Michael Fauscette

Cash Flow Trumps Margin for the Little Guy!

Welcome Daniel O'Boyle Kelly with this guest post. Daniel is an IDC Consulting Director who supports my SBS group.

  Its with a fair amount of regularity these days that I come across some vendor slideware extolling the virtues of their "partner profitability" initiatives. This, in many ways, is a good thing. Yet with few exceptions, when peeling back the layers, improving profitability relates in large part to giving 'a few extra points' to push a vendor's technology or platform. While improving margins may indeed lead to better profitability, vendors need to better meet today's business challenges for the channel and without question, challenge number one is maintaining positive cash flow.   

In a recent custom survey IDC conducted for a large software vendor, we asked no fewer than 400 of their partners about a number of business performance metrics. The positive takeaway is that at least 75% of them were experiencing positive cash-flow coming into their businesses. Of course, the flipside is that a quarter were on the bubble or in fact in negative cash-flow - an ominous position to be in during these times. What is even more stark is that when breaking down the numbers by partner size, almost a third of those channel partners with less than 10 employees were break even or negative cash-flow. In the past, when the focus was on revenue growth, rapid sales cycles could possibly carry some partners through any 'profit valleys'. But with both the number of deals and length of sales cycles being extended, partners need to shift focus to cash-flow as KPI number one to manage the business. And a few concerted actions now could keep a partner's head above water:

• Seek out vendor financing and special incentives to power specific technology buying and thus shorten sales cycles. If incentives are not obvious, partners might want to hound their vendors for options claiming that other providers are stepping up. SAP and Microsoft are currently offering 0% financing on certain business applications. Cisco recently announced the "Now's The Time" offering that lets partners offer their customers no payments and no interest for three months on all Cisco hardware, software and bundled services for deals of $30 million or less.
• Identify general channel financing options beyond traditional vendors as a way to convert bookings to cash. For instance, Tech Data has an arrangement with NexCap to provide much valued capital through Reseller financing. By structuring a deal through this arrangement, resellers can improve cash flow as accounts receivables are converted to cash in 5-7 days. There are other arrangements out there too. Now is the time for partners to at least understand their options.  
• Most importantly, partners should get disciplined on all their billing and collection practices. In a recent IDC survey, we found top channel performers had average days sales outstanding of 45 days versus typical average 64 days collecting valuable cash faster and able to fund growth or debt repayment. Even if partners need to work with customers and be creative to match their budgetary constraints, it will pay to hammer out predictable schedules. Proper terms and milestone scheduling is key and forecasting accuracy should be incented similarly to other MBOs.

Clearly, vendors need to support their partners with more options and possibly 'new ways to fund deals' type training. We will be tracking their efforts ….stay tuned.

HR BPO provider NorthgateArinso licenses SAP's HCM technology and rolls out its Own SaaS

Welcome IDC analysts Robert Mahowald and Lisa Rowen with this guest post. Robert is the Research Director for SaaS and Cloud Applications in my Software Business Solutions group and Lisa is the Program Director for HR and Talent Management Services.

  We've seen more and more Business Process Outsourcing (BPO - domain outsourcing and hosting) and Managed Service Provider (MSP - traditional hosted application management) vendors decide to take matters in their own hands, and build out their own SaaS solutions as a way to compete with software vendors becoming services vendors with SaaS offerings, and as a way to lower their costs with multi-tenant solutions. The next step, it would seem, is negotiating a deal to license the kernel of a widely-used solution and building on top of that to create a multi-tenant offering.

Services provider NorthgateArinso's euHReka OnDemand solution has done just that, and is first to market with an HCM offering based on SAP's ERP HCM technology. Although not the first to sell a SaaS offering for human capital management (Workday and Ultimate Software are two of several end-to-end SaaS HCM players), NorthgateArinso's offering is unique in that it licensed core technology from SAP and developed a multi-tenant deployment and data management model as its own proprietary solution. The terms of the licensure are not restrictive, meaning that NorthgateArinso can offer euHReka to companies of any size, whether they are part of SAP's base or not. SAP is a go-to-market partner with NorthgateArinso for this deal, with both firms sharing leads, and NorthgateArinso solely responsible for closing and fulfilling the deals. The deal affords NorthgateArinso a great deal of flexibility in continuing to give its customers the choice of traditional managed BPO services (outsourced domain and technology expertise) or SaaS services (outsourced technology and development) based on a widely-used and popular SAP solution. This level of choice reaches beyond what SAP can offer to most customers today, as it has not generally made its BusinessByDesign SaaS ERP solution available.

The SaaS play will give NorthgateArinso the chance to shift from its core midmarket base into larger customers, and allows it to provide more choice to customers, who can either manage HR processes themselves using the SaaS application, or continue to have NorthgateArinso service them as part of its existing HR BPO business using the new SAP-derived solution. IDC expects many more BPO players to follow NorthgateArinso's lead by re-architecting traditional software into multi-tenant solutions because low management costs, high scalability, and quick time to market offer BPOs with a great deal of domain expertise a path to lower their cost basis, improve profitability, and get closer to their customers' technology solutions.

NorthgateArinso has built the preconfigured multi-tenant functionality into the offering, so that user data is held in isolation, assuring users of the security and privacy of their data, and this combination of HR-domain and SaaS delivery and licensing may prove a valuable advantage in selling to what has traditionally been an audience concerned with data security. NorthgateArinso will be responsible for refreshing the licensed code in step with SAP and implementing all changes/mods to the SAP core to its customers, so they are on a consistent version.

The SaaS model often turns software vendors, which have traditionally partnered with services providers and BPO firms, into competitors with these former partners, as they can build out the services delivery themselves. Line of business functions like HR (and subsegments such as talent management) have proven particularly receptive to SaaS offerings, especially ones based on proven technology. By outpacing SAP at providing its customers with SaaS flexibility SAP cannot today deliver, NorthgateArinso, with its track record as a BPO domain and technology expert, can leverage its early-mover advantage into success in the large-company HR market.

SAS Institute: In the perfect storm to build strategic alliances?

Welcome Steve White with this guest post. Steve is Program Director for IDC’s Software Solutions Alliances Leadership Council in my Software Business Solutions Group.

I had the opportunity to attend the SAS Institute’s analyst conference last week in Steamboat Springs, CO which was entitled ‘Inside Intelligence 2009’, a nice play on words representing their business analytics offerings. SAS is the largest privately owned software company in the world, with 2008 revenues at $2.26B and it was interesting to hear from their Execs as to their outlook in these challenging economic times.

Being in an analyst role, one tends to look for patterns and indicators, and I found it interesting to piece together the SAS picture into what seems to me could be a ‘perfect storm’ in terms of strategic partnering potential. There were four key areas that struck me as being positive signs of this opportunity

• SAS’s concerted move towards a more partner inclusive model
• SAS’s impressive heritage of vertically aligned product development
• Their customers’ keen advocacy of their solutions
• The underlying economy requiring greater customer ROI

The event started with a view from the top, from Dr. Jim Goodnight SAS’s CEO and founder. Jim used some of the SAS business analytics tools to share their business outlook. Using what one of the other analysts called a ‘flashboard’ rather than just a dashboard to present the figures, this showcased how SAS are looking at their business from all facets, and was a great insight into how their tools can really help bring critical information to business executives in a usable format. Rather being a tedious deep dive into the numbers, it felt like a brief and graphic summary of the key performance indicators of what is a very substantial business, wholly improved by the use of the technology.

Back to the partnering potential that I was working out with regards to SAS, their heritage has been as a direct to customer operation. However in the past 18 months to 2 years they have made a substantial investment in building out their strategic alliances. In that time their partner impacted revenue has grown 60%. They also shared the fact that, of their top 50 deals in the past year, 20 were partner impacted. A decisive indicator of their willingness to partner.

Another key indicator for me at the event, was the way SAS develop and manage their products. When you see their roadmap, you don’t just see version of each of the core products, you see vertically defined solutions, that are created from the ground up. Their DNA as a business is derived from deep understanding of their customers’ industries, so they develop their products on the SAS platform aligned to the industries of their customers. I’ll not delve into this in too much detail, as it’s not my core area, but you only have to look at their product & solutions offerings to see how they start with the industry first.

Day 1 of the event was rounded off with a customer panel. One great attribute of this particular customer panel was that it was not ‘over managed’ and even though there were some initial prepared questions for introductions, the panel was opened up to the analysts which is often a scary scenario. What I took from this panel were two key points:

• Firstly, the clients' love of the SAS technology and what it can do for their business. In talking to these clients during the breaks, they are extremely vested in the analytics capability that SAS brings to them, and SAS’s deep knowledge of their industries is a key driver of this.

• The second point was the fact that the Business/IT divide is still out there in the market. All 4 of the customers represented areas of their businesses that were outside of IT, in effect ‘power users’ of technology. In all instances they were working hard to align with their own corporate IT goals, but equally they were almost religiously bought into using the SAS tools that had got them to where they are today in terms of their business insights and were in some cases fighting IT to look at other vendors.

I found these conversations very powerful, in that the consumers of this technology value it so much, they would be willing to work outside of corporate guidelines.

These indicators drive me to believe that SAS really is in the perfect storm for building lasting alliances. The current economic environment actually magnifies this opportunity, as customers want to have better business information, and drive to faster ROI based on these analytics. I am interested to see how SAS’s strategic partnering progresses in the coming months and years. After all, what major SI or ISV would not want to partner with such a technology specialist who has such a deep understanding, and engagement with their customers? We shall see.

A few more thoughts on SaaS profitability and SaaS channels

  Back in Sept I did a post looking at SaaS profitability and some of the issues that seem to exist around the "pure-play" SaaS business model. I won't go back through the analysis but I realize, looking back that I focused a lot of the problem with the cost of scaleable infrastructure and neglected to discuss another issue that I believe plays into the "numbers" that I showed. Simply, most SaaS vendors sell direct today (I discussed some partner issues in this post in July). Their sales and marketing cost, especially considering that up until last year, involved a great deal of evangelizing the benefits of the model and convincing reluctant customers to give it a try, are high. The other bit of information that has surfaced though is that renewals of the subscription, often thought to be a simple matter, also involved expensive sales and marketing, much like an initial close. In some part, this might be due to the industries own marketing messaging around SaaS, easy to implement, easy to use, fast to deploy might also equal easy to switch? Direct sell, in a market that is being developed and with a product that doesn't necessarily fit into the sweet spot of traditional VAR's, was a reasonable choice. But what happens when SaaS is mainstream and vendors try to extend their reach, especially in the small and mid-markets? Conventional software wisdom would lead us to think that SaaS vendors have to look for alternate distribution models. And if SaaS is now mainstream, which I do believe, then the partner model is critical.

Last week I had a briefing from a SaaS vendor that opened my eyes to the channel question even more. It seems that Intacct, a SaaS financial management and accounting applications provider, with over 2,500 SMB customers, is sold through a combination of direct and a channel partner network. Their current VAR ecosystem counts over 100+ partners and they are aggressively growing that number and accounted for 50% of their new business last year (and growing). What's more, these VAR's are set up in a traditional "dealer" channel partner model and receive revenue for the deal for the life of the relationship + services. Intact also claims a >95% project success rate (I haven't validated that yet, I'm just repeating what was presented). Although private, Intacct is reporting that they are seeing increased activity through the end of 2008 and into 2009.

I think this shows a couple of important things, there are SaaS companies that are embracing a more traditional channel distribution model to reach the SMB customers, we will have the opportunity to see if the model can be validated over the next couple of years and see if this indirect model can positively impact the over profit model of a SaaS company. If nothing else, Intacct is a company to watch.

Interview with SageCircle's Carter Lusher on my IDC SBS Group

I dropped by the analyst and AR meet up that SageCircle hosted on Monday, January 12, 2009 in the Silicon Valley. While I was there SageCircle's Carter Lusher recorded a couple of video's, the previous one on analyst use of social media, and this one of me talking about my IDC Group, Software Business Solutions and what we're up to. Here's the link: video

Enterprise 2.0, ERP, financial crisis, open source, partner, SaaS, Social CRM, Software, VAR

Salesforce.com announces the availability of the Service Cloud

I don't know about you, but I hate calling a customer service line these days. Dealing with the voice recognition systems (IVR) alone is enough to make you scream (actually I remember an incident not long ago where I tried unsuccessfully for 30 min to get to a person to ask a simple question, in the end the call deteriorated to me yelling code words at my mobile phone, like PERSON, HELP, TALK TO SOMEONE, etc., and well a few other words I won't repeat here. A pitiful sight.) What's the answer? Well, I know I try every online avenue before picking up my phone to dial the offending company. I Google, ask questions on Facebook, LinkedIn, Yahoo, the companies web site / knowledgebase, anything but deal with that damned IVR system. "listen closely, our menu options have recently changed"...pleeeeease, do you rotate these things every week!?!

Well, today Salesforce.com provided a compelling alternative to all this ugliness and carried its platform relationships with Google and Facebook to the next level by announcing a new Service Cloud offering. At the lunch briefing salesforce.com CEO Marc Benioff & company announced and demonstrated the new approach to capturing conversations and interacting with customers through various different sources. The offering is build on the Force.com platform and leverages salesforce.com CRM Ideas, Force.com Sites, and the Amazon, Google and Facebook platform integrations to create the ability to capture conversations and provide the vehicle to deliver the expertise of the community to customers, partners and agents in a device and location independent way in the "cloud". Salesforce.com claims that over 2/3's of all customer service conversations will take place in the cloud and this offering then captures the customer service process of the future...it sounds good, but how does the process flow / work?

Its probably easier to explain the offering by using an example (the one they used today at the briefing). The scenario is that you have just switched your iPhone over to Orange for service and bought a Plantronics Bluetooth headset. When you get home you can't get the headset to pair successfully with the phone so you eventually decide to try and get help. Now you could call Orange or Plantronics but you probably won't (I wouldn't anyway, because I do fear the dreaded IVR), so instead you use a channel you're more comfortable with, and post a question on Facebook. Now because Orange is a Salesforce.com customer the question you posted gets forwarded to a customer service representative (CSR) at Orange. The problem is similar to something in the knowledgebase so the CSR cuts / paste the suggested remedy into Salesforce.com, which then forwards the answer back to the Facebook question stream (this uses the Salesforce.com CRM Ideas product). You try the solution, it works, and you post a thank you (or perhaps vote a thumbs up on the suggestion, if the suggestion gets a certain number of thumbs up, it is sent to the company as a knowledgebase addition). All in the cloud and all using a method you feel comfortable with.

It's a very compelling approach and is novel in several ways. In this iteration, you can set up the process only with the existing companies (Google, Amazon, Facebook) but in the future it could be possible to capture (or scrape) conversations from almost any place on the Internet. I went into this briefing not expecting a lot, I left pretty impressed. This to me, is a great example of "social CRM"...using existing tools (search, social networking, etc.), trust relationships and methods to solve customer problems and build customer relationships.

cloud, Enterprise 2.0, Netsuite, Oracle, PaaS, SaaS, salesforce.com, Social CRM, Software

Welcome 2009, what do you have in store for us?

OK, I admit I'm pretty thankful to say good bye to 2008. Not that it was bad personally, on the contrary, on a personal level it was a very good year. But, as we all know, from a business / economic perspective it was a disaster. While I feel like I made good progress personally and professionally, I realize that many people have had severe consequences to deal with as fallout from the latest financial crisis. So, like I said, it's good to see 2008 in the rear view mirror!

Now moving on, what does 2009 have in store for us? I'm not planning on going through all my predictions for 2009 in this post, IDC has a formal process for publishing those and I'm very represented there. What I do want to do is pull out a few things that are around the edges of those predictions and talk about them a bit. Now truth is, most of these bits are already in previous blogs, but there is some value to pulling them all together. The 2008 financial crisis, the single most important driver in what will happen with the software industry, is a key factor in most of my predictions and my thinking on behaviors, trends and changes. I also believe that we are going through a fundamental industry change cycle for the software market and that we will look different on the other side of that cycle (18-24 months or so). Here are a few random thoughts:

• As a result of the crisis I think that SaaS and possibly open source software (OSS) will see a big boost in adoption, and I've covered that in some detail in past blogs (see those posts for some deeper analysis).
• Social media, social networking tools, web 2.0 concepts are catching on in the business world and that trend will accelerate this year. That said, it's still the wild west and in the end we have to figure out how to measure the impact and business value of this change. I don't know where it's going yet, will web 2.0 platforms like Facebook and Twitter be integrated into business software (for example the Salesforce - Facebook platform integration announced at Dreamforce 2008) or will a new class of enterprise 2.0 business software gain traction (Yammer, Oracle's E2.0 apps, etc.). Even though spending is declining due to the financial crisis I believe that businesses will continue to spend and experiment with these types of initiatives.
• In general, companies are not going to spend money on horizontal products and ERP upgrades if they can help it. They will spend money on high value vertical apps that solve specific business process problems. There are exceptions to this though, some markets will continue to grow at a respectable pace, products like enterprise search and content management for example, should see >10% growth this year.
• In another fallout of the financial crisis, I think businesses will increase spending in the business process outsourcing (BPO) space. The cost savings, the reduction in distractions from core business, the opportunity to increase service levels, etc. are all drivers of this trend. As a secondary and related trend, the increase in BPO spend and availability, which will surely increase competition, will have BPO providers scrambling to find lower cost solutions. The end result could be an increase in the use of open source software in BPO solutions, which would boost the overall OSS market.
• I'm beginning to think that Platform as a Service (PaaS) could be one of the key disrupters over the next few years. Part of that disruption is related to the desire for closer fit of vertical solutions (see my blog post of that topic). If this is true, then the major application players (at least Oracle, SAP and Microsoft) will have to come up with a strategy to get / build / acquire / partner for a PaaS offering and soon.
• Full blown SaaS ERP solutions like Netsuite and to some extent Workday will see good growth in this economy especially in the Mid market where companies tend to continue to invest in technology as a competitive differentiator even in a down economy.
• Google apps are a disrupter and adoption will increase in this economy.

Ok, that I think is enough for now and yes, they do look a lot like predictions, oh well. Look for my and my groups actual "predictions" in an IDC doc that will be out sometime this month.

Enterprise 2.0, ERP, financial crisis, Microsoft, open source, Oracle, outsourcing, PaaS, Project execution, Project-based enterprise, SaaS, salesforce.com, SAP, Social CRM, Software, start up, VAR, Web 2.0

Software business case 2.0

I was musing with a colleague the other day about building a business case for purchasing software and where the real value was in software implementation. I've used a methodology for years when I worked for software vendors that assisted prospects in establishing the what, why and how of the proposed software project. The basic process involved a consulting engagement that assisted the prospect in establishing their current business state, best practices for the specific industry vertical (benchmarks) and the future state of the business after the proposed project was completed. In evaluating the proposed project I used four criteria: 1. revenue, 2. cost, 3. quality and 4. innovation. The subsequent business case we developed used the four criteria and applied them to the future state to demonstrate the value of the project to the business. We looked for some combination of the criteria to use as the justification for the cost of the project. Many times this took the form of a return on investment (ROI) calculation, because, face it, that's what executives wanted to hear...that the proposed project would pay for itself in X amount of time in increased revenue or decreased cost (or the Holy Grail, both). On the softer return side you had quality or innovation, often much harder to quantify (not always though, increased innovation might be demonstrated, for example, by bringing more compelling products to market faster; increased quality might reduce scrap costs, etc.).

Lately I've started to think that the original four criteria are not the only factors any more, that something else is starting to emerge that could be used to establish value. I'm more involved in using social media tools over the last two years, so maybe that's impacting my thinking more, a good thing. I also have come to believe that Web 2.0-like tools should be used in the enterprise, so again that's opened me up to some different thinking. So at this point I'd add a fifth criteria, intimacy to my list. Intimacy can be applied to new projects to gage the increase in dialog, engagement, and interaction in an ecosystem. This might be most obvious when applied to Social CRM tools, which by their design increase customer intimacy but the term could also be used in a supply / design chain or perhaps in a partner ecosystem as well. Applying Enterprise 2.0 tools in the enterprise to increase intimacy. I will admit that I'm still in the early stages of thinking this metric through, but I'm convinced that this is an important new part of evaluating the value of a prospective software project.

Enterprise 2.0, ERP, Project management, Social CRM, Software, Web 2.0

Start up spotlight: ODesk

ODesk is, IMHO, one of the most innovative start ups that I've looked at in quite a while. Its business model is a hybrid software + services model, or maybe more accurately a staffing outsourcing company backed up by a very innovative software solution. So what exactly does ODesk do? ODesk is a one stop shopping experience for the hiring and management of offshore technical resources for staff augmentation and other software development needs. Through the SaaS application a customer can search, interview, select, manage, monitor, and pay offshore technical resources. The search / selection process is facilitated by several tools including full profiles, test results that demonstrate skills, work samples, interviewing tools, and most importantly community reviews of each resource. Once a resource is selected and the contracting process completed the ODesk tools again add value by providing a full management and monitoring system. Once a project is assigned the selected resource must log in to ODesk while completing all work (offline work can also be pre-approved and there's caching for poor Internet connections) so that billable time can be captured automatically AND, the key feature here, so that random snap shots of the resource's desktop can be recorded to validate the time and the work in realtime. Once the project is complete (or on agreed milestones), ODesk handles the payroll for each resource, removing the burden of dealing in multiple currencies and the burden of understanding local employment laws and regulations in multiple countries. To summarize the process, ODesk finds the resources, builds online profiles / resume's, maintains a community based rating / evaluation system, facilitates interviewing, handles contracting the resource, provides tools for monitoring and managing the resource and handles all compensation related activities. As the customer you select the right resource(s) based on skills and need, provide the specifications of the desired development effort, monitor the progress using ODesk tools, pay ODesk on agreed milestones in your local currency, and once the project is complete and accepted close out the project.

From the provider perspective ODesk provides an easy way to get access to projects, a way to work effectively with a remote manager and a way to make sure you get paid for what you do. ODesk provides the marketplace, the tools and most importantly the process that builds trust relationships.

So why do I like them?...if you couldn't guess, this is the most complete and elegantly executed staffing solution I have seen. The tools and the process make for a very easy to use experience and add significant value in a various unique ways. There's even a community section on the ODesk web site that provides forums, ODesk statistics, trends developed from the data collected from jobs executed on the site and resources. With close to 117,000 resources and over $45M in services delivered the business is healthy and growing. And if this isn't enough, the product is developed using the ODesk process. ODesk is VC backed and is funded by Benchmark Capital, Globespan Capital Partners, Sigma Partners and DAG Ventures. The seasoned management team is headed by CEO Gary Swart.

Enterprise 2.0, outsourcing, Project execution, Software, staffing services, start up, VC, Web 2.0

Oracle Openworld Update

Finally on Day 4 of Openworld (OOW) I'll get some time to provide an update. I have kept up a steady conversation on Twitter, but it's time to provide more information. This is my third OOW in three years as an analyst and the most obvious observation is that the overall messaging and strategy is consistent across the three conferences. Three OOW's ago was just a few months after the launch of the Applications Unlimited program and the first attempt to clarify and define the overall Oracle business strategy. In Monday's opening Keynote by Oracle President Charles Phillips he reenforced the overall messaging: Complete - Open - Integrated. From an applications strategy Complete / Open / Integrated translates to Applications Unlimited or a broad and comprehensive portfolio of industry solutions, SOA enabled (open standards) and integrated through Applications Integration Architecture (AIA). There are several key themes that are continuing across the applications strategy, investment in the horizontal suites, expansion of the vertical applications, development of more Process Integration Packs (PIP's) for integration and moving closer to Fusion Applications. Last year, Anthony Lye (who at that time was responsible for CRM On Demand, but now has responsibility for the whole CRM suite) showed the first of the Fusion Apps, mobile tools for sales people, and it turns out, gave us a glimpse into what has turned into a series of moves to rollout Web 2.0-like functionality into the enterprise. This year, with the announcement of things like Social CRM, a plethora of iPhone Apps ranging from asset management to expense reporting (which included a cool feature to automatically track miles driven based on the iPhone's GPS), Oracle makes a strong move into Enterprise 2.0.

At all OOW's there are a whole list of "announcements" and this year is no exception. One of the biggest announcements was for a new product line called Beehive. Beehive replaces the old Oracle Collaboration Suite (OCS) and provides a collaboration platform for internal management of all communication and collaboration channels. The platform provides hooks into a companies existing email or a replacement email system, presence, calendaring, IM, directory, phone, etc. and should pose an interesting alternative to other Unified Communications (UC) offerings on the market. Oracle has used Beehive internally for up to around 1200 employees for close to a year as well as supported several beta / new customer deployments to date. On the partner programs side of house Oracle rolled out it's new Partner portal and a host of Web 2.0 type tools for partner enablement. Another area of interest is the changes rolled out by Oracle's customer support organization around the new My Oracle Support. In its first release MY Oracle Support provides customers with a way to interact with Oracle and maintain current configuration information to enable more proactive and effective support. I learned from Global Support head Juergen Rottler that in a next release to come shortly over the next couple of months Oracle will up the level of support by providing communities around various customer segments. These communities will encourage P2P networking, sharing of best practices and issue resolution through the power of crowds.

Overall OOW this year is up beat and seems to have a lot of energy emanating from partners, customers and employees. The business strategy, growth through acquisition focused around more and better industry vertical solutions is fully baked and continues to drive growth. Oracle continues to invest in all major acquired brands and continues to innovate across those brands. Fusion Applications are coming, we saw, under NDA of course, several demonstrations that were very interesting. And this year, Oracle started on a path of demonstrating that they are Web 2.0 savvy and they are learning how to incorporate those concepts into the enterprise with offerings like Beehive, mobile apps, Social CRM, etc.