Saturday, March 24, 2012

Tech Vendors: Not All Bad, Not All Good

There’s something I’ve noticed over the years that bothers me. That is, the tendency for industry observers to take unqualified positions for or against certain technology vendors. My feeling about this runs deep, so, hopefully, this post will help others understand why I sometimes react the way I do in my comments on public forums such as Twitter and blog comments.

No technology vendor is 100% “good”—there is always at least something that is not so good. Likewise, no vendor is 100% “bad”—there are always positive attributes. But with some commentators, certain vendors can do no wrong and other vendors can’t do anything right.

If you are someone who always rises up to defend certain vendors, it makes me question your objectivity. This is especially true if you have some sort of commercial relationship with that vendor, whether it is advisory work you have done for them in the past, former employment, or some other connection. But in other cases, even without any commercial relationship, it appears some simply have favorites.

Likewise, if when you hear a positive report about a vendor, you cannot help but criticize, I also question your objectivity. I’ve said in the past, if you can’t say something bad about a vendor, don’t say anything at all.

Now let’s get specific and look at some examples of what I mean.

Apple

Apple is at the top of its game these days, and nowhere is there more unabashed enthusiasm. By market capitalization, Apple is now not only the largest technology vendor: it is now the largest company in the world. Over the past several years, Apple has disrupted entire markets (e.g. music and smartphones) and it has created entirely new ones (e.g. tablet computers). It popularized the concept of an “App Store,” which now everyone is imitating.

It wasn’t always like this. Many of Apple’s most devoted fans are too young to remember a time when Apple nearly failed. It fired Steve Jobs and many were calling for Apple to license its Macintosh operating system to other computer makers—in other words, to imitate Microsoft. Thankfully, Jobs came back, and Jobs had his own ideas. Today, 16 years later, Apple is going from strength to strength. I admire Apple.

So, can Apple do no wrong? Just consider Apple’s business practices that at least border on, if not cross over into, unfair competition. For example:
Just substitute the name Microsoft for Apple in the above bullets and imagine the media reaction. But because Apple is “cool,” Apple gets a pass.

Microsoft

Microsoft is the technology firm that many observers still love to hate. Years ago, with a near-monopoly in desktop operating systems, Microsoft faced relentless attacks from media, governments, and competitors. Apple’s desktop market share remained tiny, except in a few markets, such as education and graphic arts. Linux showed promise, but never gained traction as a desktop OS.

Microsoft still has a dominant (though less so) position in desktop PCs. Its developer tools are widely adopted, and its position in the data center continues to grow. It’s also had success with its game platform. But in the biggest growth markets—mobile and cloud applications—Microsoft lags industry leaders, such as Apple and Google. In other words, Microsoft continues to hold a dominant position in slow growth markets. The Microsoft haters see it as justice served.

I am neither a Microsoft lover nor a Microsoft hater. In my view, Microsoft Windows and Office are bloated and difficult to use (one close family member still doesn’t understand the right mouse button). Windows 8 doesn’t look to be an improvement either.

On the other hand, I feel some of the criticism that Microsoft receives today is undeserved. Merely mentioning Microsoft to some analysts provokes a visceral response, almost revulsion. Yet, in some respects, Microsoft is starting to become the “good guy.” In terms of privacy, I am much more comfortable using Microsoft’s Bing search engine than I am in using Google, who I fear is building a personal dossier on me. Microsoft’s Dynamics line of enterprise systems have good functionality and user adoption.

So, with Microsoft, I see some “bad,” but I also see some “good.”

SAP

SAP is a vendor that many in the enterprise software market love to hate, and I stand as second-to-none in terms of my criticism of SAP. Go to my blog, The Enterprise System Spectator, and do a search in the right hand column on SAP. To save you some time, here are some examples: my mocking of SAP for whining about price cuts; my post after post after post criticizing SAP's maintenance fees; and my hammering of SAP for fighting third-party maintenance at the same time it was offering 3PM to Oracle customers.

So, is SAP all “bad?” Certainly not. I have interviewed SAP top executives, its CEOs, and some of its board members. I can say, without a doubt, that SAP’s leaders care about its customers and that they struggle to find new and better ways to improve business value. They recognize that the TCO of their Business Suite is too high. They know that cloud providers such as Workday and Salesforce.com are eating their lunch. They also recognize that mobility apps are essential and are trying to turn the ship to provide better support for small developers. Finally, they used a skunk-works approach to develop an in-memory computing technology (HANA) that could potentially disrupt the relational database market and transform many business applications.

Will SAP be successful on any of these initiatives? Who knows? But with the largest installed base of any enterprise system provider, I hope for the best—not for the sake of SAP or its shareholders—but for the sake of SAP’s customers.

Oracle

Here’s a vendor that is hard to love but deserves respect. Once again, I stand second-to-none in my criticism of Oracle. Over the years, I’ve written about Oracle's excessive margins on software maintenance; the unhappiness of its installed base; its penchant for creating fear, uncertainty, and doubt; its mockery of its competitors; and its lack of openness.

On the other hand, Larry Ellison is a visionary. He had the foresight to be a large early investor in Salesforce.com and NetSuite long before cloud computing was fashionable. Apparently he knew he was better off making those investments in start-ups rather than trying to develop cloud applications within Oracle, where they would likely lack focus.

Furthermore, around the turn of the century Ellison saw that the enterprise software marketplace was fragmented and overdue for consolidation. Then, he acted on that insight and took advantage of it. I predicted that Oracle’s bid for PeopleSoft would fail, but I was wrong.

In terms of execution, Oracle is nearly flawless. I might mock co-CEO Safra Katz's comments on conference calls, but I have heard Oracle employees praise her ability to get things done.

Finally, on the technology front, I personally know individuals working in Oracle product management. They are some of the smartest people I know, and they are going deep into certain industry sectors. Oracle’s latest product, Fusion, might just be the last great new on-premise enterprise system ever to be developed. From the little bit I’ve seen of it, the user interface is outstanding and the embedded collaboration and business intelligence capabilities are noteworthy. I also like what I hear about Oracle’s public cloud initiative, although I’m waiting to see how it plays out in terms of pricing, terms, and conditions.

Cloud Vendors

Now we come, not to one vendor, but to a whole category: cloud providers. I am a huge proponent of cloud computing. In 2006, I wrote a report for Computer Economics on the business case for software as a service, and in 2009 I wrote of the inexorable dominance of cloud computing.

But as I’ve said in the past, “You don’t get a pass, just because you’re SaaS.” The technology is one thing, but the vendor’s behavior is another. Yet, some industry analysts cannot seem to bring themselves to criticize certain cloud vendors. Why not? When vendors misbehave, do they not deserve to be called out, or is cloud a get-out-of-jail-free card? Many of the executive leaders at NetSuite and Salesforce.com came out of Oracle. Do you think that background and experience have any influence on how they do business in their current positions? If you can criticize Larry Ellison for unfairly bashing the competition but you can’t criticize Marc Benioff for doing the same thing, then I have to question your objectivity.

This is by no means a complete list. I could go on with IBM, HP, Amazon, Infor, and many others. None are all good, and none are all bad.

Let's Be Fair

In some ways, the situation is like our political scene. Over the years, political discourse in the US and in other parts of the world has gotten more and more polarized. A political leader from “our side” must be defended from all attacks. Likewise, a public official from the other side of the aisle can never do anything right. What matters is not what is said, but who said it. This is wrong. It shouldn’t be this way in political discourse, and it shouldn’t be this way among industry observers.

Now, I accept that a vendor’s own employees and business partners may take strong unqualified positions, especially those in a sales, marketing, or top management role. But I don’t think it’s appropriate for those of us that advise technology buyers to be uncritical fans or relentless critics.

This doesn’t mean that when it comes to specific situations we shouldn’t take a position. Buyers do need us to say, “For this particular need, this vendor is good and that vendor is not good.” We have to make the tough calls. There have even been times where, because of problems with certain vendors, that I have refused to consider them in any new deals. But I try not to become hardened in my viewpoint. I try to always hope for improvement.

We all have our biases, including me. But can we all make an effort to recognize them and try to be fair?

2 comments:

Vijay said...

A very timely blog, Frank - thanks for posting it. About a year ago - I posted my thoughts on a similar topic - the bias of people who comment on enterprise software http://scn.sap.com/people/vijay.vijayasankar/blog/2011/03/28/let-he-who-is-without-sin-cast-the-first-stone

I have no problems in admitting that I have a soft spot for IBM and to a slightly lesser degree for SAP, and it is evident in my blogs and tweets. I make an effort to be objective to the extent I can - and within all my limitations , I try to offer an opinion that might be helpful to readers.


Vendors have always liked to buy influence - and seem to have succeeded to some extent. So instead of rival vendor's employees fighting it out - we now see several influencers fighting by proxy. Much to my own dismay - I have not always succeeded in staying on sidelines when I see unfair comparisons, and have jumped in with both feet and all my bias :)

Frank Scavo said...

Vijay, thank you. I had not seen your SCN post when you wrote it, but I would encourage everyone to read it. It does provide a view complementary to mine.

http://scn.sap.com/people/vijay.vijayasankar/blog/2011/03/28/let-he-who-is-without-sin-cast-the-first-stone

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