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Coopetition run amuck?

Oracle CEO Larry Ellison

This is all interesting because not all that long ago, HP was Oracle’s bestie in x86 servers . Of course that was before HP fired Mark Hurd for cheating on expense accounts and inappropriate interaction with a female contractor and before Larry Ellison blasted HP very publicly for doing so, and HP sued Mark Hurd and … well you get the picture.

Now, before it got into the server — er engineered systems —  business by virtue of buying Sun Microsystems for $7.5 billion in 2010, Oracle courted most of the major hardware guys with the exception of archrival IBM. HP CEOs Carlie Fiorina then Mark Hurd and Michael Dell, typically keynoted at Oracle OpenWorld, for example, touting their respective servers as the best possible hardware to run Oracle databases and applications.

As an enterprise software company, Oracle needed good relationships with server companies at least in part to compete better with IBM which offered servers and databases. In fact, the very first Oracle Exadata engineered system, which came out before the Sun deal, was an HP box. But  with its ownership of Sun and its server lineup, relationships with other hardware vendors got more complicated.

As one Dell partner at last week’s confab told CRN’s Joe Kovar: ”The last thing I ever expected at this event was to see Mark Hurd’s face.” I mean, come on:  A customer buying a Dell box running a raft of Oracle software isn’t likely to buy an Oracle engineered system. And, as I’ve reported for a while, Oracle hasn’t exactly hit the cover off the ball selling hardware – hardware revenues have headed south since the Sun acquisition — although Oracle would argue that the hardware it does sell is highly profitable.

Anecdotal evidence is that most people who buy Exa-boxes are doing so at discount and are not necessarily loading up those boxes with new Oracle software but consolidating what the software they already own on new hardware. Anyway, my thesis is that if Oracle truly were happy with its hardware sales and profitability it wouldn’t be snuggling up to Dell.

NSA spying, fallout for cloud computing adoption?

For folks worried about putting private information on consumer oriented services  like Facebook  clearly had more reason to worry this week as news broke about the U.S. National Security Agency’s monitoring of internet and cell phone data. GigaOM’s Mathew Ingram did a great job updating this story all week  and David Meyer outlined the huge ramifications this could have in Europe where data privacy is a key concern.

You’ve got to wonder if this will have a chilling effect on  various “cloud first” initiatives. Earlier this week, I wrote that Amazon Web Services might deploy ”mini me” GovClouds outside the U.S. for workloads that government agencies — or even businesses  –  would prefer to keep in-country.  Since posting that I’ve had several emails from people who would know that AWS is, in fact, doing this.

Given that AWS,  one of the few internet powers not named in the NSA story — is U.S.-based, could there be pushback from other countries that otherwise would consider an Amazon GovCloud implementation?

Meanwhile, Amazon finally acknowledged the existence of a “secret” contract to build a private cloud for the CIA but it took IBM to get it out of them. IBM contested the contract award to the General Accountability Office which ruled in IBM’s favor and recommended a “re-do” of the process. Kudos to Federal Computer Week reporter Frank Konkel for keeping ahead of this story.

More cloud computing news from around the web

From InformationWeek: Zynga, cloud pioneer, must fix revenue woes

From GigaOM: SAP strikes again, buying Hybris to boost e-commerce push

From CiteWorld: Why Appirio issued fitness monitors to employees

From CRN:  HP Enterprise group SVP Seidl set to step aside

From GigaOM: Why IBM desperately needed to buy SoftLayer

From GigaOM: What the web is saying about Salesforce’s $2.5B ExactTarget buy

From Bloomberg News: Ray Lane rode tech boom tax shelter wave

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” SAP co-CEO Bill McDermott

Hybris, based in Zug, Switzerland, offers technology that helps companies sell stuff or services to customers across multiple channels — brick-and-mortar stores, web sites, mobile etc. It claims an estimated $110 million in sales last year, up more than 50 percent over 2011.

An SAP spokesman likened Ariba and Crossgate to shopping malls and communities of buyers and sellers while hybris is more a foundation technology to allow companies to directly engage with their own customers. And, hybris claims some very big customer names: Costco, H&M, Ladbrokes.com, Grainger and Bridgestone.

As has become the norm with SAP, there will be big tie-ins with the company’s HANA in-memory database. According to the statement announcing the deal, SAP said:

“The combination of hybris’ commerce platform with the flagship in-memory platform SAP HANA, analytical and cloud applications, and the SAP Jam social software platform will give SAP a significant edge in delivering new levels of customer insight and engagement across all channels.”

Bill McDermott, co-CEO of SAP, said in a statement that “with hybris, SAP has made a decisive move to raise the stakes in customer relationship management and define the next-generation customer experience.”

Update: As IDG News reported, the hybris deal comes a few months after SAP launched 360 Customer, which combines its SAP’s CRM with the aforementioned HANA, Jam  offerings.

Gee, that sounds exactly like what SAP rivals Salesforce.com, Oracle and NetSuite are also trying to do. These dueling enterprise software giants are snapping up startups for e-commerce, marketing and related social networking wherewithal. Just yesterday, Salesforce.com said it’s buying Exact Target for $2.5 billion. In e-commerce, Oracle bought ATG for $1 billion several years ago and Eloqua for $879 million late last year. NetSuite bought OrderMotion  and announced a “Commerce-as-a-Service” push last month and boasts some large retail customers including Williams-Sonoma.

What this all means is that tech vendors that built their franchises on a single or small set of (albeit big important) products — databases in Oracle’s case; ERP systems for SAP; and CRM for Salesforce.com — see the need to gather in a wider set of users and own more of the applications those people depend on to run their businesses.

All these companies have cash and are more than ready to spend it. So stay tuned for more.

This story was updated at 11:33 a.m. PDT with more information about SAP’s 360 Customer launch.

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Fanning the FUD flame this week was a new report (PDF here) from the Commission on the Theft of American Intellectual Property estimates that IP theft costs the  U.S. economy  $300 billion per year. Not surprisingly, China was fingered as the chief culprit, although Russia and India were also named  as problem children here.

The panel, Reuters reported, wants to anoint the president’s national security advisor as grand poobah of a ramped-up effort to protect intellectual property. Bad behavior should be met with banking sanctions, import bans and  financial blacklisting, according to the 89-page report. (In related news, former CIA Director James Woolsey this week warned that the U.S. is at risk of a cyber attack from North Korea which truly is scary. At least Chinese motives seem rational.)

Security, or lack thereof  – is one big de-motivating factor when it comes to moving more corporate workloads to the cloud– or allowing employees to use their personal smartphones at work for that matter.  But it would foolish for security vendors to waste a good crisis.

This week Verdasys, for example, launched an update to its managed security service  to extend protection to users’ end-point devices. Expect a raft of similar offerings and updates to come.

Security guru Dan Geer says high-stakes hacking is now a way of life and the best any company can do is to mitigate, not eliminate, risk.

“If your enemy really is the People’s Liberation Army, what can you do? We can sputter about it but they’re serious and they’re good,” he told me in an interview last week. “The most serious attackers will probably get in no matter what you do. At this point, the design principal, if you’re a security person working inside a firm, is not failures, but no silent failures.”

The key is to know as soon as possible that a breach has occurred and to react fast.

Other than that, key design points are to keep things patched and to put firewall filtering both on incoming and outgoing traffic, said Geer.

Other key cloud news from GigaOM and elsewhere

It was a very busy week in cloud land. Here’s a recap of GigaOM’s coverage:

• Google cuts prices on week-old datastore
• SAP cloud chief steps down
• Joyent to Amazon: It’s on
• Skyhigh Networks gets $20M to lift IT out of the shadows
• How Amazon’s cloud competitors are trying to find cracks in AWS armor
• Dell backs away from OpenStack public cloud, steps up to Enstratius

And from around the web:

PC World: Nvidia, Citrix crank up virtual desktop delivery

From The Guardian: Public,private or hybrid cloud.

Citrix Synergy 2013 live blog from Brian Madden.

And now, for your moment of Zen

With apologies to Jon Stewart:

Photo courtesy of Flickr user annabellaphoto

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The news came out Friday as part of a flurry of SAP announcements. Another of those also relates to a departure – that of human resources chief Luisa Delgado, whose responsibilities will be taken on by CFO Werner Brandt – but the big non-quitting-related news is that SAP is consolidating its business to better reflect its newfound cloudiness.

SAP’s cloud “go-to-market” strategy will now all be under the purview of Bob Calderoni, CEO of Ariba (alongside SuccessFactors, one of SAP’s major cloud buys of the last two years). And development will all be under the control of technology chief Vishal Sikka.

SAP is pitching this new structure as an innovation accelerator, but does it finally signal a streamlining of the company’s sprawling and often confusing portfolio (a condition I like to call IBMitis)? Yes! And no.

As Sikka said on a conference call today:

“We see an opportunity to not only consolidate and streamline the portfolio, but bring incredible efforts… to transform that in the power of the cloud. We will get into areas that are truly unprecedented – applications for new industries that weren’t possible before [such as] healthcare, banking, oil and energy.”

Which is nice, but – as co-CEO Jim Hagemann Snabe chipped in – SAP has “a lot of commitments” to its existing customers too, and “we’re a company that stands by our commitments.” This may mean we should expect some redundancy within the portfolio to continue for a while yet, in order to keep those with more old-school SAP systems in place happy.

As for SAP’s ongoing cloud strategy, co-CEO Bill McDermott promised that Dalgaard’s exit would lead to “zero business disruption”:

“Our cloud DNA is now embedded across 65,000 minds and hearts and it’s become the soul of SAP. While it’s nice to have one evangelist for the cloud, it’s even better to have 65,000.

“Lars took us from $20 million in terms of revenue to a $1 billion run rate in the cloud. Now it’s about scale because everything is cloud. No other company has gone through this transition so fast – it literally happened in 12-15 months under his leadership.”

McDermott added that Dalgaard had been having “open conversations” with him and Hagemann Snabe for some time about his plans to downgrade his role to that of advisor. “This is the nicest balance he could find in his personal life and we were happy to accommodate him because we think the world of the guy,” he said.

Speaking of SAP’s thorough cloudiness, the company also announced on Thursday that it would deliver its products – including, of course, those on the in-memory HANA platform — on VMware’s newly-re-announced vCloud Hybrid Service IaaS platform, as well as vCloud Suite. This will allow for fully managed services on-premise, in the cloud and in hybrid deployments.

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This is the latest move in what appears to be an interesting new trend. Plano, Texas-based CRM firm Alliance Data recently started seeking out workers on the autistic spectrum, as have other IT-related businesses such as the Berlin-based consultancy Auticon. SAP is the first major multinational to adopt similar hiring policies.

Because autism tends to come with impaired social abilities, it can be problematic in a work environment. As a result, many people with autism find it difficult to gain and hold a job. However, the autistic spectrum is wide and many of those with low-level autistic spectrum disorder – such as the recently reclassified Asperger Syndrome – can function in a work setting.

People with autistic spectrum disorders often display highly focused and analytical behavior and it is these characteristics that companies such as SAP and Alliance Data are finding can work to their advantage, particularly in the context of software testing and programming. In its statement on Tuesday, SAP said it saw “a potential competitive advantage to leveraging the unique talents of people with autism.”

According to SAP human resources chief Luisa Delgado:

“By concentrating on the abilities that every talent brings to the table, we can redefine the way we manage diverse talents. With Specialisterne, we share a common belief that innovation comes from the ‘edges.’ Only by employing people who think differently and spark innovation will SAP be prepared to handle the challenges of the 21st century.”

SAP previously piloted its new hiring policies in India, where it worked with Specialisterne – a Denmark-based IT consultancy specializing in employing autistic workers – to hire 6 autistic software testers. It claims the result was a boost in productivity.

SAP also recently completed the screening process for hiring 5 autistic workers in Ireland. The company said the global expansion of the new policy would begin in the U.S., Canada and Germany this year.

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“Every story I read about Google is us versus some other company or some stupid thing. Being negative is not how we make progress. The most important things are not zero sum.” Page said Google struggles “with people like Microsoft,” he said. As for Oracle, which is suing Google over Android’s use of Java, Google has “a difficult relationship with Oracle, including having to appear in court … Money is obviously more important to them than any collaboration.”

In comments emailed to CIO.com, Microsoft responded:

“It’s ironic that Larry is lending his voice to the discussion of interoperability considering his company’s decision — today — to file a cease and desist order to remove the YouTube app from Windows Phone, let alone the recent decision to make it more difficult for our customers to connect their Gmail accounts to their Windows experience.”

Page’s words came a few days after Microsoft announced interoperability between its Outlook.com email service and Gmail and just after word came out that Google demanded that Microsoft rip its home-built YouTube app from the Windows store (and remove the app off the Windows Phones that were already running it.) So, who’s the winner in this melee? Neither vendor comes out looking good. For Microsoft to complain about Google’s business practices is laughable given its own track record. But for Google to claim it’s not evil while restricting consumer choice is also awful. Consumers might just say a pox on both their houses.

IBM spreads Watson around …

Watson, the natural-language-understanding software that played (and won) at Jeopardy, will be made more broadly available to third-party software makers, IBM CEO Ginny Rometty said last week. Thus Watson technology could be used perhaps even by IBM competitors, to build self-teaching computer systems, according to Bloomberg News. IBM has made the most possible PR use of Watson capabilities, working to embed that intelligence in medical and other applications. Last week, IBM took its show on the road to Washington D.C. last week to show Congress the progress Watson has made in healthcare applications.

… as SAP doubles down on HANA

German enterprise software giant SAP, in a move you could see coming miles away, said this week that HANA, it’s in-memory analytical database, will be the brains of its ERP software going forward, according to InformationWeek and other  outlets. Running do-or-die ERP and CRM applications on HANA is a big step up from data warehouses because ERP and CRM cannot go down for hours or a day without severe blowback. And yet at the annual SAPPHIRE conference last week SAP announced general availability of its core Business Suite applications on HANA. Or, as CRN put it, it “bet the farm” on HANA.

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Lumira Cloud supposedly gives SAP an answer to the recent explosion in the cloud-based, self-service data visualization offerings. The HTML5-built BI service comes with a “monthly” subscription fee (albeit one that can only be ordered in annual chunks) and lets its users publish and share data visualizations with one another for viewing or editing on desktop or mobile devices.

SAP Lumira Cloud appears to be more an Dropbox-ish add-on for the desktop version of Lumira than a cloud-based replacement, but it does also allow the creation of datasets from Excel documents. The service, which integrates with on-premise data and naturally supports HANA, can also be used to share SAP BusinessObjects Design Studio files and SAP Crystal Reports documents.

This release appears to be the culmination of what SAP has been previously referring to as “project Photon” – supposedly the company’s “true departmental self-service BI offering.” The issue here, of course, is the monumental and somewhat confusing nature of the company’s portfolio. After all, doesn’t SAP already do this SME-courting, departmental analytics stuff through its BusinessObjects BI OnDemand product?

Try visiting at least one of the BI OnDemand product pages and you’ll be taken through to the Lumira page. Look at the Lumira Cloud FAQs and you’ll be told that BI OnDemand will continue to run “in parallel” to Lumira Cloud, but also that OnDemand customers can contact their account representative “to discuss the best timing and strategy” for migrating to the new service.

Perhaps this less-than-clear situation presages a simplification of SAP’s portfolio – no doubt more will be revealed at the company’s SAPPHIRE NOW conference this week. If it doesn’t, customers in search of next-generation data visualization tools have many far more straightforward options to check out.

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There weren’t a ton of details on pricing and dates which could come at the company’s annual SAPPHIRE conference, next week, but according to the release, SAP HANA Enterprise Cloud will be delivered by SAP and its partners:

 ”SAP intends to adapt this open ecosystem strategy with its managed service providers to offer the capabilities of SAP HANA Enterprise Cloud from their data centers, as well as from multiple SAP data centers worldwide.”

In a research note, Nomura Securities analyst Rick Sherlund wrote:

“SAP indicates it will price its elastic cloud-computing service based size, scale of data, and application usage. The advantages are faster time to market and time to value, with lower total cost of ownership. Offering a service that delivers quick value and easy implementation should be a nice complement to the real-time capabilities users seek from HANA for a wide variety of new, real-time business processes, in addition to the Business Suite.”

SAP will continue to offer HANA via AWS, a spokesman said. But it’s clear that more contention is arising between legacy enterprise IT players and Amazon which is starting to compete with them by offering more higher-end services that compete with their products.  AWS has made no secret about its ambitions here —  it all but called out IBM, HP, Teradata, and Oracle by name when it announced its RedShift data warehousing service last November.

Meanwhile, SAP — along with these other legacy enterprise IT giants — has rushed to embrace cloud. Better to cannibalize your own on-premises business than to let Amazon do it after all. But, SAP got a rocky start in cloud. It launched Business ByDesign as a SaaS product four years ago to underwhelming response. But it vowed to do better and started buying up cloud expertise, with its $3.4 billion  acquisition of SuccessFactors, a SaaS provider of human resources management, two years later. But HANA, the hot in-memory database and analytics product  has become the company’s focal point in  cloud and big data efforts.

What would really be surprising is if SAP didn’t offer HANA from its own cloud.

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The service is for companies that want to quickly roll out a ride-sharing scheme for their employees – as is generally the case with such schemes, the advantages range from greater environment-friendliness to lower petrol costs and the need for fewer parking places. As Peter Graf, SAP’s sustainability chief, put it in a statement:

“We’ve combined our mobile and cloud technologies into a carpooling solution to help provide immediate economic, environmental and social benefits to companies and their employees. As such, we expect TwoGo to not only help people and businesses save money and greenhouse gas emissions, but to also connect people more closely with each other and with the company they work for.”

TwoGo works on the web and on mobile devices. Employees can enter their travel preferences, after which Nokia’s Here platform kicks in to display likely matches. Here is (in this writer’s opinion) Nokia’s big hedge against a post-hardware future, and this deal is significant for taking the location-based services platform into the enterprise. “We believe that location will be the new frontier of technology across industries,” Nokia mapping chief Christof Hellmis said in the statement.

Although it is particularly well-suited to large enterprises — the travel giant Thomas Cook is the first announced customer, having taken part in the beta program – SAP is also pitching TwoGo at smaller companies, as employees of neighbouring businesses can share rides too.

Handily, TwoGo also works with the likes of Microsoft Outlook and Google Apps (anything iCal-compatible will do) so that ride schedules can be integrated with corporate calendars. SAP has been using TwoGo internally for almost two years, and claims to have “generated more than $5 million in value for the company” through fuel and maintenance savings, lower travel expense reimbursements, cutting down on emissions and, of course, getting more employees talking to one another as they travel to work and back.

According to a separate blog post from Nokia, TwoGo is currently available for licensing by companies in the U.S. and Germany, with other countries coming online soon.

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