Key Themes from SAP TechEd 2011–How Do They Relate to SMBs?

As the name implies, SAP TechEd offers technical education, such as hands-on workshops, deep-dive lectures and sessions with SAP technical experts about all things SAP. That said, TechEd isn’t for everyone, and it’s no wonder that most of the 6,500+ attendees at SAP TechEd 2011, held the week of September 12 in Las Vegas, were SAP partners and technology specialists from the vendor’s large enterprise accounts.

However, despite the technical focus of the event, there were several key themes that have important implications for non-techies and small and medium businesses (or as SAP calls them–small and medium enterprises or SMEs). This makes sense, as SAP’s SME ambitions are core to the company’s growth strategy. Many of the partners I spoke to at the event provide sales, service and third-party development for SAP’s portfolio of SMB-centered applications, including Business One, Business by Design, Business All-in-One and Business Objects Edge. Undoubtedley not by accident, as SMB customers rely on these partners to translate the technology and solution innovations below into practical business results.

  • HANA everywhere. As noted in fellow analyst Cindy Jutras’ post, HANA was by far the lead theme at TechEd–just take a look at the tweet stream at #sapteched. HANA is SAP’s innovative column-based, in-memory database, which enables applications to zip through calculations for millions of records in just fractions of a second. While this is relevant for large companies, why should SMBs care? According to SAP, HANA will be part of every solution that SAP offers. SAP applications, from Business One through the Business Suite, will be “powered by HANA,” providing these applications with a big performance boost. The good news here for SMBs is that while SAP Business Suite customers will pay extra for high-test HANA performance, customers using SAP’s SMB-centric solutions will get at least some of this added horsepower as part of the normal upgrade cycle, at no additional charge. However, at this stage, it’s still fuzzy as to exactly how SAP will embed and deliver HANA in its SMB portfolio, what will be included, and what will be priced separately.
  • SAP Business by Design (ByD) as a platform. ByD will continue to fill the role of a cloud-based ERP suite, but ByD is evolving to become a cloud platform as well. SAP is providing partners and customers with an integrated SDK to build applications on top of the ByD platform, and plans to debut a ByD app store ala AppExchange, where customers can buy, download and deploy both SAP and partner ByD apps. The ByD cloud platform should make it easier for partners to build their own applications and IP on top of ByD and expand their market opportunity. Partner-developed ByD services will be layered on the ByD foundation to deliver the common elements of ByD.  Providing and enhancing the partner opportunity is essential for SAP to groe its SMB footprint in the cloud space, especially as it plays catch up against early birds such as NetSuite and Partner applications and services will be essential to provide the diverse SMB market with the choice and richness in solutions they require.
  • Mobile as the design center for solution development and delivery. Aided and abetted by its Sybase acquisition, SAP is putting the mobile experience front and center for application design and development. This means that SAP’s design point for new applications starts with the mobile device experience. Existing apps will get a mobile makeover–providing users with the mobile interfaces they are increasingly clamoring for and turning to over traditional desktop devices. For instance, SAP Business One presented Version 1.3.1 of it mobile app, which enables users to use Business One on an iPhone or iPad. The app provides things such as alerts and approvals, reports and interactive dashboards, and inventory management, and looks very easy to use and streamlined for the mobile experience that more and more SMBs are using in addition to or as a replacement for traditional desktop interfaces.
  • Making business applications more engaging. Mary Poppins told us long ago that “For every job that must be done there is an element of fun, find the fun and snap, the job’s a game.” Jane McGonigal, SAP TechEd’s guest keynote speaker, presented the modern-day version of this with her talk on “gamification.” In a nutshell, gamification is making a non-game application more engaging by making it game-like. While I talked to several skeptics (or Puritans?) who don’t get the connection between work and games, I’ve always bought into the Mary Poppins philosophy. To me, it’s intuitive that people doing more fun and interesting work are naturally more engaged and productive. SAP put this theory into action at TechEd with Knowledge Quest, which attendees could play and earn points by answering questions, completing interactive challenges, acquiring codes, and taking on head-to-head challenges with other players. Players with the most points were awarded prizes such as iPads, Nintendo 3DS, and headphones. I don’t know how many people played, but the Knowledge Quest booth was pretty packed whenever I went by. Now this is a very big if, but if SAP successfully tackles the gamification challenge (maybe with a game?!) it can gain a big advantage. SMBs using SAP solutions will also come out ahead–via a more productive and engaged workforce–especially as more businesses are started and run by younger entrepreneurs and employees that have been raised in a video-gaming culture.

The bottom line is that while TechEd isn’t for everyone, SAP’s key themes are as relevant to business decision-makers as they are to technology decision-makers and solution builders.

However, SAP is competing against some great marketers–most notably Marc Benioff of–who bring their own appetite for and vision of business software innovation to the market. In contrast, SAP, for all of its technical strengths, has not been a marketing powerhouse. While SAP has committed to making its technology innovations digestible for SMB customers, can it do the same with it’s marketing and messaging? Creating clear, crisp and compelling marketing for its diverse portfolio of solutions and its new technology directions may prove to be SAP’s toughest innovation challenge.

Dell Cloud Business Applications: One Stop Shop for SMBs?

Last week at Dreamforce 2011 , Dell announced Dell Cloud Business Applications, a new integrated, single sign-on approach to business solutions aimed at small and medium businesses (SMBs) with 50 to 500 employees.

In the first release, Dell Cloud Business Applications include Salesforce CRM, Boomi technology to integrate Salesforce with financial applications (either on-premise and in the cloud) that SMBs are already running, including those from Intuit, Microsoft and Sage. The Dell solution also features an analytics dashboard (from an as yet unnamed partner) that provides SMB executives with an integrated view of their business by pulling in relevant information from both Salesforce and these accounting solutions. Dell will also serve as the single source of support–or “one throat to choke” for the applications in the Dell Cloud Business Applications portfolio. The offering also features a single invoice, monthly billing and financing plan., Dell Boomi integration and Dell implementation services are included in the initial release, available now. Dell Cloud Integrated Analytics service will become available in the first half of 2012. Pricing for licensing is based on Salesforce monthly per user subscription pricing, plus a monthly Boomi subscription fee and reporting fee, as shown in Figure 1. Fixed scope, fixed fee services pricing ranges from $5,000 to $14,000 for CRM implementation and from $2,000 to $10,000 for Boomi implementation packages. Additional services, such as custom reports/analytics, data cleansing and debugging and custom connectors are fee-based depending on requirements.

Figure 1: Dell Cloud Business Applications Licensing Pricing for 10 users

Module Description Annual Fee CRM, Professional Edition Salesforce CRM cloud application $7,800
Pre-built Boomi connectors (2 sources, fixed) Synchronize data between Salesforce CRM and accounting software $6,600
Reporting (10 users, 2 sources, fixed) On-demand reports and alerts $2,400

Over time, Dell intends to broaden this offering with additional cloud applications to satisfy requirements in other functional areas, such as marketing automation and financials, slated for the second half of 2012. The service will initially be available in the U.S., but Dell intends to expand it globally.

The offering is available direct through Dell, and through Dell Boomi partners certified to sell and implement the solution. Dell plans to recruit additional partners to sell and deploy the solution over time.

What’s Behind Dell’s Approach?

Dell Cloud Business Applications build on several core Dell strengths, including:

  • Increasing focus on offering solutions tailored to SMB requirements, such as its Vostro line and KACE appliances.
  • Expanding cloud footprint, including its announcement at VMWorld that it will launch its first public cloud offering later this year, hosting VMware’s new vCloud public cloud systems in Dell data centers.
  • Experience in designing, building and delivering cost-effective, standardized systems.
  • Expertise in Web-based and direct sales.

In addition, Dell is anchoring its Cloud Business Applications approach on a few key premises:

  • SMB adoption of cloud solutions is growing, but integrating cloud apps with both existing on-premise software and other cloud applications is still too difficult and expensive.
  • SMBs don’t have analytics and reporting tools that easily pull in data from across different business applications to provide visibility across different business functions.
  • Moving to the cloud and selecting the “right” cloud solutions is difficult for SMBs, who may lack the time and/or expertise to evaluate different cloud applications, integration technologies and analytics tools.

Dell Cloud Business Applications give SMBs a hand-picked set of cloud apps, turnkey services and built-in, cross-application analytics and support, designed to relieve SMBs from the hassles and costs of selecting, deploying and managing different solutions from multiple providers. By pre-selecting cloud solutions, Dell hopes to relieve SMBs from the confusion, time and effort necessary to evaluate the myriad of cloud solutions on the market, integrate them with existing accounting solutions. Dell’s analytics dashboard incorporates data from Salesforce and accounting, to give users a more complete picture of what’s going on in their businesses. Finally, Dell is providing a one-stop shop, both to buy new cloud solutions, get them integrated with the current accounting system, and support for Salesforce and the integration.

Who’s the Competition?

Dell Cloud Business Applications faces a lot of competition from several far-flung sources:

  • Local VARs and SI partners, who offer SMBs integration (albeit typically one-off) and support. While Dell is trying to woo these partners to its fold, Dell has yet to disclose its strategy is to recruit and compensate partners. While the Boomi channel is a good start, Dell will likely need to grow the channel for this service significantly to reach the many SMBs who depend on local partners for IT infrastructure advice and service.
  • Traditional SMB business software vendors–including Microsoft and Sage–who offer hybrid solutions and pre-built integrations between their own front and back office solutions.
  • Integrated cloud suites, such as NetSuite and SAP Business by Design, which provide back and front office solutions built on the same code base and therefore integrated out of the box.

Will Dell Cloud Business Applications Hit the Mark with SMBs?

As structured today, Dell’s offering will appeal to SMBs who want to add Salesforce CRM, intend to continue using their existing accounting solution, and want a one-stop shop for both Salesforce CRM and integration with their accounting solution. Pricing for SMBs with more than 50 employees–which is where Dell is aiming–is reasonable as well.

And there’s no doubt that Salesforce wants to leverage Dell–and Intuit, for that matter–to help it sell and service the SMB market. However, for all of its CRM dominance, Salesforce isn’t they only game in town, and seems to becoming more focused on large enterprises. Though it says that the 100,000 companies using Salesforce are split evenly between large, medium and small business, large companies account for the majority of user seats. Do the math: of Salesforce’s one million users, 100,000 are from Dell, which is its largest account. Add in a laundry list of other big companies, such as Cisco, Sprint, Hitachi, NBC Universal and Prudential, stir in Salesforce’s recently announced one-off enterprise licensing plans, and its only natural to wonder if Salesforce is outgrowing SMBs.

In addition to be huge, the SMB market is also very diverse. How will Dell come up with a formula to pick the “right” for a large enough percentage of SMBs, across a myriad of solution areas, from marketing to HR to ecommerce? Let’s face it, one size does not fit all. It will become even more difficult to pick winners as Dell expands into new geographies.

In my opinion, while Dell doesn’t need to build out the portfolio to include hundreds or even dozens of applications, it does need to offer at least a handful of selections in each category to most effectively tap the huge SMB market potential.  After all, most customers want a choice. It also needs to give customers a forum to provide input–to review apps and make suggestions for what they’d like to have.

Dell can further strengthen this offering by offering service and support for SMBs’ existing on-premise IT infrastructure and solutions in a remote managed services model. In fact, Dell already offers these capabilities in Dell Managed Services.  This would truly straddle the hybrid world of computing that most SMBs will continue to occupy for the next few years.

Finally, Dell needs to clarify the value proposition for VARs and local and regional SIs to get them on board and reaching out to their SMB customers with Dell’s offering.

That said, Dell’s growing commitment to the SMB market  is not to be underestimated—nor is it’s climb into the cloud (or as Dell puts it, “the virtual era”). Dell Cloud Business Solutions is a good first step into becoming an SMB cloud services provider.  Over time, Dell can build on its core strengths and the benefits of a closed loop marketing and sales model to shape Dell Cloud Business Solutions to meet the needs of a wider swath of the SMB market.

Take the Poll: Is becoming too complex for your SMB?

In the post, Is Salesforce Outgrowing SMBs? I discussed’s new social enterprise vision, and questioned how it will work for SMBs. If you are part of a small or medium business, I’d like your thoughts!

Is Outgrowing SMBs?’s Marc Benioff is a great visionary with a big appetite for change. From packaged software to the cloud, from CRM to platform-as-a-service, he’s painted a color by number picture for businesses to emulate. But does his latest work, “the social enterprise” come with an easy enough guide for small businesses to paint it?

The Paint-by-Numbers Social Enterprise

Benioff laid out his newest work, the “social enterprise” last week in his keynote  at Dreamforce 2011. He made a convincing and compelling case that companies need to proactively listen to and engage with customers that are vocal and socially connected on a mobile, digital web–or they’ll be brought down in a “corporate spring” the way Egypt and other Arab countries have toppled in the “Arab spring.”

To that end, Salesforce has been acquiring and building the components that companies will need to become social enterprises (also known as social businesses, a term IBM coined a year or so ago). Although’s Winter 2012 release contains over 150 new features, Benioff provided paint-by-number instructions for companies to become social enterprises in a few broad brush strokes:

  1. Establish a database that maintains and updates social profiles for customers and prospects, in real-time. Paint this part of the picture with, which Benioff introduced as a social, mobile and open cloud based database, and, which builds’s 2009 acquisition of Jigsaw, which uses crowd-sourcing to gather customer info, by integrating Dun & Bradstreet lists and data services. Together, this provides data storage, external data sources, data cleansing. On top of that, Salesforce plans to introduce a new Chatter service next year that will bring external conversations into the database as well.
  2. Create a social network integrated with your business processes. Chatter is the color to use to integrate collaboration services with and partner apps. Salesforce initially introduced Chatter in 2010 as an internal, employee social network, but is expanding it so that you can open it up to customers and partners and share files in Chatter streams. Chatter is also slated to get instant messaging, presence-awareness and screen sharing capabilities (by way of its Dimdim acquisition) so you do things such as have a video conference on the fly within Chatter.
  3. Analyzing and acting on all the customer comments and data you now have. Once your listening ears are on, you need to do something with all that information. Radian6, which Salesforce acquired earlier this year, fills this piece in nicely, enabling you to view, slice and dice unstructured data and take action based on that data.
  4. Get everything to work for any customer, on any device. To make sure that you can engage with your customers on any device they choose to use, Salesforce is launching Based on HTML5, automatically renders the apps, data and customizations in and partner apps built on on any mobile touch devices.

Can SMBs Afford the All You Can Eat Buffet Social Enterprise Buffet?

This vision is compelling for businesses of all sizes. But it sounds like a lot of stuff for a small or medium business to piece together and pay for. As I discussed in Prescription for Subscription Fatigue, there are only so many subscriptions you can tack on before people will start to complain about getting nickeled and dimed. So to make things more palatable, Salesforce is introducing a new Social Enterprise License Agreement, which provides full access to everything Salesforce sells for one all you can eat price.

The only problem is, Salesforce hasn’t told us how much it will cost for companies to become a social enterprise. When queried in media and analyst sessions about how pricing would work, Salesforce execs said that’s where the direct sales force comes in, and that basically, pricing would be determined on a case-by-case basis, in relation to the value that the total solution provides the customer.

This makes sense for Salesforce–it elevates them beyond CRM and into a more strategic platform discussion. And it makes sense for large companies that actually have dedicated account reps, and enough seats and volume in the account to make the cost of one-off pricing work. But how will it work for SMBs that want to become social enterprises?

A Tough Fit for SMBs

When I followed up with a one-on-one question to’s Clarence So and Alex Dayon, they assured me that SMBs are near and dear to’s heart–and that they’ll figure out how to make this all you can eat feast feasible for SMBs. After all, as they said, democratization and leveling the playing field for smaller companies has been a core component of’s strategy. But, they didn’t offer any specifics, and I suspect that will need to figure this out as it goes along.

Clearly, will continue to be pestered for answers in this area. Customers–especially SMBs–want transparency in pricing, and to date, and most cloud vendors have provided them with that transparency. They’ve gravitated to the cloud model in part for the predictable pricing it affords, and are wary of vague or open-ended commitments that might be budget busters.

As important, its hard to see how or even most of its partners could transact these one-off deals profitably with most SMBs. The time needed to account for the number of users, the technologies used, the value derived from those technologies, etc. might be quickly recouped in a large enterprise deal, but would be a very steep sales cost to absorb in SMB deals.

SMBs not only need affordable, predictable pricing, but many require a lot of hand holding and guidance to help them through the cultural and business process changes required to transform into social enterprises. How will and its partners help them with this transformation? As of now, there are no clear answers.

Can SMBs Keep Up with as it Grows Up?  

At Dreamforce 2011, Benioff underscored his vision for the Social Enterprise with great testimonials from big companies such as Coca Cola, NBC Universal and Disney, which are using solutions to recreate their businesses as social enterprises. But these big companies are used to one-off enterprise-wide license negotiations, have the undivided attention of sales reps, and can afford to bring in Accenture or Deloitte to help them as needed.

Clearly, has grown up and evolved into a multi-faceted company with a rich portfolio of technologies and solutions that extend well beyond its CRM roots. But with this kind of growth comes complexity. In’s case, it looks like they are doing a great job of shielding customers from a lot of the technical complexity that underpins these quantum leaps. But can it figure out how to take the business complexity out of the equation for SMBs? And will it want to devote the time to do this as demands from its large customers rise?

More often than not, other vendors, faced with a similar dilemma, have been unable to find a formula that allows them to live comfortably in both worlds. But Benioff and team seem to relish Rubik cube-like challenges–and it will be interesting to watch them try.

Reflections on Dreamforce 2011: Now the Cloud Can Ride the Waves

This year,’s Dreamforce event–with a record-setting 45,000 attendees–got me thinking about the early days before the cloud was the cloud, how far its come, and how perfectly poised it is to ride the waves now driving technology adoption–mobile and social solutions.

Traveling in the Way Back Machine

In a galaxy long ago and far away, I was an analyst at the former Summit Strategies when the first cloud seeds were being planted in 1997. NetLedger (now NetSuite) and Employease (now part of ADP) were among the first to visit and brief us in Boston, followed soon after, of course, by Marc Benioff and

These vendors were among the early pioneers of what was first called the internet business service provider (IBSP) model. They built their solutions as multi-tenant software-as-a-service solutions, designing them  business from the ground up to be delivered as a single instance, to thousands of customers, in a subscription-based pricing model.

In the early going, these pioneers survived the confusion wreaked by the traditional software vendors, who put their traditional packaged apps–never designed for a services model–up on servers in the application service provider (ASP) hosting model. Then, they persevered through the onslaught of the software establishment at the time–from Siebel to Microsoft to SAP–who insisted SaaS was just a passing fad. They forged on even as multitudes of IBSP wannabes–from Agillion to Red Gorilla to vJungle–crashed and burned when the Internet bubble burst. They even survived the problems they created for themselves as they kept renaming themselves, from IBSP, online services vendor, software-as-a-service (SaaS) and then to the “cloud” label that would finally stick.

Evolutionary Vs. Revolutionary

From the start, analysts such as myself and counterparts, such as the luminary Phil Wainwright, thought that IBSP/SaaS/cloud was a great alternative to the packaged software model–and that it would catch on much more quickly than it has. But, though cloud computing has grown over the last 13 years or so, it’s growth has been more evolutionary than revolutionary. In the beginning, many of the technologies necessary to enable widespread cloud adoption, such as ubiquitous high-speed Internet access, just weren’t there. As important, IT people were often reluctant to go to the model because they were afraid it might put them out of a job, and decision-makers in some companies didn’t feel a compelling need to change the status quo.

In contrast, adoption of mobile and social technologies has been truly revolutionary. Not only were the right technologies were in the right place, at the right time, but individuals–not IT people or business decision-makers–called the shots. Employees are also consumers, and are spending their own money to BYOD (bring your own device) instead of using a company-issued brick. They started questioning why it was easier to keep track of friends on Facebook than keep track of contacts in CRM.  Armed with iPhones, iPads, Facebook and Twitter, as Benioff so rightly pointed out, individuals are now empowered not only bring about the “Arab spring” that has toppled dictators, but also stir up a “corporate spring” for companies that don’t listen to customers and employees.

Now the Cloud Can Ride the Waves

As a result, the pecking order of the IT universe is being radically altered. Apple is worth more than HP, Google is more powerful than Microsoft, and Facebook has changed the world–and what we expect from software–forever.

Though cloud computing has been on a slower trajectory than social and mobile technologies, cloud is increasingly the critical enabler for both mobile and social solutions. It provides the economies of scale and skill that developers and companies need to create, reiterate, and reinvent. It provides the customer feedback loop and data aggregation necessary to see where the puck is going and get there first. It provides the collaborative environment required to accelerate new ideas and new ways of solving problems. But it is very complicated for individual companies to piece together all the components that they need on their own.

As this perfect storm of social and mobile rapidly forms, how much time do the software vendors such as Microsoft, Oracle, Sage and SAP, have to straddle the fence and ride out the storm? You can bet that I and a lot of other storm chasers will be watching closely as the waves build.