Make me E! |
- Siebel Systems
- i2 Technologies
- Epiphany
- IBM
- EMC
- Oracle
- Sun Microsystems
- Microsoft
- Business Objects
- SAS Institute
- SAP
- Persistence Software
It was the plaintive call echoing through the canyons of commerce in 1999. Business had to be e-business; Service had to be e-service; and customers were now e-customers. The holidays brimmed with e-cheer. Even the top touring rock ‘n roll act was—you guessed it—Bruce Springsteen and the E Street Band.
Okay, The Boss is no e-phenomena: Factory whistles and ‘69 Chevys predate the Internet Age. But the best place to obtain memorabilia and even tickets to his concerts was the Web. It is now cliché to state how massively the Internet is transforming commerce and communications. Blinking at the bright lights of portals and browsers—2437, around the world—we bow to the magnificent E.
Welcome to the 2000 edition of Intelligent Enterprise’s annual editors’ choice of the most influential companies in IT. This year’s selection comes in two parts. First is The Dozen: an exclusive group of product and solution providers that are the guiding lights—if not the forces to be reckoned with—in the IT landscape. Our second feature identifies an additional list of Companies to Watch: leaders in key industry categories as seen through the lens of the editors of Intelligent Enterprise. Based on a year’s worth of research, conversations, and producing content, the choices were tough. But we had fun with it—and hope you debate our selections in the same spirit.
In the land of E, the Web is center stage. But unlike most circuses and stage performances, the Web is interactive drama. Through the interface, customers and their business partners can engage in a much deeper relationship. Knowledge is now the medium of collaboration. Like their customers, vendors—particularly the most established—are scrambling to understand the impact of this new collaboration. They fear getting Amazoned themselves. But despite their rich IPOs, the new players must prove themselves.
That’s why compiling this year’s list—and choosing Number One—was tough. Customer relationship management (CRM) pulls it all together—and defines this year’s leader. But CRM is nowhere without the integration of superior business intelligence, streamlined processes, intelligent supply chains, and coordinated applications. Whether they know it or not, that’s what customers are really demanding.
San Mateo, Calif.
The customer is at the center—if not in the driver’s seat—of a paradigm shift in enterprise applications. When .coms willingly sacrifice profits and revenues for market share, it comes as no surprise that the seat of IT leadership is now in the front office. Dominating the front office is a vendor that has no presence in the back office: nor is it on technology’s bleeding edge. But it knows what customer-facing business is about. Siebel Systems has become the white rabbit everyone is either chasing or partnering with, including leading enterprise resource planning (ERP) providers. It is the hottest vendor in the hottest sector of corporate applications: customer relationship management (CRM), which, AMR Research says, will top $16 billion by 2003. Siebel Systems is this year’s most influential vendor in the Intelligent Enterprise Dozen.
Bottom line, CRM is about guiding business interactions so that your best customers return again and again, spending an ever-greater share of their budgets. The goal of front-office CRM is to create an integrated function out of three activities that have traditionally operated separately and with little automation: sales, marketing, and service. Since releasing Siebel Sales Enterprise in 1995, the company has dominated the sales force automation (SFA) by taking an enterprise view while most of its competitors focused on single-user or departmental solutions. Siebel was the first to provide a solution for synchronizing remote salespeople with a central knowledge base of account, product, and market information, so that teams could work effectively.
Building the Total Package
Through acquisition and development, Siebel has expanded its portfolio to include applications for call centers, marketing automation, product configuration, and other functions. Being first to market, Siebel could define the enterprise relationship management (ERM) package (to use Siebel’s preferred term). Today, its Internet Component Architecture integrates the Siebel99 Enterprise Applications and enables Siebel’s “configure once, deploy anywhere” mission. Siebel built its technology by executing Microsoft’s distributed object computing development and middleware tools. It will be interesting to see how the technology changes as Siebel moves from Web-enablement to a deeper Internet implementation in 2000.
Technology is only part of Siebel’s challenge. The Internet is opening a widening sales channel that companies must exploit alongside traditional channels. Siebel’s home turf, of course, is sales. Its eBusiness suite offers Web-enabled versions of Siebel’s applications that include key features for online self-service and product configuration. The eMarketing application lets users create campaigns based on analysis using pre-built or custom data marts and OLAP dimensions.
However, Siebel’s biggest challenge may be handling insane growth. To this end, CEO Tom Siebel brought aboard two executives who guided SAP’s acceleration: Paul Wahl and Jeremy Coote, respectively the former CEO of SAP America and president of North American operations. Fasten your seatbelts, gentlemen: The front office is not like the back office. It’ll be a wild ride.
2. i2 Technologies Inc.
Irving, Texas
The sun never sets on the global supply chain. Earthquakes, typhoons, wars, and rebellion are merely temporary obstructions in the flow of raw materials, parts, and supplies to the world’s manufacturing and production centers—and from there as finished goods to market. Virtual corporations and shoppers may dream of a friction-free economy, but the supply chain is physical. Running through places like Taiwan, Singapore, Bombay, and Chihuahua, the friction made by countervailing forces is more variable than an Isaac Newton could comprehend. Ironically, the builders of the friction-free dream—the high technology and electronics industries—would be high and dry without efficient supply chains.
i2 Technologies, the leader in supply chain management (SCM), has a mission: to provide $50 billion in value to customers by 2005. To accomplish this goal, i2 focuses on applying intelligence first to SCM but increasingly to the interrelated areas of demand planning, customer management, product configuration, and product lifecycle management. Once considered a niche activity that stopped at the door of manufacturing and financial planning—that is, the realm of ERP—SCM is now mission-critical. With the e-marketplace beckoning, i2 is determined to follow its vision of value generation to supreme influence.
Finding the Rhythm
Founded in 1988 by Sanjiv Sidhu and the late Ken Sharma, i2 grew up as a sophisticated alternative to prevalent manufacturing resource planning (MRP) systems. Rather than fall in with traditional resource management and cost accounting methods, i2 focused on modern business process optimization (BPO) and productivity measures. Sidhu, who began his quest while working at Texas Instruments’ Artificial Intelligence Lab, created i2’s first planning applications. Sharma then developed the i2’s breakthrough technology: an advanced algorithm for supply chain planning. Later, i2 incorporated Think Systems and Optimax Systems, which brought multidimensional decision support and genetic algorithms. By 1997, i2 defined its Global Decision Support Architecture to enable multiple enterprises to collaborate on a single distributed supply chain.
Today, i2 is expanding its Rhythm suite to support customer-centric e-business by providing back-end eBPO, fulfillment, and SCM planning, which could make one-stop, B2B e-shopping more than a figment of the imagination. Significantly, i2 is also focusing on the demand side of the equation. In 1999, i2 released its comprehensive Rhythm Demand Creation solution, which came together after it acquired Smart Technologies, an Internet-based CRM vendor.
Using a spectrum of business intelligence, process workflow, and optimization technology, i2 is attempting to link the ephemeral world of demand with the hard calculations required to keep complex global supply chains running profitably. The digital stage for i2’s alchemy is TradeMatrix, a new “intelligent eBusiness” portal. In i2’s vision, TradeMatrix will put the e-marketplace of the next millennium on a strong foundation of customer knowledge, efficiency, and intelligence.
3. Epiphany Inc.
Palo Alto, Calif.
The only letter that rivals the power of E these days is C, often followed by R and M. Epiphany believes it has put all four letters together to give users the fundamental competitive advantage of the “Customer Economy.” CRM involves a range of software and services; but in essence, its power drives off the productive integration of customer knowledge and interaction. Like Siebel, Epiphany calls it ERM: CRM or ERM, a meaningful solution has remained elusive. To respond intelligently requires an enterprise effort.
Epiphany is stepping into the chasm between front-office CRM and BI solutions. Organizations have spent millions on data warehousing—and millions more on sophisticated analysis tools. In between spectacular successes and expensive failures, the unearthing of nuggets of information has not always ended with a coherent view of the customer. Just as beauty lies in the eye of the beholder, it is the user who best gives meaning to information. Too often, the BI user has been a “high priest of information”—as data mining or analysis experts are derisively called—not a customer-facing sales, marketing, or service expert. Web-based Epiphany is aiming at business users focused on e-CRM.
Tool integration has become a huge problem hamstringing BI. A popular answer has been analytic applications (AAs), which package data marts, extract, transformation, and loading (ETL) tools, and analysis and reporting functions into integrated suites. The original AAs were turnkey solutions aimed at business customers who didn’t need (or couldn’t afford) a portfolio of full-featured tools. The most successful AA providers have focused on deriving value from ERP systems—a tough resource for many data warehouses to integrate.
Packaging Enterprise Intelligence
Epiphany is leading the next wave. With E4, Epiphany takes an enterprise view of access, integration, and analysis. E4’s Analytic Platform uses ETL programs to pull in a wide array of transactional data; the system can listen for updates, helping create a real-time information loop. Epiphany’s analysis tools are no toys; its data mining algorithms offer business users more serious analysis than most AA suites. Unlike traditional financials-oriented OLAP, Epiphany’s analysis tools are designed for one-to-one marketing, customer segmentation, and Web-based campaign management.
Epiphany is in the right place at the right time. As a startup, its founders secured the strong backing of Kleiner, Perkins, Caufield, and Byers, the top VC firm in Silicon Valley. In September, the company enjoyed a hugely successful IPO. Epiphany’s president and CEO, Roger Siboni, is former deputy chairman and COO of KPMG Peat Marwick LLP. Big Five consulting firms are now the most important sales channels for products like E4. Siboni has established tight partnerships with not only his former firm but also Cambridge Technology Partners and others.
Customers are forever a mystery, making managing relationships more an art than a science. But Epiphany is closing the gap with intelligence.
4. IBM Corp.
Armonk, N.Y.
What is the most influential IT company, not of 1999, but of the 20th Century? It would be hard to resist the obvious choice: IBM. Thomas J. Watson, Sr., who created the mystique and commanded the company’s rise to power was one of the most important figures of the century. His son wasn’t so bad, either, guiding IBM to dominance in the burgeoning computer industry. Today we shock ourselves with market capitalization comparisons between the .coms and their brick-and-mortar competitors: But 30 years ago, IBM’s rise left only General Motors and Standard Oil of New Jersey ahead in gross sales. That’s when the revolution came of age.
Technology brains and sales brawn made IBM a colossal power. In the late 1980s, PC and client/server computing were the catalysts of its downfall; the company couldn’t connect with new customers, much less meet the changing needs of its own. Competitors stopped fearing IBM. In 1993, the company went outside not just the company but the computer industry to tap Louis V. Gerstner as CEO. It took an outsider to stop IBM from obsessing over winning or losing technology battles and refocus on customers’ business needs. Soon, customers stopped talking about unplugging mainframes; instead, they enjoyed a quickening stream of technology innovation aimed at helping them reduce costs, handle more users, and rest easier thanks to IBM’s reliability.
That’s why, so far, e-business has meant e-success for IBM. With the Internet changing everything, what could customers want more than a rock of stability? When a company like Charles Schwab and Co. decides to bet its business on handling 60 million hits a day from online traders, it doesn’t rip out proven systems and software. But lest IBM get too fat and happy, Wall Street dropped IBM shares nearly 20 percent on one October day when the company reported disappointing numbers for its large systems. Y2K was the assigned reason. What if there’s more to it than that? IBM must ask again: Is it serving customers’ business needs?
Technology: Means, Not an End
Mainframes have made an incredible comeback, but IBM learned some hard lessons about falling in love with a particular technology answer. As it observes Microsoft struggle to conclude its Windows 2000 epic and SAP try to reshape its tightly wound package to fit e-business, you have to wonder if IBM is thinking “been there, done that.” Today, IBM preaches openness and agnosticism; it battles to save eXtensible Markup Language (XML) from Microsoft and Java from Sun. Behind a collaborative portal, the Data Management group is trying to make “Universal Database” mean something. It is building a federated data infrastructure to handle a wider range of data—including digital libraries, which will be big as bandwidth increases.
Of course, all this talk about products ignores Global Services, which increasingly leads (and packages) IBM’s solutions for business intelligence, CRM, and other customer requirements. As software becomes service, IBM could dominate another century.
5. EMC Corp.
Hopkinton, Mass.
Sure as the sun rises in the morning and the starting gun sounds in Hopkinton to start the Boston Marathon every April, the world’s information systems spout more and more data. Its ultimate care and feeding falls to storage systems—the domain of EMC, the world’s leading independent provider. Founded in 1979, EMC grew rapidly by outgunning IBM and capturing the mainframe storage business. Under president and CEO Michael Ruettgers, the company became the technology leader. EMC advanced into open systems and rode the data warehouse explosion to multibillion-dollar revenue levels. With business intelligence a strategic necessity—even more so in the Internet economy—all eyes are on the data. That puts EMC front-and-center among the most influential companies in IT.
Sitting on an enviable revenue stream, EMC would have every reason to become complacent. Like its close partner Oracle, EMC has enjoyed watching traditional competitors shoot themselves in the feet. And like Larry Ellison, Ruettgers commands a famously relentless sales force. EMC’s primary vulnerability has always been that storage is viewed as peripheral to the server; in other words, as the server purchasing decision goes, so goes EMC. But interestingly, while IBM and other enterprise server vendors suffered Y2K blues, EMC’s growth continued.
The company did receive a jolt when longtime partner Hewlett-Packard introduced storage systems and management applications based on technology licensed from Hitachi Data Systems. Meanwhile, Compaq, Dell, and Sun accelerated their storage efforts. As part of larger solutions, server vendors tend to cut prices on storage, which makes life difficult for independent vendors. To help it compete in the mid-market, EMC acquired Data General, vendor of Clariion storage products.
The Software Effect
EMC’s most strategic investment has been in software development; EMC says it sold more than $750 million in software in 1999. In October, the company introduced ControlCenter, an integrated suite for managing storage devices, network configuration, data allocation, performance, and other requirements. ControlCenter emphasizes automation, which helps EMC bring down the costs of personnel—a significant issue for mid-market customers.
Storage area networks (SANs) represent the technology frontier—and a potential playing field leveler. But rather than lay back, EMC has taken a leadership role. Through its Fibre Alliance, EMC is promoting an open standard for managing heterogeneous interoperability across a SAN. In 1999, EMC introduced Enterprise Storage Network (ESN), a SAN system that allows an enterprise to manage storage growth and capacity independently of its servers.
If data warehousing helped EMC emerge from the server’s shadow, ESN is a declaration of independence. EMC wants to show the world that storage is part of the bedrock—the “E-Infostructure,” as the company calls it. As e-commerce turns increasingly data-driven, EMC will find itself in that pantheon of essential vendors supporting the new economy.
6. Oracle Corp.
Redwood Shores, Calif.
Oracle tells us that there is but one technology god: the Internet. The age of pantheism, when most of us worshipped primitive Windows and green-screens icons is over. Let us hope that this new omnipotent god is loving and intelligent, and will not crash business-critical applications or expose precious data to heathen hackers. And let us hope that this god’s “Webtone,” through which we will communicate our innermost desires, will be more helpful than recent monotheistic utilities we have known, such as telephone, cable TV, and power companies. Perhaps Oracle knows why we won’t get fooled again.
Notwithstanding IBM’s media blitz, Oracle is the world’s biggest booster of e-business applications. Whereas IBM’s advertisements took a playful, almost sardonic view of the Internet age, Oracle has been dead serious: You’re an e-business or you’re out of business. And why not: But Oracle could be talking to itself as much as its customers. In June, CEO Larry Ellison vowed to save $1 billion in annual operating expenses by centralizing Oracle’s own corporate applications and delivering access via a browser. This, of course, is exactly what it is trying to convince its customer base to do—and to use Oracle’s most advanced software to do it.
Oracle’s message is centralization and consolidation. Multiple applications and databases covering the same activities across lines of business bedevil most large companies, including Oracle. Consolidation helps trim operating expenses: If enough customers do it in a favorable way to Oracle, the company’s market share will rise.
Behind the Browser
The ultimate consolidation would be to outsource to Oracle’s BusinessOnline application hosting service. Then, the focus would be on developing self-service applications that utilize the Internet architecture for efficiency and customer pleasure. Rather than bringing applications and databases close to their users, Oracle favors putting only answers and information in users’ hands as the raw material with which they can satisfy themselves.
Bringing Oracle’s vision into reality requires seamlessly integrated applications and databases. In recent years, as it has chased market opportunities, Oracle’s identity has become fragmented: It’s a development tools and database company; an ERP provider; a CRM tools developer; and a consulting services provider. Oracle’s Internet monotheism is driving the company to unify not only the technical architecture of its software, but also its multiple identities. The company is even de-emphasizing its consulting services in favor of partnerships with the Big 5 and other integrators.
Oracle is banking on Applications Release 11i, expected in early 2000, to supply the technical integration. Oracle’s CRM, ERP, and other applications will share common components, tools, and business rules. Oracle 8i, enterprise information portal, and business intelligence software already offer a tantalizing “stack” that could deliver a tightly closed loop for analytic applications. Through the portal, Oracle is hoping customers follow its lead toward one identity, one answer: Oracle.
7. Sun Microsystems Inc.
Mountain View, Calif.
Sun has a hot hand. In Java, the company holds the ace of software development. Solaris is everything Microsoft wishes Windows 2000 could be now: mature, scalable, and state-of-the-art for network computing. Contrary to some of its competitors, Sun’s hardware continues to be a strong suit—and its storage a worthy complement. With Jini, Sun has that rare but essential gift: a vision of the future that pulls everything together. Sun knows the road ahead.
But does Sun know how to get there? Can it play its hot hand as well as Microsoft played its aces in the glory days of the PC? More to the point, will it be ready when Microsoft finally has its ducks in a row behind Windows 2000? When competitors bought insurance, Sun bet the house that Microsoft would struggle in the face of tectonic shifts in the computing landscape. It was a shrewd bet. As Sun likes to say, it changed the game. Now Sun has to show it can play the dealer.
1999 was another tumultuous year in the life of Java. Sun hardly seemed ready to let the golden boy leave the nest, much less put it in the trust of a standards body. New Software Products and Platforms Division president Patricia Sueltz, former general manager of IBM’s Java Software division, should prove more adept at the subtle diplomacy of standards and partnerships than her predecessor, Alan Baratz. In June, Sun released Java 2 Enterprise Edition (EE). With long-awaited specifications of Enterprise JavaBean (EJB) components for middleware and server-side programs, EE is intended to simplify and clarify multi-tier Java programming. Java 2 EE easily qualifies as the most important software release of the year.
Reading the Beans
Sun has dramatically increased its Java portfolio. Along with releasing its own tools, Sun acquired Forté Software and NetBeans in 1999. Now, Sun has the makings of a serious enterprise development suite, including the respected enterprise application integration (EAI) product Forté Fusion. The heat is on EAI and developer tool “coopetition” partners, who must adjust to an 800-pound gorilla in their markets. But will Sun be nimble enough to compete with the likes of Symantec, Inprise, IBM…and Microsoft? Sun also needs to bring the continuing saga of the AOL/Netscape alliance to a point of clarity regarding its application servers; delays in sorting out this strategic area have given competitors vital running room. However, the alliance is sure to prove its value for both application hosting and the explosion in Internet-enabled mobile platforms.
Sun’s current goal is to .com its customers. With Jini, Sun will make their computers disappear: or at least, lie embedded inside personal devices, appliances, and network of Java-oriented software components. Chief architect Bill Joy envisions a world of cheap, reliable “systems on a chip” that will reside everywhere and will be in touch with a wireless network that is also everywhere. Building toward this vision, Sun is making a play for 21st Century dominance. Microsoft, it’s your move.
8. Microsoft Corp.
Redmond, Wash.
Neither rain, nor sleet, nor antitrust lawsuits can keep Microsoft’s sales engine from delivering profits. The company made bigger headlines in the courtroom than in the marketplace in 1999, but Microsoft still saw its stock price more than double. Did the antitrust battle and other legal difficulties slow Microsoft down? If the fundamental power behind Microsoft’s “monopoly” is its ability to package best-of-breed software into commodity-priced products for the broader market—and then use its market dominance to enforce “critical mass” to ensure success—then the answer is yes. Unable to bundle Windows with Internet Explorer as originally planned, Microsoft had to slow down and move cautiously.
But the timing couldn’t have been better. Microsoft’s enforced reticence played a factor, but the leading edge of the Internet was already well past desktop Windows. The company needed to overhaul its understanding of what the Internet was really doing to its customers. Perhaps it can thank Joel Klein, David Boies, and Judge Jackson for the wakeup call. In 1999, the company executed a major reorganization that cast Steve Ballmer as president of a decentralized, customer-focused group of eight divisions. Windows is still an enchilada, but it’s not the whole comida. Microsoft is trying to loosen up and become a tad more entrepreneurial. As they look past 2000, Ballmer and Chairman Bill Gates seem determined not to repeat the error that the railroad magnates made in the early part of this century—that is, forgetting what business they are in.
Is Microsoft trying to reorganize on its own terms, in anticipation of being forced to break up? Is the company decentralizing away from Windows, in the event that it must accept heavy regulation or open its APIs and source code? As of this writing, answers are speculation; it’s likely that a defiant Microsoft will fight Judge Jackson’s decision. A leopard can’t change its spots, but whatever the outcome, it’s doubtful that the same old Microsoft will rule in a rapidly changing landscape.
The New Lineup
Microsoft is investing extensively to ensure that it plays a dominant role in pervasive computing, high-bandwidth Internet communications, and server-based application architectures. XML is a major linchpin, implemented in Microsoft’s BizTalk Framework and as part of a determined focus on content management. Behind the Digital Dashboard knowledge management portal, Microsoft will try to reconfigure software into services based on Digital Nervous System and BizTalk integration with Office 2000, Exchange, and BackOffice Servers.
Microsoft wants Windows 2000 to be the premier platform for enterprise business intelligence and e-commerce. Judging by SQL Server’s development and the results of collaborative work done with Compaq, Microsoft could meet that goal. However, the company must resign itself that Windows 2000 will never be a Unix “killer”—and probably not a Linux killer. It will still lock horns with Sun over control of the future of software: but Microsoft has virtual worlds to conquer.
9. Business Objects
San Jose, Calif.
Is business intelligence the Web’s killer app? Put differently, is the Internet “killing” business intelligence as we’ve known it? The three basic activities of BI—data access, analysis, and sharing—are also the three activities that, along with bidding on retired Beanie Babies on Ebay, make the Web indispensable. B2B e-commerce partners and customers alike will increasingly enjoy, and demand, access to information that helps them make intelligent decisions about products and services. Information analysis is emerging from its roots as a specialized activity for a rarified audience to become a common business-critical application with great potential as the basis for interactive services. And whether through formal communities or informal emails among virtual partners, growth in data sharing goes hand in hand with the expansion of the Web.
Ultimately, the Internet is going to overturn traditional data warehousing and BI: that is, passive resources that are accessed, analyzed, and shared by a small audience of experts. The Web interface is now a window through which the outside world looks in and the organization inside looks out. Data warehouses will have to integrate a wider range of internal and external data, including that from the parallel universe known as unstructured data. BI tools will be called upon to actively and instantaneously alert users about key developments involving customers, markets, and competitors—on their Web browsers, handheld devices, and soon in their automobiles.
Behind WebIntelligence, Business Objects is building a strong bridge over which businesses can move into the world of e-BI. Business Objects has always had its eyes on the wider audience; the company entered the scene in 1990 specializing in end-user query and reporting. Since then, particularly with the 5.0 release of its flagship BusinessObjects integrated query, reporting, and OLAP tool, the company has deepened its technology considerably. Business Objects is enjoying growing market and mind share with its enterprise BI suite.
BI: Fuel for the New
Business Objects customers have employed the thin-client WebIntelligence platform to successfully open up data warehouse resources—often to create the basis for new self-service offerings. Owens & Minor, a large distributor of medical and surgical supplies and one of Business Objects’ high-profile customers, built WISDOM using WebIntelligence. WISDOM provides hospitals and manufacturers with unprecedented access to Owens & Minor’s data warehouse. The portal not only saves the company millions in the supply chain; it also helps partners streamline their operations.
In 1999, Business Objects extended its technology to handle customer analysis and marketing. In April, the company introduced Set Analyzer, set-based end-user analysis tool for complex querying against large databases. In October, Business Objects acquired Set Analyzer’s developer, Next Action Technology: a portent of things to come. While the “old” BI industry consolidates, Business Objects gains influence among organizations headed into the e-BI frontier.
10. SAS Institute Inc.
Cary, N.C.
Far from the billboard battles, IPO all-nighters, and million-dollar fixer-uppers of Silicon Valley stands SAS Institute, the gentle giant of business intelligence. Founded in 1976 and soon thereafter the dominant provider of statistical analysis software, SAS has added steadily to its product portfolio to become a true one-stop shop for enterprise analysis and delivery. SAS looms large across the entire range of data warehousing, OLAP, data mining, and intelligent reporting categories; IDC reports that in 1999 SAS owned a “very comfortable lead” in the statistical and data mining software market. Despite the obvious lure of a hot stock market, SAS is still privately held; founder and CEO Dr. James Goodnight is in no hurry to rip apart a positive corporate culture that regularly lands the company in the top echelon of “best places to work” surveys.
Enterprise Miner has been a major success story for SAS. At one time, the data mining tools industry seemed like a threat to traditional statistical analysis tools providers. Instead, SAS created its own mining product, integrated it with the SAS system, put it all behind an easy-to-use graphical interface, and voila: a market leader. Meanwhile, the data mining tools “market” more or less evaporated as it became clear that the software could not be let loose upon unsuspecting business users without a lot of help from highly trained experts. SAS happens to have a rather large installed base made up of just such experts—as well as sales and consulting services organizations that know how to sell and support sophisticated analysis tools. Two years in a row, SAS has won the KDD Cup, an award given by International Conference on Knowledge Discovery and Data Mining, an annual gathering of the world’s leading data miners.
A Grand New Opry
SAS is in the final stages of its Nashville Project, a five-year effort to re-architect the SAS System around a new Information Delivery Architecture (IDA), which SAS describes as “open, scalable, and Web-enabled.” Along with providing an open architecture that will support Microsoft’s OLE DB for OLAP, among other middleware standards, IDA will help SAS package its suite of products for CRM, supply chain analysis, Balanced Scorecard, knowledge management (or “collaborative BI,” as SAS describes it), and other business objectives.
In the post-Y2K world, SAS anticipates a BI boom: but one that favors solutions over tools. In 1999, SAS created analytic application solutions for ERP systems—to help users access “data jails,” as SAS describes them. SAS also developed a package for CRM applications that supplies metadata-driven data mart creation, data analysis, and customer profiling based on OLAP and Enterprise Miner tools. And solutions mean service: SAS is beefing up the size and industry domain expertise of its services organization.
CRM and large-scale clickstream analysis will be the emphasis of the company’s drive to support e-businesses that are trying to understand and improve customer loyalty. Perhaps they could start by taking a page from SAS Institute’s book.
11. SAP AG
Waldorf, Germany
Success sometimes boils down to one word: relevance. Nothing is sweeter than having the right answer at the right time. You are the cock of the walk: the talk of the town. De facto standards mean your standards. Competitors tremble with fear, uncertainty, and doubt. In 1992, when it introduced R/3, SAP began an incredible roll. Packaged applications were hot and SAP was scorching. In the midst this growth, the company was even able to execute a major technology change, moving R/3 from its client/server architecture to the component-based Business Framework. When it came to SAP, “relevant” was an understatement.
But nothing is harder to take than irrelevance. The Internet at first seemed like distant thunder to SAP, which was focused on business process reengineering (BPR) deep in the back office. But by 1999, SAP found itself drifting into the periphery. Whatever boost Y2K provided in the mid-1990s had now become a serious impediment. Global 2000 companies not already committed to ERP applications certainly weren’t going to start just months before a possible software apocalypse.
More importantly, the Internet shed a rather unfavorable light on SAP. The .com world moved at Internet time; complex SAP implementations took years. The Web was about total information access; R/3 didn’t have a modern interface until EnjoySAP, introduced in spring 1999. Not until late 1998, with Business Information Warehouse, did SAP widen BI access. The Internet vision was about heterogeneous solutions; SAP was notorious as a tough partner that took pride in homegrown engineering. Finally, the Internet focused attention on the customer-facing front office, where SAP was struggling to deliver a total solution.
Testing Its Mettle
With profits flattening, 1999 turned into a crucible. But as it heads into 2000, SAP appears to have survived to potentially emerge as a stronger company. Thanks to a pep talk by BPR guru Michael Hammer, SAP’s executives are refocused on their customers. After tearing its hair out trying to “get” the Internet in a technological sense, SAP finally understood it as a market-driven change that went much deeper than a browser interface. In September, the company introduced its vision for mySAP.com as a collaborative commerce portal through which customers will be able to extend BPR’s benefits across an inter-enterprise e-marketplace. The portal is also the starting point for SAP’s mid-market ASP solution.
“mySAP.com” is SAP’s rallying cry as it tries to break down internal complacency, provide solutions in something closer to Internet time, and open up to partnerships and heterogeneous solutions. The prominent role of TopTier Software’s HyperRelational technology in the mySAP.com Workplace solution is a good example of the Business Framework paying off. The Framework will enable SAP to deliver component solutions for CRM, SCM, BI, and other areas incrementally—and integrated with software from other providers.
Process collaboration is critical to e-business. Humbled and listening to customers, SAP is on the road back to relevance.
12. Persistence Software Inc.
San Mateo, Calif.
In e-commerce, the only time zone that matters is now. Anything that prevents “now” from being the fulfilling experience it should be—2437, around the world—is not only a performance problem: It is a customer relationship problem. If delays hold up the flow of information, customers get fidgety: but if service interruptions or failures involve business transactions, they get angry. And unfortunately, most customers have long memories; they may not come back.
In Persistence Software’s view, Web-based enterprise applications spend too much time living in the past, which gets in the way of delivering the present. Even with the explosion in three-tier architectures, too many systems continue to implement transactions within an old-fashioned, database-centric paradigm. Database servers, as guardians of the system of record, are the sole authority over what happened: the settled “state” of the data. Application servers are “stateless”: their traditional role regarding transactions is to manage data access and connectivity, passing data through to the database, which brings answers into memory for each user—and for each new user operation. Application servers do not touch the state of the data.
With its PowerTier transactional application server, Persistence is shaking things up—and leading the way to a richer middle tier. PowerTier is not a database; it is not a transaction-processing monitor. Using Persistence’s Live Object Cache technology, PowerTier manages the “business state” of transactions in memory. PowerTier works cooperatively with the database server(s) to balance application throughput with the need for data recovery. This balance is obtained by using several optimization strategies, but one of the biggest is simply the 80/20 rule: That is, generally 80 percent of the users will want to access 20 percent of the data. By focusing its in-memory caching strategy on that 20 percent, Persistence has been able to accelerate performance dramatically. And suddenly, the whole distributed application server layer can be a proactive tier responsible for delivering the continuous “now” that customers are seeking.
EJB: Opportunity Knocks
Founded in 1991, Persistence entered the market by using the live cache concept as a solution for object/relational mapping. C++ developers could deal with relational data as objects and not have to concern themselves with difficult SQL programming. Performance-sensitive C++ applications are still a major target, but the company is devoting considerable energy toward establishing PowerTier as the application server of choice for EJBs. EJBs are the vehicle for a fundamental shift in application development and deployment; PowerTier’s container-managed persistent objects bring to bear the company’s object model and long experience in object/relational mapping. Component applications just might have a transaction system that is made to order, rather than one rooted in old ways.
Application servers are no sideshows. Persistence must walk through the valley of giants, including Microsoft, IBM, and Sun. But in the Internet economy, few can afford to wait for the big guys: The future is now.
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