Thomas Otter
Research Vice President
3 years at Gartner
19 years IT industry
by Thomas Otter | June 14, 2011 | 7 Comments
LinkedIn has over 100 million users, and a market cap today of over 7 Billion USD. If the market is prepared to give LinkedIn that sort of valuation for what is essentially data that should be in your HRMS, then it tells me that your people data is a lot more valuable than you probably imagine it is. Time to think about employee master data quality….
Category: HCM HR Social Software software industry Tags: HRMS, linkedin
by Thomas Otter | June 7, 2011 | Comments Off
April is the cruelest month, breeding
Lilacs out of the dead land, mixing
Memory and desire, stirring
Dull roots with spring rain.
While I’m somewhat uneasy about the impact of the iPad and Kindle on books and literature generally because of the intellectual property control that it gives the device maker, I’m rather impressed with the implications that it has for poetry (thanks Lia for the link).
Watch this video from the Guardian about Elliot’s Wasteland. It is simply delightful. Congratulations to Faber for doing this. It is doing things with poems that weren’t possible before.
For the enterprise software vendors reading this, doing the stuff you do on the desktop or the laptop on the iPad doesn’t really impress anyone, it merely illuminates the gap between yesterday and tomorrow. Do something that you couldn’t do before. Surprise and delight. Innovate rather than replicate.
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Category: Applications books ERP innovation software design Tags: ERP, iPad, poetry
by Thomas Otter | May 5, 2011 | 4 Comments
I’m heading down to South Africa for the Gartner on SAP event, at Sun City 1 and 2 of June. This is the third time I’ve been to the event. We have 4 analysts attending, and I’m really looking forward to it. We will be going through what we think of SAP’s strategy and we will be also be providing some practical guidance about running what clients have today better.
The agenda is looking good, even if I say so myself. Pat Phelan is doing a lot of great research on competency centres, training and really driving down costs in operating ERP, Johan Jocabs brings strong local knowledge and some of the leading thinking on CRM, and Dan Sholler has the measure of NetWeaver and related technologies. As chairperson I get to do the raffle , talk about user experience options and give an overall positioning presentation. It will be a busy few days.
It will also be interesting as the event is a couple of days after SAP Sapphire in Orlando, so it will be an opportunity to see how (or if) SAP’s messages have resonated with the local customer base. Some of SAP’s most innovative customers are in South Africa, and it is always good to see ingenuity of those organizations. South Africans aren’t afraid to say it as it is, so it will be lively.
I have been involved with the South African ERP and HR community for most of my working career, so it will also be good to see familiar faces and old friends.
As usual Lisa and her team do a fabulous job in organizing it. If you’d like to attend, drop Lisa a note via the website.
It will be great to catch up with family too. While I’m there I’d also like to hook up with any South African startups in the HR /ERP space, I’ve been impressed with what I have seen so far, but I’m keen to see more. I will have a few days in Jo’burg meeting clients and I’ll be popping down to Pietermaritzburg to watch my brother run Comrades (a rather long jog of 89 kms).
Category: Africa ERP Events SAP Tags: Gartner, SAP, Sooth Africa
by Thomas Otter | April 28, 2011 | Comments Off
We had a couple of meetings today with SAP execs and internally to discuss the SAP results and Donald Feinberg (SAP lead) John Rizzuto (Gartner Invest) and I figured we’d continue the vague tradition of commenting on the results. This isn’t a formal Gartner position, nor is it investment advice.
John had this to say.
SAP’s year over year growth clearly benefitted from the acquisition of Sybase, which was not included in last year’s numbers and SAP’s growth was negatively impacted by changes in foreign currency exchange rates. However, net these two effects, SAP showed solid revenue growth in its core business, indicates the company continues to mend. Overall it is reasonable to assume that SAP has turned the corner and is positioned to deliver software revenue growth that will exceed the overall industry over the next 12 months. However, we believe that over the next few of quarters, growth will be volatile and SAP will face tougher year over year comparisons. Additionally, while revenue growth is returning, it is likely that it is driven by demand from demand from existing customers, building out their existing SAP installations and not likely from the new initiatives SAP has announced over the last few quarters. These initiatives are not likely to bear fruit until 2012 when they may show a meaningful contribution to revenue. Many of these new initiatives, such as SAP’s focus on in-memory computing, HANA, Business ByDesign, mobility, and analytics show great promise, but remain immature.
My thoughts.
This is part of the email I shared with the press once I’d seen the results. I’ll leave the clever stuff like currency and so on to John.
SAP has spent the last 18 months or so building a clearer vision for the company, reengaging with customers and employees, but it has not yet had any significant new product to sell. There is only so much on-premise ERP and Analytics that SAP can upsell to existing customers, and while this business remains solid, it has limits.
SAP’s newer products, in particular, HANA and Business ByDesign aren’t yet delivering a significant financial contribution, and the time is nearing where they need to do so. SAP also hasn’t yet shipped any joint product with Sybase, so deep synergies there aren’t yet evident there either. SAP is spending money on R&D and marketing, in anticipation of success with these offerings.
SAP’s marketing talks of on-premise, on-demand and on-device, but for now on-premise is the still paying the rent.
• The flat subscription revenue is disappointing, given the rapid growth of the SaaS players such as SuccessFactors, Salesforce.com and Workday. SAP has been slow to deliver on its Line of Business SaaS offerings too.
• Mobile in an SAP application context is still a story rather than revenue generating product.
SAP has to do three things in the rest of 2011.
1. Turn HANA and in-memory from a compelling concept into real revenue.
2. Show that it can scale Business ByDesign and deliver its other SaaS efforts.
3. Prove out the value of the Sybase acquisition by shipping joint product that customers buy.
Sapphire in May will be an opportunity to assess whether the stronger vision of 2010 has turned into real product that will generate revenue. SAP has had a vision but now we need to see engineering delivering on it. What we said in Q4 remains valid.
SAP has a bolder strategy than a year ago, and a significantly stronger product pipeline. In 2011, SAP has to show that its new products, HANA, ByDesign, LOB on Demand and mobile can deliver meaningful revenue. SAP’s increased guidance illustrates the improving macro conditions and SAP’s management’s belief that it has an improved product portfolio.
There are now many moving parts in SAP’s strategy, and communicating the on demand, on premise and on device vision in a way that customers can clearly grasp will be vital. For the first time in a while, SAP has some genuine new product opportunity. The true judge of innovation, though, is not whether vendors label products innovative, but how customers do.
We all are thinking on similar lines. I’d like to see some real revenue impact from HANA this year, but my colleagues are perhaps a tad more cautious. Clients interested in knowing more about HANA should set up a call with Donald.
I’m looking forward to Sapphire in a couple of weeks time. LOB on-demand is on my mind, as is Gateway, Duet Enterprise, Sustainability, mobile beyond an iPad demo and of course the HCM applications. I’ll hopefully have a bit more time to catch up with the partner ecosystem too. Clients might want to check out the recent Cool vendors in the SAP ecosystem note. By the way, I have note coming out shortly on the German SAP HR congress, which is, come to think of it, relevant beyond just the German market.
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Category: ERP SAP software industry Tags: financials, results, SAP
by Thomas Otter | March 28, 2011 | 3 Comments
My regular reader(s) will probably know that I’m a fan of the Guardian newspaper and its on-line efforts. It does a fine job with data, both in terms of sourcing it and visualizing it. Have a look at the website and data blog here. I’ve also ranted about the need for more numeracy in HR on a number of occasions. This post will be more of the same.
Leading newspapers are making effective use of visualization today. As an example, the US treasury bond ownership graphic is far more impactful than a simple listing.
It goes deeper than just a nice graph though, at a recent lecture at Leeds Trinity College, Guardian Data Blog editor Simon Rogers presented with Tim Berners-Lee about data journalism.
Data journalism involves visualising or scrutinising often complex amounts of statistical information.
TBL had this to say.
"Journalists need to be data-savvy. It used to be that you would get stories by chatting to people in bars, and it still might be that you’ll do it that way some times.
"But now it’s also going to be about poring over data and equipping yourself with the tools to analyse it and picking out what’s interesting. And keeping it in perspective, helping people out by really seeing where it all fits together, and what’s going on in the country."
It seems to me that most professions could do with a solid dose of data visualization and the accompanying scrutiny. I’m not talking here about expensive tools, but about the love of data, and the joy of finding stuff out, getting stuck into the numbers.
I’ve given a couple of lectures on HR topics, and I’ve been hammering home on the analytics topic, but I think next time, I’ll bring some more data visualization to the party. I strongly believe that we need to see more focus on data visualization across all areas of business, but the HR department needs serious help.
I was pleased to read that Google came up with its 8 rules of management. At first sight they seem a typical list that one would find in any airport management book, but they are rooted in an empirical study. Google has built its business on analysing data, so it is not surprising that they decided to root around in their own HR data. I do wish more HR departments would fall in love with data.
I think it is possible to be “people-centric” and “data driven” at the same time. Using numbers to inform decisions and drive buy in isn’t treasonable.
Category: Applications HCM software design usability visualization Tags: analytics, google, HR
by Thomas Otter | February 28, 2011 | 1 Comment
At Gartner, we have a regular cycle of changing the lead analyst role every 2 –3 years, so it is time for me to hand the SAP lead baton.
It has been fun and challenging, I have learnt a tremendous amount about SAP, even though I’d worked there for ages. It has given me insight into Gartner too. I couldn’t have wished for a better start at Gartner.
SAP has changed a lot in the two years, and it has probably been SAP’s most challenging period in its history. Coordinating the efforts of over 100 analysts that cover SAP has been eye opening. Gartner’s breath and depth of SAP coverage is without peer, and has been a privilege to lead that effort.
Donald Feinberg will be taking over from me. He knows more about Database theory, DBMS and Data Warehousing than anyone I have ever met, and this is rather appropriate with SAP’s strategic plans for ICE, the in-memory computing engine, aka newDB, the juicy inside bit of HANA. He brings wealth of experience to the role. With Donald our SAP research agenda is in good hands.
I’ll not move away from SAP entirely, as I still cover them as part of my ERP / HCM agenda. I’ll be working closely with Donald as he gets to know SAP’s inner workings. I’ll still take client inquiry on SAP, and I’ll be part of our SAP research community. However, I’ll now have more time to focus on other research interests such as social software in the enterprise, workforce analytics, data protection law, design/hybrid thinking, usability and pattern based strategy. There is a world beyond SAP and I need to broaden my focus.
I’ll take this opportunity to thank our clients, all the folks at SAP, Gartner, the SAP ecosystem, press and broader analyst community that I’ve worked with in the role. I’ll see some of you at CEBIT this week.
by Thomas Otter | February 15, 2011 | 3 Comments
Atlassian is an Australian software vendor, active in the social software and developer tools space. I’ll leave the product evaluations to folks like Nikos Drakos, Tom Austin and Jeff Mann but I would like to call them out for something else.
I have been watching the company from afar for a number of years. I’ve been consistently impressed with how they manage recruitment, and I think a lot of IT departments and larger software companies could learn from what they do.
1. consistent use of twitter, youtube, flickr and blogs to position Atlassian as a cool employer.
2. Posts and video from current employees about working there. No complicated HR speak.
3. Engaging and dynamic careers page. with a strong graduate offering, including international placement, coding festivals etc.
4. Vigorous referral program
6. Executive focus on recruitment as being vital to company strategy
7. Excellent alignment of marketing and employer brand.
8. Effective use of their own software to help manage the process.
I’ve done a bit of research over the last couple of years on employer branding, and I plan to step it up in 2011. I’ll be on the look out for more examples like this.
Dan Pink picked up on Atlassian’s “Fed-ex” days in a recent TED talk. You should watch the whole talk. It raises some important challenges for HR and HR technology. What are you doing to attract and motivate your employees?
Category: HCM HR Social Software Tags: Dan Pink, employee brand., HR, recruiting, Social Software
by Thomas Otter | January 26, 2011 | 5 Comments
This is almost a tradition, John Rizzuto and I commenting on SAP’s results. John does the hard stuff with the numbers, and I get to write a couple of paragraphs.
I listened to SAP’s press conference this morning, and John and I also spoke with SAP executives. I spoke with a number of journalists this morning too. Here is the gist of what I had to say to the press.
SAP has done a solid job in 2010 of selling its traditional product line. Demand for ERP has ticked up with the economic recovery and SAP has benefited from this. Analytics and BI were also strong performers, for example, in Germany.
The SAP field organization continues to execute well, and SAP has worked hard to improve customer and employee engagement in 2010. Overall, most of the performance was due to better macro environment, contribution from Sybase and an increase in pricing.
SAP has a bolder strategy than a year ago, and a significantly stronger product pipeline. In 2011, SAP has to show that its new products, HANA, ByDesign, LOB on Demand and mobile can deliver meaningful revenue. SAP’s increased guidance illustrates the improving macro conditions and SAP’s management’s belief that it has an improved product portfolio.
There are now many moving parts in SAP’s strategy, and communicating the on demand, on premise and on device vision in a way that customers can clearly grasp will be vital. For the first time in a while, SAP has some genuine new product opportunity. The true judge of innovation, though, is not whether vendors label products innovative, but how customers do.
BTW, .Clients can see more SAP analysis by going to the SAP Vendor Rating on gartner.com, or set up an inquiry call.
by Thomas Otter | November 25, 2010 | 3 Comments
Shylock:
Most learned judge, a sentence! Come prepare!
Portia:
Tarry a little, there is something else.
This bond doth give thee here no jot of blood;
The words expressly are "a pound of flesh."
(painting by Alexandre Canbanel. The Merchant of Venice)
The jury has decided. SAP owes Oracle 1.3 Billion dollars. I’ll leave others to speculate on whether SAP appeals, if is a fair sum, or whether there will be other legal ramifications.
Watching it all has been fun. Good theatre, with some dramatic performance and and even more dramatic absence. Tabloid stuff.
These are my musings, rather than a formal Gartner position.
(Okay, the heading was from Romeo and Juliet, and the quote from Merchant of Venice)
by Thomas Otter | October 27, 2010 | Comments Off
Here are some quick thoughts on SAP’s Q3 performance. It was was okay. It wasn’t awesome, but it wasn’t grim either. Have a look here for what the FT says.
The headline number of 20% revenue growth seems impressive but strip out the Sybase numbers and it is very similar to Q2. You can read what John Rizzuto and I blogged about Q2 here.
As Per Q2, for the deeper financial analysis I’ll defer to John.
Core software product revenue again saw double digit increases, which signals that end-market demand remains relatively robust and SAP is benefiting from the increase in spending. With double digit growth year to date thus far, it is safe to say that SAP has gained market share or growing ahead of the market. However, was is troubling is SAP’s difficulties in expanding operating margin or meeting targets it has set. While not troubling, i.e., it is still very fiscally fit, it does speak to the challenges the company is having in managing its business to create incremental leverage – although it is self evident from Wall Street’s perspective why we want comparable margins, it also matter from a competitive standpoint as well. Specifically, it begs the question from any industry watcher, what is it that enables the other megavendors (i.e., MSFT, IBM, ORCL, even HP and Cisco) to run their business at operating margins, on average, 10%-15% higher?
Gartner Clients might want to look at some of his other SAP related research.
Personally, I’m less concerned with the margin question, and more interested in the areas of customer satisfaction and new product innovation, as that is what I spend a good part of my day dealing with.
Snabe and McDermott both continue to paint a more positive and upbeat picture than their recent predecessors did. Both Sapphire and Teched were more energized than my in-memory can remember, as indeed are the last couple of earnings calls. The infectious exuberance in SAP-Land continues.
The anti-Oracle posturing has its place on earning calls, and trading taunts makes for good headlines. Nevertheless, it is not nearly as relevant for SAP customers as many observers think.
The challenge over the next 2 quarters is to show how the investment in newer technologies and applications is having a meaningful impact on the numbers. The market is the arbiter of innovation, not the vendor.
At the same time, the existing customer base needs to be brought along to the party. This means clear communication is at a premium. This is improving, but as the UK and German user groups note, there is still work to do.
SAP has a plan. Now it all comes down to execution.
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Category: SAP Tags: John Rizzuto, q3, SAP
