SAP’s cloud chief slams Business ByDesign approach, poses cloud alternative

Lars Dalgaard, CEO of SuccessFactors, said this of SAP’s flagship SaaS offering during a question and answer session with press and analysts:

“Business ByDesign is a powerhouse, it just is,” he said. “But it hasn’t been marketed right, it hasn’t been positioned right or explained right and people haven’t been trained right. There isn’t much I can say that’s been done right.”

Dalgaard intends to change that. Pundits at the SapphireNow show here in Orlando are wondering how he’s going to change the culture as well. He’s taken up the customer mantra of co-CEOs Jim Hagemann Snabe and Bill McDermott.

“At SAP we’ve had too much PhD and too little customer,” Dalgaard said.

Business ByDesign will still be a sold as a suite to SMBs and divisions of larger enterprises, but the future of cloud applications at SAP is a modular one.

Lars Dalgaard at SapphireNow Courtesy SAP

In his keynote address at Sapphire, Dalgaard identified a four-prong approach to selling cloud apps: customers, people, money, suppliers.

The customer-focused cloud applications are already out with an upgrade to Sales OnDemand and the availability of a new social media tool (or the SAP Social Customer Engagement OnDemand solution if you’re, you know, not into the whole brevity thing). The people applications will be based mostly on SuccessFactors’ human capital management portfolio and was highlighted by the release today of a version of SAP’s cloud-based payroll system that integrates with SuccesFactor’s Employee Central. Supplier applications will be built off of SAP’s Sourcing OnDemand.

And the money applications?

Those will be based on existing work done by the Business ByDesign team, as well as new work being done by the developers at SAP who brought you R/3 and by developers at SuccessFactors, according to Dalgaard.

“It’s SAP’s God-given right to build financials in the cloud,” Dalgaard said. “It’s a very serious, very deep product. It’s a tiger in a cage. Today we let it out.”

The core difference is that unlike Business ByDesign, SAP’s cloud applications will be sold individually. That, Dalgaard said, is the way people buy clouds.

“They wanted to boil the ocean,” Dalgaard said. “The market wasn’t ready for a boiled ocean.”

 If that sounds familiar, that’s because SAP had already started down that path with Career OnDemand, Sales OnDemand and Travel OnDemand. It’s also the approach Oracle has taken with its Fusion Applications.

The link there is John Wookey, who in the merry-go-round of Silicon Valley, was head of development for Fusion Apps before moving to SAP to help build the OnDemand apps there, and is now at Salesforce.com, heading up application development. It will be interesting to see what comes from Salesforce.com two years from now when Wookey has moved on again.

Dalgaard vowed to continue to invest in Business ByDesign, but made it very clear that if it, or any other platform doesn’t perform, he’s ready to throw it out.

“If it’s not working, it’s gone,” he said. “I’m the first one to call out where the problems I find are.”

Given SAP’s checkered history with ByDesign, or its first OnDemand CRM applications for that matter, the market awaits the outcome.

Can SAP keep its promises of database dominance?

You can say this for SAP: It doesn’t lack confidence.

Its track record of living up to lofty promises, however, is a bit spotty.

The company basically laid it all out on the table this week when it proclaimed its intention to take over the database market. During the press conference detailing its many initiatives — of which database dominance was only a part — CTO Vishal SIkka promised that SAP would become the fastest growing database vendor in the industry. Of course, that’s not much of a claim considering where SAP’s database business was two years ago. Are they factoring in the Sybase business in that growth model?

SAP has been a little more boastful about its database ambitions recently. At an analyst event in Boston last winter, it promised to be “the number two database vendor by 2015.”

The question remains whether SAP can pull that off.

SAP’s press conference put me in mind of a recent post from Tom Wailgum over at ASUGnews who did some nice reporting by digging through SAP’s year-end Form 20-F document.

Among the interesting nuggets:

“We want to become a profitable market leader in cloud computing, generating $2.6 billion in revenue in this segment by 2015.” (No. 7)

So, by 2015 SAP aims to be the No. 2 database vendor and a market leader in cloud computing with $2.6 billion in revenue. Those are lofty goals and lofty goals are good, but what is SAP’s track record in keeping its promises?

Well, in 2006 SAP’s then-CEO Henning Kagermann said that by 2010, two-thirds of the installed base would be using enterprise SOA. “Using enterprise SOA” is a tough one to define so we’ll pass there.

How about in 2007, when SAP vowed to have 100,000 customers by 2010? That claim was made largely in hopes that Business ByDesign would pump up the SMB user base. In fact, SAP also pledged that Business ByDesign would bring in $1 billion by 2010. SAP ultimately fell short, scaling back on Business ByDesign as it ran into bugs and issues making it profitable enough. And the customer numbers?

Based on the Form 20-F, SAP now has 183,000 customers.

SAP actually put forth a lot of goals for 2010. In 2008, then CEO Leo Apotheker said “all customers will have upgraded to ERP 6.0 or the latest Business Suite releases.”

That one didn’t work out so well. According to the SearchSAP.com 2010 Reader Survey, 48% of respondents were still on R/3. By the 2012 survey, two years after Apotheker’s target date, the number has improved. Sixty-six percent of respondents had moved to ERP 6.0, 18% were still on R/3 4.7 or earlier and 12% were on ERP 5.0.

For most customers, whether SAP winds up the No. 1, No.2 or No. 6 database vendor probably doesn’t matter a whole lot, as long as they get the kind of response times and value that SAP is promising with HANA. Similarly, whether SAP becomes the “fastest growing” database vendor probably doesn’t matter a whole lot to SAP customers either, outside of the dollars many of them will be contributing to make that happen.

Still, it’s always good to bring some perspective to boastful software executives.

Microsoft preps cloud ERP, adds to its own SAP deployment, ponders HR

Microsoft applications executives are out on the road this month, getting word out ahead of the company’s Convergence business applications show in Houston in March.

The word, apparently, is cloud.

Microsoft is scheduled to release its first ERP product for the cloud this year with Dynamics NAV. It will be followed by the company’s other ERP products in the Dynamics line — AX and GP.

Mike Ehrenberg, a Microsoft technical fellow, explained the company’s approach to cloud ERP in a visit to TechTarget’s offices last week. As with CRM, Microsoft will offer one code base, but with the ability to deploy it on-premises, partner-hosted and Microsoft-hosted.

According to Ehrenberg, when it comes to ERP, choice is even more important than it is with CRM.

“SMBs prefer to deal with partners, enterprises want to deal directly with Microsoft,” he said.

Additionally, any company moving to ERP in the cloud will have to do so carefully. Microsoft for its own part is developing AX in key areas for its own business operations. The company runs SAP, but is “extending AX around the edges,” Ehrenberg said, building an expense management system.

“Horizontal workloads need that sort of approach,” he said. “You’re in a better position to deal with change. We’ll go after one functional area at a time.”

Moreover, re-architecting Microsoft’s suite of ERP applications from premises-based software, to software that can run in multiple environments is one the company is ready for thanks to its experience with Dynamics CRM, which was initially developed as an on-premises-only application.

“We’ve been down this road before,” Ehrenberg said. “Now, CRM was before Azure. On ERP it’s more important to go on Azure first.”

Of course, Microsoft has not ported its CRM product over to the Azure platform yet either.

Ultimately, Microsoft’s Azure ID module will allow users to access Office 365 and CRM, as well as federate the cloud with on-premises deployments.

“We live in a cross-platform world,” Ehrenberg said.

Microsoft’s cloud initiatives will also be multitenant. However, it’s not a customer concern so much as an analyst and reporter concern, according to Ehrenberg.

“The only time someone asks us if we’re multitenant is if someone tells them to,” he said, calling multitenancy “a grossly misunderstood topic.”

That may be changing. In a recent story on cloud-integration, SearchDataManagement Senior News Editor Mark Brunelli spoke with the American Automobile Association of Northern California, Nevada and Utah’s (AAA NCNU) application integration head, who insisted on multitenancy in his cloud integration platform. From Brunelli’s story:

AAA NCNU wanted a “truly multi-tenant” cloud-based integration tool-a single version of the application that serves multiple clients-but IBM Cast Iron and Jitterbit didn’t fit the bill, according to Kirk Heughens, the auto club’s application integration leader.

“We were looking for a true cloud offering,” Heughens said. “A lot of vendors nowadays say they are cloud [but actually] have multiple installations of their software out there in the cloud, so it’s really not truly multi-tenant.”

Most customers may not be concerned with multitenancy but they’re definitely interested in what it may mean for them — lower costs through economies of scale and quick and easy deployments.

Microsoft can provide those things and in fact is already pushing heavily on price in the CRM market, under pricing Salesforce.com with Dynamics CRM Online.

In fact, Azure will change the game by redifining tenancy, for example multiple tenants at the operating system level, Ehrenberg said.

“We’re going to do things differently,” he said.

Microsoft sits out the cloud HR buying spree

Meanwhile, Microsoft’s competitors in the enterprise marketplace are making big investments in the cloud and human resources with SAP’s $3.9 billion acquisition of SuccessFactors and Oracle’s $1.9 billion acquisition of Taleo.

“The prices are stunning. We certainly looked at those things,” Ehrenberg said, noting that the two companies will have a lot of integration work ahead of them. “Over time you have to have a common architecture. It’s important [the applications] talk to one another.”

Cross platform, cross device

Microsoft is also promoting the fact that its applications will run across devices and operating systems. It’s already previewed the Dynamics CRM release which will run on iPhone, iPad, Android, Windows and BlackBerry devices and on Windows, iOS, OSX, Android as well as  Firefox, Safari and Chrome in addition to Internet Explorer.

“The best experience will be on Windows,” Ehrenberg said. “We’ll be good on the others.”

SaaS dominates the cloud

Despite the hype around private clouds, Infrastructure as a Service (IaaS) and Platform as a Service (PaaS), most organizations are focused squarely on Software as a Service (SaaS) — if they’re in the cloud at all.

Results from the TechTarget 2012 IT Priorities survey indicate that SaaS is the predominant use for cloud computing - by a long shot.

Of the respondents using cloud computing in 2012, 55% are using Software as a Service, far outdistancing Storage as a Service, the next highest response at 35%. For comparison, 31% had plans for IaaS, 28% plans for disaster recovery/business continuity in the cloud, 27% for PaaS, and 21% had plans for hybrid cloud integration.

The online survey polled 2,642 global respondents, 1,308 in North America, at the end of 2011.

Rick Hassman, director of applications with Pella Corp., the Pella, Iowa window manufacturer, is among those who have stepped into the cloud with SaaS. Running some applications in the cloud via the SaaS model made perfect sense, but moving other core IT functions there — well that he’s not so sure about.

Pella, an Oracle applications shop, runs the E-Business Suite as its core ERP with the SaaS-based CRM OnDemand product in some sales groups and Oracle CRM in another.

“Based on the investment we’ve put into the infrastructure, the network, the redundancy, the disaster recovery, I would say our core strategy moving forward would still be to host this stuff [ourselves],” Hassman said.  But CRM made sense because, in Pella’s case, it’s not heavily transactional and most of its users are remote. “We felt we could integrate it and we didn’t have the inherent skill set in house.”

Pella is far from alone in this thinking.

The TechTarget 2012 IT priorities survey showed SaaS is becoming more pervasive throughout the enterprise. On-premises software/hardware and on-premises appliances remain the primary deployment models at 58% and 23% respectively, but 35% of respondents said they would use a SaaS deplyoment model in 2012. Only 16% planned to run their software on a public cloud infrastructure and 26% had plans to run their software on a private cloud. Just 17% had plans for mobile deployments in 2012.

Of those SaaS adopters, 57% said that the end user population will be using one or more cloud apps next year. Additionally, roughly a third said that as much as 40% of their end user population or more will use cloud apps this year.

Other research has shown that the spending is following SaaS. According to Gartner, vendors with SaaS models for enterprise applications brought in $9.2 billion in 2011-that’s up 16% percent from 2009 when Gartner sized the market at $7.9 billion. Additionally, momentum shows no signs of slowing as SaaS and cloud continued to converge in 2011. Gartner predicts a more than 16% growth rate for 2011 with SaaS revenue to hit $10.7 billion.

SaaS’s dominance of cloud computing is not particularly surprising given its maturity relative to other approaches like IaaS and PaaS. It can serve as a gateway to other cloud-based initiatives, according to Jeff Kaplan, managing principal at THINKStrategies, a Wellesley, Mass.-based consultancy.

“It’s the success of SaaS that opened the door to the broader idea of cloud computing,” he said.

Looking at the evolution of SaaS, it was typically brought into an organization by a renegade user, like a sales manager who bought a few seats of Salesforce.com, or some other sort of productivity-oriented application, Kaplan said. Once they found success, SaaS often found its way into the rest of the organization, with users looking at front and back office tools. From there, organizations often began thinking of other cloud-based applications that meet their industry requirements.

“Then IT takes a look and says, ‘maybe we can get them to work for us as well,’” Kaplan said. “That’s where storage as a service and infrastructure as a service comes in.”

A company’s size, age and infrastructure clearly play a part in their willingness to adopt SaaS or other cloud technologies. As Hassman mentioned, Pella has to consider the investments it’s already made in infrastructure.

“The more established companies who have a tremendous amount invested in infrastructure are less inclined to give those up and migrate over to a SaaS app unless they feel confident they can do it with little pain,” Kaplan said.

While its CRM OnDemand deployment has helped Pella prepare itself for the idea of other cloud initiatives, SaaS is no panacea.

Is the business applications market coming down to Salesforce, Oracle and SAP?

Recent events suggest that Oracle, SAP and Salesforce.com will soon be all that’s left of the enterprise software vendors - at least when it comes to the cloud.

An examination of recent announcements from the three demonstrates that the business applications giants are investing heavily in the cloud and competitors better watch out.

Current and potential customers of SAP, Oracle or Salesforce should be also concerned because consolidation is seldom a good thing for buyers.

After the last several weeks, it certainly looks like these three vendors will be the ones reigning over applications in the cloud. We start with Oracle.

Oracle acquires RightNow

Oracle has gobbled up plenty of cloud-based application vendors over the years (and plenty of other vendors as well) but its acquisition of RightNow brought a competitor of Salesforce.com’s Service Cloud in-house.  The addition of the customer service offering also served to help round out Oracle’s cloud-based CRM portfolio.

 Competition aside, what’s also interesting is that RightNow’s architecture is not, by most definitions multi-tenant. As Oracle moves its Fusion Applications — and subsequent acquisitions to the cloud — it’s clear it’s focused on virtualization as the underlying architecture and not multi-tenancy. Why does that matter to enterprise software buyers? In general multi-tenancy creates economies of scale, at least some of which get passed on to customers. Oracle does not seem interested in that.

Salesforce.com releases the Social Marketing Cloud

Perhaps the most interesting tidbit from Salesforce.com’s Cloudforce event in New York last week was CEO Marc Benioff’s aside during a press QandA about Oracle, multitenancy and their product line. Benioff, taking great pleasure in tweaking his rival in Redmond Shores, pointed to a fundamental difference in the competitors’ approaches to cloud computing.

“We heard this week– now this is just something I heard — that Oracle is discontinuing Oracle CRM OnDemand and shutting down that organization and that sales force and moving everyone onto Fusion, which is not a multi-tenant system,” he said.

Meanwhile, Benioff continued to preach the gospel of the social enterprise with the release of the Social Marketing Cloud (Paul Greenberg has a pretty good critique of the strategy). That line of business is based on Salesforce.com’s acquisition of Radian6, a onetime independent cloud vendor. In fact, Salesforce.com has bought up more than a few independent SaaS vendors to add to its suite. That’s likely the fate for many rising SaaS companies– getting acquired by one of the new big three.

Which brings us to…

SAP to buy SuccesFactors for $3.4 billion

Compared to SAP’s acquisition of BusinessObjects for $6.8 billion, the purchase of on demand talent management software SuccessFactors over the weekend seems not nearly as big a deal. But as co-CEO Bill McDermott said on the call with reporters, “we will become the No. 1 business software company in the world in the cloud. It’s only a question of what year.”

Clearly the race is on to move existing apps to the cloud (Fusion Apps); build new ones  Salesforce.com’s Chatter, SAP’s Business ByDesign); buy up what’s already doing well (RightNow, SuccessFactors); and stake out positions (multi-tenant vs. single tenant). And, as Oracle and SAP are seeking to become more like Salesforce.com, Salesforce.com is doing its part to be more like premise-based enterprise software, offering an enterprise license agreement and a database residency option for customers that absolutely, positively can’t let some data leave their home.

What about the others?

Of course, those three are not the only companies selling enterprise software.

I suppose apologies are due to Microsoft, which has a competitive cloud-based CRM offering and is scheduled to release its Dynamics NAV ERP application on SQL Azure  in 2012. But in July, there was plenty of concern that Azure is not ready to run ERP and NAV is a newer, more Web-enabled application. Moving Dynamics GP (Great Plains) and AX (Axapta) and their client-server code bases could prove a more daunting challenge. We’ll hold off on Microsoft.

(UPDATE: one day after publishing this post, Josh Greenberg at EAC made a pretty good case for Microsoft joining this list thanks to some cross-company synergies)

What about Infor? Judging from Infor CEO (and former Oracle CEO) Charles Phillips’ appearance with Benioff in New York, it’s clear the Salesforce.com platform is their cloud platform of choice while Infor services its existing premises-based customers itself.

Bottom line for buyers?

What does that mean for enterprise software buyers in the long run? Buying cloud-based apps means savings on hardware and maintenance and, while calculations differ, generally appears cheaper on a per user basis. How long will that last? Doug Henschen at InformationWeek lays it out pretty explicitly in his coverage of the SAP news:

What’s more, cloud apps vendors earn notoriously slim margins. SAP had to reassure financial analysts that cost synergies and growing scale driven by cross selling would improve SuccessFactor’s profit picture. The company lost $12.5 million on $205.9 million in revenue last year.

As Oracle, SAP and Salesforce increasingly compete with packaged cloud applications, they as well as a host of other companies are also pushing hard on the PaaS front, bringing a new dimension to the ages-old build vs. buy dilemma.

Think another vendor should be included? Make your case below.

Oracle-RightNow: Expert reactions and the future of the Cloud Services Agreement

There’s been no shortage of takes on Oracle’s acquisition of RightNow Technologies.

Opinions about the motivation and the market impact run the gamut.

Mike Fauscette sees it as way for Oracle to bolster its recently-released Public Cloud initiative.

He writes:

Oracle’s Public Cloud offering, up to this announcement, was presumed to be composed of existing Oracle products including Fusion Applications, but clearly now Oracle plans a more aggressive move into the SaaS apps space.

R Wang sees some merit to that rationale, but cautions that RightNow, not being truly multi-tenant and therefore not truly SaaS, will require Oracle to deliver a multi-tenant version of Fusion Middleware. And, like many others, Wang saw the move as partly a competitive play against Salesforce.com, but also a longer-term customer experience management move. RightNow has for years given up calling itself CRM and instead focused on branding itself as customer experience management technology.

Wang writes:

Social business, online experience optimization, and gamification represent huge holes in Oracle’s product portfolio.  RightNow brings tremendous amounts of thought leadership to the table should Oracle retain the product teams.  More importantly, the SMB focus will help Oracle bring in a new customer base.

Phil Wainwright, on the other hand, rejects the idea that Oracle bought RightNow as a reaction to Salesforce.com’s acquisition of Assistly. He sees it as Oracle buying up the SaaS old guard, and offers a lengthy and well-documented take on the multi-tenancy vs. SaaS argument.

Wainwright writes:

The choice of RightNow sends further signals about the kind of cloud vendor Oracle will prefer to acquire. Over the years, RightNow has had more than a few critics of its SaaS model, which has been much closer to Oracle’s notion of hosting customers in clustered ‘pods’ of servers than more purist definitions of multi-tenancy (of which there are many). RightNow’s variety of SaaS model is more prevalent than you’d believe from listening to the hype that comes from the industry. There are large numbers of vendors with similar architectures, and it’s a tough path they’ve chosen. As time goes on, I suspect they’ll find it harder and harder to compete against more technologically and economically agile vendors that more effectively leverage true cloud architectures.

Meanwhile, Beagle Research’s Denis Pombriant offers a similar reaction to Wang’s, seeing the long-term potential for customer experience management.

Pombriant writes:

Seriously though, Oracle, ATG and RightNow might be a thing in the future.  Multi-channel communication combined with e-commerce outreach could be very important.  Add to this Oracle’s success in what it has called clienteling (sp?) in which store sales associates carry mobile devices that can orchestrate customer centric shopping, and you might see a pattern.  If the customer can’t come to the store, perhaps the store will come to the customer.

The ATG connection is an interesting one. It got relatively little attention in the marketplace when it happened and Oracle’s CRM executives have cited it repeatedly as a differentiator. Seen through the lens of IBM’s Smarter Commerce push, in which IBM is combining its own acquisitions of Sterling Commerce, Unica, Coremetrics and SPSS, software buyers might actually have the luxury of pitting Oracle against IBM once again.

Forrester’s Kate Leggett wonders how Oracle will rectify all the overlapping functionality.

She writes:

Oracle has many overlapping and competing assets for CRM and customer service as well as for point solutions (e.g., email, chat, and knowledge management). Oracle must position RightNow as a unique offering in its current solution portfolio and must clearly message and steer customers to the right solution for their particular business need (for example, if I am a customer needing knowledge management, do I buy InQuira from Oracle or RightNow from Oracle? What about a chat solution? Do I buy InstantService from ATG/Oracle or from RightNow or the Oracle product?).

 Of course people were posing those same questions about PeopleSoft CRM, and Siebel. The answers remain elusive. 

Leggett raised another interesting dilemma, that of clashing corporate culture. Normally, I wouldn’t put much stock clashing cultures. They’re part of acquisitions, people meld or move on, sometimes the acquiring company changes up. Yet in this instance, the two companies could not be more different — at least based on public perception.

What I wonder is, what happens to the RightNow Cloud Services Agreement? Think Oracle will continue with sales based on a three-year price commitment plus a three-year renewal price cap? What about “pools of capacity” similar to wireless rollover minutes? Ramping licenses up based on seasonal demand?

One need only to look at Mark Fontecchio’s reporting on SearchOracle.com to see questions about Oracle’s commitment to support, Oracle’s tactics when it comes to license audits, or its less-than-customer-friendly contract negotiation practices to find the likely answer to those questions.

Perhaps one of the most interesting revelations in the wake of the acquisition is the re-surfacing of an October 2010 interview with RightNow CEO Greg Gianforte on BusinessCloud9. It seems Gianforte had his own issues with Oracle licensing.

“Let me tell you about Oracle,” says Gianforte. “We needed a new accounting system. The one we had was at end of life so we set out to procure a new one. There are really not that many options out there. That German company that makes accounting systems was probably too big for us, so we had a shortlist of Oracle and NetSuite. Now I didn’t trust Oracle as far as I could throw a stick! We try to keep our data centres an Oracle-free environment.”

In fact, RightNow had purchased some Oracle software the previous year, he recalled, but found that in order to scale,  it was necessary to put it onto 30 servers. That resulted in a visit from Oracle’s compliance people clutching a multi-million dollar tab. In the end RightNow settled for a lower rate of $250,000, but winning price certainty was a pre-requisite for this new accounting system.

As Rosemary Cafasso, reporting from the RightNow user conference is already discovering, many RightNow customers are nervous about their new software provider.

And from the take it for what it’s worth department:

There’s a major snowstorm in Colorado Springs at this moment.

SAP and Oracle follow in Microsoft, Salesforce.com’s footsteps with PaaS

Back before it was preaching the wonders of the Social Enterprise, Salesforce.com was fixated squarely on Force.com and Platform as a Service (PaaS). It remains invested as its acquisition of Heroku and the recent plans for Heroku to support not just Ruby on Rails but Java would seem to indicate.

Now it looks like SAP and perhaps Oracle are preparing to take their own PaaS at the idea.

SAP has revealed some of its plans for NetWeaver on-demand, as noted by ASUG News’s Courtney Bjorlin:

NetWeaver OnDemand will go into ramp-up at the beginning of 2012 for use by a limited number of customers. SAP’s looking to make it as open as possible. NetWeaver OnDemand is meant to be a “multi-programming paradigm environment,” [Sanjay] Chikarmane says. It will support multiple programming languages, including ABAP and Java, as well as popular frameworks such as Spring and Ruby on Rails.

Meanwhile, word on the street has it that Oracle is preparing to unveil its own offering at OpenWorld next week. Indeed, Oracle has been talking about PaaS for a couple of years and with Exalogic, Exadata, Fusion Middleware and WebLogic with Oracle Enterprise Manager as the front end to control it, Oracle has all the pieces. In fact, this Oracle PaaS FAQ naturally outlines all of Oracle’s software and hardware infrastructure products that could be used to build a PaaS.

Does that mean Oracle is going to put one together that it will host itself and offer it to developers?

Forrester’s Stefan Reid outlined Oracle’s plans for PaaS in a blog post in February, which left the PaaS hosting piece up to partners (though it came with a caveat).

In contrast to Microsoft, Oracle will not host this PaaS stack on their own (to Forrester’s current knowledge). Oracle’s focus is to enable partners for cloud business models with their technology stack. This can be Amazon’s EC2 images, or eventually soon a multi-tenant Oracle installation at a hosting provider like Rackspace.

But that might be changing. Check out this session description for OpenWorld on Tuesday at 11:45, Platform as a Service: Enterprise Cloud in Three Simple Steps.

Here’s the description:

Platform as a service (PaaS) is getting popular as more and more public cloud providers offer simple platforms for deploying applications. In this session, learn how you can set up and use Oracle’s PaaS solution, leveraging the provisioning, chargeback, and policy management capabilities in Oracle Enterprise Manager.

The term “solution” is nebulous at best, but it certainly sounds like Oracle is readying a platform of its own for the marketplace.

There’s no shortage of PaaS offerings out there. Here’s a handy rundown of existing and upcoming PaaS vendors courtesy of Andyland. Yet, SAP and Oracle’s interest in the market, along with Microsoft’s obvious presence with Azure, may signal a coming maturity and should complicate - or simplify - the buy vs. build decision.

Oracle did not respond to a request for comment.

Is benchmarking data the next big step for SaaS?

Two weeks ago, the Wall Street Journal published a story about an increase in business travel expenses. It cited data showing that corporate employees were spending more on meals, entertainment and hotels, and doing it in style.

The data all came courtesy of Concur, maker of an online expense management system, which provided aggregate data from its customer base to the Journal.

While the exercise provided an interesting story for the Wall Street Journal and some good publicity for Concur, Software as a Service (SaaS) companies - and their users - are uniquely positioned to turn customers’ aggregate data into a real business advantage.

Continued »

Benioff is a rock star and other notes from Dreamforce

Dreamforce has come and gone. So too has Labor Day.

That means it’s time to clean out some of the notes from last week’s conference in San Francisco and to stop wearing white pants.

A few thoughts…

What of VMforce?

To no one’s surprise, one of the announcements from Dreamforce was that Salesforce.com is now supporting Java on its Heroku development platform. What does that mean for VMForce, its partnership with VMware to allow Java and SpringSource developers to build applications on Force.com?

When VMforce came along we wondered what it meant for Apex, the proprietary “Java-like” Salesforce development language. Now we wonder what Java on Heroku means for VMforce. Over at the Silicon Angle blog, Alex Williams was already sounding the death knell for VMforce as the two companies turn from partners to competitors. He writes:

This is a good lesson for us all. Be very skeptical of alliances between technology companies. Companies can easily become competitors, leaving users with the challenge of moving what they have developed to an entirely new environment.

Marc Benioff, Salesforce.com’s CEO, again not so surprisingly, gave a halfhearted endorsement of VMforce in a question and answer session with press and analysts.

“Everything had to evolve and shift as we learned,” he said. “We still have a tremendous relationship with VMware. Springsource will be integrated into Heroku and they’re still a tremendous partner.”

He did, however, address the future competition as it relates to the cloud.

“They’re about the virtual machines and virtualization,” he said. “We have a different approach to the Cloud, which is public services.”

Salesforce.com’s roadmap includes ERP… partnerships

While Salesforce.com has a longstanding partnership with FinancialForce, ERP took a more prominent role this year, with the company announcing a partnership with Infor and funding a supply chain start up in Kenandy.

The Kenandy announcement led to one of the funnier moments of Dreamforce. Sandra Kurtzig, chairman and CEO of Kenandy, and Ray Lane, managing partner at Kleiner Perkins, a backer of the venture, joined Benioff on stage. Benioff asked Kurtzig what technology she considered when launching the company — IBM, Oracle, HP?

“Are those guys still in business,” she responded.

“One is. The chairman of HP is to your right,” Benioff said, pointing to Lane.

Infor’s partnership is interesting from a CRM perspective. Just before the announcement I talked with George Wright, Infor’s senior vice president and general manager for CRM, on the show floor. I asked if they’d given up on the Epiphany product the company acquired with SSA Global. On the contrary, Wright said, Infor is leveraging Epiphany as part of Inforce Marketing, a marketing application built on top of Force.com.

That means Infor is basically ceding the sales force automation piece to Salesforce.com, at least in the SMB market. A case of “if you can’t beat ‘em, join ‘em.”

Meanwhile, Benioff said later that Salesforce.com is still building out the marketing cloud. He pointed to the investment in Radian6 and the importance of social media monitoring. However, as part of the partnership, Salesforce.com made an investment in Infor and one has to wonder if the recommendation engine of the marketing cloud won’t come from the ashes of Epiphany.

Dennis Howlett has a full take on Salesforce.com’s ambitions for manufacturing ERP in the cloud.

Social monitoring and interest from HR

One interesting tidbit from Autodesk , the CAD software company that recently adopted Radian6. It’s created a hub and spoke model for social media within the company. Every department is exploring social media in its own way, while getting feedback and best practices from a core group, explained Dan Zucker, the social media manager in worldwide marketing.

That includes the HR department, which is considering social media as a way to recognize and promote employee performance. Social media also has potential as a recruiting tool for the company, according to Marcel Lebrun, general manager of Radian6. Other organizations are also beginning to explore social media and HR, he added.

Marc Benioff is a rock star

Finally, if hanging out with people like Will.i.am, Neil Young, MC Hammer and gracing the cover of Forbes, the business world’s Rolling Stone, weren’t enough. If erecting posters of that very cover all over the Moscone center and giving every attendee a complementary (or is it complimentary) copy of the magazine that named Salesforce.com the most innovative company in the world weren’t enough. Then let me share this anecdote to prove Marc Benioff is a rock star.

Walking down Third Street on the way to the Moscone Center on Wednesday, I caught sight of a woman with an ear-to-ear smile. She was holding a camera in her hand and seemed she just had to show somebody. I was there, so she showed me. It was a picture of her and Marc Benioff. She was absolutely giddy.

Just a small data point on what passionate leadership can do for a company.

Is Salesforce.com’s DRO the first step to a private option?

At its annual Dreamforce event, Salesforce.com announced its plans to offer a Database Rights Option for customers, allowing customers to store some of their data in their own data center while still accessing Salesforce.com.

I caught up with ThinkStrategies’ Jeff Kaplan to discuss what it means for the SaaS market and the possibility of Salesforce.com offering a hybrid deployment of even running Salesforce.com in a company’s private cloud.