Author Archives: John Appleby

On New Years Resolutions, Blogging, and Writers Block

I was recently watching Stephen Fry talk about language. In the beginning there was the word. All of society as we know it, was built on language.

And yet as writers, we often struggle. I created this blog as a means to express myself, and it has slowly fallen fallow. It reminds me of friend Mike Prosceno’s blog: Focussed: Elsewhere “This blog is on hiatus until I can figure out what to do with it next.”

And yet I feel a pressure to continue to write on this blog, to continue to express myself in some arbitrary way. As such, it has became a dumping ground for stuff that didn’t have a proper home. I have ranted, opined, waxed and blubbered about People, Process, Technology, but mostly about stuff.

And lately, nothing. Why? Because the pressure to write, without having either a purpose or a deadline, leaves my mind as colorful as a Rausch Painting.

Rausch White Painting

Rausch White Painting

Has this blog served its purpose, served its time? Should I mark a sign on the front:

Gone Fishing

Gone Fishing

Or should I relax, recycle, revitalize? Make a New Years Resolution to write something every day. Let me know. The future of this blog lies in your hands.

 

P.S. The title of this blog has what’s called an Oxford Comma. Though the title would have worked both ways.

Oxford Comma

Oxford Comma

Why does Hackers News have to be so whiney? Open Source SAPUI5

Disclaimer: I’ve been pushing SAP to Open Source their UI platform for some time. So this matters to me.

I found about SAPUI5 finally making it Open Source via whiney news platform Hackers News. SAPUI5 is a general-purpose web framework for application technologies, built on jQuery. It’s not perfect. It’s more than a bit bloated and a little slow, but a bunch of people saw potential in it. In the SAP internal and external developer community, and the customer community.

We also saw that the potential that it had, would be killed by it being a closed framework. So, we lobbied, internally and externally, to make the framework Open Source. Why? For many reasons:

– Open Source can crowdsource product problem resolution and drive the framework forward
– Customers and developers alike can understand the license implications
– SAP can benefit from greater penetration and utilization

In short, we believed that SAPUI5 was a good framework that could become great, and heavily used, by opening up the source to the community. There was no downside, in our estimation.

So, I was sad to read the usual garbage in Hackers News:

“A UI toolkit from SAP, that’s rich.”

“Looks like UI kits from 3 years ago.”

“This looks like ExtJS, but worse than ExtJS.”

“Why is it so slow?”

Alas that’s pretty much what I expected from that website. I really don’t understand why “hackers” don’t see the significance of a company like SAP, that will have struggled hard to make a framework like this Open Source.

This is a really important and good thing for the community. So take a look at OpenUI. If you don’t like something, please contribute. Criticize heavily, from within. Add some value.

But please don’t whine about those people that worked hard, just because it’s SAP.

Three steps to protect your online identity in five minutes

According to Russian businessman Eugene Kaspersky, online fraud costs more than $100bn per annum. The US National Security Agency and UK GHCQ have been spying on your personal emails for years. What do you do about it? Login to your Bank of America account with “Password1″, to find out that someone emptied your account.

Yes, Bank of America allow that password. So do Chase and Citi.

I studied Computer Science at University, where I learnt from Ross Anderson about cybercrime. We knew all about it in 1996 – we estimated that the NSA could easily build a computer to build modern cryptographic algorithms in a few minutes for about $2m. Cybercrime is 20 years old and we don’t get any smarter about it?

So what can you do to protect your money, your identity, your life? It turns out that it takes three steps, and five minutes.

Encrypt your computer

I use a Mac. You click Apple -> System Preferences -> Security & Privacy -> File Vault -> Turn on FileVault. That’s it. If you use a PC then it is no harder to enable BitLocker.

If you have a PC or Mac built in the last few years, it will be 1-2% slower. Big deal.

Now, if someone steals your laptop, they can’t access it unless they have your password. Both BitLocker and FileVault use encryption which is pretty hard to get through, though you had better believe that the NSA can still get in. Sorry.

Use a Secure Password

You would be surprised how quickly hackers can crack passwords. They can crack 50% within a few minutes and 80% within a few hours. Remember why you installed the security alarm at home? Mostly, because you want the burglar to break into the house next door? It’s the same with passwords – you want to be in the 20% that hackers can’t be bothered to get to.

Hackers use wordlists that have proper nouns (London), foreign wordlists (mot-de-passe), non-Latin characters (пароль) and substitutions (P4ssw0rd). None of these things protect you. Two things matter – length of password, and number of words.

So choose something which is easy for you to remember, and hard to guess. Make sure it has 4 words. Let’s say you’re a Dickens fan. OliverPickwickChuzzlewitRudge. You are now in the 20%. Why? Read this awesome article by Ars Technica.

But be careful – don’t use phrases from books, especially the Bible. Hackers are now using phrases taken from books to fuel their word lists.

Never use the same password twice

You should never use the same password twice. If your password is stored by one website and hacked, then they can log into any other website where you used the same password. But using a different password on each site means you have to remember hundreds of passwords, right?

Wrong. Meet LastPass.

You enter one master password, and then LastPass generates random secure passwords for all the websites you access. It is so easy to use, there’s no excuse not to use it. And it is cloud based so you can use it anywhere you need it.

It has a handy side-effect that you track the websites that you have passwords stored in. Remember to protect your LastPass master password with OliverPickwickChuzzlewitRudge!

Final Words

These three steps to protect your digital existence take less than FIVE MINUTES to complete. Yes, there are other things that you can do. But these three steps put you in the 20%. Unless you are specifically being targeted – the hacker will go somewhere else.

But take note – no one looks after your privacy. Bank of America certainly don’t – they allow insecure passwords. Neither do Apple or Microsoft – they provide secure functionality but don’t enable it by default or encourage you to use it. If you care about this then you have to take action to look after yourself.

Upgrading my Digital Life – analysis of home Cloud Providers

There was a time, not so long ago, that I had a big computer in a cupboard that stored all my digital life: my movies, photographs, music and documents. This way, when I was home, I could access everything from one of several computers and I would synchronize the stuff that I really needed to my laptop.

This seemed like a sensible approach at the time but the world has moved on, and so have I. For a start, I no longer want a noisy computer in a cupboard. It would cost thousands of dollars to buy, and more money to power. Second, I travel and I want my information available to me wherever I am. Third, the access and price of cloud storage has plummeted. For a few dollars a month, you can get whatever you need.

Like most people, I already use a bunch of cloud services. iTunes Match for my music collection, iCloud for email, Facebook, Flickr. I used to use Mobile Me for file storage but when iCloud came around, that got removed from the service. But in particular, I don’t have safe backups of my music and documents, so I thought I’d spring clean my digital life.

What do consumers need in cloudy digital life?

I feel like the needs are pretty simple – probably yours are similar, but for the detail.

– The ability to upload all my music somewhere, and store the stuff that I want on my Mac and iPhone, and stream the rest. Plus the ability to connect up music players as needed. I’ve consumed a lot of music over the years!
– Safe file storage that synchronizes with my main machine (Mac) and allows me to view and edit documents in the cloud from time to time. I don’t actually have a lot of documents – it boils down to a few GB in the end.
– Storage for large quantities of photographs (100GB) including support for bulk upload, albums, preferably location information and faces.
– Email archive for tens of GB of older emails that I rarely access.

The first thing I realized was that it really doesn’t matter to have one provider, or several, for these services, so long as the overall cost is reasonable. Given the cost of equipment I used to buy, I’m good with paying $100-200 a year for the pleasure. Less would be a bonus!

Music

I’ve been using iTunes Match since it first came out. It’s a pretty nice service in many ways and I uploaded most of my music up there. But now I want to switch from the UK to US iTunes stores and iTunes Match doesn’t let you do this. You have to download all your music, cancel your subscription, move the store and upload all your music again (argghhh!).

Whilst iTunes Match makes it super-easy to move content to the iPhone or iTunes, it is a walled garden and you can’t play music without either iTunes or Airplay. No support for playing from the web on another PC, or via a streaming device like Sonos (without Airplay).

So, I went looking to see what else is out there. Amazon CloudPlayer looked good so I signed up for $25 a year and started uploading my music. Unfortunately I’ve not had much luck with this – it only matches some 30% of my music, which means I am uploading tens of thousands of songs. This is pretty inconvenient! iTunes Match matched about 95% of my songs. CloudPlayer is also based on horrible Adobe Flash technology which means when I pause the upload on my laptop during the working day (it slows the internet), it gobbles up the battery life.

I moved from there to Google Play, which is completely free for up to 20,000 tracks, and then $120 a year, which is very steep. I’m also unimpressed by the very high CPU usage (200%) when uploading music, though it does upload music fast. I’m struggling with the $120 a year price tag, when Amazon and Apple are only $25!

Not sure where I’m going to – but I’m tempted to cancel my Amazon subscription and put up with the pain of moving iTunes Match.

File Storage

Apple’s iCloud offers cruddy file storage – only really supported if you create files within the iCloud walled garden using Apple’s apps. This doesn’t really suit me well and the folder management within iCloud sucks, as does offline availability. Yuck.

It turns out that there are a bunch of GREAT options for file storage management out there. There’s Google Drive, Amazon Cloud Drive, Dropbox and a hundred others. What’s more, this market has commoditized, so prices are consistent and low.

I tried out Amazon and Google (I’ve used Dropbox in the past too) and I immediately liked Google’s interface the best. You get 15GB free (vs 5GB with Amazon) which means I can store all my files for free. If I need more, Amazon or Google are both around $50 a year for 100GB. Both provide great file synchronization and you just drop your documents in.

But more than anything with Google, the cloud storage management and ability to view and share files is just great. I have to admit I’m concerned about privacy with Google but unless I want to host my own files in a country with very strict privacy legislation, your data is not 100% secure anywhere in the cloud, especially from the Government. Be mindful of what you upload. My only other problem with Google Drive is I do get a lot of “Unable to Sync” errors even when I have otherwise good network connections.

Photos

Photos are the trickiest as unlike Music, the cloud provider can’t match them against some existing list of albums and avoid big uploads. You really do need to organize, sort and upload a truckload of images yourself.

Apple provides absolutely no mechanism for this and there is no iPhoto in the cloud. What’s more, iPhoto uses up all the disk space on my Mac with various copies of images for different devices, caches, thumbnails and databases. I have 35GB of images on my Mac and iPhoto uses 70GB. What a pile of junk.

That said, I love the convenience of PhotoStream synchronization between devices, and iPhoto does do a good job of collating my Photo albums.

It’s less obvious where to go to from here and I’m still evaluating options. Yahoo! bought Flickr, and you get a massive 1TB of free image space with them as well as great web content management software. But how do you get all your images up into the Yahoo! cloud? There is a Flickr Uploader and an iPhoto plugin but they are both quite buggy in my experience. Also, how do you get a copy of your images on your PC or iPad, to share with your friends when you don’t have a network?

Then there’s Google Drive. It has support for the Picasa photo management software with integration with Google+, which sounds alluring. Unfortunately the version of Picasa that’s available for the Mac is a horrible old-school Mac app that is slow, clunky and doesn’t work well with the MacBook Pro Retina screen. It does however appear to let you keep your photos in sync with iTunes and Google+ and what’s more, photos less than 2048×2048 don’t use up your space on Google Drive.

I’m still lost here as to a way that will work for me to manage my photos. Guess I need to blog again when I find a workable solution.

Email

I’ve not really got to email yet, but I do have a collection of older email archives that I’d like to keep for posterity. One thing is for sure: Apple’s iCloud won’t be the place I upload my email. It’s an OK location for occasional personal email, but it’s almost entirely unmanageable and the web interface sucks.

It feels like Gmail may be the easiest solution, given I’ve already chosen Google Drive. There is Google Apps Migration for Microsoft Outlook, which lets you upload email and then Google Sync to synchronize with all your devices.

Conclusions

One thing is for sure – Apple’s walled garden of iCloud Apps falls way behind what else is out there in the market and it has pushed me out of the Apple ecosystem. I think the problem is sufficiently bad that I will seriously consider a non-Apple product like the Google Nexus 7 when I come to buy a new device. Unless the new iPad Mini is amazing, of course.

The other thing is that it’s clear that the major players: Apple, Google and Amazon, are trying to compete with each other on land grab for subscribers – free, or paid. It’s also clear that none of them have got it right yet and if you want the best of all worlds, you have to go with different providers for different apps.

Google are a strong contender across the board and Google Drive appears in particular to be best of breed. Google’s desktop app support is lacking and Picasa for Mac really sucks. There is a lack of a consistent interface with Google which is a bit frustrating. However, their web services like Google Drive are the best, bar none.

Amazon are trying very hard to compete but I don’t really feel they are trying hard enough. I’m an Amazon Prime subscriber and this gives me no benefits with their cloud apps, which is frustrating enough. Add to this a lack of photo software, and a sucky CloudPlayer and I’m struggling.

Yahoo! seem to want to play in this world with their Flickr acquisition, but their strategy feels confused and whilst they offer huge free storage for both Mail and Photos, the apps leave something to be desired unless you want a pure-play cloud approach.

I’m left feeling I will continue using iTunes Match for music ($25/year) and Google for Documents/Photos/Email ($60/year for 100GB) for a total of $85/year. But mostly, I’m left feeling there must be a better way. Have I missed some obvious options? What do you think?

The evolution of Analytics with SAP HANA

I was recently sent a collection of analytical business questions by a customer. I can’t share the details of them of course, but I was surprised by the level of sophistication in the questions – they included product, time, demographic and geospatial dimensions.

The analytics team was trying to get answers to these questions for their executive team and they were encountering time-outs trying to get the data out of their existing data warehouse. The vendor will go unnamed but it is a traditional disk-based EDW platform.

The analytics team had heard we had built a SAP HANA system, which included some of the elements around which they were asking questions, and were interested to see if we could help answer them using SAP HANA.

In the meantime, I was reading Holger Mueller‘s interesting blog on Why is analytics so hard? Or: The holy grail. It’s an interesting read, come back here once you’ve read it. And following this, I had a bunch of thoughts:

What did we build in HANA?

Again I can’t share the specifics, but I can tell you what we did, generally. We loaded Point of Sale data (not a retail customer) and a collection of master data like Customer, Supplier, and also a bunch of reference data like Geospatial, Demographic.

What’s really cool about doing this in HANA is that we can use as many CPUs as we have available to process a question, and we have 160 cores in my test box. This means that we can answer a question like “Tell me about the average sale price by customer, and slice it by the age of the customer at time of transaction, and group it by political leaning”. And HANA returns the answer in 2-3 seconds. Any question you like. Keep asking questions.

Now we used both SAP’s Lumira tool and Tableau on top of this to do visualizations. Lumira is a little quicker, Tableau has a lot more features. And I came to some conclusions:

1) HANA brings structured analytics into Holger’s innovation “Phase 3 – A business user can – with appropriate, but affordable training – use the innovation”

You have to be able to formulate questions, and use a tool like Tableau/Lumira. I learnt how to use Tableau in a few hours with no training, and Lumira in a few minutes. But, you have to know what questions you want to ask, and they have to have meaning.

More specifically, we could answer some of the questions using the model we built, and he wouldn’t have timeout problems.

2) Data quality problems always lurk under the surface

It won’t surprise anyone who has worked in data warehousing, but data is a big challenge. It’s not possible to easily answer some of his questions because their category hierarchy doesn’t allow for it. They have categories A-E and his question wants to know about category F. Category F has business meaning but their system hasn’t been updated to know that category F exists.

This requires an update to how they process master data and assign categories to transactions. We can actually do this really easily in HANA. For instance, we could use publicly available reference data like SIC codes to process this and then reprocess the transactions. Because we never need to aggregate with HANA, we only have to do this once and we’re done.

3) The structured data we built so far is not enough

There are data elements that we didn’t include in the initial model which means that some of the questions being asked can’t be answered yet. But also, some of the business questions are sophisticated and based on the latest trends, so the model hasn’t evolved.

We can add this stuff into the structured model easily enough, or with Tableau you can join a HANA model with a Tableau model so you can load that stuff into your own Tableau software and then do analysis. But suddenly we’re in Innovation “Phase 2 – Through tools more trained professionals in the relevant technology can make the innovation happen”.

And with HANA, we have to be careful with our data model if we want sub-second performance on billions of records, which may push us into Innovation “Phase 1 – Only experts can apply the technique to make the innovation happen” if the structure change is substantial.

Conclusion – the Layered Structured Architecture

And this is where my mind is headed: we have to classify how we want information to be available and what sorts of extensions to the analytics model different types of people can do.

For example, Phase 3 users will quickly find they can do quite advanced analytics. For example with Tableau you can easily join against Outcode to do geospatial analysis. And it performs great when joined against customer data in HANA.

But if you want to include new transaction categories (data) then you’re in Phase 1, which means you need a process to regularly update your structured model to include the new things people are thinking about.

Good business people will keep asking for more, harder questions. I think with HANA we have a platform which facilitates this, rather than handcuffing us.

Sony Walkman W – Klout Perks Review

So I got my Sony Walkman W in the mail on Thursday – read my previous blog about how Klout Perks sent one to me for free.

Their competition for the best social media content ended the day after, on Friday, so I guess I missed out on that! I haven’t had much time to try them out, but here’s my analysis so far:

Sony Walkman W

 

To set the scene – I’m a runner, and I do hate running with headphones – the wires get in the way, they fall out the whole time and it’s just not very liberating. So I have an open mind here. This is the Sony Walkman W Meb Keflezighi model, who obviously likes Orange.

Good – It’s much more compatible than I had expected

So it doesn’t sync with iTunes, but I can get music on relatively easily. I create Genius Playlists on my iPhone, download them on my Mac (I use iTunes cloud so quite often the music isn’t on my Mac) and then I drag the downloaded content from iTunes onto the Sony Walkman, which appears as a USB disk on my Mac.

So in 5 minutes or so I have 100 songs on it, which is enough for a workout. Admittedly I do like the flexibility of iTunes Match on my iPhone, where I can dial in a Genius playlist for the exact mood I’m in, but I usually listen to the same stuff anyhow.

Good – Fit

The fit is much better than the device looks it ought to be, and not having cables everywhere is a big win. I focus more on running and less on not getting tangled, which is more fun.

Good – Sound Quality

It’s not at the top of my list for workout headphones, but the sound quality is surprisingly good. Better, I’d say, than Apple’s iPhone 5 headphones. Not as good as a high-end Sennheiser or Shure headphone, but I can’t say I really care when I’m pounding the pavement. Bass is pretty awesome, which is a really nice in a workout headphone, and mid-ranges and trebles have plenty of detail.

Good/Bad – Noise Canceling

These headphones give you a really surprising amount of noise canceling effect. It does mean that if you’re on the open road, you need to make sure you pay extra attention because you may not hear cars and cyclists around you.

Good/Bad – Controls

The controls are on the bottom of the ear-pads and take some getting used to because you have to navigate them by touch and they are close together. The Sony Lady barks commands at you like “Shuffle Play” in a sci-fi style, which is pretty funny. As you use the device, they become just fine but they’re fiddly on first attempt.

Not so Good – Music Choice

You can’t really choose what you listen to. Sony say you can drag and drop your iTunes playlists but I can’t get it to work.

Not so Good – You look like Cheburashka

Need I say more? I tried it in the office and felt like a nerd. This headwear is acceptable only for work-outs!

Cheburashka

2) It’s not… integrated

I love the idea of sports headphones, but syncing music is sooooo last decade. I mean check out the Polar H7 Heart Rate Monitor. That thing syncs with your iPhone via Bluetooth and takes a full ECG to your favorite Fitness App.

The Jabra Sport looks like it might be a very nice companion to a workout, as an alternative.

Conclusions

If Sony made a version of this that was a bit smaller on the ears, fitted slightly more comfortably, and worked with Bluetooth rather than using old-school USB technology, I think it would be way cooler.

Sony have done a great job of the Walkman W, and if you want a set of USB headphones without the wires, then these guys are just what you need.

It looks like they are positioning them against the iPod Shuffle and since I have one of those too, I’d say the Walkman W definitely wins.

Sony Walkman W – Klout Perks – first thoughts

I was sat having a quiet haircut yesterday, responding to a few emails on my iPhone when up popped a notification from Klout:

You have a new perk from Sony, a free Walkman etc. etc.

In this society the initial reaction is 1) I’m being scammed 2) How did my phone get hacked 3) What’s the catch. As it turns out, Sony really is giving Sony Walkman W (is it Walkmans or Walkmen???) away to “5,000 active lifestyle influencers“. I’m feeling slightly pleased with myself that some social media marketing engine thinks I have an active lifestyle.

 

I’m actually a huge fan of the Walkman brand too. I’ve owned at least 6 of them, from the original 1980s tape, to a huge yellow waterproof model, to a MiniDisc one, two of the iconic Walkmans: the Professional WM-D6C and the Walkman WM-EX1HG (both of which I still have).

Sony WM-EX1HG

The last Walkman I owned was one of the early MP3 models in about 2000, called the Walkman NW-MS7, and there my love of Sony Walkman died. The software interface was painful, the proprietary MemorySticks were small and expensive (and fitted just one album at a time, so you carried around a bunch) and the battery life sucked.

Soon after this, I bought a generation 1 Apple iPod and my life was changed forever. I have owned probably 15 Apple devices in the meantime from the iPod classic to the Nano, Mini, Shuffle and iPhone. Yes, I’ve been accused of being an Apple Fanboy.

And that’s just it: my current work-out music player is my Apple iPhone 5. Why? Well it’s really the only device I have. I use Apple’s iTunes Match service to stream any of 100GB of songs to my ears, using the Genius product to create a personalized playlist depending on my mood.

Can a Sony Walkman W compete with Apple?

There are some drawbacks to the iPhone 5 and the major one is that even with the new headphones, which are pretty awesome, the headphones get in the way whilst working out, especially whilst running.

Sony Walkman W

And the Sony Walkman W sounds pretty interesting in that respect: there are no wires, so it sits on your ears and gets out the way of your work-out.

That said, it looks to be limited to a meagre 2GB of music, and I hope the jukebox software got better in the last 10 years. Actually I’m kinda hoping it will just work with iTunes and my existing playlists, but something tells me that is wishful thinking. Who knows how it will function with DRM and my existing MP3 collection? Will I feel like I look stupid in orange headphones?

According to the product page it should actually do all that and more. Interesting. Some reviews suggest the earphones come out when running, but I’ll judge that myself.

The fine line between genius and insanity

And that’s just it – is this social media marketing genius, or madness? Sony is offering the 5 most influential content writers an upgrade to the new waterproof version of the Sony Walkman W. It’s a gutsy move, because if the product sucks, they have 5000 whiney bloggers complaining about it and the backlash could be severe.

It’s especially a gutsy move because they seem to be shifting 5000 of the old product line which is being replaced by a better model. Is this because it doesn’t sell and they have a ton of them in the warehouse gathering dust, or because it’s a fantastic product and they believe in it?

I’ll let you know when it arrives.

Altruism is an illusion that will get you killed

I’ve been pondering this for the last few days, and Mark Finnern brought it up at the SAP Mentor Monday Webinar today, so it seemed time to put pen to paper. Last month I wrote a blog post entitled “Top 5 Database Platforms – the Developer Experience Exposed.” The subject isn’t important for the purposes of this blog.

It was inspired by an unnamed source, which led me to do a detailed analysis. I wrote it because I thought that a wake-up call would serve the common good, and allow a positive discourse. It would give some people the air cover they needed to make change.

What I didn’t realize at the time was two things: first, that it would go viral, with 12k views in 3 days, not helped by a competitor picking up on the article, and riffing it. Second, it would also have a negative backlash. Some people felt betrayed, some felt I used deliberately over-emotive language some felt I was naïve in my comparison and others felt I’d got it wrong. Some felt that I’d been used and someone loaded a gun and put it in my hand.

Is it possible to have an independent voice?

Well in short of course not: we all have a bias.

But the irony of this situation is that it was the critical voice that I held within the SAP community that let me to have discourse, which led to relationships and eventually close friendships.

The irony is that once you have close friendships, your voice is compromised and this consequently diminishes your value to the community.

Altruism is an illusion

In writing this blog I’ve spent time pondering the nature and illusory nature of altruism. Nietzsche describes this in his book Beyond Good and Evil, where he points out that the strong do not delude themselves to believe that altruistic behavior can be taken at face value.

Instead there is usually a reason for our behavior – to further our own means, to feel good or for pride, or power. Even the TV show Friends gets in on the action with psychological egoism, or “there is no unselfish good deed”.

What should we do?

I don’t know. As someone told me the next day, altruism will get you killed. So in case you hadn’t figured it out yet, this one was written for me.

The true cost of our caffeine addiction and why Nespresso is not the answer

Like 54% of the public in the US, I have a coffee addiction, and we have been slowly brainwashed to spending more and more on our daily Java intake in the last 10 years. Take some of these facts:

I don’t know about you, but I consume my coffee in a bunch of places, from coffee shops like Starbucks, to restaurants after dinner and also at home. I started to wonder how much this addiction costs me.

In a conversation with friend Nick Brown last week, we discussed the folly of buying expensive Starbucks lattes at $4 a cup every day. Even if you drink just one of these you’re incurring a $1000 a year habit. And with 2% milk, it will cost you 190 calories a go.

Nick explained that he had gone the Nestlé Nespresso route, which costs just $0.60 a capsule, thereby saving a large amount of money. The thing is, I’m not so sure it does. Nestlé and others sell premium coffee machines – typically costing about $200 or more. So let’s do the math.

I have a similar machine that brews Keurig K-Cups. I like Green Mountain’s Nantucket blend coffee, which costs $16.49 for 24 capsules – that’s $0.69 a shot. There are ways of getting this down to about $0.55 a shot (print a 20% off coupon and go to Bed Bath and Beyond for example) but let’s face it, it’s a hassle. What’s more, I go through an average of 5 of these a day (some decaffeinated, you will be glad to hear). That’s a $1200 a year habit.

What’s interesting is that Nantucket Blend costs $9.49 for a 12oz bag of beans. It’s tricky to make comparisons here, but a typical single shot of espresso weighs about 7g, so a 12oz (340g) bag of coffee can make 48 shots of coffee. This weighs in at about $0.20 a shot. But to do this, I’d have to buy an espresso machine. I had a Gaggia Classic some time back and it’s rusting in a cupboard. Too much mess, too much hassle.

What are we supposed to do?

The worst thing is that even if you have one of these single-cup machines like Nespresso or K-cup, it won’t stop you from spending in Starbucks. It’s a social thing, and I find myself in a coffee shop with a colleague, friend or business associate several times a week – spending at least $10 a week on average, or $500 a year, in addition to what you spend at home.

The only other alternative is an expensive Super Automatic machine – costing $699 or more for something like the Jura ENA 4 from the Seattle Coffee Company (I’m not affiliated with them, but I think owner Gail’s jacked-up-on-caffeine YouTube video channel is hilarious social media marketing). That’s an awful lot of capital outlay to consider. Let’s compare the costs over a 3 year period (a machine like this should last about 3 years before it explodes).

Starbucks Nespresso/K-Cup Super Automatic Espresso
Capital Outlay N/A $250 $700
Cost per cup $1.45 $0.69 $0.20
Cost over 3 years for 3 cups a day $4763 $2266 $657
Additional $10 weekly budget for coffee N/A $1500 $1500
Total annual cost over 3 years $4763 $4016 $2857

Shocked? I am – by two things. First, how much this addiction costs us. In the Starbucks case I took the cheapest coffee – if this was a $4 latte or cappuccino, this would have been much higher, and it is only for one person. In a family of two coffee addicts, it could be much worse.

Second, I’m shocked by the cost of the friendly Nespresso machine. You get into the espresso market at a lower cost, but the TCO is shocking.

The hidden cost of Nespresso

First, you don’t get as much coffee with Nespresso, so we’re not even comparing like-for-like. You actually only get 5 grams of ground coffee (28% less), so you (may) need 28% more, which brings the cost up to $4663 over 3 years (the same as going to Starbucks).

Second, $0.20 of the $0.60 is going to coffee, and the other $0.40 is going to make the plastic, and into Nestlé’s pocket. Since 42% of Nestlé is owned by the Swiss, most of the money is going out the country (yes, there is an irony that the Super Automatic machine I feature is also Swiss, I know).

Third, most of the Nespresso or K-Cup capsules go in landfill. Nestlé have sold 27 billion Nespresso capsules so far, which is a metric shitload of rubbish.

Fourth, the coffee is bad. I think Nespresso is better than K-Cup but even the best Keurig coffee is an unpleasant parody of a proper Italian coffee.

Think again

So if you were thinking to save money, like Nick, by buying a Nespresso machine, think again. If you think that spending $700+ on a coffee machine is ridiculous – do the maths based on your intake, because you may get a nasty shock.

And also take a look at the Coffee Review website, where you can search for local coffee roasters by location (just put it in the keywords). This means that if you purchase coffee from a local roaster at about $10-15 a pound, you will be feeding the local economy. That makes me feel good.

What’s more if you look at the International Coffee Organization cost of wholesale coffee, you will see that coffee has fallen in price over the last year to about $1.40 per pound, from highs of $2.73 in 2011. Did you see Starbucks drop its prices? Or Green Mountain K-Cups?

I didn’t think so.

SAP HANA: disrupting 3 markets, but does SAP have the stones to disrupt itself?

I’ve been immersed in SAP HANA ever since I first heard about it, when Hasso Plattner talked about it in May of 2010. SAP HANA is an in-memory database that computes thousands of times faster than traditional database products.

There are two business lessons that I learnt in this time: first, amazing products are products that disrupt markets and create new markets. Think of the Dyson vacuum cleaner or the iPhone, for example. Second, as Steve Jobs said, “If you don’t cannibalize yourself, someone else will.”

What’s fascinating about SAP HANA is that it has the capability to disrupt four market categories. Even SAP themselves don’t see the full potential of HANA – and that’s fine, because the most disruptive technologies don’t always know their purpose in advance. Let’s get into the detail of these categories and what it means.

1) Database Market

This is the most obvious – SAP HANA is a database much like Oracle, but it runs entirely in-memory. This means it is 1000x faster for many operations and scales linearly. As SAP CTO Vishal Sikka told me this week – “If it runs in 100 seconds with 1 core, it can run in 1 second with 100 cores. That is the beauty of HANA”.

This matters because there are things you can’t do with Oracle that HANA can do. Cancer genome sequencing in seconds. Real-time monitoring of oil drills. Providing offers to customers at a till based on their basket and historic purchases.

In addition, SAP HANA can now be used as the database for all of SAP’s existing Business Suite install-base – 89,000 customers, and it’s a lift-and-shift simple process to move off Oracle. Once you’re on HANA, you can start to take advantage of things you couldn’t do before.

As of now, SAP is the fastest growing database vendor in the world, and overtook Teradata as #4 in June 2012. They booked $800m of database revenue in 2012 (see slide 37). SAP HANA is disrupting the database market.

2) Enterprise Hardware Market

Most Enterprise Software customers run software on expensive mainframe-style hardware. Individual boxes can run into the millions. So SAP built their HANA database on high-end commodity Intel x86 hardware. HANA will run on your laptop (if you have enough memory) and it’s supported by a number of the usual hardware vendors.

SAP expected to disrupt the hardware market, as well as the expensive enterprise storage market, which is based around selling outdated spinning chunks of metal. The market already moved onto solid-state storage and it’s known to be reliable (how many iPhones, iPads and Samsung Galaxies do you see?).

Unfortunately, the hardware vendors like IBM and HP saw SAP HANA as a means to sell yet more spinning disks, and so created hardware configurations with even more of them. SAP got annoyed and invested $50m in Violin Memory, a start-up that has a solution to this. No vendor has yet produced a SAP HANA configuration based on Violin, though I hear SAP bought a ton of them. [update, a colleague tells me that Fujitsu went live with a customer on a Violin appliance, but it's not officially certified hardware]

So this year I expect further disruption to the hardware market, perhaps with a new entry into the x64 Server market that knows how to do premium commodity. Lenovo, perhaps?

3) Services Market

One thing is for sure: SAP wouldn’t be where they are today without Accenture and IBM Services. Those guys pimped SAP R/3 in the 90s and made SAP the success that it is. In the process of this, they created an even bigger market for themselves – 6-8x larger than the Enterprise Software market.

This really annoys SAP co-founder Hasso Plattner and to quote SAP CTO Vishal Sikka: “we have this strong strategic need to not have the partners come in to implement HANA. If that happens, then we have failed, and Hasso told me that.”

I talked to Hasso about this last week and he was unrepentant: SAP have to solve the services market problem. I told him he had got it wrong and SAP as an SI was just the same as Accenture and IBM and the ratio is not decreasing for HANA projects. If SAP wants to disrupt the consulting market then it needs to do so by facilitation – like the Violin model.

Services disruption is of particular interest for me and I’m always pushing my consulting teams to innovate. I noticed that on a recent deal, the ratio was inverted: 10% Services, 30% Hardware and 60% Software. Of course, we will do more services work once the software is installed, but it gives you a flavor of how the services market might be disrupted, if we can scale our models.

Interestingly, SAP Global Head of Sales Rob Enslin just got put in charge of SAP Services, and he’s an ex SAP Basis consultant. I talked to him last week and he is changing the organization in ways that I believe will support this disruption.

Can SAP disrupt itself?

If you know anything about the Enterprise Software market, you are probably wondering why I missed the elephant in the room: The Cloud. I didn’t, I just left it until last. Here is SAP’s biggest challenge for 2013.

SAP HANA is sold in one of 3 ways. One, you can buy a runtime license for your Business Suite for 15% of your Software Application Value (total of what you paid SAP) per annum. Two, you can buy Enterprise licenses which are bought by the 64GB chunk of memory (minimum 128GB). Third, you can buy 60GB of HANA One on the AWS marketplace for $1 an hour (plus $2.50 an hour for hosting).

Now, Amazon are a very impressive company and they are creating bigger machines – 244GB systems were released last week. As of now, SAP haven’t announced if they will be supporting them and if so, what the cost will be.

However the problem is simple: HANA One doesn’t cannibalize on-premise sales, because you can’t buy 60GB of HANA from SAP on-premise. 120 and 240GB Amazon instances do, however, cannibalize the low-end of SAP HANA on-premise sales and this will have a negative impact on revenue perpetual license revenue.

But the fact is: the world is going cloud. As William Gibson said: “The future is already here — it’s just not very evenly distributed.” – and whilst there are many companies who will run on-premise software for a very long time, companies as big as Pepsi are implementing cloud solutions (they just bought 300k Employee Central licenses from Success Factors).

My view is that in any case, providing a cloud subscription model for HANA can only be a good thing. It dramatically simplifies adoption and – at least for the medium term – there won’t be an option to do cloud HANA for large installations so customers will have to move on-premise at some later stage, and will probably then buy even more HANA. Moreover, Wall Street and thereby the shareholders put a higher value on recurring revenue (Workday is valued at P/S of 41x, whilst SAP is valued at 6x), which should help.

So as for me, there are two crucial questions here:

1) Does the SAP board have the stones to accept a short-term hit in revenue and move to the recurring revenue subscription model for HANA?

2) When will SAP enter the in-memory cloud market? For every $1 they take for HANA One, they are giving away $2.50 to Amazon for hosting. This is money left on the table.

2013 is shaping up to be a very interesting year.