IBM buying Sun, bad for most everyone

I truly hope that another suitor will pick up Sun, or the IBM deal falls through on its own. Can you think of a single technology or software that has been improved after it has been bought by IBM? I can't. I can see why IBM wants to do the deal, and of course, I can see it from a pure economic standpoint for Sun shareholders, but for everyone else this very bad with one notable exception, namely Microsoft.

Microsoft will be the big winner here. Contrary to some thoughts out there that suggest that an IBM/Sun combination will strengthen Java and open technologies, I believe just the opposite. IBM's game is to monopolize the entirety of the IT stack, from hardware through services, and it inexorably moves in that direction. Why is this bad? IBM will stack the deck with proprietary (and often inferior) technologies like WebSphere, DB2, Cognos and more. Companies that loved Sun for it's commitment to openness and compatibility will begin to wonder how long they can stay on a JBoss/Oracle platform when IBM starts providing monetary and support advantages to other proprietary components of the stack. If that happens, it will be a shitty day for SaaS providers and other software developers.

So why does Microsoft win big by this? Because is reduces the stack monopoly providers, really to two companies, Microsoft and IBM. I tend to believe Microsoft will grow its market share substantially in database and .NET framework at the expense of ex-Sun customers that want no part of the big so-called value proposition IBM will drive, namely Blue from top to bottom.

So where will the open systems and Java communities seek shelter? My bet is HP. My hope would be the HP does everything it can to buy Sun in lieu of IBM, but I am doubtful. Perhaps they see some short-term growth in the enterprise server business if IBM gobbles Sun, but over the haul, this could be setting the stage for Microsoft and IBM to carve up the landscape. The nightmare scenario would be for IBM to take Java in a proprietary direction. I hope IBM would not do this, but I trust them not one bit.

Who is the biggest loser? Why Oracle of course. Larry Ellison must be ripping his hairpiece out right now at the thought of his biggest enterprise database competitor controlling the hardware that runs Oracle databases more than any other application. Can you imagine the headlines in 18 months? "DB2 processes on average 34% more queries per second than Oracle 11g on the IBM Sun new I-Sun Series database servers." I am sure Ellison is out of his mind about this.

Truly though, everyone in software will lose because all of those enterprise-class and scalable SaaS applications that utilize innovative open technologies are going to suddenly be marginalized in a market now being dominated by two players, named IBM and Microsoft, who have no interest in open technologies.

My list of potential saviors: HP, Intel, Cisco. I am already praying to their Boards for intervention. I suggest everyone do so as well.

HR is not strategic...business is strategic

HR professionals, as a tendency, are really insecure saps. This on-going crap about making HR strategic has been going on for years. It is laughable and pathetic all at once.

What makes HR "strategic?" Is it the fact that it is a necessary function for a business to operate? By that standard, what isn't strategic in a business? the building maintenance crew? the telephone reception function? the accounts payable function?

I firmly believe this "strategic" desire for HR can be stated differently, i.e. "I want my function to be considered 'strategic' so I can feel more valued because I am insecure about my chosen profession and that I might not be important enough." Does anyone ever hear sales, marketing, services, finance, or IT professionals worrying about whether or not the business views them as strategic? Every once and a while perhaps, but minimally compared to HR.

My advice to HR professionals, stop your whinging, be proud, do your job well, and get on with it. It's a job that needs to be done for every business, and that, in itself, should be enough.

This just in - Lawson website is awful

I hadn't looked at Lawson in too much detail in a while, but a recent trip to their website left me reeling in shock, and frankly, laughter. It is simply awful. Neither informative nor engaging, it just leaves me wondering, "What were they thinking?" The little cartoon character, Lars Lawson, takes the cake. Does anyone think this website leaves visitors with a positive impression of the company? If so, please let me know. I am truly curious.

Check it out at http://www.lawson.com

See what I mean?

Technology vendor risk in this economy

In the midst of this lovely economy we are all now enjoying, most organisations who are currently taking a look at HCM/Talent technology are spending a good bit of effort trying evaluate vendor viability and risk. Without delving much into the data on specific vendors, I do believe that you can categorize HCM/Talent technology vendors in this economy to some extent by the sort of risk they might possess.

Here is one way to break this down:

Early stage private companies - Vendors in this category are often innovative and exciting. They also are relatively small (less than around ~$20M USD in revenue) and more often than not, venture funded and still burning cash. But, with a prolonged recession in the works and little new money available for investing, these companies are having to pull back significantly in order to conserve precious cash. Since their businesses are less mature, with a small base of long term recurring revenue, pullbacks can be draconian, and customers could be in for a rough ride. Buyers, do your financial diligence! Some of these companies will do fine, but be aware of the risks.

Highly devalued public companies - This is the highest risk category of all. Why? Because these companies are trading near the basement with no near term prospects for recovery and they have investors that want out. While some of these companies may be sizable and have enough cash to survive, they are at very high risk of being bought out within the next year. I don't need to name these companies, which would be exceedingly impolite, but you likely know who they are, and buyers should be very careful when dealing with them.

Stable public companies - All public companies have been hit hard by this economy, but some of them are fundamentally sound, of scale and still capable of charting their own course and innovating. I would include companies such as Laswson, Successfactors, Taleo, and Ultimate among some others in this category. I think buying from these sorts of vendors is a pretty safe bet. They have enough scale and cash to survive, and even innovate a little in a prolonged down economy. However, I don't look for these companies to be very acquisitive during the recession. They all view their equity as devalued, and are unlikely to use it (or cash) to do a big deal.

The ERPs - As usual, the ERPs get their own category, but I'd throw in ADP, Paychex, and some of the other large employer service giants in here as well. The good news is, nothing has really changed. The bad news is, nothing has really changed. Buyers will probably get better deals, but don't expect much to change about doing business with the big boys. Don't expect a lot of innovation. But, if your organisation was okay with that direction, then move along smartly.

Stable private companies - The wild cards! For those looking for action, this is the place. First of all, the category is truly a mixed bag, but if there is going to be change, I think there is a good chance it could come from this category. Some companies are simply of scale and will keep doing what they've always done. But, some well run private companies could end up being very acquisitive over the next year while the stable public companies are still rebuilding their share prices. All of this is predicated on the return of some amount of private equity in to the market over the next year, which, in and of itself, is questionable. Given the lack of constraints that a private company of scale has, plus a return of some capital, some real breakouts could occur here in the next year. But, as with all private companies, buyers should do their diligence, both financial and strategic. Sometimes it's hard to tell who belongs in this category and who belongs in the category below.

Declining private companies - Stay away unless they really have some differentiating thing your organisation must have. These companies are neither innovating nor stable. Sometimes a company in this category may have a technology that survives, even if the company may not. Sometimes, a declining company gets recapitalized and can change its course. But this relatively common phenomenon in the past, is unlikely to happen in this economy for some time. Again, buyers do your diligence.

There are many valid and different ways to look at the HCM/Talent technology vendor landscape, and this being only one of them. I hope it provokes some thoughts and is of some use.

Cutting industry analysts a break...sort of

I am often pretty hard on industry analysts for a number of reasons. I think they epitomise the axiom " a little knowledge is a dangerous thing." I also firmly believe that they are spoiled by being in a position where they rarely face any consequences for what they write or say, and are thereby emboldened to make pronouncements with incomplete data and poor assumptions. In HCM/Talent technology, I think they really get away with some things because, truly, as a rule senior HR professionals are the most stupid people in an entire organisation when it comes to technology.

There, I said it. You know it's true. This isn't to say that HR professionals aren't otherwise competent or smart, just generally not when it comes to technology.

So, this is where I believe industry analysts can, and often, do the world and their clients a real service. Namely, explaining to senior HR practitioners that many of there assumptions about technology, HCM applications, etc., are often wrong, or minimally, much harder to do than they think they are. At its finest, this is a consultative process where industry analysts can demonstrate that the practicality of technology is always less than it's promise, and that great success comes only with focus and discipline. But most of all, industry analysts can help practioners build a support network of technologists and processes that will keep practitioners safe from putting on rose colored glasses, and instead keep them focused on achieveable results.

In HCM/Talent technology, industry analysts offer organisations far more value when they help practitioners understand how to think about technology, rather than telling them which technology or company is better. My New Year's wish is for analysts to stop telling us about vendors, and to start telling organisations how to think.

Bill Kutik's latest column

A few days ago Bill Kutik wrote a column about recent events at Authoria http://www.hreonline.com/HRE/story.jsp?storyId=155253755. In a single column, Kutik manages to provide the single best and most useful overview of Authoria and Tod Loofburrow ever published, at least to my knowledge. Simply by reporting the facts and history of the company as they are, any organisation looking at Authoria now has a much better context of what this company is about, good, bad or otherwise.

I reviewed earlier analyst and media coverage of Authoria for the last few years, and it was overwhelmingly worthless hype or commonplace information that would not help a buying organisation really understand a potential vendor. I am on the record as being more negative than Kutik on Authoria, and it is certainly not my intention to plant my nose firmly between his arse cheeks. But, with this column and others, Kutik reminds us of why proper press coverage and informed reporting are so important, not just to HCM technology, but to business in general.

It's truly baffling that with all of the analysts and consultants out there charging organisations premium fees to help make HCM technology decisions, that a simple column by a member of the press is the person to actually deliver some goods. Best of all it was free!

The Workday Mystery

Why is it a mystery? It's a mystery because no one seems to know how Workday is truly performing. Recent press releases indicate that Workday has over thity customers live, but what vexes me is that I can't say whether or not this is good, bad or in between.

Among analysts, publications, trade shows and the general industry buzz, no company is quite as well known as Workday. I guess having Dave Duffield as your founder helps that. Some of that buzz is truly deserved as Workday is making the most audacious effort possible in HCM, namely overturning the Oracle/SAP ERP hegemony in HCM. Also, having seen a few demos, there is no lack of innovation, coolness and utility from the application itself. It's definitely not yet complete though, and likely lacks polish in a number of areas, but it seems to be getting there and it has a first rate technology team.

Still, questions remain:

• How much in revenue are they doing? Are they profitable? Do they care?
• How happy are these thirty customers? What are they implementing?
• Is the technology working? Is it buggy, reliable, fast?
• Is the functionality really flexible enough for the enterprise, or are there pressures to customise?
• How are Dave Duffield and Greylock Capital defining success for Workday?

Lucky for them, as long as Dave is paying the bills (something he can do for a long time), they don't really HAVE to answer any of these questions anytime soon. However, if they are meeting with success, one would think that they would WANT to tell the world.

Personally, I am cheering for them.