Microsoft Partner Summit and the new economic landscape

I attended the Microsoft Partner Summit Africa, and heard some interesting points in the keynote address made by the two executives who run Microsoft’s business for most of Africa – Nteto Nyati, Managing Director of Microsoft South Africa, and Hennie Loubser, Regional General Manager for Microsoft WECA (West, East and Central Africa).

• The BRICS (Brazil, Russia, India, China, South Africa) are now areas where most growth is projected;
• 6 of the 10 fastest growing economies are in Africa;
• a number of Microsoft employees from Africa who have been working abroad are repatriating from Europe and the US back to Africa;
• there are 1300 large and mid-market companies in Africa from which Microsoft gets 75% of its revenue in this region;
• Africa has become a continent of hope and opportunity;
• on the African continent, the community expects companies to become an integrated part of the society – profitable returns to company owners must also accompany returns to society.

This led me to these thoughts:

1. the focus of economic growth in the world has moved from developed economies (the so-called North) to the emerging and developing economies (the South);
2. this change should have some impact on the issues and location of technology innovation;
3. a good deal of technology innovation focuses on mostly ‘northern’ business, consumer and societal issues;
4. there is an expectation, particularly in the North, that the source of technology innovation should still occur in certain ‘northern’ locations;
5. Points 1 and 2 do not agree with Points 3 and 4

It makes me proud therefore to say that SYSPRO is an African company that supports the real issues of small and medium businesses throughout the world. Comments of “how can innovation come from Africa?” should now be discarded for the irrelevant and arrogant rubbish that they are.

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Some other information from the keynote

Microsoft SA’s FY2011 growth areas:

Public sector	43%
Entertainment and devices	32%
Enterprise services	28%
Enterprise group	22%
Small & medium business group	20%

Microsoft SA’s FY2011 market share changes:

Web browser	+ 11 pts
Email, calendaring	+ 17 pts
Unified communications	+ 7 pts
Database server	- 2 pts
Smartphone	- 7 pts

Some Microsoft Africa stats (via IDC):

PC shipment growth	15%
Serve shipment growth	6%
Software piracy rate	> 80% (US $785 mill) in 2010

Microsoft partner logos changing

Have you ever noticed those logos on your Microsoft consultants’ letter head that said “Microsoft Certified Partner”?

From the end of October, Microsoft has mandated that its partners start changing their partner logos. Watch out for the change.

These are old logos.                                       This is the new logo. 

BI’s continuing problems

I recently attended a Microsoft seminar on BI (business intelligence) and who should I meet there but a former colleague, who worked with me in the field of what was then called decision support (in the days before the term BI was coined by Howard Dresner).

The first interesting point made was that, over 20 years since I started in BI, one of the continuing challenges is that the ability to access data is limited. That may be explained by the next point. An interesting diagram was shown during the session which highlighted some of the issues facing BI (I have adapted it here):

My era was very much that of Traditional IT, whose prime concern was control. Data was extracted from the source (usually operational systems), massaged and finally provided in a different form to the user. This ensured that the data came from the right sources, followed the approved definitions, and used the right formulas. If you follow this approach, access to data is going to be limited.

The problem with the traditional approach is that it creates other challenges, which again were issues we faced 20 years ago, namely:

• IT expends a lot of effort in providing information that is often used by one person, once;
• information requirements change too fast for the technology and approach to keep up.

The solution from the Microsoft perspective is to encourage self-service BI, with the emphasis on agility. It helps to understand that Microsoft advocate their PowerPivot product as the route to enable self-service BI. One unquestionable fact is that the goal of the universal BI front-end tool has been reached – and that tool is Microsoft Excel.

The problem with self-service BI is that the issue of proper understanding of the source data is not managed. It actually gets us back to the days of fourth-generation languages, such as SAS and FOCUS, when users with some technical understanding could pull data from mainframe databases without asking for the help of a programmer. This led to situations in which two people could produce information in a meeting, using the same source, but with differing results. That created the demand for a ‘single source of the truth’, something which the data warehouse was supposed to address, which brought the control of data back into the realm of IT.

So it seems that BI’s problems continue today in much the same way as they have done in the past. How can we solve these ongoing problems? If you have a suggestion, please let me know.

Notes from the UK version of the BI seminar can be found here.

Where is Dynamics in Microsoft?

It has been some years since Microsoft changed its financial reporting structure so that their ERP and CRM business, Microsoft Dynamics, was included in a larger division rather than reporting separately. Dynamics is now part of the Business Division, which also includes the ‘mega-earner’ Office applications.

How Dynamics contributes to the overall Microsoft business came to mind this week when I read a report by Mary-Jo Foley on the SharePoint product. In 2009, SharePoint earned Microsoft over $1.3 billion, and according to Foley usage of the software is growing at a phenomenal rate. Another source noted that, for the same year, Dynamics revenue was $1.25 billion. However the earnings for the Dynamics business in the latest annual report (2010) were reported as being flat. Bear in mind that Microsoft total revenue for 2010 was $62 billion – so Dynamics is less than 3 percent of the business. Perhaps some good news is that in the first quarter of 2011, the Dynamics business grew 4 percent.

Back when I sold Dynamics software, I reported on a talk by a senior Dynamics executive about what it was like running the then ‘Microsoft Business Solutions’ (MBS).

It was interesting to hear how difficult and long he found it turning MBS into a division that could work properly. He also gave some insights into how Microsoft builds its business – aims for platforms rather than products…

If the strategy for building platforms still holds true, then SharePoint is succeeding. It is becoming a de facto standard in many businesses for content and document management, and collaboration. The part of Dynamics that is doing well is CRM, however the ERP part has not established itself as a platform in the same way.

With other products doing so well – “Kinect sensors selling at a rate of about 130,000 units a day, selling 657,534 Windows 7 copies per day … a copy of Office 2010 sold every second” according to Foley – and a strong focus on the new Windows Phone 7 mobile operating system, how important will the Dynamics business continue to be for Microsoft?

Some time ago, I wrote that Microsoft is becoming like the old IBM:

IBM was good in some areas and terrible in others, but still continued in the terrible areas, so too is Microsoft.

I am aware that the performance, growth and market share of the Dynamics ERP products vary geographically, but one does have to ask what role Microsoft’s executives see for Dynamics. If they want to spend a lot of resources to grow in the consumer and mobile sectors, how much will they have left over for Dynamics? Their competitors in the ERP space – SAP, Oracle, Epicor, Infor, and yes, SYSPRO – are able to focus all their efforts and talents on enterprise software issues.

I wonder, is Microsoft just too proud to admit they made a mistake and that ERP software is not really their field of expertise? Could the analysis be true that:

Microsoft will continue to increase its CRM software revenues by increasing its share in the ever increasing CRM market. We also expect it to more than offset any revenue loss experienced from ERP software sales.

Microsoft wins on the swings as well as the roundabouts

The saying “swings and roundabouts” is a British one that describes a situation where you can win and lose. I am using it here to point out that Microsoft’s combination of business divisions may be giving it advantages on both the traditional (Windows, server) as well as the Dynamics (ERP) sides.

What kicked off this train of thought was an article by Josh Greenbaum: The Realignment of the Enterprise Software Market: Oracle vs. Everyone, Microsoft in Ascendance, and Watch out for Infor. The article notes that Microsoft’s Dynamics division

… the former bastard stepchild of the Microsoft portfolio, is now becoming the poster child of innovation in Redmond. And Redmond is taking notice big time[.]

Dynamics is one of the smallest divisions in Microsoft, and I have discussed its problems in the past here, here and here, but the company now seems to have discovered a major advantage.

Dynamics is a great driver of product pull-through. Today, every dollar of Dynamics generates from $3 to $9 in additional software sales for Microsoft.

Note: the article mentions other points but my focus is the first one.

I know from a Microsoft partner perspective that product pull-through is one of those phrases that brings a sparkle to the eyes of Microsoft’s partner managers.

Does this mean that Microsoft is discovering the value of a wide eco-system? Greenbaum makes an interesting comment about Microsoft, in comparison to Oracle:

This places Microsoft front and center in a battlefield where it is deploying 21st century technology against an Oracle that fighting the battle as though this were still the 20th century.

Microsoft’s strategy seems to provide a whole range of “interchangeable, plug and play” components. In my opinion this is far better than the Oracle strategy which wants to control the full stack – from hardware, to database, application, and middleware.

I have thought for some time that the Oracle strategy of vertical integration is an anachronism since so many other industries have abandoned the practice. In effect, it is a throwback to a bygone era when IBM ruled the computer world in the 1970s.

I also wonder how customers would feel about putting all their computer ‘eggs’ in the Oracle ‘basket’? There is an advantage to having a single, strategic supplier, and a single ‘throat-to-choke’, but a small customer has very little bargaining power with such a large supplier.

where is Dynamics in the cloud?

Jason Hiner at Tech Republic published the PowerPoint slide from TechEd 2010 that showed Microsoft’s strategy for private and public clouds. I think there is something missing from that picture – on the private side you can see Dynamics, but it is not on he public side. So my questions are: where is Microsoft Dynamics, and especially the ERP component, in Microsoft’s cloud strategy? What does this say about Microsoft’s plan for ERP Software-as-a-Service?

Office 2010 and ERP – more thoughts

I’ve now had time to digest more of the information about the Office 2010 and ERP announcement that I discussed previously, specifically the functionality of Business Connectivity Services (BCS).

Microsoft has positioned BCS mainly for Office 2010 but has also mentioned it as a function that could be used for ERP, i.e., being able to access ERP data offline.

BCS … simplifies the process of accessing data offline by enabling the connection of any data in a SharePoint list – such as External Lists displaying data from Microsoft Dynamics ERP solutions – with either Outlook 2010 or SharePoint Workspace 2010.

I think they are being disingenuous. What seems to be the real situation is that static data from an ERP gets copied to a temporary file which can be used offline. The other issue is that to use BCS seems to require quite a stack of technology including the renamed Groove, now SharePoint Workspace.

Offline access is fine for having access to data for read-only purposes, e.g., customer or product lists, but offline access with transactional capability (which I think Microsoft insinuates) could compromise the data integrity and validity of the whole ERP.

Do you think I am reading the wrong thing into the Microsoft announcement? How would you see offline ERP operating?

Google Wave vs. SharePoint

I have done a comparison of products from Google and Microsoft before, and now it’s time for another one – this time on Google Wave vs. SharePoint. At my office, we have been trying out  Google Wave, but  we are also a starting to use SharePoint so I have had the opportunity to use both.

Google Wave is a web application for real-time communication and collaboration. That means it allows you to view a document or a conversation at the same time that someone else is editing and updating it, and see those changes happen in real-time. The Google spin is that “With live transmission as you type, participants on a wave can have faster conversations, see edits and interact with extensions in real-time.” Note that Google still refer to Wave as a beta-test product.

SharePoint (officially its Microsoft Office SharePoint Server, aka MOSS) is a product that Microsoft have been gradually developing and building for the last 3-4 years. It provides a platform for content and document management, collaboration and enterprise portals.

Here is my Pros and Cons of both products:

Wave

Pros

• Ease of access, access via browser
• Easy to read and edit
• The extensions, which are innovative and growing

Cons

• If you are using Internet Explorer, the Chrome Framework is required
• Sign-up for non-Google users is laborious
• No printing capability
• Poor support for export/import docs (an extension to do that didn’t seem to work and was difficult to understand)
• The results of pasting text is not predictable

SharePoint

Pros

• Support for all Office files

Cons

• Hierarchical nature – everything is part of a hierarchy of information, which can make finding documents difficult
• From my experiences elsewhere, it is implementation specific
• The process of checking documents out to edit them, and then checking back in is confusing and annoying

Both applications provide alerts for when documents change.

Overall report

While I think Google Wave is a great tool, it has been difficult to get many in my office to adopt it. In effect, moving to Google Wave is also a change management project. Another Google Wave project sums up a number of issues:

• Not everyone has access to it, nor do most people care to get access
• It’s slow
• We weren’t using it right

Although a larger project seems to have been successful.

When I started planning this blog, I wasn’t sure how I would end it. However, in the last week a new development has introduced a new slant – Microsoft’s announcment of Office 2010, which includes a new feature called ‘co-authoring‘. This appears to offer the same functionality as Google Wave - allowing multiple people to work on a document at the same time. If Office 2010 delivers on the promise it appears to offer, Google Wave is not going to get into the enterprise.

Why Google has taken so long working on Wave in beta, and not given it the capabilities that enterprises require, I do not know. If they want to get it adopted in companies, Google needs to start considering the organisational issues of implementing the system, and not just focus on cool technology features.

At the moment, I think Google has squandered a good chance it had of getting into the enterprise via a route that (initially) didn’t compete head-on with Microsoft. Unless Google make some substantial development efforts very soon I think they will lose out. Do you agree? What is your experience with Wave?

(Note: The comments expressed here are my own, based on my experiences with the products, and do not necessarialy reflect the views of my employer)

Office 2010 and ERP – Microsoft misses out

Amongst the news about the ashcloud in northern Europe and the build-up to the FIFA 2010 soccer World Cup here in South Africa, there was an announcement from a US software company called Microsoft  about the release of Office 2010.

Reading the Dynamics-related articles, my impression is that Microsoft is trying to sell Office 2010 as the user interface for ERP – which is what I said almost exactly 2 years ago.

For data manipulation and presentation, Excel now has ‘Slicers’, ‘Sparklines’ and PowerPivot:

• Slicers are a better, more visual way of filtering for pivot tables.
• Sparklines are another of Edward Tufte’s innovations of graphical data presentation which provide a simple, ‘word-size’ graphic to accompany a number in a table. This looks cool and is obviously a feature made feasible via XAML.
• PowerPivot is a set of tools to get data out of a SQL database and into Excel and/or SharePoint.

If you have seen SYSPRO 6.1 you will know that the Fluid User Interface with XAML allows graphics like sparklines to be created, and SYSPRO Analytics already has the data management capabilities of PowerPivot – so Microsoft, no differentiator there for the Dynamics ERP products.

However, they show up one of Microsoft’s traditional focus areas – Office. Microsoft seems to have abandoned the opportunities made available from ProClarity, which could have complemented their ERP offerings, in favour of the product they know so well … and which earns them so much money.

What do you think of Office 2010? Will the Excel and other features encourage you to get Office 2010?

Microsoft’s core strength

While I’ve not been a big proponent of Microsoft in the enterprise software space (I don’t believe they really understand it), I’ve always been impressed with their work in the server and development areas (the core areas that the company was built around). It’s in that latter area that I’ve had seen where Microsoft is doing good work – it’s the platform on which SYSPRO built its new Workflow Services product.

With the new version of SYSPRO 6.1 comes a new product, SYSPRO Workflow Services (SWS). Microsoft published a case study this month about it – Global Software Company Cuts Development Time for Workflow Solution by 80 Percent.

Because of our development track record, Microsoft invited SYSPRO into their Technology Adoption Program, which gave our dev team the opportunity to use the beta versions of Visual Studio 2010 and .NET Framework 4 for the development of SWS. .NET 4 included new features in Windows Communication Foundation and the new Windows Workflow Foundation (WF). Without WF, we could not have produced SWS.

What Microsoft did in VS 2010 was to deliver templates which effectively provided a rapid development environment. Project templates contain the project settings, references, and files that  are need to begin a certain type of project. Some of the default templates used were:

• Activity Designer Library
• Activity Library
• WCF Workflow Service Application
• Workflow Console Application
• WCF/WCF Service Library
• WCF/WCF Workflow Service Application

The project duration for SWS was about 3,500 man hours, and an in-house development methodology was used, which has elements of agile and scrum. Our Software Arcitect estimated that without the .Net 4 and VS2010 features, the development time for SWS would probably have been tripled or quadrupled.

The product that Microsoft provided SYSPRO to do the development was first class, and it makes me wonder why Microsoft doesn’t focus more on this core strength, an area in which they have long and deep experience. Instead, they get distracted by going into ERP (Dynamics), mobile phones (Windows Phone 7) and music consoles (Zune).

I have commented on this before – Is Microsoft like ‘old’ IBM?, The Microsoft-IBM analogy again. Do you think Microsoft is trying to be all things to all people?