from people?

Sure. And, as you mentioned at the beginning of the call, you and I have been in this business for a long time — and understandably security is at the top of the list of questions about, really, all forms of cloud computing, as it should be. And companies should have to demonstrate that they’re following best practices and providing a very secure environment. With Dropbox, we’re able to provide encryption both in-flight and — or, in transit and — at rest in our servers. And obviously, all the other different kinds of security technologies involved.

So we think we can deliver a great security solution for companies of all sizes. And when you look at the entire feature set that Dropbox provides — in terms of the collaboration features; in terms of really being able to synchronize across your devices completely transparently, without having to change how you work; being universally accessible; being able to automatically store changes and revision history on all of your documents. There’s a lot of technology that goes into that, and our physical infrastructure today spans hundreds of servers.

So while I certainly understand the inclination to want an on-premise solution at times, I think people quickly realize that doing so would mean giving up a lot of the functionality and benefits that a service provides. Because in order to think about deploying a solution like Gmail, or Salesforce, or Dropbox on-premise, you’d probably need to employ, at a minimum, tens of people and hundreds of machines, in order to get that into operation with the features that you’ve become accustomed to.

More importantly, frankly, I don’t think that people are really interested in owning and operating their own infrastructure. I think they want to get out of that business. But I think they understandably want assurances that their data is going to be safer in the hands of a third party service than it would be, even operated within their own data centers — which I absolutely think is a value proposition that the cloud computing companies can provide.

Well yes, and actually, I said we feel more comfortable because we know whether our hard disks have been stolen. But actually these days, we’re all connected to the cloud, and you don’t necessarily know whether somebody has been able to use a phishing attack, or a hacking attack to get into your desktop, or your server. And you’re probably not encrypting your files anyway. So the chances are that a document stored on Dropbox is actually safer than a document stored on a typical home or small business server.

It’s an important point and this is something that I would advise IT professionals to take a look at. Cloud services, again, are rightfully being very closely scrutinized. But if you look at the recent attacks, the ones that we’ve learned about, the ones that have potentially national security implementations, the vectors of those attacks tend not to be on the server; they tend to be the client. And again, you talk about things like phishing, or whaling, those other kinds of activities, which are all client-targeted activities as well.

So if I were an IT professional, I’d want to make sure that, working in an enterprise, I’d want to make sure that I’m applying at least equal if not more scrutiny to what’s going on on the desktop as I am to what’s going on in the cloud. And I do fear that there’s been perhaps an unbalanced level of attention placed on the cloud, when again we’ve seen so much activity and vulnerability on the desktop itself. So that’s just a little aside, but I think it’s an interesting trend in what’s happening in computer security in general.

Okay. Adam, one other thing I need to ask you before we close is, I know that at Salesforce you were very much marketing to developers in ISVs and enterprises, and a lot of Dropbox users have been asking for an enterprise version. Is the fact that you’ve been hired at Dropbox perhaps a clue that that’s in the pipeline?

Well, the reality is we already have many, many business and enterprise users using Dropbox today. And we have a lot of really exciting stuff that we’re coming out with that’ll be very consumer focused, and we have a lot of really exciting stuff that we’re coming out with that’ll be business focused and enterprise focused. So we’re going to continue to interface across all aspects of the service.

Read the complete article @ The Connected Web

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Enterprise Irregulars is sponsored by Salesforce.com and Workday.

There are a few questions every CIO, developer and business user will ask about VMForce:

• What is VMforce?
• Why does it matter to me?
• How will it work?
• Will it help me build new kinds of apps that are social and mobile?

• Does your application run inside the web browser?
• Does your application allow you to search by any keyword across all data that you are allowed to see?
• Does your application allow you to write a report that aggregates relevant data? Can you create a dashboard yourself?
• Does your application allow you to see your data when you are on an iPhone or a BlackBerry? Can you even connect to your application?
• Does your application have a feed for relevant changes to data that you care about just like Facebook?

• Can you start building your application right away or do you need to first install and fuse together ten different pieces?
• Are you spending more time writing interesting, new applications or more time simply keeping the old ones running?
• Are your OS upgrades, database upgrades, and hardware upgrades managed for you? Or do you have to spend time doing that?
• Are you able to write the business logic of the application and then offer features like search and reporting? Or do you have to cobble it all together?
• Are you using an infrastructure cloud today? If so, does it offer all the services you need to build your apps and does it automatically manage those for you?
• Can you build apps that are mobile and social? How do you do that?
• Are you having fun?

• Search: Ability to search any and all data in your enterprise apps
• Reporting: Ability to create dashboards and run reports, including the ability to modify these reports
• Mobile: Ability to access business data from mobile devices ranging from BlackBerry phones to iPhones
• Integration: Ability to integrate new applications via standard web services with existing applications
• Business Process Management: Ability to visually define business processes and modify them as business needs evolve
• User and Identity Management: Real-world applications have users! You need the capability to add, remove, and manage not just the users but what data and applications they can have access to
• Application Administration: Usually an afterthought, administration is a critical piece once the application is deployed

• Social Profiles: Who are the users in this application so I can work with them?
• Status Updates: What are these users doing? How can I help them and how can they help me?
• Feeds: Beyond user status updates, how can I find the data that I need? How can this data come to me via Push? How can I be alerted if an expense report is approved or a physician is needed in a different room?
• Content Sharing: How can I upload a presentation or a document and instantly share it in a secure and managed manner with the right set of co-workers?

• Register at www.vmforce.com or contact your Salesforce.com or VMware account executive
• Watch these videos to learn more about Salesforce.com and VMware
• You can get started with a Free Force.com Developer Edition and not only build but deploy and run applications at no cost!
• Encourage your development team to start building applications using the Free Force.com Developer Edition

• Register at www.vmforce.com to get the latest updates including availability and beta signup information
• If you are a Java programmer and already familiar with Spring, you can learn about Force.com atdeveloper.force.com
• You can sign up for the Free Developer Edition, which includes all the great features mentioned earlier and start building Force.com apps and/or learn how to write these apps
• If you are a Force.com developer and want to take advantage of Java, click over towww.springsource.com and learn to build Spring-based Java apps by using the SpringSource Tool Suite and all the innovation in the Spring community

• Steve Herrod (CTO, VMware)
• Rod Johnson (GM, SpringSource Division, VMware)
• Parker Harris (EVP Technology, Salesforce.com).

(Cross-posted @ AnshuBlog)

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Enterprise Irregulars is sponsored by Salesforce.com and Workday.

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Enterprise Irregulars is sponsored by Salesforce.com and Workday.

Salesforce and VMWare have big news today with the pre-announcement of VMForce.  Inevitably it will be less big than the hype that’s sure to come, but that’s no knock on the platform, which looks pretty cool.  Fellow Enterprise Irregular and Salesforce VP Anshu Sharma provides an excellent look at VMForce.

What is VMForce and how is it different from Force.com?

There is a lot to like about Force.com and a fair amount to dislike.  Let’s start with Force.com’s proprietary not-quite-Java language.  Suppose we could dump that language and write vanilla Java?  Much better, and this is exactly what VMForce offers.  Granted, you will need to use the Spring framework with your Java, but that’s not so bad.  According to Larry Dignan and Sam Diaz, Spring is used with over half of all Enterprise Java projects and 95% of all bug fixes to Apache Tomcat.  That’s some street cred for sure.

Okay, that eliminates the negative of the proprietary language, but where are the positives?

Simply put, there is a rich set of generic SaaS capabilities available to your application on this platform.   Think about all the stuff that’s in Salesforce.com’s applications that isn’t specific to the application itself.   These are capabilities any SaaS app would love to have on tap.  They include:

Pretty potent stuff.  The social features, reporting, integration, and business process management are areas that seem to be just beyond the reach of a lot of early SaaS apps.  It requires a lot of effort to implement all that, and most companies just don’t get there for quite a while.  I know these were areas that particularly distinguished my old company Helpstream against its competition.  Being able to have them all in your offering because the platform provides them is worth quite a lot.

There is also a lot of talk about how you don’t have to set up the stack, but I frankly find that a lot less compelling than these powerful “instant features” for your program.  The stack just isn’t that hard to manage any more.  Select the right machine image and spin it up on EC2 and you’re done.

That’s all good to great.  I’m not aware of another Platform that offers all those capabilities, and a lot of the proprietary drawbacks to Force.com have been greatly reduced, although make no mistake, there is still a lot to think about before diving into the platform without reservation.  Force.com has had some adoption problems (I’m sure Salesforce would dispute that), and I have yet to meet a company that wholeheartedly embraced the platform rather than just trying to use it as an entre to the Salesforce ecosystem (aka customers and demand generation).

What are the caveats?

First, this is just an early glimpse.  You can’t actually go try this thing out and pricing isn’t even being talked about until this year.   Historically, pricing has been another Achilles Heel of the Force platform, although I know Anshu disagrees with me on that one.  We got our Helpstream service to the point where it cost 5 cents per seat per year to deliver the service.  Don’t be surprised if VMForce is a LOT more expensive than that.  Second, ISV’s will also have to wonder whether Salesforce is friend or foe.  At Helpstream, we finally got comfortable with the idea that they are a sort of Dr Jekyll and Mr Hyde.  Their product organization viewed us as competitors, and would’ve been only to happy to wipe us off the face of the Earth.  Meanwhile, we were getting around a hundred leads a month from being on the AppExchange and they were good quality leads.  We were able to appear at Dreamforce, and it was a good venue for us.

But VMForce represents a much higher degree of collaboration.  Take advantage of all those juicy services and it will be hard to back out of that platform, Java or no Java.  There just isn’t anything else like it, and that’s the real distinction of VMForce.com.  It’s a brilliant repackaging of some great functionality from the Salesforce apps as a platform.  What remains is to see if Salesforce can behave itself and act like Switzerland the way a platform vendor is supposed to.  And don’t overlook what kinds of data will now be completely beholden to that Swiss Data Bank.  The heavy focus on Social will be very powerful.  In the broadest sense, CRM is a system of record for what your customers and prospects are doing.

On balance, I think Salesforce has tee’d up a potential game changer for the SaaS platform world.  Whether or not ISV’s get comfortable with the Swiss angle, Corporate IT should find a lot to like here from the get-go.  VMForce also seems like a rich opportunity for the Salesforce ecosystem of SI’s and VAR’s to add value too.  Salesforce has listened and learned and seems to be on the right track.  I don’t see it as an Amazon killer, but rather as a welcome new addition to the Clouds that’s going to enable new things we haven’t seen before.

Two thumbs up for now and let’s see how things develop.

(Cross-posted @ SmoothSpan Blog)

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Enterprise Irregulars is sponsored by Salesforce.com and Workday.

I must confess that Salesforce.com has surprised me today with the launch of VMforce.com — and in a good way. For a while, I’ve been thinking that open source platforms were the chink in the armor of proprietary PaaS providers. Little did I imagine that Salesforce.com, creator of the archetypal proprietary cloud platform, would itself seize the initiative and redraw the entire PaaS landscape in the way that it has today. Evidently I’ve underestimated the resourcefulness of the company and the imagination of its VP product management, my good friend and fellow Enterprise Irregular Anshu Sharma, who has been responsible for bringing VMforce.com to fruition. [More disclosure: Salesforce.com is a recent client but we have no projects under way at present].

To really understand the full extent of what Salesforce.com has done today, you have to look at how VMware is positioning the announcement. You won’t get the full story from Salesforce.com because an important element is the defeat of its hitherto wholly proprietary Force.com platform strategy — but what a way to snatch mainstream acceptance from the jaws of distrust! Here’s how VMware’s CTO Steve Herrod explains his company’s ‘open PaaS’ strategy:

“One big challenge with today’s PaaS offerings is that they are all fairly unique and incompatible with one another and with the way that enterprises run their applications. Once you select a PaaS offering, it is easy to become locked into their particular offering, unable to easily move your applications and data to another PaaS provider or back into your own datacenter should the need arise … Our initial open PaaS offerings focus on a particularly important choice… choice as to where you deploy and run your applications.”

Seen in that context, VMforce.com is to SpringSource what Heroku is to Ruby on Rails; a high-quality, multi-tenant, operational instance of an open-source platform. These platforms are popular with developers because of the apparent lack of lock-in. In principle, you always have the option of moving to another provider or to an in-house stack. In practice, it may not be so easy; but the principle is what matters. At a stroke, Salesforce.com has opened up its proprietary platform to the mainstream market of an estimated two million Java developers who put their trust in the open-source Spring framework.

The cleverness doesn’t end there, of course. VMforce.com isn’t just an undifferentiated instance of SpringSource. It has a smorgasbord of useful platform resources that massively short-cut the development effort when building PaaS applications; from data to social media, from identity management to application administration, from search and reporting to mobile device support. Every one of these conveniences is another tendril that binds an implementation to Salesforce.com’s operational platform, each one a further line of essential life support that increases the complexity and risk should you ever at any time dare to contemplate moving off VMforce.com to some other platform.

Back in January, I wrote about the somewhat surprising alliance between Microsoft Azure and the Intuit Partner Platform. That tie-up highlighted the huge importance in cloud platforms of service delivery capabilities:

“… a platform’s support for all the components that go with the as-a-service business model, including provisioning, pay-as-you-go pricing and billing, service level monitoring and so on. Conventional software platforms have no conception of these types of capability but they’re absolutely fundamental to delivering cloud services and SaaS applications.”

IPP (which as I mentioned at the time, funded the research for an analyst report I wrote last October, Redefining software platforms), brings a raft of services to Azure that are especially useful to Microsoft’s partner channel. VMforce.com infuses SpringSource with a set of services that meets the needs of enterprise computing environments. This is a landmark event because it fuses the enterprise credibility of the two platforms — the conventional software platform of Java and the operational PaaS infrastructure of Force.com.

Just as PaaS redefines software platforms (for reasons that are explained in more detail in my analyst report and subsequent blog post), so VMforce.com now redefines the PaaS landscape — and heralds a huge shift in Salesforce.com’s own PaaS strategy. It’s no longer about battles between closed proprietary platforms. The battle now moves to two new fronts: between competing open source platforms to establish which of them become the mainstream cloud platform stacks; and between competing operational providers to define the dominant infrastructure frameworks. What impresses me most about today’s announcements is that I had thought those battles would leave Salesforce.com at a disadvantage. Instead, the vendor has pre-empted the potential threat and seized the initiative to map out the lines of battle, bypassing most of its competitors, who are still arming themselves to fight a war that’s no longer relevant.

(Cross-posted @ Software as Services)

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Enterprise Irregulars is sponsored by Salesforce.com and Workday.

The new thing is that force.com now supports an additional runtime, in addition to Apex. That new runtime uses the Java language, with the constraint that it is used via the Spring framework. Which is familiar territory to many developers. That’s it. That’s the VMforce announcement for all practical purposes from a user’s perspective.
–William Vambenepe, Cloud Philosopher-at-Large, Oracle

Later this year, Salesforce will have an additional, more pure-Java friendly way to deliver applications in their cloud. The details of pricing and packaging are to be ironed out and announced later, so there’s no accounting for that. Presumably, it will be cheap-ish, esp. compared to some list price WebSphere install run on-prem with high-end hardware, storage, networking, and death-by-nines ITSM.

For developers, etc.

The key attributes from developers are the ability to use Java instead of Salesforce’s custom APEX language, access to Salesforce’s services, and easier integration and access to the Salesforce customer base.

Spring

Partnering with VMWare to use Spring is an excellent move. It brings in not only the Spring Framework, but the use of Tomcat and one of the strongest actors in the Java world at the moment. There’s still a feel of proprietariness, less than “pure” Java to the platform in the same way that Google AppEngine doesn’t feel exactly the same as an anything goes Java Virtual Machine. You can’t bring your own database, for example, and one wonders what other kinds of restrictions there would be with respect to brining any Java library you wanted – like a Java based database, web server, etc. But, we soothe our tinkering inner-gnome that, perhaps, there are trade-offs to be made, and they may be worth it.

(Indeed, in my recent talks on cloud computing for developers I try to suggest that the simplicity a PaaS brings might be worth it if it speeds up development, allowing you to deliver features more frequently and with less ongoing admin hassle to your users.)

Tools, finishing them out

The attention given to the development tool-chain is impressive and should be a good reference point for others in this area. Heroku is increasingly heralded as a good way of doing cloud development, and key to their setup is a tight integration – like, really tight – between development, deployment, and production. The Heroku way (seems to) shoot simplicity through all that, which makes looks to make it possible. The “dev/ops” shift is a big one to make – like from going to Waterfall to Agile – but so far signs show that it’s not just cowboy-coder-crap.

Throw in some VMforce integration with github and jam in some SaaS helpdesk (hello, Salesforce!), configuration management, and cloud-based dev/test labs…and you’re starting to warm the place up, addressing the “85 percent of [IT] budget just keeping the lights on” that Salesforce’s Anshu Sharma wags a finger at.

PaaS as a plugin framework, keeping partners alive

“In theory what it means for Java developers is that there’s sort of a ready marketplace community for them to develop their applications,” said RedMonk analyst Michael Cote. “Because there is that tighter integration between the Salesforce application and ecosystem, it kind of helps accelerate the market for these [applications].”

Many PaaSes are shaking out to be the new way to write plugins for an existing, large install-base. Of course, Salesfoce will protect its core revenue stream, and without any anti-trust action against Apple, the sky’s the limit when it comes to using fine print to compete on your own platform by shutting out “plugins” (or “apps”) you see as too competitive. That’s always a risk for a PaaS users, but I suspect a manageable one here and in many cases.

Intuit’s Partner Platform is another example of PaaS-as-Plugin, and I think such setups are good all around. As with the Apple App Store, the owner of the PaaS takes a cut, fee, or both, to give developers access to the ready-to-buy channel of users. Microsoft’s platform, Azure, doesn’t seem to fit this mold, but you can see where folks like IBM would take their Live product lines (Lotus and Tivoli) and slap PaaSes on the backend to build out partnering ecosystems.

There’s your “cloud destroys the partner ecosystem” problem solved. Partners just have to learn new tricks, but that’s always been the case.

Arms-dealers…

(Read the full article @ Coté's People Over Process)

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Enterprise Irregulars is sponsored by Salesforce.com and Workday.

I’m at Salesforce.com’s Cloudforce event in London today, where there’s a lot of talk about Chatter, the vendor’s social collaboration platform. There are several announcements coinciding with the event, in particular Chatter Mobile, which takes Chatter out onto iPhone, iPad, Blackberry and Android. Also of interest is the news that social stream aggregator Seesmic now integrates Chatter as one of its feeds.

With these announcements, Chatter is starting to grow up and demonstrate how social networking tools can actually deliver business benefits if they have the right capabilities and are tuned to the needs of an enterprise environment.

Chatter (as I’ve covered here previously) allows users to track data as well as people: both internally, for example open support cases, credit alerts, regularly updated documents such as slide decks, price lists and commission plans; and also externally, for example updates to contacts from Salesforce.com’s recently acquired JigSaw application, which ‘crowdsources’ up-to-date information about contacts and organisations.

One of the most compelling attributes of Chatter is that it makes real-time communication and collaboration really easy — especially in comparison to current enterprise collaboration tools, which rely heavily on email and on shared web pages. Salesforce.com has customer case studies, as well as its own experience internally, that show that it’s fairly typical for sales teams to see email traffic cut in half when they introduce Chatter.

Staying on top of social network information streams is often a challenge, and in a business context it’s important that key messages are spotted and acted on. There are a number of different ways of filtering the information streams in Chatter so that a worker can home in on the conversations and data feeds that are important to them. I’m told that early adopters have especially welcomed the recent introduction of groups, making it possible to tune into the conversations from certain teams.

The big advances with Chatter compared to more conventional collaboration platforms are how easy it is to put messages into the stream for collaboration purposes. This is partly because Chatter is integrated into the Salesforce.com application interface (or Force.com UI), and partly because the short message format is much easier both to compose and to read. Dropping in links and attachments is really easy too.

The mobile application adds to that effect. It looks especially impressive on a touch screen device (so here’s another reason to equip your sales team with iPads), incorporating many of the time-saving touch-screen gestures that Apple has made so familiar to many of us in the past couple of years. But it’s also important that these smart devices have built-in capabilities such as cameras, which can be adapted to the needs of the application. For example, sharing a quick visual sketch of an idea is as simple as scribbling it on a scrap of paper, photographing it and posting it to your Chatter stream. No more faffing about with inadequate whiteboard applications, just jot, click and go.

The next phase is to integrate the corporate Chatter stream with other conversations happening in the outside world. Loic LeMeur, founder and CEO of Seesmic, joined Marc Benioff on stage today to show off precisely that capability. Seesmic already aggregates more than 40 social networks and geolocation applications. Now it aggregates Chatter so that sales, marketing and support staff who need to see what people are saying out in the outside world can do that alongside their Chatter stream and bridge across different streams when necessary. Available as a browser app this week, the app will be on the iPad soon and Android next.

Read the complete article @ The Connected Web

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Enterprise Irregulars is sponsored by Salesforce.com and Workday.

Dreamforce, Salesforce.com’s annual user meeting and thought leadership confab, is two weeks away and the anticipation for this event is palpable.  In a tough economy people are looking for the company to do some magic and lift our spirits.

The company did a smart thing by turning on its new collaboration product, Chatter, for any attendee wanting to communicate, synch or share an idea.  The result is a Facebook-like storm on Chatter about Dreamforce.  In the process, thousands of people who had no familiarity with Chatter are educating themselves.

It’s a no brainer to me that the Chatter coverage coming out of Dreamforce will be a bit better for all of the familiarizing.  This is quite different from how we all came out of Dreamforce (was it just last year?) when the company introduced the idea.  The problem was that the description had to be done in terms that many people were not expert in.  What a difference a year can make.

Dreamforce has taken on an aspect of secular saturnalia with quasi-religious undertones as people comment that it’s late this year, as if they were describing Easter.  And it is late, so late that the December date will do little to help any exhibitor finish the quarter well but it may prove to be a good injection of enthusiasm for the year ahead.

Unlike Easter though, which is calculated by a lunar calendar, Dreamforce is calculated according to the Moscone Center.  I suppose you could contemplate a Dreamforce in New Orleans, Orlando, Chicago or Las Vegas, but salesforce.com has such a strong tie to San Francisco, that it’s doubtful it would ever move the event.  So the wait for space on the Moscone calendar is what determines when Dreamforce starts.

Like the company that sponsors it, Dreamforce is many things and it morphs from year to year as products roll out and company marketing plans and market demand changes.  Salesforce has been careful over the years not to simply extend its CRM product line but to add new lines of business.  Dreamforce reflects this and consequently it will resemble multiple events rolled into one.  Just as Oracle Open World has major tracks for its applications, database, Java and Sun for instance, Salesforce will feature tracks for CRM, its social technologies — especially Chatter, its platform and its development tools.

The Salesforce product line has spread out so much that two people could easily go to Dreamforce and see two completely different events—especially if one of them is a developer who gets sucked into all of the sessions about the platform and its related parts.  And it’s assumed there will be more parts to talk about once the show starts.

I expect important announcements in most areas.  CRM is perhaps the most mature part of the company’s offerings in what has become a mature market but the introduction of the Sales Cloud and Service Cloud combined with the re-think of the associated business processes will provide opportunity for many new ideas.

Chatter offers a fresh perspective on collaboration and I hope there will be more discussion about how to use it effectively than about how to implement it.  From what I’ve seen implementation amounts to turning it on.  It’s like calling people to Thanksgiving dinner, you don’t really need to teach the how to eat.  So stories from some of the sixty thousand companies now using Chatter is all that’s needed.

Then there’s the platform.  In the last two years the rest of the vendor community has played catch up with Salesforce in cloud computing.  Everyone has a flavor of it today and most vendors straddle the fence offering single and multi-tenant implementations that deliver on the literal interpretation of SaaS but leave the benefits of multi-tenancy to discretion.

Perhaps that’s as it should be, we can’t expect a wholesale change to multi-tenancy over night for two important reasons.  First, many customers can’t or won’t contemplate the idea and second, many vendors can’t contemplate the business model change.  For them, multi-tenancy will happen in about ten years, the next time they discover that their cloud computing paradigm didn’t really protect them from obsolescence.

But back to the platform.  Salesforce has always had a lead over traditional vendors that varied in length but was always centered on its platform.  There have been important platform innovations in the last year or so including the VMforce effort but I think it’s time for something else.  So it might be that the biggest new product announcement will be in the platform area.  That would make sense because it would give the company time to consolidate its Chatter rollout on the application side of the business.

Other things to think about for Dreamforce: Bill Clinton and Stevie Wonder.  There’s no moss growing on Bill Clinton.  Since leaving the Whitehouse he’s been a tireless worker for humanitarian causes and his keynote, “Embracing our Common Humanity” is eagerly anticipated.  Then there is the incomparable Stevie Wonder who will bring his hefty songbook to Dreamforce.  To me, there is no one in modern music who combines the musicianship and lyrical dexterity of this man and I predict there will be dancing in the aisles.

So that’s what I think about Dreamforce going in.  I will post more comments from the event and hope to get some pics to share as well.  Meanwhile, have a great Turkey Day and Go Patriots!

(Cross-posted @ Beagle Research, LLC.)

Anticipating Dreamforce is copyrighted by Denis Pombriant. If you are reading this outside your feed reader, you are likely witnessing illegal content theft.

Enterprise Irregulars is sponsored by Salesforce.com and Workday.

(Cross-posted @ Michael Fauscette)

Dreamforce 2010 is copyrighted by Michael Fauscette. If you are reading this outside your feed reader, you are likely witnessing illegal content theft.

Enterprise Irregulars is sponsored by Salesforce.com and Workday.

All the chatter about the Salesforce acquisition of Radian6 is quite interesting.  A couple of postings from people I respect make good points.  First Joe Payne, CEO of Eloqua:

“Conspicuously absent from Salesforce’s network of role-specific “Clouds” is one that centers on the marketing function.  Is the Radian6 acquisition the beginning of a Salesforce Marketing Cloud?  Someone on the investor conference call asked Marc Benioff whether this was the first move toward business-to-consumer.  His answer was worth noting: ‘We’re really seeing the beginning here of the Marketing Cloud.’ Given the excitement we have seen around Revenue Performance Management – a discipline that requires both sales and marketing data – in the executive suite, it is not surprising to see Salesforce moving this direction.

And here’s Jon Miller CMO of Marketo:

“Personally, I think Salesforce will continue to make acquisitions “around” the marketing automation space (such as Jigsaw and Radian6) without moving directly into the category; I also would not be surprised if they bought an email service provider.  Salesforce has never shown much interest in a “Marketing Cloud;” they seem more interested in Chatter, the Force.com Platform, and Service Cloud 3, and I suspect future acquisitions will focus on augmenting those capabilities more than in marketing.

It reminds me of the old joke, if you want three economic opinions ask two economists.  We’ll need to wait a while to know which is right but I’m betting on Payne’s analysis more or less.

IMHO Salesforce has been deficient in marketing for a long time.  Perhaps that’s because marketing’s business processes have been more amorphous compared to sales and service.  But more likely, it was because Salesforce grew up selling to emerging tech companies that were selling new category products.  Your marketing needs in such a situation are rather minimal.  But today, there is much less category formation going on — that will likely change with the introduction of the tablet PC— but for now, companies wanting to sell, and who doesn’t, need to market like many of them never have.

Marketing and customer intimacy have driven the social CRM market for several years and the demand destruction caused by the financial meltdown a couple of years ago tipped the scale.  That’s why ideas like revenue performance management are so important today and in order to do RPM you need tools.  So it’s not surprising that Salesforce bought Radian6.  It was time.

(Cross-posted @ Beagle Research, LLC.)

More on Salesforce and Radian6 is copyrighted by Denis Pombriant. If you are reading this outside your feed reader, you are likely witnessing illegal content theft.

Enterprise Irregulars is sponsored by Salesforce.com and Workday.

Dreamforce 2011

It’s worthwhile to consider the economic consequences of Dreamforce — the products announced as well as the cultural issues it raised.  Now, I am not an economist and I encourage you to think about that and maybe not read this if that matters.

Many people might look at the news coming out of San Francisco and try to calculate the ROI on one or another introduction or announcement but I think that’s like looking through the wrong end of the telescope.  ROI is a financial measure and when I think about economics, especially marco economics, I am trying to figure out how the changes affect the ways we work and make money now and especially in the future.  Let’s take a look a just a few ideas.

DRO

Salesforce announced an option (Database Residency Option) aimed at letting companies store their data on their own devices rather than in the cloud.  I’ve already written that this approach will be welcomed by companies and government entities that can’t for regulatory or policy reasons, let their data reside on a cloud infrastructure.  There are many organizations in that position and this should be a boon to their approaches to IT but also a boon to Salesforce’s business.

About the only folks who might be adversely affected will be other vendors.  Companies like Microsoft and Oracle have made a big deal of offering architectures that run in any mode including on-line, on-prem and hybrid implementations.  They’ve taken this to market and used it as a differentiator with Salesforce but that’s rapidly fading in importance, in part I believe, because these solutions preserve single tenancy for applications.

True enough, the other vendors can claim that companies can still own their source code and to be able to manipulate it at their whim while Salesforce still holds the code and is totally responsible for managing it.  Of course customer developed code might be stored in the cloud but Salesforce will not be editing it.  Just backing it up and acting as a custodian.

Which is better?  I like the idea that Salesforce will continually upgrade its code and make sure that its updates do nothing to corrupt my code.  In my humble opinion VRO is a net positive.  Sure it goes against the Salesforce religion but it gives customers what they want and does not compromise the applications.

The Social Enterprise

Salesforce did a good job of defining what is most important — the social enterprise.  This is not a new buzz word or a new shiny object.  In incremental steps over the last three years the company has been defining social business, building products to support it and training the early adopters.

There is a lot of heavy lifting left to do here and the world outside of Dreamforce is not always welcoming.  At a press conference on Thursday, Marc told an interesting story about this reality.  He said that he speaks with CIOs and other C-suite people all the time and on one occasion recently — a conference, I think —he showed a CIO Chatter.  When the CIO saw the stream his first question was, “So now the person receiving all this has to answer it?”  The answer was not, shall we say, appreciated and with that the CIO said this isn’t for me.  Net/net there’s still a lot of proselytizing to be done and a lot of reticence to be over come.  Last week I mentioned some research just out of Cornell that examines why we like creative ideas but shy away from creativity, check it out here xxx.

The Social Customer

There are many manifestations of the social customer.  It can be someone who renders an opinion on a product or service, someone who lends a hand to help out someone with a question or an issue and it’s someone who values privacy.  I was struck in watching Marc’s conversation with Eric Schmidt of Google, of how many times Schmidt in describing a social interaction, used words like, “With the user’s permission”.

One question from a British reporter at the same press conference had to do with not wanting a socialized customer service person to see everything a customer might have recently posted on social media.  Some things while social are still reserved for the intimates of the poster.  That’s a fair point and one that right now gets the very unsatisfactory answer of, well if you don’t want the world to see it, don’t post it.  That’s hardly comforting to many people but I think the issue won’t be solved with more technology.  I think it will be an issue of professionalism.  We forget that in addition to building out a new technology infrastructure that we’re also building the rules of the road and this might be an example of where smart use of the technology trumps more technology.

This will likely be a touchy topic for some time and the sensitivity will be different from culture to culture and country to country.  As an economic issue privacy might be the biggest roadblock to mass adoption and my advice to anyone listening would be to never take it for granted and to continue being as explicit as Schmidt.

Heroku, Ruby and developers

One of the areas that gets almost no coverage is what all this means for developers and as it turns out there was a lot at Dreamforce for them.  Salesforce is on a path that delivers tools for three major kinds of development — business applications, websites and I don’t know what to call it, web resident apps.  Schmidt was emphatic about the need for the modern company to be able to develop quickly and iterate toward perfection while enabling users to get at products quickly.

For business applications there’s the Force.com platform with a choice of Java and Apex, the company’s proprietary language that basically fills in declaratively where point, click, drag and drop don’t do enough.  Then there’s the company’s website builder.  You can build a website integrated with your Salesforce instance using your data.  This capability is most useful for building customer facing apps that capture customer data and interact directly with them.  So a registration page is the obvious example.

Finally, Salesforce spent a lot of cash buying Heroku which is a development environment that uses Ruby on Rails and several other languages like Java, to build applications that are intended to live on the web perhaps at other sites.  A great example of this is Facebook integrated applications.  Some people are referring to F-commerce meaning commerce apps on Facebook and that’s very exciting.  Heroku is a go to choice for building applications that run well and scale massively for the Web.  In a demo we saw an application built by NBC to promote Warner Borothers’ new Harry Potter movie.

Obviously, this illustrates the idea that Heroku might be a good choice for this kind of app but even more importantly, it shows us that we probably don’t know how all of this technology and infrastructure will be adopted and consumed in the years ahead.  That’s what makes Dreamforce so interesting and the ideas unveiled there so powerful.

I am glad I dodged a hurricane to get to Dreamforce.  I lost my voice but recovered and saw a lot of cool people.  It’s going to give me something to write about for a while.

(Cross-posted @ Beagle Research, LLC.)

Some Economic Consequences of Dreamforce is copyrighted by Denis Pombriant. If you are reading this outside your feed reader, you are likely witnessing illegal content theft.

Enterprise Irregulars is sponsored by Salesforce.com and Workday.

Because studentforce is 100% declarative any changes to the force.com platform are changes to studentforce.

(Cross-posted @ Beagle Research, LLC.)

Rypple Scores One for the Force.com Platform is copyrighted by Denis Pombriant. If you are reading this outside your feed reader, you are likely witnessing illegal content theft.

Enterprise Irregulars is sponsored by Salesforce.com and Workday.

The Next (and Hugely Important) Frontier

Many, many years ago, on a very snowy day in New York City, I sat in on a Merrill Lynch investor conference. Marc Benioff of salesforce.com was one of the technology CEO speakers that day. As Marc spoke, it dawned on me that salesforce.com was not going to be a giant application software vendor. Instead, salesforce.com was angling to become a platform player first and foremost.

In that moment, I realized a fundamental change was occurring in the application software marketplace. But, I wondered if other vendors would also see this and act in a manner similar to salesforce.com? The uptake of platform technology has been slow among application software vendors until recent years. There is currently an arms race underway inside software companies today with each trying to build its own cloud platform stack. Unfortunately, too many firms may be too late in the development of their platform technology and worse, may have missed the boat altogether in developing a vibrant platform ecosystem.

Within the ERP space, platform-as-a-service (PaaS) technology is something that salesforce.com and NetSuite have developed, promoted and used to attract developers. The force.com architecture of salesforce.com may currently be one of the largest business PaaS ecosystems today.

Over the last many months I have quizzed a number of ERP, HR and other vendors regarding their platform-as-a-service offerings. In summary, what I have learned is that:

• there are a number of application software products that utilize Microsoft technology as its basis for its original (SOA and then cloud) platform
• some vendors believe that continued enhancement of these SOA platforms may require rewriting much of the their solutions
• vendor after vendor are rolling their own PaaS environment utilizing combinations of open source and commercial software technologies from both large and small providers
• vendors and vendor management see the development of a PaaS as a technical challenge that will deliver benefits for their customers. They are not fully aware of nor understand the ramifications that a PaaS ecosystem will bring to their firm and their customer base

A few days ago, I sat down with Phil Simon. Phil has a new book out called, “The Age of the Platform“. This book focuses on four major technology platforms: Apple, Amazon, Google and Facebook. In the hour and a half Phil and I spent at lunch, I was astounded at how deeply each of us understood the platform space but also recognized how each of us has come to different understandings around platforms based on our coverage areas. I care mostly about how platforms will be developed within the application software space while Phil’s closes the gap with many more examples in the consumer technology space.

That lunch was a particularly important one as the lessons that have developed in the platforms of Phil’s big four (Amazon, Google, Facebook and Apple) will doubtlessly come back to apply to PaaS developers in the ERP and other application spaces. And possibly, the most important lesson that warrants focus today is this: there will not be an infinite number of successful platform ecosystems and many of the platform development efforts of ERP vendors today will not deliver big benefits.

State of ERP PaaS and PaaS ecosystems

SOA (service oriented architecture) has been a significant focus area of ERP and other application software vendors for the last decade or so. These architectures compartmentalized many common “services” such as user interface presentation, database access services, mobile device interaction, etc. By isolating specific services, large portions of code would remain unaffected by changes in one of the component service areas. SOA made application software easier to adjust to the evermore changing world full of cell phones, social networks, etc.

But, SOA was not necessarily designed for concepts such as multitenancy — the critical capability found in the best software-as-a-service (SaaS) applications. Indeed, SOA was conceived in a time before distinctions such as single or multi-tenancy were commonplace. SOA was good but it did not possess the completeness, tools or ecosystem capabilities found in some of the PaaS environments of today.

The Force.com platform, for example, now contains development tools, cloud database technologies, code development tools and more. The VMForce offering possesses much more. It is an architecture that enables the citizen developer world where anyone with a live Internet connection and a computing device can build sophisticated Web applications on their own. That platform allows one, two or three person development teams (and larger) anywhere in the world the ability to build complex, powerful business applications. These programmers do not need to acquire expensive licenses for databases and other systems management tools. These programmers do not need to purchase computing hardware such as servers, routers and other devices. No, these developers need only an Internet connection to become commercial software firms.

It is the ease of use with which individuals can use platforms like force.com and iOS from Apple that both transforms the software industry and also the nature of the companies propelling these platform ecosystems. The size of the Apple iOS ecosystem is staggering when one sees the number of applications developed and the number of developers within the community. But more important is the fact that Apple has begun to build a separate marketplace for business applications created through this platform. Understand this, neither Apple, NetSuite, Salesforce.com nor are other vendors interested in just building a platform. No, they want to build an ecosystem and they want to do it badly.

So what’s the big deal?

The big deal is the ecosystem – that’s what’s really BIG. It’s not the applications a vendor has, it is the ecosystem around them. It is in the ecosystem where:

• hundreds of thousands of developers build extensions to the software vendor’s applications
• other software firms build complementary, robust applications that run on the same platform as the vendor’s applications
• users of the ecosystem can share their experiences, ratings and other feedback about the multitude of products available in the ecosystem
• channel partners flock to the ecosystem because they see a way to develop unique intellectual property and collect royalties on the usage of it thousands of times
• people, firms (large and small), partners and customers can monetize their intellectual property and product extensions
• providers of third-party data, analytical algorithms and other non-software types of intellectual property can find new users for their thoughtful works

The ecosystem is about money. A PaaS ecosystem extends the value opportunity by placing functionally rich, possibly low cost, vertically relevant extensions and new modules within the reach of all ecosystem users. Many of those extensions, modules, etc. come with price tags. The revenue from those solutions represents an income stream to their creators.

Let’s not forget that the ecosystem has significant benefits to the vendor creating this environment. Apple, Amazon, salesforce.com, etc. are not creating these ecosystems and their technical environments for altruistic and non-economic reasons. They are collecting toll charges for usage, transaction fees and other events. These ecosystems make money for the provider. In some cases, they make the providers a lot of money.

Why power is so key to this part of the ERP world

The PaaS ecosystem creates a virtuous cycle for its creator and its participants. PaaS ecosystems represent the epitome in virtuous cycle environments. When one ERP vendor decides to create another version of its product utilizing the platform tools found in another company’s ecosystem, they create an opportunity to cross sell into the install base of every other software firm was built products for that ecosystem, too.

When Coda created FinancialForce.com under the Force.com platform, it quickly found a ready made market available to it. Thousands of salesforce.com customers were now potential subscribers to the FinancialForce financial accounting software products. Likewise, third parties that have built applications on the NS-BOS architecture of NetSuite have found that platform and its ecosystem to be a built-in channel for their products.

SAP’s Business ByDesign, a multitenant ERP solution for the midmarket, does not possess a full PaaS yet but does offer a SDK (solution development kit) that permits third parties to build a number of complementary capabilities and extensions to the product line. SAP has tried to bring some measure of supporting ecosystem capabilities to its channel partner network. This is a product line that is moving towards the support of an ecosystem and at least has made a number of moves in that direction.

The virtuous cycle occurs when momentum builds around the ecosystem. The more developers the ecosystem can attract, then:

• the more products will be created,
• which entices more customers to the ecosystem,
• which triggers more customers to buy from the software developer and other developers in the ecosystem,
• which fuels more development,
• which attracts still more customers,
• etc.

In contrast, a platform that does not create momentum does not create an ecosystem. It is clear in conversations with technology leaders in some ERP firms, that their PaaS efforts will remain largely an internal tool set or one that will be highly restricted to all but a few outside entities. These limited, closed ecosystems may not prove to be sustainable or will suffer from low market uptake.

The ecosystem is about power. Power is not the same as control. Market power and mind share are what the PaaS ecosystem builders are seeking. Yes, they will build customer pleasing application software. But, they are more interested in building the destination for the largest possible universe of customers to come to.

In the minds of these forward-looking, ecosystem building ERP vendors, they are creating some solid, yeoman products but will leave many of the millions of potential enhancement requests in the hands of volunteers, third-party integrators, independent software developers, etc. that participate in the ecosystem. It’s absolutely brilliant this approach as it transfers significant amounts of R&D costs that the application software vendor would have incurred to members of the ecosystem. And, while others are doing the development work, the software vendor is selling even greater amounts of their basic core product at ridiculously solid margins.

The smart ERP play today may be to focus one’s R&D efforts on building out platform capabilities instead of only focusing on application functionality. The purpose of this is to create a technology platform that will enable record MARKET power for the ERP vendor.

Market power is what causes an application software vendor to be considered automatically in any software evaluation decision. In the past, any large enterprise would have automatically considered SAP, Oracle and possibly other vendors in an ERP selection. These are companies that are well-known in their space and are considered by prospective buyers whether the prospect has been actively marketed to by these vendors. Lesser-known vendors have a more difficult process of getting the attention of and staying in contention for this business because of the lack of market awareness and market power of the brand these vendors possess.

What is happening now is that market power is shifting to the vendors with the largest ecosystems not to the vendors with the largest installed bases. The distinction is critical and will represent a fundamental shift in buying habits of ERP software purchasers. To ignore the shift in where market power is moving is to do so at one’s peril.

The power vs. control issue will be a big discussion item in the executive suites of ERP firms. Some vendors will have a tough time transitioning from bring control mavens to facilitators of great ecosystems. These firms believe that:

• only they can do product development to the ERP product
• only they can create new functional applications
• only they can implement the software
• only they should determine who will be a partner
• only they can own the customer relationship
• only they …. (well, you get the point)

Controlling most aspects of an ERP firm may give one a sense of security. But, in the world of PaaS and PaaS ecosystems, it will be a false sense of security. Letting go will need to become a core competency of the modern ERP firm. Students of the human psyche (and change management) know this will be a tough road for some firms.

Why these ecosystems are SO important

Why is a PaaS ecosystem so important, especially to ERP and other application software firms?

Application software buyers continue to evolve, learn and refine their shopping skills and business needs. They are, often by virtue of the effort they put into these deals, quite savvy and up-to-date. They know the score and they reward the vendors with the most appropriate, most current products.

A few years back, customers were looking at on-premise apps. Then, they started to consider cloud application software. Whether it was called SaaS (software-as-a-service) or cloud, they looked at and started to buy cloud solutions for office automation (e.g., Google Apps, Zoho, Microsoft Office 365), HR (e.g., Workday, Taleo, Silkroad) and CRM (e.g., Salesforce). Some even found business specific solutions in the cloud (e.g., Plex Online and Rootstock for Manufacturing).The move to cloud was on its way.

But in the rapidly evolving cloud world, future waves of buyers started to find lots of cloud choices. So, these buyers do what all rational, logical buyers do – they got smarter and refined their solution choices. Today’s SaaS (software-as-a-service) cloud apps buyer knows they want a SaaS product. With so many out there (and more to come), they need a way to differentiate these. So, these buyers thin the herd a bit and look at only multi-tenant SaaS applications. And, sometimes, that means they need another differentiator. They look at vendors with a PaaS (platform-as-a-service).Today, the truly discerning buyers will also want to look at apps with a PaaS and a vibrant ecosystem to go along with it.

Competition in the application space will require vendors continue to innovate and improve their value proposition. Logical buyers will seek the products that offer the best value for them. It’s simple economics and market dynamics.

The PaaS ecosystem will become important to vendors and not just to software buyers. To vendors, the ecosystem will become a major differentiator for a few vendors that can build one out and get wide market adoption of their platform. For other vendors, their participation in someone else’s ecosystem means that they can take advantage of other firms’ selling and distribution efforts. These ecosystems are full of integrators, product enhancers, resellers, add-on product builders, other major software firms, vertical solutions and more. When someone in these other firms makes a sale, it increases the probability that they will also trigger sales for other members in the ecosystem, too.

But the ecosystem is really important as it can fuel non-linear growth. When a traditional software vendor wants to grow, growth often occurs at a linear rate. This is because the company cannot develop new products beyond what its cash flow can support. R&D takes money and limited R&D funds artificially constrain how quickly the company creates new products. Moreover, the company can only grow other functions, like Sales, based on its available cash. SaaS companies really feel the cash constraint as they don’t get those huge upfront license fees. Many firms are instead getting monthly usage payments. Their cash comes in lots of smaller dosages over time.

In an ecosystem world, a software vendor can use the scale of others in the ecosystem. Third parties will recommend and may even implement a vendor’s products. The vendor doesn’t even need to sell these products. They can scale without pain. Likewise, they can start selling products while others round out the apps for them. The best PaaS technical environments permit users and third parties to create and reuse product extensions and enhancements. The advantage to a software firm is that they don’t have to do all of their product’s R&D work. They can rely on the ecosystem participants to build out additional vertical and horizontal capabilities. In the PaaS ecosystem world, Sales can scale big-time without making massive and time-intensive investments in people, Sales, Marketing and R&D.

“Does every ERP application vendor need to have its own PaaS ecosystem?” – No. Besides the market won’t tolerate more than a few successful ones anyway. Instead, vendors may want to look at which ecosystem(s) they will play in. RootStock already co-exists in both the NetSuite and Force.com ecosystems.

“Is there risk with being part of another firm’s ecosystem?” – Yes. The PaaS ecosystem creator has a vested interest in growing the ecosystem. They won’t give any third party applications firm an exclusive as this limits the growth of the ecosystem. Some PaaS creators may even want to develop their own products to supplant those of its early ecosystem participants. For this reason, your apps firm must insist on seeing the product road map of the ecosystem creator before committing to this space.

Why PaaS, ERP and ecosystems need planks

Phil Simon (author of “The Age of the Platform“) sees the platform and its ecosystem as two conjoined entities. I get the logic behind his combination of these two, but I have chosen to keep the two concepts separated in the ERP space as it is clear to me that too few vendors see them as one combined goal.

To these vendors, a platform is a collection of technologies. An ecosystem is something they will worry about “someday“. Phil believes a platform is “an extremely viable and powerful ecosystem that quickly scales, morphs, and incorporates new features (called planks in this book), users, customers, vendors and partners.” He adds, “the most vibrant platforms embrace third-party collaboration. The companies behind these platforms seek to foster symbiotic and mutually beneficial relationships with users, customers, partners, vendors, developers, and the community at large.”

The planks that Phil discusses are needed to create large, vibrant platform ecosystems for the ERP space. I believe the planks that ERP vendors should include capabilities such as:

• Application marketplace/monetization engine/
• Payment processing/currency
• Personalization/tailoring
• Channel partner built apps
• Customer extensions
• Reviews/ratings
• Development tools
• Social tools
• Mobile tools
• Analytic tools
• Big data services
• Search
• Place technology (maps, RFID, etc.)
• Collaboration tools
• Context sensitive content
• Security
• Industrialized compute power (or peak computing power)
• Third party data/content
• Benchmarks
• Etc.

When I meet with ERP vendor executives, I often hear them rattle off portions of the list above. However, what is so telling is how they intend to utilize these capabilities. For many of the technologies, like mobile applications, they see these technologies as being something that will be part of the core part of their product and not something that will be utilized by a third party. Likewise, mechanisms to create a way to publicize and monetize third-party products are way down the priority list for the vendor. In fact, the development efforts have a eerily familiar ring to them from vendor to vendor. The initial platform efforts are designed around extending the original SOA model with ecosystem enhancements well out into the future of the product map.

What is (or will be) a good ERP PaaS ecosystem?

Remember, in technology, the best solution isn’t always the market leading solution. The same may be true for PaaS ecosystems, too. There probably won’t be a single “industry standard” for PaaS ecosystems. However, I am willing to bet that the market leaders will undoubtedly introduce products that possess:

• Easy to use tools and applications
• Citizen programmer speed and simplicity
• Low capital requirements to use
• Low barriers to entry
• Fair (not necessarily cheap) economics
• Some policing of the membership and solutions offered
• Support
• High velocity growth
• Lots of user content, reviews, rankings, ratings, interaction
• A reason for users to treat this as a destination

Furthermore, the new market leaders will be ones that:

• move quickly in creating their ecosystems
• shift from thinking entirely in terms of applications and application functionality and develop a mindset and finesse around creating an ecosystem
• fuel the virtuous cycle around their ecosystems to create market power and market momentum
• learn from non-ERP ecosystem pioneers like Apple and Facebook

What should ERP apps vendors do now? It’s a lot. Every ERP executuve committee should be pondering the following now: 

• Should we go with NetSuite’s, salesforce.com’s or another PaaS? or should we roll our own?
• Is it too late to roll our own PaaS?
• Are we prepared for the culture and other changes that PaaS and PaaS ecosystems will place on our software firm? Issues such as:
  • Sales compensation issues (e.g., who gets the commission when a channel partner sells your product?)
  • Channel conflict
  • Non-linear growth
  • Can we make channel ecosystem developement a core competency?
  • Do we need a new business model?
  • Do we understand the new economics in an ecosystem world?
  • How much hyper-growth can our cash support?
  • Can we get more revenue from royalties, tolls and commissions than from original app licenses/subscriptions
  • Have we done enough planning to scale well?
• Are we prepared to transform not just evolve?
• Can we make Marketing (especially into all new areas and to channel ecosystem constituents) a new core competency?
• Do we know how to recruit an all new kind of channel partner? (How does an old school ERP vendor recruit a 2-3 person code developer groups in Malaysia to create apps for their ecosystem? How do they even find them?)
• Are we ready to really understand how customers will use the ecosystem?  If you don’t really know much about how they use your apps today, how will you get this right?
• And, finally, are you ready to focus on customers to come – not just the existing ones?

The Platform age is upon the ERP space. How these vendors fare depends on how well they adapt. This should be interesting….

(Cross-posted @ Software & Services Safari Blog RSS | ZDNet)

PaaS Ecosystems & ERP: The Next (and Hugely Important) Frontier is copyrighted by Brian Sommer. If you are reading this outside your feed reader, you are likely witnessing illegal content theft.

Enterprise Irregulars is sponsored by Salesforce.com and Workday.

(Cross-posted @ Michael Fauscette)

Applications that are Social is copyrighted by Michael Fauscette. If you are reading this outside your feed reader, you are likely witnessing illegal content theft.

Enterprise Irregulars is sponsored by Salesforce.com and Workday.

The arc of nCino’s brief existence provides a good description of the power of application development on the Force.com platform.  nCino (“Encino” roughly translates from Spanish as “live oak”),  supports commercial loan origination, including CRM functionality to manage the sales process and document management to handle all of the details.  The product was originally developed within a conventional bank, Live Oak Bank in Wilmington, NC.

To say that Live Oak Bank is conventional is not to imply that it is ordinary.  It is the third largest originator of business loans in the U.S. despite being significantly smaller than its competitors.  With the banking industry in a slump Live Oak could not compete as a low cost provider because borrowing activity was slack and interest rates were at low points.  So the bank decided to innovate and  to compete on business execution.

Anyone who has paid attention to banking issues during the recession has probably realized that banks had not been keeping up with managing documentation for example, in home mortgages.  But the same has been true of documentation management in commercial loans and it was the content management part of the process that the bank decided to attend to first.

Live Oak used Force.com to build a commercial loan origination system that could take better care of loan documentation and better attend to the customer relationship issues that attend any loan sale.  But the story doesn’t stop there.

When Live Oak showed off its new system at Dreamforce 2011 the bank discovered significant demand from other banks at the show.  But not wanting to go into the software business, Live Oak spun off its software to a new company —nCino that is the subject of this piece.

By taking care of all loan origination documents within its Salesforce CRM instance, nCino has developed an origination process that is streamlined and effective.  The company’s initial data shows that it can cut twenty five percent of the loan origination cycle time and put money into the hands of the business borrower faster than its competition thus providing a unique form of competitive differentiation.

But operational efficiencies are not the only thing that many bankers are seeking out these days.  The financial crisis exposed the document handling capabilities of many banks as unreliable costing many of them lost time, revenues and legal fees.  Industry data shows that as much as thirty percent of loan documents are inaccurate.  These deficiencies have consequently driven many banks into the market for better document handling software and loan origination systems.

According to Pierre Naudé CEO of the company, Force.com has enabled his team of 27 people to innovate much faster than other technologies.  After about a year, the company has nine installed customers with five more in process and several more in the pipeline.  The AppExchange continues to be a good source of leads, which might surprise some people because nCino is an enterprise solution.  But Beagle research shows that enterprises shop on the AppExchange just as smaller companies do.

Perhaps another surprise for some people familiar with banking is the nature of the solution.  nCino is a cloud offering like all Salesforce solutions and the banking industry, according to Naudé has accepted it without fanfare.  Naudé says it is because “many banks and credit unions have been using hosted solutions for some time, and there’s no difference between running a hosted solution in some remote data center and running a SaaS solution.”  It helps that Salesforce already has all of the certifications that bankers look for including SOC Types 1, 2, and 3 and that it is PCI (private card issuer) compliant.  nCino relies on these certifications as cornerstones of its business and they simply come along with the Salesforce service.

nCino was started with a loan from Live Oak Bank and it has since raised an A round of funding worth $7.5 million, which Naudé says was oversubscribed.  The company’s roadmap includes delivering a mortgage origination system and retail loan facility later this year but the company does not release information about its roadmap beyond that.

nCino is a great story about what’s possible given the power of the Force.com platform and the AppExchange.  More than this it provides a useful model for the future of enterprise software.

(Cross-posted @ Beagle Research, LLC.)

nCino — Loan Origination on Salesforce Platform, Gets the Records Right is copyrighted by Denis Pombriant. If you are reading this outside your feed reader, you are likely witnessing illegal content theft.

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(Event note: the traditional Salesforce marketing cycle is to announce a new model/slogan/message at a Dreamforce event, then take the next 1-2 yeas to strengthen the delivery of that message, refining it along the way in Cloudforce or Tour events like this one.  This is what happened with the social enterprise, and what is happening with the customer company.  I still don’t like the concept of the customer company – don’t think i ever will – but, the past few months have been very good for Salesforce corporate communications people and the message I heard here was much better – not there yet, but better.  I trust that by Dreamforce in November we will have a good message… it is just the painful process of having to listen to the iterations that makes it long and tedious.  Oh well, as long as they get it right – no pain, no gain)

Today at their Customer Company Tour in the UK Salesforce (SFDC) announced the launch of communities.  They showed a pretty poor demo on stage, had a follow-up session that did not add much, and the message is still work-in-progress: they talked about different purposes and models (the traditional purposes: answers, ideas, collaboration) and how each applies in different ways.  In my opinion, they missed showcasing in detail how collaborative sales, support communities, and inbound marketing (the three easiest use cases that come to mind) could be improved by the use of communities – but were on the right track.

I would be inclined to say it was a bad launch and that they are behind in the market for communities.  I would probably be mostly right too.  There is little value to what they can do today (very basic communities, just be there and collect content while integrating collaboration streams) and most of it is around external communities that can tie back to other SFDC functions.

However, to do so would be shortsighted — it was not the launch today that is the big news in this case, but the roadmap I saw and the features in it.  A large part of it was under NDA / Safe Harbor (that means they don’t want me to repeat it so they don’t look like they are promising product that could affect their stock price – public company stuff) but I can give you a few hints based on what I see as a next-generation community platform.

I have been saying for a long time that communities are the true value we inherit from the social media craziness we lived the past few years.  I have also been saying that the antiquated model is not right for what we need, and that the new model for communities should include:

• the ability to create communities for specific purposes, and tie those communities to business objects (like creating a new community for a new lead, bring in the people that can help close the deal, then disband that community while retaining the knowledge and value generated)
• the ability to easily add data, system access, people (from inside and outside of the organization), references to other communities, direct links to any content and knowledge produced before, and sufficient tracking and reporting tools to ensure compliance, audits, and other legal issues
• use semantics and natural language understanding to automatically filter content, bring related content and people, and create links to knowledge already existing in other locations (whether communities, knowledge repositories, other systems, or other people anywhere in the world)
• be part of a platform (PaaS, open cloud model of platforms – not a PINO [platform in name only]) that is open, expandable, secure, and easy to integrate into any other system of engagement or system of record with which it can easily exchange data both ways
• contribute all that was learned and known as knowledge to existing knowledge management systems, including the ability to improve existing knowledge without having to create a new entry that would muddle the finding of the right knowledge at the right time

There are other considerations surrounding culture, metrics, and integration – but I would be very happy if I could find these new communities.  This is not, yet, what SFDC has created – but these items (some of them) are part of their roadmap.

And it is that roadmap that excites me the most about their solution (and what I kept telling Lithium for years to develop).  I was not present at the latest event from Lithium, I have limited knowledge of what they are doing other than what was publicly shared and thus cannot comment whether they are going in this direction or not (although I trust they will say they already have it or it is in the planning) and not going to do that.  I know that Jive (also a client) is working on several of those topics in their roadmap and already has others in their solution – and I trust some of the other providers (Telligent, Mzinga) will agree with that as well.

Alas, none of them are SFDC and are able to deliver the solution as part of Force.com (which is slowly becoming a de facto “platform” provider).  This is where it could become big — and please notice we are in the land of the IFs…

IF SFDC can deliver what it promised, and IF it is a platform service that is part of the Force.com platform, and IF they stick to the items we discussed (some of which are referenced above), and IF they are able to showcase by Dreamforce in November — then I think they have a very good chance to become very, very competitive in the communities market.

IF.

I am hopeful, always am.  I am a glass half-full type of person (cue laughter).

I really believe this is possible, and if so I am looking forward to see the Spring 2014 release when (acting under Safe Harbor provisions) they are supposed to have most of what we discussed integrated into their product and showing.

IF.

(Cross-posted @ thinkJar)

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