CIO-Reinvented Blog - By Prashanth Rai

Open Source BI Goes Mainstream...Gartner

According to a recent press release by Gartner they are predicting that Open-Source Business Intelligence Tools Production Deployments Will Grow Five-Fold through 2012.  The question is, how significant is that given their current base?

Couple of interesting excerpts from the same:

1. Although the average size deal for an open-source BI contract remains approximately $30,000 for a yearly subscription, some contracts repeatedly exceed $500,000 for a multiyear support subscription, which is in the same ballpark as many commercial counterparts.
2. Open-source is more often seen in price-conscious midsize companies, as well as in government and the public sector, healthcare or manufacturing, and more Type B organizations with smaller budgets. (Type A being financial + telecommunication)
3. A large portion of the growth in open-source adoption is coming from the vendors' original equipment manufacturer business, which cannot be properly sized, as many independent software vendors simply use the downloadable version of the open-source BI product.
4. System integrators have started to build practices around open-source technology, and they are also implementing BI platforms
5. “As you might imagine, the increasing open-source traction has not gone unnoticed by the commercial vendors. While often dismissed as being no competition, even the large established BI vendors have come up with counter measures to address the challenges from the lower-cost competitors,” said Andreas Bitterer, research vice president at Gartner.

Source:1

Tags: open+source - gartner - business+intelligence - BI

Prashanth Rai

Interesting data / statistics about SAP ....(SAP Influencer Summit)

During the last couple of days at the SAP Influencer Summit, There were a lot of interesting discussions / sessions. I will post about them over the next couple of days. To start off, I wanted to just list out some of the interesting data points / stats that I heard.

• By 2011 - 12% of world wide software market will go to cloud computing / on demand route(Merrill Lynch)
• 60-70% of the world's population have mobile devices
  • 4.1 billion phone, 35m iphone, 20+ smartpone types
• 350m FB users, 2m SCN users, ~1m blogs updated / day
• 14 Billion devices will be connected to the Internet, ~1Trillion events
• Business By Design currently has 100 customers.
• To reach a market audience of 50 Million
  • Radio - 38 years
  • TV - 13 years
  • Internet - 4 years
  • Ipod - 3 Years
  • FB - 2 years
• SAP ERP 6.0 productive systems - 18721 in Nov'09 vs 11804 in OCT'08 - Half installed base using the latest version
• Transaction On these systems:
  • 3200 car engines per day
  • 50 million bank accounts
  • Processing 2.5 billion utility bills
  • Retail outlets - $330 million worth of transaction per day
• In Memory technology - Provides 1000x+ performance gain - Extreme advantage enables brand new value creation
• SAP Summit Attended by 275 People in attendance / 20 + Customer & Partners
• SAP has 8000 people in Goto Market division & 10000 in the services organization
• Newell Rubbermaid - SAP / BCone (Sap partner) Supply chain Project executed in 90 days, Sales process took 37 days.
• Business By Design - lot of work done by R&d for the suite, factor  20 reduction in TCO for SAP
• Johnson Products implemented Business By Design in 30days (Start to finish)
• SAP EcoHub - 400 partner solution on the hub / 10000 demos off the hub - Most available online from within the hub.
• SAP has 12 centers inside sales centers
• SAP has 5400 partners (VARs, resellers etc) - 2700 are Partners & 2700 Extended Business Partners
• In 2007 SME was setup as a separate service line within SAP
• 75% of SAPS 92000 customers are SME
  • SAP Acquire >35 new SME customer per working day
  • 70500 SME Customers in total
  • 50500 SME Channel customers
  • Tripled the SME customer base in 3 years
  • SAP SME Number further broken down:
    • Upper ME = 11%
    • Lower ME = 42%
    • SE = 47%
  • SAP has 25000 B1 Customers
• Green Blue Auto SME Customer (Canada) - Implementation in 4 Weeks

Tags: sapsummit - sap - sap+sme - erp - ecohub - sap+erp

Prashanth Rai

Renewed Raids by SAP on the EPM space on Oracle / Hyperion

Last year SAP had a program titled "CPM Acceleration Program", the program focused on ridding Oracle / Hyperion from the sites that are primarily SAP. One of the key result this program was having was a replacement each day. This was covered in an earlier post here.

SAP is making a renewed push against Oracle in the EPM (enterprise performance management) space, and has a rip-and-replace success story to show for it.

CKE Restaurants used Oracle's Hyperion software for 15 years before starting a switch to SAP's BusinessObjects Planning and Consolidation product this year, said CTO Tom Lindblom. - The 3,000 restaurant chain, which includes brands such as Carl's Jr. and Hardee's, made the change for a combination of reasons

SAP is hoping to showcase many more customer-win stories in the future,

The Microsoft Alliance, Helping the cause...

In November, the companies announced that Microsoft would back BusinessObjects Planning and Consolidation as "a preferred solution for companies running their business applications on the Microsoft platform." Microsoft will also participate in various marketing initiatives.

The fact is - from a platform perspective at least - SAP is aggressively pursuing the planning, budgeting and consolidation market. Microsoft wants to as well, but at a mid-market level. Hence both stand to benefit from this integration - SAP in particular, by giving the company a foothold in Microsoft accounts. The key of course is pricing - many Microsoft BI accounts are about lowering the cost of ownership.

Source: 1, 2

Tags: sap - Hyperion - CPM - epm - Microsoft - replacement

Prashanth Rai 

Summary of Enterprise Solutions - Infosys Analyst Meet

Saw the slide deck from the presentation by Chandrashekar Kakal Senior Vice President and Global Head Infosys - Enterprise Solutions gave at their recent Analyst meet. Below are some interesting excerpts & some of my comments on the same:

• 83% of Enterprise solution services if from NA + Europe
• Enterprise solutions - 70 Billion $ market
• Demand for upgrades seem to be down, but one of the trends driving the space seem to be Next generation of product suites: Business suite of SAP & Fusion of Oracle. - Does that mean that they are not seeing demand for upgrades to these next gen suites?
• Support & Maintenance is up, that aligns with the Forrester reports discussed in an earlier post
• Enterprise Solution - Service line breakup
• Newer engagement / pricing options
  • Application based pricing
  • Ticket based pricing
  • Outcome based pricing
  • Transaction based pricing
  • Volume based pricing
  • Device based pricing

   

  Infosys created a comprehensive business platforms, Applications + solutions + services +BPO

  

Tags: infosys - sap - oracle - enterprise+solution - support - it+Services - offshoring - outsourcing

Prashanth Rai

SAP SME Channel & Business Growth ...

Headed to the SAP Influencer Summit tonight, expecting to hear details about their plans for the SME space and also the progress / initiatives they plan to launch on the "on demand" front.

SAP has been taking some aggressive growth steps on the SME ecosystem side, led by their "SAP Extended Business program". The SME business also seems to be growing fast in terms of number of customers, still wonder what it is like in terms of percentage of revenue.

SAP Extended Business Program

Participation in the SAP Extended Business program is voluntary, free of charge and open to companies who are associated to channel partners in the SAP PartnerEdge program. The manner in which program members and VAR partners cooperate and provide compensation is at their discretion; the commercial relationship between VAR and customer remains unchanged by the new program, added the release.

Asia Pacific & Japan

Currently eight selected SAP channel partners act as Master VAR in the SAP Extended Business program in APJ; managing approximately 40 program members across the region. All members have access to SAP systems and resources, training and enablement, coaching and deal support for the SAP Channel Partner's SAP solution portfolio, said the release.

"With the SAP Extended Business program, SAP continues to demonstrate its commitment to the SAP ecosystem in APJ," said Christopher Knoerr, vice president Indirect Channels, SAP Asia Pacific Japan.

SAP India SME Growth

“Out of 4000 odd customers in India today, almost 75 percent (more than 3000 customers) are SMEs. Apart from adding new customers on annual basis, it is highly important to monitor the repeat business through regular customers with us,” informed Debdeep Sengupta, VP – SME & Channels, SAP Indian Subcontinent. “With an extensive portfolio of solution offerings, it becomes crucial to enable partners to up sell and extract regular business from loyal customer base,” he added.

Canada

November SAP announced three new members of the SAP Extended Business program that will deliver SAP Business All-in-One solutions to Canadian midsize companies.

On the SAP extended business partner program - “Participation in this unique program is mutually beneficial to the member of the SAP Extended Business program and the VAR,” said Michael Pearson, president, CONTAX. “Members have access to a wide range of SAP training, sales and marketing materials, as well as an experienced partner to lean on for support. On the other hand, the VAR can offer a broader and more flexible range of specialized solutions and services to SMEs, delivering best-fit solutions and quicker implementation with expanded geographical coverage and additional implementation and sales resources at lower costs.”

CONTAX, an SAP PartnerEdge channel partner specializing in cost-effective and rapid implementations of SAP Business All-in-One, has been especially successful in driving the program in Canada

Mexico & Central America

SAP Mexico and Central America currently has 2,800 clients, and that figure will rise to 3,000 by year's end. Of the total client base, roughly 66% are SMEs.Some 200-300 SME clients will be added division-wide during this quarter, head of SAP's Mexico and Central America division, Ali Hamid, said. "There is a large market."

Source: 1, 2, 3, 4

Technorati Tags: sapsummit - sap - partneredge - channel - india - canda - apj

 

Application management services - Outsourcing / Interesting stats - Forrester

Saw this really interesting chart at a Forrester report

Couple of points that stood out:

The significant interest in Managed hosting services, it will be interesting to see how the Cloud computing trend impacts these stats.

• Currently outsourcing - 6%
• Will outsource to a 3rd part in the next 12 months - 17%
• People Interested & considering it - 44%

Another surprising insight is the low % of adoption of outsourcing in low value addition / undifferentiated heaving lifting type tasks / Summarized in Chart below:

This just emphasizes the opportunity size for outsourcing services.

Tags: outsourcing - appsupport - forrester

Prashanth Rai

Trends / Facts / Stats / Thoughts about the Mobile "Data" space....

Below are a list of points / trends / Thoughts about the Mobile space from various sources that I have been reading over the last couple of days:

Forrester Outlook of 2014 - United States

• By the end of 2009, 234 million US consumers — 76% of the population — will have a mobile phone subscription, and the total number of phone subscriptions will approach 270 million, representing 88% of the country’s population
• Most subscriber growth will be prepaid. Those without a mobile phone are less likely to be able to afford a postpaid option: 37% of those without mobile service have a household income of less than $25,000.
• Laptop or netbook — these connected PCs will account for nearly 11 million subscriptions by 2013
• A dizzying array of devices from cars to home alarm systems to eReaders to navigation devices are available today with a cellular connection, and new options such as health monitors and connected cameras are on the way. This diversity of connected devices will result in a proliferation of wireless subscriptions beyond the traditional mobile phone.
• Mobile Internet usage will boom. As 2008 drew to a close, more than 34 million US mobile subscribers accessed the mobile Internet on their phones at least once a month. That number will grow at an impressive 52% rate in 2009 to 52 million, and mobile Net users will continue to exhibit double-digit growth through 2014, when 106 million users, or a full 39% of all wireless subscribers, will become regular mobile Net users.
• Operators’ shift from metered to unlimited data plans has been one of the critical drivers for mobile Internet and data adoption, but these plans have a downside in that they limit future data revenues while encouraging wanton usage. To manage this risk, carriers will introduce new service tiers at lower  price points — with concomitantly lower data limits — that will reduce the barrier to entry for those subscribers not yet convinced that they get their money’s worth.
• Messaging +data services - these growth engines have only served to balance the concomitant decline in voice revenues — keeping ARPU nearly flat over the past few years. This trend will continue, as the growth in data subscriptions will be tempered by the introduction of lower-price voice offerings designed to maintain growth
• Data access revenues will approach $20 billion in 2014, the rate of growth will slow as the average monthly price of a data bundle decreases from $17.34 per month in 2009 to $16.64 in 2014
• Today, nearly one-third of active handsets are 3G; by 2014, more than four in five handsets will use 3G technology — whether that’s UMTS, a flavor of HSPA, or CDMA2000 — or its successor, LTE.
• Today, even the most recalcitrant voice-centric customer isn’t able to buy a new handset in this category, and these devices constitute a paltry 3% of active phones in the US market (see Figure 3). By 2014, this number will have fallen to less than 1% of all active handsets, confined to the remaining “glove box” users and those served by remote rural providers.

Economy + Internet Trends - Morgan Stanley

• Mobile Consumer - 10billion + Units

India - An interesting article in the Wallstreet journal

• Radio Via Phone - With the more than $200 million in revenues phone company executives expect this year, the radio via phone business already makes almost as
• much as consultants at KPMG estimate all the regular FM stations in India will make.
• ......requires tailored services that are delivered simply and can work even on a $20 phone.
• Monthly ARPU, Q4-2006 - 300+ Rs, Q2-2009 - <200Rs, The biggest phone companies have also started charging per second rather than per minute, further crimping the number of rupees they get from calls.
• The mobile value-added service business, which also includes standard nonvoice services like texting, will rise close to 70% in the next year to 165 billion rupees ($3.6 billion), according estimates by the Internet and Mobile Association of India.
• So far these types of services make up only about 10% of cellular companies' revenues, analysts say. But in the next five years the portion of revenue generated by these services could rise to as much as 25%, they estimate. Telephone Revenue from Non Voice Cellphone Services - 2006 - 25 Billion Rs, 2008 - 75 Billion Rs, (Estimated) 2009 - 100 Billion, (Estimated) 2010 - 160 billion Rs.
• New revenues won't come anytime soon from so-called 3G services. India has yet to even decide which private companies will be allowed to offer 3G services, though an auction of spectrum is expected early next year.
• many of India's 750,000 villages remain isolated except for the cellphone reception that now blankets almost the entire country after a decade of rapid expansion by operators

Source : 1,  2, 3

Tags: mobile - data - mobile+trends - ms - morgan+stanley - forrester - india - US - japan

Prashanth Rai

In conversation with Zia Yusuf - SAP TechEd 09

Yesterday we had a great conversation with Zia Yusuf. Zia  is the Executive Vice President, responsible for Global Ecosystem & Partner Group at SAP AG. It was an interesting conversation touching upon various dimensions of community, partners, SI's and social media. Zia & his team have a really tough job moving forward trying to change the perception and or reality of SAP in many areas like

1. the lack of trained quality consultants,
2. of being seen as a "innovation" laggard,
3. changes required in the services partners to deliver to the SME and deliver around solutions like BBD.
4. it being "white elephant" to implement & support,
5. ....etc

What was promising to see was that they seem to be moving slowly but steadily in that direction but they have a lot of work in front of them and they are open to collaborating and discussing on ways to achieve these results. Below are the key / interesting points or thoughts from the discussion that came up during this conversation:

• The community initiatives are thriving, it has reached 2 million now. And its also evident with the growing popularity of the SAP mentors and the initiatives they seem to be taking. The "Blue Jerseys" are great guys.
• The inclusion of SI (System integrators) into the Eco hub. This is a big move. . I think there seems to be a broad set of initiatives that SAP is taking to make the system integrators play nice. They seem to be taking small but progressive steps towards reducing that 1:7 (license cost :implementation cost) ratio, without ruffling too many feathers at the SI's end. Strangely I think a lot of enabling of this will be dependent on the customers and how much they are willing to adopt these changes & enforce some of these things with their SI's & service providers. On the question of SAP Ecohub or SDN becoming a services market place its an interesting discussion for sometime in the future.
• Enabling the Smaller partners - As a part of the ecosystem organization , there seem to be a set of Partner service advisor's that are looking at enabling partners particularly the small / mid sized ones by providing them access to the SAP product technology road map etc etc. This seems to be the only side of the SAP organization that has grown in headcount.
• Factoid - There seems to be a total of 400k SAP consultants globally with 250K of them being in large or in the organized sector the other 150k are typically independent contractors.
• Zia's thoughts on characteristics of great SAP SI firms:
  • Deeply involved with the evolution of the SAP Roadmap
  • Training & certification,
  • Dynamic in models offered,
  • customer service-value driven,
  • Ability to have a longer term relationship.
• A chance to collaborate - Zia is asking for "Use cases" that we can think of where "Social Media" will connect or interact with "Core business processes" that are a part of the Enterprise business processes. Specifically around crowdsourcing etc - Which will change the way business is done! Ideas welcome
• Community contribution into the product, the SDN / communities framework that was created for communities (SDN/BPX) is now a product called Collaborative Workspace and now has 1400 installations.
• SAP Safegaurding - Recently it has been communicated to all the SI's that they need to include / push safegaurding as a part of their implementations etc
• Job board has now been included in SAP Communities / SDN. First couple of days 180 jobs posted on it

Zia is now on twitter and you can follow him @ZiaYusuf

Tags: communities - sap - sapteched09 - zia+yusuf - sdn - bpx - partner

Prashanth Rai

Update: Looks like this would be the last event for Zia with SAP, All the very best to him for all his future ventures.

Disclosure: SAP paid T&E to TechEd.

IDC’s New IT Cloud Services Forecast: 2009-2013

New Cloud Services Forecast Publised by IDC - The new forecast, segmented by offering category, for 2009 and 2013:

Excerpts:

1. The five year growth outlook remains strong, with a five-year annual growth rate of 26% – over six times the rate of traditional IT offerings.
2. The revised figures are still in the same ballpark as last year’s forecast, although they reflect about a six month revenue knock back from what would have been expected from last year’s forecast, due largely to the global recession and, to a lesser degree, to better market tracking and tightened definitions.
3. This year, cloud services will total only about 5% of IT revenue. Even with a compound annual growth rate of 26% – over six times that of traditional IT – they will account for just 10% in 2013. Some might look at this, and conclude that cloud services are not very important – after all, in 2013, 90% of IT will NOT be from public clouds.
4. IT cloud services for the industry - $17B in 2009 and $44B in 2013
5. Of the $27 billion in net new IT revenue in 2013, 27% will come from IT cloud services. Given the 6X growth advantage of cloud services offerings over traditional ones, that percentage will grow very quickly in subsequent years – meaning that suppliers who don’t position themselves as IT cloud services leaders over the next several years, will forfeit larger and larger portions of the highest-growth markets.

Source: IDC

Henning Kaggerman to join Wipro's Board

Dr. Henning Kaggerman is joining Wipro's board as of Oct 27th. I think this is great news for Wipro. It was always a great experience meeting with him at the SAP events. Henning is a big believer / proponent of the consulting or value added approach to IT services & in reducing the implementation / services costs in SAP / Packaged implementations i.e. reducing the ratio between the licenses to services fees. Will be interesting to see how his thinking influences Wipro. Some comments / excerpts:

Commenting on his appointment, Dr. Kagermann said, "I have for long admired Wipro as a company as much for its innovative approach to business as for its strong commitment to values. I am excited at the prospect of guiding the company as it prepares for its next phase of growth"

Azim Premji, Chairman, Wipro Limited said, "We are delighted to welcome Dr Kagermann to our Board. He brings in a unique combination of academic perspective, technical expertise and leadership experience. I am sure that Wipro will benefit from his rich knowledge, insights and wisdom."

Source: 1

Prashanth Rai