Gary's rant: an analysis

by admin on April 14, 2010

in General

Gary Turner, MD Xero UK went on something of a rant with this post: When black and white makes grey. Knowing the man as well as I do, he must have been REALLY ticked off if he felt the need to pen such a piece. In it he berates the on-premise (Fear, Uncertainty and Doubt) FUD that dominates on-premise marketing and takes a pop at his old employer Microsoft. Some of what he says are classic Turnerisms:

…after speaking with someone today who was just totally bewildered after having spoken with a classic software vendor about pseudo-hybrid-virtualized-models and rinky-dink cloud versions of CD based software apps, I could no longer contain myself and I decided that it’s time for some inconvenient truths about the future of the software business.

Oh-ho…Welcome to the world of FUD. So what next? Among other gems:

When software executives talk apparently with conviction and authority (they’re technology experts, right?) about hybrid models, the ‘best of both worlds’ or cloud apps being a trivial ‘souped-up’ way of describing good old fashioned software that’s only different because it’s accessed over the internet instead from your hard disk, then in my view they cease to hold the right to call themselves software executives. They’re just executives.

You’ve got to admire the scything action even though I think in his last sentence Gary was being more than kind. Executives? More like droids. But then we see the frustration:

Customers look to our industry for guidance, help and for people in which they can place their trust. And so it really gets my goat when some of the so-called technology advocacy coming out of established software businesses deliberately compromises that relationship in favour of protecting their own businesses ahead of those of their customers.

I hear what Gary is saying and his points are valid. But as I was discussing software vendor marketing with a buddy of mine earlier in the day I said there is a reason why these companies spend 40-50% of revenue on marketing. Because they waste 30-40% of their effort. SaaS is no different. There have been way too many examples of SaaS companies providing the kind of ‘guidance’ that could only ever be understood by geeks and bore little relationship to what user organizations need to understand and know. Earlier in the post, Gary talks about his passion for selling accounting solutions. That’s to be admired in any salesperson.

In many tech companies there is a pernicious variant of that passion – love of the technology. I see it all the time and it blinds salespeople to addressing the customer reality. As a side issue it often blinds development organizations and CEOs into believing that the only technology that matters is the stuff they build. What is known as the ‘Not Invented Here’ syndrome. It is stifling to innovation and leads to many blind spots. Now for the good news:

In Gary’s rant he says:

I usually prefer to take the high road and let our success do the talking

Yes – that’s the way but success is not measured by the company but by its customers. That’s why at every turn I will say to vendors: ‘let the customer speak.’ It’s the cheapest yet most effective form of marketing known to man because when push comes to shove: customers buy via other customers. They don’t buy FROM the vendor. That’s tough if you’re a tiny start up with few customers but it is those early adopters who have taken the vendor on trust and not a little faith who are the most valuable assets.

There is a new twist on that. In recent times I have heard an increasing number of other analysts say to me: ‘I’ll look at that because you’ve said it is good.’ That’s an interesting phenomenon. This is something the vendors cannot do. So while I praise Gary for his ‘high road’ approach, I’ll argue that other constituencies are setting the buyers’ agenda. Work with those people and communities or continue to pour money down the marketing drain. It’s the vendors’ choice.

Comments on this entry are closed.

DavidTurner_UNIT4 April 14, 2010 at 7:17 pm

No-one, not even Gary can predict the future. In the meantime organisations, particularly medium and large ones, have to work with the software and infrastructure that works for them. That’s a reality and in most cases that means a mix – cloud vendors CANNOT fulfil all the requirements of larger organisations or government bodies right now and it will be some time until they can – if at all.Of course we, like Gary, are going to market a message that’s favourable to our business just as Gary would have promulgated the ‘Software plus Services’ message he now criticises, when he worked for Microsoft. But that doesn’t mean the message is wrong or that the individuals don’t believe in it. At UNIT4 we offer a full choice of application delivery ranging from pure cloud-based, multi-tenant SaaS to on-premises ERP and everything in between. We do that because it is what customers want. We are not talking about hybrid just because it's what we developed, we are responding to what customers demand – every client is different, with different business needs and ways of using technology to fulfil those. Our friends at Xero are limited to offering online accounting and we wish them all the best. But like most cloud vendors they can’t meet every organisation’s requirements and shouldn’t pretend that they can.”

Anonymous April 14, 2010 at 4:17 pm

No-one, not even Gary can predict the future. In the meantime organisations, particularly medium and large ones, have to work with the software and infrastructure that works for them. That’s a reality and in most cases that means a mix – cloud vendors CANNOT fulfil all the requirements of larger organisations or government bodies right now and it will be some time until they can – if at all.

Of course we, like Gary, are going to market a message that’s favourable to our business just as Gary would have promulgated the ‘Software plus Services’ message he now criticises, when he worked for Microsoft. But that doesn’t mean the message is wrong or that the individuals don’t believe in it. At UNIT4 we offer a full choice of application delivery ranging from pure cloud-based, multi-tenant SaaS to on-premises ERP and everything in between. We do that because it is what customers want. We are not talking about hybrid just because it’s what we developed, we are responding to what customers demand – every client is different, with different business needs and ways of using technology to fulfil those.

Our friends at Xero are limited to offering online accounting and we wish them all the best. But like most cloud vendors they can’t meet every organisation’s requirements and shouldn’t pretend that they can.”

dahowlett April 14, 2010 at 4:56 pm

Fair point David. Where I think Gary draws the distinction is with those vendors that persist with FUD around cloud computing, something which I see on a daily basis. The ‘what customers need’ argument is something I find difficult at times. How does the customer ‘know’ if they’re confused – as was Gary’s contact on this occasion?

As I said, the industry does itself few favours and it will be those that potential buyers trust most who will have the sway. Most likely among peer groups.

dahowlett April 14, 2010 at 7:56 pm

Fair point David. Where I think Gary draws the distinction is with those vendors that persist with FUD around cloud computing, something which I see on a daily basis. The 'what customers need' argument is something I find difficult at times. How does the customer 'know' if they're confused – as was Gary's contact on this occasion? As I said, the industry does itself few favours and it will be those that potential buyers trust most who will have the sway. Most likely among peer groups.

DavidTurner_UNIT4 April 14, 2010 at 4:17 pm

No-one, not even Gary can predict the future. In the meantime organisations, particularly medium and large ones, have to work with the software and infrastructure that works for them. That’s a reality and in most cases that means a mix – cloud vendors CANNOT fulfil all the requirements of larger organisations or government bodies right now and it will be some time until they can – if at all.

Of course we, like Gary, are going to market a message that’s favourable to our business just as Gary would have promulgated the ‘Software plus Services’ message he now criticises, when he worked for Microsoft. But that doesn’t mean the message is wrong or that the individuals don’t believe in it. At UNIT4 we offer a full choice of application delivery ranging from pure cloud-based, multi-tenant SaaS to on-premises ERP and everything in between. We do that because it is what customers want. We are not talking about hybrid just because it's what we developed, we are responding to what customers demand – every client is different, with different business needs and ways of using technology to fulfil those.

Our friends at Xero are limited to offering online accounting and we wish them all the best. But like most cloud vendors they can’t meet every organisation’s requirements and shouldn’t pretend that they can.”

dahowlett April 14, 2010 at 4:56 pm

Fair point David. Where I think Gary draws the distinction is with those vendors that persist with FUD around cloud computing, something which I see on a daily basis. The 'what customers need' argument is something I find difficult at times. How does the customer 'know' if they're confused – as was Gary's contact on this occasion?

As I said, the industry does itself few favours and it will be those that potential buyers trust most who will have the sway. Most likely among peer groups.

Gary Turner April 15, 2010 at 9:57 am

There are parallels in my experience at least in the shift from character based or MS-DOS/Unix based systems to GUI/Windows around 15 yrs ago. “Why would anyone ever want to use a mouse to do their accounts?” was the cry from developers and the like.

The key point, particularly in relation to Microsoft and its Software plus Services strategy is that hybrid S+S was the best route for Microsoft (and its customers) at the time. Microsoft openly promoted that this hybrid approach was the best route forwards 3+ years ago. And it was because there was frankly no real practical alternative for Microsoft or the market. They were open about it, dressed it up to look as attractive as possible and went with it while also talking credibly about building a significant investment in web platforms and services for the future.

But that was then and Microsoft now feels ready to more emphatically get behind the cloud having baked in the R&D shift and build its new web services stack. For them at least, the hybrid approach was only ever going to be a temporary state of affairs. In the face of Microsoft’s recent public endorsement of a full cloudy roadmap, companies who still promulgate the hybrid approach and who have no plans to replace their apps with cloud variants as Microsoft is doing are the people I take issue with.

Equally, a big old ERP vendor that has 5% of its stack as SaaS in the form of web based expenses or procurement functionality doesn’t qualify as being an online vendor. This is the other side of the same problem.

Throw any software exec on a lie detector today and ask them if on premise software will be a dominant factor in 5-10 years time.

Marketing technology used to be about product innovation, not marketing innovation.

Anonymous April 16, 2010 at 4:21 pm

Agreed Gary, but Marketing Technology is also about offering customer choice and the right solution for them – not innovation for innovation’s sake.

Right now, the VAST majority of enterprise customers do NOT want to go cloud and would be extremely unhappy to be forced in that direction.

Some of them want to try it out – that’s where the hybrid approach works for them. But look at public sector – interested in cloud but by no means ready – though they are working at developing a framework to allow bodies to adopt cloud where appropriate.

garyturner April 15, 2010 at 12:57 pm

There are parallels in my experience at least in the shift from character based or MS-DOS/Unix based systems to GUI/Windows around 15 yrs ago. "Why would anyone ever want to use a mouse to do their accounts?" was the cry from developers and the like.The key point, particularly in relation to Microsoft and its Software plus Services strategy is that hybrid S+S was the best route for Microsoft (and its customers) at the time. Microsoft openly promoted that this hybrid approach was the best route forwards 3+ years ago. And it was because there was frankly no real practical alternative for Microsoft or the market. They were open about it, dressed it up to look as attractive as possible and went with it while also talking credibly about building a significant investment in web platforms and services for the future.But that was then and Microsoft now feels ready to more emphatically get behind the cloud having baked in the R&D shift and build its new web services stack. For them at least, the hybrid approach was only ever going to be a temporary state of affairs. In the face of Microsoft's recent public endorsement of a full cloudy roadmap, companies who still promulgate the hybrid approach and who have no plans to replace their apps with cloud variants as Microsoft is doing are the people I take issue with.Equally, a big old ERP vendor that has 5% of its stack as SaaS in the form of web based expenses or procurement functionality doesn't qualify as being an online vendor. This is the other side of the same problem.Throw any software exec on a lie detector today and ask them if on premise software will be a dominant factor in 5-10 years time.Marketing technology used to be about product innovation, not marketing innovation.

garyturner April 15, 2010 at 9:57 am

There are parallels in my experience at least in the shift from character based or MS-DOS/Unix based systems to GUI/Windows around 15 yrs ago. “Why would anyone ever want to use a mouse to do their accounts?” was the cry from developers and the like.

The key point, particularly in relation to Microsoft and its Software plus Services strategy is that hybrid S+S was the best route for Microsoft (and its customers) at the time. Microsoft openly promoted that this hybrid approach was the best route forwards 3+ years ago. And it was because there was frankly no real practical alternative for Microsoft or the market. They were open about it, dressed it up to look as attractive as possible and went with it while also talking credibly about building a significant investment in web platforms and services for the future.

But that was then and Microsoft now feels ready to more emphatically get behind the cloud having baked in the R&D shift and build its new web services stack. For them at least, the hybrid approach was only ever going to be a temporary state of affairs. In the face of Microsoft's recent public endorsement of a full cloudy roadmap, companies who still promulgate the hybrid approach and who have no plans to replace their apps with cloud variants as Microsoft is doing are the people I take issue with.

Equally, a big old ERP vendor that has 5% of its stack as SaaS in the form of web based expenses or procurement functionality doesn't qualify as being an online vendor. This is the other side of the same problem.

Throw any software exec on a lie detector today and ask them if on premise software will be a dominant factor in 5-10 years time.

Marketing technology used to be about product innovation, not marketing innovation.

DavidTurner_UNIT4 April 16, 2010 at 4:21 pm

Agreed Gary, but Marketing Technology is also about offering customer choice and the right solution for them – not innovation for innovation's sake.

Right now, the VAST majority of enterprise customers do NOT want to go cloud and would be extremely unhappy to be forced in that direction.

Some of them want to try it out – that's where the hybrid approach works for them. But look at public sector – interested in cloud but by no means ready – though they are working at developing a framework to allow bodies to adopt cloud where appropriate.

DavidTurner_UNIT4 April 16, 2010 at 7:21 pm

Agreed Gary, but Marketing Technology is also about offering customer choice and the right solution for them – not innovation for innovation's sake. Right now, the VAST majority of enterprise customers do NOT want to go cloud and would be extremely unhappy to be forced in that direction. Some of them want to try it out – that's where the hybrid approach works for them. But look at public sector – interested in cloud but by no means ready – though they are working at developing a framework to allow bodies to adopt cloud where appropriate.

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