Project Server 2010 defines its market segment

One of the Microsoft bloggers has provided the software requirements to run the forthcoming version of Microsoft Project Server 2010, which is:

Project Server 2010 will be 64-bit only
Project Server 2010 will require 64-bit Windows Server 2008 or 64-bit Windows Server 2008 R2
Project Server 2010 will require 64-bit SQL 2005 or 2008
Project Server 2010 will only support Internet Explorer 7 or 8 (IE 6 will not be supported nor other browsers)

What this effectively announces is that Project Server is aimed at the large enterprise organisation (over 1000 users), and that Microsoft will not be continuing with an enterprise project management (EPM) solution for the mid-market. I would see that as an indication that Microsoft believes it should be competing with Oracle’s recently acquired Primavera product, rather than with products like Sciforma’s PSNext.

Microsoft’s BI direction

It doesn’t surprise me to hear the Microsoft is consolidating its Business Intelligence (BI) offerings around three widely-used platforms: SharePoint Server, SQL Server and Microsoft Office Excel; most of PerformancePoint Server’s functionality will be merged into SharePoint Server.

I heard a Gartner analyst referring to Excel as the most widely used BI tool, and SQL Server is a common database for data warehousing. The SharePoint announcement further confirms to me that Microsoft sees that platform as an extension of the desktop and is working hard to make that extension as common as Windows.

The interesting gap for me is what has happened to ProClarity. Is that now part of PerformancePoint?

Microsoft strategic bets – where’s Dynamics?

Mary-Jo Foley has listed Microsoft CEO Steve Ballmer’s strategic bets for 2009, 2008 and 2007. It could be quite eye-opening if you are a Dynamics ERP or CRM customer.

Firstly, Dynamics contributes less than ten percent of Microsoft’s annual revenues, so its unlikely to get much strategic focus.

Secondly, and in my personal opinion, Microsoft doesn’t ‘get’ ERP: it’s seen numerous changes in senior management over the last few years, the development focus seems to be on product integration with other Microsoft products rather than business application functionality.

Only in 2008 is there a vague mention of Dynamics in the Ballmer top bets list:

“He cited Office 2007, Windows Server (especially in the lower-end of the market), Dynamics ERP and CRM as examples of hot products.”

Recently, Vinnie Mirchandani criticised Oracle for lack of technology vision and Dennis Howlett called Oracle Apps an ‘innovation free zone’. I reckon it’s time that someone started to consider whether Microsoft is an ‘ERP dead zone’.

Google Reader vs. Outlook RSS feeds

I am trying to find a RSS reader/aggregator that works for me. I have been comparing Google Reader and the RSS Feed in Microsoft Outlook 2007 to track the blog that I follow. An article I read recently compared a number of RSS Readers, including Google Reader, but didn’t mention Outlook - Which RSS Reader Is Right for You? 

What I like about Outlook is that it holds all my incoming information in one place, if I’m offline I can still read the blog entries, and I can keep a history of blog entries. But I can’t easily share or personally note interesting blog entries without going online. When I started using the Outlook RSS feed, it seemed that, being in South Africa with our limited and costly broadband, having an on-premise app (Outlook on my laptop) for my RSS feeds was a good solution. But with the number of blogs I follow, Outlook can get slow at times, especially when starting up.

Initially I liked Google Reader but had trouble with it needing to be online, so I went over to Outlook full-time. Then I discovered Google Gears – in my terms, Gears is a database that provides offline capability for Google Reader. I prefer the user interface for Google Reader to that of Outlook, and I like ability to share and ’star’ (note) blogs without having to tag them on my del.icio.us site.

The final decision hasn’t been made yet, and there have been times in the past when I thought I had found the ideal RSS reader for me, so I might still change my mind, but I am leaning towards Google Reader these days.

The changing EPM space

I was surprised by the announcement that Oracle was acquiring Primavera, one of the large players in the enterprise project management (EPM) space. I went to see if AMR had some comment, and sure enough they did. Apparently it wasn’t a surprise to them.

I use the term EPM, but analysts like AMR like to use the fancier term, project portfolio management (PPM); I wonder if using the word ‘portfolio’ makes it sound better to financial buyers. This latest development is particularly interesting to me because it is in the project space that my company operates.

Oracle’s acquisition of Primavera will deepen its vertical presence in industries where it already has a presence (e.g. defense), and will expand Oracle’s horizontal profile where it doesn’t have major presence (e.g. engineering, construction). Microsoft has had EPM products for a few years, Office Project Server and Portfolio Server, but has done little with it; at the recent World Partner Congress there was only one session.

EPM is currently a niche market, like product lifecycle management (PLM). Oracle bought a major PLM vendor, Agile, some time ago, but that hasn’t raised PLM to a broader level. So I doubt that Primavera’s purchase will change much in the EPM market either. 

It will be interesting though whether this will change Microsoft’s activity and approach to the market. Microsoft probably hasn’t worried about a major competitor. It has been making the link between Project and Portfolio Server tighter with SharePoint has part of an corporate portal strategy. Conversely, now that Oracle has a project management tool, will it use it against Microsoft? Microsoft’s Office Project software is the de facto standard in project management and has no competitors. Oracle is the only company big enough to develop a competitor, using Primavera. With the recent announcement of the Beehive, Oracle also has a portal product it could integrate with Primavera.

Frank Scavo points out that ”project-based organizations are relatively under-served by enterprise system vendors today” and so this may be an opportunity for Oracle.

Another question is whether Oracle plans to link Primavera with its PLM software acquired via Agile. Our experience in project industries is that the combination of the two would be quite a powerful product. However, Vinnie reminds us that this kind of integration is “going to take years of sustained investments for Oracle to make these vertically complete”. AMR also notes that “Oracle will have difficulty rationalizing the significant overlap in functionality between the products, with Oracle Projects, PeopleSoft ESA, and JD Edwards Enterprise One all having varying degrees of PPM ability.”

I do feel sorry (a bit) for Oracle’s sales people, because this is going to bring yet another set of products that they have to learn about – it now includes database, several ERP, middleware, retail, BI, CRM, and PLM.

Microsoft Dynamics, the SA experience

According to Josh Greenbaum, Microsoft Dynamics has decided to re-focus to the small- and medium-business market, leaving the enterprise (ie, large US, European and Asian companies) mainly to SAP and Oracle. Well, that’s one lesson I could have helped Microsoft with five years ago.

The South African experience of Dynamics has not been spectacular, with Dynamics being a poorly recognised brand; mainly in my opinion due to foreign mis-understanding about the local ERP market.

Now the inside story from Dynamics SA is that they did less than 80 deals in the previous financial year, with nearly 50 percent of that in the CRM business. Therefore less than 50 customer adds happened for the three Dynamics ERP products (GP, NAV, AX) in SA. As a result, for the first time the Dynamics budget for SA has been reduced.

BTW, Microsoft SA is not the only office having troubles; according to Mini-Microsoft, Microsoft India seems to be going through something similar.

The spikey ERP world

For some time there has been a debate about whether the world is flat or spikey. This refers to whether globalisation has made everything uniform (flat) around the world, or whether there is still significant regional diversity (spikey).

A survey of the ERP market in South Africa seems to indicate to me that the world is definitely spikey. If the world was flat, I would have expected that the relative market shares of the major ERP players in the developed ‘north’ would be reflected in the SA market. But as the research found, that is not the case.

Looking at the SA mid-market (companies with 50 to 250 PCs, or 251 to 500 PCs), 35% of the survey were manufacturing companies; about 30% were in professional services, wholesale trade, and logistics; and rest in areas like construction, finance, mining, and parastatals. Over 50% of the survey were in the Gauteng province where Johannesburg is located. 70% of the respondents had between 50 and 250 PCs.

When it came to products, Microsoft Dynamics GP (ex Great Plains) and CRM had over 50% recognition; the other Dynamics products were not well known (NAV had some awareness but AX was very low).

What were the best known ERP brands? SAP (not surprisingly) and SYSPRO (SA’s own ERP) … by far. So much for the other big ERP players efforts in SA!

So when you read another press release from a large ERP vendor which describes them as “leading”, check which geographies they are referring to.

The survey also asked what factors made companies change their ERP, in order:

1. greater functionality
2. new business requirements
3. company growth
4. lower cost (note this)
5. merger/acquisition with company with different ERP

What were the reasons for choosing an ERP, in order:

1. good fit to business
2. quality/reliability
3. technical superiority/innovation
4. ease of implementation
5. low cost of ownership (note again)

The vendor selection criteria were:

1. quality/reliability
2. understand our business/industry
3. customer service
4. ease of implementation/doing business

For the ERP marketers, the major sources of ERP information were:

1. search engines
2. vendor/product websites

What had the biggest impact in creating awareness:

1. customer reference
2. technology/business events
3. sales person visit

The Microsoft-IBM analogy again

Last year, having come out of a period as a Microsoft ERP partner, I blogged how it reminded me of IBM in that company’s ‘old days’. My impression was that:

It doesn’t matter if there is better software, if Microsoft promote it the organisation might just take it.

IBM had a monopoly cash-cow in mainframe hardware and operating systems, Microsoft has their one - Windows and Office …

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

We thought that IBM should maybe not do AS and AD/Cycle, and now some of us think Microsoft should maybe not do ERP and Search.

No I see Larry Dignan has blogged about Microsoft’s “IBM moment of clarity“. He comments how Microsoft is being diverted by:

chasing Yahoo, plotting to be an advertising empire and pining for consumers with things like the Xbox and Zune

IBM had its crash in the late 1980s, and as a result has now focused on “enterprise and helping business get stuff done.”

Where I disagree with Larry is when he supports Microsoft as an enterprise player with all these opportunities (as quoted by Microsoft CEO Ballmer):

“We see the most fantastic growth opportunities of all time in the enterprise. Desktop value, mail and collaboration, business intelligence, business applications, the server market despite virtualization is still exploding, enterprise search, the move of enterprises to host their infrastructure in the cloud that we call Microsoft Online, conferencing and IP telephony, management, virtualization software, the database and database application platform. I think palpably we are about this close, Microsoft, able to claim that we’re the number one enterprise software company in the world, which nobody would have been able to say 20 years ago, and yet we see nothing but opportunity.”

In my opinion this is Microsoft trying to be like IBM of old. Where is the synergy in, for example, business intelligence vs conference and IP telephony; or desktop value vs virtualisation.

I also disagree that Microsoft is the number one enterprise company in business intelligence and business apps (unless they justify that with Excel), enterprise search and conferencing.

I agree with Larry that Microsoft needs to learn to focus, as IBM did, but I believe that the areas of focus need to be trimmed even more.

The next Windows killer app

The argument over the next ‘killer app’ for Windows may have been answered.

According to an AMR report (login required) Microsoft Office SharePoint Server (MOSS) has become hugely important for Microsoft. The product is now in its third version and, according to AMR, ”is the fastest-growing product in Microsoft’s history, gaining more than 100 million client access licenses in a few years; that’s roughly one-fifth of the legally licensed Microsoft Office installed base.”

Watch out for the third-party add-ons and specialised apps to start appearing.

What is Microsoft’s commitment to Dynamics?

Josh Greenbaum commented on how the Microsoft Dynamics division was doing – Microsoft Dynamics Revenues: Is More Really Less?

There has been a lot of management change in the Dynamics organisation, and we have seen that recently in SA with partner account managers leaving.

My director friend at SYSPRO said four years ago that Microsoft would not understand the ERP business, and would eventually leave it. From what Josh says, if Dynamics’ growth doesn’t improve that prediction might come true.