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

Greater Adoption In Social Business Signifies A Move To Consolidate Platforms

Constellation’s buy-side clients tend to fit in the market leader or fast follower categories when it comes to organizational personas of disruptive technology adoption.  Since 2010, respondents have progressed through the DEEPR framework and the latest results from 2012 indicate that most survey respondents have moved to Level 3 (see Figure 1).  Changes between 2010 and 2012 show the following top three priority shifts as users move from Level 2 (Experimentation) to Level 3 (Evangelization):

• The top challenge among respondents is choosing the right platform (63.8%) among the many inside an organization.
• Over half (56.8%) of the respondents have incorporated social into business models.
• Respondents fostering internal collaboration (53.5%) now must worry about adoption challenges.

Figure 1. Respondents Shift to Level 3 in DEEPR Framework for Social Business Adoption

The Bottom Line.  Its Time To Scale The Technology While Pushing Ahead On Innovation

The era of best of breed disparate platforms purchased by siloed departments is over.  It’s time to consolidate different platforms and scale.  This natural evolution in the DEEPR framework means IT must scale while line of business focuses on innovation (see Figure 2).

Figure 2. IT Must Scale As Line of Business Pushes The Limit On New Platforms

Catch the relevant research report “Disruptive Technology Adoption: An Executive Primer”

Your POV.

Ready to fight change management and adoption head on? Have a story on how you’ve achieved engagement? Add your comments to the blog or send us a comment at R (at) SoftwareInsider (dot) org or R (at) ConstellationRG (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

Related Research:

• 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

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales .

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.

* Not responsible for any factual errors or omissions.  However, happy to correct any errors upon email receipt.

Copyright © 2001 – 2013 R Wang and Insider Associates, LLC All rights reserved.
Contact the Sales team to purchase this report on a a la carte basis or join the Constellation Customer Experience!

Constellation Alumni

"I am fascinated by understanding technologies, then explaining how to apply these within enterprises -- while still retaining common sense." Charles Brett is VP and Principal Analyst at Constellation Research, Inc..  His primary focus is on all aspect of mobility and the use of mobile technology in the enterprise.  For 25+ years Charles Brett has focused on delivering common sense to the application of technologies, especially software ones, in organizations of all sizes around the world. While concentrating at Constellation Research on mobility and its management in the enterprise (sometimes known as MDM or Mobile Device Management) he also addresses: mobile app development and deployment mobile apps and associated data management BYOD (Bring or Buy Your Own… Read more

Steve Jobs did a wonderful thing when he put sensors (GPS, accelerometers, gyroscopes, compasses, etc.) into the iPhone and the the iPad family.  Others have followed, adding barometers, light sensors and more besides.  But there is a downside —  battery usage — as well as an upside — the potential to save that battery usage by making  more intelligent use of these sensors, and not only to maximize power utilization.

These points were brought home at MWC by Kevin Shaw, the CTO at Sensor Platforms (of San Jose, CA).  Sensor Platforms specializes in producing platform-agnostic software to enable SOC manufacturers and device manufacturers to make best use of the sensors on mobile devices.  One objective is not to disable sensors and even the main power-hog, the CPU, when they are not needed.

For example, consider GPS.  When you go into a building you lose GPS signals.  But on most mobile devices that does not mean the GPS function switches itself off, until you go outside again.  Rather the opposite is true: the GPS tries and tries to find satellites and in so doing greedily consumes the battery.  In different ways this is true for all sensors: if they are running when they are not in use they use up that valuable battery resource.

In the mobile world — especially in the enterprise mobile world where battery performance is at a premium, to last at minimum a long work day — battery performance matters.  With each new device release, whether laptop or smartphone or tablet, the reviewers crawl over of the mAh ratings to forecast longevity in use.  Yet the irony is that the quickest and least expensive way to lengthen battery life is to use less electricity.  If one can turn off parts of the system that are not being used,  this reduces consumption.

At MWC Kevin went further and produced  two Samsung SIIIs, one with Sensor Platform’s Sensor Fusion/Context Aware platform and one without.  The Context Aware software uses that mobile’s sensors even when those users are not directly interacting with their devices, so that apps can know the users’ context (what he or she is doing).   He argues that “This empowers a new generation of smart devices that will improve people’s lives without intruding on their activities”.

Sensor Platforms optimizes by:

• providing a layer of basic user contexts: device motion, carry, posture and transport
• implementing a Resource Manager which directs computing sources when contexts change, while  minimizing power consumption when contexts remain unchanged
• enabling contexts to do system power management — for instance knowing when a user has not moved and thus can skip GPS refreshes, or knowing that the device is in a pocket and turn off the backlight
• presenting app developers with an API that treats contexts as virtual sensors.

He then showed how intelligent application of the sensors enables greater context awareness.  The SIII with the software could detect when he sat down or stood up (the other could not).  It could also detect when he put the equipped SIII in his pocket and when he took it out.  He even showed that the increased sensitivity could detect when one went up 1 floor or down 3 floors (using the barometric change in pressure). Indeed this ability to measure vertical changes was accurate already to about 30cm, and constantly improving.  And all of this was accomplished while reducing power consumption (switching off unnecessary power consumers on a device when it is in a pocket or briefcase, for instance or reducing main CPU usage when less power hungry components of a mobile device can do the same for less).

What might this mean for an enterprise?

The first, and possibly the most important,  is that devices which have “sensor control”, like that provided by Sensor Platforms,  incorporated by vendors will have longer usage times. Unfortunately, this not an easy capability to establish before you buy — and will not be until SOC manufacturers and device vendors publicize what is possible.

The second is more interestingfor the enterprise.  With increased context awareness new capabilities can be added to not only the device but potentially to apps.  For example, in a medical application you may want to know from the combination of sensors that someone has fallen over, which might in turn trigger an alarm. Similarly, if you know where you are located (from GPS) before you go into a building, the use of accelerometers, compasses, barometers and other sensors will enable accurate positioning within that building, and even on what floor.  This sort of capability could open up mew types of accurate indoor solutions that are not amenable to solving by GPS today.

There is a caveat.  Sensor Platforms basically sells only to manufacturers.  To this analyst an opportunity may be begging — to provide the software tools (or platform) to assist app developers to build more intelligent apps that used sensors better — even when the device manufacturer has not integrated Sensor Platforms-like capabilities in to a device.  While doing it this way might not be an energy efficient as embedding the capabilities at the SoC or device level, the opportunities enabled might be all the more startling for enterprises.

Alumni: Constellation Research Constellation Research

Yvette Cameron was VP and Principal Analyst at Constellation Research, Inc. focusing on next generation HCM processes and technologies, and is founder of NextGen Insights. Yvette is now a Constellation Research alumna. , Title: Big Ideas CRM concepts will transform HCM processes for new levels of Employee Engagement and Business Results Companies are investing heavily to understand and optimize their customer relationships, but less so with their employee relationships. We must apply the tenets of CRM to HCM processes to understand, engage and align the workforce, because customer success begins with employee success. From “Command and Control” to “Engage and Inspire” Traditional work practices and business structures are evolving at an unparalleled rate. New thinking and… Read more

Proving it has not lost its appetite for acquisitions, on March 4th, 2013, Infor announced its planned acquisition of New York based CERTPOINT Systems, Inc., a SaaS provider of global learning management software (LMS) and learning content management software (LCMS).

CERTPOINT background

Founded in 1996, CERTPOINT (formerly Vuepoint) offers comprehensive learning solutions including LMS, LCMS, content authoring, competency management, integrated web conferencing, mobile access and social learning to more than 1300 clients across more than 80 countries.  Marquis customers include Toyota, Honda, Motorola, Ralph Lauren, LANCOME and Weightwatchers. Like Infor, it boasts a hybrid offering, delivering on-premises, hosted and SaaS-based offerings; the majority of its clients, however, utilize the SaaS applications, consistent with adoption trends in the human capital management (HCM) market.  CERTPOINT also provides consulting services including content development, implementation and strategic consulting.  It currently employs approximately 50 staff, most based in New York.

The acquisition expands two key areas for Infor:

• With the CERTPOINT acquisition, the Infor Human Capital Management (HCM) suite delivers a comprehensive end-to-end offering. Tarik Taman, the GM of Infor HCM, noted that, “The acquisition of CERTPOINT will enable Infor to offer customers an end-to-end HCM solution, delivered to help maximize access and business insight and achieve breakthrough performance. In addition to complementary functionality, the acquisition of CERTPOINT sends the signal that Infor intends to be atop the leaderboard of SaaS Enterprise Human Capital Management solution providers.”
• Point of View (POV): As Infor continues to move its HCM suite of products fully to the cloud (watch for their announcements in this area in the Summer of 2013), the acquisition of SaaS-based CERTPOINT completes the suite with solid LMS capabilities. And in today’s global, virtual and mobile work environments, CERTPOINT’s delivery of personalized electronic content to mobile devices is precisely the type of capability required for business performance.  Integration via Infor’s technology framework, Infor ION, will focus on the HCM products (Lawson HRM, Talent Management and Service Delivery), but will also extend to other Infor solutions to meet strategic opportunities. WebEx Communications is the current partner to CERTPOINT for delivering integrated web training and conferencing; Infor does not currently have a competing offering but I expect this to be an area of development for the Infor ION team in the future. From an end-to-end perspective, Infor is one of the few providers of HR Service Delivery (having acquired this from Lawson/Enwisen in 2011).  The Infor Enwisen platform has served as a unifying solution across all Infor Lawson HCM products, delivering portal, knowledgebase and multi-tiered support across the suite. Integration with Enwisen will bring rapid value-add to CERTPOINT customers.

• CERTPOINT fortifies Infor Healthcare solutions with critical learning capabilities. Certification and compliance training are mission critical activities in the healthcare industry.  Combined with the verticalized solution for Healthcare from Infor HCM, clients will be able to move beyond certification and compliance to the creation of high performing healthcare organizations.
• Point of View (POV):  Infor gained a major presence in Healthcare with the acquisition of Lawson software in 2011, and so CERTPOINT’s Healthcare industry solution is a natural launch point for showcasing the combined offering. Infor has, in fact has already begun this push, as it positions richer capabilities for the Healthcare industry as well as increased thought leadership with the hiring of a Chief Medical Information Officer (CMIO) to oversee the Infor Healthcare suite. Other industries such as Automotive, Food & Hospitality and Manufacturing  will be early solution targets as well. One of Infor’s points of differentiation is its micro-vertical strategy: beyond the standard 21 or so industry vertical classifications, Infor recognizes the unique needs coming from more than 2000 micro-verticals within these broader industries. CERTPOINT clients will benefit over time from Infor’s micro-vertical focus as this specialized knowledge infuses and expands the capabilities of its nine current vertical offerings.

Bottom Line:  Infor Advances its Move to the Cloud

Today,  Infor is the third largest provider of enterprise applications and services, with a valuation of $16B and five consecutive quarters of double-digit license revenue growth. It doesn’t just compete with Oracle and SAP, however; it increasingly competes with the likes of Workday and Ultimate as clients look to the cloud for Enterprise HCM.  The acquisition of CERTPOINT not only completes the Infor HCM suite, it does so through a SaaS offering that enables rapid, low cost deployment and frequent innovations in a business-critical area.  Additionally, CERTPOINT provides support for the extended enterprise – training for partners, suppliers and customers – including eCommerce capabilities for companies that deliver training for profit. With Infor Mingle, Infor’s social platform still in development, CERTPOINT’s social learning will also be a welcome and timely addition to the Infor HCM suite.

As always, the devil is in the details, but given that CERTPOINT today integrates with many HCM solutions (including its strategic partner, Ultimate Software), the initial phase of the Infor/CERTPOINT integration should come to market quickly, with more strategic points of leverage following in subsequent iterations.  Infor clients will benefit from this acquisition through the additional depth of learning capabilities; CERTPOINT clients will have a new, integrated path to consider as they evaluate the upgrade or replacement of their current HCM infrastructures.

Related posts:

Event Report: #InforSummit Reveals More Than a Redesigned Infor

Seven Ways Infor is Advancing HCM (Hint: Lawson is but One)

Filed under: Cloud, ERP, Future of Work, Global HCM, HCM, Hybrid IT, Infor Lawson, Learning and Development, M&A, Mobile/Social, SaaS HCM, Service Delivery, Social Learning, Talent Management Tagged: CERTPOINT, Cloud, Collaboration, constellation research, Enwisen, HCM, HR, HR Tech, Lawson, Mobile device, Next Generation apps, SaaS, Social Learning, Software as a service, Ultimate Software, Workday, Workforce Technologies, yvette cameron

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

In many ways this is what we’d expect. In the industrial era – business was designed to maximise the profits from investment and expenditure – and that’s what they were doing. We call it creating “shareholder value”. But times are changing. We are no longer living in a world where industrial era business models rule. They are the dinosaurs of the 21st century and those companies and industries that don’t look to reinvent their business models will not only face declining revenues – they’ll risk disappearing altogether.

Don’t think it can happen to you? So did Kodak.

When Google created their own financial services division, they fired a shot across the bow of the slow moving personal lending businesses in the UK. What Google understands is speed to market – and disruption. And remember, they have the inside view of what we search for, what we click on and how long we stay there. The shift to digital – the massive transformation in the way that we think, shop and live has largely been driven by access to Google’s services – and financial services is just the next step in a long journey for them.

But it’s not just global internet giants who will disrupt the market. Smaller, agile players are entering the market – rethinking the old business models and out-flanking them. Take a look at SocietyOne. Connecting borrowers and investors in a peer-to-peer fashion SocietyOne takes “crowdfunding” to a new, more knowable level. It’s designed to match investors and borrowers in an interest rate/risk online pitch-off. Check out their introductory video. Looks like no bank that I know. And that’s the point.

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

These days we see a lot of blog posts masquerading as news – about the industry, media, technology and so on. But there is often not a lot of insight, or action. There’s opinion and sometimes a few ideas – but precious few wrestle with what it means to live in media-saturated, always connected age. Here are five posts from last week that do. I hope they kickstart your brain for the week!

1. Mark Hurst has an unusual point of view about Google Glasses – and it’s not about the technology. It’s about the experience. But it’s not what you think. It’s the feature no one is talking about. HT @ozdj
2. Katie shares images from a photographer’s point of view. And how does he see the world? Framed by the view of his girlfriend. Great storytelling.
3. The world is changing – but we sometimes forget that it changes at different rates for different people. Becky Lang shares some advice for college kids – what they don’t hear, but should.
4. Great article from Edward Boches reminding us that social media isn’t about reach, controlling or drowning out the message, but about participation. And here’s what can happen when you do it right.
5. Finally, powerhouse marketing innovator, CK has delivered a knockout transformation with her new website AllThingsCK, complete with mobile experience, an eBook and a range of new services designed to help you and your business. Get the full details on her blog.

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

We often (still) hear stories of businesses and individuals fearing social media. And if you listen closely to what is being said, you will hear the fear. You will hear anxiety.

And when you hear about those folks who brave social media – who push the envelope within their organisation, you will hear them talk about managing risk. Engaging stakeholders. Dealing with the randomness.

But this great TED Talk by Amanda Palmer reveals a new way of thinking about this.

What if, rather than managing risk, we were to think about “gaining trust”. What would that mean for the way we approach our customers, audiences, stakeholders and employees?

And how would it change what we do.

President, Computer Economics and Strativa, Inc. Computer Economics and Strativa, Inc.

Frank Scavo is skilled at formulating and communicating IT strategy, developing the business case for new systems, and facilitating the selection of enterprise systems, such as ERP, CRM, and supply chain management. He is also an expert in benchmarking IT spending and staffing levels for end-user IT organizations. Frank was one of the first tech bloggers, beginning in 2002 with his launch of the Enterprise System Spectator providing independent analysis of issues and trends in enterprise applications software and the strengths, weaknesses, advantages, and disadvantages of the vendors that provide them. Frank has been quoted as an IT expert in numerous business and industry publications such as the New York Times, Wall Street Journal, Computerworld, CIO Magazine, ZDnet, eWeek,… Read more

I've just published a new report. The report, titled Supply Chain Management Adoption Trends and Customer Experience, finds that the total cost of ownership for SCM systems often exceeds budget.

Nevertheless, the payback on SCM systems is so good that most companies achieve a return on their investment within two years, despite the challenges in managing costs.

As shown in Figure 1, the full report compares the adoption, investment, ROI and TCO rates of supply chain management systems against the rates for 13 other technologies from an annual Computer Economics survey on technology trends.

Based on survey responses, SCM and the 13 other technologies are given numerical ratings on the levels of adoption, investment, ROI and TCO. Then, SCM technology is categorized as having low, moderate, or high rates relative to other technologies in the survey.

• Adoption Rate: SCM adoption is moderate compared to other technologies in the study. That means the percentage of organizations that have SCM solutions in place is within the middle third of the range, defined by the technologies with the highest and lowest adoption rates in the study. It does not include organizations that have plans to implement the technology for the first time but have not yet done so. The moderate-to-low adoption rate for SCM is due in part to the fact that this technology does not have widespread application in some industry sectors, such as financial services or information services.  
   
• Investment Rate: The percentage of organizations investing in SCM technology falls just shy of moderate and earns a low rating. Investors include organizations that plan new implementations or enhancements to existing systems within the next 18 months. Once again, the relatively low investment rate is because the technology does not have relevance in some industry sectors.
   
• ROI Success Rate: Among organizations that have adopted SCM, the experience is positive. The survey shows that, compared to the other technologies in the survey, SCM has a moderate ROI success rate, bordering on the high side. The percentage of organizations at least breaking even on their investments within a two-year period is at the high end of the middle range when compared to other technologies surveyed.
   
• TCO Success Rate: However, compared to the other technologies covered in the survey, the TCO success rate for SCM is on the low side. As with many enterprise applications, there is a danger of underestimating total cost of ownership. We define TCO success as actual costs coming in at or under budget.

Interestingly, the ROI success rate is more positive than the TCO success rate. This indicates that the business case for SCM systems is strong: Some adopters must be achieving positive or breakeven ROI in spite of exceeding their budgets for SCM projects.

Competitive pressures, globalization and increasingly complex offshore manufacturing relationships are spurring organizations to expand their supply chain management (SCM) systems, which encompass a wide variety of technologies and capabilities.

The full study quantifies the current adoption and investment trends for SCM systems as well as the benefits that are driving companies to expand their SCM implementations. We assess these trends by organization size, sector and geography. In terms of economics, we look at the ROI and TCO experience of those that have adopted SCM along with current investment per SCM user. The report concludes with practical advice for those considering investment in SCM technology.

President, Computer Economics and Strativa, Inc. Computer Economics and Strativa, Inc.

Frank Scavo is skilled at formulating and communicating IT strategy, developing the business case for new systems, and facilitating the selection of enterprise systems, such as ERP, CRM, and supply chain management. He is also an expert in benchmarking IT spending and staffing levels for end-user IT organizations. Frank was one of the first tech bloggers, beginning in 2002 with his launch of the Enterprise System Spectator providing independent analysis of issues and trends in enterprise applications software and the strengths, weaknesses, advantages, and disadvantages of the vendors that provide them. Frank has been quoted as an IT expert in numerous business and industry publications such as the New York Times, Wall Street Journal, Computerworld, CIO Magazine, ZDnet, eWeek,… Read more

As I've written in the past, financial analysts may provide good advice for investors in the tech sector. But their analysis is not very useful to buyers of technology products and services. It's not that they don't have insights, but they are writing for a different audience: investors, not customers and prospects.

Some parts of the financial press are another story. Some financial media reporters so poorly understand the tech industry that neither investors nor prospective buyers should listen to them.  

I saw an example of this today on The Motley Fool, in a story entitled, Is Oracle's Cloud Really Fake? In it the contributor, Richard Saintvilus, takes issue with an Infoworld article by David Linthicum that criticizes Oracle's most recent "cloud" announcement as "faux IaaS."

The Motley Fool is a website aimed at the individual small investor. It provides both free content as well as paid subscriber material. It also makes money from advertising. Therefore, generating page views is a key objective, with much of its content generated by freelancers, as appears to be the case here. So, the quality of its content varies.

Apologies to in advance to Saintvilus, who reached out to me on Twitter after I sniped at his story. He asked for specifics, so here you go.

Oracle Late to the Cloud

Staintvilus immediately starts with a misconception, that Oracle was an early proponent of cloud computing. Here is his lead:

Wall Street loves a hot trend and had essentially decided four years ago that the cloud was next. With corporations needing all of the cost savings/productivity benefits the cloud offered, the timing was perfect. Oracle was one of the first blue chip enterprise companies to realize this opportunity. [emphasis here, and throughout, is mine.]

Sorry Richard. Even as late as 2009, Oracle's CEO Larry Ellison famously mocked the term cloud computing, calling it no more than a fashion statement. Furthermore, he not only mocked the term, he mocked the concept. To this day, Ellison criticizes multitenant applications, which are the cornerstone of most large scale SaaS providers. Only recently, as Oracle realized it was losing the war did Oracle embrace cloud computing, albeit with its own twist (either hosted single tenant applications, or multi-tenant applications with single tenant databases.) Industry analysts can argue all day about the relative merits of each approach. But none would claim that Oracle was anywhere to be found at the beginning of the trend to cloud computing.

Oracle Market Share in Cloud Services

He continues with a comment on Oracle's rising revenues:

The company [Oracle] is providing a service, of which there has been very few complaints -- at least not according to the rising revenues, which suggest it's stealing share from rivals such as salesforce.com. And Oracle is not the cheapest on the market, either. So, there's a reason why customers are willing to pay the premium. And it's not because these corporate CIOs are dumb.

Yes, Oracle's revenues are rising. But those of Salesforce.com are rising also, up 37% in 2012. Furthermore, while all of the revenues of SFDC are derived from cloud computing, only a small percentage of Oracle's are. So to impute on the basis of revenues that Oracle is taking market share from Salesforce.com is ludicrous. Certainly, in my own firm's work advising buyers in software selection, I do not see Oracle taking market share from Salesforce.com. In fact, in CRM, I see deals in which buyers want to look at Salesforce but do not even consider Oracle, especially in the midmarket.

As far as software pricing is concerned, neither do I see Oracle as commanding a premium price over Salesforce.com, or over other application vendors for that matter. In fact, Oracle is notorious for competing on price when it really wants a competitive deal, as it knows it can make it up on maintenance revenue in the future.

But the author wouldn't know that, because he does not advise technology buyers, nor is he in a position to see actual deals going down.

Oracle's Engineered Systems Are Not "Cloud"

He then confuses Oracle's new Exa-boxes with cloud services.

However, David Linthicum of InfoWorld thinks [CIOs are] idiots (I'm paraphrasing that a bit), which doesn't make sense. CIOs are spending billions annually with Oracle. But in Linthicum's recent article, he insists they don't know what they're buying: "Oracle is continuing its faux cloud strategy, adding to its private-cloud infrastructure offering the ability to rent for a monthly fee preconfigured application servers to be deployed in customer data centers. The available application servers -- what Oracle calls 'engineered systems'"

The author can be forgiven for this misunderstanding, as Oracle itself confuses this issue, which is the whole point of Linthicum's criticism. The basic point is that cloud computing is a "service," whereas Oracle's computer hardware (whether old school Sun commodity servers, or Oracle's new "engineered systems") is a physical product. Renting Oracle hardware does not magically turn the hardware into a cloud service.

Oracle's Engineered Systems Are an Old Concept

He continues with the impression that Oracle's Exa-boxes are somehow a new concept. 

Linthicum clearly has an ax to grind. While he's going all-out on Oracle's product portfolio, rival companies have been working hard to duplicate Oracle's offerings. For instance, IBM has a rival offering called PureSystems -- launched three years after Oracle's Engineered Systems, or ES. And, after Oracle has already deployed ES to more than 1,000 customers in 43 countries, IBM followed. Big Blue has gained traction, but not to the extent of Oracle. And I doubt that IBM would have followed a model it didn't think had sustaining potential.

The author appears unaware that Oracle is attempting to return to the IBM era of the 1960s. In fact, Larry Ellison has said so himself. The IBM mainframe at the time was a single integrated platform of hardware, operating system, database, and applications engineered from the ground up to work together. IBM's AS/400 series of machines (now called Series i) took this concept even further. What broke up IBM's dominance in the mainframe era was the fact that these boxes were all based on proprietary standards, and eventually low cost commodity hardware (whether IBM personal computers, or later, Unix boxes from providers such as Sun) could do the job much more cost effectively. The downside was that the new approach led to challenges in system integration, in making all the layers of the technology stack work together.

Oracle's strategy with its Exa-boxes is to return to this single technology stack from hardware through applications, engineered from the ground up to work together. Will Oracle be successful? Only time will tell. And, certainly the 1,000 customer number that the author mentions is not yet enough of a measure of success.

Regardless, what does any of this have to do with cloud computing? Absolutely nothing. Oracle is launching a public cloud offering, with its Exa-boxes as part of the infrastructure. Other providers can do the same using commodity hardware, as Google, Amazon, Microsoft and others have already done.

But the Oracle offering that Linthicum is criticizing and that the author is defending is not Oracle's public cloud service. Rather it is an arrangement whereby Oracle customers can, for a monthly fee,  rent preconfigured Oracle application servers and run them in their own data centers. Linthicum is absolutely right: this has nothing to do with cloud computing.

According to the NIST definition of cloud computing, there are five essential characteristics of cloud computing, and Oracle's hardware rental offering does not satisfy four of them. (See the link in this paragraph for a more complete definition.)

• On-demand self-service. Oracle's rental agreement does not allow the customer to unilaterally provision computing capabilities, such as server time and network storage, as needed automatically without requiring human interaction with each service provider.

• Resource pooling. Oracle's rental agreement does not pool computing resources for multiple customers in a multi-tenant model, with different physical and virtual resources dynamically assigned and reassigned according to consumer demand.

• Rapid elasticity. Oracle's offering does not allow computing capabilities to be elastically provisioned and released, in some cases automatically, to scale rapidly outward and inward commensurate with demand. As Linthicum points out, the customer has to pay extra for spikes in demand and there is no provision to ramp down demand, and cost.

• Measured service. Oracle's offering does not automatically control and optimize resource use by leveraging a metering capability. Customers do not pay as they go.  

Clearly then, Oracle's offering may use the terminology of cloud computing but it does not display the essential characteristics of cloud computing. You can call me a fish, but that doesn't make me one.

The List Goes On

I have neither the time nor the patience to go much further. Let me just list a few (and by no means all) of the remaining errors.

• "Linthicum is pretending to be an expert on something that is still in its infancy." Cloud computing may not be a full grown adult, but it is certainly not an infant. Providers such as Salesforce.com have been delivering cloud services for well over a decade, ancient history in the technology industry.  
• "Oracle innovates at the technology layer, thereby giving customers more leverage and independence from consulting fees." What exactly is the "technology layer?" Everything from bare metal hardware to business applications are "technology." Furthermore, talk to Oracle customers: I doubt anyone will tell you they have less need for consultants. 
• "Had Cisco contracted out its cloud services to Oracle, it could have remained focus on growing its business." The types of cloud services that Cisco offers, such as cloud network management, are not services that Oracle provides. Therefore, it would not be possible for Cisco to contract with Oracle to provide those services on behalf of Cisco. 
• "Even if Linthicum's pricing claims were correct, then it means Microsoft's Azure, which has a pay-as-you-go model, is also fake. But Microsoft has been reducing its prices because it can't compete." If Microsoft is lowering its Azure pricing, it's not because it can't compete, but because it can deliver cloud services at lower and lower costs over time, as it scales and the costs of technology drop (see "Moore's Law"). Similarly, Amazon lowers its AWS prices multiple times per year and no one in his right mind claims it because Amazon can't compete.

Parts of The Motley Fool article are nearly indecipherable, especially toward the end. But I think this is enough to illustrate: parts of the financial press are poor sources of information on enterprise IT. By that, I do not mean to imply that all financial reporters are suspect. One would not expect to see a story such as this one to appear, say, on the pages of The Wall Street Journal or Financial Times.

Furthermore, none of my criticism should be taken to mean that Oracle is not a good company from either the investor perspective or customer perspective. As the author tweeted me, "Oracle is one of the best tech names on the market and it deserves fairness."

Yes it is, and yes it does. And because of that, it also deserves accurate reporting.  

Related posts

Enterprise IT Buyers: Don’t Listen to Financial Analysts
Oracle's Behavior Undercuts Its Own Cloud Accomplishments
Cutting Through the Fog of Cloud Computing Definitions

Photo Credit: NS Newsflash

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

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