The Village View

Tuesday, January 31, 2006

You're not going to buy my cheese because of a cartoon?

You've got to be kidding me?!? Don't you think God can take care of Himself and doesn't need anyone running a boycott or recalling ambassadors to "defend" Him? Besides, do you think He really cares?

Unfortunately, the Danes aren't God and so can use a hand.

UPDATE: Now the Danes are really sunk.

IBM joins Microsoft and Oracle in offering free versions of its db

This is probably a good thing for SAP as it provides another non-Oracle db option. However, given that it's "a trimmed-down version of its commercial product, and IBM limits its deployment to two-processor servers," the immediate effect on our customer base is probably minimal. Wonder how/if this would affect the SME market?

The following line from RedMonk analyst Stephen O'Grady was my big take-away:

The real battle here isn't revenue, it's developer mindshare, by leveraging open source, (open-source database provider) MySQL and others have been phenomenally successful at capturing developer mindshare."

Monday, January 30, 2006

I'm in the wrong business!

I've been having a discussion about margins lately with some work colleagues; generally around SAP's efforts to improve them. Mostly moving along the curve stuff. Well, we need to jump curves and move to the soccer ticket broker business. FIFA (world soccer body) charges 100 Euros for a category 1 ticket to a Group game (first three games a country plays). That's 120 bucks. Ok, so those unlucky souls who haven't won the ticket lottery (your humble correspondent included), have the opportunity to buy them through ticket brokers. That same category 1 ticket will cost $614! Given that the brokers get their tickets from FIFA and assuming that this is at less then face price, we're talking margins of 500+%!!!
I'm in the wrong business.

Friday, January 27, 2006 launches AppExchange

I know this is from last week, but i just got to playing with AppExchange this week and I gotta say it's pretty damn cool. I hit the "Test Drive" button on a couple of the apps and checked them out. If I had an account with SFdC (which obviously I don't) I could have logged in and downloaded one. In addition, there are reviews and a 5 star rating system. It's slick and user friendly.

Also, today I had a call with an analyst from Forrester today. She had an interesting insight:
Most of the partner apps on AppExchange bridge functionality gaps in the core SFdC offering. SAP has most of this functionality built into our core product set.

What is cool is that partners can now build apps on the SFdC data model. Formerly, you had to do a data import/export.

Wednesday, January 25, 2006

Would you invest in the next RSS Reader? I wouldn't

I had an interesting discussion today about RSS readers. Some believe that RSS is a “gamechanger” and are thrilled at the number of different RSS readers available.

While I like RSS, I’m less optimistic about the market for the reader applications. Here are my thoughts:

From an investment point of view I think the market is over-saturated with “me-too” companies providing yet another RSS reader. My best count is that there are at least 16 RSS readers out there and it seems like new ones are launching every week. I don’t get this; do we really need 16 different of RSS readers? Is there really a market for that many?
If I were a VC I’d steer clear of this market, with the possible exception of one of the “big boys” like Newsgator (FeedDemon is not bad) who may be a short-medium term acquisition target Note: take this with a grain of salt as I was recently told that I would make a “shitty” VC.

In a few years you’re going to have 1 or 2 major players in this market and maybe a few niche providers. The niche providers will address the needs of the “long tail” and be nice life-style companies bringing in $10-20M consistently; certainly not of interest to a venture investor.
Look at the browser market, to which I see parallels. Currently, Internet Explorer has 83% market share, followed by Firefox with 13% and Netscape with 2%. Why do 83% of internet users use IE? Two reasons: 1) Microsoft’s distribution power (read bundling with Windows) and 2) it’s good enough for what the vast majority of people want to do with the internet. Is Firefox better, more secure, more flexible? Most likely, but who cares? If I’m Joe Internet User in Wichita Falls, I can pay my bills online, check out the newspapers, watch an video and, of course, access my Yahoo or Gmail accounts with very little problem.

How does this pertain to RSS readers?
1) I’m sure I don’t understand all the complexities of RSS and the reader apps, but it doesn’t look that hard. Pretty straight forward, kinda like the browser. Furthermore, while all readers have slightly different functionality, at the end of the day, they need to get you posts from the feeds you subscribe to when they’re updated. I just don’t see that much “must-have” innovation left to do.
2) Microsoft is about to enter the RSS game; Outlook 12 will have the capability.( So I open Outlook to check my email and I can get all my RSS feeds. Why would I open a 3rd party RSS reader when all I have to do is open a folder in an app I already have open and know how to use (ie Outlook)? Now I now that not everybody uses Outlook and that some users will want functionality not provided by Micrsoft RSS Reader, but I think that in the long run, 80% of the blog readers are going to be happy with the functionality that Outlook has for RSS feeds. (Functionality is likely to increase in future releases as well) A similiarly large number are going to balk at learning a new app. Does that mean that Joe VC in the Valley will be happy or Lauri the power Open Source developer in Tallinn content? No, but these guys are the long tail.

Monday, January 23, 2006

Fusion event last week in San Francisco

I attended the Oracle Fusion event last wednesday in the San Francisco City Hall (an amazing building, worth peeking around in). Fyi, my colleagues and I registered fully disclosing our SAP affiliation and using our SAP addresses. We had no problem getting in, which i thought was damn decent of them since SAP is, afterall, an important Oracle partner ( a large % of their db revenue comes from SAP customers).

Here are some links to various write ups on the event (no need for me to re-hash):

Also, below are some of my notes. These are not extremely complete given that they were complementary to a blog post concerning the event on an internal SAP blog.

Chuck Phillips
- Chuck Phillips mentioned SAP by name twice in his opening statement and referenced "the competition" throughout both his speeches
- repeatedly emphasized that the move to Fusion Aps was "no big deal"

- Closing remarks
-- Announced that Oracle is JD Powers' latest certified technology and support company- stated that 1st tech company to have entire global support process certified
-- Innovation: No one else i s both willing and able to make the investment in the next generation solution
--"only one powerful and big enough to do it"

- Few points on Oracle in 2010- the leading On Demand company
-- Software as Service is important to us
-- "more on demand customers in enterprise then any other packaged apps company"
-- more subscription business

Thomas Kurian
- Fusion Middleware
- mentioned SAP 3 times by name
- Fusion Middleware achievements
-- 5 Gartner Magic Quadrants
-- 9 Forrester awards
-- 145 total awards
-- 220 patents

- Reference clients include: Merrill Lynch, Dell, Cisco, Virgin
-- 38 of Fortune 50, 800+ of Global 1000

John Wookey
- Fusion Apps
- 2006 will see first use of Fusion Technology
- Fusion reporting
-- begin delivery of library of Fusion reports in JDE, PS, EBS
-- Publishing of web services repository
-- Extended directory of Fusion services
-- Mapping to current integration repositories
-- Business process flows
-- BPM for Siebel and additional industry solutions

Duncan Angove
- GM of Oracle Retail
- "We acquired solutions that our customers had already embraced and fused them with what we already had"
-- Quoted the Stratoscape numbers from the recent Oracle Retail press release

Phillips closed by saying that Larry had the flu (why did they wait to the end to mention this? one of those sudden onset things?) and by introducing Safra and three board members

What do you do with 72,000 square feet?

Jeff blogged about Workday last week. And while I don't have any real insightful thoughts on that yet, I did come across this article on Peoplesoft and Workday founder Dave Duffield. Among other things the article mentions that Duffield evidently wanted to build a 72,000 square foot house in Alamo, CA. However, after protest from the HOA he "scaled back" to 21,000+ square feet.

My question (and keep in mind, I live in Manhattan): what do you with all that space? Now it seems he has 6 kids; so if all kids lived with Duffield and his wife, that would be 9k sq ft per family member. That compares to a US average of 2266 sq ft per house and 872 per family member. A Duffield kid would have gotten 10X the space of a "normal" American kid. In the reduced version of the house, they will "only" get 2,625 each. Well, they probably have a lot of toys.

Thursday, January 19, 2006

Why IBM embraces blogging

"First, it is important for any company to understand and participate in such an important market trend, something made easier if you have your own people actively involved in the blogosphere; and second we believe that IBM's open attitude toward blogging helps us attract and retain top talent." (from Irving Wladawsky-Berger's blog - Irving is the Vice President, Technical Strategy and Innovation at IBM)

Also check out IBM's blogging Policy and Guidelines

My boss, Jeff Nolan, has been pushing the idea of social media (blogs plus more) at SAP. I would be curious to hear what the state of blogging is at your company.

Oracle makes two acquisitions in Retail sector

AMR Research analysis
Line 56 article

Oracle has plugged the holes in their enterprise retail solution. Today's annoucement of 360Commerce was largely expected as Oracle lacked a POS and SAP earlier acquired Triversity (perceived as the other major player in the category). For Oracle to compete effectively with SAP, it will need to continue to build out the functionality(especially in Temposoft) and rationalize and integrate the code bases.

Oracle views India as more then just a place to offshore, empasizes SME market

Indian Express story
Mercury News

Oracle plans to add 1,400 employees to its sales, consulting and support operations in India as it focuses on expanding business among small and mid-size companies in the country's towns and rural areas, a company executive said Tuesday.

Can the tech industry take a page from Henry Ford's playbook: by investing in India will US/European tech firms help spawn a larger, healthier mid-market and thus help "create" (or at least expand) their own potential client base? The NASSCOM-McKinsey report (2005) estimates that over half of Indian IT outsourcing revenue will be from the SME segment by 2008. Currently, less then 15% comes from SMEs.

At the very least, this move is recognition that the Indian market is an important domestic market for software products and services and not just a place to develop and support software.

Waterloo gets Googled

Google Inc. has quietly established a growing foothold in Waterloo, Ont. -- the home of Research In Motion Ltd. -- following the stealth acquisition of a wireless startup last summer, as well as plans to staff up a recently established research and development facility.

When I interned at a VC firm while in business school, I used to cold call a lot of small software companies in Waterloo looking to source deals. My assumption was that they were generally being ignored by many US-based VCs. My colleagues and bosses ribbed me about my Canadian "fetish." I gotta say that this article makes me feel a bit redeemed.
As the article illustrates, Waterloo has a a critical mass of high quality, educated (and English speaking) software engineers. Salaries and other development costs are in Canadian dollars (1C$ = 86 US cents) and the Canadian R&D tax credits are slightly more generous then the US ones. See Deloitte's explanation of both:,2307,sid=16190&cid=52649,00.html

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