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.

Today, one of the biggest barriers to large-scale SAP HANA environments is hardware. It’s true that HANA is expensive but it also provides massive value that justifies the cost for the right scenarios.

But for large environments, HANA hardware is huge. Let’s take a typical 8TB IBM HANA appliance (remember you get great compression so this is equivalent to 40TB of Oracle).  But still you need 16x512GB IBM nodes, each of which has a 4U server and 4U storage node. That’s a massive 128U or 4 32U server racks. You need to locate, power and cool this much equipment:

You can buy 1TB EX5 nodes now from IBM but they are really just 2 512GB nodes stitched together with a special connection, so it is not any more dense. HP, Dell, Fujitsu, Hitachi and Cisco all make HANA hardware too, but it’s all roughly the same size.

The reason for this is because SAP HANA is highly optimised for the massively fast Intel Westmere-EX platform, which has really fast memory. The smaller Westmere-EP blade servers don’t have the grunt to run SAP HANA in an optimal way.

Enter Intel Sandy Bridge-EP

There won’t be a new EX platform until some time late 2012 or early 2013 – Intel is in no hurry because the EX platform is highly profitable and fast. But Sandy Bridge EP is out now and it provides some very interesting characteristics.

Westmere-EX. 40 2.4GHz cores, 512GB (4xDDR1333), 2x 6.4GT/sec QPI

Sandy Bridge-EP, 32 2.9GHz cores, 1TB (4xDDR1333), 2x 8GT/sec QPI

What this doesn’t show is the details of this great Real World Technology blog, which shows that for I/O intensive requirements like SAP HANA, Sandy Bridge-EP massively outperforms Westmere-EX. It has faster interconnects and lower memory, plus 50-70% better core performance.

Based on this it should be possible to run 1TB RAM in a (much smaller) single node with the same performance as Westmere-EX. Interested yet?

What will these systems look like?

Well Westmere-EX can take 1.5TB RAM in 48 sockets but you get a performance hit. As a result I think the right system will be a 32 RAM socket 1TB 32-core blade. Based on what I have seen so far in the blade server market, this means 8x1TB blades in a 10U blade chassis – plus roughly the same in shared storage. We are down from 128U to 20U – over 6x more dense.

Plus the cost reduction is extreme because Sandy Bridge-EP is much cheaper. The expensive item in a 1TB HANA node is the Fusion-IO log storage.

Does this pose a problem for the Intel sales engine?

In my opinion, it’s a big yes. SAP HANA is well suited to scale-out platforms and the highly profitable for Intel. With Sandy Bridge-EP you can use fewer, cheaper, less profitable CPUs for the same effect. HANA simply doesn’t need the scale-up that Westmere-EX requires.

What’s more this is big for a customer. A typical 1TB node currently costs around $200k. With Sandy Bridge-EP and the new FusionIO IODrive2 cards, you are looking at bringing this down below the $100k mark.

Interesting times indeed

I’ve been in a period of quiet contemplation since Oracle posted bad quarterly results for the first time in… like ever. And the reaction from the markets was scathing. Stock went down 15% the day after and has slowly recovered – currently tracking at -11% since the results.

What’s even more interesting is there was a knock-on effect on other tech stocks. TIBCO was down at -11% and SAP at -6% on the same day – and they hadn’t done anything. TIBCO’s results were due the next day and SAP’s are due in mid January; the markets clearly believed that if stalwart Oracle had done badly, then presumably others would follow.

Let’s deal with TIBCO first; they posted fantastic results for Q4. 22% up on revenue. 31% up on profit. Innovation, success stories and all that; despite this, the stock is now only back up 1% above what it was before Oracle posted its results.

As for SAP, they posted blockbusting Q3 results and did the smart thing by keeping the full year advisory as it was. If they didn’t have a great Q4 then they would likely still hit the full year milestones – and if they had a great Q4 then they would smash them. Either way, investors would be happy.

I don’t have inside information on SAP’s results but Oracle blamed deal slippage. Some of the same seems to be visible across the enterprise IT space. From where I’m sitting, customers scrutinise where they spend money because they have to get value. If you’re a customer reading this – please do this. Take your time and ensure you spend it wisely – this way you will spend on the projects that help meet your strategic objectives. That can only be a good thing.

The worrying elephant in the room is further macro-economic trends We all know that the Euro is shafted. The UK economy is tightly linked to European exports so we are reliant on their – non-existant – buying power. The USA is reeling from the financial mess it has put itself in and only China is a huge buying force right now.

How much of the deal slippage can we attribute to the ailing global economy? Is everyone avoiding talking about it because they are afraid it might be true? And does this reflect on what might be a very tough economic market for 2012 and beyond?

We will see.

December 2011 has been a terrible month for the quality of SAP news. Or perhaps a reminder that some modicum of research and interest is required to produce a half decent article on a topic. Last week I hammered TechCrunch’s covering of the SAP and SuccessFactors acquisition with: Why TechCrunch is boring, SAP is not, and the world has gone mad.

Today I’m on the warpath at Julie Bort from Business Insider, who wrote a piece entitled: The Awful Economy Is Really Going To Hurt SAP, Says BofA. Now to be fair it is Bank of America analyst Chandra Sriraman who is at the centre of all this. Some of the article is speculation and that’s fine. It’s the facts that worry me. First, here’s a quote on SAP’s biggest innovation in 2011.

HANA was hailed as groundbreaking when it was introduced about a year ago. It sits in a computer’s memory so it literally runs while the computer processes transactions.
There’s just one problem: No one is buying it.

When SAP CEO Bill McDermott told us last year that they were going to sell $100m of HANA in 2011, we thought he was being a bullish salesman. The product didn’t even exist and wasn’t released to market until July. But over 60% of that $100m was done already done by Q3, and Q4 is traditionally SAP’s biggest quarter by far. There aren’t any official numbers yet because some deals have not closed but insiders I talk to suggest that Q4 could be as big as the rest of the year combined, for HANA.

SAP’s revenue for 2011 is likely to be around €13.5bn (actually I think it will be more, but that’s the advisory, so work with me). Of this about 22% is license revenue – about €3bn, give or take. So of course even if it’s $120m or $150m of revenue from HANA, that is less than 5% of license revenue.

But Chandra totally misses the point. First, 5% isn’t bad in my books for year one of a product that wasn’t properly available until Q3. And second, HANA is really limited in its use cases right now. It was first available as an analytics appliance, and has just been made available as a data warehouse database. But soon, it will be available as a replacement to Oracle, Microsoft and IBM databases for SAP – and non-SAP customers. The available market just increased 100 fold. Steve Lucas – Global GM for Business Analytics & Technology at SAP told me this week that he wants to be the #2 database vendor by 2015.

“Although we remain positive on HANA, it contributes less than 3% of 2011 licenses and will not be able to offset any slowdown in the core applications market,” says Sriraman.

Well SAP’s license revenue for 2011 year to date is $2.2bn, up from $1.8bn in 2010. Thats 23% increase on 2010 (overall revenue is 16% up) and SAP have put an advisory for meeting the original 9% – rather than uplifting the revenue advisory. This is likely to be due to the worrying macroeconomic trends in the Eurozone meaning there is no up-side to increasing the advisory. My thoughts are overall revenue will be closer to 16% than 9% with a good chunk of that coming from software licenses.

The reason for that is multifold. First, the last of the old ERP licenses out there are being replaced with Enterprise Agreements – because support for the old R/3 software runs out in March 2013 and a lot of customers are planning upgrades. Second, Business Analytics is phenomenally strong under Lucas’ leadership and they made 50% of Line of Business sales in 2010. Third, Mobile and HANA will have added 6-8% to the top line.

Now it’s theoretically certain that ERP license sales should be on the decline, although SAP is still performing pretty well in that area too. But let’s say they do decline. If so, the question is can SAP increase revenue from Analytics, Mobile, in-Memory, Cloud and whatever else they decide to get into by acquisition or innovation – faster? Based on the evidence above, I say yes – and I wouldn’t have been this bullish myself, a year ago. And if you don’t believe me, meet Steve Lucas and his equivalent in Mobile, Chris Maclean.

Although SAP has been the “best performing Software and IT Services stock in our coverage portfolio up 15% YTD vs. the sector down 23%”

Yes – quite.

As a final note, I talk to a number of financial analysts on a regular basis and exchange notes on the markets. It’s a great gut check because they see life from a different perspective. They also don’t like to talk about this but the financial analyst market is under massive pressure and there will be big redundancies next year (I heard 50% of all analysts will leave the market for good). So in a few weeks you may end up reading: The Awful Economy Is Really Going To Hurt Analysts, Says BofA.

It was a bit of a shock when Google’s acquisition of Motorola Mobility hit the news today. Moto was once a cellphone superpower, and it created the first commercial cellular phone, the DynaTAC 8000X. It had a demise in the early 2000s after failing to innovate around software for its phones.

More recently it has attempted a comeback in the smartphone market by implementing on Google’s Android platform and now the majority of their product lines are built on this basis.

But whilst Android sales have been sold, nothing can match the build quality and usability of Apple’s iPhone. The reason why Apple outclasses the other smartphone vendors in this respect is because it builds the software for the device – thereby limiting the number of varieties of device out there.

This has pros and cons. On the one side there isn’t diversity and choice, and on the other, this makes building software that works well much easier. And this is where Android falls over – there are so many variants that software doesn’t really work well. Updates work even less well and vary from manufacturer to manufacturer and from device to device.

So Google’s acquisition of Motorola Mobility is a great thing in one respect. It allows google to control one of the devices in the Android market and to set a gold standard for which other vendors like HTC and Samsung to adhere to. It can control updates and make really great devices that can really go up against Apple. This can only be a good thing for a market which is starting to become dominated by one major player.

The downside seems to be that the big players have started to play hardball in the courts around patents. Apple are suing Samsung around its Galaxy tablet PC and if history is our guide, the fights will get bloodier and messier. Google’s acquisition of Motorola Mobility means that they acquire a large and varied patent pool.

The question is: will Google flex its muscles in the court as Apple is starting to do, or will it instead use the acquired company to innovate and drive competition in the marketplace for smartphones. We will see.

I have had a problem on my phone line for some time. Sometimes I get noises and crackling on the line and this can make calls impossible. It’s intermittent and gets worse on longer calls and is pretty unpredictable.

So I phoned my telephone provider BT who said they would send an engineer out to take a look, which seemed fair enough. The engineer came and couldn’t pinpoint a fault and told me that he wasn’t sure if there was a fault or not, and therefore he would mark it as such and there wouldn’t be a charge.

Fast forward 3 months and they sent me a bill for £130 ($200) for the engineer visit. I phoned and they said that it was at their discretion and the engineer had no business telling me that there wouldn’t be a charge, and the charge would be maintained.

I pointed out that the engineer worked for them and therefore he was representing them and they said “he doesn’t work for us, he works as a subcontractor” – to which I responded that was their problem, not mine. I asked for an escalation and they said their supervisor would call me but wouldn’t be taking the charges off.

In the meantime I still have the intermittent problem and I therefore don’t ever use my phone line for calls – it’s just useless and unpredictable.

Interestingly I also have internet problems – I live just a few hundred yards from my BT exchange and I’m unable to get reliable internet past 8Mbit – despite paying for a 24Mbit connection. We downgraded the service and it’s worked reasonably since. I wonder if those things relate but I can’t be sure.

It amazes me that BT think that they can force substantial charges on their customers and there won’t be a backlash. I’m considering moving house so I won’t be moving from BT right now but they can be assured that I will never ever buy a BT service again.

Have you had this kind of  behavior out of a service provider that you pay for? Or indeed have you had such a problem with BT and won an appeal? I’d love to hear from you.

Do you work for BT and would you like to talk about the impact of upsetting your customers in this way? Research shows that upsetting one customer has a negative impact on a whole bunch of customers, especially those who might be reading this blog and considering moving provider.

It’s slightly ironic that just 6 days after I blogged about “Social Networks in 2011 – it’s all about contextual networks“, Google should launch their new service: Google+, or Google Plus. Google+ is for my money, a sign of things to come and a significant disruption to the social media market. In fact, I think we will see a completely different landscape by the end of 2012 with a shift of power.

What does Google+ bring that’s new?

The most significant thing is the ability to easily build contextual networks. Its concept of “circles” allows you to group friends, enemies, mentors, colleagues, customers into easily managed lists that mean you can switch between social contexts. Don’t want to worry about work rubbish during the weekend? Switch to your friends circle and leave work behind.

Other than that there’s a bunch of useful things like the ability to chat, video chat, share photos etc. etc. I particularly like the “hangout” option, where you can video chat with a group of people that form part of a circle. As a blogger that loves the back channel, I can see that be a really useful place to have an off-the-record chat with a bunch of people.

What’s Google+ missing?

Tons of stuff. It feels pretty basic, the conversations aren’t well threaded and can be hard to follow and the email notifications are driving me a bit nuts. But none of that matters if Google invest in it and continue to improve user experience. Because they have a whole bunch of people around the world that use Google as their homepage, and those people will get their G+ bar at the top of the screen. And keep using it. Supposedly 10 million people have joined in 2 weeks, which is incredible – in the top 50 social media sites already.

Google+ vs Facebook

Facebook  isn’t under any threat just yet and probably won’t be, because the social media market needs competition and Facebook offers that. They also have incredible customer loyalty, with FB people spending on average 30 minutes a day.

But Facebook is starting to feel a bit limiting – you can’t easily group people which means that having work and personal contacts in one place can be uncomfortable, and as a collaboration platform for documents, rich media and videos, it is a bit limiting. Plus they have been slow to market with mobile apps – something which Google appear to have got right on day 1 – there is an iPad app on the way through the Apple approvals process.

Google+ vs Twitter

I think Twitter is in real trouble. It has poor support for threaded conversations and can be impossible to follow. Plus it’s really difficult to manage lists of people and keeping your followers under control is a pain. Add to that a growing spam problem and the limitation of 140 characters when most devices are rich and allow longer updates to be read easily.

Google+ isn’t taking Twitter on head to head yet, but if they improve the conversation thread, email notifications and provide excellent mobile apps, people may flock to it en masse.

Google+ vs LinkedIn

Again I think LinkedIn is in real trouble. It’s a poor platform for collaboration and most people use it as an online CV and linking engine – I often use it to check out new recruits, customers etc.

If Google build in the professional side of LinkedIn – support for places to work, recommendations, shared contacts and company sites, I think that LinkedIn is in real trouble fast, because they’re not a destination site – just somewhere that you go to get a job done.

Google+ vs Skype

Again I think Skype is in real trouble. Facebook doesn’t do video or audio chat yet (get a move on Zuckerberg) and Google+ support for chats and hangouts is fantastic – they have used the GTalk engine. My initial test suggest that Skype remains much better especially on poor connections, but Google may fix this.

If so I can see myself using G+ above Skype because it’s convenient and I’m there already, and so are my friends and colleagues. Which may be a worry for the $8bn that Microsoft just spent, although they need the technology platform for other purposes e.g. Lync.

Google+ vs Apple

It’s an interesting one because Apple are approaching it from the other angle – get your documents, emails and music in their cloud first. But make no mistake, it’s a content war – the war to get your content uploaded to their website. Once they’re there, building out the Social Media platform around it can only come next. But their position is safe building from the other direction with iCloud for now.

Conclusions

Just my opinion but I think by the end of 2012, we will have seen a consolidation of the major players and Apple, Google and Facebook will start to be the 3 dominant social media players.

It’s bad news for LinkedIn, Skype, Twitter and others but I think it’s an inevitable consequence of the fragmented market.