#TheDailyBestofEnterpriseSoftware – June25

Oracle and Microsoft Announce Cloud Partnership. As previewed by Larry Ellison last week, long-time rivals Oracle and Microsoft announced a strategic partnership that includes Oracle certifying and supporting Oracle software such as Java, Oracle Database and Oracle WebLogic Server on Windows Server Hyper-V and in Windows Azure. Microsoft will also offer Java, Oracle Database and Oracle WebLogic Server to Windows Azure customers, and Oracle will make Oracle Linux available to Windows Azure customers. So the cloud wars are making friends out of enemies. The cloud software market is growing rapidly with 60 percent growth projected by 2016. Microsoft can’t seem to make headway against Amazon’s cloud offerings and Oracle disappointed the market with its software numbers last week. So desperate times call for desperate measures. It will be fun to see how this partnership plays out.

Oracle and Salesforce.com Announce Cloud Partnership. Also previewed last week by Larry Ellison, Oracle announced their second major cloud partnership of the week. It’s a nine-year deal that will have Salesforce.com standardizing on Oracle Linux operating system, Exadata engineered systems, the Oracle Database, and Java Middleware Platform. Oracle plans to integrate Salesforce.com with Oracle’s Fusion HCM and Financial Cloud, and provide the core technology to power Salesforce.com’s applications and platform. Salesforce.com will also implement Oracle’s Fusion HCM and Financial cloud applications throughout the company. Basically, they plan to use a lot of each other’s software and offer integrated cloud solutions to the marketplace. If this goes according to plan, I see potential for some M&A action down the road. After all, Oracle has a history of buying successful CRM software companies that were founded by former Oracle employees. First Tom Siebel and now Marc Benioff.

The Ten Most Important Companies in Cloud Computing. I like to throw in a Top 10 list when it pertains to some key news events of the day. This recent Top 10 list by Business Insider is a good one:
1. Amazon – Clear leader in cloud infrastructure.
2. VMware – Clear leader in cloud software that has OpenStack supporters and Citrix vying for some of its marketshare.
3. Microsoft – Trying to make Azure competitive with Amazon’s cloud.
4. Salesforce.com – SaaS leader that is trying to grow beyond current CRM offerings.
5. Google – Apps and infrastructure.
6. Rackspace – Cloud infrastructure provider using OpenStack.
7. IBM – Lots of cloud offerings and a big OpenStack player.
8. Citrix – Cloud operating system provider competing with VMware and OpenStack.
9. Joyent – Cloud operating system provider competing with VMware and OpenStack.
10. SoftLayer – Large cloud and web-hosting company that is being acquired by IBM.

A couple of takeaways from this list. 1) Oracle is not on it and perhaps that explains why Larry Ellison is partnering with Microsoft and Saleforce… Maybe Larry will make next year’s Top 10 list. 2) There seems to be heavy competition in the cloud operating system business given that half the companies on the list seem to be in that business.

That’s the Best for today. Please chime in if you feel I missed something or you like/dislike my takes (I’m ok either way).

Bern Baumgartner
ERP Ready, Inc.
http://www.erpreadyinc.com
@erpreadyinc

#TheDailyBestofEnterpriseSoftware – June24

GE gets into the Big Data and Analytics Game. Look out IBM and SAP, your newest competitor is General Electric. GE announced their cloud-based Big Data and analytics platform focused on managing large scale, industrial machines. It will focus on providing real-time analytics and machine-to-machine big data for industries such as aviation, healthcare, energy, transportation, and manufacturing. As part of this solution, GE has partnered with Pivitol to leverage their Cloud Foundry, in-memory and Hadoop-based technology. GE will deploy its industrial Internet platform on Amazon Web Services. It should be interesting to watch how GE battles with IBM and others for the large scale industrial clients.

Oracle CEO Ellison Promises “Startling” Cloud News. After last weeks poor fiscal Q4 earnings announcement by Oracle, we are now in hot anticipation of the Larry Ellison’s diversion tactic of “startling cloud news” to be forthcoming this week. As reported last week, Ellison has indicated that Oracle will announce some new SaaS and cloud partnerships with Salesforce.com, Microsoft, and others. Stay tuned as we watch Oracle scramble to improve their cloud software story.

Oracle’s Bad News is Bad for SAP, Good for Salesforce.com and Workday. Since last week’s poor earning results by Oracle, both Oracle’s and SAP’s stocks are negative relative to the NASDAQ – Oracle’s stock is down by nearly 10 percent since Thursday’s announcement. Meanwhile, Salesforce.com and Workday are both up relative to the NASDAQ. See this Stock Chart to view the performance of all four stocks over the past five days. This is a clear reaction by the market in favor of cloud-based software companies. While both Oracle and SAP have made significant investments in the cloud, the cloud still represents a small fraction of their overall revenues. Until that changes, look for both companies to have challenges relative to the pure-play cloud competition.

Day 60 – Still No Press Release from Microsoft Dynamics Newsroom. Waiting…

That’s the Best for today. Please chime in if you feel I missed something or you like/dislike my takes (I’m ok either way).

Bern Baumgartner
ERP Ready, Inc.
http://www.erpreadyinc.com
@erpreadyinc

#TheDailyBestofEnterpriseSoftware – June21

Oracle’s Fiscal Fourth Quarter Disappoints. Oracle investors are in sell mode following another disappointing quarter. Oracle had forecasted 8 percent growth in its software division, but only showed 1 percent growth in Q4 as compared to Q4 2012. Software sales are a closely watched metric for Oracle because it has high margins, annual maintenance revenue, and downstream services revenue. Oracle CEO Larry Ellison cited poor global economic conditions as the primary reason for the disappointing results. However, many analysts expressed concern about Oracle’s ability to compete with the newer SaaS and cloud solutions such as Salesforce.com and Workday.

Oracle CEO Ellison Promises “Startling” Cloud News Next Week. Perhaps in a move to deflect attention from its own weak Q4 software numbers, Larry Ellison previewed some key SaaS and cloud partnerships with Salesforce.com, Microsoft, and others. Oracle has to do something as they are clearly late to the game with their cloud solution. The irony of this is that Ellison was an initial investor in both Salesforce.com and NetSuite – two pioneering SaaS companies. Now he’s late to the cloud game with his own company.

Why SAP is Beating Oracle in the New Software Era. SAP has made better moves and acquisitions than Oracle over the past few years to compete in this new era of software that favors cloud, analytics, and mobility solutions. Oracle started making major software acquisitions such as PeopleSoft, JD Edwards, and Siebel; these solutions are now considered “old school” and do not compete as well with some of the newer SaaS offerings such as Salesforce.com and Workday. While SAP is also feeling intense pressure from these same SaaS competitors, SAP is making gains with some of its acquisitions such as Business Objects which has kept SAP very competitive in the growing business analytics space. Additionally, SAP has invested heavily in its in-memory database solution called HANA which enables SAP to be part of the red-hot Big Data industry. Furthermore, SAP’s acquisition of Sybase in 2010 has enabled SAP to gain an advantage over Oracle in the mobility space which is another growth area in enterprise technology. While both SAP and Oracle will be heavily challenged in this new software era, SAP seems to have better solutions in many of the hot enterprise technology areas which they will be able to sell inside and outside of their large install base.

Day 57 – Still No Press Release from Microsoft Dynamics Newsroom. Seriously! Come on Dynamics Newsroom, something newsworthy must have occurred since April 25.

That’s the Best for today. Please chime in if you feel I missed something or you like/dislike my takes (I’m ok either way).

Bern Baumgartner
ERP Ready, Inc.
http://www.erpreadyinc.com
@erpreadyinc

Why SAP is Beating Oracle in the New Software Era

Oracle just announced another quarter of disappointing earnings results. Most of the focus is on Oracle’s lack of growth in new software and software-subscription sales which were a mere 1 percent more than last year’s fiscal fourth quarter. Many analysts believe Oracle’s woes in the software arena are due to intense competition from the new breed of Software-as-a-Service (SaaS) companies such as Salesforce.com and Workday, not to mention long-time archrival SAP. SAP is also under attack from the same SaaS companies, but they have put themselves in a better position to compete in this new era of enterprise software that seems to favor cloud computing, analytics, and mobility.

One of the reasons SAP is in a better position is that they have made better major acquisitions over the past few years. Oracle started the software acquisition spree much earlier than SAP with major acquisitions such as PeopleSoft / JD Edwards and Siebel Systems. SAP’s first major acquisition was the purchase of Business Objects in 2007. The problem for Oracle is that PeopleSoft, JD Edwards, and Siebel are “old school” enterprise software solutions and they are slowly being replaced by the new SaaS solutions. Meanwhile, SAP Business Objects is still a hot solution in the growing business analytics space. More recent cloud acquisitions have been a bit more comparable with Oracle buying Taleo and RightNow Technologies and SAP buying SuccessFactors and Ariba. Clearly, both Oracle and SAP have an urgency to buy their way into the cloud market.

Another area where SAP has gained an advantage is with its in-memory computing and database system called HANA. SAP has been working with HANA over the past three years. Oracle recently announced their version of in-memory applications, but they are clearly behind SAP. HANA is a solution that puts SAP right in the middle of the Big Data space – a hot and fast-growing technology area. Oracle is in catch-up mode. Worse for Oracle is that SAP plans to make HANA the database for all it’s applications which threatens some of Oracle’s key database business given that most of SAP’s customers currently run SAP on Oracle DB.

One more hot technology area that SAP jumped into a few years ago is mobility. SAP acquired Sybase and their mobility platform solutions in 2010. While SAP has had numerous challenges with this acquisition and their mobility solutions, they definitely got a nice head start on Oracle. Once again, SAP saw this market and trend well before Oracle and are now in a better position to gain.

To be sure, both SAP and Oracle will continue to be major players in enterprise software as well as feel the pain of transitioning to the new era of SaaS and cloud-based solutions. However, Oracle has to un-wind some of their major legacy applications they’ve acquired as well as try to figure out how to make more money with their cloud-based solution acquisitions. SAP has plenty of “old school” applications itself, but they also have strong offerings in hot areas such as cloud, analytics, Big Data, and mobility solutions which they can sell into or outside of their massive install base.

Bern Baumgartner
ERP Ready, Inc.
http://www.erpreadyinc.com
@erpreadyinc

#TheDailyBestofEnterpriseSoftware – June 19

Cloud Confusion with HP, Amazon, and Workday. A nice little brouhaha developed at last week’s HP Discover event when an HP executive announced that Workday was moving off of Amazon’s AWS cloud and onto HP’s Public Cloud. It was quickly clarified by Workday and Amazon, that Workday still uses AWS for some of it’s activities (mainly test and development). Also, Workday’s use of HP’s Public Cloud is a bit ambiguous and may be tied to a recent deal where HP will use Workday’s SaaS HR solution. (BTW, that sounds a bit suspicious to me and raises my software revenue recognition radar screen). Lastly, it appears that for the majority of Workday’s operations, they use their own cloud infrastructure that does not involve HP or Amazon. Woo, what a mess! It does go to show that the competition for the cloud is heating up. HP see’s their nemesis IBM getting in the game and they want to be there too.

Microsoft Azure Competing with Amazon Cloud. OK, it looks like a good day to talk about the cloud wars, so why not include Microsoft in the mix. Microsoft claims to have 250,000 cloud customers and they are adding 1,000 new customers per day. If that is anywhere close to true, it begins to explain why every large computer and software company and their brothers want to get into this space. Microsoft differentiates it’s value proposition from Amazon by offering the software to manage a hybrid model of both a private and public cloud. Microsoft rightfully points out that many corporations are not ready to put sensitive company information up in a public cloud such is offered by Amazon. This makes sense and I’m sure we will see Amazon also offer private or hybrid cloud models in the future. Meanwhile, Microsoft and the other major players like IBM and HP are also gunning for some of Amazon’s marketshare leadership pie.

NetSuite announces SuiteVolunteers. SuiteVolunteers is a corporate citizenship program by NetSuite that donates their cloud ERP software and employee’s time to assist qualifying non-profit organizations and charities such as Eliminate Poverty Now. This is a good PR move that can be leveraged for marketing purposes, but I’m sure is greatly appreciated by the participating charities. Studies also show that these type of corporate social-responsibility activities are a boost to employee morale.

Day 55 – Still No Press Release from Microsoft Dynamics Newsroom. Just because I did the above bit on Microsoft’s cloud strategy, I am not letting the Dynamics Newsroom off the hook. That’s too good of a solution to have cobwebs grow out of my laptop screen when I access the Dynamics Newsroom website. 🙂

Please chime in if you feel I missed something or you like/dislike my takes (I’m ok either way).

Bern Baumgartner
ERP Ready, Inc.
http://www.erpreadyinc.com
@erpreadyinc

#TheDailyBestofEnterpriseSoftware – June 13

Top Cloud Infrastructure Equipment Companies. Cisco moved to the #1 market share spot (~15%) for Q1 cloud infrastructure, nudging out IBM and HP for the top spot. While Cisco has seen steady growth over the past two years, it’s still a tight 3-way race between them, IBM, and HP. The 4, 5, and 6 spots belong to Dell, EMC, and VMware, respectively.

NetSuite Execs Getting some Positive Press. Last week it was announced that NetSuite CEO Zack Nelson will give the keynote at the Credit Suisse Disruptive Technology Conference. Today NetSuite announced that their CFO, Ron Gill, was named Bay Area CFO of the Year by the San Francisco Business Times. NetSuite has been around since 1998 and they saw the market for ERP cloud computing well before most of us. And while they have seen nice top-line revenue growth in recent years, they still are not profitable. Good thing they have had Larry Ellison as a major investor all these years (Larry reportedly owns more than 50% of NetSuite). Sorry, I drifted a bit from the above headline…

Would SAP Steal Database Market Share from Oracle? The net of this MotleyFool article is that SAP’s HANA database revenue has grown 60% in the past year, but it is still relatively very small in terms of both the overall database market as well as SAP’s total revenue. However, SAP does seem committed to making HANA the database of choice for its entire ERP platform. When you also consider that SAP has been a top (if not #1) database reseller for Oracle over the years, this story may get more interesting considering the number of Fortune 500 companies that currently run their business with SAP sitting on the Oracle DB.

No News from Microsoft Dynamics??? I’ve been aching to do a bit on some interesting Microsoft Dynamics news. Unfortunately, there hasn’t been any. This is a major Tier 2 ERP solution that I admire, but they can’t seem to get any press because Microsoft has been all about the Xbox, Windows 8, etc. So I went to the official Microsoft Dynamics Pressroom. Unfortunately, the most recent Microsoft Dynamics press release is some announcement about healthcare HIPAA requirements released on April 25… C’mon Dynamics, throw me a bone that is a little more interesting and current.

Please chime in if you feel I missed something or you like/dislike my takes (I’m ok either way).

Bern Baumgartner
ERP Ready, Inc.
http://www.erpreadyinc.com
@erpreadyinc

#TheDailyBest of Enterprise Software – June 12

The Top 10 SaaS Companies by Revenue. This link provides a nice compilation of SaaS Stats, including the Top 10 SaaS Companies:
1. SalesForce
2. SAP
3. Oracle
4. Microsoft365
5. Workday
6. Intuit
7. Zuora
8. Pardot
9. NetSuite
10. Marketo

LinkedIn Vs Facebook. Mark Zuckerberg is in the news this week trying to calm his shareholders about Facebook’s stock performance. When I explain LinkedIn to my college business students (many of whom have never heard of LinkedIn), I say it’s “Facebook for professionals”. Ahhhhh! So, I thought I would do a quick 1-year comparison of LinkedIn vs Facebook. As you can see from the stock-chart link I provided, LinkedIn is killing Facebook in terms of 1-year stock appreciation; LinkedIn: `80% gain, Facebook: `12% loss. In terms of Revenue, Facebook is much bigger; $5B for Facebook in 2012 vs $972M for LinkedIn. However, it’s much closer in terms of 2012 Net Income; $32M for Facebook vs $22M for LinkedIn. Those kind of numbers start to explain the huge difference in stock price changes for these two companies over the past year.

SAP Insurance Analyzer Integrates Finance and Risk. If you are interested in SAP’s developments for the insurance industry, this press release is for you. What I found even more interesting is that this was a rare SAP press release that did not make mention of HANA or the cloud… Good to know they are still working on all the other stuff.

Please chime in if you feel I missed something or you like/dislike my takes (I’m ok either way).

Bern Baumgartner
ERP Ready, Inc.
http://www.erpreadyinc.com
@erpreadyinc