Software vendor: Have you even had the problem of discontinuing a software solution?

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There has been an outcry the last few days due to the decision of Google to drop its Google Reader application. Jim Aley concludes in his article that life will continue even without Google Reader, but it is painful to a lot of people that have relied on the service. Google has announced that Google Reader will not be available after July 1, 2013. Reading this annoucement, I reflected a bit on what I have seen during my career in respect to discontinued software solutions and issues around that decision.

What Google did is something that we all have probably run into in some shape or form. I used to run software product development teams earlier in my career and have had to “kill” products due to different reasons; some of them being based on economics and some of them purely on the change in competition and changes in strategy. I have also been consulting software companies that have killed products along the way because they company has had to change direction of their strategy.

When I see companies grown their operations, I have also seen a tendency to increase the complexity of the solution portfolio which typically leads to complexity in the entire operations. Suddenly your operation has become more complex from support and delivery perspective, your channel partners do not understand what you are trying to accomplish and your sales is scratching its head to figure out how to position the solution as there are so many moving parts.

Looking back at my career, I can say that I am guilty of this as well so I have experienced it first hand and have had to do difficult decisions along the way. Just the fact that the software vendor has to inform the customer that something that they use on a daily basis does not get enhanced anymore can be very difficult to message to a customer. How do you inform this kind of decision to an end user customer without getting a blooded nose?

When I select software solutions, I typically also consider the strength of the software vendor whether I will be investing my resources and future into it. There has been a few times during my career when I have “seen the signs” of weakening of a software vendor and then made a decision to transform my operations to something else. I am sure this will be the case also in the future. This is extremely true specifically in the cloud space as the investment to start a cloud business is almost zero (if not considering the labor) from infrastructure perspective so anybody can now come with an idea but for the business to be sustainable, it is another story altogether.

What do we learn from the Google Reader case? In my opinion, we can easily say that even large companies with loads of money will make decisions that can hurt the client base even if it is a non-paid solution. Secondly, I think we need to learn to understand that nothing exists for ever and if you select a solution for your operation, you better analyze the vendor first to see if they are for real or just a hobbyist organization.

What can we learn from SolidWorks Channel Program–Conclusions

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This is the final blog about the case SolidWorks and the channel program and success that that David Skok describes well in his series of blog entries. SolidWorks grew their revenue from $135M to $400M in 5 years and one of the key elements was the channel. In my first blog entry, I described SolidWorks VAR development program, in my second blog I discussed the means how to grow your sales with the channel and in my third blog, I discussed about scoring your channel partners.

When I reflect back on the SolidWorks growth with the situation today with a strong cloud drive, I will draw some conclusions of things that are still valid when building your channel. Lets look at what David Skok concludes in his summary of SolidWorks channel program.

The fallacy of thinking that Channel gets too much money

ISVs tend to forget, that the ISV do not finance the building of the channel partner from a cash flow perspective. If the channel partner hires a couple of sales reps and technical people, the sales of the solution better to work. According to Skok, ISVs fall very easy to the trap thinking that channel partners take too much money from the transaction and that it really should be the ISV that owns the customer relationship. But is it really this way? I hear this more and more from ISVs moving to the cloud where the ISV wants to move the customer relationship to itself and let the channel partner to become more or less the lead generator. I think this is a dangerous proposition from the ISV side specifically in the enterprise side as most end user organizations still expect to have support from the organizations that know the locals and these locals also kind of “own the relationship”. What was interesting that some of the competition had the direct sales force compete with the channel and this is never a good way to grow the business.

SolidWorks took the channel as the route to market, believing and investing in the channel. This investment meant that the SolidWorks had to believe that the channel would bring the needed growth and that SolidWorks had to gain trust in the channel. Without trust, there is no channel. Some organizations have even thought that the channel is loyal to the vendor, but that is just a dream. The channel is loyal as long as they make money. End of discussion.

Building a channel requires hard work – there are no shortcuts to success

The management team picked the strongest and most experienced senior managers with strong operational experience to build and develop a channel. This team had not only seniority, but were also experienced operationally. If the channel person has never sold anything, how do you expect the channel to believe in this person? I would not. I mentioned this in in my previous blog posts that I got reminded this in my younger days when becoming CEO in young age. The SolidWorks VAR channel managers became coaches to the channel, helping to build the business.

It was not easy for the VAR team and the pace was challenging to keep up with\ and some of these people still had other things to do besides being coaches. According to Skok, one of the learning’s was to understaff the VAR team and reward the success and this also led to a behavior where the VAR managers invested their time to relevant tasks.

The management needs to make a commitment to lead by example. If the management “walk the walk”, how can you expect the line management to do it? Lead by example is the key and this has applied at least in my career. The collaboration between the top management and the VAR team was ongoing with immediate access for discussions and reviews. That is a powerful concept and unfortunately many organizations forget this. Management stare purely on the amount of calls and not asking the right questions why something does not work. If you have a broken model, how can you expect to work in the future?

Building a channel is a road that requires ongoing reviews, changes in direction and deep understanding of the target markets. If the ISV does not have this touch, how can one expect them to lead the channel partners to success? I do not think it will ever work.

The question that we have to ask is whether you need to be a large ISV to afford this type of channel program that SolidWorks created. The answer according to Skok is that the team does not have to be big as long as they are dedicated and know what they are doing. You also have to pick the measurements that you want to track, metrics that apply regardless of geography and culture and this helps everybody to get aligned and speak the same language.

You have to have a long-term view on your channel partners

You should take a long-term view on the channel partner. Do not create “incentive of the month” kind of initiatives. This drives the wrong behavior in your channel partner. Your channel partners should be strategic and this will always require a long-term view.

Would the SolidWorks VAR Channel model work with cloud business?

In the beginning of this blog entry, I said I would reflect if the VAR channel management will change anything when building a channel for cloud VAR channel partners. The answer is no. The same basics will apply, but what needs to change is to get alignment between the ISV and the channel partner and this should be done by comparing the business models side-by-side, looking at the drivers for both sides. In the cloud business, there are multiple new factors that will change and one of the biggest factor is revenue model and this could be a prohibiting factor for the channel partner. Building an organization from recurring revenue streams in the beginning could be challenging and it is also challenging for the ISV.

This concludes the series of blog entries of SolidWorks, a successful ISV that was able to create  strong channel.

Will it help to accelerate your channel by scoring your VAR Channel Partners?

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I wrote about the creation of an effective channel program for VARs in my previous blog entry and explained how SolidWorks made a decision to really understand its channel partners, their strengths and weaknesses. What SolidWorks also did was to rank its partners and the question that we of course have is how to make all of this happen. There are a myriad different ways to rank things but what SolidWorks decided to do was to create a derivate of GE Marketing Management Model that enabled them to rank the channel partners.

Based on the analysis from David Skok, clustering the partners based on different criteria helped SolidWorks tremendously to see where to put their focus on and also create a plan how to help its VAR channel.

The criteria that they put together was based on a numeric score (from 1 to 5) and the questions were based on factors such as “Do you have a dedicated sales manager?”, “What percentage of your sales representatives has attended formal sales training?”… I am sure you get the point here… Read more about the questions in the excellent blog by David Skok.

What the interview process revealed was that most of the VAR channel partners did not have written  documents capturing the business plans or any system to track the performance. Furthermore, the business leaders had for the most part a good and solid understanding of their business, but the lack of written procedures and documentation prohibits these organizations to scale and grow.

What was also interesting in the analysis of SolidWorks Channel Partners was that not all of the VAR channel partners bought into the improvement program of different reasons: some just couldn’t and some just did not want to. This is a very tough question to any ISV: should I kick out the channel partner from the program if it does not show its readiness for investment? What if I walk away from considerable revenue source if I do that?

I have built and managed channels throughout my career and I have to say that it is very hard to provide one simple formula for success. What I can say though is that an ISV has to treat its channel partner almost as part of the ISV organization itself. I have seen too many organizations mistreat its channel in many different ways, everything from competing with its direct sales to changing terms during the sales process. Those are things that will cause trouble for the ISV sooner than later.

I have soon lived half of my life in the US (second half in Europe) and I can confidently say that even if the the world is large, it is extremely small in respect to each industry. Europeans see US as a huge market (which it is), but the players are still pretty much known. I know the Microsoft ecosystem and I would be tempted to say that many know me and my company as well. It is the years of collaboration on multiple different levels that has made this happen. I think this is extremely fascinating to think about and it is also a tremendous opportunity for any ISV to grown and build its channel. There is a simple rule to this: “treat your channel as you would treat your own people, and you will see that your interests are aligned”. Nothing else matters.

It the last and final blog entry about SolidWorks, I will summarize the findings, and recommendations of their channel program.

Stay tuned for more….

Is a Solid Channel Program the foundation for increasing your sales?

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This is the fourth blog posting about VAR Channel programs.In my first blog entry I claimed that the ISV needs to realize that it works for the channel, not the other way around. In the second blog entry, I initiated the discussion of why it is important for an ISV to really pay attention for its channel program and educate the channel specifically in the cloud transformation as that is what the channel is saying is needed.  In the third blog entry I explained the channel program developed by SolidWorks and what type of findings that this ISV found out as reason for its successful channel development and results.

In this blog entry I wanted to portray the VAR Development Program modules that SolidWorks developed with some comments around these. The program “Channel Capabilities Assessment” is divided into four separate areas in following way:

VAR Channel Program-003

When you review the areas above, there isn’t really big surprises as such, but what is interesting is that most ISVs neglect many of these areas and this will hurt the ISV in the long run. If the ISV does not know its channel and its partners well, how can the CAM estimate anything in respect to forecasting or even the skillsets that the channel partner has in the sales process itself.

What David Skok explains in this blog entry is that to really understand the channel, SolidWorks had to put a “social scientists” hat one to really study the behavior of the partner and to understand their capabilities and what was really needed from the ISV. It is so easy for us to ignore to reach out to our customer/partners/prospects to ask: “how can I help you guys to become successful”. If you are working with a channel, ask yourself how much you really know about your channel partner business? I would bet that not much. To be transparent, I have had the same issue myself, still have but have tried to really dig into my customer case and understand what is needed. It is an ongoing battle and challenge.

In the SolidWorks case, a survey of 65-questions was created with six categories: Business Planning, Finance, HR, Sales, Marketing and Technical Support. Two person teams where trained to do face-to-face interviews and each interview took an entire day.  What I find fascinating is the way these VARs where ranked. Two dimension was created, one that portrays “Vision and Execution” and the second was based on “Willing and Able”.

The process was not only good for the ISV to achieve better understanding of the VAR channel, but it was also interesting for the VAR channel partner to understand its needs and also to get a better understanding how the ISV can help the channel to become better. SolidWorks used a modified or variant of GE Market Management model to categorize the VAR channel partners and I will present this in my next blog entry of this topic.

The conclusion that we can make of this blog entry is that an ISV needs to put time and effort to understand its channel and this will take time and money. Besides this, it is imperative to rank and categorize the business partners so the ISV can allocate its resources to the partners that are “Willing and Able” to perform and invest in the joint future.

Stay tuned for more….

A Case Study – Creating a VAR Development Program

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This blog entry continues on my first blog entry where I concluded that the channel does not work for the ISV, it is the ISV that has to ensure that the channel has the tools to become successful with the solution itself.

In my second blog entry I highlighted a case study of a successful ISV that was able to grow its business by doing the channel development by identifying an impactful approach where the VAR channel felt that it was a win-win situation for both sides.

In this blog entry I am high lightening the VAR development program (Phase 1) that SolidWorks created for its channel and as I stated in my previous blog, this program was almost like a mini-MBA where the ISV wanted to facilitate and help its VAR channel to run its business more effectively. The program that David Skok highlights in his blog entry as phase 1 of the development program is divided into two main areas: Business Management and Sales Management.

VAR Channel Program-001

From the picture above, the channel assessment was reviewed from these two perspectives and each of these perspectives are divided into smaller components that have relevance specifically when running a VAR business.

Cash is king as they say and I have also experienced this as an entrepreneur. What ISVs tend to forget is that somebody has to fund the activity to build the funnel of the solution that the ISV wants to sell. So lets review the typical steps that we expect to happen when an ISV signs up new channel partner:

  • The ISV wants to ramp up the activities immediately once the deal is signed, which means that VAR technical and sales team needs to be trained and educated of the intransiences of the product and learn how to take objections from the target prospect market segment.
  • The ISV expect the VAR channel marketing team to dedicate resources to start building the funnel and sometimes forgetting that there are other products that they might have in their portfolio.
  • The ISV Channel Account Manager puts effort in getting things going as he/she is the one that will have the pressure of getting first deals going and to ensure that he/she meets the budget.

With all of the effort that has been put into the joint effort, the VAR finally signs its first deal and now everybody can be happy. On top of this, the deal is very sizable and this makes the VAR a bit nervous as there are some financial risks that it now has to carry as it carries the paper with the end user organization.

The project starts, everybody is working hard on getting the client happy but sudden and unexpected issues comes up in the implementation. The customer tells the VAR that it is unacceptable and they will not pay until the software has been fixed. The VAR tells the customer that they do not have the means to fix it as it is the ISV that carries that responsibility. The customer tells the VAR that that is not their problem, the responsibility is with the VAR as that is whom they bought the solution from.

As the invoicing relationship of the solution delivery is between the VAR and the end user organization, the VAR runs into issues as an invoice has already been issued from the ISV and they want to get paid.  This puts the VAR management to sweat and now they really understand the consequences of this and need to do something about it.  The ISV wants to get paid, but the channel partner has not got paid yet. Worse than this, the software included bugs that the VAR can’t do anything about and has to wait for a fix. The ISV still wants to get paid, no matter what as its view is that this issue has nothing to do with them. I am sure you get the scoop of the vicious circle.

If the ISV is reasonable, they will work with the VAR and the end user customer to get it right, but unfortunately I have seen cases where the VAR has really run into a wall. I can’t imagine how that feels as I run my own business every day and have to consider risks and rewards when conducting the business. In large organizations with huge cash piles, this might not be a problem, but for the majority of ISVs, SIs and MSPs, this could be a huge issue.

The scenario above describes some of the areas where the VAR has to pay special attention when running its business. The number one in business management side is cash flow and how to manage it when dealing with ISVs and purchase management overall. I have run companies with high growth and one of the most pressing issue seems always be cash flow. People want growth, but with growth you need cash flow. Sales in your books does not mean that you have money in your bank account. Having lots of receivables might feel good, but you can’t feed your family with receivables.

The second area is “Sales Capacity” where typically small VARs become the victims of their own success. Skok concludes that a typical successful VAR is where the business owner is number one in sales, but one person does not scale up to grow the company. There needs to be more than one to scale the business. If the owner becomes the gatekeeper, then that becomes the bottleneck for the growth for both the VAR and the ISV.  What a VAR needs is a strong sales manager that can scale the sales, follow and create processes and the owners should keep away from that (my observation).

Also, what is typically undervalued among VARs and ISVs is market research and what sales people tend to use as an excuse for poor sales is that the “market segment is saturated’. Good research includes information about market size, market share, historic customer growth rates and sales coverage etc..

According to Skok, one of the most difficult task that VARs are struggling with is the requitement. I can really believe this. The key for success is to build an interview process to identify the right candidates and even if you become good at this, you will still fail. I have.

What an ISV might see with its channel is that VARs are hiring new employees, but there are more leaving the company that coming in. So what will happen is that the VAR has new people that are learning “the ropes” and then the ones that have learned are leaving for different reasons. The VAR ends up having a situation where the skills don’t meet the demand of the market.

One key thing that is often ignored is to ensure that the employees have a good view of their professional development,  like sales people having strong  product training, presentation training, and  sales management training.

And finally, and probably one of the most difficult tasks: how to manage and review the pipeline that everybody presents to the management. How should the VAR and ISV ensure consistency in the pipeline? One of the key things for both ISV and VAR is to create a standardized view on the pipeline, not based on each and every sales persons personal definition which is typically biased to his/her own preferences.

The question is what kind of deliverables can an ISV and VAR expect from both Business and Sales Management exercise? The way Skok defines them is in following way:

VAR Channel Program-002

It is obvious that each one of these need to be worked on and each ISV will have to estimate how much to put effort into this exercise. Also, what something might work for one organization, could be very different for another.

The next phase of this case study I will discuss about the way that the case study ISV segmented and categorized its VARs and their ability to grow. Stay tuned for more.

How to become successful with your Channel–a case study to learn from?

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In my yesterday’s blog entry, I gave a few hints of channel development and what kind of things the software vendors should avoid.

Today, I thought to share some perspectives on a case study that David Skok gives in his excellent blog entry.  Like in my previous blog entry, I will give my perspective on the findings of this case study.

The case study software company is SolidWorks and this company is specifically known within modeling for mechanical design. This company grew rapidly and one of the key reasons was an effective and well-managed VAR channel. According to the blog, the success of the channel was based on three distinctive phases:

  1. Hiring an executive that had been part of the channel in the past, so this person really understood the channel and how a VAR business works.
  2. Understanding that the success of SolidWorks
  3. Realizing that the VAR channel as an un-optimized  resource and how decide that it was worthwhile for SolidWorks to educate its channel on business skills. This meant every aspect of the business, almost like a mini-MBA

During the spring/summer 2012 I did some research in the VAR/MSP channel and one of the findings was that a key obstacle for many VARs and MSPs specifically in moving the cloud business is lack of expertise and the business model was seen to be unclear like can be seen in following picture (Source: CTTA 2012):

Obstacles in moving to cloud-2012

The latter is specifically relevant to the discussion of SolidWorks and what they did to make the channel successful. What happened in the case of SolidWorks was that the channel account teams became business mentors for the VARs and educating them to run a better business. In retrospect, I think this is exactly what ConnectWise CEO Arnie Bellini is trying to do with its resellers in its annual User Group Meeting IT Nation in the beautiful Orlando, Florida in November 2012.

He even brought in my favorite author Jim Collins that has written many bestselling business books and the latest book “Great by Choice: Uncertainty, Chaos, and Luck—Why Some Thrive Despite Them All” was given to all conference attendees.

I had the opportunity to hear Jim Collins keynote and I think it was one of the best speeches I have heard in my life. He brought up things in an interesting way and without every loosing the audience in the session.

In the next few blog entries, I will review what a good VAR channel program should look like and what kind of VAR development program did SolidWorks have to run its VAR business. I will also give my own add to this by looking it from a Business Model Canvas perspective which we use every day for everything we analyze in respect to Business Models. Stay tuned for more!

The Channel does not work for you, you work for the Channel

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pentagons and negative stars - CPBuilding a channel is not an easy task and there are many things what one has to think about when building one. I have had the pleasure to building channels for more than 20 years in enterprise software space, specifically in business intelligence,  collaboration, document management and integration software.

Today, when doing some preparation work for a channel related gig, I found an amazing link of a case that describes a successful channel development initiative and also some of the common mistakes that software vendors do.  The author of this article (David Skok from Matrix Partners) is definitely an authority in many areas (specifically SaaS related things). He lists a few very important points for software vendors to remember and I am now listing them here with some additional comments based on my own experience:

  • You (ISV) have to figure out the sales model first and then using this to teach your channel. I have heard many naïve comments from ISVs where the management explain that “we don’t have to do anything, the channel will take care of that…” Well.. I have not experienced this in my 20 years…..
  • Building a channel takes long time and ISVs forget that the channel has different priorities to what the ISVs have. The channel is focusing on products that are paying the bills and if you have not been able to demonstrate your capabilities to sell, why would they want to take the risk with you? I will never forget when a good friend of mine in California asked me once when I had become a CEO for a software company in the US and recently emigrated from Europe (from from a technology role). He asked me: “ How many have you Petri sold yet…. Call me when you have some stories to tell…”. I closed a few deals, called him and he was a man of his word. We closed large deals together during our collaboration. I had to show my friend that I could sell myself and show by example how enterprises would buy my BI solution.
  • Resellers need ongoing education on your solution, how to handle objections and how to differentiate your solution from the fifty-nine others on the market. You will have to provide marketing material, PowerPoint decks, PDF White Papers etc. And please do not say that there is no competition for your product. Give me 2 minutes and I will list 20 for you….
  • Do not expect your resellers to do lots of marketing, because they expect you to participate and expect you to pass some leads as well. You are expected to help in the channel demand generation efforts by working together with your channel partners.
  • Try to identify a pre-existing channel that supports your solution or your solution can be sold as an add-on. Business Intelligence is a good example where you can sell a collaboration solution as part of the value-added delivery. When you do this, you have to customize your messaging in a way where the channel partner realizes that that your solution together with the other solution is more than 1+1, it is in fact 1+1=3.
  • When ISVs build a channel and have an existing direct sales model as well, there will always be conflicts between the channel and the direct sales force. This can’t be avoided and if the ISV is committed to the channel, the channel will always come first. It is not easy and there are some rules that the software vendor has to apply. These rules will have to be emphasized from the top management of the company. Skok also states that one should expect the direct sales execs have an issue in moving to the channel sales model. Channel people know that with good channel management and right type of partners, the channel will give much higher leverage than trying to grow with direct sales.

These are some of the statements flavored by my own experience and I could not agree more with Skok on these. The good news according to Skok is that with the “right channel, the right people, good product/market fit and with lots of patience, the channel sales model can be one of the most profitable business models.” I echo with this!

Stay tuned for more in this topic and love to talk about it as I happen to have million different scenarios that I have been exposed to.

photo by: origami joel

The App Economy – How should we view app monetization?

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The blogosphere is all about apps and how different ecosystems compete for the eyeballs of these and the money of course. You might still remember the the news when a far app pulled as much as $10,000/day in revenue but since then there is tens of similar applications on the marketplace. This started a trend where people left their well-paid jobs to chase their dream of creating apps and living a life without pressures. The growth of app economy is one of the most promising trends, but people/organizations that want to make real money of it, need to include some risk management into it as well. The app industry has become similar to film industry where relatively few people make money and the ones that make, are hugely successful like Angry Birds phenomenon from Finland.

One might of course ask oneself is whether this is a shift in our society and how work is performed. according to Erik Brynjolfsson (director of the M.I.T. Center of digital business), “technology is always destroying jobs and always creating jobs, but in recent years the destruction has been happening faster than the creation”. There is no question that technology is creating new jobs and apps can be part of this opportunity as can be seen in many of the reports that have studied this trend towards “app economy”.

What I have not seen many discussions around is how the app economy is linked with the enterprise software business. I have researched around this and identified the “dimensions” that are typically linked to the app business, but not that much is said how established software vendors should view this space and how these vendors can make a entry to the app space in a way that makes sense and where there is also a sustainable economical model.

So, the question that we should ask ourselves is how much of the app business is truly geared towards the consumer business and how much of this will gradually move into enterprise business? Should software vendors keep the app business in their plans when building enterprise solutions specifically using the cloud? If they should keep this in mind, what kind of pricing should the ISV use? Maybe free as the real money comes from the enterprise solution and not the app that accesses it? As you can see, it is not that clear and my own experience when working with both small and large enterprises, the app business hardly ever comes up in discussions. I am convinced that this will change and it will change very quickly. One of the drivers will be Windows 8 and Windows Phone 8 developers that will create solutions that will be based on app technology and not on traditional desktop app architectural model even if these will be able to run in Windows 8 Pro environment.

Another valid question that we need to ask ourselves is whether app economy should be see purely from mobile app development perspective or should we view it from a perspective where the device is just the means to get to what you want and the backend (typically the cloud) is the one that provides the services and brokers the interaction between different services. Shouldn’t we in fact be talking about services economy instead where organizations build apps to consume and combine information from different sources using different SOA interfaces that organizations/developers have exposed to the world. Isn’t this what we have always dreamt about?

NokiaExpressI downloaded today a Windows Phone 8 app (Nokia Xpress) to my shiny Nokia Lumia 920 and this app really demonstrates where things are going. After having installed the app, it asked me whether it can use location information (which most apps want to use), but what really made me to think about the future of apps is that developers really have to think “outside the box” on when developing apps. The thing with this Nokia Xpress app is that it enables users to store and read articles on your phone (locally) so when you travel, you do not have to use expensive data roaming. I know.. there are many of these apps from before, but what this app has specifically thought of is to really monitory and minimize data usage and provide a combination of technology such as Microsoft SkyDrive technology to store videos and images without having to use the data plan. Why is this relevant to me? Just this week, my son’s data plan was going over the limit and I found out that it was all about video streaming and 2 gig data plan does not cope well with this.

The topic of “app economy” is very interesting to me as researcher, but also as practitioner. A recent paper written by Dr. Michael Mandel and Judith Scherer (commission by CTIA (The Wireless Association) and Application Developers Alliance provides an interesting view on the app economy. According to Mandel, the entire “App Economy” was coming to use in early 2009 and was popularized by a cover story run by BusinessWeek in November 2009.

The way that Dr. Michael Mandel describes App Economy in his February 2012 report resonates well with what I have educated my customers in respect to ecosystems:

“ App Economy is a collection of interlocking innovative ecosystems”. Each ecosystem consists of a core company, which creates and maintains a platform and an app marketplace, plus a small and large companies that produce apps and/or mobile devices  for that platform. Businesses can belong to multiple ecosystems and usually do”.

There is no question in my mind that this topic is relevant to anybody that works in the software industry and it is fascinating to see how this evolves with time and what kind of new companies will rise to take advantage of this.

If you work in the Microsoft ecosystem, I highly encourage you to read the article “Microsoft’s cloud vision: Why Azure is the linchpin of the firm’s new devices and services strategy”. Another great article from Information-Management.com that predicts Enterprise Apps to go mobile big time and that money apps will move to the cloud. The article lists quite a few things that are very interesting and I encourage you to read that article as well.

Stay tuned for more, there will be more to come on my research on different topics and this app economy being one of them!

Is Big Data going to replace Enterprise Data Warehousing?

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In my blog entry yesterday I concluded that Big Data as an acronym is on the rise and ISVs need to pay attention to this. The next question that one needs to pose is how is Big Data different from the traditional enterprise data warehousing? I still remember vividly the arguments 15 years ago whether Bill Inmon (considered the father of data warehousing) Top Down approach should be replaced by Ralph Kimball’s approach (Bottom Up) where the Enterprise Data Warehouse is built as collection of data marts that then together conform the enterprise data warehouse. There are also concepts such as operational data store, master data etc. Following link shows a couple of pictures that explains the difference in these approaches and a blog entry that explains pretty well the differences in these two approaches.

During my career, I have personally been involved with all and above and the latest implementation was based on SQL Server 2008 R2 with not only ETL logic to the ERP applications, but also a staging area, relational data warehouse and then the multi-dimensional OLAP cubes with SharePoint 2010. Needless to say, you need to have an understanding of multi-layer architecture and how all of this work together.

The question is how Big Data relates to all of this? One view of this is that different market segments sees it in a different way. Start-ups will see this more of a web-based approach with cloud solutions supporting Big Data. The SMB market has invested in Business Intelligence solutions and to get scale, they are going to look at cloud solutions that can take their analytics to the next stage. An then the larger enterprises that have invested huge amounts in enterprise data warehousing, data marts, ETL processes etc. will probably keep these solutions but might amend to cloud-based solutions when it is appropriate.

The competition in the Big Data space will increase during 2013 and we have already seen this by new solutions being introduced to the market like Amazon Redshift and Windows Azure Big Data. The distinction in the Big Data solutions is that many of them are typically based on NoSQL technology and data is dumped into computer memory (In-memory) and these solutions are specifically good for non-structured data. It is important to understand that there isn’t one “turn-key” solution as these types of Big Data implementations are both complex and require very distinctive skills to maneuver like “programming, statistics and how to visualize and communicate data”.

What we also need to remember is that the need to integrate data from different sources still exist, the data will be typically very different to what we are used to (like digital sensor and cameras) and when you add social media to all of this, you will have a mixture of data that never existed.

And finally, if you have been involved in Business Intelligence or Data Warehousing projects, the data/information still has to be presented in a format that makes sense for your audience, whether it be your management or other information junkies. What I do know is that analyzing the data won’t be easier than before given the fact that there is so much statistical swing into it, but the results of that data could take you and your company to the next level if information is used in proper manner.

To answer to the question I posed in my heading. No, I do not think one thing replaces another, but I would say is that you can expect to see multiple different variations on implementations and you can call them what you like and cloud will definitely be part of that implementation.

Business Analytics Gurus that you might want to follow on Twitter

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If you want to learn about your domain, the best way to do this is to follow  your fellow researchers and researchers and practitioners that are known in your domain. I have learned throughout the years to focus and learn from masters and by taking this information as foundation, trying to build the next steps in my own understanding in the domain. This applies to anything that one does in life. Do not take everything as given, but take the information, analyze it, maybe criticize it and/or improve it and then build the next level of intelligence that you can then educate the community with.

I submitted a blog post yesterday about the importance of Big Data for software vendors and when reading things around the topic, I run into an interesting list that Information-Management.com suggested to be the top 7 list of Analytics Gurus.

  • Mike Gualteiri from Forrester and his Twitter tag is @mgualtieri and his forte based on the web is focused on Big Data, predictive analytics and emerging technology.
  • Vincent Granville from AnalyticsBridge Newsletter and his Twitter tag is @analyticbridge. He publishes a newsletter and focuses in data science, predictive modeling, text mining and business analytics.
  • Doug Laney from Gartner Research with Twitter tag @doug_laney and he focuses on Analytics, Info Innovation & Big Data and the discipline of Infonomics.
  • Leslie Ament from Hypatia Research Group and is listed as “Industry Analyst & Customer Intelligence Researcher with Twitter tag @Hypatia_LeslieA and she focuses on Customer Intelligence and business value of #CRM #BI # Analytics #VOC, #Social Media and #Info Mgmt.
  • Hyon Park  from Nucleus Research with Twitter tag @cambervillechow focuses on #analytics, #bigdata, #collaboration and #socialmedia & #sabermetrics.
  • Gregory Piatetsky from KDNuggests.com with Twitter gat @kdnuggets and he focuses on #analytics, #Big Data #, and #Data Mining
  • Anil Batra with Twitter tag @AnilBatra says he moves beyond web analytics and is working on multi-channel analytics with granular customer level data.

I think you should follow these guys for at least a little while to see what kind of information they share to the community.