Gavin Heaton

Founder Disruptors Co

Gavin is the Founder of Disruptors Co, one of Australia’s leading independent strategy and innovation companies. Gavin advises firms on strategy, marketing, product development and innovation. He is also a member of the Orbits program, the influencer network of  award winning analyst and advisory firm, Constellation Research. Gavin advises boards and leadership on innovation strategy, marketing, data-driven product development and corporate venturing. Gavin is on the board of Vibewire, a youth-led social enterprise based in Sydney, Australia and on the Technology Advisory Group for Good2Give – the workplace giving platform. Read more

When I began researching the marketing automation market late last year, it seemed like a crowded market. It seemed clear at the time that the competitive fog produced by the various marketing platforms was obscuring the very real benefits that technology delivers to marketers, and that the end result would be consolidation.

Yesterday, Adobe helped clear some of this fog by completing its acquisition of privately held marketing automation vendor, Neolane. What impact will this have? My news analysis can be found here – and the official release here.

From a platform point of view, Adobe is filling the gaps in marketing technology arsenal, with:

• Analytics – the data and data crunching at your fingertips
• Target – personalisation and targeting
• Social – executing and measuring social marketing programs
• Experience Manager – cross platform content digital asset management and optimisation
• Media Optimizer – managing and optimising cross channel campaigns

And with Neolane joining the Marketing Cloud offering, Adobe is aiming to be the marketing technology partner of choice. Expect to see more activity in this crowded market.
Image: Kevin Dooley via Compfight

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… Read more

Forward And Commentary

Constellation Research keynoted at Ping Identity’s Cloud Identity Summit 2013 in July.  Gathered in front of the Identerati,  an Identity Manifesto was presented.  The research behind that manifesto has been summarized here in this summary.  The final big idea research report will offer insight into four of Constellation’s primary research themes, the Next-Generation Customer Experience, The Future of Work,  Matrix Commerce, and the Consumerization of IT and the new C-Suite.

A. Introduction

Identity often means many things to many people for good reasons. Traditional definitions of identity for the identity and access management professional have revolved around standards for authentication, access, authorization, and management.

B. Research Findings – Identity Expands Beyond Enterprise Despite Stuck in Massive Standards Hell

While standards such as SAML, Open ID, OAuth 2.0 address the technical side, the rise of consumer and enterprise social networks has spawned a consumer identity that reflects a digital ubiquity of the individual. Facebook, Google, and Twitter now dominate most social logins. Users expect their identity to be transportable from personal to work environments.

However, a limitation exists between personal and work worlds. In fact, the facets of one’s identity remain isolated and separated by not only our digital and analog presence, but also by our inability to deliver context across our worlds. Why? The lack of context separates our personal life from our work life and creates artificial barriers by role, relationship, and a host of other factors.

The reality – identity plays a multi-faceted role for each individual. The business implications of identity after authentication, authorization, access, and availability touch on commerce, work lives, personal lives, and engagement with each other. Without a more comprehensive view of identity, organization and individuals will continue to undermine the strategic role of identity in the context of business. Identity is a unifying factor in the current transformation to a digital world.

The Identity Manifesto Relates Identity To Work, Life, And Society

Identity plays a central role in the future of business and is a unifying point. The seven points in the identity manifesto set the stage on the future of identity (see Figure 1).

Figure 1. Seven Point in The Future of Identity – The Identity Manifesto

The Bottom Line: Herald The Reputation Economy – Identity All Comes Down To Trust and Transparency

Identities inside an organization may come more from external sources and vice versa. Is a Twitter ID enough? Could one’s corporate identity allow access to stores or allow credit for mass transit fare? Will employees trust their B2B world more? Will a third party emerge so employees will not have to worry about their employer encroaching into one’s private lives? Would you use your corporate identity for access to your hotel loyalty program?

As the individuals and organizations face a convergence of identity, trust is the currency. Transparency is the requirement. The reputation economy foreshadows a world of authentic commerce or business. However this world will require a trust, but verify approach because perfect transparency is impossible.

C. Report Links

The report is in it’s final stages of editing and will be available on the Constellation Research website in the next few weeks.

Your POV.

Where do you see identity playing a role for you in Matrix Commerce, Future of Work, Next Generation Customer Experience?  Add your comments to the blog or send us a comment at R (at) SoftwareInsider (dot) org or R (at) ConstellationR (dot) com

Please let us know if you need help with your Social Business efforts.  Sign up for a Constellation Academy Workshop or let us assist with:

• Assessing readiness
• Developing your social business strategy
• Vendor selection
• Implementation partner selection
• Connecting with other pioneers

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact sales (at) ConstellationRG (dot) com.

Related Research:

• Research Summary: Demystifying Social Business – Optimizing the Lead to Deal Process (Sales)
• Tuesday’s Tip: It’s Time To Consolidate Social Business Platforms
• Monday’s Musings: Understand the 4 Organizational Personas of Disruptive Technology Adoption
• Monday’s Musing: Avoiding Social Media Fatigue Through Engagement
• Friday’s Features: Using Attensity Analyze 6.0 To Compare Customer Sentiment For @united @southwestair @virginamerica
• Event Report: Lithium Network Conference 2012 #LiNC
• Best Practices: From First To Worst – Continental In A Post United World, Lessons In Next Gen Customer Experience
• Monday’s Musings: Seven Basic Privacy Rights Users Should Demand For Social Business
• News Analysis: Lithium Technologies Adds $53M in Financing
• Monday’s Musings: Balancing The Six S’s In Consumerization Of IT
• Monday’s Musings: A Working Vendor Landscape For Social Business
• Product Review: Google+, Consumerization of IT, and Crossing The Chasm For Enterprise Social Business
• Monday’s Musings: Using MDM To Build A Complete Customer View In A Social Era
• Monday’s Musings: Mastering When and How High End Brands Should Use Daily Deal Sites Such As Groupon
• News Analysis: Salesforce.com Acquires Radian6 For $316M
• Monday’s Musings: Q1 2011 State of Social CRM and CRM From An EMEA Point Of View
• Best Practices: Applying Social Business Challenges To Social Business Maturity Models
• Research Summary: Software Insider’s Top 25 Posts For 2010
• Best Practices: Five Simple Rules For Social Business
• Research Report: Constellation’s Research Outlook For 2011
• Research Report: How The Five Pillars Of Consumer Tech Influence Enterprise Innovation
• Research Report: Next Gen B2B and B2C E-Commerce Priorities Reflect Macro Level Trends
• News Analysis: Jive Fills Warchest, Ready to Battle Enterprise Software Giants And IPO?
• Tuesday’s Tip: Applying The Five Stages Of Adoption Towards SCRM Projects
• News Analysis: Lithium’s Acquisition of Scout Labs Ups The Ante in Social CRM
• News Analysis: Biz360 Acquisition Signals Attensity Group’s Move Into Social CRM
• Monday’s Musings: Avoiding Failure In Social CRM Projects Requires Ecosystem Coordination
• Research Report: The 18 Use Cases of Social CRM – The New Rules of Relationship Management
• News Analysis: Siperian Acquisition Vaults Informatica Into An MDM Leadership Position
• News Analysis: Jive and Radian6 Partner – Great For Business, But Could Fragment IT Systems
• Event Report: Salesforce.com Pushes Social CRM Technology — But Don’t Expect Companies To Be Successful With Tools Alone
• Monday’s Musings: Why Every Social CRM Initiative Needs An MDM Backbone
• Personal Log: Altimeter Group – Helping Organizations Bridge The Technology Obsolescence Gap
• Monday’s Musings: 10 Essential Elements For Social Enterprise Apps

Disclosure

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy, stay tuned for the full client list on the Constellation Research website.

Copyright © 2001 – 2013 R Wang and Insider Associates, LLC All rights reserved.

Holger Mueller

Vice President and Principal Analyst Constellation Research

Holger Mueller is VP and Principal Analyst for Constellation Research for the fundamental enablers of the&nbsp;cloud, IaaS, PaaS and next generation Applications, with forays up the tech stack into BigData and Analytics, HR Tech, and sometimes SaaS. Holger provides strategy and counsel to key clients, including Chief Information Officers, Chief Technology Officers, Chief Product Officers, Chief HR Officers, investment analysts, venture capitalists, sell-side firms, and technology buyers.<br>&nbsp; Coverage Areas: Future of Work Tech Optimization &amp; Innovation<br>&nbsp; Background: Before joining Constellation Research, Mueller was VP of Products for NorthgateArinso, a KKR company. There, he led the transformation of products to the cloud and laid the foundation for new Business… Read more

Over the weekend we learned that SAP is making more changes at the top - with Hagemann-Snabe giving up the co-CEO role in May 2014 and likely moving to the supervisory board then. With that the other Dane is leaving the SAP executive board - but not so much in Wiking raid retreat speed as Lars Dalgaard did. 

The official story line

SAP played this that Hagemann-Snabe always said he would be available only for a limited time for the co-CEO role - and that he notified Plattner of his request to move out of the role by 2014. This triggers a supervisory board meeting and with that a public notice under German public company regulations. And SAP deserves kudos for actively addressing this change in a press and analyst call - even though Plattner did not have all the answers we are sure he would have liked to have in place today.

Plattner countered Hagemann-Snabe's resignation by suggesting to make him a member of the supervisory board - subject to shareholder approval (which of course isn't an issue with the three SAP founders Hopp, Plattner and Tschira owning way over the 25% needed to establish a member to the supervisory board). Hagemann-Snabe and McDermott will operate the business as usual for the next 10 months to come - that is sharing the CEO role and Hagemann-Snabe looking after the vertical aspects of the SAP software portfolio.
 

Behind the scenes

The reader needs to keep in mind that German supervisory boards are staffed half by shareholders, half by employee representatives. With Plattner having to go back to the supervisory board with Hagemann-Snabe's notice, this knowledge was also in the heads of the employee representatives. And while there is no reason to doubt their professionalism in regards of the confidentiality of a personnel change - the safe choice is to pro-actively communicate the change to the public - and with that to the employees. And as mentioned before the stock markets.
 

Did Hagemann-Snabe surprise Plattner?

We know how fond the SAP founders are of the co-CEO model. It balances things out, gives more bandwidth etc. So if Plattner knew for sure that Hagemann-Snabe would be leaving - why not have the next junior partner for McDermott groomed and ready to go in time? Well, Plattner answered this literally with saying I could not find another Jim. Which lead to some good questions from the press in regards of the viability of the unusual co-CEO model. You need to have the right talent to operate in such a leadership model. 

As an alternate view I would not be surprised that McDermott wanted to be the sole CEO of SAP at some point, and Hagemann-Snabe knew that and took himself out of contention with saying he wants to fill the role only for a limited time. To give some more credibility to this, the respected German daily F.A.Z. unearthed that in an interview with German management magazin Capital McDermott once answered to the question of being a co-Ceo with is this a the joke?

Why not co-CEO with Sikka?

That is one of the questions in the room - but what has not happened, can still happen. And Sikka's position just got stronger with the last re-organization - as he is since then completely in charge of all product development activities. It's now time for him and his team to deliver and they have their hands pretty full. Maybe with Hagemann-Snabe's move to the board in May 2014 Sikka will become co-CEO - but that would not have been true to the statement today, starting McDermott being the sole CEO. So the message for Sikka has probably been to deliver the products that the company needs to grow in all product areas - and good things will follow for him once proven.
 

The German Angle

Despite all the international operations and success of SAP - a large part of its employee base and much of its DNA is still German. For instance at the shareholder meeting in June Plattner reassured the audience that the official company language ("Amtssprache") is and remains German. Bill McDermott's remarks had to be translated from English to German. 13 of SAP's 16 supervisory board members are German. The necessity for this press conference came from German public company regulations to relay supervisory board decisions with no delay. SAP's German labor council leader was quick at hand at stating that Germany as location had been weakened and that there is no more representation of Germany and Europe at the CEO levels. Fears got even more fuelled by SAP moving its communication department from Walldorf to Palo Alto recently.
  
So Bill McDermott has his work cut out not only in Germany but all over Europe, where Hagemann-Snabe handled almost all customer interactions. How these first meetings will go will be a key indicator for McDermott's success in his CEO tenure. It speaks for him offering to learn German and potentially even moving or spending substantial time in Walldorf or Europe. Nothing would win the hearts and minds of the German employee base more than these symbolic actions. But McDermott will be well advised to find some Walldorf based executives to be a sounding board for him - and Mucic, Leukert and Goerke come to mind.
 

The Pros and Cons of Co-CEOs

The continuous mutual complimenting of McDermott and Hagemann-Snabe has been seen for many years now. And there are advantages in the different backgrounds and styles of two professionals - as you always get a multi-dimensional perspective and feedback on things. When this is not desired - it requires intense coordination and choreography - and that takes time. This is the time that McDermott will save now and will hopefully use wisely. Freeing up 2-3 hours of a CEO's time per week can make a huge impact on a company's success. The question now is, who will play the role of McDermott's sounding board. In the short run Hagemann-Snabe is of course around - but there will have to be a partner or partners for that. With Plattner preferring the technical topics and playing the role of instigator and mentor with Sikka - he is not the natural counterpart for McDermott. Oswald does not speak much English. Brandt is retiring. So it will be interesting to see who will fill that role. Working closely on future earnings calls with Mucic, he should be the forerunner for this role. 

What's next?

SAP is a complex organization so in the past most promotions came from within. Bill McDermott himself was the highest hire SAP made in the last decade - that did not join through an acquisition. And the tenure of the acquired CEOs - John Schwarz and John Chen has not been long enough to be of a lasting impact. 

We will see if McDermott will promote further on the internal promotion path - or hire from the outside. The organic path would be to make Rob Enslin an executive board member running sales and market operations. Then there is the retirement of Werner Brandt - and as we learnt in typical Plattner style side remark - that Luca Mucic will be his successor.

That one resolved - there is the question what to do with veteran Gert Oswald - on the executive board since 1996 (!), continuously expanding his area of responsibility. But he is 60 - so we will see if his contract will be extended - or not.

What will go a long way would be for the board or McDermott to promote or bring in a board member from Asia or Latin America. These are growth markets for SAP and they look for representation at the top - which is missing so far.  

And maybe these promotions will be to the global management body, the body under the executive management board. Right now Ensslin is the longest tenured non executive board member, Calderoni and Leukert were just added in the last re-org, and Mucic was added quietly. With Poonen leaving, I would expect CMO Becher getting a seat in the global management board, marketing is too important and Plattner agrees with that - for not having it presented in one of the two management boards. 

Advice for partners

Not too much changes, unless you were a product partner that relied on Hagemann-Snabe for the success of the partnership. In that case find some visibility with McDermott, Sikka or Plattner immediately. Everything else at board level is transitioning, so the same advice is valid for partners going through Brandt and Oswald.

Advice for customers

Dennis Howlett makes the case clear why customers need to take notice and genuinely care for executive level changes here. 

We don't think too much will change - unless your executive board sponsor is one of the current co-CEOs. McDermott will have to reduce his exposure here, and Hagemann-Snabe will have to hand it over. Less customers will be directly served by a CEO - but that may be too their advantage - as they may get sponsorship closer to where it matters, in the product development organization. We recommend to actively start moving your executive sponsorship to where your critical automation areas are - if it's with technology go with Sikka and / or directs, if it's with the Business Suite Leukert is your man and if it's vertical automation then ... wait for the dust to settle a little. 

MyPOV

SAP already streamlined the organization with moving all development responsibility to Sikka in the last reorganization back on May 24th (my take here). It now has simplified and accelerated the decision processes on the CEO level with putting the reins in McDermott's hands exclusively, we expext this transition to happen faster in day to day operations than the formalities. 

Everyone knowing and having experienced McDermott knows that customer relations are in very good hands. SAP's challenges are however on the technical side - and that's where McDermott will need to have a firm, steady and foremost credible hand. McDermott will have to earn his respect on the key technical development side, with European and Asian clients and win the German employee base over. 

In short he has to turn into a global CEO that can project his charisma and communication skills beyond English speaking audiences and cultures. From all I know McDermott can make that transition - if will be for the better of SAP. We wish him das Glueck des Tuechtigen. (translated freely - the luck will come to the hard working). 

-----------------
Find key articles and tweets in my Storify collection here. 
My predictions on future (organic) executive level nominations are here. 

Alan Lepofsky

Vice President & Principal Analyst Constellation Research

Alan Lepofsky - VP and Principal Analyst, Constellation Research. With almost two decades of experience in the collaboration software industry, Lepofsky helps organizations improve the way their employees work together to get their jobs done. Lepofsky’s primary research area The Future of Work, focuses on: integrating collaboration and business processes (Purposeful Collaboration), structuring work via Social Task Management, leveraging analytics and digital assistants to work more productively, the strategic impact of mobile computing on business transformation, and measuring workforce culture based on Digital Proficiency instead of age. Twitter: @alanlepo<br>LinkedIn:&nbsp;https://ca.linkedin.com/in/alanlepo &nbsp; &nbsp; , Title:&nbsp;Big IdeasIntelligent Collaboration: The… Read more

The following video is part 2 of 3 of my conversation with  BBC Click tech reporter Kate Russell on the BizCouch while at Oracle CloudWorld in London

Resisting Opportunity
0:10 - 2:39 - Points of view around privacy and collaboration. How much of my business life do I really want to share? Knowledge is power vs. sharing is power. What is the epiphany moment that makes people see the value in sharing.
2:40 - 4:10 - Can openness and sharing help equality? Will it make our future society more forgiving?

Part 1, You Need To Have A Strategy For Social Software (2:53 min)
Part 3, Understanding the Dynamic Cloud (5:09 min) will be coming out in a few weeks, so stay tuned.
 

Constellation Research, Inc. the research and advisory firm focused how disruptive technologies transform business models announced the publication of ”The Cloud Changes Everything” by Constellation Vice President and Principal Analyst, Holger Mueller. This research report recaps the events of June 20 through June 27 in which Oracle entered into several strategic relationships with Microsoft, Salesforce, and Netsuite, and examines the implications of the Oracle alliances for the market, customers, partners and competitors.

Download the report snapshot

Report highlights:

• The strategic alliances entered into by Oracle from 6/20-6/27
• The drivers and benefits of the three alliances between Oracle and Microsoft, Salesforce.com and NetSuite
• Implications for vendors and the market
• Implications for customers and partners

“This series of Oracle alliances has created a lot of confusion in the market. This report sheds light on the recent movements of these giants, and provides insight on how these movements will affect the different players and the market in general,” said Holger Mueller, Vice President and Principal Analyst, Constellation Research.

ABOUT HOLGER MUELLER

Holger Mueller is Vice President and Principal Analyst covering [Technology Optimization and Future of Work. Holger’s current research focuses on [IaaS and PaaS with forays to SaaS, Analytics, BigData and mobile.

COORDINATES
Profile: http://www.constellationr.com/users/hmueller
Twitter: @holgermu
Linkedin: www.linkedin.com/in/holgermueller/
Geo: San Diego, CA

THE REPORT
The Cloud Changes Everything can be found here: http://www.constellationr.com/research/cloud-changes-everything

Press Contacts:
Contact the Media and Influencers relations team at [email protected] for interviews with analysts.

Sales Contacts:
Contact our sales team at [email protected].

Holger Mueller

Vice President and Principal Analyst Constellation Research

Holger Mueller is VP and Principal Analyst for Constellation Research for the fundamental enablers of the&nbsp;cloud, IaaS, PaaS and next generation Applications, with forays up the tech stack into BigData and Analytics, HR Tech, and sometimes SaaS. Holger provides strategy and counsel to key clients, including Chief Information Officers, Chief Technology Officers, Chief Product Officers, Chief HR Officers, investment analysts, venture capitalists, sell-side firms, and technology buyers.<br>&nbsp; Coverage Areas: Future of Work Tech Optimization &amp; Innovation<br>&nbsp; Background: Before joining Constellation Research, Mueller was VP of Products for NorthgateArinso, a KKR company. There, he led the transformation of products to the cloud and laid the foundation for new Business… Read more

On July 18th SAP released their 2nd quarter 2013 results - you can see the results here and listen to the recording here.

Cloud and HANA saved SAP's Q2 - almost

For the first time in a long time, SAP did not grow their software license revenue.  In Q2, SAP recorded 982ME in license revenue, which is down 77M E less that quarter Year over Year. Instead of addressing the drop in new license growth, SAP emphasizes the overall growth of its software and cloud subscriptions revenue, a paltry 3% or 1.141ME.

Of the 982ME, in the overall software number,  102ME HANA revenue  is included.  Should we remove HANA - only 880ME would have been recorded in Q2 2013. In Q2 2012 SAP recorded 85 ME HANA revenue - bringing SAP's Q2 software number to 974 ME.

Consequently,  it looks like the SAP core business is down by a ballpark of 10+%.

From SAP website.

The cloud subscriptions and support revenue grew from 52 to 159ME, a 206% increase, which is good news - at first glance. 

But let's dissect the cloud subscriptions and support revenue a  little further. This is revenue that comes from SAP home built SaaS applications (like byDesign or the SaaS CRM product) - but mainly from the former Successfactors and Ariba products. If we do a ceteris paribus and assume that the revenues of Successfactors and Ariba would remain constant - not withstanding the SAP acquisition - then these should contribute 76.6 MUS$ (Ariba) and Successfactors claimed 73.2 MUS$ - which is a total of - let's round up - 150 MUS$ - at today's exchange rate 107 ME (all based on calendar Q2 2011 data - as 2012 they were already acquired / being acquired). So the good news is, that there is growth in these numbers and SAP's homegrown SaaS products must be contributing - but not the stellar growth rate that SAP wants us to believe in. 

Why is SAP weak in core license sale?

The questions from the financial analysts unfortunately did not point into this area - so we can only speculate - and state to what we know. 

SAP is well licensed if not over licensed for most of their accounts in North America and Europe. So SAP needs to sell the business suite where it's not yet in the  market and there it is focusing on the BRIC countries  - and it seems to have done a very good job in Brazil. And it singled Mexiko out as well. But SAP - like all vendors - seems to have had issues in APAC. Basically SAP needs to execute very well in the BRIC countries to keep up core license sales, if these markets do not do well economically or if SAP blunders execution  - then SAP won't be able to keep up core license sales. If HANA would not be around - SAP would be a shrinking company on the license revenue side. 

And HANA is the product that SAP need to fill the missing revenue - but it looks like SAP was asking for too much from the just two year old in Q2 - as HANA revenues grew only by 20%. SAP said that HANA deals are year end loaded - which leads to the impression that SAP and their sales reps are using HANA to close the year well in Q4. Any missing sales could be filled with HANA licenses for running the Suite on it - starting a push in the fall. Always assuming customers have budget and SAP can convince them of a winning value proposition to move the Suite on HANA. 

If SAP is a cloud company...

Through the conference call both Bill McDermott and Jim Hagemann-Snabe referred multiple times to their view that the cloud age has started, customers are buying cloud products etc. - they should have been asked then, how they plan to convert their product portfolio from a mixed portfolio to a more and more cloud based product portfolio.

We all know, that SAP has a number of homegrown SaaS products and then the acquired entities like Successfactors, Ariba and hybris. But this is not a complete SaaS suite - so either SAP is missing out on bringing all its products to the cloud - or it's only a partial push to SaaS. This will be a vital area to watch as SAP does not have any SaaS offerings in Finance and Manufacturing, two key enterprise automation areas. 

Verticals to the rescue?

SAP seems to have gotten more focus on their vertical offerings recently. Certainly making Verticals Hagemann-Snabe main responsibility has helped the matter. And certainly SAP has significantly more potential on the vertical side than for its horizontal offering. Overall the market has been under penetrated and mostly been addressed with customization. But with the main focus being to move Suite customers on HANA - it may be tough to convince customers, who are not on HANA to move to an industry offering that may be improved or upgraded soon. SAP will need to explain how vertical investments can be used between the older conventional database platforms and the new HANA platform.

The larger challenge is that in the past SAP - like other enterprise automation vendors - has not been able to solve the vertical automation puzzle yet, for a variety of reasons (good for a whole other blog post). But that does not mean that SAP may not be able to address and solve this now for the first time. Assuming SAP will succeed - this will however not address the overall revenue challenge that SAP faces. The reason is that in most sales scenarios the vertical functionality is an add-on from a revenue portion - compared to the horizontal piece of the pie. And true - there is untapped potential - those enterprises that have not been conquered by standard software vendors yet - banking anyone? But these opportunities form the minority of the overall vertical enterprise automation market - so at the end of the day, even a very successful execution by SAP on the vertical opportunity - will only be able to address a smaller portion of the SAP revenue challenge that SAP faces. 

Can the sales force do it?

SAP has a formidable sales force - but it's an on premise enterprise application license sales force. Traditionally SAP succeeded to sell the integrated suite vision to the executives to who the overall working of the enterprises matters - to the CEO, CFO and CIO. But SaaS applications are often sold to the line of business executive - often against the establishment guidelines and standards. Sales reps need to setup a whole new set of relationships - that are even harder to develop since they sold SAP to these companies before - and that wasn't always a popular decision with the line of business executives. Many, many preferred products and installations that were used and preferred in a division or line of business - got replaced by SAP as the central, CxO mandated product. It's not only hard to change the comfort zone - but the SAP sales reps also need to re-invent themselves.

The other challenge we see for the salesforce is, that they are an enterprise application sales force that now needs to sell HANA technology. And while it should be still easy for an applications sales rep to sell the move from another database to HANA - after all SAP was always sold with a database - it's a different story to sell pure HANA technology opportunities. SAP recently told me - correctly - that of course SAP still has sales reps selling Sybase - but that salesforce does not have the reach and cannot generate the volume that SAP needs from HANA - which is around at least 1 BE in the next 4 quarters. 

So it's good news for the salesforce when we learnt - deep buried in the Q&A section of the earnings call - that SAP has made the sales of on premise vs on cloud commission neutral to the sales reps, which used to be one of the primary challenges of vendors transitioning from license to service products. But SAP will have to do a lot to re-train or hire a technology sales force that can sell north of 1 BE of HANA licenses year after year. 

The reason is that enterprise application sales reps are a different breed of sales reps than the enterprise technology sales reps. While an application sales rep is supposed to sell the standard automation as much as possible that  is supported in the product - the technology sales rep is supposed to chase non standard automation, that can be built on the technology's standard capabilities. Both skills are seldom combined in professionals, who even if they have them - need to build separate relationships and rapports with their customers and prospects. 

MyPOV

We are seeing some potential structural revenue challenges coming up on SAP's horizon. Emerging markets and HANA may not be enough revenue potential that SAP can exploit, to keep traditional license revenue growing. And SAP will need to have a lot of help from the new subscription based services to compensate for the reduced core license revenue. Or monetize other markets like mobile and social better.

We will see how the SAP co-CEOs will address this challenge going forward and wish them luck on the journey - as a strong and growing SAP is better for the market place and its customers 

And lastly I would have hoped my fellow financial analyst colleagues would have harped more on these questions in the Q&A section - but what hasn't happened - can still happen. 

Good news! Due to OVERWHELMING demand, we've extended the deadline for SuperNova Award applications. The new deadline is August 7, 2013.

Revised timeline

• July 22, 2013 August 7, 2013 last day for submissions.
• August 22, 2013 finalists announced and invited to Connected Enterprise.
• September 9, 2013 voting opens to the public
• October 9, 2013 polls close
• October 30, 2013 Winners announced, SuperNova Awards Gala Dinner at Connected Enterprise

We're searching for the rebels, catalysts, and innovators that are shaping the future of technology! If you have completed a project that produced a disruption within your company or industry we want to hear your story!

APPLY

2012 SuperNova Award winners:

• Lynn Hemans, Director, Industry and Competitive Insights, Taco Bell
• Jason Williams, Community Manger, Ipswitch, Inc.
• Chris Salles, Director of Store Labor, Guitar Center
• Miguel Angel Lozano Martinez, Corporate Innovation, CEMEX
• Leerom Segal, President & CEO, Klick Health
• Meagen Eisenberg, Vice President, Demand Generation, DocuSign
• Cari Cook, Executive Director, Delta Delta Delta
• Steve Haindl, Senior VP and CIO, ARI

The awards are open to end users only. End users at vendor companies may enter the awards. We will disqualify any vendor applications.  Vendors may submit on their customer’s behalf but must enter their customer’s details and have their approval.

Award categories center around Constellation's business research themes. Award categories:

• Consumerization of IT & The New C-Suite
• Data to Decisions
• Digital Marketing Transformation
• Future of Work
• Matrix Commerce
• Next Generation Customer Experience
• Technology Optimization & Innovation

The SuperNova Award Winners will be announced live, on stage, at the SuperNova Awards Gala Dinner on October 31, 2013 on the first night of Constellation’s Connected Enterprise.

• Finalists in each category will be awarded one complimentary ticket to Constellation’s Connected Enterprise.
• Winners in each category will win a one-year subscription to Constellation’s Research Library.

NOMINATE SOMEONE SPECIAL

Gavin Heaton

Founder Disruptors Co

Gavin is the Founder of Disruptors Co, one of Australia’s leading independent strategy and innovation companies. Gavin advises firms on strategy, marketing, product development and innovation. He is also a member of the Orbits program, the influencer network of &nbsp;award winning analyst and advisory firm, Constellation Research. Gavin advises boards and leadership on innovation strategy, marketing, data-driven product development and corporate venturing. Gavin is on the board of Vibewire, a youth-led social enterprise based in Sydney, Australia and on the Technology Advisory Group for Good2Give – the workplace giving platform. Read more

On the last Friday of every month, Vibewire in partnership with the Powerhouse Museum, hosts fastBREAK. Now in its third year, fastBREAK has become an essential part of the Australian creative industries scene – providing a vital showcase for young innovators, artists, creatives and entrepreneurs. The event attracts an eclectic audience, with artists mixing with business people, ballerinas rubbing shoulders with bankers and social entrepreneurs sharing breakfast with venture capitalists and investors. And most importantly of all, it is an event that encourages cross-generational conversations – where people of all ages are inspired to network and engage, fuelled by powerful ideas, great coffee and a creative breakfast from the Black Star Pastry.

Join us for fastBREAK: Technicolour

The next event is scheduled for 26 July and will have the theme “technicolour”. It promises to be provocative and stimulating:

Since the invention of Technicolor in 1916, the world of cinema and television have been brought to life with vivid contrasts and saturated colours, infusing both life and character into the film reel and captivating the imaginations of both adults and children around the world.

By injecting their own character and perspective into real life scenarios, some have been able to bring more colour into the lives of others. Now, that same passion and imagination is being brought back to life through the efforts of this month’s fastBREAK speakers.

You can pick up your tickets here – it’s the best $10 you’ll spend in Sydney.

Holger Mueller

Vice President and Principal Analyst Constellation Research

Holger Mueller is VP and Principal Analyst for Constellation Research for the fundamental enablers of the&nbsp;cloud, IaaS, PaaS and next generation Applications, with forays up the tech stack into BigData and Analytics, HR Tech, and sometimes SaaS. Holger provides strategy and counsel to key clients, including Chief Information Officers, Chief Technology Officers, Chief Product Officers, Chief HR Officers, investment analysts, venture capitalists, sell-side firms, and technology buyers.<br>&nbsp; Coverage Areas: Future of Work Tech Optimization &amp; Innovation<br>&nbsp; Background: Before joining Constellation Research, Mueller was VP of Products for NorthgateArinso, a KKR company. There, he led the transformation of products to the cloud and laid the foundation for new Business… Read more

NGA (NorthgateArinso) had their analyst day on July 16th, and it was well attended and provided an update where the company is standing and where it plans to go in the coming years.

Corporate and Executive Changes

It was a good opportunity to get to know the new CEO, Adel Al-Saleh, who previously was the Group CEO of Northgate. After the divestiture of the Northgate the Managed Services divisions, Al-Saleh took over for Mike Ettling as the NGA CEO. Al-Saleh has a long tenured background with IBM and IMS Health.

Good FY13

NGA comes out of a good financial year, growing on the sales side and increasing TCV by 36%. With the launch of a Japan office, NGA is now present in this key economy. The company keeps evolving its strategic partnerships with Workday and SuccessFactors and has an opportunity in South Africa / Africa with a joint venture with local SI powerhouse BCX, just named NGA Africa (and not discusses on the call, happened a day later).

On the operations side NGA keeps improving service readiness and focuses on scaling up in what it has designated its strategic delivery centers. On the products side the euHReka releases 12 & 13 have centered on deeper localization functionality and customer driven enhancements. The MoorepayHR launch for SMB companies in the UK seems to be going well and the company delivered the connectors to run payroll for Workday and Successfactors clients. These connectors and more have been bundled to the new offering the company named Payroll Exchange.

Recently NGA was named by Gartner (with ADP, Ceridian and Talent2) a member of the leader's quadrant of the 2013 Magic Quadrant for Payroll BPO Services.

NGA's Strategic Agenda

The company describes itself as a IP led HR services company, with its core business being the automation of administrative HR processes encompassing the employee life cycle, with a focus on global enterprises - all running on the euHReka product / platform.  Talent Management (NGA calls it Administration) is an Add-on the company equally offers, but depends on the sales scenario and partnerships that are in play.

Where NGA has a SMB offering with products like ResourceLink and Preceda, it plays in the these markets additionally, which are the UK and Ireland, South Africa (with BCX) and Australia / New Zealand.

And NGA believes it can differentiate itself by its exclusive focus on HR, it's flexible service delivery portfolio and it's advanced technology platforms and applications. The company takes an opportunistic view in the cloud religious wars, offering its products both on premise and in the cloud.

NGA FY 14 Priorities

In the upcoming financial year NGA will focus on the further evolution of its client centric coverage model, drive more maturity into global delivery capability and further investment into the key products (euHReka, Preceda, ResourceLink and Moorepay), the new Payroll Exchange and service center tools and utilities.

Obviously the company will focus to extend its partnership with Oracle - next to the existing partnerships with Workday and SAP / SuccessFactors.

Still doing BPO? Yes...

To my surprise the company never used the term BPO - Business Process Outsourcing, something that NGA provides for their customers and does pretty well. That's where key internal initiatives of standardizing support centers and making not only the service side of the business, but the overall company more customer centric. With no doubt both initiatives will be beneficial for existing and future NGA customers.

The company now operates over 3000 agents in 8 key strategic delivery centers that are spread over Europe, Brazil, India, Philippines and China.

Product direction 

Not surprisingly NGA plans to expand payroll capabilities further, and since the company does a large part of the implementation work in house, there is a focus to reduce implementation times and with that the related service costs.

NGA's flagship product euHReka has its release 14 right now in testing and release 15 will focus on learning and recruitment capabilities.

The big ambition on the product side is to standardize APIs internally to work with the new Payroll Exchange product - and to enable this product to automate extensive employee life cycle services not only for the NGA products but equally for other vendor's products.

With a lack of industry standards and an industry wide interest to keep these APIs close to each vendor's chest, coupled with NGA's iterative approach to the challenge, Constellation Research foresees this to be quite a challenge going forward, but the company merits respect and encouragement for having embarked in the effort.

NGA and Talent Management - multifaceted

At this point NGA has a unique strategy in regards talent management functionality- while it de-emphasizes talent management in meetings like the analyst meeting, focusing on what it calls employee life cycle services and payroll, NGA is at the same time adding learning and recruitment capabilities to upcoming euHReka releases. And we expect this effort to continue at least for the near future. 

In case NGA may decide to end work on talent management - it will find itself in a unique position - as all competitors providing HRMS / payroll and talent management products are scrambling to build offerings in all three markets. 

But that decision has not been made as we learnt and so NGA keeps both options open - partner for talent management or build some themselves.

The positioning challenge

NGA has a unique combination of services and product IP that does not fit the mold that is usually applied by both financial and industry analysts. Being KKR owned there is no financial analyst scrutiny at this point, but as the the question of my esteemed colleague Brian Sommer showed - it's tough to make out NGA. Take a look at the blog post of my former colleague Amy Wilson from the NGA analyst summit in April 2011 - and the challenge for the analyst community is clear.
But the onus should not be on the company - but on the analyst community to better understand NGA's unique capabilities and the accompanying challenges.

The problem we see with the IP led services positioning is, that today all services business are trying to differentiate themselves through differently functional and capable IP offerings - and NGA has more with software IP assets and a global BPO delivery organization. Together with ADP, NGA is the only player for large enterprise to run their multi country payroll and HR systems.

Advice for partners

Make sure your service offering is in a stable area that NGA has no interest to cover. If you are partnering with NGA for international payroll services that NGA is not covering, you are probably in good hands, as you can expect NGA to be more flexible than ADP - for better or worse.

Advice for customers

We see four scenarios where euHReka customers and prospects may find themselves these days:

• You are most likely using and or planning to use NGA for multi country payroll services, maybe a international HR system, potentially a BPO play. NGA is well positioned to aid you with both, make sure you exercise the customary best practice provisions on the SLAs and penalties side.

• If you are looking for NGA's talent management for the unified user experience, make sure you keep NGA committed to provide and strive for best practices (or at least good enough support) of future talent management trends that matter to your enterprise.

• If you are having a 3rd party talent management system but want to use NGA's HR system and payroll offerings, make sure to get commitments to keep supporting your talent management system through robust interfaces for the usage time frame you see.

• Finally - if you use one of the talent management vendors that NGA partners with (as of today Workday and Successfactors) then make sure that both vendors reassure you to support the interface for the lifetime you expect to use them or the maximum you can negotiate. You will need to not only understand NGA's road map - but equally Workday's or Successfactor's road map and realize where they may encroach on each other and how to insulate your enterprise against that possible event. 

MyPOV

NGA is making good progress on many good housekeeping initiatives. Rationalizing products, consolidating centers, standardizing services, making employees more customer centric are all good initiatives - but other vendors are doing the same or at least similar initiatives. The winner will be who out-executes the others.

What I missed was some visionary and leadership pieces, something NGA showed in the recent past with the idea of a BPaaS (Business Process as a Service) idea and plan. 

The other key aspect will be for the executive team to position NGA's unique product and services capabilities in an easy understandable manner that reflects these capabilities of NGA and at the same time allows analysts and influencers to apprehend and correctly position these capabilities. 

Not only execution, but also positioning will be key for NGA in the next 12 months. 


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You can find NGA's Storify here and  mine here.

[Disclosure: I had the honor and pleasure to run Products for NGA from Summer 2010 till Spring 2012]