Andy on Enterprise Software

The other shoe drops

June 8, 2007

For sometime I had been wondering which company Microsoft would buy to enter the MDM market. This is a key area in the broader business intelligence arena that they aspire to progress in, and was a major gap in their offering. Stratature was their choice, and it was a smart choice. Stratature plays in the analytical MDM area rather than being an operation transaction hub (like Siperian, say). It had built up a good reputation for flexible hierarchy management, an important feature of most MDM applications. They competed directly with Razza (an excellent tool which Hyperion purchased but Oracle seems to have now buried) and Kalido.

Stratature is the kind of bite-sized (16 employees) acquisition that Microsoft likes. It prefers to catch a company when it is small so that it can easily absorb the technical staff and mould them into the Microsoft way of doing things. When it has deviated from this rule (Great Plains, Navision) it has discovered why this was a good rule in the first place.

Congratulations to Ian Ahern, who impressed me on the several occasions I met with him. He also supports my (possibly biased) thesis that all the best MDM people are Brits. The terms of the deal are not public, and it would have been interesting to see what valuation a good MDM vendor achieved; I am sure it worked out well for Stratature’s shareholders. This now leaves Kalido as the main remaining independent analytic MDM vendor. This is not necessarily a bad thing for Kalido. Informatica has shown how you can thrive once your competitors get swallowed by the behemoths. Being stack-neutral in data management carries advantages.

Kalido repositions itself

October 19, 2006

Kalido has now announced revised positioning targeted at selling solutions to business problems (and will soon announce a new major product release). The key elements are as follows. The existing enterprise data warehouse and master data management product offerings remain, but have been packaged with some new elements into solutions which are effectively different pricing/functionality mechanisms on the same core code base.

The main positioning change is the introduction of pre-built business models on top of the core technology to provide “solutions” in the areas of profitability management, specifically “customer profitability” and “product profitability”. This move is, in many ways, long overdue, as Kalido was frequently deployed in such applications but previously made no attempt to provide a pre-configured data model. Given that Kalido is very strong at version management, it is about the one data warehouse technology that can plausibly offer this without falling into the “analytic app” trap whereby a pre-built data model, once tailored, quickly becomes out of synch with new releases (as Informatica can testify after their ignominious withdrawal from this market a few years ago). In Kalido’s case its version management allows for endless tinkering with the data model while still being able to recreate previous model versions.

Kalido also announced two new packaging offerings targeted at performance management/business intelligence, one for data mart consolidation and one for a repository for corporate performance management (the latter will be particularly aimed at Cognos customers, with whom Kalido recently announced a partnership). Interestingly, these two offerings are available on a subscription basis as an alternative to traditional licensing. This is a good idea, since the industry in general is moving towards such pricing models, as evidenced by salesforce.com in particular. In these days of carefully scrutinised procurement of large software purchases, having something the customers can try and out rent rather than buy should ease sales cycles.

The recent positioning change doesn’t, however, ignore the IT audience – with solution sets geared toward “Enterprise Data Management” and “Master Data Management.” The enterprise data management category contains solutions that those familiar with Kalido will recognize as typical use cases – departmental solutions, enterprise data warehouse and networked data warehouse. The key product advance here is in scalability. Kalido was always able to handle large volumes of transaction data (one single customer instance had over a billion transactions) but there was an Achilles heel if there was a single very large master data dimension of many million of records. In B2B situations this doesn’t happen (how many products do you sell, or how many stores do you have – tens or hundreds of thousands only) but in B2C situations e.g. retail banking and Telco, it could be a problem given that you could well have 50 million customers. Kalido was comfortable up to about 10 million master data items or so in a single dimension, but struggled much beyond that, leaving a federated (now “networked”) approach as the only way forward. However in the new release some major re-engineering underneath the covers allows very large master data dimension in the 100 million range. This effectively removes the only real limitation on Kalido scalability; now you can just throw hardware at very large single instances, while Kalido’s unique ability to support a network of linked data warehouses continues to provide an effective way of deploying global data warehouses.

Technologically, Kalido’s master data management (MDM) product/solution is effectively unaffected by these announcements since it is a different code base, and a major release of this is due in January.

This new positioning targets Kalido more clearly as a business application, rather than a piece of infrastructure. This greater clarity is a result of its new CEO (Bill Hewitt), who has a strong marketing background, and should improve the market understanding of what Kalido is all about. Kalido always had differentiated technology and strong customer references (a 97% customer renewal rate testifies to that) but suffered from market positioning that switched too often and was fuzzy about the customer value proposition. This is an encouraging step in the right direction.

Metamorphosis

July 19, 2006

It is a big day for me today, as I have decided to move from Kalido to pursue other interests. Kalido has come a long way since I encountered some original generic modeling research at Shell in 1996 that I could see had massive potential to provide Shell with integrated information from across the world throughout business change. After success at Shell with the software, I set up a business unit to commercialize Kalido, resulting in Kalido being set up as an independent company in 2001, and, with the backing of major venture capitalists, subsequently spun off from Shell in 2003. By this time it was clear that the next phase of growth for the company was to become successful in the US market, the largest in the world, and as I am based in the UK, I handed over the reins of CEO, and assumed the role of customer champion, company spokesperson and chief strategist. There has been no shortage of projects to work on, and I have thoroughly enjoyed continuing to raise the public profile of Kalido, but now that a new CEO – Bill Hewitt – has come on board to take the company to its next level of growth, I felt it was the right time for me to move on. Bill Hewitt has exactly the right background in enterprise software to take the company to the great commercial success that it deserves.

I have immensely enjoyed building Kalido up from an idea to a company with tremendous potential, and I look forward to seeing its continuing success. It has been an exhilarating experience for me, above all because I have had the privilege of working with a group of highly talented and committed individuals. It has been an immense pleasure to see so many examples of real business benefit in customer projects that have deployed Kalido in over 100 countries. The success that the company has enjoyed so far has been based on a passion for customer success and the high quality of its people, and is something I am extremely proud to have been associated with.

I intend to initially do some independent consulting and do a little writing. This blog, of course, will live on!

Mastering data

September 22, 2005

At the 2005 Kalido User Group this week in London a survey was carried out of the attendees regarding the attendees persepctives on master data management. The striking result in the survey was that, although around two-thirds of the respondents (and these are serious companies, like BP, Unilever, Philips etc) felt that dealing with their companies master data was a “top three”priority issue for them, no less than 90% felt that the industry had failed to address it properly. While there are a few software products out there to help tackle customer data integration and product information management, very few address general issue of managing master data across a global corporation.

Large corporations are need to manage not just customers and products, but also other data such as brand, organization, people, price etc, which are scattered throughout a wide range of corporate systems, including multiple instances of ERP systems from the same vendor. The application consolidation that has been occurring in recent years has clearly failed to make inroads into this issue in the eyes of the people that matter: the customers.

Hiring Top Programmers

August 12, 2005

At Kalido we want to hire the best 1% of programmers. This is for a very good reason: the top 1% of programmers code 10 times as much code as the average ones, and yet their defect rates are half the average. This is a pretty amazing productivity difference, yet has been found consistently over the years e.g. by IBM. In order to try and search out these elusive people, we use a couple of different tests in addition to interviews. Firstly we use ability tests from a commercial company called SHL. In particular their “DIT5″ test, aimed at programming ability, proves to be very useful. We found a very high correlation between the test results and our existing programming team when we tried this on ourselves, and we now use it for all new recruits. Another is a software design test that we developed ourselves. We find that very few people do a decent version of this, which allows us to screen out a lot of people prior to interview, sacing time for all involved.

I actually find it encouraging that some people don’t like to have to do such tests, thinking themselves above such things or (more likely) fearing that they won’t do well. This is an excellent screening mechanism in itself – as a company we want the very best, and in my experience talented people enjoy being challenged at interview, rather than being asked bland HR questions like “what are your strengths and weaknesses” (yeah, yeah we know, you are too much of a perfectionist and work too hard, yawn). Partly as a result of these tests, as well as detailed technical interviews, we have assembled a top class programming team.

I am encouraged that a similar view is shared by Joel Spolsky, who writes a fine series of his insights into software, “Joel on software”:

http://www.joelonsoftware.com/articles/HighNotes.html

which I highly recommend.