SAP has agreed to acquire cloud-based human capital management (HCM) offerings provider SuccessFactors for $3.4 billion. Under the acquisition, SuccessFactors' team and technology will be added to SAP's cloud assets and the combination of SAP and SuccessFactors will establish an advanced end-to-end offering of cloud and on-premise solutions for managing all relevant business processes.
Without a doubt SAP has made a good move and in the right direction. One may argue that paying 13 times the revenue for a loss making company with nearly 66% of revenue going towards SG&A does not make financial sense. However, if SAP can leverage SuccessFactors’ technology and talent to speed up its transition to the cloud, the price would be quite worth paying. In fact, by offering SuccessFactors’ technology to its current customers, SAP could help reduce the cost of new customer acquisition for SuccessFactors, which has been a major concern for many SaaS providers.
SAP has been trying to add subscription-based cloud solutions to its license and services offerings for a long time. A lot has been written about non-success of SAP’s Business ByDesign – a SaaS offering for large-scale business-management deployment focused on growing mid-market companies. SAP needed just the right acquisition to truly begin its journey into the cloud.
SuccessFactors will not only provide SAP with 3,500 customers, but also technology and above all talent. SAP’s task in the immediate future would be use the technology and talent to scale across businesses, in effect a larger customer base. This is something that Cisco does well and has repeatedly demonstrated its capabilities across numerous acquisitions.
While enterprise and mid-market businesses can be targeted through the acquisition, there is still no “S”, that is, small business, within the SAP portfolio. The small business cloud computing market is the most fragmented and among the fastest growing. SAP should continue to look for acquisitions in the area. Possibilities could be Concur, SugarCRM, Zoho and others.
Several companies are ahead of SAP in delivering SaaS to small businesses including Microsoft Dynamics, Salesforce.com and NetSuite. Microsoft also has one of the largest numbers of channel partners that are very conversant with Microsoft cloud solutions and Salesforce.com has its Force.com platform that enables channel partners to develop new solutions for their customers. SAP should also think about expanding its SMB-focused channel partner base and offering PaaS for those partners to develop new solutions for
SMBs.
Anurag Agrawal
Techaisle
Techaisle Blog
VMware just announced two new and updated cloud offerings for the SMBs - VMware Go Pro and VMware vCenter Protect Essentials Plus. VMware Go Pro is a software-as-a-service (SaaS) product designed to make it easy for SMBs to manage, monitor, and secure both physical and virtual machines through a single console. VMware vCenter Protects Essentials Plus is an on-premise IT management system including asset discovery, configuration, power management, antivirus and endpoint security designed for use in both physical and virtual environments.
VMware Go Pro
While VMware Go Pro was introduced in January 2011, the latest release has some new important capabilities such as - “IT Advisor,” which scans and assesses an SMB’s physical and virtual infrastructure and then provides recommendations, guidance, alerts and actions to help the small and mid-market businesses optimize their environments, streamline management processes, improve security and expand their virtualized infrastructure. Each time the IT Advisor scans the environment, it provides new alerts to quickly identify and solve problems. The latest release also includes updated asset and patch management capabilities that allow users to create and label groups of machines and then schedule patch scans and deployment for these groups.
VMware Go Pro with a starting price of $12 per managed system/per year will become available for download in Q4 2011. However, it will take some time for the product to be widely available through VMware’s global partner network of nearly 25,000 channels.
VMware vCenter Protect Essentials Plus
New features within VMware vCenter Protect Essentials Plus include – new scripting capabilities to drive increased efficiency by allowing SMBs to manage and execute scripts across machine groups or the entire network. It will also allow users to execute Remote Desktop Protocol from the vCenter Protect Essentials Plus “Machine View,” allowing IT admins’ remote access to a target machine. While not a typical scenario for a small business, nevertheless, vCenter Protect Essentials Plus console will also allow multiple administrators to simultaneously perform different tasks at the same time in IT-intensive mid-sized organizations that offer hosting and other cloud-based services including social media services.
Similar to VMware Go Pro, VMware vCenter Protect Essentials Plus will be offered through VMware’s global network of channel partners in Q4 2011. It is expected to be available as an annual subscription at $57 per server/per year and $36 per workstation/per year.
Techaisle Take
As per Techaisle’s research, Worldwide SMB Virtualization spend is expected to be US$952 million in 2011. However, the spending is heavily driven by medium businesses (100-999 employees), in fact, 95 percent will come from this segment. US represents nearly three-fourths of that spend. Thus far, most virtualization vendors like VMware have focused their efforts on the mid-market businesses that have in-house IT staff and large IT infrastructure. On the other hand small businesses can also benefit from virtualization if vendors actively market their offerings to service providers that can provide aggregated offerings for smaller businesses. But with its new offerings available in 28 languages, VMware is making a bold attempt at broadening its SMB customer base on a worldwide basis.
The messaging used by Mark Shavlik, Vice president and General Manager, SMB Management Solutions, VMware seems quite right as he addressed virtualization as solving a business issue and not a technology product. He said, “We continue to innovate to bring SMBs advanced solutions tailored to their needs so that they can increase efficiency and reduce costs regardless of the size or sophistication of their IT organization”.
VMware has being doing well because it has established itself as the default Virtualization vendor for large enterprises. However, with its new initiatives, it is increasing its focus on its messaging specifically for SMBs. This would allow global SMBs to enjoy the benefits of virtualization and improve their asset utilization and reduce management costs while at the same time increasing business flexibility and security.
The cacophony surrounding virtualization has led to confusing generalizations. VMware would do well to guide SMBs better in this regard. While the virtualization market has developed, systems management tool vendors have continued to enhance capabilities of their products as well. It would be useful for VMware and its channels to provide better case studies and ROIs to SMBs underscoring when it would or would not be useful to deploy virtualization.
VMware has three major advantages: its portfolio of products, ecosystem to implement and support, VMware's environments and brand recognition. It is time to start capitalizing on these advantages to target the SMB market segment. Microsoft and Citrix are not far behind.
Tavishi Agrawal
Techaisle
Cloud and Solutions have become front and center - solutions that are designed and imagined to directly address business issues such as productivity, automation, enhancing sales and marketing, reducing operational cost and many others.
Some may begin to call Dell the new IBM. However, unlike IBM, Dell is addressing entire sets of market segments – small businesses, mid-market businesses, enterprises, government, healthcare, consumers. Dell’s recent different acquisitions are playing a big part in its transformation. Most notable among them have been Boomi, SecureWorks, KACE, Compellent, InsightOne and Perot Systems. Dell may have fewer big case studies as of now compared to IBM but it will get there.
PCs, servers and general computing hardware are still relevant to Dell’s business and integral to its growing arsenal of solutions. PC is still relevant to businesses and consumers alike. Those who predict the PC is dead are not seeing the picture correctly. They are probably getting carried away by the current “wave” of tablet adoption. However, the nature and use of the PC as the foundational block has changed. An SMB today can start work immediately with a server that resides in the Cloud, use a smart phone that provides access to corporate information anytime and anywhere, a CRM application that resides off-premises, a communications infrastructure that is cost-effective, and a line of business application that is plug-and-play. At Dell World 2011, Dell demonstrated solutions in each area such as device management, unified communications, cloud business apps, collaboration, storage, datacenters, expense management and many others.
Traditionally, the IT industry gets caught up in terminology such as Cloud, Mobility, Managed Services, Big Data and so on. We had written that vendors have a real opportunity now more than ever to tweak their messaging to take on a series of statements that explain what the new IT can do for SMBs and enterprises in terms of functionality, operational cost, fixed cost, profitability, and how it benefits their business plan. Or even in more simple terms, messaging such as: how can a business use a PC to connect to
line of business applications faster, more securely, and from anywhere to help
them run their business better. We have begun to see this messaging from Dell.
Anurag Agrawal
Techaisle
Techaisle conducted a quantitative survey with over 8300 SMBs and spoke with ITDMs in US, UK, Germany, Australia, Brazil, Singapore, Malaysia and India to understand small
and medium business Cloud Computing market opportunity along with issues,
concerns, problems and challenges.
One of the questions that we asked to current non-users was: What vendor actions would compel you to use Cloud services?
Top reasons ranked in order of % of respondents for the US is given below.
There are obvious differences between SBs (1-99 employees) and MBs (100-999 employees).
There exists a strong correlation across all the points raised by SMBs. While most cloud computing vendors may like to pick up one or two issues and address them in their marketing messages but it may not have the most impact. Vendors like Dell that have embarked on the journey to help SMBs adopt cloud solutions have the most to gain by addressing all of the above issues.
Other large IT vendors may soon follow, but at least if Dell executes on its plan it may take the lead. The last time we spoke with Dell, they had already implemented most of the points and had developed a roadmap to roll out the remaining.
Needless to say, vendors should take specific actions to overcome SMB Cloud Computing adoption barriers.
Anurag Agrawal
Techaisle
