Helping SMBs move to the cloud

cloud-computing-626252_640The increasing adoption of cloud computing by businesses doesn’t appear to have convinced many small and medium businesses (SMBs) in the UK to move their business application from on-premise to the cloud. The three common concerns mentioned are:

  • security of the cloud, particularly data privacy,
  • complexity of migration, the amount of time is takes to migrate, and the downtime while migrating,
  • cost of migration, with many believing that the costs are high.

Although I haven’t found the evidence, I suspect the same reluctance holds true for SMBs in other countries. The question is – are these concerns valid, and how can SMBs mitigate their concerns and the risks. Continue reading

Don’t forecast 10 years ahead

tarot-991041_640An article on Medium written at the end of 2015 tries to predict how we will be living in 2025. The problem with predicting so far out, and ten years is far out, is that we cannot possibly know how things we haven’t even thought about will dramatically impact our lives.  It got me thinking what someone in January 2006 would have missed when predicting how we would be living in 2016.

The smartphone/tablet revolution

In 2006, the dominant global cellphone manufacturers were Nokia and Blackberry. The term ‘crackberry’ had been coined to describe how addictive the device was. The dominant personal computing device was a PC or a laptop running Windows XP.

In 2007, Apple introduced the first iPhone; in 2010, the iPad came out. They were both instant successes. In 2007, Microsoft launched Windows Vista and seriously damaged its reputation as a software provider.

No one in 2006 would have foreseen that Nokia and Blackberry would miss the uptake of smartphones, that Microsoft would fail in grabbing a significant share of the smartphone and tablet markets, and how these new technologies would revolutionize business and personal computing.

  • The terms BYOD (Bring Your Own Device) and ‘consumerization of IT’ arose from the preference of people for using their own, non-Microsoft, devices at work because the user interface and experience was better than that of the corporate Windows environment.
  • We now talk about ‘mobile-first’ application development, and try to make sure our websites are ‘responsive’, so that people will find it easy to use apps on their smartphones and view websites.
  • The mobile app became the preferred way to access products and services via the Internet, and subordinated the browser to a secondary role.

Social media

In 2006, people would discuss their views and experiences via a blog. The way you made contact electronically with people was by phone or email. You could send short messages to people using products like MSN Messenger. No one could have foreseen how two companies would change things.

Facebook had been in existence as a closed network for universities since 2004. In September 2006 it was extended to anyone with a registered email address, and by 2007 it had begun to change the way people kept in touch.

In July 2006, Twitter was launched, and while it took a while for people to catch on, it soon became the de facto source for breaking news and information sharing for a global community – restricted to messages of 140 characters or less. (I was an early user, my user number is 3011. You can find your Twitter number at http://www.idfromuser.com/).

  • Although the concept of global communities was not new – the worldwide web had been around for over 10 years – Facebook and Twitter introduced the world to the phenomenon of social media. Soon, companies would start having to introduce guidelines for social media usage.
  • Within a few years, businesses were looking for a Facebook- or Twitter-like experience for communication and collaboration for the enterprise.
  • Facebook became the first tech company that could challenge Google as an advertising platform.

Cloud computing

Both Amazon and Salesforce were well-known businesses in 2006, but few people could foresee how cloud computing would change the business and personal software space. It was in 2006 that Amazon launched AWS and Salesforce released Force.com, as platforms on which developers could create and maintain applications that ran in the cloud. The effect of these new platforms was seen in the scramble that started within a few years among the major enterprise software companies to build or acquire cloud applications.

  • Terms such as PaaS (platform-as-a-service), IaaS (infrastructure-as-a-service) and SaaS (software-as-a-service) were created to describe the new types of applications that cloud software could provide.
  • Who could have predicted that a new CEO at Microsoft (Satya Nadella) would change the company’s strategy to support competitive platforms because of the proliferation of cloud apps, and the negative impact the cloud had on Microsoft’s classic on-premise business.

Tech companies

Back in 2006 it was easy to see that Google was the new leading player in the tech space, but no one could have guessed how far ahead Apple would become in market capitalization. In the early 2000s, some large software companies had begun acquiring other companies – Microsoft with Great Plains in 2001, Oracle with Peoplesoft/JD Edwards in 2004 – but by 2010 the major enterprise software companies had gone on an acquisition binge. Despite their size and reach, these software behemoths were unable to anticipate changes in software requirements and so had to buy products in order to compete.

  • In 2006, no one would have predicted how much of shareholders’ and customers’ money would been spent by enterprise software companies on acquisitions.

Looking further back

It occurred to me what people in previous decades might also have missed.

  • 1996 – would not have been able to foresee the growth, dominance and influence of Google ten years later.
  • 1986 – with companies like IBM and DEC as dominant players, would predictions have missed the impact of the then recently released Windows operating system, and the personal computer revolution.

Conclusion

If you are going to make predictions about how people will live or business will work, my recommendation is that you keep it to a reasonable time frame. Five years is probably a safe horizon to predict, but any longer and you are likely to be horribly wrong.

Review of the Gartner ERP Magic Quadrant

magic-quadrantIt’s been six years since I posted my views on the Gartner ERP magic quadrant for Tier 2 vendors. It has been one of the most viewed posts on my blog, but I think it’s now time to have a relook at the ERP magic quadrant (MQ) and the ERP market as a whole.

For reasons that don’t seem to make sense Gartner have changed a number of points about this MQ category.

  1. It’s now called “Single-Instance ERP for Product-Centric Midmarket” which changes the whole category completely
  2. The term ‘product-centric’ was added, but since ERP is a product this new term would seem to be an oxymoron,
  3. They now don’t differentiate between Tier 1 (ie, expensive for large corporations) ERP and Tier 2 (for midmarket companies), which was why the original MQ was useful for midmarket companies.

The obvious Tier 1 ERP products are SAP, Oracle and now Microsoft Dynamics AX. The growing issue in the ERP market however is that other vendors might be called Tier 1.5, ie, getting there, like Infor; not forgetting of course about brand new entrants like Workday. The old Tier 2 vendors are still there – QAD, SYSPRO, JDEdwards, Epicor, Sage – but now up-and-comers are appearing – NetSuite, Plex, Acumatica. Why not have a category for the Tier 1.5 and Tier 2 vendors?

So, here are my views on the ERP MQ, and where ERP is going.

  • The ERP sector is getting to resemble the old days of the big car manufacturers – eg GM, Ford, VW, Toyota – who didn’t realize that there was a new bunch of manufacturers emerging – eg, Hyundai, Kia, Mahindra – who would take a large slice of the market. That’s leaving out the brand new set of competitors with disruptive technology like Tesla. IDC analyst Mike Fauscette recently commented about incumbent business software vendors:

your business is at risk more from new models that can appear almost overnight than from new products/services or changes in pricing … A large part of the future of business software is tied up in the new platforms (PaaS) that are forming and evolving today.

  • 10 years ago companies needed the MQ to get a insight into the category. Now it’s easier, quicker and cheaper to search the Internet these days to find out about ERP vendors. You may only need to refer to the MQ if your board needs placating.
  • What’s the value of ERP? Aberdeen research pointed out the the prime reason for leading companies to implement is to “serve as a complete and auditable system of record”.  ERP therefore should be your system of record, the ‘single source of truth’ for financial reporting and auditing, but it doesn’t have to do everything else. For the industry-specific line-of-business functions – customer support, supply chain, etc – consider best-of-breed and cloud. The way you make it work is by integrating those apps back to the ERP. Another post by Mike Fauscette predicts:

As software as a service (SaaS) replaces old monolithic systems, the need for the older application packaging becomes irrelevant. The new reactive systems are a loose coupling of microservices based on a business process not a collection of monolithic application blocks that can be integrated into a “suite”.

  •  The ERP vendor market will change significantly in the next 5-10 years, because the use of technology for business transactions and processes will change due to the growth of cloud computing. Gartner is now using the term ‘postmodern ERP‘, saying that cloud vendors are now disrupting the old ERP providers. When your company invests in an ERP, bear that in mind.
  • For ERP vendors, they need to stop thinking that customers value ‘an integrated business management system’. They used to in the past when there wasn’t any alternative, now they want something that benefits the part of the business they need to fix or transform, the rest is unnecessary fluff. A recent PWC report by uses the term ‘hybrid ERP for applications that are fit-for-purpose and cloud-based, not be the highly complex, expensive ones of the past.

Traditional ERP systems have long been criticized for their high cost, lack of flexibility, and difficulty of implementation. Hybrid ERP assemblages of modular components, on the other hand, typically cost less, allow companies to pick and choose among their various functions, and offer greater mobility.

The ERP landscape is going to go through a period of disruption and change in the coming years. As a customer or future customer of an ERP vendor, make sure you don’t lock yourself in for too long, or spend too much time and money on lots of specific customizations. There will be options in the next few years that many businesses don’t even realize yet. Keep your options open by leaving some of that ERP investment for better tech spending in the future.

Bimodal IT doesn’t mean complexity

bimodal_itFor over a year the Gartner analyst group has been talking about the need for ‘bimodal IT’. An article in InformationWeek described it as the need for an IT organization to

split its focus between the core services that make other things possible and the more exciting possibilities of digital innovation.

When I first heard of bimodal IT I was still working in the ERP software space. Coming from that traditional background I used to think that any bimodal IT effort had to be somewhat big and complex. But now I’m at a cloud software company I’m beginning to see things differently.

According to a recent study, 44% of enterprises expect cloud computing to help launch new business models, and this will increase to 55% by 2018. Moving some of your enterprise apps to the cloud may therefore give you one bimodal IT project.

There will be cases however where an IT department needs to develop apps. The growth of platforms-as-a-service (PaaS) offer higher productivity gains than traditional on-premise developments environments, and these don’t just enable faster starts but also quicker results.

Then there was something I learnt recently about the power of the much used, and also much maligned, product – Excel. If people are going to organize, format, tabulate or calculate data, they will most probably use an Excel spreadsheet. Excel formulas are a standard business application logic than everyone understands. But Excel is also architected for integration because it is stored in a standards-based XML-based format. This means that using an PaaS for integration, business users can create sophisticated reporting and analysis solutions using a tool they already know and understand using data from other sources. This is something we wrote about on the company blog recently – making Excel awesome.

So bimodal IT doesn’t have to be big and expensive, nor does it only need to depend on IT. I would be interested to learn of other options that make bimodal IT easier and quicker.

Why monolithic systems of record will disappear

cloud-computingI thought that having left the ERP industry I would not have any reason or inspiration to write about it, but I was wrong. My experiences since I started working in the cloud application market have led me to believe that the era of the monolithic systems of record, as typified by ERP, might be coming to an end.

When I started in the ERP field as it was taking off in the late 1990s, only large organizations could afford, or saw the rationale for, ERP. It took another ten years for ERP systems to penetrate most sizes of business. Now, because moving off ERP is a mindset change, and organizations have invested hugely in enterprise software, I don’t believe that change will happen overnight. But as the economics and business benefit of cloud become more apparent, and a younger generation assume decision-making roles, it could occur over the coming decade. Several writers have commented that the growth of cloud computing bears many similarities to the expansion of electrification in the early 1900s.

Here some of my reasons for believing that monolithic systems will disappear.

1. You don’t need an ERP as single source for company truth
Many organizations use specialized applications for key customer-facing operations, and increasingly these are SaaS (software-as-a-service) systems. With modern iPaaS (integration platform-as-a-service) apps, software integrations can allow different systems to be a system of record for a set of business functions. The only system that needs to be centralized is accounting, and with companies are already using iPaaS to synch operational data into the accounts system.

2. Legacy systems diminish the ability to innovate
According to a recent survey, 90% of IT decision-makers say legacy systems prevent them from adopting new digital technologies that they need.

3. The push to digital disruption requires new approaches
An article by Constellation Research explains that ERP arose out of the business process re-engineering movement and the disruptive innovation caused by the PC. In its day the emergence of ERP software disrupted the existing business model, but there is now the new disruptive influence arising as a result of cloud and mobile computing. It would be unlikely that a new company these days would opt for an on-premise ERP; more likely it would look for a SaaS solution. “New business model = new ERP model!”

4. The cloud is now acceptable for many business-critical solutions
Analyst companies are reporting a change in the way the cloud is perceived. Gartner notes that fears about the suitability of the cloud for critical applications is now a thing of the past. Forrester Research found that agility is the most important driver of cloud adoption. The fact that many cloud providers are now certified for compliance and security regulations has also made them more acceptable.

5. Ease of SaaS upgrades
SaaS software has the advantage of “bite sized, frequent, managed- by-the-vendor upgrades“, compared to the headaches of managing on-premise upgrades. I am noticing a proliferation of SaaS applications with a fairly narrow industry focus. What enables that is that is a relatively easier to develop and maintain cloud-based applications (compared to on-premise), and SaaS subscription model enables profitability at an earlier stage than the traditional license fee model.

6. ERP consultant recommends alternatives
When ERP consulting firm Panorama recommends alternatives to typical ERP solutions you start to ask whether ERP may be close to its sell-by date.

Companies are increasingly being made aware of the possibility of digital disruption to their business. It’s difficult to cope with a disruptive business model that requires agility by staying with a monolithic legacy system like an ERP.

Why cloud computing will grow

cloud computingAn article in the Economist in 2014 noted that the expenditure on cloud applications was small compared to the huge amount business spent on IT as a whole. However, it pointed out that corporate reluctance to cloud computing was starting to be overcome.

Since April when I started my new role at Flowgear, I have become increasingly aware how strong, convincing and valuable it can be for business to embrace the cloud rather than resist it. I also attended the Gartner Application Architecture, Development and Integration Summit in London to help promote Flowgear, and heard senior Gartner analyst Andy Kyte speak on how old applications, i.e., on-premise systems, are being relegated, and even decommissioned, in favour of newer applications, which are increasingly cloud-based. His comment to me about the rate at which cloud computing was replacing some major on-premise systems was startling.

A major reason in my case for my previous ignorance and dismissal of cloud computing came from my work and background. As a baby boomer working in the ERP industry, my whole work experience was around on-premise applications, and I now realise that it was very difficult to see outside that envelope. I think it is also the perspective of many IT people of similar age and experience, and it may mean therefore that until the next generation become the decision makers, cloud computing won’t really take off. This may apply more in large businesses – in smaller ones and start-ups the Generation Xers and Millennials are already in charge.

Two recent articles on the ZDNet site have covered the topic of innovation and why cloud computing will grow. One article discussed how the enterprise technology incumbents were not seen as enabling innovation, and published survey results that showed cloud computing was the main platform for innovation.

innovation-tech-vendors-3
The other article reviewed the drivers that would make businesses move to the cloud. It will boil down to competing in a new world of business. This will mean that companies will be running:

mostly off-the-shelf enterprise software with a handful of custom-developed applications, probably containing core IP.

It’s going to take some time, but:

Enterprises will make increasing use of platform as a service, enabling developers to create web and mobile apps for any platform that integrates easily with software as a service and on-premises applications. Cloud technologies will be pervasive, with all corporate data managed using a cloud-based business model, underpinned by a hybrid cloud infrastructure.

I am now starting to wonder – I got my first experience of the enterprise software industry in the late 1990s, when ERP was beginning to come of age; within five years it was booming. I am now doing a similar thing with enterprise cloud computing; where that will be in 2020?

Leaving the ERP world

changingAfter over 15 years, I will soon be leaving the world of ERP and enterprise software.

It’s been a great time to work in the ERP software field, especially as small- and mid-size (SME) companies started seeing the value and justification for ERP in their businesses. For ERP vendors like my nearly former employer SYSPRO, the growth in the SME market has been wonderful.

For me it’s been a great experience working for a South African software company that is truly global. Having been in the SYSPRO corporate office I have had exposure to how an international software company does strategy and development planning, and been able to interact directly with some of the best developers around. I also got to engage with colleagues in other countries, and learnt a lot about how those countries can be both the same and very different. I could not have done any of that at any other enterprise software company in South Africa.

Now I am moving on, up into the cloud, so to speak. I will be joining a Johannesburg-based software company called Flowgear as head of marketing. This company was founded in 2010 and has been one of  Microsoft’s local stars in the startup space. It has also got onto the Gartner magic quadrant in the sector where it plays – Enterprise Integration Platform as a Service.

I am impressed by what I’ve seen and heard of the company – especially at a recent seminar held at Microsoft. I am also really looking forward to my new role: helping to promote the company and grow the business, not just in this country, but also internationally.

I will keep on blogging here, but I’ve realised I may have to change the top tag line, I will have to drop the “enterprise” part off.