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Clash of Titans

Following all those announcements of AI, machine learning, IoT, IaaS, PaaS and what not over the past months, I was beginning to wonder where the big business software vendors are going. What is the game plan of Microsoft, Oracle, Salesforce, SAP? How does newcomer Adobe fit in there? Maybe Amazon and Google, too; or Facebook. It is a time for another Quo Vadis – this time: Quo Vadis, industry?

Clash of Titans

In the last about 2 – 3 years we have seen a strong acceleration of innovation, or at least talk about it.
-       Cloud computing, offering nearly unlimited scalability and elasticity of computing resources has become main stream. Cloud computing also allows for nearly 100 per cent uptime
-       Since the advent of the iPhone (yes, I know this was earlier than 2013) the proliferation of sensors has increased a lot, resulting in them becoming cheaper and cheaper, allowing for an increasing number of data rich applications
-       This has also driven fast mobile connectivity, which has become nearly ubiquitous; maybe except a few blessed spots on this planet, which will be covered soon, too. Think of Google’s Balloon project or Facebook’s drone
-       Memory has become dirt cheap, and fast
-       In-memory technologies, No-SQL databases, Hadoop, Spark, and improvements of analytics algorithms make it possible to work with huge sets of data in real time
-       The (re-)emergence of AI technologies, progress in machine learning and deep learning, enabled by the now available computing power, help in pattern recognition that allows machine driven suggestion, prediction, and prescription of actions, based upon huge amounts of data
-       Data, be it machine-generated or human created in social networks, communities, business applications, etc., along with analytics and algorithms on it have become the fuel that drives businesses
Are some of these topics on the peak of inflated expectations? Clearly so. But Gartner estimates that they are maturing fast. What is clear to me is that these advances have created something akin a clash of titans.
Effectively, after the cloud war we now see a heated platform war.
So how does this clash affect the dominant software vendors – and how are they positioning themselves?

SAP

Let me start with the company I know best. SAP has its roots in enabling the corporate back end with their ERP solutions. From there on they moved on to “New Dimension” products like SCM, APO, CRM, BW etc., supporting many, many processes around the business core. In essence SAP has become the company that a business can be run on. SAP was/is the company that connects businesses with their stakeholders, internal ones as well as external ones. The company supports nearly all relevant industries, but still has a core in the manufacturing industries.
SAP also over the years has become a very strong eco-system player.
But now there is more to it. With HANA as an in memory database engine SAP now has become a technology vendor, too – again. And on top of HANA there is the HANA Cloud Platform (HCP) with an increasing number of services that it supports and which is a key component to their strategy. Notably, SAP does not talk much about AI and machine learning, nor about social media – or their possible acquisition. Instead SAP is focusing its messaging on their core and the Internet of Things, and there predominantly the Industrial Internet of Things.
SAP aggressively builds outcome-focused business applications on top of HCP and also with some success invites everybody to build business applications using HCP. In their words they want to connect the enterprise with the world.
From an infrastructure point of view SAP pursues a multi-ecosystem approach by supporting AWS, Azure, and their own cloud services.
Given all this it appears that, coming from the strong installed ERP base, starting from the back office and from the Industrial Internet of Things, SAP wants to become the platform of choice to be the fabric that connects businesses with their stakeholders, as a key member of their ecosystem.

Oracle

Oracle comes from a slightly different angle. They are also supporting a full stack of business applications. They have started from the database side and from there entered the business applications world, mainly through applications, but then evolving their own Fusion application world. Oracle is not as much an ecosystem player as SAP, but concentrates on the own infrastructure services, including data centers and servers, and, of course, on the leading DBMSs with the Oracle DBMS and MySQL. Oracle is also not that much of an applications ecosystem player as SAP is. The messaging lately appears to be less around the Internet of Things but more about AI and machine learning, intelligent applications, as they name them. With the IaaS announcements Oracle is squarely aiming at AWS, even ignoring Azure.
Oracle, of course, too, want to become the fabric to connect enterprises and their stakeholders. Same overall goal as SAP has, but catering to their own strengths, which are a bit more towards the infrastructure side than SAP’s.

Salesforce

Here again I see a strategy that is similar to the one of SAP. However, Salesforces starting point are customer facing applications. Salesforce is not an ERP company, but by origin, a CRM company. Similar to SAP they are strong on ecosystem, but are less inter-ecosystem than SAP and more into buying than partnering. From an infrastructure point of view, they are strongly using their own data centers and only recently announced a deepening partnership with AWS. From a data point of view, they naturally lean towards AI and machine learning, although Salesforce has its own IoT platform. This can also be seen by the fact that they hired Bob Stutz as CEO of the analytics cloud, who just recently delivered Einstein, Salesforces AI platform. Their focus is customer facing- and sales-enabling data, with them having a strong stake in Inside Sales, and having had a very strong interest in buying LinkedIn and now rumored to be interested in acquiring Twitter.
Again, same overall destination, different strengths, so a slightly different starting point.

Microsoft

In my eyes Microsoft is the 800-pound gorilla in this game. They seem to have a bigger goal than the three other big ones. They want to become the fabric that connects enterprises of all sizes with their stakeholders, including the consumers’ personal lives. And they have all ingredients for it. With Dynamics they have a strong business applications suite. It is overall probably not as strong as SAP’s or Oracle’s but from the CRM side it is absolutely a leading one – except of marketing functionality, which I will have a word on later. They have strong database engines and a strong IaaS platform, probably the only one that near term can get close to AWS. They own strong IoT- and AI/machine learning platforms. And they have recently acquired LinkedIn, which offers very interesting synergies with Dynamics CRM, in the sales and marketing areas, and also as a training ground for their AI systems. They, too, have a strong stake in Inside Sales, just like Salesforce.
On top of this there is Office365, the leading productivity platform. This gets topped up with the leading identity management system, Active Directory. On the business applications side they arguably only miss an e-commerce solution.
And this business software side is about to get integrated into one single offering Dynamics365.
But Microsoft doesn’t stop here. Microsoft is also one of the leading players in the consumer market, offering the most widely used operating system that includes smartphone support and a strong search engine.
Ecosystem wise they are a strong player, actually the player that is most versed in ecosystem play. With one exception, and that is Azure. Microsoft naturally does not have much inclination to have its business applications run on AWS. It is possible, though, but the cloud versions of Dynamics are Azure.
Microsoft’s origin is with consumer software but right now they are in the admirable position of being able to combine business customer data, consumer data, and business data, leveraging their AI offerings. IoT seems to play a secondary role for them at the moment.
If I were one of SAP, Oracle, Salesforce, I would be outright scared.

Now, Who Else?

There are a few other companies around with big stakes, like IBM, Amazon, Google, and a few more. And then there is Adobe, the rising CRM star.

Adobe

Let me start with Adobe. Adobe and Microsoft just entered a strong partnership that in my eyes benefits Microsoft more than Adobe. Of course they have partnerships with SAP, Oracle, and Salesforce, too, but this one is a landmark as Microsoft so far had a distinct weakness in the marketing arena.
Adobe, with its origins in the graphical and Internet content sector a year or so ago popped up as a marketing technology vendor – and thus smack in the CRM arena. So far my impression is that they have a focus on the intersection of business and customer, be it B2B or B2C, but somewhat leaning towards B2C. Borrowing the ‘customer experience’ definition (read this article, it is more than worthwhile) of friend and CRM god father Paul Greenberg they want to positively influence “how a customer feels about a company over time” by consistently enabling positive (consumable) experiences. In my eyes every experience with a company is consumable and every single one vastly contributes to a customer’s feeling about a company at any given point in time.
I think they will either continue to be a cross-ecosystem partner or be plucked by one of the dominant platform players. And at this point in time this is rather Microsoft than any other.

The ‘Rest of the Pack’

This covers Google, IBM Amazon and Facebook; Google and IBM being somewhat in the business applications play as well, Google and Amazon being strong infrastructure players.
Let’s start with IBM. IBM sells the servers and services. They are also invested in SugarCRM and with Watson have one of the strongest AI’s around. When it comes to an IoT platform, theirs is mainly a concept, an architecture.
Amazon owns with AWS the strongest IaaS platform around. Having started from their own needs they have created a market and offer a vast array of services that business application vendors can use, including strong database-, IoT- and AI services. Their platform is open for whoever wants to use it, which makes them a strong player in the market.
Google is a hybrid. They are strong on infrastructure, including services for database, IoT and AI, but they also offer a competitive suite of productivity applications and are increasingly interested in business applications.
Not to mention the data coming out of their search and advertising business; and from Android. When it comes to intelligence about consumers and the ability to turn data into insights they are probably the dominant player in this group, closely followed by Facebook – for the moment.
Facebook, too, sits on a ton of actionable data that they can utilize and sell. Facebook is about to enter the business productivity market with their ‘at work’ product. In contrast to Google they do not offer their platform for other companies to run on and are a walled garden as opposed to the open ecosystem that Google runs.
Don’t forget about these four.

Famous last Words

The big 4.5 are on a collision course with, in my eyes Microsoft currently having an edge because of their sheer strength, including very deep pockets. They are followed by SAP due to their strength in business applications, their strong ecosystem approach, and their focus on the Industrial Internet of Things. Salesforce comes from the customer side of the house and Oracle in my eyes looks at the wrong game at the moment.

But then everything is fluent. There are additional players in the game and small companies can thrive in the gaps between these players. Until too much consolidation happens this is a good time for them and for the customer experience.

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