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Key Takeaways from Salesforce's Q1

Key Takeaways from Salesforce's Q1

Chris Kanaracus
Chris Kanaracus
Managing Editor, Constellation Insights Constellation

Chris Kanaracus is managing editor of Constellation Insights.  Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members.  Prior to joining Constellation, Kanaracus spent seven years covering the enterprise software industry for IDG News Service, where he frequently broke exclusive stories with a focus on end-customer issues. Kanaracus has also held various managerial and reporting roles at newspapers in New England since 1998. Twitter: @chriskanaracus , Title: Big IdeasConstellation Insights Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members. ...

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Constellation Insights

While Salesforce dipped back into the red in its first quarter, after posting modest profits in the previous few, the company remains on a serious growth tear with revenue up 25 percent year-over-year. The full numbers are available here, but as usual, we will go through the earnings conference call and pull out the most relevant pieces of information and perspective (H/T to Seeking Alpha for the call transcript).

Einstein, the Straight Shooter: Salesforce's take on AI in the enterprise is Einstein, built from a collection of homegrown and acquired technologies. It's been pushing out Einstein capabilities across its various clouds. But for now, at least, one Einstein component, Guidance, remains in-house. Salesforce CEO Marc Benioff gave a preview of it on the call:

[W]e then have a piece of Einstein now that we've not yet rolled out to our customers called Einstein Guidance. So this is a capability that I use with my staff meeting, when I do my forecast and when I do my analysis of the quarter, which happens every Monday at my staff meeting like a lot of CEOs do, it's a very typical process, of course, we have our top 20 or 30 executives around the table. We talk about different regions, different products, different opportunities. And then I ask one other executive their opinion and that executive is Einstein. And I will literally turn to Einstein in the meeting and say, "Okay, Einstein, you've heard all of this. Now what do you think?"

And Einstein will give me the over and under on the quarter and show me where we're strong and where we're weak and sometimes will even point out a specific executive, which has done in the last three quarters and said that this executive is somebody who needs specific attention during the quarter. ... I think for a CEO, typically the way it works is, of course, you have various people, mostly politicians and bureaucrats, in your staff meeting who are telling you what they want to tell you to kind of get you to believe what they want you to believe. Einstein comes without bias.

Industries Going All In: Salesforce rolled out a vertical strategy several years ago, and president Keith Block gave a progress update on the call. Ten of the 15 largest telcos, 8 of the United States' 10 largest retailers, and nine of the top 10 wealth management firms "rely" on Salesforce, he said. For public sector, Block reported expanded relationships with the U.S. Army and Air Force, as well as a new deal with the state of Florida centered on tourism. 

Salesforce As Digital Transformation Driver: Benioff noted on the call that acquisitions such as SteelBrick for CPQ (configure, price, quote) capabilities are helping drive new Sales Cloud deals, particularly into existing customers. Overall, Salesforce is capturing a bigger piece of IT spending now and this is positioning it as a key player for digital transformation projects, Block said:

[W]e're able to say, "Okay, now the walls between sales, service and marketing are coming down." So now we have an opportunity to provide a 360-degree view of the customer with service and with marketing. And take that now one step further, as we've moved from systems of record to systems of engagement to now systems of intelligence. ... So it's an expansion of our capabilities and our opportunity to drive transformation with these customers.

 

Amazon Web Services Is Salesforce's 'Best Friend': Salesforce is moving some of its workloads to Amazon Web Services, a move that will help it shave costs and expand its global footprint. But the alignment seems much closer than a financial transaction, judging by this remark from Benioff:

I think at Salesforce, we really strongly believe that the enemy of my enemy is my friend, and I think that makes Amazon Web Services our best friend. 

As for that enemy? Benioff didn't actually say the word "Oracle," but he may as well have.

Data to Decisions Marketing Transformation Next-Generation Customer Experience Tech Optimization Chief Customer Officer Chief Information Officer Chief Marketing Officer Chief Digital Officer Chief Revenue Officer

Google I/O: The Key Enterprise Takeaways

Google I/O: The Key Enterprise Takeaways

Chris Kanaracus
Chris Kanaracus
Managing Editor, Constellation Insights Constellation

Chris Kanaracus is managing editor of Constellation Insights.  Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members.  Prior to joining Constellation, Kanaracus spent seven years covering the enterprise software industry for IDG News Service, where he frequently broke exclusive stories with a focus on end-customer issues. Kanaracus has also held various managerial and reporting roles at newspapers in New England since 1998. Twitter: @chriskanaracus , Title: Big IdeasConstellation Insights Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members. ...

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Google's I/O developer conference kicked off this week and as in past years, it generated a lot of news spanning both consumer and enterprise-oriented scenarios (and of course, in some cases that line is a bit blurry). Here's a look at the top takeaways from the event's announcements for CXOs to consider.

Not Mobile First, AI First

Artificial intelligence has been the hottest trend in tech for some time now, and fittingly was the dominant focus of I/O. Put simply, Google wants to dominate the AI discussion and is making major moves to succeed in doing so.

It introduced Google.ai, which ties together all of its AI efforts in one place. It's aimed at both private companies, individual developers and academics and will focus on Google's AI research, tools and applied AI. 

Google CEO Sundar Pichai unveiled a new project called AutoML, a neural network capable of designing neural networks. This notion has been a holy grail of sorts in the AI field, and Pichai says Google will make major strides on the relatively near horizon, writing in a blog post:

We hope AutoML will take an ability that a few PhDs have today and will make it possible in three to five years for hundreds of thousands of developers to design new neural nets for their particular needs. 

AI is informing how Google evolves its products in a fundamental way, and the shift applies to the tech industry as a whole, Pichai added.

We are now witnessing a new shift in computing: the move from a mobile-first to an AI-first world. ... Think about Google Search: it was built on our ability to understand text in webpages. But now, thanks to advances in deep learning, we’re able to make images, photos and videos useful to people in a way they simply haven’t been before. Your camera can “see”; you can speak to your phone and get answers back—speech and vision are becoming as important to computing as the keyboard or multi-touch screens.  

There is still a long way to go before we are truly an AI-first world, but the more we can work to democratize access to the technology—both in terms of the tools people can use and the way we apply it—the sooner everyone will benefit.

Google has its own commercial considerations for AI, of course, going beyond its core products. It is hoping to make Google Cloud Platform the go-to place for developing bespoke AI applications. Google's secret sauce for accomplishing that are its TPUs (Tensor Processing Units), specialized chips designed for machine learning workloads.

The first generation of TPUs were introduced last year, but focused on running Google's existing machine learning models more efficiently. Pichai annnounced that the second-generation of the chips, dubbed Cloud TPUs, will be offered through Google Compute Engine later this year. Cloud TPUs not only run existing models but can train new ones. 

Google is also clustering the TPUs into what it calls "pods," which provide huge performance gains over past approaches. A new large-scale translation module once required a full day of training on 32 high-end GPUs, but accomplishes the same thing now "in an afternoon using just one eighth of a TPU pod," according to Google. TPUs will work in conjunction with TensorFlow, the machine learning framework Google open-sourced in 2015 to considerable success.

The company is running an alpha program for the TPUs and is also introducing the TensorFlow Research Cloud, which will make 1,000 TPUs available to researchers from both private industry and academia if they're willing to give back contributions to the open-source community.

Instant Apps Go GA

First announced at last year's I/O conference, Android Instant Apps are now out of preview and available to all developers. Instead of making users download and install an app, Instant Apps actually stream to devices from Google Play. Later on, users can decide to install them permanently.

Naturally, Instant Apps aren't as powerful as installed ones, which have deeper access to the device, but they do include useful capabilities such as payments and location.

Instant Apps provide a middle ground between websites and full-featured apps. That's a useful tool for enterprises to have in the toolbox, whether for internal users or outreach to customers. Constellation Research VP and principal analyst Holger Mueller noted earlier this year that Instant Apps have security advantages, since installed apps would involve MDM (mobile device management) issues.

The question now is how much momentum Google can build for Instant Apps out of the gate. Instant Apps capabilities will ship with Android O, the next version of the mobile OS, but will also be compatible with previous versions—a must, given the rampant fragmentation in the Android ecosystem. 

Enterprises should take a look at how Instant Apps can fit into their overal mobility, marketing and internal IT strategies. Beyond the potential use cases, Instant Apps give IT leaders a new way to balance development resources; currently supported, full-blown apps could be replaced with lighter touch Instant Apps requiring less overhead for IT.

Google Steps Toward HR with Google for Jobs

There has been much speculation about which directions Google will head in the enterprise application market since the arrival of former VMWare head Diane Greene as SVP of cloud. While it's not clear that Greene's fingerprints are on it, a new Google service called Google for Jobs brings the company into the orbit of HR and HCM software. Pichai described the new service in a blog post:

[A]lmost half of U.S. employers say they still have issues filling open positions. Meanwhile, job seekers often don’t know there’s a job opening just around the corner from them, because the nature of job posts—high turnover, low traffic, inconsistency in job titles—have made them hard for search engines to classify. Through a new initiative, Google for Jobs, we hope to connect companies with potential employees, and help job seekers find new opportunities.

As part of this effort, we will be launching a new feature in Search in the coming weeks that helps people look for jobs across experience and wage levels—including jobs that have traditionally been much harder to search for and classify, like service and retail jobs. 

Google has already worked with companies such as LinkedIn and Glassdoor to integrate them with Google for Jobs. What will be interesting to watch for are potential partnerships down the road with enterprise HR and HCM vendors. 

 

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SAP Leonardo and Digital Transformation: The Strategic Implications

SAP Leonardo and Digital Transformation: The Strategic Implications

Dion Hinchcliffe
Dion Hinchcliffe
Vice President and Principal Analyst Constellation Research

Title: About Dion Hinchcliffe Dion Hinchcliffe is an internationally recognized business strategist, bestselling author, enterprise architect, industry analyst, and noted keynote speaker. He is widely regarded as one of the most influential figures in digital strategy, the future of work, and enterprise IT. He works with the leadership teams of large enterprises as well as software vendors to raise the bar for the art-of-the-possible in their digital capabilities. He is currently Vice President and Principal Analyst at Constellation Research. Dion is also currently an executive fellow at the Tuck School of Business Center for Digital Strategies. He is a globally recognized industry expert on the topics of digital transformation, digital workplace, enterprise collaboration, API…...

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Billed as a "digital innovation system", the central focus on SAP Leonardo at the company's massive annual confab in Orlando this week speaks volumes as to its perceived importance to the firm's overall vision. SAP is clearly betting Leonardo is the right mix of technologies, tools, patterns, and services to help large companies deliver quickly on the latest high-impact digital capabilities beyond the fundamentals in the increasingly commoditized public cloud industry. The specific capabilities targeted by Leonardo include technologies such as Internet of Things, machine learning, analytics, blockchain, and big data as well as key enabling approaches like design thinking and tapping into strategic pools of shared intelligence.

You can get a clearer sense of the specifics of the Leonardo announcement from my industry colleagues Chris Kanaracus and Andy Mulholland, as well as Holger Mueller.

Most organizations today badly need a leg up to close their digital gap, and Leonardo is very much aimed at this target. As I've noted on ZDNet recently, the data shows there's no doubt that most organizations are now under severe pressure this year to digitally adapt much faster than they have been. The prime reason is that technology change continues to speed up, and the distance between what enterprises need to do to be digitally competitive and what they're actually doing is growing. This has turned into a vital existential issue: The number of companies that have encountered end-of-life events in recent years has led to the many dire predictions for the curtailed longevity of the large enterprise that are cited at so many conferences and articles these days. SAP Leonardo has the potential to help with these strategic challenges across the board and become an engine for digital transformation.

SAP Leonardo: Digital Business Enabler

The Strategic Motivation for Systems like Leonardo

Yet organizations need much more depth for their digital transformation efforts than the high-level blueprints or non-enterprise-class cloud offerings that most vendors are currently promoting. At issue -- and where Leonardo offers a specific solution that is geared for true enterprise use -- is the ever-more arduous task of successfully navigating and then executing on the fast-growing number of modern new digital capabilities expected today. Staying on the technology treadmill has grown very difficult for the typical organization to achieve directly. The reasons for this abound: With IT budgets relatively flat over the last few years, the incoming technology portfolio is proving much too large and costly to absorb in terms of available talent, scope, and resources using home-grown skills, infrastructure, platforms, applications for all but the very largest players.

Worse yet, is that unless organizations have already been investing in scale to develop native expertise in the complex and sophisticated capabilities of emerging enterprise tech (public cloud stacks, cognitive technologies, connected device hardware/software, open ledger stacks ala blockchain, to name just a few), then they're already years behind, never mind figuring out how best to combine these technologies together into a cohesive and mature set of digital business and customer experience offerings. They need a way to catch up and sustain the exponential tech growth curve.

Instead, for many organizations, what's really needed are ready-to-use platforms that combine all these digital services together into proven capabilities that are refined and matured across many customers. This is exactly what SAP, Salesforce, and many others did back in the day with ERP and CRM, and to which enterprises were largely happy to delegate while receiving best practices and economies of scale in return. It appears to be the same route that most will now have take to deliver on the promise of today's next generation of enterprise technologies.

All of this is why few CIO or CDOs will be rolling their own target platforms for digital transformation. Instead, they will be curating a small but top flight set of next-generation digital business platforms, of which Leonardo is a prime example, from market leaders that they can then realize their specific digital businesses strategies upon. I've previously included the SAP Cloud Platform on my informal short-list of digital transformation target platforms and Leonardo is an important extension of this platform that's aimed at a) enabling contemporary digital business -- which will ultimately represent the majority of revenue generation for companies within 10 years -- and b) representing SAP's product suite for the latest strategic enterprise technologies.

Digital Business Enablement: Leonardo Goes Up the Stack

Leonardo clearly shows how what I call digital transformation target platforms are really dividing into two halves as a category: a) Enterprise-class Platform-as-a-service (PaaS) offerings that offering foundational cloud capabilities like compute, data, and storage, as well as the standard applications related to the ERP suite, and b) new higher-order digital capabilities that yes, improve those same standard applications, but more significantly, allow them to be crafted into transformative new digital business services and business models that will sustain enterprises into the future.

Examples of the higher order business functions that Leonardo can enable include helping enterprises convert unconnected market offerings into data-driven connected products (IoT), applying blockchain in specific industries (financial services, healthcare, real estate, supply chain, etc.), and using machine learning/artificial intelligence to generate timely strategic insights to significantly improve the customer experience. Thus, Leonardo is decidedly in the latter category of target platform, which SAP Chief Digital Officer Jonathan Becher told me at SAPPHIRE NOW this week is based upon and entirely operates within the SAP Cloud Platform, which itself fits squarely in the first category. In short, Leonardo is a higher order digital business platform, while SAP Cloud Platform provides the core foundation.

Key Leadership Takeaways for SAP Leonardo

What then are the strategic implications of SAP Leonardo that business and IT leaders should know? Here are the key takeaways:

  • Leonardo can shorten the time needed to execute on a more ambitious digital business vision. How much remains to be seen, but SAP's betting that by having Leonardo's capabilities already fit together and proven by initial early adopter customers (currently Trenitalia, Nissan, and Stara) that it can help enterprise customers simultaneous take on a more expansive digital vision while also adopting the new technologies that Leonard offers much faster. Just as significantly, SAP is touting industry-specific accelerators for Leonardo. The company already plays in 25 major industries today, as they reported at SAPPHIRE NOW this week, but are currently focusing on accelerators for Leonardo in the retail, consumer products, manufacturing, sports, and entertainment industries at first. Other industry accelerators are coming. SAP claims these accelerators, which have much of the domain knowledge for an industry already baked into a reference model, can boost the execution speed of a Leonardo-based solutions by up to a substantial 50%. Leadership takeaway: If these expectations are borne out, Leonard can potentially contribute to a vital first-mover advantage in digital's increasing winner-takes-all world.
  • Leonardo goes beyond technology, by applying its system in key ways that are more likely to create competitive advantage. Unusually among digital platforms (for lack of a better word, as SAP calls it a 'system'), Leonardo's promotional materials prominently lists design thinking and something SAP calls data intelligence as part of its central capabilities. Design thinking is an increasingly popular -- some would say trendy -- way of developing more people-centric solutions by employing empathy for the problem space. Hard data for design thinking's effectiveness is still in short supply, but most reasonable people believe the practice is more likely to produce better digital experiences than older methods. As digital customer experience is becoming the market differentiator (and a major force for value creation), SAP is anticipating that featuring design thinking in the application of Leonardo to enterprises' digital business needs will ensure its technologies are more aptly and effectively applied. Data intelligence is touted by SAP as a way to "extract insights from a large network of anonymized data." Done right, this allows Leonardo customers to use private pools of otherwise hard-to-obtain strategic data that can be employed to create a distinctly unique digital business offering. As controlling or having access to vital and hard-to-replicate sources of data has steadily become a sustainable competitive advantage over the last decade, this lets Leonardo offer a hard-to-copy value proposition than goes beyond technology. Leadership takeaway: SAP is hoping that these capabilities will offer significant advantage well beyond basic technology modernization, as Leonardo offers strategies design and data services that can potentially impart real differentiated business advantage, at least against those not already using the system.
  • There is a risk of vendor lock-in, but the platform underlying Leonardo is multi-cloud capable. Along with the advantages of Leonardo (speed to market, vital emerging tech, competitive differentiation in design and data), there is issue of vendor and one-size fits all. The CIOs I speak with regularly these days are concerned about the tendency for the largest vendors to offer an exhaustive technology and business applications stack, making them both beholden to vendors like never before (by putting most or all of their eggs in one vendor basket) while also making it hard to differentiate in the market without very extensive and time-consuming customizations. Certainly, there are advantages as well, as a vendor being a one-stop-stop often means the product pieces fit together better, support and management is easier, etc. Leonardo's strategically significant nature certainly extends the company's value chain more deeply into the enterprise than ever and will make SAP customers more reliant on them. Yet I spoke at SAPPHIRE NOW with several customers running alternative clouds like Microsoft Azure, with SAP running on top, and reporting very good results. As long as SAP maintains this kind of friendliness towards hybrid vendor configurations that lets enterprises mix-and-match their cloud infrastructure with important new higher-order platforms and systems, then there is lower risk. Leadership takeaway: Require long-term multi-cloud flexibility from SAP (and all vendors) in your contracts, and verify Leonardo supports your planned strategic vendor mix before adopting.

There was a good amount of discussion this week at SAPPHIRE NOW about the composition of Leonardo and if it hung together as workable product. Overall, I believe the vision makes sense, even if the messaging itself, which puts technologies and design/data approaches at the same level of abstraction, is a little unclear, but I believe this will be sorted out. The bottom line is the Leonardo does offer a big enough umbrella that it's clear that it's intended for enterprises that want to step into their overall digital future, whatever that may be. In practical terms, Leonardo offers a go-to-market vehicle and approach for companies that want to meaningfully adopt Internet of Things, machine learning, and blockchain technologies in an overall approach that makes sense.

Longer term, the main question will be whether the elements of Leonardo truly fit together so advantageously as described, if SAP continues to incorporate important emerging technologies into it, and if some of the more interesting components, like industry accelerators, get fully fleshed out to critical mass. For now, I advise enterprises to consider Leonardo earnestly (taking care not to overcommit prematurely) for use in their digital transformation plans and experiments, especially if they are already SAP Cloud Platform customers.

Related Links

SAP Leonardo

SAP Cloud Platform

Sapphire 2017: Keynote By SAP CEO Bill McDermott and his Guests Announcing SAP Leonardo

Introducing the New SAP Leonardo: Empowering Companies to Digitally Transform at Scale

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How to avoid the blockchain weeds

How to avoid the blockchain weeds

Steve Wilson
Former Vice President and Principal Analyst Constellation Research

Steve Wilson is former VP and Principal Analyst at Constellation Research, leading the business theme Digital Safety and Privacy. His coverage includes digital identity, data protection, data privacy, cryptography, and trust. His advisory services to CIOs, CISOs, CPOs and IT architects include identity product strategy, security practice benchmarking, Privacy by Design (PbD), privacy engineering and Privacy [or Data Protection] Impact Assessments (PIA, DPIA). Coverage Areas: -  Identity management, frameworks & governance-  Digital identity technologies-  Privacy by Design -  Big Data; “Big Privacy”-  Identity & privacy innovation Previous experience: Wilson has worked in ICT innovation, research, development and analysis for over 25 years. With double…...

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After spending two years researching blockchain and the evolution of advanced ledger technologies, I still find a great spread of understanding across my clients and business at large about blockchain.  While ledger superpowers like Hyperledger, IBM, Microsoft and R3 are emerging, there remains a long tail of startups trying to innovate on the first generation public blockchains. Most of the best-selling blockchain books confine themselves to Bitcoin, and extrapolate its apparent magic into a dizzying array of imagined use cases.  And I’m continuously surprised to find people who are only just hearing about blockchain now. 

For all sorts of specialists, it can seem that everyone is talking about blockchain and ledger technologies, but the truth is most people are not yet up to speed.  No one should be shy to ask what blockchain is really all about. 

Many blockchain primers and infographics dive into the cryptography, trying to explain to lay people how “consensus algorithms”, “hash functions” and digital signatures all work.  In their enthusiasm, they can speed past the fundamental question of what blockchain was really designed to do.  I’ve long been worried about a lack of critical thinking around blockchain and the activity it’s inspired. If you want to be able to pick the wheat from the chaff in this area, you really only need to know what blockchain does, and not how it does it.

So I’ve tried to write a fresh and uncomplicated explanation of what blockchain can do and what it cannot do.  You can down load the report Blockchain Explained in Plain English here.

 

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Teradata Transition to Cloud and Consulting Continues

Teradata Transition to Cloud and Consulting Continues

Doug Henschen
Former Vice President and Principal Analyst Constellation Research

Doug Henschen is former Vice President and Principal Analyst where he focused on data-driven decision making. Henschen’s Data-to-Decisions research examines how organizations employ data analysis to reimagine their business models and gain a deeper understanding of their customers. Henschen's research acknowledges the fact that innovative applications of data analysis requires a multi-disciplinary approach starting with information and orchestration technologies, continuing through business intelligence, data-visualization, and analytics, and moving into NoSQL and big-data analysis, third-party data enrichment, and decision-management technologies. Insight-driven business models are of interest to the entire C-suite, but most particularly chief executive officers, chief digital officers,…...

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Teradata simplifies pricing, executes on business consulting and hybrid cloud strategy. A look at next steps in the company’s ongoing transition.

“Business outcome led, technology enabled.” This was the theme at the May 8-10 Teradata Third-Party Influencers Summit in San Diego, and it reflected a two-to-one ratio of consulting-oriented presentations to technology updates.

Teradata has been expanding already robust consulting and implementation offerings in part because mass migrations to cloud computing and open-source big data platforms like Hadoop have reduced demand for Teradata’s on-premises racks and appliances for data warehousing. Even as data volumes have continued to grow exponentially, Teradata’s revenues have declined in recent years from a high of $2.7 billion in 2014 to $2.3 billion in 2016.

Teradata compared it's old (at left) and new (at right) pricing scheme and cloud managed
services options at its May Influencers Summit.

Last year’s Summit was held shortly after the company replaced its CEO, announced plans to sell off its Aprimo marketing business unit, and introduced a more aggressive path to cloud and consulting services. At this year’s Summit we learned that Teradata has not only executed on that strategy, it has gone further to transform itself by pursuing simplicity, flexibility and control in four areas:

Pricing: Responding to feedback that its licensing approach was too complex, with too many licensing models and too many a la carte options, Teradata has devised a consistent, subscription-based licensing approach that will apply on-premises or in private or public clouds. The model is based on two dimensions: T Cores and Tiers. T Cores measure compute cores and disk I/O, but there are discounts if you’re using less than maximum input/output capacity.

The four-tiers reflect how capacity is being used, ranging from the free Developer tier to progressively more feature-rich (and most costly) Base (simple production), Advanced (production with mixed workloads), and Enterprise (mission-critical, enterprise workloads) tiers. The pricing is designed to be simple, predictable and consistent, with no penalties for choosing or moving between on-premises, private cloud or public cloud deployment. What’s more, pricing is more aggressive, with the Base Tier taking on cloud rivals like Amazon Redshift.

Portfolio: Where Teradata previously offered as many as nine systems in its portfolio, in now offers just two. IntelliFlex, the company’s new flagship, separates storage and compute decisions to support multiple workloads within a single rack. Customers can add different types of storage and compute nodes, ranging from archival retrieval to the ultimate in in-memory query performance. Customers can also add capacity in smaller increments than previously available and they can quickly reconfigure as needs change.

IntelliBase is Teradata’s entry-level appliance. It costs approximately 15% more than commodity hardware. IntelliBase is designed for more balanced data warehouse workloads. IntelliBase is designed for more balanced data warehouse workloads. It is not as flexible as IntelliFlex, which can be reconfigured to address high I/O or high CPU requirements..

Cloud: Teradata has made over and recast its managed cloud services as IntelliCloud. The offering combines the new T-Core- and Tier-based pricing scheme with three flexible infrastructure options behind the cloud services. Teradata previously offered only appliance-grade (2800 series) capacity behind its services, but you can now choose IntelliFlex or IntelliBase as the platform for managed services in the Teradata Cloud, which has data centers in Las Vegas and Frankfurt. The third option is Teradata-managed services running on carefully selected infrastructure services in the Amazon cloud (and, later this year, the Microsoft’s Azure cloud). Consumption options are more elastic with the public cloud options, but it won’t be as performant as IntelliFlex-based capacity, and service-level agreements aren’t available because Teradata has no control over the infrastructure. The intent it to give customers choice, with a fourth choice being bring-your-own-license and managing Teradata Database on AWS or Azure yourself.

Consulting: Teradata has consolidated its growing consulting offerings under the Teradata Global Services umbrella, and it has formalized three service lines to avoid overlaps and confusion. Think Big Analytics, the big data consulting business Teradata acquired in 2014, continues as the business-outcome-focused unit, offering industry-focused expertise in data science, data visualization and big data solutions. Enterprise Data Consulting focuses on technology, offering expertise in architecture, data management, data governance, security and services. Customer Services helps customers get the most out of their systems and people, applying proactive and reactive expertise in systems and software management and change management.

MyPOV on Teradata’s Ongoing Transformation

Disruptive market forces have dealt Teradata a tough hand to play. There’s clearly disillusionment with complex open source platforms like Hadoop these days, but that doesn’t mean we’re going back to Teradata’s heyday of enterprise data warehousing. Companies are still pursuing high-scale data lake approaches on low-cost, distributed platforms, whatever flavor prevails (whether that’s HDFS, objects stores like S3 and Azure Data Lake, or the next open source fad). Companies will also continue to rationalize their comparatively high-cost data warehousing infrastructure expenditures.

Teradata acknowledged last year that we’re in a “post-relational world,” but this year’s Summit shows signs that it’s truly adapting to a changed market. The company has not only delivered far more flexible hardware, it has gone further with the simplified, hybrid subscription-based pricing and more flexible cloud-deployment options.

Teradata is becoming more of a software and services company and less of a hardware vendor. That shift should eventually improve profitability, even if revenues continue to slide as deployments shift to the cloud.

Will customers trust Teradata to provide impartial, “business outcome led” consulting services? Customer Gerhard Kress said he chose Teradata in 2013 in large part because “the company understands that the world is a lot bigger than Teradata.” Director, Data Services at Siemens, Kress presented at the Summit on the train manufacturer’s global IoT deployment, and he noted that other vendors (mostly big platform vendors) asserted that they could address all challenges within their stacks. Teradata, meanwhile, suggested a heterogeneous approach reflecting technologies already in place at Siemens.

This “Blended Architecture” slide, from a Teradata Ecosystem Architecture Services presentation,
captures the vendor’s realistic sense of its place within enterprise environments.

Teradata has also become more realistic about its cloud ambitions. Two years ago Teradata talked about pursuing midsize businesses with the Teradata Database on AWS service. At this year’s Summit Teradata said it’s no longer pursuing that idea. Instead, executives said the company is focused on the needs of the 500 highest-scale and most sophisticated customers. That’s where Teradata’s technology really shines.

Teradata thrived in the past when it focused on delivering data-driven business outcomes at top of the market. It appears that focus is back.

Media Name: Teradata IntelliCloud.jpg
Media Name: Teradata Ecosystem Architecture Services.jpg
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Examining Leonardo: SAP's 'Digital Innovation System'

Examining Leonardo: SAP's 'Digital Innovation System'

Chris Kanaracus
Chris Kanaracus
Managing Editor, Constellation Insights Constellation

Chris Kanaracus is managing editor of Constellation Insights.  Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members.  Prior to joining Constellation, Kanaracus spent seven years covering the enterprise software industry for IDG News Service, where he frequently broke exclusive stories with a focus on end-customer issues. Kanaracus has also held various managerial and reporting roles at newspapers in New England since 1998. Twitter: @chriskanaracus , Title: Big IdeasConstellation Insights Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members. ...

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Andy Mulholland
Andy Mulholland
Vice President and Principal Analyst, Constellation Research Constellation Research

Andy Mulholland is Vice President and Principal Analyst focusing on cloud business models. Formerly the Global Chief Technology Officer for the Capgemini Group from 2001 to 2011, Mulholland successfully led the organization through a period of mass disruption. Mulholland brings this experience to Constellation’s clients seeking to understand how Digital Business models will be built and deployed in conjunction with existing IT systems. Coverage Areas Consumerization of IT & The New C-Suite: BYOD, Internet of Things, IoT, technology and business use Previous experience: Mulholland co authored four major books that chronicled the change and its impact on Enterprises starting in 2006 with the well-recognised book ‘Mashup Corporations’ with Chris Thomas of Intel. This was followed in…...

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In January, SAP moved to bundle its offerings for IoT under the brand name Leonardo. Jump forward just several months later to this week's Sapphire Now conference, and the vision has already grown much broader. 

What you might call 'Leonardo 2.0' now encompasses IoT, machine learning, analytics, big data, design thinking services and blockchain, all built atop SAP's cloud platform. Customers who adopt SAP Cloud Platform won't be tied to SAP data centers for the underlying infrastructure, as the company has inked partnerships with Amazon Web Services, Microsoft Azure and Google Cloud Platform as well.

The new Leonardo is SAP's "digital innovation system," and the basis for the company's drive into digital transformation projects. Digital transformation was the central theme of this year's Sapphire, and where SAP sees ample opportunity for growth as customers not only migrate older ERP environments to the new S/4HANA, but look to adopt the leading-edge technologies targeted by Leonardo.

SAP is shipping a number of industry accelerators—fixed-priced products composed of services and subscription licenses—for Leonardo, aimed initially at retail, sports organizations, consumer products and discrete manufacturing. 

For sure, Leonardo is an apt title for what the product set stands to offer customers, with its evocation of renaissance man Leonardo Da Vinci. It also raises the bar high for SAP to deliver customer success, of course, given how much Leonardo projects will depend not only on technology but professional services from SAP and partners. 

Some may question whether quickly broadening Leonardo's remit so far beyond IoT could create market confusion, but Sapphire provides the biggest platform of the year for SAP to educate customers on its product strategy. In any event, it's far from clear how much penetration the original Leonardo vision had made among the installed base. 

SAP is making the right move with the new incarnation of Leonardo because it sketches out a clearer picture of what a digital business ought to be, says Constellation Research VP and principal analyst Andy Mulholland.

"There will be a lot of CIOs who will be grateful for the clarity this new version of SAP Leonardo provides towards potential a proof-of-concept deployment of IoT and AI in the enterprise," he says. "Describing SAP Leonardo as adding systems of intelligence to to the traditional SAP systems of record will help the general market confusion as to exactly how to view the role of IoT and AI in enterprise digital business, as well as positioning Leonardo as an architecrure and a platform for ongoing development."

"The numbers and importance of the partners who have expressed commitment to supporting SAP Leonardo suggests that they too feel this is an important and radical move in the marketplace," Mulholland adds. "Constellation Research advises SAP customers to take a detailed look, and suggests non-SAP customers may also find the platform interesting too."

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SAP Makes A Concession on 'Indirect Access' Fees: What It Means for Customers

SAP Makes A Concession on 'Indirect Access' Fees: What It Means for Customers

Chris Kanaracus
Chris Kanaracus
Managing Editor, Constellation Insights Constellation

Chris Kanaracus is managing editor of Constellation Insights.  Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members.  Prior to joining Constellation, Kanaracus spent seven years covering the enterprise software industry for IDG News Service, where he frequently broke exclusive stories with a focus on end-customer issues. Kanaracus has also held various managerial and reporting roles at newspapers in New England since 1998. Twitter: @chriskanaracus , Title: Big IdeasConstellation Insights Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members. ...

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SAP CEO Bill McDermott took the stage for the Sapphire Now conference's opening keynote this week, and after a few minutes of audience engagement and banter, launched into his first core topic. No, it wasn't about a new product or strategy, but rather something that affects many SAP customers: Indirect access.

The term refers to scenarios in which a customer uses a third-party application, such as Salesforce, to tap into SAP system data. The problem arises when a user doing so isn't also a licensed SAP user. In the course of a software license audit, companies can find themselves on the hook for substantial penalties for unpaid license fees, whether the violation was intentional or not. 

Earlier this year, SAP won a landmark court victory against drinks distributor Diageo, who could pay up to $68 million in penalties. Diageo had developed two Salesforce-based systems which it connected to its core SAP system through SAP Process Integration. The court rejected Diageo's defense that PI served as a "gatekeeper" license to SAP. 

SAP has also sued Anheuser-Busch InBev, the world's largest brewer, regarding both alleged indirect access violation and unlicensed use of SAP software. It is seeking $600 million. 

Invoking the notion of "empathy" toward SAP customers—a theme he first introduced at last year's Sapphire—McDermott referred to the indirect access issue and said SAP had come up with "simplified pricing," which he briefly described.

"Procure-to-pay and order-to-cash scenarios will now be based on orders, which is a measurable business outcome for any business," McDermott said. The more significant statement came next. "In addition, static read access in third-party systems is your data," McDermott said. "Competitors charge you for static read in third-party systems, SAP will not."

SAP corporate development officer Hala Zeine elaborated on the topic in a blog post. During discussions over pricing and licensing with user groups, indirect access came up repeatedly, Zeine wrote:

We decided to tackle this topic first through the lens of pricing modernization. Our objective was to make pricing predictable, linked to unit of value, transparent, and consistently applied.

We looked first at the areas that would have the greatest impact on the greatest number of people. We found that approximately 80 percent of our ERP customers will benefit from our changes to just these three scenarios: Procure-to-Pay, Order-to-Cash, and Indirect Static Read.

Indirect static read access reinforces that a customer’s data is yours. Just because the data was in the SAP system, does not mean you should pay to view it when it is outside the SAP system. Indirect static read is read-only that is not related to a real-time system inquiry or request and requires no processing or computing in SAP system. Indirect Static Read will now be included in the underlying software license – i.e. free of additional charge when a customer is otherwise properly licensed. SAP leads the pack in addressing customer expectations related to this scenario.

Does this address every indirect access scenario in the age of devices, IoT, and collaborative networks? Not yet. There is much more to do and we are eager to keep updating pricing scenarios to bring you greater value. It is, however, a step in the right direct toward pricing modernization.

However, SAP in turn wants customers to help avoid an unpleasant audit experience by proactively examining their current landscapes and usage:

If you’re fully licensed, there’s no action for you. However, if you’re questioning whether you are under- licensed, let’s talk about it. ... SAP assures customers who proactively engage with SAP to resolve such under-licensing of SAP software that we will not collect back maintenance payments for such under-licensing. We will look at your specific circumstances when resetting your licensing agreement, including providing you the opportunity to receive credit for certain products you may have already licensed so you can update to the new metrics.

Analysis: A Measured Step In SAP Customers' Favor

The UK ruling against Diageo should have been a wakeup call for any SAP customer using third-party software in conjunction with it—which is obviously a large percentage of the overall base. SAP's case against Anheuser-Busch InBev is in arbitration, meaning the details—in particular, any defenses the brewer may have—won't become public. 

While SAP is offering back maintenance indemnity for under-licensed customers who come forward willingly, doing so could still result in additional license fees, which then carry maintenance going forward. There's no sound argument to be made for willingly using SAP software without required licenses, but it remains to be seen how many customers take SAP up on its offer. In any case, Constellation has seen a significant uptick of late in inquiries regarding indirect access and related SAP license audits—in short, this issue is not going away.

Meanwhile, the concession SAP offered on indirect access is limited in scope. Indirect static read means just that—nothing that requires processing within the SAP system. Still, indirect static reads are part of many valuable use cases.

Constellation backs the generally accepted industry parameters of indirect access, which should include the ability to process batch data; aggregate information into a data warehouse or other data store; access data for use in another system via data integration; and to enter data from a third party system. On its face, SAP's new policy would only prohibit the last. 

However, another telling passage in Heine's statement was this: 

Does this address every indirect access scenario in the age of devices, IoT, and collaborative networks? Not yet. There is much more to do and we are eager to keep updating pricing scenarios to bring you greater value.

That's a bit opaque, considering how important those workloads are now and will be in the future. Digital transformation is the predominant theme of this year's Sapphire event, which featured the unveiling of an expanded product strategy called Leonardo, a "digital innovation system" that brings together machine learning, IoT, blockchain and other leading-edge technologies on SAP's cloud platform. 

SAP, of course, sees digital transformation projects as its major growth engine and wants customers to come along for the ride quickly. To that end, it will hopefully provide a broader explanation of how indirect access will work in this new landscape soon, preferably before the next Sapphire rolls around. That would be the empathetic thing to do.

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Rimini Street Is Going Public, But Not Through Long-Anticipated IPO

Rimini Street Is Going Public, But Not Through Long-Anticipated IPO

Chris Kanaracus
Chris Kanaracus
Managing Editor, Constellation Insights Constellation

Chris Kanaracus is managing editor of Constellation Insights.  Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members.  Prior to joining Constellation, Kanaracus spent seven years covering the enterprise software industry for IDG News Service, where he frequently broke exclusive stories with a focus on end-customer issues. Kanaracus has also held various managerial and reporting roles at newspapers in New England since 1998. Twitter: @chriskanaracus , Title: Big IdeasConstellation Insights Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members. ...

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R "Ray" Wang
Principal Analyst and Founder Constellation Research

R “Ray” Wang is the CEO of Silicon Valley-based Constellation Research Inc. He co-hosts DisrupTV, a weekly enterprise tech and leadership webcast that averages 50,000 views per episode and blogs at www.raywang.org. His ground-breaking best-selling book on digital transformation, Disrupting Digital Business, was published by Harvard Business Review Press in 2015. Ray's new book about Digital Giants and the future of business, titled, Everybody Wants to Rule The World was released in July 2021. Wang is well-quoted and frequently interviewed by media outlets such as the Wall Street Journal, Fox Business, CNBC, Yahoo Finance, Cheddar, and Bloomberg. Short Bio R “Ray” Wang (pronounced WAHNG) is the Founder, Chairman, and Principal Analyst of Silicon Valley-based Constellation…...

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Independent enterprise software support provider Rimini Street will soon be a publicly traded company, but via a merger and not with a long-expected initial public offering. The move stands to give Rimini the capital it needs for expansion. 

Under the arrangement, Rimini Street will merge with GP Investments Acquistion Corp. The latter will be renamed Rimini Street and continue trading on NASDAQ, but with the ticker symbol RMNI. The deal will have an initial enterprise value of $837 million. Rimini Street founder and CEO Seth Ravin, who will lead the combined company, laid out the rationale for the deal in a statement:

"The combination with GPIAC will provide Rimini Street additional growth capital to expand service offerings and capabilities, strengthen our balance sheet and fund potential acquisitions," said Mr. Ravin. "We believe that having a public company structure will further fuel our growth by facilitating additional sales opportunities and providing additional capital market access."

Rimini is the most prominent third-party support vendor in the market. Founded in 2005, the company has offered software support for Oracle, SAP and other products at half the price of vendor-provided maintenance, while claiming superior service.

It has experienced steady growth even while battling litigation brought against it by Oracle, which alleges Rimini's business model infringed on its intellectual property. That case, as well a suit Rimini filed against Oracle aren't yet resolved, but the specter of litigation apparently wasn't a deal-breaker for GPIAC. (Nor has it been for customers, given Rimini's advancement in the market).

Third-party maintenance appeals to customers with stable systems and little desire to upgrade to newer versions as vendors release them. The option has long been a pillar of Constellation Research's Software Bill of Rights. 

While Rimini has reported annual run-rate revenue of $196 million, that remains a tiny fraction of the total addressable market for on-premise maintenance, which the company estimates at $81 billion.

"I think this [merger] gives Rimini a huge opportunity to expand," says Constellation Research founder and CEO R "Ray" Wang. "More importantly, they can increase their speed in go-to-market."

Rimini's emergence as a public company could have a ripple effect, emboldening more players to enter the business, while prompting competitive responses from incumbent software vendors. Overall, the move looks like a good one not only for Rimini, but enterprise software customers. 

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10 Unique Customer Experience Examples & Best Practices to Boost Your Brand

10 Unique Customer Experience Examples & Best Practices to Boost Your Brand

Sam Fiorella
Partner, Sensei Marketing Partner, Sensei Marketing

Sales & marketing veteran with almost 30 years’ experience and now 1800 digital projects to his credit for clients including Morgan Stanley, AOL, Hyatt Gaming Management, Snyder's of Hanover, Hitachi, the Home Depot, Kraft Foods, Drees Homes, American Idol, and hundreds more, including leading agencies around the North America.     ...

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1

Great customer service goes beyond fixing a computer or handing out discounts.

It’s about leaving people with a good feeling about your business.

And thanks to social media, your customers and prospects are already sharing thoughts about your brand whether you like it or not.

So if you want to minimize the negativity and amplify the positivity, here’s ten simple tips:

1. Treat your employees as your first customer

Great customer service and experience starts with those delivering it: your employees.

When employees are happy, so will your customers.

Southwest Airlines has been consistently ranked as one of the best places to work as they built a work culture of putting their employees first.

The airline company has a team-based environment, one that is fun and inclusive with core values that remind their employees to enjoy their work.

They motivate employees to take pride in the work they do, which often leads long lasting customer service experiences.

A famous example of how Southwest Airlines went above and beyond for their customers occurred in 2011. A man booked a last minute flight to Denver in order see his 3 year-old grandson one last time. Due to heavy traffic, he arrived at the airport 12 minutes after the plane was scheduled to leave, but the pilot had specifically waited for him before taking off.

Go the extra mile for your employees, and they’ll go the extra mile for you.

2. Build an emotional connection with customers

The most memorable customer experiences are the ones that create an emotional connection with customers.

In fact, businesses that use emotional connections outperform their competitors by 85% in sales.

A great example comes from Zappos, the popular online shoe store.

A customer was late returning a pair of shoes due to a death in the family, so the Zappos’ customer service team went out of their way to take care of the return shipping and arranged a courier to pick up the shoes at no cost. They also sent the customer a bouquet and a note offering their condolences.

That’s service with a human touch.

So how do you create customer connections?

It starts with listening.

The process of listening itself shows customers that you care, and you’ll also be able to uncover their needs, challenges, and pain points.

Use tools like Hootsuite, Twitter hashtags, or SocialMention.com to monitor conversations people are having about your brand.

3. Get real (time) about feedback

The best way to capture customer feedback is right after you deliver it.

Consider post-interaction surveys that can be delivered in real-time through programmed tools such as email or phone calls.

Starbucks, for example, often sends an email survey to their customers immediately after a store visit.

The survey asks customer service questions specifically for the Starbucks location they had just made a purchase. In the survey, they ask the customer to rank the friendliness of the baristas and speed of the service.

AT&T uses SMS or text messaging to send a customer service survey to gather feedback from their customers after visiting their stores.

Don’t forget to link great customer feedback to specific customer support teams, as recognizing their contributions helps demonstrate what quality service looks like to other employees.

4. Focus furiously on individual customer needs

A great customer service strategy always starts with understanding what your customer needs.

And if you really want to know what they need, just ask them.

Take Feargal Quinn, the founder and president of Irish food distributor SuperValu. He personally invites twelve customers to join him in a roundtable discussion twice a month.

He asks them about service levels, pricing, product quality, and even about upcoming advertising promotions.

Quinn uses the feedback to evaluate store managers and to improve the company’s strategic planning, and so far it’s working.

5. Practice Social Listening

What’s the best tool to improve customer experience?

Your ears, for listening.

You can create wonderful customer experiences just by listening on social media.

One example comes from Tommee Tippee cups.

By listening on Twitter, the company came across a father who needed replacement of a limited edition Tommee Tippee sippy cup for his son, Ben Carter, who has severe autism.

These sippy cups were the only cups Ben would drink from.

So the father created a hashtag called #cupsforBen and the tweet went viral, garnering hundreds of thousands of retweets, likes, and shoutouts.

As a result, Tommee Tippee announced they would create a limited run of 500 of the discontinued cups, especially for Ben.

That’s how to turn listening into memorable customer service experiences.

There’s lots of tools for social listening such as Hootsuite, Quora, Reddit, SocialMention.com, or just simply searching with hashtags, brand terms, or relevant keywords.

Social media isn’t all about promoting – it’s about listening and helping.

6. Use AI to your advantage

We all know about the importance of customer data.

But there’s different ways of getting it than with surveys, feedback forms, and questionnaires.

In fact, with AI there are ways of gathering customer intelligence without even lifting a finger.

Mattress company Casper, for example, created a free chatbot specifically for insomniacs.

To use it, customers simply text “Insomnobot3000” from their mobile phones and talk about whatever is on their mind and it will have a real conversation with you.

With the Insomnobot3000, Casper is able to collect mobile numbers and send insomniacs promotional offers and discounts for their comfy mattresses. Casper pulled in $100 million in sales its first year of launching the chatbot.

Other examples include Netflix, who use predictive analytics to provide show recommendations to their subscribers, and Google, who use AI to help redirect drivers around traffic jams.

7. Prove that you really, really appreciate your customers

People want to feel that the companies they interact with appreciate their business.

TD Bank created one of the most memorable customer appreciation campaigns.  What was so memorable about it, you ask?

They gave away cold, hard, cash.

Nothing says thank you like giving away money.

But it’s not always about money.

In their latest campaign, TD created “TD Thank You Account” where they surprised millions of their North American customers at ATMs, in branches and on the phone with personalized messages of thanks and touching gifts.

A woman from Drayton Valley, Alberta, who was diagnosed with cancer, received a special vacation getaway to Jasper with her family.

When AT&T reached two million fans on Facebook, they thanked their fans by making over 2,000 personalized “thank you” videos. Instead of using boring generic social media updates, you can get creative with showing appreciation to your customers.

8. Livin’ things up with live chat

Live chat technology has been around for a while, but businesses have been slow to adopt it into their customer service strategy.

But live chat is crucial, because customers demand immediate responses when it comes to customer service.

They want answers now, not later today or tomorrow.

One company that makes great use of live chat technology is U.S. Patriot Tactical.

The company uses SMS to Chat services that allow customers to start a live chat with their support team with a simple text message.

They display their “Text-to-Chat” phone number on their website in order to quickly ease communication around order inquiries, status and returns.

9. Speak human

Tech-speak, legal-speak, jargon-speak.

Throw it all out the window when it comes to customer communication.

Health insurance, for example, is one of the most complex things that we need to buy: the language, policies, and coverage can be beyond confusing.

That’s why Oscar, a health insurance company from New York uses a simplified design website experience and easy to understand language to “speak human” to customers, and help them find a policy that works best for them.

They do this by asking simple questions like “How many doctor visits per year will you need?” and excluding words like premiums and deductibles.

Oscar was able to get 16,000 people to say yes to their plan selections and buying process in their first year.

That’s success any human can understand.

10. Encourage engagement

The quickest path to a better customer experience is engagement, engagement, engagement.

You need to create customer interactions that produce engagement.

Example Microsoft.

Microsoft has a strong presence on Twitter, with a dedicated Twitter account to numerous themes including security, development, events, careers and customer service.

By covering all areas, Microsoft customers can interact and engage with every aspect of the brand.

The various Twitter channels all serve a different purpose but what underlines them all is engagement.

Other ways you can encourage engagement is by simply asking questions to start conversations, take quick polls, ask for feedback, and comment on other blogs, chats, and forums.

Or, you can curate content from your followers.

Share user generated content such as photos or videos of your products through contests or other incentives.

Respond to your comments in a timely manner on social media. When you respond quickly, customers are more likely to feel that your business values their feedback and will remember your response.

Burt’s Bee’s regularly responds to comments and questions on Facebook within minutes to an hour. They have more than 2.8 million followers on Facebook and responses are signed by individual employees to build trust and improve transparency.

Now go forth, and engage!

Next-Generation Customer Experience Chief Marketing Officer

SAP Corrals App Store Sprawl with New Unified Portal

SAP Corrals App Store Sprawl with New Unified Portal

Chris Kanaracus
Chris Kanaracus
Managing Editor, Constellation Insights Constellation

Chris Kanaracus is managing editor of Constellation Insights.  Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members.  Prior to joining Constellation, Kanaracus spent seven years covering the enterprise software industry for IDG News Service, where he frequently broke exclusive stories with a focus on end-customer issues. Kanaracus has also held various managerial and reporting roles at newspapers in New England since 1998. Twitter: @chriskanaracus , Title: Big IdeasConstellation Insights Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members. ...

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SAP is getting its app store act together, with the unveiling of a new App Center that brings together partner offerings for its entire catalog in the same place. The move gets what had become a growing problem with app store sprawl under control, as SAP's Steve Ache writes in a blog post:

In the first generation of the SAP App Center we focused on applications that were designed to run on SAP Cloud Platform. The SAP App Center developed into great resource for customers who were looking for applications to extend their digital core.

At the same time, SAP continued to run other marketplaces, particularly those that are associated with our cloud applications like – SAP SuccessFactors, SAP Analytics, Concur, SAP Ariba, and others. The marketplaces continued to grow, and we uncovered a problem. We had partners who developed applications that had to list and maintain their applications on multiple marketplaces. And we had customers who had to visit multiple SAP marketplaces to find what they were looking for.

SAP's first move was to consolidate the SuccessFactors app store into App Center last year. The latest iteration of App Center goes much further, bringing together all partner applications. There are now 1,405 applications in total on the site, the vast majority of which were developed by partners. It also features Ariba technology for payments, along with billing and provisioning capabilities.

Meanwhile, SAP Store will remain in place for software and services sold by SAP directly. 

Analysis: One-Stop Shopping Makes Good Sense

It's good to see SAP recognize the problem that had formed due to multiple app stores, and the move to consolidate them is one that should especially please partners, who will benefit from greater visibility compared to what was possible in the previous siloed structure.

The combined store should also appeal to customers thanks to the improved navigation and buying experience—in particular the benefit to procurement of having purchasing, billing and partner vendor communications through a single portal. 

It also represents an example of SAP living up to its pledge in recent years to become easier to work with on both a partner and customer front. That being said, the standard in enterprise app stores has long been set by Salesforce's AppExchange, which has been unified from the beginning and remained so through dozens of acquisitions. In that sense, SAP's new App Center is playing catchup, but it's still a welcome, if overdue move.

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