Larry Ellison has predicted his company’s cloud ERP business will grow faster than projected, being “a lot bigger” than $20 billion in five years.
Oracle’s cloud ERP business has been gaining traction, building on the company’s wide portfolio of products and services. The company recently released its quarterly results Thursday, handily beating analysts’ expectations, thanks in no small part to the performance of its cloud business.
Speaking to investors following the repot, co-founder Larry Ellison said he believes Oracle’s cloud ERP business will be worth far more than current projections and growth rate would indicate, according to ZDNet.
“I think it’s going to be a lot bigger than that,” Ellison said. Ellison then went on say that the company’s plans revolved around partnerships with other companies, especially in the financial services and and logistics industries, partnerships that will help it accelerate its growth beyond the $20 billion mark.
Oracle has increasingly been making waves in the cloud industry, poaching major customers from competitors and, most recently, pointing out the reliability of its platform compared to market leading AWS.
If Ellison’s predictions are correct, Oracle could be poised to make serious headway against the top three cloud companies.
SAP entered into an agreement with the Department of Justice (DOJ), admitting it illegally exported thousands of copies of its software to Iran.
SAP is the one of the leading enterprise software companies in the world, with a focus on ERP, cloud and IoT solutions. The company does business all over the world, requiring it to adhere to the laws and regulations of the many countries it operates within.
Unfortunately, the company has run afoul of the US, ignoring sanctions and export restrictions against Iran. As a result, SAP has entered a non-prosecution agreement with the DOJ, admitting it sold thousands of copies of its software to Iran, and agreeing to penalties and restitution.
Under the terms of the agreement, SAP will pay combined penalties of more than $8 million. SAP will disgorge $5.14 million of the money it received through the illegal sales.
“Today’s first-ever resolution pursuant to the Department’s Export Control and Sanctions Enforcement Policy for Business Organizations sends a strong message that businesses must abide by export control and sanctions laws, but that when they violate those laws, there is a clear benefit to coming to the Department before they get caught,” said Assistant Attorney General John C. Demers for the Justice Department’s National Security Division. “SAP will suffer the penalties for its violations of the Iran sanctions, but these would have been far worse had they not disclosed, cooperated, and remediated. We hope that other businesses, software or otherwise, we heed this lesson.”
“By supplying Iran with millions of dollars’ worth of illegally exported software and services, SAP circumvented U.S. economic sanctions against Iran—pressure that is intended to end Iran’s malign behavior. However, it was SAP that first uncovered and reported this sanctions violation, and we would like to thank them for working hard to enhance their compliance program to prevent future violations,” said Special Agent in Charge Joseph R. Bonavolonta for the FBI’s Boston Division. “Let this case be a lesson to others that it’s better to self-report and own up to one’s mistakes than undermine U.S. foreign policy and adversely affect our national security.”
“Innovation is the key,” says Honeywell CEO Darius Adamczyk. “Anything we do in Honeywell, innovation is always the key. Whether it’s expanding into Europe, driving more robotics, a connected warehouse offering which we are bringing to customers and having a broader play, are the key technology levers for that business.”
Darius Adamczyk, CEO and Chairman at Honeywell, discusses how the company is using innovation and technology to drive growth in an interview on Bloomberg:
Honeywell Digital Makes Us a More Contemporary Digital Company
As we always said my number one priority as CEO was to drive organic growth, but we never say we’re going to give up on our margin expansion. We do it through a combination, both commercial levers, which is managing our mix, and always introducing new products, which bring more value to customers. But also not forgetting our roots, which is driving productivity. With the number of ERPs we have and the kind of complexity we have in our supply chain, Honeywell Digital, which is going to make us a much more contemporary digital company, we have plenty of levers for productivity as well.
Honeywell Digital really has three primary elements. First is data governance, which is standard across all our various businesses. We’ve done over 80 acquisitions in the last 15 years so we have a lot of disparity. Then there are common processes, which is we want to run our businesses the same way in a very consistent manner. We have some pockets of excellence, but those have some inconsistency. Finally, all integrated into a common IT platform. Just to give an example, we had well over 1,500 different software applications before we started. We had over 150 ERP systems. It’s just very difficult to run a company efficiently and enable us to really make good data-based decisions. Honeywell digital is really all about enabling that.
Anything We Do In Honeywell, Innovation is Always the Key
Warehouse automation, which we started in 2016 with our Intelligrated acquisition. It’s been just a terrific business growing strong double-digit. We also made another acquisition called Transnorm which added to that technology in Europe in Q4 last year. We were planning on growing it organically, but also we’re looking to enhance our offerings, so we’re looking for inorganic opportunities as well. Innovation is the key. Anything we do in Honeywell, innovation is always the key. Whether it’s expanding into Europe, driving more robotics, a connected warehouse offering which we are bringing to customers and having a broader play, are the key technology levers for that business.
Amazon is a big customer but we have a lot of big customers. I wouldn’t say it’s a predominant customer in that business. Just about everybody is looking into ecommerce because with a lot today’s retail you really have basically two options. One option is to enhance the in-store experience which a lot of retailers are doing. The other one is to drive ecommerce. We think that this trend is going to continue. Although I would say it’s in the middle innings in the US, it’s just beginning in Europe. We think we have a huge opportunity in Europe, India, and some of the other overseas markets.
We have a very active venture capital fund and we’ve made about six investments in the last six months which is augmenting our technology plays. So although we haven’t made any big acquisitions, other than Transnorm in Q4, we are continuing to invest through our venture fund and we’re deploying capital that way. It’s been a terrific story for us in 3D printing for instance, particularly for our aerospace business. For a lot of the slow-moving parts we’re trying to basically get a new part certified and three printing per day. That’s our objective. Our aerospace businesses have made tremendous progress in achieving that and it’s really helping both for our inventory and on-time delivery for a lot of our aftermarket customers.
It’s Important For Teachers To Be More Effective in STEM Education
Regarding the workforce, education is the key and particularly STEM education. Honeywell is a big believer in that. Not only do we develop a lot of our young people that we bring into the company but we also spend a lot of money and time on developing teachers. It’s important for teachers to be more effective in STEM education. It’s something that we’re going to be supporting going forward even on a broader scale because that’s the way to differentiate our company.
We’re always going to be differentiated by technology and we want to bring the brightest and the best. We want to make sure that it’s a competitive issue, not just here in the US, but everywhere we hire people, and we hire people just about everywhere. We have engineers in the US, China, India, everywhere around the globe. I would say lately we’ve actually been very much on the hiring string. When you grow 8% that creates a lot of opportunities to hire a lot of people particularly in the area of technology and engineering and software.
“Cloud ERP is a very new principle in the market,” says Mark Chalfen, director at PwC. “The way that I see cloud is all round simplification—simple and standard. It’s a lot more easy than it was five, ten, fifteen, twenty years ago.”
Mark Chalfen, director at PwC, talks about how cloud ERP software can help companies drive innovation, standardization and cost savings.
Speed is not a problem. Speed for the organization is the speed to consume the change. The speed is understanding your roadmap, building that roadmap, understanding what the future holds and then planning that back in.
Overcoming Preconceptions About ERP Software
A true ERP, a SaaS ERP, is an asset. There’s a number of clients I will work with and start to talk with and they see it as a liability. We take them on a journey and the realization changes that actually cloud ERP is an asset. The speed, the innovation, the standardization—all the things that people previously thought an ERP was, the ability to write lots of custom code, those benefits are removed when they see the power of the cloud ERP and the future direction of SAP in cloud ERP.
Now, all of our engagements are with the c-suite—a CFO, a CEO—who understands the power of cloud ERP, understands the power of SaaS. That means that the programs we work on are business-led, truly business-led. They understand the benefit that it provides: standardization, simplification, speed and the cost benefit. Now you have standard process. You get some efficiency and you’ll get some cost savings.
There’s three key areas. Break everything off into small consumable chunks. Build that confidence within the business. ‘Look, we deployed within three months. We deployed within six months.’ You then build that confidence. We then need to focus on the change appetite. You need to plan the change engagement. Followed around that, the actual governance and the ownership of the program—you need strong stakeholder management all the way through.
The Tool Is Not the Issue
The tool is there to help you. The tool is mature, the tool is ready, the tool is not the issue. It’s people and data and change. If you can control all of those three, your program will be successful.
SAP CEO Bill McDermott says that buying Qualtrics creates a “global growth juggernaut in the cloud, the number one business software growing in the cloud in the world.” McDermott says that he’s here to build a company for the generations, not just for a few days and that this is a fundamentally transformational deal, one that will reshape the entire industry.
Qualtrics CEO Ryan Smith says that combining forces with SAP will change the experience economy forever. “This is by far a once in a generational opportunity and it’s going to change how everyone thinks about cloud and SAAS and CRM and ERP and HCM forever,” said Smith. “Why wouldn’t we want to be a part of that?”
SAP CEO: If You Can Combine X-Data and O-Data You Can Change the World
We’re reshaping the enterprise application software industry. What led us to this deal is that all CEOs you talk to want to run their companies on an end-to-end basis. They want to deal with their customers in every channel, they want to fulfill, and that requires operational data. SAP touches 77 percent of the world’s transactions, but the operational data doesn’t ask the right question. It doesn’t say, why does the customer feel a certain way about your brand, about your products, and about their experience. This new category called experience management is all about x-data and if you can combine o-data and x-data you can change the world.
Ryan I have known each other about three months. We spent a lot of time together, a lot of text, a lot of phone calls, and we fundamentally wanted a transformational deal, one that would reshape the entire industry and here we are.
SAP CEO: If You Want to Survey Somebody You Hire Survey Monkey…
Have you looked at acquiring SurveyMonkey? No, they do surveys we reinvent customer experiences in a whole new category called experience management. If you want to survey somebody you hire Survey Monkey, if you want to fundamentally change the way an enterprise thinks about its culture, its brand, its products, and its people, now you’re talking Qualtrics, the leader in the marketplace by a factor of 10x. We’ve always bought the biggest and the best one and thankfully with the high trust that Ryan and I developed and our companies developed we’re ready to go.
SAP CEO: A Global Growth Juggernaut in the Cloud
When you’re talking about this particular company, Qualtrics, they’re growing at 40 percent on a year-over-year basis in the cloud. They have a very serious go-to-market strategy, but it’s modest in size. We’re growing at 41 percent year-over-year in the cloud and we have a very large go-to-market machine, more than 15,000 people touching the customer every day. If you combine that rate of growth you have a global growth juggernaut in the cloud, the number one business software growing in the cloud in the world. So digest that dear shareholders.
We’re saying and we’re very clear on this, we’re going to grow total revenue in double-digit, operating income in double-digit, not to mention being the fastest growing cloud company in the world. So today this will be digested. Now they’ll know, why did he do a big one when he said he was more likely gonna do tuck-ins? Because I never thought I would get Qualtrics and it takes some skill to pull deals like this off and convince a great entrepreneur like Ryan that he’s better off with SAP than going it alone when he’s 13x oversubscribed in his IPO.
SAP CEO: I’m Here to Build a Company for the Generations
So that’s what took a little bit of time and when we pulled it off together this weekend we were literally crossing each other in the air at 39,000 feet, so this was high-stakes. Now that we’re here, we’re doing all-hands meetings, we’re talking to the media, we’re talking to the bankers, and I expect the stock to do extremely well as the day progresses, and more importantly in the mid and the long term. I’m here to build a company for the generations, not just for a few days.
Qualtrics CEO: We Created the Experience Management Category
We were planning on ringing the bell on Thursday. I was home this weekend just to kind of take a little break after a week on the road it was going really well. We were 13 times oversubscribed with the best still ahead of us and then we had an opportunity to combine forces with SAP and change the experience economy forever. I think in my conversations with Bill it’s something that we only dreamed of that we could make this happen. It’s pretty special.
We’ve been doing this for 16 years. We transformed the entire experience management category, we’ve created it. We’re powering the feedback for 14 different airlines, 200 financial institutions, and we’ve really created this category to go do something big, that was the goal. We never had a financial reason to go public, we bootstrapped our company longer than anyone and we had no investor pressure. We’re one of the only companies that has been cashflow positive and high growth since its inception. The reason why we were going public was to create this massive new category.
Qualtrics CEO: A Once in a Generational Opportunity
When Bill approached us with a once in a generational opportunity that we could take all the power of Qualtrics and our 9,000 brands and have that sit alongside SAP and have every ounce of customer feedback go into the entire product process with an ERP system, reshape how the world thinks about CRM, and everything that we’re doing to power all the employee experience of the whole world that’s all available overnight. That’s something that we couldn’t turn down and we chose to be here.
Our IPO was already way oversubscribed, it was gonna take off and everyone was looking at us saying, hey this is the next $20 or $30 billion dollar standalone company. But we want to win and this is what winning looks like and we’re going to reshape the entire industry and Bill’s on board and we’re excited.
We were pretty set on going public and so it wasn’t till this opportunity came through this weekend where we said, hey look, this is by far a once in a generational opportunity and it’s going to change how everyone thinks about cloud and SAAS and CRM and ERP and HCM forever. Why wouldn’t we want to be a part of that? We couldn’t be more excited and like I said this is a pretty special team with Bill and me.
Microsoft announced that Microsoft Dynamics AX, its next-generation ERP solution is now available in 137 markets in 40 languages. The product is built on and for Microsoft Azure.
Companies already using it include Hagler Systems, Haldex, Icon, Renault Sport Formula One Team, Priva, Smiles, Travel Alberta and Umbra Group. Microsoft shares plenty of positive remarks from them here.
“Customers from around the world are using the cloud in incredible ways to accelerate and transform their business,” said Scott Guthrie, executive vice president of Microsoft Cloud and Enterprise. “Today’s release is an exciting milestone extending Microsoft’s business cloud offerings. It’s now possible for organizations to run their entire business in the cloud with Microsoft — from productivity with Office 365, to business analytics with Power BI and Cortana Analytics Suite, customer engagement with Dynamics CRM and business operations with Dynamics AX.”
“The new Dynamics AX moves beyond traditional business solutions and brings ERP, business intelligence, infrastructure and database services together in a single offering, empowering organizations to run industry-specific and operational business processes that are extendable with specific solutions from partners,” the company added.
Microsoft announced over 50 ISV solutions that are available on the Azure Marketplace. These are in addition to the over 50 that were already available. Hundreds more are in development.
Big data analytics and marketing application provider Teradata announced that its product Teradata Analytics for SAP Solutions can now infuse data from SAP ERP applications into enterprise analytic and reporting applications in near real time.
According to the company, this will enable organizations to unlock additional business value that’s hidden within their ERP applications. It does so by automatically capturing and delivering current data from SAP ERP applications, and combining it with non-SAP data stored in an integrated data warehouse. Teradata says this enables a wider group of users to leverage its in-database processing at in-memory speeds for reporting, ad-hoc analysis, and advanced analytics.
Teradata presdient Scott Gnau said, “Teradata Analytics for SAP Solutions is a fast, ready-to-use solution that can be deployed in a matter of weeks to support more agile data-driven business decisions. By providing access to integrated data in near real-time we’re enabling our customers to make data from SAP ERP applications usable for business intelligence across the enterprise.”
“Once all data is integrated within the Teradata IDW, users can also take advantage of over 150 out-of-the-box Teradata Analytics for SAP Solutions dashboards and standardized business reports in key categories that include financial accounting, spending analysis, and manufacturing operations,” the company explains. “Users also have access to more than 1,000 SAS Institute, Fuzzy Logix, and R in-database analytic functions that run at in-memory speed. In addition, users have self-service access to all of the detailed data in the warehouse to create custom reports and apply analytics with their favorite tools.”
Teradata Analytics for SAP Solutions is currently available, and is compatible with Teradata Database 13.10 and higher.
Sage announced the launch of the new Sage ERP X3 version 7 solution aimed at helping companies in new customers, reduce operating costs, and grow revenue. This version has a completely redesigned web and mobile experience.
The new version features personal dashboards and intelligence tools so users can monitor performance, and get notifications of events that need to be attended to.
The redesign is based on HTML5, and offers various apps. It comes with a mobility development kit, compatible with iOS, Windows Phone and most Android devices.
Joe Langner, executive vice president and general manager of midmarket solutions for Sage North America, said, “A recent research study commissioned by Sage indicated that midmarket companies with improved data accessibility, quality, intelligence and usability can expect 35% more incremental revenue year over year than lower-performing companies. That’s roughly $980,000 incremental revenue a year for a company earning $42M annually in gross revenue, which is significant for any business.
“As companies grow, they can lose agility and profitable growth. Sage ERP X3 version 7 provides the tools to simplify and speed up the use of information to revive this growth.”
Sage’s solution has 4,500 customers and 219,000 users.
Gartner predicts that by 2016, the impact of cloud computing and the emergence of postmodern ERP will mean “legacy status” for highly customized ERP systems, and urges CIOs to take action to address this “fast-approaching reality”.
“The need for agility and responsiveness has led highly customized ERP implementations to an impasse, creating a subset of legacy ERP installations that must be dealt with constructively,” said Andy Kyte, vice president and Gartner Fellow. “Early ERP adopters, particularly large enterprises in energy, manufacturing and distribution industries, are paying the penalty of a decade or more of excessive customization. Businesses looking to improve administration today can take advantage of lower costs, better functional fit and process flexibility offered by blending cloud applications with on-premises applications in what we now refer to as ‘postmodern ERP.”
“When ERP was in its heyday, CEOs and business executives wanted reliable and integrated solutions, so they seized upon ERP as the way to provide this,” Kyte added. “Business stakeholders still want these same qualities, but now they assume that these qualities will be present in any software solution, and their requirements have switched to the twin concerns of lowering IT costs and seeking increased flexibility. A system that is not sufficiently flexible to meet changing business demands is an anchor, not a sail, holding the business back, not driving it forward.”
Gartner also made a couple other bold predictions. By 2018, it says, at least 30% of service-centric companies will move the majority of their ERP applications to the cloud.
Even sooner – by 2017 – it says, as many as 70% of organizations adopting hybrid ERP will fail to improve cost-benefit outcomes unless their cloud applications provide differentiating functionality.
Gartner research VP Carol Hardcastle finds the outlook “worrying”.
You can find Gartner’s actual report on all of this here.
SAP recently announced the SAP ERP Foundation Extension, which it describes as “an integrated and comprehensive modering offering” that lets companies new to SAP implement a system optimized for their specific needs.
The company made the announcement at a customer conference in Sao Paulo.
The extension is based on its established ERP application, which is optimized for use with SAP HANA.
“Powered by SAP HANA and enhanced with application innovations in mobile, analytics and cloud, SAP ERP Foundation Extension spans mission-critical core processes — such as finance, human resources, IT management, manufacturing, procurement, sales and service and compliance — and can be deployed flexibly on premise, in the cloud or in a hybrid model,” the company says. “To help accelerate business productivity and efficiency, it offers industry best practices, unparalleled integration tools, role-based controlled access and extensions for basic business processes via cloud, analytics and mobile solutions.”
There’s a new report out from ZDnet indicating that organizations are increasingly integrating CRM and ERP product, looking at more hybrid environments.
“In the new business economy, innovation matters,” says Chakib Bouhdary, executive vice president, Industry Solutions and Customer Value at SAP. “SAP ERP Foundation Extension is an extended offering designed with the power of SAP HANA, the beautiful usability of SAP Fiori and analytics and mobile integrated into one platform — a complete rapid-deployment solution.”
“This is one of the most sophisticated ERP offerings in the market run by SAP and its partners across the world,” he adds. “This is another example of SAP innovating and driving high value for our customers as never seen before.”
SAP’s offering comes with the SAP Business Objects, SAP Access Control, SAP Fiori, SAP Cloud for Sales, SAP NetWeaver, SAP NetWeaver Single Sign-On and SAP Hana apps.
SAP announced the launch of some new ERP rapid-deployment apps this week. These would be the SAP ERP for Finance and Controlling, SAP ERP for Manufacturing and SAP ERP for Trading solutions.
The company says they will deliver speed and simplicity to enterprises considering the adoption of adoption of SAP Business Suite powered by SAP HANA.
The solutions include preconfigured software, implementation services, best-practices content and “end-user enablement.” Each comes with a fixed price.
“The promise of SAP Business Suite powered by SAP HANA and SAP 360 Customer is to enable businesses to run faster, simpler and smarter,” said Steven Birdsall, senior vice president and general manager, SAP Rapid Deployment Solutions. “Now, through rapid-deployment, we have wrapped this innovation into an easily accessible package as well. We have helped reduce implementation barriers for a non-disruptive and practical transformation into real-time business. Rapid-deployment solutions are offering customers game-changing innovation with controlled risk.”
“These new rapid-deployment solutions support IDC’s findings that emerging technology implementations are becoming shorter, and require fewer consulting and integration services,” said Gard Little, research director, at IDC for IT consulting and systems integration research. “Delivered as a complete package with a modular approach, SAP Rapid Deployment solutions allow customers to incrementally address business needs at their own pace in a simple and pre-integrated framework that can help them unlock value quickly.”
The British Foreign & Commonwealth Office (FCO) will invest somewhere between £250 and £750 million in an Oracle shared services ERP platform, which will reportedly be opened up to other government departments. This is a consolidation effort, to get things running on fewer platforms.
PublicTechnology.net shares a statement from prior information notice issued last week:
“The scope intends to cover existing Oracle platforms in the UK government departments and any supporting technologies, and to include upgrades and implementations of new Oracle version for these existing platforms”.
According to The Channel, Oracle partners are drooling over the FCO’s investment. Paul Kunert reports:
One Oracle partner told us government departments procure Oracle software individually and at different prices.
“There is a lot of room for negotiation and pricing is bloody messy,” he told us.
It is likely that Oracle will bid directly for the business but in line with all the noise coming out of the Cabinet Office, small biz suppliers are likely to be shoe-horned into the framework.
The framework tender is expected to be released within the next several months.