Federated Applications

Intuit recently launched a new ambitious program to deliver Federated Applications on their platform. These applications will be available to Intuit customers via a "marketplace" (my term not Intuit's). Intuit has a number of SDKs to use their Cloud platform (Flex seems to be a strategic platform for them) but Federated Applications will not be constrained to a specific technology because they will be able to use a REST API. From the distance this program looks similar to Salesforce's successful AppExchange--approaching 1,000 published applications rapidly--but after a closer look it is important to highlight two intriguing differences:

1) Intuit takes care of the billing. It collects the monthly fees, pays the application developer and keeps a %. To many developers this is a nice service, they just know that every month money will be deposited in their bank accounts and they don't have to worry about paying Intuit. Intuit gets paid right away.

2) Federated applications have the ability to read data from Intuit applications but ALSO from any other Federated application in use by the current user. To make this happen Intuit requires that all applications meet certain integration requirements. While this is an extra step for most application developers the amount of work does not appear to be excessive (i.e. weeks not months). These requirements help to deliver a more consistent user experience and they make it easier for customers to try new applications. Another interesting consequence is the potential Network effect among applications. Federated applications are expected to publish their data objects to an open and shared environment. This means that application A can read/write data from Intuit applications but also from federated application B. This data exchange can increase the value of individual applications significantly (the more connected the more valuable). Of course, each application would need to know what type of objects to expect and what to do with them but given a common framework it should not be too difficult.

Compared to other Cloud providers (e.g. Salesforce) Intuit would seem to be off to a slow start but I find their vision intriguing and ambitious. More importantly if Intuit succeeds in recruiting useful applications this strategy could become very profitable for all involved.

The Cloud is Crossing the Chasm

Cloud Computing is crossing the chasm. Every other week you hear about the deployment of Cloud Computing applications to thousands of users by leading corporations and governments. These deployments go hand in hand with the announcement of new Cloud offerings by leading technology vendors and service providers. You can still find disagreements about the size of the market or the actual definition but there is no doubt that Cloud Computing is having a great year and the best is yet to come. These are some of the many news/announcements that caught my eye:

1) This is a couple of months old but I have to mention Oracle's acquisition of Sun. It was interesting to see Oracle make the move after all the talk about IBM buying Sun. But the implications to the industry are far more intriguing. How is this acquisition going to impact HP? Will IBM see any impact from Oracle 'owning' Java? Will ORCL be able to manage Hardware and Software effectively? Oracle has been a bit slow to announce a compelling Cloud strategy. Sun made a late announcement about their software strategy and more recently another one about consulting services for the Cloud. This is an intriguing combination, it might seem like the odds are against them but you should never underestimate Oracle.

2) TIBCO launches TIBCO Silver an application development platform for AMZN's AWS. I'm intrigued by this announcement. Although some have labeled it "Amazon for Dummies" I'm curious to see if TIBCO will be able to leverage some of its sophisticated analytical technology for intelligent scaling and SLAs.

3) In close partnership with RedHat (RHT) Verizon (VZ) launched a new service offering called Computing as a Service (CaaS) "With CaaS, you have access to bandwidth, servers, storage, and firewalls with dynamic real-time control over what, when, and how those resources are deployed". This service will put pressure on traditional/smaller hosting providers looking to transition to the Cloud. It will also help enterprise customers feel more comfortable about embracing the Cloud.

4) The brilliant Ray Ozzie elaborates on Microsoft's view of the Cloud. You know it is serious when Microsoft gets serious about it. It is hard not to imagine a future with public and private clouds, unless of course, networking technology evolves to a point where the difference is irrelevant. Given MSFT's impressive footprint in the enterprise (Exchange, Sharepoint, SQL Server, etc.) they seem to be in a perfect position to dominate that hybrid world with Azure. If you can offer greater scalability, lower costs and greater flexibility leveraging the same skills and the technology you already have then you have a winning recipe. The question is "Will they be able to execute?"

5) CSC to offer cloud services. Now if it wasn't enough that Microsoft is dead serious about Cloud Computing, CSC one of the largest and most successful government contractors will leverage its security and strategy expertise to offer cloud services. I'm expecting Lockheed, EDS and others to follow with similar offerings. These services will certainly lower the risk for CIOs in the public sector.

6) More fuzzy math, this time courtesy of Gartner in one of their estimates for the size of the Cloud Computing industry. Inconsistent estimates are the consequence of inconsistent market definitions, I can see that. I just hope that there are no hidden agendas.

7) Google Apps is profitable and growing. Although not a direct replacement of MS Office, Google Apps continues to capture market share one enterprise customer at a time. Although mostly driven by cost savings in Email you can expect the adoption of Google Docs to increase as new and improved versions continue to roll out over the next year (including of course my favorites: App Engine and SDC).

With so much activity it is hard to believe that the best is yet to come but trust me, it is. Hang on tight.

HTML5

Today Google dominated the spotlight with with the announcement of Google Wave. The idea and implementation appear superb while the approach to open a lot of its code is very intriguing. However what I found just as important was HTML5 and how much Google is embracing it.

Google has an impressive portfolio of APIs and products for developers. They have created and embraced a large number of open standards and are working hard to bring everything together as a comprehensive platform. A platform that depends heavily on the support by "Modern Open Source Browsers" of HTML5 and Javascript.

Microsoft has a dominant footprint in the enterprise and Silverlight continues to gain popularity. Adobe's Flash is as ubiquitous as HTML and Flex is also gaining momentum. But I when I look at the power and simplicity of Google's App Engine, along with the dozens of open APIs (from visualization to online analytics to documents scripting) it is hard to believe that the status quou will resist this powerful 'wave' of innovation. 

Are we answering the wrong questions?

Lyndsay Wise wrote a good article on about different types of Business Intelligence (BI) and how organizations adopt them based on their level of BI maturity. It reminded me of a recent user group meeting where several people from a Fortune500 company discussed their difficulty managing the ever growing list of sales reports requested by their users. The business users were not finding the answers they were looking for and they hoped that having more reports would help answer their questions. Quantity over quality.

I think this is a reflection of how the evolution of BI has been driven by IT and not Business. This same reason is a common obstacle for BI projects and a contributor to elusive ROI. Looking around it is easy to find many vendors offering "Sales Dashboards". You can get them on a browser with AJAX or Flash, you can get them on your iPhone and even integrate them in your favorite SFA platform or portal. 

This is nice but when you look at the actual reports, they are still pretty basic. These dashboards show charts such as: Revenue and Win Rates Trends, Revenue by Industry/Region/Quarter, Variances over Plan, Count of Deals by Age, etc. These are important questions but companies have been looking at similar reports for the past 20 years. The technical delivery has improved (faster, better, easier) but the actual business content is still lagging.

What would I like to see instead? Well, if I was a sales executive I would be looking for information that can drive action. Something to tell me "what to do" and "what to stop doing" (beyond 'pick up phone and call a Region Manager to ask him why is he/she behind plan'). Knowing that my win rate for last quarter was 25% is fine but I want to know why? What are they key contributing factors? How do I increase it to 30%? 

Technology has had its 15 minutes (years?) in the spotlight. I think it is time to turn our focus on Business. This new focus will drive innovation and will ultimately make companies more effective and more competitive. Of course, I think the solution is Predictive Analytics and I will explain why in a future post.

Customer Experience beyond Customer Feedback

Customer Experience analysis and management has gained a lot of popularity as a business intelligence application. This popularity is due in part to advances in text processing technology as well as the exponential growth of unstructured data (i.e. blogs, email, IM, twitter, etc.)

A common analysis parses customer feedback to identify problems or causes of dissatisfaction. For example measuring the sentiment (positive or negative) of a hotel guest after a stay. This is an important metric for the hotel management along with identifying the root cause of that sentiment. However, I hope that we pay enough justice to these applications and consider all of their capabilities and potential. Otherwise our vision could be too narrow and a narrow vision is risky for adopters, providers and the industry in general. 

The vendors of Customer Experience software and methodologies offer depth that goes beyond the simplistic example of customer sentiment. In my opinion Customer Experience needs to be analyzed in the context of Customer Life-cycle and Customer Value. 

Once we have identified and ranked the key factors that drive customer's sentiment, we need to look at those rankings across a number of dimensions, including time and geography but most importantly customer segment. After tracking both sentiments (both positive and negative) across customer segments we need to overlay financial metrics at the customer level and at the company level. How is this sentiment affecting profitability and how big is the impact. For instance "... because the A/C was too loud in these locations, our business traveler segment reduced their number of stays by X which caused a drop in margins of Y ..." These type of analysis would offer a clear and meaningful ROI analysis to justify and champion initiatives to manage and improve Customer Experience. The next step of course is enhancing these analysis with predictive analytics to create stronger leading indicators and react before the problems appear.

Comment on this blog or email if you have any thoughts on this topic. If you are a vendor and have a case study that touches on these topics let me know as well, I'd love to write about it in this space.