I just read Steve Duplessie’s take on the HDS acquisition of Bluearc. If I had a dollar for every time I read about HDS buying a NAS appliance, I’d still be poor. They tried it a few times with some small OEMs over the years and in most cases the problem was part technology and part a sales issue.

Let’s face it… HDS is used to selling humongosaur-like systems to the very large enterprises who can afford to buy big iron. Much of HDS’ traditional hardware (manufactured by parent Hitachi) is designed around block-based storage (yes, agree with Steve on this).

Unfortunately for HDS, and lucky for NAS-behemoth NetApp, there are still customers out there, even the big ones, who need file storage  because companies still store a lot of information in the form of files – probably a lot more than you feel comfortable with. I have a 1.5TB redundant NAS appliance at home serving the four members of my family. Yes, applications like ERP, CRM and SCM have limited use for NAS systems and will run a lot faster if the database is running off a powerful SAN engine. But for 100% of employees in any company, they will need to store their files in the network somewhere – and a NAS is a perfect place for that.

So back to HDS… why does HDS need a NAS solution? Likely because customers are hinting they need it. But more importantly lacking a NAS  solution gives competitors like NetApp a window to get in and slowly eat through the HDS armor that surrounds Mr Enterprise customer.

Will this ever work for HDS? I think the bigger challenge for HDS is understanding the technology and being able to sell it convincingly.  From history, this is where the rubber meets the road. This is where all those countless NAS technologies that HDS tried to sell got buried. The good news is HDS has had a few years of history selling BlueArc. Now its just a matter of getting the sales people (in Asia) to get moving.

Some months back I spoke to a senior executive discussing about their product strategy. At one point in the discussion, he quoted an old Arabian Proverb: “the enemy of my enemy is my friend”. It is his interpretation of how partnerships are created in the business world. What scares me is that I understood what he meant and see its practical applications.

A week ago I wrote about SAP’s acquisition of Sybase and its implication to the software arms race. I follow this rant with a twist that comes in the form of new partnerships that are shaping up, not directly as a result of SAP’s acquisition, but as a progression of what’s been happening in the IT industry over the last five years.

And it begins with an interesting article written by Gavin Clarke (the UK Register) around the budding relationship between SAP and HP, as they go after Oracle in a more concerted effort. For HP, its because Oracle dumped its technology (Exadata 1) in favor of Sun (Exadata 2), following Oracle’s acquisition last year of Scott McNealy’s company. And to think that at the 2009 Oracle OpenWorld there was scant anonymity between HP and Oracle despite the Sun relationship.

So with all the knowledge gained from the first Exadata, HP brings a lot of knowledge to bear. Still I think the new SAP appliance will have a tough time competing with the Oracle product (now on Gen 2). SAP will likely integrate its expertise around in-memory architecture (NetWeaver Business Warehouse Accelerator) to market a “powerful calculation engine” for data modeling applications.

SAP Co-CEO  Bill McDermott told Informationweek’s Doug Henschen that SAP had briefed partners including IBM, HP, EMC and Cisco on its plans. Partners are eager to embrace the innovation, he said, and said they will find opportunities to build new products and services around the engine.

Granted that HP, IBM and EMC are interested in building an appliance to compete with the Exadata (with HP having a leg-up at this point in time), at this point IBM would be in the best position given that it has a strong database business, has a captive “mainframe” market, and the resources to spend on R&D. All this without necessarily working with SAP assuming that the German software giant will want to push its Sybase database as part of the bundle. HP may be more interested in this although it would hurt its relationship with Oracle big time (we’ve seen this with HP’s relationship with Cisco).

Speaking of which, a Cisco-EMC-SAP triumvirate may present the best opportunity to run against Oracle.

For the moment, Oracle has the upper hand, having created an opportunity with the Exadata and the rest of the industry is playing catch-up. Larry Ellison is having a ball.

SAP [7] agreed to buy Sybase [8] for US$5.8 billion further accelerating the software arms race that appears to have no end in sight. The acquistion is just a tad bit shy from the German software giant’s 2007 acquisition of Business Objects [9] for US$ 6.78 billion.

The Sybase acquisition gives SAP two things: a database of its own, and a foothold into the mobile marketplace by way of Sybase 365.

For years SAP has been content on selling its ERP applications to interested Oracle [10] database customers. The co-opetition scenario benefited both companies as it allowed them to ride on each other’s brands to grow their business. Ray Wang, an analyst with Altimeter Group [11], estimates that SAP sells about US$1 billion of Oracle databases annually. With the Sybase acquisition expect that number to come down a bit in the long term as the German giant uses its size to sway customers away from Oracle.

But not everyone thinks SAP can dance their way around the Oracle strangledhold on customers. WSJ quoted Peter Goldmacher, an analyst with Cowen & Co [12]., said the deal seems to be a desperate move by SAP. “Their business is terrible,” he said. “They’ve been out-executed at every turn by Oracle.” Goldmacher said he believes SAP will have a hard time convincing customers to move from Oracle database software to Sybase offerings.

IBM [13] benefited on this as well but mostly through its systems business and middleware offering. But with Oracle beefing up its middleware stack and offering a single-box solution, IBM should start feeling the pinch from the Oracle Exadata offering. The selling point for many business executives is still faster, better and cheaper – all the elements you will find in the Oracle Exadata product brochure.

The Sybase365 [14] business should be an interesting new field for SAP as it is aimed squarely at the mobile market – an area many analysts agree should get very hot very fast, not only in the consumer space but in the enterprise arena as well.

IBM CEO Samuel Palmisano is quoted on Wall Street Journal as indicating software is the top priority [15] for Big Blue. Palmisano is aiming to have software account for about half of the company’s pre-tax profit by 2015. IBM has spent US$13 billion over a period of seven years acquiring a total of 57 software companies.

One particular area on Palmisano’s analytics. Itself a broad segment of the software industry although around the area of business intelligence and analytics, there is only one vendor left standing by itself – SAS [16].

Wang believes that this acquisition is good for SAP [17]. It allows the vendor to prepare for the next generation of applications that are heavy into mobile and cloud technologies.

At the same time, the Sybase acquisition gives it better access into the financial services and public sector markets. The bonus for SAP is China. Sybase has a strong presence in that market.

M&A, a gentler way of saying takeover, continues to be the norm. I’m not seeing any changes to this strategy anytime. It is the goal of many a small or mid-sized niche software vendors to get rich quick by being acquired and retiring to the Bahamas.

Which leaves me to wonder, what is Microsoft [18] doing?

The turn of the century was a bad omen for computing industry stalwart Sun Microsystems. Once seen as leading the pack in the Unix server market, its decline in fortune may have stemmed from its refusal to accept early on the potential of the Intel x86 platform as a viable, computing workhorse for all but the most demanding of applications.

As far back as 2002, Sun faced quarter-upon-quarter of revenue decline even as analysts estimate the market was actually picking up steam with rising server revenues by most vendors (except Sun).  And so it was that nearly 8 years later, Sun finally conceded defeat accepting an offer by database giant, Oracle, to be acquired for US$7.4 billion at 2009 levels.

Should the industry mourn the death of Sun? I don’t quite revenue the atmosphere during the days when Digital Equipment closed it’s doors following the completion of its acquisition by Compaq (itself eventually gobbled up by HP).

Will the sunset for a veteran hardware vendor mark the official beginnings of the dawn of the software age? It can be argued that for many years most industry observers swooned to the music of hardware vendors. Even today we applaud with each new processor by Intel, or the new lineup of Thinkpad laptops, and tomorrow – January 27, 2010 – the much anticipated Apple tablet device (or whatchamacallit). Sure, we turn our heads when Microsoft launched the latest incarnation of its much despised yet very popular Windows operating system. Yes, enterprises raised their hands to view the latest SAP ERP software. And definitely, businesses are listening more intently on how Software-as-a-Service will reduce their CAPEX cost considerably and make them look better on the accounting books because OPEX doesn’t hurt their market positioning as much as CAPEX.

Its hard to figure out when the software revolution started. But you can bet that just as Apple revolutionized the MP3 market not with a neat, flashy, fancy music player (on the contrary it defined convention by being overly simple) but with software, so too will we finally see the years ahead as the period when software defined how consumers and enterprises will use technology.

For the moment, we bid fond adieu to one of the pioneers of hardware-based computing solutions – Mr Scott McNealy. He is, by many reckoning one of the more colorful characters of Silicon Valley. Hopefully his legacy will somehow survive under the watch of Oracle CEO, Mr Larry Ellison – another industry stalwart.

CEO farewells are fun to read because they are often drafted by wordsmiths who don’t fully understand the emotional turmoil that accompanies an executive’s departure. I am not sure if Mr McNealy hired a professional writer for his farewell but it certainly paints a sad story of the rise and fall of an icon. So before you take out that tissue to wipe away the sadness in his farewell message, watch this video to take the bite out of Mr McNealy’s bittersweet farewell.

Click more for the memo. (more…)

Streetinsider.com recently posted its commentary following IDC’s 2010 prediction that IBM would acquire Juniper Network. This may be a response to HP’s ongoing acquisition of 3Com and the continuing speculation of a potential Cisco-EMC merger.

The much delayed completion of the acquisiton of Sun Microsystems by Oracle will likely come to conclusion during the first of 2010.

Seeing itself more a bridesmaid than a bride is Brocade, which has put up its “For Sale” sign and seen no real suitor moving to take the offer. As far back as October 2009, Gigaom analysts pointed to Juniper as a potential buyer for Brocade. IBM would have also been a good suitor but the overlap is in the Foundry products (assuming Big Blue does acquire Juniper).

I still think Brocade would made a fine addition to HP. Of course Brocade may need to get rid of its Foundry portfolio to minimize overlap with HP’s Procurve offerring.

Assuming that Cisco and EMC do combine, that would leave NetApp and HDS as the lone pure play storage vendors. Can these two survive in an environment where customers want true ease of use, best possible integration, and one throat-to-choke accountability from their vendors?

If you look back at all this a proliferation of vendors came about because customers clamored for more choice. But while enterprises say they like choice because it allows them to haggle on the price, in reality, they will turn to one vendor who has everything because its simply easier to deal with one supplier than a multitude of vendors.

Having a choice of sources is great only in as much as it gives you the perception of freedom to pick what you want. But choice brings chaos to the equation. This goes agaiinst the grain of businesses that must operate in an orderly fashion so that processes can be streamlined resulting in greater efficiency, higher productivity and lower total cost of doing business. Which if my math is correct will mean greater profits and better shareholder value.

So the old adage of vendor lock-in doesn’t hold sway in today’s highly competitive world. As one CEO told me recently, “At the end of the day, its really not a matter of giving customers a wide array of choices to choose from. It is giving each customer the product that he or she will want to buy. And that could be just one product it just so happens to look a little different to the individual customer.”

Smoke and mirrors!

October 10, 2009. I braved the cold winds of San Francisco to attend Oracle Open World 2009. It was my first time to attend this event and true to what my hostess told me, it was jam packed with people wanting to listen to Larry Ellison deliver his welcome keynote address. What surprised me was Scott McNealy, chief executive of Sun Microsystems peddling his stuff to a crowd of Oracle guests and employees. Everyone was expecting McNealy to give his traditional Top 10 “funny, sometimes insightful, and almost always highly Microsoft-targeted” list. But the on-going Oracle acquisition of Sun prevented him from being his usual self (or so he said). Watch him deliver what may be one of his last keynotes as CEO of Sun Microsystems.

In his keynote, McNealy reminded everyone that Sun has “always been about innovation and despite today’s technology having the shelf-life of a banana, you have to keep inventing, creating and breaking-through with new stuff.” He also emphasized that the combined Oracle and Sun companies will create one of the largest pools of R&D in the world. Innovation is not just about creating something new but you need to provide value to your customers, and must result in success.

Larry Ellison, for his part, shared the ‘same excitement’ about the potential that two industry innovators (Sun on the hardware and Oracle on the application software) can bring together to the market. He promised to continue investing in Sun’s core innovations including the Sparc chip and the Solaris operating system.

The announcement of the next release of the Exadata server series seems to corroborate this promise. The first Exadata released was a HP-Oracle venture. Exadata Version 2 sees Oracle partnering with Sun to produce an even better product. While the first version focused on speeding up data warehousing (DW), the succeeding version included online transaction processing (OLTP) compute capability in the same box. What Oracle is trying to do here is deliver a complete DW/OLTP solution that integrates server, storage, operating system, middleware and application to do something faster than is possible by amalgamating different elements from different vendors, the way system integrators do.

Certainly the Exadata offers a slightly radical way of running your data warehouse. If you believe Larry Ellison’s slide on the comparative cost of the Exadata to the IBM near equivalent offering, the price differential is staggering. Such a shift in the way data warehouses are built and delivered should amount to what McNealy calls innovation that delivers true value and profits to an organization.

So am I sold on the idea that Sun will thrive under the Oracle umbrella? The Exadata 2 proves there may be a future for Sun inside Oracle. But I still have some lingering doubts and perhaps its because of the way McNealy left the stage as he closed his keynote. In my mind, it signalled a quiet resignation on the part of this entrepreneur who co-founded a company that today represents a sizeable install base in finance, education, and government industry sectors. But maybe I am just reading too much into it. Watch for yourself below.

Click here for other stuff around Oracle Open World 2009.

It was many years ago while selling ERP systems that I learned to appreciate the power of technology to help me manage my prospect database. Cutting edge back then was a laptop, Microsoft Windows, MS Word and MS Excel. I used MS Word to craft my proposals and invitations. I used MS Excel to keep tabs of my prospects as they progress from cold to hot leads and everything in between.

Reports were simple because I only had a few leads at any given time. I spent an inordinate amount of time between looking for prospects and nurturing my relationships. Most of those relationships were forged through long hours of sifting through directories, begging for referrals, and sticking by every bit of opportunity that comes my way.

My newfound career in the publishing doesn’t require me to be directly involved in sales but I still have relationships to forge with our company’s customers. My contact database is a respectable 2,300 records of people I’ve met in the last seven years, many of whom have moved about their own respective careers and businesses. So if forging good relationships is important in my job as well as career, how do I keep my tabs of all 2,300 names?

The only technology I use at this time is my Outlook contact database. Is this sufficient? Probably not. It would be good for me to know what each of my 2,300 contact looks like because my memory fades as I age (with grace). It would be nice to greet them on their birthdays – thank you FaceBook! And so on and so on.

A friend suggested I try using customer relationship management (CRM) software. Although I’ve heard of and written a bit about CRM, I’ve never really used one. The sales people in my company have. They tried their hands on a CRM solution from salesforce.com and recently migrated over to Oracle On Demand.

I’ve not been offered nor asked to use the system. I am testing out a couple of free CRM products: FreeCRM, MX-Contact and ZohoCRM. I’ll let you know what my adventures (or misadventures) in finding the right CRM software in a separate story. For now this is about de-linking CRM from customer relationships.

According to Anthony Lye, senior vice president of Oracle CRM, many companies misconstrue having CRM as tantamount to knowing and understanding your customers. He re-iterates an old computing adage: garbage in, garbage out. He warns that many CRM implementations fail because companies implement CRM without understanding the context for which the [CRM] solution is being deployed.

He has a point. Today we are often overwhelmed by the promise of technology and we lose sight of what we want to achieve in the first place. Technology should always be viewed as an enabler of a goal or objective. Process innovation should not be sacrificed in favor of technology.

It’s not a matter of “if you build it, they will come.” Rather, its about listening to your customers whether an opportunity is present or not. My aunt is probably my best role model for developing loyal customers/clients.

I’m not advocating you ignore what technologies like CRM, business intelligence and business analytics can do for you. These are great tools at helping you automate some of the mundane aspects of customer relationship building and nurturing. Rather I am suggesting that we do not let technology, and all the marketing hype that surround it, to overwhelm our sense of what is right and proper. Each of us is endowed with common “business” sense. Use it wisely.