Irregular Enterprise

July 2nd, 2009

Saas? We're too busy making ERP work

Posted by Dennis Howlett @ 6:09 am

Categories: Uncategorized

Tags: ERP, Panorama Consulting, Enterprise Resource Planning (ERP), Tools & Techniques, Enterprise Software, Software, Management, Dennis Howlett

It’s sometimes good to be reminded that while the industry hype is around saas/cloud/on-demand that there is still another world out there where customers are wrestling with more traditional approaches to computing.

The other evening I had a conversation with Erick Kimberling, CEO of Panorama Consulting. Panorama is a rare beast. It gives away 80% of what it knows in a steady stream of data driven reports, webinars and thought pieces over on IT Toolbox. It’s a smart go-to-market strategy for a small analyst cum consulting operation and is only a gnat’s whisker away from being in the open source mold that Redmonk favors.

While the ERP players’ app sales are in the toilet and the traditional SI’s scramble for work, Panorama is busy: “We were unclear about 2009 coming into the year but so far we’re 80% up on 2008, which was a good year anyway,” said Kimberling. 80%? Are you kidding me? Not at all. Panorama gets involved in software selection and price  negotiation - and here Kimberling reckons that discounts are heading 20% north of what’s usually possible. That’s no surprise - I’ve seen that myself - and more in some cases. (Investment watchers take note.)

Instead, Panorama helps companies with their implementations in an effort to avoid becoming one of Mike Krigsman’s case studies. Equally important, Panorama works to try bring those projects in on time and to budget. That’s where today’s rubber hits the road. “There’s no doubt that CIO’s are under tremendous pressure to deliver. They just don’t have the luxury of over spends and under delivery in this economy,” said Kimberling. I suspect that even when things do return to more favorable conditions, companies will have learned valuable lessons about how implementations should proceed and where value can be extracted.

On that point, it is interesting to note Kimberling’s explanation for failed projects. He argues a different kind of Devil’s Triangle. While Mike Krigsman concentrates on the relationship between vendor, consultant and implementer and buyer, Kimberling talks about:

• Making the wrong software choices and force fitting solutions
• Setting unrealistic implementation targets
• Failure to manage scope and duration

The two sets of theory are not mutually exclusive but complementary to one another.

I asked whether there is pressure to look at the burgeoning saas/on-demand market: “We’re dealing with what you might call traditional ERP but I can tell you that the saas hype which is really a follow on from the old ASP model, is nowhere near the reality - at least not in the cases we see. Sure, in 3-5 years’ time we may be seeing more but where is the saas company that’s going to beat an Oracle or SAP out in a large scale ERP deal today?” It’s a good point though I’d argue that in the mid-market, NetSuite has been doing a credible job, even in a tough economy.

Of course nowhere in our conversation did the other buzz expression ‘Enterprise 2.0′ turn up. As Kimberling alluded, his customers are far too busy getting their projects to work on time and to budget. Thank goodness there is at least one person out there prepared to look at the world in a realistic fashion rather than the rose colored spectacles some of us are prone to wear.

July 1st, 2009

NetSuite + AdaptivePlanning = BPM disruption

Posted by Dennis Howlett @ 3:35 pm

Categories: business analytics

Tags: BPM, NetSuite Inc., Business Process Automation, Operational Planning, Aerospace & Defense, Strategy, Enterprise Software, It Operations, Business Operations, Manufacturing

This slipped under the radar but on June 10th NetSuite and AdaptivePlanning announced a marketing and integration partnership that will see NetSuite acting as a reseller for AdaptivePlanning’s business performance management (BPM) solution. Why should this matter?

So far, the saas/on-demand transaction app players have been running hell for leather to bring functionality to a point where they can compete effectively in mainstream deals. One area that’s been ripe for disruption but which is buoyant is BPM. According to Channel Web:

Worldwide sales of business intelligence software, including BI platforms, analytical applications and performance management software, reached $8.8 billion last year, according to a new report from Gartner…The 2008 sales were up 21.7 percent over $7.2 billion in 2007, a remarkable showing given the economic headwinds vendors faced all year during which the U.S. was officially in a recession and much of the rest of the world’s economies were struggling.

“In tough times, the first step is to increase transparency, which helps identify cost centers and then to more tightly align strategy with execution,” said Gartner analyst Dan Sommer in a statement.

The recession may be a two-edged sword for BI software vendors and their channel partners. Some prospective customers may delay product purchases as part of their overall cost-cutting efforts, but the need for companies to improve visibility into their business operations and gain control of their spending may be boosting BI software sales.

We have to be a tad careful not to totally confuse BI with BPM but they tend to come under the same broad umbrella.

BPM has been one of the few bright spots in enterprise sales but it often comes with a high price ticket. Part of the reason is that BPM is an add-on to existing database structures which require a lot of heavy lifting in the form of ETL plus mapping to solutions. This has been a sticky issue for many years because many of the tools have not really advanced as much as the front end functionality. IT needs to be involved, a lot of (expensive) horsepower is required and the ability of the incumbents to get tools into the hands of many users has been difficult.

The surprise with the NetSuite and AdaptivePlanning deal is that none of the heavy lifting usually associated with reporting is required. So far, they’ve done a one way integration from NetSuite to Adaptive. In the future they will have a two way connection, vital for tying up the loose ends of putting planning into practice.

During my conversation with Bill Soward, CEO of Adaptive, he said the magic words: “The link is saas to saas so even though you can think of it as a sort of batch operation, it’s pretty much minutes.” As the comic books say: ‘Kerraaaaanng!’ This is a massive advantage because it not only cuts time to information but it means that much of the cost associated with BPM evaporates. That allows Adaptive to offer its solutions at an average implementation cost of $15,000 with a per seat price of $800 per user.

Compare with Host Analytics, another saas BPM provider, which is trying to go up against SAP/Oracle at a price point of some $50-60,000 - which is competitive in anyone’s language for an enterprise deal in this space. Compare again with BusinessObjects, Hyperion and Cognoes where you’ll see precious little change from $100,000 before the obligatory 17-22% maintenance fees, consulting, implementation and hardware costs, often to reach a handful of finance and market analysis rock stars.

Adaptive is able to reach 1:15 employees in a 200 person company across both finance and sales. NetSuite on the other hand expects to reach everyone in a similar sized company. Think about it. If NetSuite is already reaching this level of penetration then it bodes very well for Adaptive and/or Adaptive style solutions alongside NetSuite while NetSuite has an extra strong string to its bow.

There is more. Since Adaptive is a saas solution, it can use the data it unearths to provide broad industry benchmarking data. In this economy, what company would not wish to know how its performance fares against its peers? What business would not like to discover others with which it might share resources?

I also spoke with NetSuite about the offering. They were a little less gung ho about it and I was surprised they didn’t seem to have thought benefit all the way through. That might be a tad harsh because this is a fresh deal and Adaptive are in the driving seat when it comes to knowledge about how this can change the planning and modeling landscape, especially for big ‘M’ in the SMB space. As with all partnerships of this kind, both parties need to be joined at the hip and that’s not quite where they’re at today.

This is exciting stuff. The SMB market has been poorly served in the analytics space, often defaulting to Excel, a tool I have long railed against as dangerous. Right now, mid market businesses are especially vulnerable for all sorts of structural and economic reasons. They need tools such as these. If Adaptive is able to drive adoption through NetSuite’s larger channel AND is able to make the concept of bench marking stick then it becomes a disruptor the incumbents will struggle to compete against. And that despite their longevity and deep experience.

Assuming NetSuite and Adaptive make a good go of this then there is a clear win-win-win. How many times do you see that in the on-premise world?

July 1st, 2009

Oracle Fusion Middleware 11g: turkeys voting for Christmas?

Posted by Dennis Howlett @ 10:11 am

Categories: Enterprise applications

Tags: Oracle Corp., Middleware, Enterprise Software, Software, Dennis Howlett

The love fest around Oracle Fusion Middleware 11g is truly extraordinary. The geek crowd certainly seem to like it and Oracle does a great job of singing to the DBA crowd. Dana Gardner is positively effusive:

Oracle has sewn up its field brilliantly via its organic and aquisitions-fueled growth of the past decade. With Sun and its ID management, file system/directory, storage, Solaris community, and speedy silicon, the path to cloud seems inevitable and closer than most thought for Oracle. Incidentally, control of Java is more a strategic weapon than an enabler.

…and of course the spin machine goes into hyper drive.

In the Twitterverse, the real time proxy that served reasonably well for the failed registration and streaming service that was supposed to bring remote users into the event, Oracle’s PR tried to say that customers such as Vodafone, AT&T, Qualcomm and others ’support’ the move. I was not impressed. The tone then changed to ‘in favor of’ which immediately made me think of turkeys voting for Christmas. As I fired back:

I would have been much more impressed if Oracle had said: ‘And here are our customers who will tell you what they’re doing.’ As I write this there are no signs of that. I should not be surprised. The mega vendors are masters of pre-announcing ’stuff’ or providing other world demos that may hint at slivers of functionality available today but which really portend meat tomorrow. Or in Oracle’s case, 2010 and out.

If I was a a buyer though, I’d be worried about Oracle’s strategy. You can see it coming. It won’t be Miko Matsumura’s ‘One Ring to Rule Them All’ although it’s a cute image but a vise like grip on everything from hardware through middleware and on to applications. No vendor on the planet has successfully pulled off the ‘end to end one stop shop’ trick and Oracle most certainly won’t do it. Regardless of the hubris.

There’s a certain paradox in all of this because in order to reach this position, Oracle CEO Larry Ellison needed to hand Charles Phillips, Oracle President a check for $25bn+ to fund 58 acquisitions (I’m glad he reminded us, I’d lost count) in six years. It’s a pantomime horse of many moving parts the company is trying to pull together and which may one day see its nadir in Fusion Applications. I’m wondering whether this will be Oracle’s cue to take a stroll down Butt Hole Road. That and its laser focus on pleasing Wall Street explains why customers continue to contribute to Oracle’s obscene bottom line.

I’m still betting that in the long term, Oracle’s strategy will be shown as fundamentally flawed. The turkeys may be voting for Christmas in July, but I wonder how they’ll feel come December 24th. If not 2009 then 2010.

June 30th, 2009

PwC: rotten to the core or just plain stupid?

Posted by Dennis Howlett @ 1:34 am

Categories: outsourcing

Tags: PricewaterhouseCoopers Consulting, Satyam, Francine McKenna, Financial Accounting, Outsourcing, Finance, It Operations, Business Operations, Outsourcing & Subcontracting, Dennis Howlett

I hope that my good friend Vinnie Mirchandani doesn’t take offense to the title of this post. PwC is his alma mater in a past life. However, events at Satyam in India, which have not received the attention they deserve in the US, have taken a decidedly weird or comic turn, depending on your point of view. A brief summary:

• Satyam’s CEO admitted to defrauding the company of around $1 billion in cash in January
• He was thrown in jail along with the two PwC partners who had signed off on Satyam’s accounts
• Assorted other Satyam managers were also thrown in jail
• Satyam was eventually rescued in a fire sale deal

More was said by:

Sam Diaz: Fraud and deception at Satyam was deep

Brian Sommer: De-Briefing the Satyam Sale

When the story originally broke, my colleague Francine McKenna and I had many a conversation trying to understand what the heck happened. How could one person, or as it turned out, a small band of conspirators, spirit away $1 billion without anyone noticing and especially the auditors of record, PricewaterhouseCoopers? It didn’t make sense. Regardless of management’s actions, that seemed to put PwC on the hook for a substantial negligence and/or fraud suit.

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June 26th, 2009

Weekend stuff: geeks who love to help

Posted by Dennis Howlett @ 12:54 pm

Categories: Uncategorized

Tags: Geek, Marketing Research, Marketing, Dennis Howlett

Earlier today I was speaking with an Adobe Flex geek. I needed some help with a wee project and he’s an Adobe rockstar. It was a real pleasure to have someone solve a problem in 10 seconds flat with which I’d been scratching my head for several hours. That’s what geeks do - solve problems.

Three years ago, Craig Cmehil invited me to RIA Hacker night at SAP TechEd. I knew nothing about RIA, didn’t want to know and secretly thought I’d be bored. But he said the magic words: ‘There’s free beer.’ I’m eternally grateful to Craig because that night was an ah-ha experience.

While I spend a lot of time talking to marketing types I’d never really spent any deep time with geeks. Some might say: ‘To your eternal shame,’ but this was a genuine learning experience from which I have benefited many times over in the years that have followed.  This is what I discovered:

• Smart geeks may argue about such trivialities as the install routine but they know how to solve problems in ways that mere mortals would find mind numbing.
• If you have half a clue what you need to get done, geeks will sit with you until the other half is resolved. How many others do you know who have that patience?
• Geeks are rarely patronizing when you show yourself to be an idiot.
• Really smart geeks can think about three or more things at the same time and not get confused. Watching how they process problems is an experience you rarely forget.
• Given half a chance, geeks are eager to help. I sense that’s because few people ask them, often relegating them to the status of plumber.
• Geeks may at times appear to be strange but they can be intensely social when given the opportunity.

All of the above applies equally to both men and women. I guess it’s the way geeks are cast. Perhaps I’ve been privileged, maybe I’ve been lucky. All I can say is that today I prefer a geek event over a tech marketing event. Who’d have thunk that of an enterprisey businessy type?

What’s your experience? Am I looking at the world through rose colored spectacles?

June 25th, 2009

CODA and Corefino ink cloud accounting partnership

Posted by Dennis Howlett @ 7:49 am

Categories: Enterprise applications

Tags: Business Process, Accounting, Partnership, Financial, CFO, Corefino, CODA, Business Structures, Operational Planning, Financial Accounting

CODA, which has developed an on-demand financial application built on the Force.com platform has inked a partnership deal with Corefino, the Sunnyvale CA. based accounting outsourcer. Dubbed Corefino2go, the service sees CODA providing the technology requirements for Corefino’s people, place and platform offering.

Karen Watts, Corefino’s CEO explains: “I started this business because I was stuck in the vortex of number crunching and could not do the strategic things needed of a modern CFO. So what we’re doing is solving a pain point. It’s in our best interests to partner with companies that are closely aligned to our view of the world and CODA fits that well.”

I was interested to discover what differentiates this from other go to market deals of this nature. Jeremy Roche, CEO CODA said: “We got the deal done in around eight weeks, in part because from the early meetings, it was clear that we have similar objectives.”

Corefino operates in four main verticals: healthcare, alternative energy, electronic gaming and municipalities/non-profits. These are not markets with which I particularly associate CODA and wondered how the partnership might work: “We’re not anticipating a lot of customizations being required inside CODA2go because many of the 500 financial processes are not really about how the technology handles things but about the way we address specific problems,” said Ms Watts.

What’s striking about this deal is that while Corefino represents a channel to market for CODA2go, Corefino will be the customer as their people will be operating the software on behalf of end user organizations. “We’ll be running our business on this and will be providing quarterly feedback to the CODA team to make sure they know what needs working upon,” Ms Watts continued. Corefino has around 40% of its customer base in companies that have an international element to their operations. CODA2go built international requirements functionality from the get go, making it a good fit for these types of business.

As to the specifics and from the press release, the partnership hopes to deliver the following benefits::

• key business processes and applications implemented, managed and maintained by specialists leaving the company free to focus core business activities
• reduced reliance on internal and frequently scarce IT and administrative resources so that organizations can ensure their people are working on more strategic business processes
• a cost-effective means to access a best-of-breed finance system, delivered via the internet and charged on a per-user, per-month subscription basis
• ability to benefit from affordable business process outsourcing
• rapid deployment and return on investment
• secure anytime, anywhere access to financial data for a complete view of business performance
  none of the issues related to on-premise software, such as ongoing maintenance, post-implementation changes or system upgrades.

A sign of CODA’s enthusiasm for the deal can be taken from CODA’s announcement that it is hiring staff for the Valley area. “There will be some staff working in Corefino’s offices,” said Mr. Roche.

I asked Ms Watts to talk to the issues around outsourcing in the current economy: “In 40% of the deals we closed in the last quarter, the CFO was initially skeptical about whether we could truly reduce cost, asking about how we do it and how would we integrate with what they are already doing.” The reality is that as saas becomes better understood by end user organizations, the opex versus capex argument is proving powerful in a cash strapped economy. It’s also reasonable to say that cloud computing techniques allow service providers with new opportunities to develop business models where value can be added of the kind Corefino is developing.

See also: Brian Sommer details the choices that CFOs have to make and the place that Corefino occupies in this space.

Disclosure: CODA is a sponsor at my personal weblog and has been a recent consulting client albeit on unrelated matters.

June 25th, 2009

Get ready for Oracle's 100 days of press releases aka innovation

Posted by Dennis Howlett @ 3:00 am

Categories: Uncategorized

Tags: Innovation, Oracle Corp., Bruce, Simon Wardley, Leadership, Strategy, Management, Dennis Howlett

It’s a while since I read Bruce Richardson, chief research officer at AMR but a couple of his most recent posts rang bells with me. The first: Who Drives Software Innovation? The “Best-of-Breed vs. Giants” Debate raises a donkey’s year old discussion where he concludes:

Call me cynical, but I believe today’s large vendors are more interested in commoditization than innovation. Ideally, they want to be able to sell a generic version that will appeal to customers across dozens of verticals, hundreds of countries, and tens of thousands of customers. For them, true breakthrough innovation doesn’t scale.

I’d go further. The large companies are little more than financial engineering outfits with Wall Street masters. If you track Oracle’s history, you’ll quickly see they are masters of managing investor expectation. Sam Diaz most recent report says it all: Oracle bucks trend; beats Q4 estimates.

Sure, they understand innovation but do we see it? Do they talk about it in any meaningful way? Often the answer is ‘no’ or it crops up in tiny pieces. That’s because of the generic nature of what they offer. They may be in x-industries but you can be sure they only touch 15-30% of any particular company’s requirements. That’s not to say innovation doesn’t happen from the efforts of the larger tech companies.

In the last couple of weeks I’ve heard stories of several brand leading enterprise customer projects that are truly changing the way they do business through technology. Mostly with sensor and predictive analytics capabilities plus hardcore integration. No sex, no sizzle but making a huge difference for both consumers and the companies themselves. If I ever get clearance, I’ll write them up. They beat the heck out of anything you’ll hear from Enterprise 2.0 hand wavers.

More broadly, Bruce is right. Time and again, the most striking innovations I’ve seen over the years come from the smaller companies (ie best in class/breed) that no-one hears too much about in the mainstream until they either get acquired or themselves turn into giants. There are of course exceptions in the non-tech world: Wal-Mart, Harrahs, P&G to name but three. Can we say the same about large tech companies? Not really. They look at their balance sheets and cash reserves, shrug and say ‘We’ve got a successful business model.’ Back to Oracle and Bruce Richardson.

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June 25th, 2009

Oracle spinning its numbers a tad too much?

Posted by Dennis Howlett @ 1:47 am

Categories: Enterprise applications

Tags: Oracle Corp., SAP AG, Sales Strategy, Financial Management, Operational Accounting, Sales Force Management, Financial Accounting, Tools & Techniques, Sales, Financial Planning

Michael Hickins at BNet accuses Oracle of ‘lying’ about its competitive position vis-a-vis SAP. Such statements are always fraught with difficulty for several reasons:

• The year ends are five months apart
• The economy has been changing over time
• Currency rates are volatile: Oracle reports in US dollars, SAP reports in Euros
• Each company makes slightly different assumptions about the way they report
• Trying to get behind the figures is never easy - claim and counter claim abound. Whenever Oracle takes a pop at SAP, SAP comes back saying it is seeing no real evidence or that reported Oracle wins are in small subsidiaries.

The table at the top of this post attempts to show what is happening on a like for like basis. I’ve taken SAP’s applications software results for Q1-4 2008 which ended December, 2008 and compared those with Oracle Q1-4 2009 which ended 31st May, 2009. I’ve then adjusted SAP’s Euro rate for the currency rate Oracle used for its non-GAAP earnings report. I realize this is an odd way to do things but it provides a better like for like comparison based on the way software sales actually happen in the real world. On that basis, the revenue patterns look remarkably similar. SAP dipped more sharply at Q3 than Oracle but accelerated faster in Q4.

In comments to Hickins post, Karen Tillman of Oracle Communications said:

Michael ? Lying? If you look at year-over-year growth rates of Oracle and SAP for the last two quarters, whether in constant currency or in USD, we are outperforming SAP in every region.

And, that doesn’t take into account that SAP includes Business Objects sales in their applications numbers. Oracle’s apps numbers are purely applications. If you took Business Objects out of SAP’s applications number for an apples-to-apples comparison, the difference would be even more dramatic.

The beauty about facts is, they don’t lie.

That depends on who’s doing the telling and on what basis. In this case, she cites BusinessObjects but I could equally cite past acquisitions such as PeopleSoft, JD Edwards, Hyperion and Siebel. I”m betting that if those were stripped out there would be precious little left for Oracle to crow about, whichever way you slice ‘n’ dice the numbers.

The more egregious part of Oracle’s earnings statement comes where President Charles Phillips says:

We grew faster and took market share from SAP in every region around the world” said Oracle President Charles Phillips. “In Europe our applications business grew 5 percent in constant currency versus negative 27 percent growth for SAP in their most recent quarter. Historically Europe has been an SAP stronghold, but these results prove that we can compete and beat them everywhere.”

There is no way to prove that claim one way or the other. Oracle’s comparisons may look impressive but remember that Oracle’s Q4 results represent two-thirds of as yet unannounced Q2 earnings for SAP on my basis for comparison. Also remember that while the percentages look starkly different, Oracle is assuming that its only competition is SAP. That’s simply not true. Neither is the converse.

This is not a new story by any means. Check what Frank Scavo said back in October, 2007:

These results do not look great in comparison with Oracle’s most recent quarter (its Q1). Last month Oracle reported a 35% increase in new license sales, including a 65% increase in application software revenue. Of course, Oracle’s results include the benefit of its new acquisitions of Hyperion and Agile Software. Its not clear to me how much of the increase is due to revenues from those product lines, but it certainly can’t explain all of the difference from SAP’s growth rates…

…Separately, SAP announced that it had won a deal with Wal-mart for financial management software.

Go figure?

SAP is due to report its Q2 numbers next month. I’m sure they will be pored over as well.

PS - I’m an accountant by trade - line six more up against me and you’ll get seven different results. ;)

June 23rd, 2009

SocialText goes free for up to 50 users

Posted by Dennis Howlett @ 6:39 am

Categories: Social computing

Tags: Socialtext, SocialText Free50, Wiki, Productivity, Strategy, Online Communications, Management, Dennis Howlett

Last weekend Ross Mayfield, president of SocialText called up to discuss the release of SocialText Free50, an offering which allows up to 50 users free access to many of SocialText’s functions. Included in the offer:

• SocialSignals - SocialText’s spin on microblogging
• SocialText Desktop - an Adobe based application
• SocialText People - social newtworking
• Dashboard - customer homepage
• One Workspace - wiki area

SocialCalc, which is now in open beta is not included, neither is support other than the basic online knowledge base.

Once the user count exceeds 50 people then it triggers a cost of $6 per user month for all users. In other words if you have 51 users then it weighs in at $306 per month. Appliance users pay the same amount plus $1,000 per month. The full pricing schedule can be found here.

Free50 allows IT to ‘claim’ control of the system: “We wanted to give IT the option of pro-actively managing SocialText environments - we think that will help get over some of the IT adoption problems that social software can experience,” said Mayfield.

On the call I expressed surprise that SocialText was giving away so many seats. While ‘free’ is always welcome, SocialText will not be able to monetize many SMBs, especially in Europe where there are millions of companies below the 50 person threshold. However, Mayfield countered that: “We’ve wanted to do this for a while - we’re trying to drive down our marketing costs and hoping the offering will go viral.”

SocialCalc has also been improved (see image) with a simpler history and the ability to share data across multiple worksheets. “This will put an end to massive spreasdsheets being emailed around the enterprise,” said Mayfield. However, I believe that in its current iteration, SocialCalc will not see full deployment but may be reserved for simple activities like feature list spreadsheets. As I pointed out on the call, finance people won’t touch an alternative to Excel unless pivot tables are included. That’s the number one feature for these people who also control which spreadsheet gets used.

June 22nd, 2009

Infor Flex: innovation or fail?

Posted by Dennis Howlett @ 10:23 am

Categories: Enterprise applications

Tags: Innovation, Customer, SOA, Infor Flex, Service-Oriented Architecture (SOA), Software As A Service (SaaS), Web Services, Managed Hosting, Enterprise Software, Middleware

Infor today announced Infor Flex, a program designed to keep customers happy and keep those all important maintenance dollars flowing Infor’s way. At first viewing, the Infor prgram looks exciting:

Infor Flex makes it easier for customers to take advantage of Infor’s innovative service-oriented architecture (SOA) capabilities through the Infor Open SOA framework, such as Infor MyDay and new component applications to be released throughout 2009 and beyond. In many cases, customers are entitled to these capabilities at no additional charge as part of their maintenance agreements. Infor Flex provides a rapid, low-cost way for customers to take advantage of these product innovations by making it easier for them to adopt SOA-enabled product releases.  By combining reduced fees and rapid implementation services, Infor Flex enables customers to leapfrog to new levels of business agility and functionality at a lower cost and less risk than the rip-and-replace approaches of competing vendors.

Vinnie Mirchandani was less than impressed:

If customers only want a low-touch plan – some bug fixes, minimal number of support calls, regulatory updates – you have to keep paying at full rates. As I have written before, customer needs and vendor delivery speeds (and their support costs) vary considerably making it very hard to justify a single maintenance rate across the product lifecycle – so my suggestion about letting maintenance rates float

To a question I asked, Jim responded “Unlike what we are reading about our competitors, we are not seeing as much defection in our customer base to SaaS or third party maintenance. Besides we will offer SaaS in several components of our offering”.

I’m going to give Infor credit for at least coming up with something, even if it does have a whiff of SAP’s reworked maintenance plans. However, regardless of how cool anyone thinks Infor is being, there is a relentless downward pressure on end user organization costs. It therefore makes no sense to continue offering same pricing when less help is required.

It doesn’t for example go un-noticed that in its press release:

“Our business has been running on the Infor ERP BPCS solution for over 20 years, and we recently renewed our maintenance contract with Infor after being inactive for several years,” said Wayne Gale, CEO, Stokes Seeds. “With this program, as well as the long-term product strategy, Infor has shown us that they are committed to their customers and helping us move forward, on our terms and on our timetable.”

Strip out the PR speak and what I read is this: ‘We have an old system that got to a point where the maintenance price wasn’t worth paying. Now it looks like it is, especially given we’ve had a maintenance cost holiday.’

Reports continue to drip in that customers are resisting maintenance demands from vendors, often on cost pressure grounds but equally because they are not getting the value they thought they were. Right now, the default position must be: don’t pay, and then negotiate up for what you really need. It’s the only way to get some of these knuckleheads to see business sense by forcing them to stand in the customer’s shoes. It’s a rotten way to do business but then the enterprise software game has never been as clean and tidy as the sharp suits would imply. More like mud wrestling with Hulk Hogan.

UPDATE:

Frank Scavo gives Infor a cautious thumbs up

Forrester’s Ray Wang is enthusiastic - but then it fits with Forrester’s messaging around SMBS ;)