Microsoft/SAP need to become phoenixes – part 3

by admin on April 12, 2007

in Innovation

In this last part, I’ll look at how one company is changing the game, how I missed it and why it’s relevant. Earlier in the week, Salesforce.com announced it acquired Koral. I had an opportunity to go on a call with SFdCbut passed. Big mistake. The reason I passed was because I could not get my head around the significance of the announcement and did not see it in the strategic terms expressed by SFdC. Fortunately, I’m part of a community that is tolerant of folk like me and Jason Wood helped me understand the importance:

SFA apps (Salesforce included) are used by reps because they’re EASY…Koral, similarly, makes things like versioning EASY. How many times has someone saved a document and forgotten where in the file system it’s located? So you open one locally or a version that was attached to an outbound email and resave it. Now what if that’s a spec sheet for a product? Or a boiler plate contract? Or a marketing document? You’re now using a document that’s not the “official” version and in many cases isn’t up to date. Koral solves that, and does so in a way that requires no thinking.

In my example, if you try to save the document, it’s got a coded alert which will tell you if this is the most up to date version. You have to opt out of receiving and viewing the most recent version. You have to make an explicit choice to branch off your version of the document from the root. That’s POWERFUL.

I sent this announcement to three buddies, all are reps at ERP firms, all three gushed and wondered why they don’t have something like it.

I could not see the link but once it was explained in terms I can understand then other things started to make sense. But without the conversation, I might well have rested in blissful ignorance. Crucially, SFdC understands customer need equally as well as the intermediary customer obsessed vendor – in this case Koral. Both are innovating. This is not some virtuous circle but a community network at work. Now let’s look at Microsoft and SAP.

Microsoft’s version of community

Microsoft has 95% of its business with channel partners. It wouldn’t know a customer if it slapped them in the face. With ONE major exception. Convergence. That’s the place where Microsoft’s $1 billion (i.e. fleabite) community of business applications customers and resellers meet. 8,500 in San Diego. And if my experience is correct – they are happy customers.

The channel thinks it owns the customer relationship. Customers talk about Microsoft products. You figure the confusion there. So how does Microsoft respond to these customers in an effort to start conversations and put itself in similar shoes to those worn by SFdC? Check out the Microsoft Dynamics Live community and in particular, the blog section. Notice the very low number of page views and comments. Look at the quality of information. Note how it is almost exclusively US centric.

The good news is that Microsoft has Hugh MacLeod on board as a change agent. I really hope that Hugh is able to go beyond talking to geeks. I hope he’s able to reach out through to those users who are hearing the services siren call and get those conversations aligned to the channel. In turn, I hope he’s able to wake the channel up to the challenges it faces. Microsoft may think that for every $1 of Vista, there’s a $13 partner opportunity but I’m far from convinced.

SAP’s business and geek networks

SAP has SDN. This is a thriving community of developers. They’re passionate about code. IMO a few at least are in the wrong place. I’ve previously mentioned Eddie Herrmann and Dan McWeeney. I’d also count Craig Cmehil. These guys are geeks but they understand making a difference to business. They should be on the business side of the house with firm links to the code warriors. The reason for that while SAP has a business community, it is a million miles away from the goodness you see at SDN. What SAP is doing is demonstrating a massive commitment to engineering. Not people.

SAP may have James Governor in the not too distant future. That’s a very good start. But it doesn’t compensate for the need to reach CXOs who are not where edge folk like he is. Along the way, James will inevitably be faced with having to tussle with guys like Jason Busch, Brian Sommer and, of course, Vinnie Mirchandani. In a straight intellectual scrap, I reckon those guys have the edge. Should he even try? No. Instead, SAP should be listening carefully to what these folk say instead of relentlessly defending their business models. Of course SAP must defend itself. But do it from a position of customer focused intellectual high ground. Get those conversations going.

Bottom line?

The only remaining question then becomes whether Microsoft and SAP can successfully undergo a cultural shift so that they start to win the battle for ideas. I don’t know the answer though my gut says Microsoft, no – SAP, maybe. In the meantime however, I’m not going to bet against either. They may each have enormous challenges. But they each have incredibly deep pockets. In a war that is set to rage for the next few years, those war chests will be needed. To come through as relevant, credible and invigorated, they both need to step into the phoenix fire.

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Hey Craig - check this pic out at Flickr. This was taken at an SAP event.

Dennis - Thanks for the interesting post and the positive words on the Convergence event which my team runs. As it happens the very same team is also behind the Finance community you mention. In the same way we grew Convergence from 100 attendees to nearly 9,000 over the last few years we are very committed to building a vibrant online finance community but recognize this will take time. Today this effort is in its infancy with our beta site having been online since March 12th only. We have been running it in a skunk works fashion initially with a small number of users to collect and incorporate feedback on what users would like to see there before a broader launch. We are now in the process of building out these enhancements and getting relationships in place with external content providers. Our goal is to have this work finished for the launch of Microsoft Dynamics GP 10 in the summer. This product is the first to ship with a direct link to the community built right into the user experience. We are planning over time to build this same level of community integration directly into all our Microsoft Dynamics products and expand to support additional roles outside finance. Early days I know but we have big plans and huge enthusiasm for bringing the benefits of online community to our users and bringing the spirit of Convergence online 24 x 7. As an experienced blogger and industry expert we would also welcome your participation so feel free to join the community and help us build it!

Thanks for dropping by Eddie - perhaps what IT needs to do is demonstrate it can be a value centre rather than a bunch of cost driven plumbers.

Nice series, D.

I believe the overall disconnect from the business stems from the disconnect of IT/IS departments in general. IT shops are cost centers and their focus is on lowering costs of their own operations; they have indeed lost focus on what is most important: "making a difference to business". Instead, it ends up being a question of "How can we do what the business is making us do, while doing it as cheap as possible and without increasing our TCO?" While this may make sense from a cost perspective, there is no incentive to go above and beyond; there is no push for real innovation.

-ewH

Here is another trackback from SDN:
SAP needs to become a Phoenix?

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