Andy on Enterprise Software

To be or not to be

October 12, 2006

I spent the early part of this week at ETRE, an unusual IT conference that has been running since 1990.  Organised by ex-journalist Alex Vieux, the conference is for technology CEOs and founders, general partners at VCs and the usual hangers on, rather than for customers.  It moves around to a different European city each year, and this year attracted about 500 people.  The conference is notable for two consistent things: the very high quality of people attending (Bill Gates used to be a regular) and the utter inability of the “organisers” to keep to schedule. This year, it has to be said, the overruns were of more manageable proportions than usual, and indeed the opening session only started 14 minutes late.  John Thompson of Symantec and Niklaas Zenmstrom of Skype were the star names this year.  Skype now constitutes 7% of all long distance calls, which does rather make one wonder at what point the phone companies who generously provide the infrastructure will send the boys round to collect some money from eBay.

The “future of enterprise software” session was definitely the odd one out, since the future was clearly all about social networks, at least in the eyes of investors.  They have a sort of Dragon’s Den session called ”meet the money” where early stage companies pitch to a panel of VCs, and this year the company funkysexycool.com (I couldn’t make that up), a sort of myspace wannabee for mobile phones whose business cards feature a voluptuous fantasy woman, had the VCs lining up to throw money at it.  By contrast a shipping ecommerce company, who had been around a few years, had several million in revenues and was profitable, could not have caught a cold, never mind funding.  Perhaps a social networking site for melancholy enterprise software executives?  No takers?  Oh well.

What interest there was around enterprise software was confined to “software as a service” companies.  Rightnow has now reached USD 100 million in revenue, joining salesforce.com in that rarefied air, and certainly there seem to be a few other early stage companies branching out into software as a service for things like HR and ERP.  Given that as much as 80% of technical problems with software are to do with the client environment (often some odd combination of software versions that the vendor had not, or could not, test) then the model certainly makes a lot of sense.  The drawback is that the rental model that usually goes with this means relatively slow growth, though the recurring revenue generated certainly means less sleepless nights near the end of a quarter for software executives.  

One of the few enterprise areas prospering was security, where there was a general consensus that the hackers and spammers were comfortably winning the war.  I was impressed with a company called BitDefender, who are a Rumanian security software firm that has grown since launch in 2001to USD 60 million in revenues.  This has all been done without a dollar of venture capital (there are not too many VC conferences in Bucharest).

The lack of organisational skills of the conference remain legendary.  They denied all knowledge of my booking until I produced the bank transfer details, though they at least seemed embarrassed when I pointed out that they had done exactly the same thing last year.  The conference check-in was a procession of people with lost reservations and people who had booked airport transfers that never arrived.  To be fair, a very helpful gentleman called Farley Duvall did a bang-up job of sorting out my misbehaving video presentation, and the Red Herring people always seem to cope with problems with willingness and good humour. Perhaps they just need some German organisers. 

With its baffling inability to stick to a schedule, ETRE remains something of an enigma.  Attendees wonder aloud whether it is worth the high cost, and yet each year they come back as there is nowhere else quite like this for networking.  If your company is not there, what does this say about you?  With other conferences very much in decline (even Esther Dyson’s US conference just bit the dust) you certainly have to give a lot of credit to Alex Vieux and his team for managing to attract a healthy turnout of people back every year.  Not many tech conferences can claim a 17 year unbroken heritage.

 

Conferences and clocks

June 23, 2006

Those who are getting on a bit (like me) may recall John Cleese’s character in the 1986 movie Clockwise, who was obsessed with punctuality. I am less neurotic, but what does distress me is when conference organizers let their schedule slip due to speaker overruns. I speak regulalrly at conferences, and this is a recurring problem. At a conference in Madrid a few weeks ago they managed to be well over an hour behind schedule by the time they resumed the afternoon session, while the otherwise very useful ETRE conferences are famed for their “flexible” schedule. At a large conference this is beyond just irritating, as you scramble to find speaker tracks in different rooms, all of which may be running to varying degrees behind schedule and starting to overlap.

This poor timekeeping is depressingly normal at conferences, which makes it all the nicer when you see how it should be done. I spoke yesterday at the IDC Business Performance Conference in London, which had an ambitious looking 14 speakers and two panels squeezed into a single day. If this was ETRE they would have barely been halfway through by dinner time, yet the IDC line-up ran almost precisely to time throughout the day. It was achieved by the simple device of having a clock in front of speaker podium ticking away a countdown, so making it speakers very visibly aware of the time they had left. I recall a similar device when I spoke at a Citigroup conference in New York a couple of years ago, which also ran like clockwork.

The conference was a case study in competent organization, with good pre-event arrangements, an audio run-through for each speaker on site, and speaker evaluation forms (some conferences don’t even bother with this). The attendees actually bore a distinct resemblance to those promised, both in quality and number; recently some conference organizers seem have had all the integrity of estate agents when quoting expected numbers. The day itself featured some interesting case studies (Glaxo, Royal Bank of Scotland, Royal Sun Alliance, Comet) and a line-up of other speakers who mostly managed to avoid shamelessly plugging their own products and services (mostly). Even the lunch time buffet was edible.

In terms of memorable points, it seems that the worlds of structured and unstructured data are as far part as ever based on the case studies, whatever vendor hype says to the contrary. Data volumes in general continue to rise, while the advent of RFID presents new opportunities and challenges for BI vendors. RFID generates an avalanche of raw data, and a presenter working with early projects in this area reckoned that vendors were completely unable to take advantage of RFID so far. Common themes of successful projects were around the need for active business sponsorship and involvement in projects, the need for data governance and stewardship and for iterative approaches giving incremental and early results. Specific technologies were mostly (refreshingly) in the background in most of the speeches, though the gentleman from Lucent seemed not to have got the memo to sponsor speakers about not delivering direct sales pitches. With Steve Gallagher from Accenture reckoning that BI skills were getting hard to find, even in Bangalore, it would suggest that performance management is moving up the business agenda.

Well done to Nick White of IDC for steering the day through so successfully. If only all conferences ran like this.

Enter the Dragon

May 19, 2006

I spent the last two weeks on holiday in China. Apart from the awesome sense of history (the Great Wall is 3,000 miles long and was completed n 220 BC) it was intriguing to get a sense of one of the world’s two great emerging economies. Shanghai was striking in this regard. In just 20 years since Deng Xiaoping’s reforms Shanghai has been transformed into the most dynamic of ultra-modern cities. There is a striking symbolism in standing on the Bund (one side of the city’s Huangpu river) amongst the fine 1920s and 1930s building built mainly by the British, and looking out across the river at the future. On the opposite bank is Pudong, a sort of Canary Wharf on steroids, a city of gleaming steel and glass. The sheer scale of Pudong is best appreciated from the Grand Hyatt hotel, the tallest hotel in the world at 1,380 feet. From either the 54th floor lobby or the 88th floor (8 is a lucky number in Chinese culture) bar you look out across at the old Shanghai, but also at the forest of skyscrapers that is Pudong. A quarter of the world’s cranes are at work here, to give some sense of scale. The desire to create an image of progress is epitomized by the Maglev train, which whisks you from the town to the international airport at a top speed of 266 mph (431 km/h). It can go at 311 mph (501 km/h), but at its slower cruising speed still does the 30 km journey in well under eight minutes. Symbols are important, and the Maglev stands in striking contrast to the shambolic infrastructure of India’s airports and trains. India does have the key advantage of widely spoken English, but China’s modern infrastructure wins hands down. One danger to Western companies is also apparent in the Maglev. Built on German technology, China now intends to build a far longer Maglev track to Hangzhou, but will build it on Chinese technology: quick learners, or intellectual property theft? Conversations I had when in China suggested that intellectual property rights are an alien notion in China, at least for now; our guide in Beijing ran a web site selling fake Rolex watch mechanisms which can be made up into expensive replica watches. He was simply bewildered at the notion that there could be anything wrong with this.

However, despite this, China is now the world’s largest exporter of hi-tech products. When you are there you can sense the sheer dynamism of the place in the air. As an example, just today Teradata announced that their new R&D centre was to be based in Beijing.

Honey I shrunk the attendees

April 5, 2006

I was in Silicon Valley this week speaking at Software 2006. This was pitched as having 2,500 attendees, and the organizers claimed 1,700 on the day itself, yet at any plenary session I could only count about 400 or so. Indeed on the first morning the main hall was so awkwardly empty that the number of chairs was dramatically reduced for future sessions, presumably to make it seem fuller. This is getting silly, rather like the perennial numbers game between police (”10,000 protestors”) and demonstrators (”100,000 protestors”) played out in countries the world over. As noted previously the trade show seems to be in secular decline, even here in the heart of hi-tech country. The show itself had good speakers and excellent conference admin, yet the partly deserted exhibit hall spoke volumes. Even the bikini-clad girl handing out free gifts (note to the marketing manager at Aztec who hired the model: you may want to consider trying a gimmick that does not look quite so tacky; even in the 1980s this seemed a bit dubious) was unable to lift the atmosphere. The exhibit sponsors did not seem best pleased (sample comment: “four of out of five people who came to the booth were trying to sell us something rather than the other way around”) and the supposed legion of CIOs attending were either cunningly disguised or further optimism on the organiser’s behalf.

Ironically the conference hotel perhaps held the clue as to why attendance at trade shows seems to be so hard to drum up these days. If you go to the Hyatt Regency Santa Clara concierge desk you are greeted not by a person but by a video screen. The concierge herself (the helpful Anna) sits 80 miles away and chats to you, even able to print out directions on the printer at the concierge desk. If even the hotel concierge can’t be bothered to travel to work any more and can do her job quite adequately by video link, is it any wonder that busy executives spend less time at trade shows and more time on webinars?

Interest in MDM grows

March 6, 2006

Last week I was a speaker at the first CDI (customer data integration) conference, held in San Francisco. Although the CDI institute (set up by Aaron Zornes, ex META group) started off with customer data integration, looking at products like Siperian and DWL, the general movement towards MDM as a more generic subject has overtaken it, and indeed Aaron mused in his introductory speech whether they may change the title to the MDM Institute. For a first conference it was well attended, with 400 people there and supposedly 80 being turned away due to unexpectedly high demand. There were the usual crowd of consultants happy to advise expertly on a topic they had never heard of a year ago. Most of the main MDM vendors put in an appearance e.g. IBM/Oracle/I2 (but no SAP) as well as specialists like Siperian and Purisma, plus those like HP who just have too big a marketing budget and so have a booth everywhere, whether or not they have a product (those printer cartridges generate an awful lot of profit).

The conference had a rather coin-operated feel, as sponsoring vendors duly got speaker slots in proportion to the money they put in – with IBM getting two plenary slots, but there were at least a few customer case studies tucked away amongst the six concurrent conference tracks. My overall impression was that MDM is a bit like teenage sex: everyone is talking about it, people are eager to know all about it but not that many are actually doing it. As time passes and MDM moves into adolescence there will presumably less foreplay and more consummation.
Further conferences are planned in London, Sydney and Amsterdam, demonstrating if nothing else that plenty of vendors are willing to pay Aaron to speak at the shows.

Go east young man

December 21, 2005

Those who think the rise in the Chinese economy can be safely ignored for a few more years or is restricted to cheap toys, sneakers and steel can think again. In 2005 the world’s top exporter of high tech products was not the United States, but China.

This was quite a landmark event, and something that technology companies need to consider carefully. China has become a major force in manufacturing, but is also starting to move into off-shoring. At this stage it lags India by a long way, but 1.2 billion people constitute an awful lot of potential programmers and engineers. At present India has the huge advantage that English is the most common second language, meaning that call centers and programmers can more easily pick up US software skills and communicate with western companies. Also there are far more established technology players in India, but this advantage will not continue forever. Napoleon once said “Let China sleep, for when it awakes it will shake the world” – after 9% economic growth rates for 20 years, it looks like the alarm clock has gone off.

Bangalore and BI don’t mix

December 19, 2005

An article by Nakis Papadopoulous asserts that offshoring does not work for business intelligence applications, though he spends little time discussing why. Off-shoring has clearly moved beyond the pioneering days. My first experience with it was a project when I was at Exxon back in the 1980s, which in itself tells you that ideas often take a long time to really catch on. With the likes of TCS and Wipro now huge companies in their own right, off-shoring has become fairly mainstream, is it ought to be possible to look at some lessons.

While perhaps any project can be off-shored, there is a spectrum of risk that you need to consider. The big Indian companies have developed a high level of process quality, many of them certified to CMM level 5, which is more than can be said for most western IT outfits (about three quarters of CMM Level 5 IT companies are in India), so there is a major focus on quality. However in order to really feel the benefits of this you are going to need a stable, high quality specification; the CMM process is big on repeatable, documented processes. On a conventional project, questions about the specification can be dealt with by someone wandering across a corridor, but this is more difficult many time-zones and thousands of miles away. Hence the more stable and well understood the requirements, the better the chance of success. A perfect example would be an interface program between two systems. This can (and must be) tightly defined, so there is minimal ambiguity. As IT systems (unlike human beings) always behave consistently, there is a high degree of stability where each “user” is an It system. This type of application would be a low-risk one to outsource.

Building transactional systems with a well-documented set of needs should be only moderately risky, provided the requirements are well-defined, which in many cases they will be. Similarly, testing is something that requires a series of well-documented cases and responses, so again can work well in an off-shore environment.

Even with interfaces, are not guaranteed, though. We had a recent project at a very large company where the extract-transform-load was off-shored. In principle this should be relatively low risk, but it turned out badly since, among other reasons, some of the systems to extract from had complex business rules that required a lot of explanation, and because the target system was a data warehouse, where there can be a lot of changes in the data needs as users refine their understanding for what they can do. Much of this work was brought back on-shore and the project is now live, but only after a scary phase.

At the high-risk end, building user-interfaces where a lot of prototyping is needed would clearly be awkward many time-zones away, as would systems where the requirements are rather loose. This is frequently the case in business intelligence, where the users often are only partly aware of what they can get out of a system until they have seen the actual data. Here it is rare to see bullet-proof functional specification documents, so an off-shore team is at an inherent disadvantage compared to one camped out next to the business users. This is above all the reason why business intelligence projects are some of the least suitable to be off-shored.

I’d be interested to hear of any experiences, good or bad, out there with respect to off-shoring. Does you own experience match that of the above, or not?

The decline of the trade show

November 10, 2005

Douglas Adams once remarked that mathematics is universal, with its rules being consistent across the universe with the exception of the numbers on an Italian waiter’s billpad. To this he might have added the supposed attendee numbers at IT industry trade shows. Ever been to a show recently where the organizers claim 500 paying attendees, yet you can only count half that? Some trade show exhibitor sections in the last few years have become depressing affairs, with a thin trickle of conference attendees registering for prize draws, or in some cases just handing over their resumes at the booths. Vendors have been increasingly desperate to drum up attendance. At one trade show recently I was handed a brochure about a database appliance by a pretty girl. I asked her about the technology and she said “actually, I don’t know anything about this – I’m a model”. Is this what things have come to?

I had assumed that the malaise would have improved with the general modest recovery in the IT industry’s fortunes, but this barely seems to have happened. I am unaware of any proper data on the subject, but anecdotally the punters seems to be staying away in droves. Where have they gone?

For one thing they are attending webinars. Enabled by modern technology such as Webex, webinars are a more targeted way of reaching people interested in your message. They are attractive to vendors because they are relatively cheap (a trade show exhibit can cost USD 10-30k in fees, plus travel and people costs) and you get people attending who are genuinely interested. Instead of a trickle of bored looking geeks in search of free giveaways, with the odd five minute conversation thrown in, at a webinar people log in and listen to you for perhaps an hour. The number of contacts can compare well also. At a regular trade show you might get (say) 40-50 contacts, but perhaps only 5-10 of these will be of any real level of interest. By contrast, at a webinar you have people who have bothered to take an hour of their time to listen to you. At Kalido we have run webinars with over 300 attendees, so it can be seen that this compares very favorably to trade shows.

The other forum that people still attend are user groups e.g. there were 2,000 attendees at last week’s Business Objects user group. Customers still want to hear about product directions, meet other customers and get a bit of free education. While trade shows are not yet an endangered species, I wonder whether the rise of the webinar will gradually cast them in the role of the slide rule against the pocket calculator.