Michael Fauscette

2012: The Year in Enterprise Software

As we move into 2013 it's time to take a look back and see what major events shaped and changed enterprise software in 2012. It was an active year, particularly from the standpoint of continued consolidation in the enterprise software markets. Several hot trends continued to drive acquisition activity and product directions, including cloud, mobile, social, Internet of things and data analytics. Social business has started maturing somewhat and is at least much clearer in specific directions and the best areas of focus for businesses to see real benefits.

The cloud wars really started in late 2011 with SAP's acquisition of SuccessFactors but gained momentum throughout 2012. The major enterprise apps vendors are moving quickly to gain footprint and functionality in cloud apps, as well as define platforms and infrastructure. Early in 2012 Oracle fired the first return shot to the SAP / SuccessFactors deal with its bid for Taleo. Not to be left out, IBM joined the HCM race with its acquisition of Kenexa in August. HCM continues to be a hot area for investment, for more on the 2012 HCM market see this guest post from IDC analyst Lisa Rowan.

The next major cloud acquisition came, once again, from SAP with its acquisition of cloud collaborative commerce vendor Ariba. Ariba provided SAP with a full featured and mature cloud based procurement, sourcing and contract management tools and the largest and oldest supplier network. Maybe more valuable though is the cloud expertise and credibility that Ariba's executives added to the SAP management team.

Oracle filled out its cloud portfolio quite a bit by focusing on customer experience. The Oracle Cloud CX suite, which arguably started in late 2011 with the acquisition of RightNow, added social marketing platform Vitrue, socialytics platform Collective Intellect, social media management platform Involver and finally with the recently announced acquisition of marketing automation vendor Eloqua. Combined with other cloud assets in commerce, sales (Fusion CRM), content, etc., the suite has a broad footprint. I wrote about the Eloqua acquisition here. In addition to Oracle's strong move into CX Lithium acquired social support vendor Social Dynamx and IBM moved to redefine it's web experience products in the context of the overall customer experience.

Social business, particularly around enterprise social networks (ESN), applications to support CX strategies, innovation management and talent and performance management, matured quite a bit over the past year. Much like cloud almost all the major tech vendors get involved in social business technology through new acquisitions, new products and enhancements to existing social tools. Existing social vendors also moved to broaden offerings through acquisition.

ESNs are one of the hottest areas for growth as many companies have / are deploying the technology and working to consolidate existing networks. Consolidation in the ESN market started in 2011 and continued last year, as larger tech vendors moved into the space. Adding to VMware SocialCast, Salesforce Chatter, Cisco Webex Social, Tibco Tibbr and IBM Connections Microsoft purchased ESN leader Yammer for $1.2B in June, Oracle made its own Oracle Social Network generally available in the Oracle cloud, Citrix acquired Podio and SAP completely revamped its offering into SAP Jam.

More and more companies are looking for ways to drive adoption of social processes and increase productivity. Getting social embedded into the enterprise workflow is gaining support and more companies are looking for ways of providing an integrated social experience. The trend is gaining momentum as vendors move from social applications to apps that are social, or have social functionality embedded inside the workflow. At Dreamforce 2012 Concur and Salesforce  announced a good example of this concept, Concurforce, an app built on the Force.com platform.

As more companies embrace social technologies internally and externally a few issues are growing that will need some answers as we move into 2013. In particular there is a growing skills gap in consulting expertise to help companies drive successful social projects and sort out ongoing operations. I wrote about it here. In addition to the skills gap there is also a growing issue for many companies that have deployed several ESN products, which often grow virally and at least initially without full executive support. This social network sprawl issue is creating the exact opposite of the desired outcome by perpetuating organizational silos. To solve this companies will have to consolidate in some cases and in other they will need to integrate the networks so that functionally a single ESN exists.

Mobile continues to be an enterprise priority as the need to support multiple devices with multiple OSs is expected by employees. Tablets continue to grow in popularity and smartphones are a standard. Many vendors have provided native mobile apps with some subset of enterprise features but are feeling pressured by customers to give compete access to enterprise features on multiple devices. Many vendors moved to provide a better mobile framework on which they can provide a richer mobile experience to cuatomers. Among those vendors that made good strides last year include Netsuite, Deltek, salesforce, SAP and Oracle, although they all have more work for this year.

Internet of things was discussed quite a lot as sensor technology gets better and more and more "things" are added to the network. In the area of automation the use of sensors with new software products is providing benefits as diverse as preventative maintenance to inventory control. From a consumer perspective the mobile device is becoming a "Swiss army knife" of sorts and integrating sensor data opens up many possibilities for health and fitness monitoring to commerce. Look for 2013 to see this trend explode across business and consumer.

There seems to be more pressure on IT over the past few years to redefine and change its roles to be more relevant to the business. What has become more of a governance and enforcer role for many IT organizations is getting pressured to find new ways of adding value as more IT buying decisions get pushed out to the line of business executives. In many companies CMOs now manage a larger IT budget than the CIO, particularly as companies deploy technology to drive CX strategies. The move to the cloud is also changing the staffing requirements for many IT shops. Many IT organizations are finding that they need more of a business process focus and less of a deep developer technical focus. Look for this trend to accelerate in 2013.

 In general enterprise software has remained a growth area as companies continue to buy technology. Driving this growth are several trends, including the need to provide better mobile support, the need to get technology that helps facilitate critical CX strategies and the need to provide a more collaborative and networked work environment. As a result of the economic pressures that continue to plague businesses many companies find themselves doing more with considerably less resources. The only reasonable way to maintain and increase productivity is though automation and through better software tools. Hot markets in 2012, social, mobile, CX, etc. will continue to be hot in 2013.

Tags: software, enterprise, social, socbiz, CX, ESN, innovation, IT, CIO, acquisition

SAP Goes Social

It's turning into a big news week for enterprise social network (ESN) software, first Yammer's 1st user conference, YamJam12, and then a very interesting announcement from SAP. SAP has, in the past at least, not really exhibited a great deal of interest in social software, nor have its few product attempts in the social business area been particularly compelling. The truth is that many of the enterprise software vendors have had some false starts and made some missteps over the past few years in attempts to get involved in the rapidly evolving enterprise social software market. The market is large already and getting larger quickly as adoption rates for social business solutions are skyrocketing. For the social software market (ESN) our recent forecast shows ~$1.1B in 2012 growing to ~$4.5B in 2016 (a CAGR of 42.4%), but that's not the whole story. The overall social business solutions market is ~$2.9B in 2012 growing to ~$10.3B by 2016 (a CAGR of 28.8%). With market numbers like that, it's pretty obvious why major enterprise vendors like IBM, Oracle and Salesforce.com have all rolled out new social business offerings ranging from ESN's to customer experience suites this year. It also explains why Microsoft recently bought ESN vendor (and a market leader in our recent social software marketscape) Yammer.

So now its time for SAP to make its move and with this weeks announcement, SAP becomes a contender in the social software market. Now this didn't just happen though, there's a bit of a story to it, as one might expect. Earlier this year SAP signaled that it was getting serious about social by hiring well known social business expert Sameer Patel to head up its social business efforts as the Global VP and GM of social software solutions (DISCLAIMER: and also a friend). Sameer spent the better part of the last several years helping companies actually DO something with social business solutions, so he brings a wealth of real world experience to the position and the team. Since joining SAP he has gathered together a talented team and completely reworked SAP's strategy and offerings, and I have to admit so far, I like what I've seen.

There are quite a few ESN solutions on the market today, and frankly most have similar features. They can operate as a system of relationship across the entire organization and offer employees a modern, clean and simple way to collaborate and connect to each other, and to data, content and systems. This approach, forming a new social layer, works fine for some employees and some roles, that is, moving collaboration and a lot of day to day communication into a new system. Some employees, particularly in some specific roles, roles that spend much of their time doing work inside an enterprise system, like customer service agents or AP/AR clerks, find it undesirable or inconvenient to add an new system for communication and collaboration that is separate from the system that occupies most of their daily activities. That's why it's necessary to provide the capability to embed the ESN into other enterprise systems to get the broad adoption that delivers the greatest value from the network. While the current leading ESN's have this capability it has always seem to me that the major enterprise vendors were in a unique position here, and could leverage the ESN most effectively through inserting it into the work flows inside its other enterprise systems. That's exactly what SAP is doing with its new ESN product, SAP Jam.

SAP Jam, which is offered both on prem and in the cloud, is built to connect people (employees, partners, customers) to people, content and data in context to the enterprise work flow / process. Jam is enterprise ready, mobile (iPad app available now), secure, not silo'ed and in SAP terms "infused" across the rest of the SAP apps portfolio (phased in across the next few releases of course). The following diagram, provided by SAP, gives a good overview of the strategy:

The current roadmap, which is subject to change, provides social on-boarding and collaborative opportunity management in Q4 2012, along with several integrations including Sales OD, Finance OD, Social OD and CRM 7, as well as the Jam API. In the first half of 2013 SAP plans to add:

• Social Goal & Performance Management
• Collaborative Travel Planning
• Collaborative Contract Management
• Collaborative Call Center Support

along with a number of additional integrations, including an OpenSocial API.

SAP has come a long way in a very short period of time, and has some very aggressive plans in the coming months. The real proof is in the execution, so I'm anxious to see how the plans progress and to talk to some live customers once there's a bit more experience with the new solutions. Based on what I've seen so far, SAP is definitely in the social business software game now, and has a good opportunity to provide significant value to its customers.

Tags: socbiz, SAP, social SW, ESN, networks, Jam, SCRM

The Evolution of US Securities and Exchange Commission Rules

This week there was quite a bit of debate and discussion instigated by a letter from SEC Chairman Mary Schapiro to Rep. Darrell Issa, Chairman of the House Committee on Oversight and Government Reform that was a reply to a letter from Issa and talks about the possibility of reforming the regulations around capital formation. Lately high profile start ups like Facebook, Zynga and Groupon have been under a lot of scrutiny because of their sky rocketing valuations in the secondary markets and a SEC rule that private companies with more than 500 shareholders must report financials just like public companies. This rule is designed to protect investors and takes away one of the major reasons for staying private. As Schapiro points out there is a fine line between protecting investors and in supporting a start ups need to gain access to capital. In the letter the SEC Chairman steps out from under what is often seen as a very conservative regulatory stance and suggest that some of its rules may not be in line with the current needs of start ups and need to be reviewed on a regular basis to make sure that they keep pace with current thinking or as Schapiro says "to make sure that they are up-to-date and costs and benefits remain appropriately calibrated." She goes on to provide a long lists of regulations that are being reviewed. There are a few of these that have significant implications for start ups including the increase of the 500 shareholder cap and relaxing the prohibition of companies publicizing the issuing of shares, called the "general solicitation ban."

The changes to the rules around reporting are interesting of course, taken in context to the Facebook, Groupon, Zynga, etc. status in the secondary markets. The change in the general solicitation ban though, is probably the more important. The truth is that most if not all start ups break the ban every time they raise money today. By changing the ban not only does it remove the current violation but it paves the way to using crowdsourcing as a funding vehicle. Current crowdsourcing platforms like Kickstarter are limited to projects not companies and can't offer equity stakes in those projects (prohibited by the general solicitation ban). Instead they offer "rewards". Allowing equity as a vehicle to encourage crowdsourcing would allow start ups to use these platforms. The one thing not addressed in the letter though, is a review of the accredited investor criteria, something that many start ups have called for. I suspect that those criteria will not be lowered and maybe that's not such a bad thing.   

Here's the full contents of the letter if you'd like to read it yourself:

Schapiro%20Issa%20letter%204-6-11  

Organic Business Networks

I was having a conversation the other day with a colleague about trends that are impacting and driving change in businesses and as often happens lately we ended up on the subject of business networks. When discussing new concepts we have no choice but to apply words that have existing, accepted meanings, even if those terms don't quite fit what we're trying to say, and add other adjectives to help translate the picture that you have in your head to mutual understanding. For the last few years, as I've focused my research more and more on emerging trends in the enterprise, I've found this task very challenging. Using the word social in some business context for example, is fraught with issues as people try to shoehorn their own understanding of the word into some new frameworks. The word network, I've learned, is another ambiguous term when used in a business context. It seems that the word's techie baggage, while appropriate to some extent in understanding where I'm trying to go with this idea, causes some confusion. The challenge then is to find the right adjective(s) to start to move people in the right direction, or perhaps, even though it's not my favorite activity, delve into a more detailed definition of business network.

The problem with the word network is also part of the strength of applying it to the current emerging business environment. From IT networks that are flexible, scalable, configurable, fault tolerant, accessible from multiple points and on multiple devices, we can borrow concepts that businesses need to begin to apply more broadly. The downside I think, to using the word network is that when many people hear the word they start to think of the physical connectors, the Ethernet cables and routers, etc. that make up the LAN or WAN and that's very limiting. Or perhaps they think of it in terms of the social web, which can also be distracting even though again some of those characteristics apply.

Sitting in the Philadelphia airport early this morning in one of those inviting white rocking chairs they provide, sipping a cup of tea and prompted by the sight of so many people connecting and carrying out business, I had an idea. When I think about business networks in the context of all of the other technical and cultural change factors that I see in our post-industrial information economy, maybe what I mean is "organic business networks". The word organic could be confusing though, but when I think about it in this context I am thinking that it has similar traits to organic computing. Organic computing is a computing system that is self-optimizing, self-healing, self-configuring and self-protecting. More broadly organic models are generally patterns and methods found in living systems used a metaphor for non-living systems. So applying an organic model, organic business networks are networks that represent the interconnectedness of the emerging information business environment. Organic business networks connect people, data / information, content, and IT systems in a flexible, self-optimizing, self-healing, self-configuring and self-protecting system. People are the primary nodes of the network but the other nodes, data, content, applications and systems, are no less important.

A business functioning as an organic business network would incorporate the characteristics of a social business, as I listed here, but go beyond this basic idea, using social business as the operational paradigm but using the organic business network as the mode of operating it's business. The two concepts play off each other, social business is the "what" and the "organic business network" is the how. An organic business network lets the business work outside of traditional "firewall" boundaries and is the continuously adapting implementation of an optimized business strategy. In this approach value creation can move to the optimal point in the network depending on strategic influencers like economy, market dynamics, customer behavior, prospect behavior, partner behavior and needs, supply chain dynamics, predictive business outcomes, etc. An organic business network driven company is the anthesis of a hierarchical, rigid, reactive, process constrained, and silo'ed organization. Instead the business can adapt to changing conditions, leverage assets effectively and thrive in a hyper-connected, global competitive, information driven environment. What do you think, does that add a little clarity?

Maybe it should be "Networked Business"?

I like the term social business, I'm comfortable with the concepts I've used a lot over the last two or so years. I think that it captures the necessary transformation that the post-industrial enterprise needs. As I think about social business I've started to use another concept that seems to help clarify things a bit, people-centric enterprise. But, I've started to think that maybe something beyond social business and people-centric enterprise might help us think through what is really happening or should be happening in the business transformation. There are two very key social outputs (see the IDC Social Business Framework for a discussion on social outputs) that we need to consider, content and community, that represent the force of the social web. In the social context content is often represented by social media and community is seen as a social network. So here's my idea, maybe we need to start thinking of the new business model as the networked enterprise?

To build a new model for business we have to leverage the power that comes for shifting the focus from process to people. Relationships are drivers of people-centricity, so doesn't this really mean we're changing from a hierarchy to a network? I considered other terms that apply, connected enterprise, ecosystem, collaborative enterprise...all are relevant. The business transformation has impact on all parts of the business from sales to field service and from inside to out. There's a concept in economics called the network effect, or the tendency that the value of a product or service increases as more people use it. The example of network effect most often cited by business texts is the telephone, a single telephone is useless but value increases the more people have and use it. We see this effect on the social web to a great degree, social networks like facebook and Myspace are relevant because people are connected there and become more or less valuable as more people join / use the service (or don't, so network effect can be both positive or negative).

From what I've started to observe I think that there could be a related concept to the network effect in a networked enterprise. In the networked enterprise there is an effect that I call network synergy, or value to the business is increased as a result of the increased interconnectivity of it's people. The addition of the term synergy implies that the interconnection of people produces a result that could not be obtained if the people were not connected (in simple form it's the idea that 1 + 1 = 3). So in a people-centric business the increased interconnection of employees, suppliers, partners, and customers produces a result greater than what could happen if the network didn't exist, or in other words increases value to the business. The social business, which has people as its platform, performs at a higher level because of network synergy. The more interconnected the business becomes the greater the return from network synergy.

Tags: network, social business, social web, Internet, community, enterprise

Deal Log: An Update on Software M&A for 2010

So far 2010 has been another prolific year for M&A activity in the software markets. The software industry and tech in general has seen a solid amount of M&A activity through out it's existence, but over the last 6 years or so the pace has accelerated quite a bit. The current economic conditions have created additional pressure and opportunity that has caused the pace of acquisition to increase substantially this year. Vendors looking for bargains, looking for new growth opportunities, filling needed talent gaps and looking to build out additional product capabilities have aggressively pursued the M&A route this year. We also see consolidation starting to accelerate in a few newer hot technology areas like social software, mobile and cloud, as both start ups and established vendors look to expand product portfolios to take advantage of the emerging markets.

 I try to keep a reasonable list of M&A activity during the year, especially around the enterprise software markets, so I thought it might be useful to share it. If I missed anything please add it in the comments and I will update my list.

Tags: M&A, software, deal log, acquisition

Culture Drives Innovation

I have an ongoing interest in innovation and the culture around it. I guess that stems from my many years in the software industry. In software, innovation is the life blood of the business. I've written about innovation a few times but as reminder I believe that there are two types of innovation in software, continuous and discontinuous. Continuous innovation is the process that feeds the maintenance stream of traditional software companies. It could also be argued that it feeds the ongoing customer commitment to a subscription based or SaaS software product. Discontinuous innovation is the process by which a "category killer" or disruptive product gets to market. This type of innovation results in a giant leap forward in technology and often has a transformational impact on business. For example, Apple's iTunes software (and marketplace) changed the way people consume music and movies and pushed the person MP3 player into the mainstream. Platform as a service (PaaS) offerings like salesforce.com's Force.com and Netsuite's SuiteCloud could be changing the way companies develop and deploy applications (that remains to be seen). On a broader scale Client / Server disrupted the mainframe, the Internet disrupted client / server and the social web is disrupting relationships and business. Continuous innovation is important as a business sustainer but discontinuous innovation is important as a way for companies to leap frog competitors and rapidly gain marketshare and walletshare.   

Alright, so why am I rambling on about innovation again. Recently I ran across a great example of the culture of innovation (or to be precise the impact of culture in a negative way on innovation). I recently transitioned from AT&T / iPhone for my family mobile ser vice to Verizon (not the subject of this post, but a very good transition). As a part of that shift my two daughters (11 and 14 yrs old) had the chance to pick new phones. They were moving from a Nokia slider (the 11 yr old, the slider replaced the 1st gen hand-me-down iPhone by her choice btw) and an iPhone 3G. I allowed them to pick whatever they wanted from the current Verizon phone portfolio (including the HTC Incredible) and they both picked the new Microsoft Kin although different models, the 11 yr old took the Kin One and the 14 yr old took the Kin Two. Their only real complaint was the lack of apps but the social integration of the OS more than made up for that shortfall (and my older daughter has an iPod Touch so she didn't really miss the iPhone at all). They both required full data plans but then both had already been on full data plans on AT&T so I didn't really think about it.

The Kin has been much maligned in the blogsphere in recent weeks. Microsoft discontinued the phone a couple of weeks ago after a really poor showing with something less than 10K sold. I've heard and read lot's of stories about why the phone wasn't popular but my own experience leads me to believe that the phone did in fact have the potential as a disrupter, but fell short on two fronts...the lack of an apps store and the requirement of a full data plan (so pretty expensive for a phone targeted at teens). Now the funny thing is that both of these issues were created when the phone fell victim to some internal politics at Microsoft. The original Kin (or Project Pink as it was known internally at Microsoft) the brainchild of J Allard and with technology from the 2008 acquisition of Danger was something of a darling project and operated independently of the Windows Mobile OS division led by SVP Andy Lees. The project was on a short timeline for delivery in 2009 and included an apps store concept. Verizon won the bids to carry the phone and had promised a lower price data plan to make the phone attractive to teens (and parents). Allard, who is also credited with the Zune, used bits from Danger and from Zune but did not include the legacy Win Mobile platform (which was later scrapped and rebuilt as the Win 7 mobile platform). Not to go through this whole debacle play by play, you can do that here in this Engadget Post, but the problem was politics. Lees wanted control of this rogue project and eventually got control. Thus begins the end of innovation, the project was re-scoped, the apps store was out as were other innovations and the delivery date was slipped. Verizon, faced with the new longer timeline reneged on its promise of lower pricing and the phone was released to its now predefined failure.

From the reaction I've seen the phone had potential but politics and the desire for control smashed the innovation and set it on a path of sure failure. This is to me, a great example of what happens in companies when they value the organizational structure and power over innovation. It also points to the evolution of a company and its ability to innovate. Culture is one of the most critical elements that allow people to develop and launch innovative ideas. Microsoft, and executives like Lees, do not foster innovation if it threatens their political power and control. Often we see larger software companies in the continuous innovation camp, but rarely as creators of discontinuous innovation. The open culture that is required to create disruptive products is much more prevalent in start ups. Not that larger software companies can't create disruptive technologies, but often those technologies come through acquisition, not internal development. Politics make it very difficult for the culture of innovation to thrive.

Tags: mobile, microsoft, Kin, innovation      

Moving to the People-centric Enterprise

The fun thing about trying to figure out what might happen next in software and business in general is the ability to evolve your thinking over time as you gain more data and more clarity. I suppose that's why IDC's tag line is "analyze the future", that's effectively what my job is, at least a large part of it. Sometimes the process is sort of like putting together a puzzle that is mostly blank pieces, but the pieces slowly reveal themselves to you over time. The more pieces you reveal the better the overall picture becomes. Ok, enough rambling around inside my head, what's the point of this anyway? The point is this, I started a few years ago thinking and talking about social media, social networking and enterprise 2.0. That evolved into social enterprise which I used to mean the combination of e2.0 and social CRM and eventually we started calling the movement social business. As a part of social business I started to dig into a concept that I think is an important key to understanding what is happening, that is, in the transformation of business people become the new enterprise platform. That people-centricity is absolutely critical to understanding and building the processes and systems that facilitate the social business transformation. I'm starting to think though, that social business is really just a part of a bigger thing, the people-centric enterprise.

People-centricity defines our current social and business progression past the industrial society's focus on business, technology and process. Not that business or technology or process go away, but instead they become supporting structures that facilitate new ways of collaborating and interacting with customers, suppliers, partners and employees. The idea also has to permeate system and process design. Here's a simple example from collaboration systems. In the past collaboration was more often that not defined as the ability to share and work on a file, so let's call the system file-centric. File-centricity defines the core of how the system works, it's core workflow. In the defined process you create a file, upload a file, share a file, edit a file, review a file, approve a file, etc. So as long as the collaborative work is about a file the system process is fine. What happens though, when I need to deal with a customer who calls in a service issue, the product they ordered from their account executive is on backorder and won't meet a critical deadline? I probably start by logging the issue in my CRM system of course and then maybe I look up the order history in the order management system...so far so good, I'm doing system-centric tasks. But if the answers are not clearly in the system the work changes. Maybe there is conflicting information in the system so I have to talk to the account executive or the warehouse supervisor (phone, IM, do we have presence or unified communications...email). Perhaps it's a logistics problem or a production problem...all of these are people-centric tasks. From a system perspective the customer service rep needs something to bring interaction with systems, information and people together, not a file.

Working with customers, internal and external business partners, suppliers, logistics providers, at the core they're all people-centric issues. Not that you don't need to share files or work together on files, co-creating documents, sharing information, all of those things support the work and need to be accounted for in a collaboration system, but the focus is on enabling people to people interaction. This concept also extends to process. Current systems do an adequate job of facilitating work process (one might argue some systems are much to rigid, but that's a topic for another post). The problem arises when the work doesn't fit the process. Workers today often spend much more time on problems that fall outside of the business process, or exception processing. Exception processing often involves working outside of systems and gathering temporary teams to work through the issues. These ad hoc work requirements are a necessary part of the business but can take an inordinate amount of the resources. Because they tend to be people-centric, most fall outside the enterprise systems and processes. We need collaboration systems that are social, or people-centric and capable of effectively dealing with the ad hoc nature of information-based work.

This extends to most enterprise systems as well. Project management is really about executing against a plan, or in other words about people working together to accomplish some end goal...which is by its nature social or people-centric. Content management is file centric but if you step above the files and start to think about curation of content, people are once again the key to accomplishment. Many enterprise tasks today have moved to a more people-centric method and the systems have not caught up.

So where am I going with this train of thought...I'm not sure yet. I do know that the concept of people-centric enterprise is important and that it needs to be built into our systems and processes. The shift in focus from process and technology to people is the key to working in a post-industrial information driven business, IMHO. I'm starting to think about a broader research project to try and tie this together across the enterprise and across the underlying systems but the thought is only just starting to come together.

Deltek announces intent to acquire Maconomy

Today Deltek announced its intent to acquire Maconomy, a European based services resource planning (SRP) vendor. In the realm of project based businesses there are only a handful of vendors that offer complete, end-to-end solutions, and this acquisition brings together two of those vendors, each with strong products and each with unique focus areas both in geography and micro-vertical. Both companies are public so first let's look at the financials:

Maconomy:

Total Revenue 2009: $41.1M

Breakout: $9.8M new license, $15M maintenance and $16.3 services

This statement is taken from their consolidated financials report for 2009: "Total revenue declined 5 percent compared to 2008. This was mainly due to a licence revenue decline of 19 percent, which means that this revenue comprised 24 percent of total revenue in 2009. Subscription revenue rose by 10 percent to comprise 36 percent of total revenue, while consulting revenue dropped by 5 percent to make up 38 percent of total revenue."

Approximately 211 employees

Deltek:

Total Revenue 2009: $271M

Breakout: $72.2 new license, $108.8M maintenance, and $90.1M services

From a product perspective Maconomy X1 is similar to Deltek Vision but is tailored for different segments of the professional services vertical, specifically its micro-segments are agency, consulting, audit and tax, research and PR Consulting. Deltek Vision is mostly sold and deployed into architectural, engineering and consulting firms (AEC) and some consulting firms, which was a new area of product focus over the last two years. Maconomy has another interesting product that could offer opportunity across the entire Deltek customer base, People Planner. People Planner, a resource and capacity planning solution, could be offered in the Vision customer base but also could be appealing to Deltek's government contracting CostPoint customers. The product would also make a good cloud-based add-on offering. Maconomy has already moved toward cloud offerings with roughly 1/3 of its revenue from subscription last year, which could help Deltek accelerate its moves in that direction. Deltek is committed to fully supporting and investing in Maconomy's product portfolio and the Vision product line moving forward, which is consistent with the treatment of its other acquired products.   

Here's a simple graphic depiction of the X1 product:

From a geographic perspective there is great synergy between the two companies, Deltek is strongest in the North American market and Maconomy is strongest in Europe. Deltek gains a seasoned sales organization in Europe, a chance to take Vision to AEC firms there and a solid product in X1 to sell in the NA market in adjacent verticals. Europe is clearly the next growth opportunity for Deltek and the addition of a seasoned distribution organization that has local expertise will accelerate that move. Maconomy headquartered in Copenhagen has offices in The Netherlands, Sweden, Norway, UK and Boston.

Overall this is a smart move on the part of both companies and strengthens Deltek's offerings through expanded verticals, geographies, delivery models and additional vertical expertise. The combined company is a strong player in the SRP market, a market that has and should continue to outpace the overall applications market for the foreseeable future.

The Social Employee Manifesto

  Traditional relationships, roles and leadership models are being challenged every day in our post industrial, social web enabled, information driven, people centric business world. Old approaches to managing employees, with their roots in the industrial society are not adequate for hyper-connected, socially aware employees. We need a new paradigm for getting things done and for empowering a new breed of employee that does not function well in a hierarchal, top down, highly controlled environment.

So what does the social employee need to be successful? Here's a list of some things I think need to be considered in building a new and more productive work model:

• Social employees look for coaches and mentors not "bosses"
• Empowerment to take on business problems without micromanaging but within established guidelines.
• Social web policies and training.
• Freedom to choose hardware like mobile devices, laptops, etc. that fits their individual work style.
• Continuous access to the social web.
• The freedom and ability to form ad hoc workgroups as needed to address business issues and problems.
• People centric enterprise systems that are individually configurable
• Flexible work locations and schedules when practical
• Open and transparent executives
• Multi-point communication
• Co-branding - providing a place that nurtures strong personal brands that are combined with a strong corporate brand to gain extra impact on the marketplace
• Inclusive decision making culture
• Community
• Ethical and responsible as a world citizen
• Manage to successful outcomes not methods
• Shared control
• Clear business objectives supported by a flexible strategy

What the social employee brings to the business:

• Distributed micro-problem solving. Every employee can solve a small problem everyday. Distributed problem solving eliminates most large business issues before they get "big".
• Creativity
• Strong work ethic that can self manage to personal results and high levels of productivity
• Responsibility and accountability
• Strong personal brand
• Participates and is engaged with the business
• Ethical
• Effectively represents the corporate brand

This is a start anyway. This new social business model can, I believe, create a work environment that values the individual and increases employee productivity significantly with the correct balance of individual to corporate control. Striking that balance will no doubt take some experimentation and vary by industry and role but is critical in the emerging social business culture. It is not sufficient to only address the social customer in this new model, the new interaction models span customers, employees, suppliers and partners. You can't, IMHO expect to change corporate culture around customer engagement if you can't first create an environment for the social employee.