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GigaOM | Cisco Outlines How to Move The Enterprise to The Cloud

Cisco today outlined its plans for delivering IT services over the web (aka cloud services), and as part of a conference call, showed off a great slide that illustrates exactly how many companies this former networking gear maker wants to take on. If I were to boil it all down, I’d say the company’s cloud strategy relies heavily on its hardware to make its WebEx-branded collaboration software run economically. Padmasree Warrior, Cisco’s CTO, said the company sees the cloud as having four layers, with thebottommost layer being the hardware infrastructure provided by Cisco’s new servers. The top three are the more traditional infrastructure-as-a-service offerings, platforms as a service and software as a service (see slide).

The only area where Cisco doesn’t want to play (most likely because it’s where its service provider customers want to build their own businesses) will be the infrastructure-as-a-service layer. However, Cisco will host its own services, and will do so on the new UCS hardware.

Warrior said the company has seen a 30 percent reduction in capital expenditures and a 20 percent decrease in operating expenses tied to IT, thanks to hosting its WebEx platform on Cisco hardware. She also spent some time describing new features and how Cisco is building its PostPath and Jabber acquisitions into its WebEx brand to offer email and IM integrated with WebEx’s meeting capabilities.

However, as Cisco moves deeper into the cloud, it will be interesting to keep an eye on the questions that weren’t answered. I asked how Cisco plans to interoperate with Amazon’s computing and storage platform. Instead of giving an answer, Warrior started talking about how there will be a variety of clouds, including public and internal private, and how Cisco wants to provide an “inter-cloud” system for communications among the various clouds in five to six years. In order to do that, Warrior said, the technology world will have to work on open standards for naming, directories, and presence awareness, as well as protect corporations that don’t want to have such openness between clouds. But most folks want their clouds to interoperate today, not half a decade from now, so all of this is more hype than help.

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http://gigaom.com/2009/06/30/cisco-shows-off-its-hit-list/

VentureBeat | Analytical Database - ParAccel - Raises $22m in 3rd Round of Funding

ParAccel, maker of database technology that allows users to see broader patterns in massive data sets, has raised $22 million in a third round of funding from Menlo Ventures, Bay Partners, Mohr Davidow Ventures, Tao Venture Partners and Walden International. The money will be used to expand its marketing efforts, VentureWire reports.

Based in Cupertino, Calif., ParAccel says it will reach profitability in 2011. In allowing companies to slice their data many different ways, the company competes with heavy hitters like Oracle and IBM. It also rivals smaller players like Green Plum, Vertica Systems and Aster Data.

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http://deals.venturebeat.com/2009/06/30/paraccel-brings-in-22m-for-analytical-databases/

BNET | Is Oracle Gaining Market Share at the Expense of SAP?

Oracle is putting out the word that it’s gaining market share at the expense of SAP to distract attention from its declining revenues and profits, but the numbers put the lie to the spin. Oracle held its own in database and middleware revenues, where it doesn’t compete with SAP, but in applications, where it does go head to head with the business applications vendor, new license sales declined almost 20 percent and total applications, including support and license updates, declined by 9 percent. It was able to make up some of that ground thanks to twelve percent growth in license updates and product support for middleware and databases.

But Oracle president Charles Phillips boasted that, “We grew faster and took market share from SAP in every region around the world.” The funny thing is, when I spoke to SAP communications chief Bill Wohl back in May, he predicted that Oracle would try to spin its results this way. While granting that Oracle is the bigger company, and is growing in some areas, Wohl assured me that “in the space where we compete we’re doing very well, thank you.”

It doesn’t surprise me that Oracle is trying to deflect attention from its deficiencies. I recently criticized both companies for treating existing customers as cash cows, a situation to which SAP responded by entering into a pact with its user group; Oracle, meanwhile, made a meaningless announcement about freezing maintenance costs that in fact affect a very small number of customers and legacy products.

Oracle is also apparently reversing course on cloud computing, a software delivery mechanism CEO Larry Ellison recently derided as gibberish just last September. Then yesterday, Ellison said all the products associated with its Fusion middleware suite will be available on-demand. I found his earlier dismissal of software-as-a-service (SaaS) impossible to take seriously in any case, since Ellison was an early backer ofSalesforce.com, the most well-known cloud-computing vendor, as well as SaaS business applications vendor NetSuite, which is trying to compete with SAP at the low end of the market. In fact, Oracle has proclaimed itself a SaaS vendor since at least 2007. (It’s my understanding that lying to the public isn’t a violation of Regulation FD so long as you lie to everyone at the same time.)

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http://industry.bnet.com/technology/10002335/oracle-lying-about-sap/

GigaOM | Rapid Growth Expected in the Enterprise Social Software Market

While most people associate social web features with consumer web sites such as Facebook and Twitter, the enterprise world is rapidly embracing many of the same social features, according to a new report from GigaOM Pro and The Community Roundtable. Still in its infancy, the $275 million enterprise social software market is expected to grow quickly in 2009 and beyond as large companies look for ways to integrate social functionality with legacy systems to publish, share and collaborate in real-time.

“While the enterprise social software market is evolving out of traditional content authoring, management and CRM solutions, it has significant potential to disrupt these markets,” said Rachel Happe, founder of The Community Roundtable. “This is because established application technologies — and the companies that create them — will have trouble keeping up since they are architected around content or process, and not the end-user.”

The enterprise social software market today is made up of many players, from point solution players like Wordpress in the blog space, to larger social suite players like IBM with Lotus Connections. Cisco, a new entrant to the social software suite market, is looking to disrupt the disrupters, taking market share from early players in this space as they elbow their way into the market. 

“By collapsing authoring, publishing and distributing into one action, social software vastly increases productivity and the speed of communications,” said Happe. “While the largest of the pure social software companies have yet to reach $50 million in revenue, we expect this fragmented market to grow and potentially consolidate quickly as established players move to integrate social features into the enterprise.”

“Social Media in the Enterprise,” which can be found at the GigaOM Pro web site, examines how social software and related functionality is poised to disrupt existing enterprise application markets.

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http://www.centredaily.com/business/technology/story/1359783.html#ixzz0JEcd7jVy&C

ZDNet | SAP CTO Dismissive of Salesforce.com - Whither, SAP/SaaS?

My jaw dropped as I read this just-published CIO.com interview with SAP’s CTO Vishal Sikka. Last week, John Wookey, executive vice-president of large enterprise on-demand, set out SAP’s commitment to on-demand in a widely-reported speech in Amsterdam (SAP this week reiterated the commitment in a corporate press release). This week, the company’s CTO had this to say about leading SaaS vendor Salesforce.com:

“When [vendors] call their little salesforce-automation application a ‘platform’, that does actually bother me, as a technologist, to be honest with you.”

If SAP wants to be considered a leader in the on-demand space, as John Wookey proclaimed in Amsterdam, then the last thing its top executives should be doing is going around belittling the achievements of other SaaS players.

I find it astonishing that Sikka — who works out of the same Palo Alto facility as John Wookey — could be making such statements at this time. Was he not aware when he gave this interview of the likely content of Wookey’s presentation in Amsterdam last week? The message this sends is that Wookey’s initiative doesn’t have the wholehearted support of SAP’s board.

Unfortunately for SAP, the outcome of Sikka’s intervention may be the opposite of whatever was intended. His smug contention that the entirety of SAP’s supported software catalog is “timeless” is just an invitation for ridicule. He ends the interview warning about the responsibilities inherent in running mission-critical software:

“You need to ensure that the first requirement of customers — which is integrity and stability — is met. You cannot afford an 8-hour downtime in a service or some security lapse. You’re dealing with financial, payroll or customer data, and if things don’t work, people can go to jail.”

I wonder, was Sikka thinking about examples like the “troubled SAP implementation” reported this week by ComputerWeekly? In a story headlined Staff get stress support after SAP go-live, the UK title reports:

“Somerset County Council went live with the delayed first stage of a SAP implementation on 1 April 2009. Staff have struggled to pay invoices on time. It is further claimed that some bills have been paid to the wrong suppliers and that some companies have been paid twice for the same service … a higher-than-usual number of emergency payments to the authority’s suppliers are being made through the same-day bank-to-bank Chaps network.”

More ... http://blogs.zdnet.com/SAAS/?p=799

Information Week | Tough Economy = Business Intelligence Sales Booming ...

Worldwide sales of business intelligence software grew a hearty 22% in 2008, according to Gartner, proving that many companies see BI as a good investment during tough economic times.

Total revenue for the market came in at $8.8 billion, with six vendors -- SAP/Business Objects, SAS Institute, Oracle, IBM/Cognos, Microsoft, and MicroStrategy -- owning 75% of the market.

SAP/Business Objects led the pack with 24% of the market, or $2.1 billion in sales last year. SAS Institute and Oracle tied for second place, each with 14.6% of the market, followed by IBM/Cognos, with 11.3%. Microsoft came in with 7.7%, and MicroStrategy, 3.2%.

Gartner included sales of BI platforms (or suites), analytic applications, and performance management software in its analysis.

By comparison, the market for worldwide BI software grew only 13% between 2007 and 2008, according to a Gartner report issued last year. Growth was stronger in 2008 because companies are looking to "increase transparency" to identify costs and better align strategy with execution, said Gartner analyst Dan Sommer.

In 2008 and 2007, the four largest vendors made up about two-thirds of the market, compared with one-fifth of the worldwide market in 2006. Gartner also indicated that many smaller BI companies saw low or no growth last year.

"Most, but not all, of the midtier independent BI vendors targeting businesses struggled more, which indicates that there is bifurcation in buying to either more stack-centric behavior, or smaller tactical departmental projects," Sommer said in a statement.

In other words, many customers of vendors that sell a wide swath of enterprise applications and systems, such as IBM, SAP, and Oracle, are likely now going to those vendors for their BI needs, too. Also, there may be fewer instances of business departments purchasing BI from smaller vendors.

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http://www.informationweek.com/news/business_intelligence/analytics/showArticle.jhtml?articleID=217800991&cid=RSSfeed_IWK_ALL

Computerworld | Technology One: Oracle and SAP Set to Decline - Think iPhone ...

The business model used by Oracle and SAP is fundamentally flawed and will lead to their downfall within the next decade, says Technology One chairman Adrian Di Marco.

Speaking exclusively with ComputerworldAustralia, in a wide-ranging interview Di Marco said that the fact that SAP and Oracle use third party implementers has lead to growing customer dissatisfaction.

"Oracle and SAP are expensive, and the question is whether they are delivering value for money," Di Marco said. Technology One competes with Oracle and SAP for mid-range businesses, educational institutions and municipalities that turn over between $250 million and $2 billion.

Di Marco says his company has a competitive advantage because it does its own implementation. "People are replacing Oracle and SAP in our target market with our new generation Connected Intelligence product," he said. "It's a vindication of our strategy of developing in Australia, doing our own R&D and doing our own implementations."

In commentary accompanying the release of Technology One's half-year results to March 31, Di Marco noted "in the last six months, we've won five major deals where customers have moved to Technology One from solutions provided by Oracle and SAP".

He also noted that Technology One is making inroads into the UK market, saying "we're making significant headway in the UK, where we have now beaten our major competitor on five consecutive deals.

"We've signed a number of new high profile contracts in the first half, including University of Hertfordshire and Scarborough Borough Council".

Speaking to Computerworld Australia, Di Marco also called into question Oracle's, and to a lesser extent, SAP's acquisition strategies. "Buying Sun just doesn't make any sense at all," he said, of Oracle's recent decision to acquire the iconic Silicon Valley brand. 

He also called into question the viability of cloud computing in the enterprise space, saying that it was at least a decade away. "It's a point solution — like Salesforce.com — as opposed to an enterprise solution," he said. "There is a minefield of issues for enterprise, such as where the data is, the security and protection aspects of the data in the cloud.

"We simply aren't seeing it as a big thing."

Where it will make inroads, he said, is with early-stage companies that are geographically dispersed and agile. In fact, it's these agile companies, he said, that will come along and out-innovate the incumbent players. Technology is a process of renewal, and the incumbents aren't always willing, or able to take advantage of new technologies or new ideas, he said.

He points to the iPhone as an example; it took a company from outside the telecommunications space to show the big players — Samsung, Nokia and Motorola — that a phone was essentially a software-based device. "And the thing is that something like the iPhone could have been done in Australia," he said. "I firmly believe it."

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http://computerworld.co.nz/news.nsf/mgmt/19EB1EECAA2AB91BCC2575CC000FB792

The Economist | Open Software Firms Flourishing in The Recession

MANY technology firms are floundering amid the recession. But many of the ones that offer services tied to open-source software—free programs written by volunteers who collaborate online—are boasting double-digit growth. Sales at Red Hat, the world’s biggest independent open-source firm with annual revenues of $653m, grew by 18% year-on-year in the first quarter. More and more firms, particularly in Europe, seem prepared to embrace open source (see chart). “Budgets are tight and we think that is good for open source,” said Jim Whitehurst, Red Hat’s boss, when announcing the results.

Indeed, open source is so widely accepted that traditional software firms are beginning to dabble in it, while some open-source firms are starting to sell proprietary add-ons to open-source programs instead of charging to provide support to firms using open-source software. If current trends hold, traditional software firms and their open-source rivals will soon be hard to tell apart. “A new pragmatism is rising,” says Matt Asay, an open-source advocate and an executive at Alfresco, which makes open-source software that helps firms manage digital content.

The “free and open-source software” movement, as it is officially called, has come a long way from its anti-establishment origins. Pioneers such as Richard Stallman did not want users to be locked into monolithic products, but to be able to change programs in whatever way they wanted, and to share their modifications.

For years, this software commons was no more than an obscure sideshow. But then the internet provided volunteer programmers with a way to co-operate cheaply. IBM and Oracle, two industry giants, threw their weight behind the Linux operating system, in part to weaken their rival Microsoft. After the dotcom bubble burst in 2001, many firms turned to Linux and other open-source software to save money.

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http://www.economist.com/business/displaystory.cfm?story_id=13743278

TechCrunch | Salesforce, CRM and Twitter = Service Cloud

Cloud computing and social networks are two of the more powerful movements in the web 2.0 space. So the potential of social media and the cloud integrating is compelling to say the least. Salesforce.com recently rolled out the Service Cloud, a customer service application that tries to capture the crowdsourced pools of knowledge floating across the internet from sites like Google, Facebook and Amazon, and then uses this information to better equip commercial customer service operations with useful knowledge. Salesforce has now connected Twitter to the Service Cloud, allowing customer service reps using the SaaS to access tweets from more than 8 million Twitter users.

Salesforce’s CRM for Twitter allows enterprises to search for tweets about their companies, products and brands. Here’s how it works. First, Salesforce CRM searches within the Service Cloud for any tweets that are relevant to a company. Then, the company can capture and monitor the conversation, creating a database in the Service Cloud that keeps track of all subsequent conversations about the company. The Service Cloud also allows enterprises to tap into company-wide online communities, creates connections to existing social networks and the blogosphere, provides SEO tools, shares the social network knowledge with business partners, and integrates customer service operations into the cloud.

The Service Cloud seems like a useful tool to capture and then sort conversations about a particular enterprise. But what’s fascinating is how businesses want to tap into the dialogue of what’s happening on social networks, like Facebook and Twitter. Social networks are becoming much more than an online gathering of friends; Facebook and Twitter are becoming destinations for ideation, e-commerce and marketing. Its of no surprise that companies want an easy and simple way to capture all of the information that is relevant to their businesses and then leverage this knowledge to improve customer service. As we’ve said earlier, Salesforce has consistently managed to provide innovative, desirable technology platforms for enterprises to merge their business operation with the web 2.0 world.

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http://www.techcrunchit.com/2009/03/22/salesforce-puts-tweets-in-the-cloud/

The Wall Street Journal | Cisco Aims for HP, IBM

In a sharp reversal, Cisco Systems Inc. said its sales have stabilized and the prolonged slump in corporate spending on technology may have leveled off.

For the first time in months, the networking-equipment company's customers "are seeing some stabilization," Cisco Chief Executive John Chambers said Wednesday in a call with analysts. He added that "no one knows how long this leveling out will last or whether it will result in an upturn several quarters from now."

The comments came as Cisco reported a 24% drop in profit and a 17% drop in revenue for its fiscal quarter ended April 25. But the remarks are nonetheless a turnabout from earlier this year, when Mr. Chambers said businesses were increasingly scaling back their technology spending.

Digits

• Cisco on Its Forecast, Telepresence and Competing with H-P and IBM

Cisco is one of the first tech companies to report earnings that include April, and it is widely seen as a barometer for the tech industry. The San Jose, Calif., company was among the first companies in 2007 to say the economic downturn that started with the financial sector would take a toll on tech spending.

Mr. Chambers is the latest in a series of tech CEOs to speak of improvements. Intel Corp. said the PC market had hit bottom during the first quarter, while Cisco rivals Juniper Networks Inc. and Alcatel-Lucent SA recently said the economy is starting to stabilize. In February, Mr. Chambers had said he expected the recession to end in late 2009, earlier than most prognosticators.

Getty Images

For the first time in months, the networking-equipment company's customers "are seeing some stabilization," said Cisco CEO John Chambers, seen at a conference last month.

Mr. Chambers's comments also come as some of Cisco's customers have seen improved performance. Some of its biggest customers are Goldman Sachs Group Inc. and Comcast Corp., which recently announced better-than-expected earnings in what may be a precursor to increased tech spending.

Large businesses "tend to move as groups," Mr. Chambers said during the conference call, adding that many of Cisco's customers that had been focused on cutting costs are just now starting to invest in projects that would require additional networking gear.

The shift was evident in Cisco's month-by-month performance over the quarter. The decline in the number of orders the company received each month in the quarter remained stable compared with a year earlier. In previous periods, the company experienced a greater drop in orders in the last month of each quarter.

Cisco's revenue for the quarter fell to $8.16 billion from $9.79 billion a year earlier. Profit was $1.35 billion, or 23 cents a share, down from $1.77 billion, or 29 cents a share, a year ago.

Cisco said it expects revenue for the current quarter of $8.3 billion to $8.6 billion, down 17% to 20% from last year, but a smaller decline than Wall Street had expected.

Simona Jankowski, an analyst at Goldman Sachs Group Inc., said Cisco's comments on stabilization hold a lot of weight because of the company's global reach, and called the company's month of April "encouraging." She adds that the fiscal third quarter results were "on the surface, better than expected."

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http://online.wsj.com/article/SB124164119922292941.html