The Wisdom Life Cycle

It’s been an interesting 24 hours, and if you’d like to catch our version of Twitter, go to James Taylor’s (the IT analyst, and brother of the opera singer, not the singer/songwriter) excellent play-by-play coverage of Ilog’s Dialog 2008. Taylor, myself, and several others sat down for a lunchtime roundtable with IBM’s Sandy Carter, plus an encore performance from Ilog CEO Pierre Haren.

At the start of the discussion, the question of whether SOA is old wine in new bottles came up. (We’ll be raising that issue again tomorrow as we moderate back-to-back sessions on IT Industry trends and SOA.) Carter claimed that, compared to earlier approaches like CASE, rapid application development, object-oriented or component-based design, that SOA is more evolutionary than revolutionary – and besides, there’s a real body of industry standards this time. Haren interjected, “I’ve never seen an object,” and that “service orientation” was the key. As if anticipating the line, Carter added that she’s encountering many customers who want their companies to be service-oriented; in case you’re wondering, IBM’s been holding a number of SOA Executive Summits to press that very point.

“We don’t talk the “A” word [of SOA] anymore, we talk process orientation,” Carter said. That was kind of an interesting statement, as consultants like David Linthicum have long railed that SOA is an enterprise architecture pattern – a point that yours truly, Dana Gardner, and Todd Biske had a lot of fun with at last summer’s Open Group EA conference in Austin. In other words, lets start painting SOA as less enterprise architecture, but more business process management.

Maybe that’s because, as our colleague Joe McKendrick just pointed out, that there’s a perception that SOA is a long journey. The not so-hidden question: has the business run out of patience with SOA as a journey? Yet another question we hope to pose tomorrow.

As this is a conference about business rules management, the topic waded back into focus when discussion shifted over the looming generation gap, and with impending retirement of the baby boomers, the fact that a collective amnesia is about to settle over the corporate world if we don’t take action now to imbed those rules and processes before they literally walk out the door. It’s a thought that almost makes one pine for the simpler days of Y2K, when at least there were a few aging geezers still alive to patch up those 30-year general ledger systems.

That’s where Haren pointed to a concept he raised during his keynote this morning, that having good data is not good enough. Not that there was any offense meant against the data quality vendors, but you can have conflicting pieces of data where both are technically right. He pointed to a customer, which had an SAP system that had a transportation management system that numbered trucking lanes starting with the number zero, while another package was designed to reject integer values less than one. Taylor added that the problem gets compounded when you implement master data management, at which point you’d better have a data validation rule before you literally broadcast out what is supposed to be the golden copy.

That’s the point where Haren referred to what we’d call the wisdom life cycle. That is, you have apps that convert data to information – for instance, you total up sales and you have information on how well sales performed during a given period. It becomes knowledge when the information is absorbed by sales and marketing groups, and becomes wisdom when those same groups gain the insight on what’s likely to sell when the weather report predicts 60 degrees F and sunny on the weekend before Christmas. (Hint: you probably won’t be selling many overcoats.)

Eat or Be Eaten

Just before dinner last night, we sat down with several colleagues in a highly informal but on-the-record chat with Ilog CEO Pierre Haren on the first day of Ilog Dialog 2008. Although he phrased it differently, a term he called “Movement Wars,” the message he conveyed was a familiar, but poignant one given the current state of the software market. Coming just ahead of a 3-course meal at a luxurious Palm Springs resort, our takeaway is that to survive in the business, you must eat, move, or get devoured.

It was an appropriate follow up to an interview we conducted with Haren last fall on how western technology companies can thrive in Asia that was published in CBRonline.

The obvious examples he was pointing to included Microsoft, and to a lesser extent, SAP and Oracle. He mentioned that in the typical lifecycle of a software vendor, first you get about a handful of successful references; then you try replicating it into a solution and if you succeed, you get to about 20 – 30 successful accounts. That’s the time you have to either start thinking of specializing your solution for vertical sectors or other specialized sectors of the market, or you must change your role and move on.

He gave the example of optimization, a market where Ilog has played an OEM role with players like i2, but is now starting to push its own independent brand. It was initially a custom development market, then i2 commercialized it. And once it became a billion dollar market, SAP and Oracle acted as “bottom fishers” in pushing i2 (which was busily shooting itself in the abdomen anyway) back into a corner where it barely breathes.

Haren then recalled a talk delivered by Steve Ballmer in front of an audience of French software vendors. With vivid memory, he noted the number of bodyguards that surrounded Ballmer, who is not exactly physically diminutive in physical stature himself. “What were they worrying about? That some disgruntled customer who discovered a bug in Excel would go knife him?”

Ballmer’s message was, in effect, if a market gets big enough, that Microsoft would move in (“crush you” was Haren’s, but probably not Ballmer’s term) and that you as software vendor, would have to cultivate some niche and deepen it to survive once Microsoft gets in your face.

This of course comes on the heels of Ilog’s recent announcement of a new set of offerings that natively tie in with the forthcoming BizTalk Server “6” (eventually to be officially branded 2008 or 2009), Office 2007, and the latest version of the .NET framework. Echoing words that we heard from Ballmer himself at Sand Hill Group’s Software 2007 conference last spring, it’s the vision of Office Business Applications, of which the best known example the joint Microsoft/SAP Duet offering.

While knocking the previous BizTalk 2006 as “crap” (this was a candid discussion), he claimed that with BizTalk 2008 and the emerging Oslo initiative, that Microsoft is going to get enterprise apps, and specifically, BPM, right this time. Of course to anyone who’s watched Microsoft over the years, the pattern is familiar: they get it down by version 3.0.

And, while nobody (yours truly included) likes the prospect of having to move onto yet another new Office file format (Office 97, anybody???), Haren pointed out that this time it’s different. “With XML, added to the new file format, you can turn Word into a generic GUI for any business application with elements that are updated in real-time. You have a form that you fill with structured elements, where you can imbed rules.”

Of course, the idea of a dynamic document took us back to the old Interleaf notion of “Active Documents,” where with millions of dollars of custom programming, your documents too could be populated live by Oracle databases. That was back in 1994, but this being 2008, and the fact that there’s XML, it should hopefully be a bit cheaper on this go round – that is if you don’t mind the hassles of conversion or coexistence with the new .docx file format.

(By the way, while we’re on the topic of Microsoft file formats, frequent blogger and developer Joel Spolsky last week gave a great explanation on while those Office file formats are so bloated.)

But back to the saga of the African Veld. Just as Ilog gets cozy as an early member of Microsoft’s Business Process Alliance, it too must think about moving on, because at some point, Microsoft is likely to do to business rules what it previously did with OLAP.

Of course, in the grand scheme of things, Haren believes that Google is the first challenger to emerge that might make a tidy meal of Microsoft itself. Not of course, that that is anything we haven’t heard before, except for the fact that it follows in the same breath his grand expectations for Microsoft as enterprise applications platform. (And, as a recent post from Josh Greenbaum confirmed, Google itself still doesn’t get the enterprise apps market.)

When we asked Haren about how he can be so bullish and cautious, he explained that in the next wave of the market, success on the enterprise side may not be enough to keep a company from becoming history.

Are SAP and Oracle listening?

Upgrade, Or Else

At some point, software vendors have to pull the plug because they can’t afford to keep supporting products going back 10 or 20 years. And so it’s inevitable that ISVs sunset support at some point. But in most cases, vendors don’t go out of their way to disable products that are otherwise working just fine, thank you.

And so we recently stumbled upon a mailer from Intuit, warning us that the company will pull support from Quicken 2005 after April 30. Although three years seems awfully soon for a vendor to sunset support, we’re willing to give them the benefit of the doubt because it does cost money for vendors to support product. But the kicker is that with support ended, that Intuit would disable what is arguably Quicken’s most valuable feature: automated updating of financial data from banking and credit card issuers. Of course, if you pay the “discounted” price of $79.95, Intuit will gladly upgrade you to the new Quicken 2008 version and keep your online service alive.

Once our anger subsided, we realized that (1) we resent forced upgrades, but (2) that software vendors must be compensated for maintenance. Somehow, we don’t mind it when Symantec charges roughly $30 for annual subscriptions for Norton Internet Security, because the company provides a real service in keeping virus signatures up to date. And so we thought, maybe there is some element of that with Intuit, which maintains a database of financial intuition online sites for ready connect. But their frequency of update is nothing like keeping pace with the fast mutating world of malware.

So we vented with Jim Geisman whose sole business is to help software firms price properly, and profitably. His verdict? “Security stuff changes so an annual fee makes sense whereas Quicken doesn’t. Now if they bundled TurboTax with it, that would be another matter.”

Our sense is that Intuit is trapped in an old software pricing model that is downright deceptive -– the license might be “perpetual,” but the product has planned obsolescence written all over it. Interestingly, Intuit is being very hush hush about all this — it buries its product sunsetting policies to a very remote corner of its website.

It also alienates customers. Who likes to be pushed into an upgrade that they don’t really need? Intuit is missing the boat on subscription pricing which, not only lessens the sticker shock for customers, but also provides opportunities to engage with the installed base far more often than arbitrary 3-year cycles.

2011 update: Intuit is still pulling the same old tricks 3 years later.

Open Sourciness

We noted last week that JBoss seems to be undergoing some generational pains, as it strives to morph from an open source products company to an enterprise open source products company. So its formal announcements covered the enterprise tack: something called Enterprise Acceleration that performs the basic blocking an tackling to show enterprises, ISVs, and systems integrators alike that nobody will get fired for buying JBoss. And then there were the pronouncements to the faithful that, while JBoss is trying to go enterprise, that it won’t forget its roots.

First, the enterprise stuff. So-called Enterprise Acceleration is a new bunch of consulting services, testbeds, benchmarks, and best practices for reducing the risk of migration, covering migration, interoperability, and performance tuning. Plus, for ISVs and systems integrators, a center that formally certifies that third party applications indeed run properly on JBoss.

There’s little startling about the announcement. Given that JBoss has always pitched itself as the challenger, and that its product has cultivated a reputation as a compact, flexible body of code that just actually works, the burden of proof is on JBoss to document that it can scale up and won’t jeopardize security.

JBoss also announced its new SOA platform, but there’s less to the announcement than met the eye because JBoss already had some of the pieces. The SOA platform announcement was that its ESB (enterprise service bus) was now ready enough to be bundled with JBoss’ existing JBPM (business process management) offering. We emphasize “ready enough,” because the ESB is stil technically in beta. According to Crag Muzilla, vice president of the middleware business, the core is in place, but still lacks some tooling.

But back to the growing pains. Although the acquisition by Red Hat is almost two years old, as we noted last week, the move has not gone down smoothly with the customer base. At first blush, the concerns are over licensing and support, but they belie a general feeling that Red Hat is trying to tame JBoss’s culture. Muzilla likened it to sibling rivalry, where the younger brother resents the older one for growing up too quickly.

Addressing questions about whether the deal was good business for JBoss, Muzilla admits that sales drops following the deal were the result of turnover in the sales teams and inadequate cross training of Red Hat reps, who didn’t fully understand the JBoss business. But he claimed that JBoss is on the upswing, with business increasing for each of the last three quarters, and that the accounts teams have been repopulated with salespeople from the likes of BEA and Cape Clear – who obviously should the business.

Although both began and still conduct business as open source product companies, arguably, Red Hat was around commercializing a support model for external innovation around Linux, whereas JBoss’s open source model is more about what we have called in the past the captive model, in that it was largely about its own project – or projects such as Hibernate where it hired the leaders and brought them in house.

CTO and Fleury contemporary Sacha Labourey apologized for “a complete shutdown of communications” that exacerbated the problem with JBoss faithful, admitting that JBoss management was too preoccupied with integration into Red Hat. When it came to communications, JBoss swung from one extreme to another. He conceded that when JBoss spilt off the enterprise product from the core open source project on JBoss.org, that many of its best customers were not even aware of the split. Admittedly, the turning down of the volume reflected a move to make the company more enterprise-friendly, where customers with large deals value product stability over nightly innovation.

And, with the splitting of JBoss.org, the goal was to align JBoss’ open source business with that of Red Hat, which has two separate streams: one for that stabilizes code for enterprise licenses, and the other the purer open source model where source code is updated nightly. Labourey took pains to point out to us that, although JBoss was trying to align itself more closely to the Red Hat business model, that JBoss would retain its uniqueness. Admittedly, the differences were a bit subtle to our ears: While Red Hat Enterprise Linux is only publicly available in binary, for JBoss, you can get access to the source code if you go to the JBoss.org side, where it’s frozen in an image.

To paraphrase Stephen Colbert, some open source technologies have more open sourciness than others.

April in Orlando

Until now we’ve never had the pleasure of seeing IDS Scheer founder Dr. August-Wilhelm-Scheer belt out his baritone sax. But then again, excluding Borland founder Philippe Kahn’s riffs on the sax that used to greet his press conferences during the 80s, I can’t say that we’ve seen a keynote session introduced by a swinging rendition of Nat Adderly’s Work Song either. Evidently, a few others such as BPM blogger Sandy Kemsley have seen Scheer’s mean baritone before.

But at lunch, Dr. Scheer performed an extended set in front of press, analysts, and customers, and then spoke of the parallels between playing Jazz with managing an organization and embedding robust business process. And as a jazz lover ourselves, we especially appreciated his guiding metaphor: you can’t have creativity or innovation without underlying structure, and vice versa.

He spelled it out as “APRIL.”

“A” stood for “Autonomy.” The Jazz idiom is unique because it prominently features improvisation. Soloists are granted autonomy to invent new patterns of notes that float above the tune and reinforce, or deliberately contrast, to the harmonies. It is assembling a new solution on the fly to captivate the demand at the moment, which for jazz, is presenting compelling music. Scheer drew parallels with SOA, which in a sense involves similar improvisations as we compose processes while we dynamically orchestrate services. There are also parallels with mass customization, where you provide teams or set business rules that provide the business unit the autonomy to configure to order on the fly. But all this does not happen in a vacuum. Autonomy only succeeds when you keep it within context, which in the case of jazz involves some sort of relationship with the melody and/or rhythm, and in the enterprise, means that autonomy is exercised in support of business goals and in compliance with organizational (or regulatory) compliance mandates.

“P” stood for “Passion.” In jazz, as in any art form, a successful performance is not only one that is technically proficient, but one that is inspired. The same applies to running a business – your staff will only be effective, creative, resourceful, and act with agility when they have internalized the mission and have a passion for executing to it.

The “R” word, for a change, is not “recession,” but in this case, “Risk.” When any performer goes out in front of an audience, they must be prepared to take risks and venture into new territory if the same old material won’t captivate the audience. In jazz, it is the soloist’s reaching for new notes that, while he or she may be practiced, are composed on the spur of the moment because it feels right. It means taking risk, because sometimes that extended high note could either sound flat or absolutely dazzle – but you won’t know till you tried it. In running a business, taking risk is all about not simply surviving, but growing your market share on dare, pioneering a new market, or deepening your relationship to the customer. Yes, you need solid quantifiable research, but at some point, it comes down to making a dare.

Related to risk is the “I” word, which is “Innovation.” The best musicians are well practiced, but also the ones that are willing to take their musical styles in new directions, or willing to add new nuances to well-known standards. When somebody asks “Play Misty for me,” hopefully the keyboardist will add some new hooks that will make that rendition memorable. And so, innovation is also the key to business growth. Simply churning out the same commodity inevitably invites competitors to swoop in with their own innovation and steal your market right out from under you.

Finally, the “L” word is “Listen.” As Scheer’s mike was not working at the time, a few of us all too gamely asked, “What?” Inside joke (probably not intended) aside, it means that musicians jell together only if they listen and literally stay attuned to each other’s rhythms. Obviously, the band must respond to where the soloist is going, but if the soloist detects the band picking up on a riff, he or she must be prepared to seize the moment. In business, it’s all about listening to your colleagues and your customers, because that’s only way that your business can stay relevant and agile.

With someone like Dr. Scheer who is often referenced as an esteemed professor, we were expecting a business process lesson. We didn’t expect that he would literally hit the high note in driving that lesson home.

Generation Gap

Now safely out of the snow, slush, ice, and freezing rain that flooded roadways on the way to the airport this morning, we finally made it down to Orlando where we’re in for a rather interesting juxtaposition. On adjoining hallways in the same Marriott, JBoss and IDS Scheer are holding their annual North American events. On one side, a bunch of open source developers, on the other, a sober group of business and enterprise architects who deal with what the JBoss crowd might otherwise consider the enemy: IBM, SAP, and Oracle.

Today was JBoss’s turn. Maybe it was too appropriate, that fresh out of the rain and slush (not to mention an unscheduled refueling stop in Jacksonville), we felt right at home in muddy sneakers and dirty jeans at the JBoss event. Tomorrow we’d feel embarrassed (yes mom, we’ll start ironing our slacks once we’re done with this blog).

Reinforcing our perception is the sense that JBoss is trying to find its own voice now that the reins have passed on from founder Marc Fleury (yes, he’ll make his emeritus appearance tomorrow, but we’ll be elsewhere). Red Hat CEO Jim Whitehurst, barely on the job for 6 weeks (he was formerly COO at Delta), touting an enterprise message with the stretch goal to claim half of all enterprise middleware workloads by 2015. VP of engineering and cofounder Sacha Labourey making a rather amateurish presentation that seems all too fitting with the improvisational, open source roots of the company, conceding that the company has not been as vocal about its accomplishments lately (e.g., Fleury’s no longer around to trumpet them) – and promising to do better in the future.

Over the past year, we’ve been musing about whether JBoss is finally growing out of its outlaw heritage. And our sense now is that the company is still trying to settle on its identity now that it is part of Red Hat, and how it can afford to serve two masters: the installed base that likes the freedom of being able to monkey around with the appserver without losing support, and the structures of Red Hat Enterprise Linux, where changes to the supported configuration might jeopardize support.

As we’ve noted, JBoss is trying to build its own alternative to Oracle/BEA and IBM with a fuller middleware platform stack, buttressed with Red Hat Enterprise Linux. Yet, we’re not sure how well that strategy will go down with JBoss’s historical base.

We found a surprising number of JBoss Server customers who considered Red Hat Enterprise Linux too bloated, opting for other distributions instead. Aside from Hibernate (and deep respect for creator Gavin King, who’s part of JBoss), JBoss still has its work cut out getting adoption of the portal, rules, orchestration, ESB and other parts of the platform. For instance, one customer claimed the portal product was too buggy, finding it more expedient to write his own code. Others spoke of dispensing with JBoss’s still developing ESB in favor of the more established Mule open source project.

Now you’ve got to take a lot of the feedback with grains of salt. The core base that loves JBoss Server is a group that resembles the UNIX programmers of yore: they prefer slimmed down, command line interfaces because for them it’s far more efficient than monkeying around with a GUI. And in fact Microsoft, which obviously promotes visual development and administration, bit the bullet earlier this year with the command line admin console PowerShell. And these folks love to program rather than take packaged solutions.

The problem for developer-focused ISVs is that these folks don’t buy enterprise suites.

That poses a dilemma for JBoss. It’s been known and loved for fairly compact, configurable server platforms right-sized for Linux and Unix geeks. Yet as it becomes part of the Red Hat Enterprise, and charts ambitious goals to grab half of middle tier workloads, it’s got to cultivate more enterprise appeal, and especially, targeting business and process architects who wouldn’t fit in at a JBoss conference today (well, we did happen to meet one).

Unfortunately, because JetBlue packed only enough fuel to get us only as far as Jacksonville, we missed our opportunity to ask Whitehurst how he plans to take JBoss upmarket (we hope we’ll get our chance next week). But for now, we’re hedging our bets on whether or how soon JBoss will be able to deal with what’s likely to become a generation gap.

Closeout Special

It’s tough when you get caught on the west coast, on your day off, and wake up to find that the world has already reacted to what is likely to be the tour de force in IT industry consolidation for 2008. By now you’ve already read that, previously spurned, Microsoft is finally going hostile in a takeover attempt for Yahoo. It’s price — $44.6 billion – is more than enough to jolt potential white knights like AT&T, Comcast, Time Warner (which didn’t do so well last time it made a bid, or more officially, got swallowed by an Internet portal), or even News Corp. for that matter

Having built one of the web’s most successful first generation portals, Yahoo has continually struggled to find Act Two. Microsoft has also struggled with online strategy, and not without trying, has attempted a portal strategy that dates back as far as its largely moribund MSNBC partnership. Of course, the difference between the two is that unlike Yahoo, Microsoft has this annuity business called Office and Windows.

The good news for Microsoft is that Yahoo is likely to come cheaper than it would have fared a couple years ago. The bad news is that Yahoo’s position is far weaker, and that in the interim, Google has so far remained invincible despite a textbook vulnerability of its core business remaining a one-trick pony. Nonetheless, Dana Gardner felt Microsoft should have jumped much earlier for a deal that “should have been an obvious merger for them a long time ago.” From published reports, it’s evident that Microsoft has wanted to make the move for some time, but was leery about resorting to a hostile bid.

Unquestionably, the deal is an attempt to build critical mass vs. Google and, arguably, a wide variety of media outlets that until now did not necessarily deem themselves Microsoft rivals. Clearly, this is a battle for consumer eyeballs, meaning online ad dollars. If you have any doubt, compare growth numbers for mobile device providers (except Motorola) vs. anybody in the high tech industry except Google. Or compare the numbers going to Comdex vs. the Consumer Electronics Show. Oops, there is no more Comdex.

For sideshows, it would represent a federation of two leading developer networks. And although Yahoo’s is largely based on open source, such a deal would provide a combined Microsoft/Yahoo (Microhoo?) real legs for Microsoft’s current open source strategy, which essentially amounts to, “if you can’t beat ‘em, join ‘em.” Specifically, it would be a way to really scale Microsoft’s WAMP stack strategy, as a diagram shared by ZDNet Microsoft watcher Mary Jo Foley after her conversation with Microsoft’s open source lab director illustrates.

Much of the blogosphere views the deal as a circling of the wagons. eWeek’s Steven Vaughan-Nichols stated that “Microsoft has been beginning to decline” as it struggles with lukewarm reception to Vista, and the fact that Google, and to an obviously lesser extent, OpenOffice are making inroads to Microsoft’s dominance on the desktop. “If Microsoft is to avoid aging into a last-generation technology company it must make a major move like trying to buy Yahoo. The company literally has no choice about it from where I sit.”

Mary Jo Foley couldn’t agree less. “I — and, apparently, many Microsoft shareholders (given the hit Microsoft’s stock took today) — am more in the “hate it” than “love it” camp.” Besides technology overlap and cultural differences, not to mention “the staggering price tag that has folks, including yours truly, up in arms,” Foley slammed the move as betraying Microsoft’s core competence in remaining forced on its own platform. Gardner added that given the conflicting platforms, that the whole deal “spells a significant period of confusion. And that’s for consumers, IT buyers, enterprise CIOs, and advertisers as well.”

What bothers us is that this seems to be a Hail Mary pass, in that Microsoft is departing from, as Foley described, what it has historically done quite well. That is, with some notable past exceptions, Microsoft has typically practiced a steady but shrewd acquisitions strategy that targeted small startups whose technologies could readily extend its core products. Obviously, Yahoo is an extreme departure, modeled after the ridiculously sized minority equity stake in Facebook, that’s intended to jumpstart Microsoft in consumer markets orbiting outside its domain.

So while we have a relatively easy time figuring that Microsoft could make this a laboratory for its WAMP open source strategy, we have a much harder time with several bigger issues: First, whether Microsoft can indeed do a big acquisition, not to mention gain clearance from the SEC, the EU, not to mention both company’s shareholders? Secondly, while each has strong spots in the battle for online eyeballs, will scale be enough to propel what are isolated areas of success into the critical mass necessary to take on Google or News Corp?

We’d like to see Microsoft duplicate its original success embracing the Internet, which it did so coming from a late start. Nearly 15 years ago, Bill Gates mobilized the company in a turnaround that remains to this day a classic business school case study. At the time, the company had executive vision, not to mention the depth of talent, to pull off such a 180. On this go round, we’d rather see Microsoft do what it does best instead of a huge, highly speculative gamble.