From mainframes to client/server to the cloud, Bruce Richardson has anointed many winners and losers during his years at AMR Research. The software expert made a name for himself with a reputation for straight talk and in-depth connections with both buyers and makers of enterprise systems.
When AMR was bought by Gartner in 2009, Richardson moved to the vendor side and settled down at Salesforce.com in 2011 as Chief Enterprise Strategist. I asked Bruce about the status of cloud ERP, the ways CIOs are coping with rapid product innovation, and where he’d place an innovation bet over the next few years.
M.R. Rangaswami: Given your experience with past industry paradigms, what is the status of the enterprise software market today? Are cloud-based enterprise apps “there” yet?
Bruce Richardson: At a CIO event last week, one of the attendees came over with his iPad to show me his new IT strategy. The first slide showed his old architecture built primarily around SAP ERP and other assorted SAP acquisitions, with almost all of it running on-premise in his data centers. Two slides later, he showed how this is being replaced with a strategy built around putting the customer at the center. He’s focusing on business processes that can positively impact the customer experience – truly inside-out thinking. He described the dichotomy as the “CRM vs. ERP” view.
He’s not the first to see the world through a “customer-first” lens. At the same event, a well-known, Fortune 500 manufacturer told me that he was rethinking his SAP strategy, too. His SAP account team is pushing him to move to R4. This will involve re-licensing all of the software/modules that he has already paid for. He described that strategy as “insanity.”
If you look back at how SAP cracked open the client-server market in the early 1990s, it was able to leverage several key trends. The mainframe had come to be seen as the enemy. It was expensive, inflexible, and required a huge IT staff for support (ironically, SAP R/3 was guilty of the same charges). Leading thought-leaders like the late Dr. Michael Hammer created a boardroom mania for “Business Process Re-engineering.” Consultants and systems integrators raced to build teams to help companies with BPR programs and ERP evaluation engagements (they quickly discovered that the real money was in the multi-year ERP implementations and upgrades).
If you fast-forward to today, most CIOs I meet have adopted a “cloud-first” strategy. This approach usually refers to everything BUT replacing their current on-premise ERP system. While there are some F500 companies doing that, it’s been pretty slow. For that to happen at a faster pace, we’re going to need some large cloud ERP vendors with great customer testimonials, support from the major consulting firms and SIs, and the endorsements of analysts who get the benefits of “customer-first.“
M.R.: You’ve always had your finger on the pulse of business software buyers over the years. Adopting new solutions has never been easy, but the pace of change in today’s market seems extraordinarily fast and furious. How have you seen customers succeed in managing the balancing act between innovation and reliability?
Bruce: While one could argue that initiatives around creating new digital business processes are really a modern-day version of the BPR craze, the big differences are the lower costs and greater familiarity with newer technologies. Everyone that has ever made a purchase on Amazon is now an expert on e-commerce. Likewise, if you have booked a ride on Uber, you can appreciate ‘the API economy’ that links disparate piece of information — when the car will arrive, the name and rating of the driver, the cost of the trip, the route to your destination, and a tip and rating for the driver. From our experiences with consumer technologies, we understand and appreciate the value of cloud, mobile, social, big data, AI, and security, too.
Today, it is so much easier to experiment with emerging technologies. And there are so many resources available, whether self-paced training or design-thinking teams offering “imagineering” services. Going back to the SAP example, there were a lot more unknowns during the transition to client-server such as the total cost of ownership (especially upgrades), the challenges of managing ‘shadow IT’ (especially the third party apps that employees were loading on their PCs), and the risks of viruses and security hacks.
M.R.: If you had to place a bet, which of the following would be the best investment over the best three-five years: Cloud-based enterprise apps, IoT, artificial intelligence, autonomous driving, cybersecurity, big data, Amazon stock, bitcoin, SF Bay Area real estate, or In-n-Out’s expansion into Colorado?
Bruce: What I love about the tech market is the constant change – even if it is often the return of technologies from the past. AI is a great example. I remember back in the mid-1980s when Kendall Square in Cambridge was known as “AI Alley” thanks to the presence of Symbolics, LISP Machines, Thinking Machines, and MIT and Harvard.
At Salesforce, we have a shared collaboration site called Futures Lab. I have posted ideas and articles on a wide range of topics on the site, including edge computing, new blockchain use cases, unique AI developments, conversational computing and other new user experiences, IoT, 3D printing, CRISPR and other medtech advances, ag tech for feeding the world, the future of work, the future of transportation (especially Hyperloop and flying cars).
If I were to wager, I would bet on things that create new and better “experiences,” for example, AI making you smarter at work or home, Hyperloop getting you from SF to LA in 30 minutes, medtech improving your health or minimizing the restrictions, and ag tech increasing the supply of locally grown food – even in a desert.