The Village View

Thursday, November 30, 2006

Only in Florida

I swear, this kind of thing could only happen in my home state. Not that folks aren't attacked by alligators in Georgia or Louisiana; but, only in Florida would the guy be naked and high.

Occurrences like this are why Carl Hiaasen (love this guy) is able to write such great, but crazy, books. All he has to do is look out the window or read the local paper.

...a naked man slumped over, caught in the jaws of a huge alligator amid thick cattails in bloodied water. He said the man, who had been using drugs and lost a lot of blood, seemed oddly calm....[The man] told deputies he had been smoking crack cocaine at the adjacent park, but it was unclear why he was naked or how he was attacked by the alligator.

MetaSolv sued in bid to block takeover by Oracle

I wonder if this is a question of valuation (Discovery is described as an "investment group"). During the post-announcement conference call in October (it's still on the sell-side analysts didn't sound too happy with the price MetaSolv sold for ($219 million). I just re-listened to the call and picked out these quotes: "Like to have seen a better valuation," and "quite disappointing."

MetaSolv, which makes products for the communications and media industries, said in a regulatory filing that Discovery Partners filed a class action petition charging that the company's directors breached their fiduciary duties to shareholders by agreeing to the merger.

Tuesday, November 28, 2006

The Power of Persistence

So there I was doing my weekly reading of the Sunday New York Times while drinking my cafe con leche from the Dominican place next door ("El mejor cafe con leche de New York" as the sign says). Turn the page and there is a profile on Bill McDermott, President of SAP Americas. I've seen him speak on a few occasions and always walk away feeling good about where I work.

However, it looks like I didn't know the half it. This is pretty impressive as when I was 17, I was bagging groceries. Guess that's why he's the boss.

A delicatessen in town had a help-wanted sign in the window. One day I walked in with the black tuxedo and black velvet tie I wore at the restaurant and approached the owner. I said, “I bring an understanding on how to serve food to your constituents.” I explained what I did at the restaurant, how we had white gloves and were extremely professional. He hired me on the spot.

I ended up buying that delicatessen at the age of 17. I bought the store on borrowed money because I did not have enough.

Monday, November 27, 2006

On Demand or On Premise? How about Hybrid

Nick Carr gives a sneak peek of the McKinsey CIO Survey that will be released shortly. (I actually worked on developing questions for the 2005 version of this survey...ah the memories).

Seems that one of the key takeaways from the Firm's survey is similar to one I had from the Office 2.0 conference.

CIOs are rapidly abandoning the assumption that they should own and control their entire IT architecture. Instead, they're embracing the idea of a "hybrid architecture" that combines components maintained internally with components hosted or otherwise supplied by outsiders. This model, say the consultants, promises to bring greater efficiency as well as greater flexibility - for both IT and the business in general.

Another Oracle Telco acquisition in the works?

Back from Thanksgiving and it looks like Larry is not going to make it a slow week for me (one of the things I do is look at the impact of Oracle M&A activity). If this is truly a billing software, need to understand how it's different from the Portal Software acquisition Oracle did earlier this year. It would also follow on the heels of the MetaSolv acquisition.

Oracle, the US software giant led by Larry Ellison, has held preliminary takeover talks with Intec Telecom Systems, a £100m Aim-listed rival. Charles Phillips, Oracle's president, met Intec's chief executive Kevin Adams in central London earlier this month. Although Intec has yet to receive an offer from Oracle, a potential transaction has been discussed. Intec, which produces billing systems for telecoms companies, has beaten Oracle in two recent competitive tenders.

Tuesday, November 21, 2006 wakes up Oracle On Demand

Following on the heels of's positive earnings announcement (61k net new subsribers, $130M in revenue) Oracle issued a press release on Nov 16, 2006 claiming Oracle On Demand had surpassed 1.7 million users.

Dan Farber of ZDNet does a good job of deconstructing this claim (suprise! it's not quite what it seems).

Oracle issued a press release stating that it has more than 1.7 million users of Oracle On Demand services across more than 2,200 companies. Note that Oracle doesn’t say that it has the 1.7 subscribers.The 1.7 million figure includes subscriptions, managed applications, and software management consulting services.

Rottler defined Oracle On Demand as anything where Oracle has operational ownership for a customer software environment, which doesn’t include any services that the company might provide to customers running their own IT.

The majority of on demand revenue is coming from Oracle-hosted versions of Oracle E-Business Suite, PeopleSoft Enterprise, JD Edwards Enterprise One and World, Oracle Collaboration Suite, Oracle Database and Fusion Middleware, Retek, ProfitLogic and G-Log, as well as consulting services associated with on demand applications.

Previous to this release, Oracle had not done a lot of On Demand messaging (exception being a recent PeopleSoft Enterprise On Demand press release).

Here on are some thoughts on how I saw Oracle's messaging prior to last week's press release:

Oracle had been relatively quiet
  • No mention during earnings call
  • Minimum sales collateral and case studies; mostly qualitative information.
  • Few direct attacks on SAP CRM On Demand

Industry analysts I spoke with noted few claims
  • Not a lot of information or opinion on Oracle On Demand
  • Noted increased Oracle messaging on hosted solutions – branding as “On Demand”
  • Minimal anti-SAP claims heard (This latest press release strikes me as a reaction/attack on [and it's customers and prospects] much more than on SAP)
Minimal press coverage
  • October press release announced “general availability” of PeopleSoft Enterprise On Demand and Oracle On Demand for Siebel CRM
  • First press release in months concerning hosted solutions
  • Last Siebel CRM On Demand press release that I could find was issued in April

Thursday, November 16, 2006

Thoughts on Oracle's Stellent acquisition

For more a more in-depth take, especially around the financials, I'd recommend checking out Jason's take.

Basic Info
Deal Announcement: Nov. 2, 2006
Location: : Eden Prairie, MN (HQ)
Founded: 1989
Employees: 560
Total Revenue: $131M (ttm)

Sub Sector: Enterprise Content Management
Price: $440M

Key Customers: Procter & Gamble, Merrill Lynch, Los Angeles County, The Home Depot, British Red Cross, ING, Vodafone, Georgia Pacific, Bayer Corp., Coca-Cola FEMSA, Genzyme Corp.

Information (data & content) management is becoming increasingly important to enterprise technology customers
  • Regulation and compliance requirements are accelerating the adoption of Enterprise Content Management (ECM) by enterprise customers
  • For ERP users, a content enabled application can save time and effort by improving data and content collection
    • Avoid “data cleansing” issue
  • ECM systems are useful in unlocking and utilization of unstructured data often needed to complete business processes in ERP systems

Products and Services of Stellent
  • Stellent’s Universal Content Management has solutions for document management, web content management, information rights management, digital asset management, records and retention management, imaging and governance, risk and compliance (GRC)

Oracle’s Acquisition Rationale

Increase revenue generated from current Oracle customer base

  • Customer decision makers and influencers of ECM purchase are the same as for other IT infrastructure areas (middleware, databases). Oracle’s existing relationships will ease the ECM sales process
  • IT infrastructure decision makers demand support for true enterprise-wide deployments
  • CIOs want to reduce the number of vendors and are showing a preference to source ECM applications from same provider as infrastructure

Oracle currently has a limited ECM suite, but an integrated platform. Stellent’s suite offering is a good complement to Oracle Content Database and will fill in some gaps in the rest of Oracle’s suite

  • Oracle has a platform for ECM built on the application infrastructure and RDBMS and is integrated with Fusion Middleware and able to leverage team collaboration, BPM and enterprise search
  • Content Services 10g has good Document & Records Management, but is not as strong in other areas of ECM. Oracle was finding it difficult to penetrate ECM market with this offering
  • Stellent has broad ECM capabilities (especially strong in web content management and DM for intranets)
    • Stellent has a compatible J2EE infrastructure and feature set
  • Other IT infrastructure vendors, such as IBM (FileNet), Microsoft and EMC (Documentum) have string presence in the ECM market. Oracle needed to expand breadth of offering in this area to compete

Stellent is a profitable company with a strong customer base

  • Price paid fits with Oracle rationale financially. Oracle can likely justify the acquisition cost given the good maintenance base and high renewal rate
  • Oracle can likely improve the profitability by reducing costs (e.g., SG&A, S&M)
  • By leveraging its sales force, Oracle can increase Stellent sales
    • As an example, Oracle sold more G-Log in one quarter after acquisition than G-Log has sold in the entire year previous to the acquisition
Stellent customers should consider....
  • Oracle has made numerous infrastructure-related acquisitions (OctetString, Thor) in the last year. There is much work to be done to provide a truly integrated solution.
  • Oracle will be primarily occupied with development / integration work around its Fusion project; ECM integration may not be a priority

Wednesday, November 15, 2006

Teqlo developer preview and screencasts

Jeff posted an update on the Teqlo blog yesterday that includes a video with some screencasts. Looks like his team is making steady progress.

Yesterday marked a major milestone for Teqlo, we went live with a preview release....we have 1/2 of the promise fulfilled, that we can reliably render third party services as application components. Next week we will be ready to unveil communication between the components which means the ability to create full fledged applications with no programming required.

Also, here's a video demonstrating how to build (or "assemble") a mash up in Teqlo - in this case, one involving Google and eBay

Monday, November 13, 2006

Web 3.0 - it must be true, it's in the NY Times

Just as we're trying to figure out what Web 2.0, Office 2.0 and Enterprise 2.0 mean, the New York Times informs us that we are actually already living Web 3.0.

goal is to add a layer of meaning on top of the existing Web that would make it less of a catalog and more of a guide — and even provide the foundation for systems that can reason in a human fashion...
Referred to as Web 3.0, the effort is in its infancy, and the very idea has given rise to skeptics who have called it an unobtainable vision...

As the article alludes to this is a rebranding and/or extension of the Semantic Web concept.

Radar Networks' founder Nova Spivack is quoted and pictured. (Radar Networks is funded by Peter Rip -among others- and has AppExchange creator Lew Tucker as its CTO).

Thursday, November 09, 2006

Heard at software conference

What follows are some comments and/or ideas I heard at the Goldman software conference I attended the last 2 days. It’s not complete or exhaustive, just what I wrote down and thought interesting:

  • “Peer review” of open source is less personal, than that which happens within proprietary software companies – it’s generally people you don’t know commenting on your code, and not other developers whom you work with and whose code you also review, commenting on your code. This is one reason that open source code is generally better than proprietary code. -Andre Boisvert – Pentaho, Chairman & Co-founder
  • Haven't seen that the hybrid model of a company offering open source and proprietary products is proven. - Paul Cormier - Red Hat, EVP Engineering
  • Their is a fundamental difference in open source companies that own the trademarks to their code (MySQL) versus those that don't (Red Hat). Important in ERP business to own the copyright to your code. - Several presenters
  • Oracle Linux is not the same as Red Hat Linux. There will be a different ecosystem; uses a different operating environment. Impossible for Oracle to recreate Red Hat Linux product. It's unclear if Oracle will even be able to patch Red Hat versions. - Paul Cormier
  • Oracle can't promise to fix things better (in Red Hat Linux) and stay the same. - Mark Shuttleworth - Ubuntu, President
  • In response to a question from Rick Sherlund about "what was up" with the Oracle/Ubuntu rumors prior to Open World: "smoke screen that came from Oracle." - Mark Shuttleworth
  • Microsoft / Novell deal is a tax on open source software. It's base for innovation and for customers. - Paul Cormier
  • We want to be a big database on the internet. - Marc Benioff -, CEO
  • is going to become the Killer App that becomes a platfrom, like Lotus Notes. - Marc Benioff
  • Strategy is to use platform to expand within a customer. - Marc Benioff

Wednesday, November 08, 2006

SAP NetWeaver Fund Makes Investment in Visiprise

The SAP NetWeaver fund announced a minority investment in Visiprise today. This is the fund's 3rd investment (after Questra - I posted here - and ArisGlobal Holdings). Unclear how much the investment was, but SAP has said previously that investments from the $125M SAP NetWeaver fund would be less than $5M each. Other investors in Visiprise include: Investor Growth Capital , RRE Ventures, Wheatley Partners, Credit Suisse First Boston, Westbury Partners, Morgan Stanley, Canaan, Foundation Capital.

Visiprise, based in Atlanta, makes software for manufacturing companies in the aerospace, defense, and medical industries, among others. It has around 200 customers, including Boeing Commercial Aircraft Group, Northrop-Grumman, and BAE Systems. - InfoWorld

Visiprise had been already been working with SAP in the Industry Value Network for High Tech.

To address the specific needs of high-tech manufacturers, members of the high-tech IVN are initially collaborating to develop solutions around manufacturing execution, product compliance, price management and service parts management.
Driven heavily by customer participation and SAP’s deep industry expertise, these networks bring together customers, partners and SAP to co-innovate and quickly develop solutions to solve industry-specific customer challenges. The solutions developed through these IVNs will leverage the SAP NetWeaver® platform to create end-to-end business solutions while avoiding costly integration projects between software from partners and SAP solutions through the usage of enterprise services. The end result will enable customers to extend and enrich their investments in SAP® solutions, helping optimize asset utilization and lower IT investment risk. - SAP press release

Cognos CEO Rob Ashe speaks

I spent some time at the Goldman Sachs Software & IT Services Retreat yesterday and today. We've been having some BI-related discussions among the Enterprise Irregulars so I attended the breakout session with Cognos CEO Rob Ashe. I'm no where near a BI expert, but here are a few things that I recall that Ashe said that I took note of:

· It's a good market for BI, although it's been a confusing time for customers over the last 18 months. In its market of large mid size and enterprise customers, Cognos has been moving to an enterprise wide sale from a departmental sale. CIOs are starting to look at BI across the entire enterprise

· Result has been longer sales cycles and bigger deals

· Lots of noise from infrastructure players. This makes the sales process more complex. However, it's been mostly noise so far and has not really changed competitive dynamics

· BI customers: 1/3 always buy from ERP vendors, 1/3 never buy from ERP vendors, and 1/3 are competitive

· See mainly Oracle and SAP at the high end (SAP a bit more)

· Microsoft at the deparmental level

· SAP exerts a bit more influence than Oracle

· Business is becoming more seasonal with larger deals becoming more important

· IBM relationship has helped a lot

· Question: How do you backfill and seed pipeline?

· Segment the market and set up Global major accounts

· Average deal - $70K - 100K; good deal - $200-250k; enterprise deals fall in the middle

· Sales reps are compensated not only to bring in the largest deals

· Cognos Series 7 - last in a road of product development

· Cognos 8 - takes us back to the first step in a new multi-year architecture

· SOA from ground up

· Workplace performance application is built off of Cognos 8 backbone

· Will ship a Finance app built on Cognos 8 next year

· Question: is there an On Demand opportunity?

· Big opportunity, with caveats

· If BI were as simple as problems that solves, Cognos wouldn't be here

· BI is very specific to each company

· Not as simple as data collection

· Planning is a good candidate for SaaS

· Two part SaaS strategy

· Partners - 40 OEMs with SaaS solutions

· Cognos 8 can operate in multi-tenant environment

· Bring more traditional On Demand market

· Cognos not currently architected for SaaS (I'm unclear how this reconciles with the above statement that Cognos 8 can operate in multi-tenant environment)

· Question: what can you tell us about the recent cost cutting efforts

· The "action" was executed in a single day

· Targeted at management - 20% of VPs eliminated - goal was to speed decision making

· Teams responded well

· Field didn't miss a beat

· We continue to hire sales reps

· Corporate staff took a little longer to get over it

· Currently 366 sales reps - will be hiring 20-25 in Q4 (unclear if this is a net new number)

· Question: Consolidation in the industry?

· See more tuck-in type of acquisitions instead of major acquisitions

· Big believer in independent BI space

· Specialized

· Diversity of IT infrastructure

· For core ETL Cognos prefers to partner. Doesn't want to go down the stack, but rather "out" - where we can creat value

· Question: how has the deal between Business Objects and IBM affected you?

· Doesn't change our relationship with IBM

· IBM has tried to be neutral

· We knew it was coming

· We are in better position than BOBJ because we have been more focused on IBM software


· 1000 mid-market channel partners

· Reasonable amount of revenue

· Strong interest

· CIOs of SMBs ofter work for CFOs which bodes well for Cognos

· Resources over the last 24 months have been put in Large Enterprise, not SMB

· See Cognos architecture having more of an influence on the high end

· Definition of mid market: $100-500M revenue

· Question: What is the opportunity for independent BI vendors?

· There is such a varied infrastructure that there are companies that want BI from independent vendors

· It's easy to rip BI out, but not to replace. It's reasonably sticky

· Customers will look at new BI vendor when there is an event e.g., upgrade to XI

· When will Cognos end support of older versions?

· Typically end support after 2 years

· Difference between BOBJ and Cognos is that more Cognos customers are on a modern release (Series 7). No big rush to upgrade them because they generate good maintenance revenue

· Discontinue Series 7 in 2010

· Question: How easy is it to recruit sales people?

· Good pipeline of recruiting candidates. Not hard to recruit. Cognos is a very nice sized company and there are plenty of peoplw who want to work for a company of this size.

Friday, November 03, 2006

Thoughts on Oracle's MetaSolv acquisition

Basic Info
Deal Announcement: Oct. 23, 2006
Location: Plano, Texas (HQ)
Founded: 1992
Employees: 438

Sub Sector: Networks and services management software
Price: $219M
Closing: Q4 2006
Key Customers: AT&T, Brasil Telecom, British Telecom, Cable & Wireless, O2, Singtel, Sprint, Telstra, T-Mobile, UPC, Verizon Dominicana, various entities of Vodafone

Relevance of Operational Support Systems (OSS) for Telco
  • Operational Support Systems are network-facing systems that link the business applications (e.g. CRM) with the Telco network infrastructure enabling the execution of key services (e.g. new account activation, billing)
  • Combination of increase in number of telecom packaged service bundles with a shorter life-cycles for service offerings makes “time to service” and “order-to-activate time” increasingly important for Telecom providers
Products and Services of MetaSolv
  • MetaSolv supports network and services management with components for order management, inventory management, service activation, network billing mediation and device configuration management
  • Consulting for implementation and configuration, training and solution support form the service offering

Acquisition Rationale - Provide complete telecom solution

1. Another step in Oracle’s efforts to establish themselves in the Telecom vertical
  • Media & Telecom is the 3rd largest market by IT spend with significant opportunity for consolidation
  • Market size of $6.3B in 2010 (license and custom SW)
  • Carriers are expected to spend more than $10B each year from 2007-2010 in application upgrading (including license, maintenance and services)
  • Fragmented market with top 5 players holding less than 20% market share and no player providing end-to-end offer
  • Oracle aspires to become the #1 player in Telecom vertical with the expectation to reap “extraordinary” profits

2. Offer a complete solution stack for Telecom service providers
  • Oracle is completing its product offering with targeted acquisitions of niche vendors
    • 5 pure play acquisitions (Portal Software, MetaSolv, Telephony@work, HotiSIP, Netcall) in the last 2 years with total M&A investment of $0.5B, plus a share of $0.7B price of Times Ten and $3.6B of Siebel
    • Oracle pursuing an ownership strategy across the Telecom stack in order to reap the advantages of full stack integration
  • Pre-integrated solution will include OSS, Billing and CRM components
    • Will be provided as hosted offering and targeted to smaller 3rd tier providers at first
    • MetalSolv has ~10% market share in OSS and a fairly complete OSS solution, although it was perceived to be less competitive than Telcordia
MetaSolv was not Oracle’s first choice: it tried to acquire Cramer, but lost out to Amdocs

Thought this comment by the 451 group was interesting:
“MetaSolv began shopping itself in early August, after several months of discussions with possible acquirers. We understand it attracted at least one other interested party, although investors would be forgiven if they didn't necessarily see that fact reflected in the price Oracle paid”

I listened to the financial analyst call with MetaSolve after the acquisition and remember one analyst say he was "disappointed" with the sales price.

Oracle on a buying spree

UPDATE: Fellow Irregular Jason Wood posts on the Stellent acquisition, including some financial data (see below).

As if they didn't have enough code bases to integrate, Oracle has announced several acquisitions recently. Hopefully, I'll be able to post something insightful on these over the next couple of days, but for now:

ETL (Extract, Transform, Load) Solution. See my previous blog post.

OSS for Telcom service providers. Operational Support Systems are network-facing systems that link the business applications (e.g. CRM) with the Telco network infrastructure enabling the execution of key services (e.g. new account activation, billing).
Price: $200+

Content management provider (area in which Oracle had been weak) that competes with Documentum and FileNet. See Jason's take here.
Price $440 (cash)

SPL Worldgroup
Described as: "a utility billing and software vendor whose applications include customer care and billing, asset and work management, meter data management, mobile workforce management, outage and distribution management, and enterprise business intelligence."

Wednesday, November 01, 2006

SAP Month of Service

As part of SAP's Month of Service, my colleague Denise Broady and I volunteered at a book fair at Intermediate School 347 in Brooklyn recently. It was lots of fun, and I'm happy to report that under the financial management and sales & marketing savvy of Denise and me, the fair brought in more money than it had on any previous day. (Hey, selling to 12 year olds in not easy).

The pencil has more hair than I do

Minding the till