The most important tool that enterprise software vendors have in their respective arsenals is their platform.
While Vinnie Mirchandani rightfully states that Enterprise Software Platforms have so far underwhelmed, Denis Pombriant proclaims them the new battleground. In my opinion it is not that new a battleground but as part of the Clash of Titans it is becoming more evident as a battleground. An enterprise software platform was always part of the battle for dominance in the customer engagement — or putting it into (marketing) industry lingo — customer experience market. It is actually an integral part of it. This is largely because of the ongoing commoditization of transactional business applications.
But it was sexier to talk about shiny topics like engagement and experience than to talk about the grease and the machinery behind that drives and enables the technical delivery of engagements — note, that there are systems of engagement, but there is nothing like a system of experience.
And now topics like chatbots, machine learning, AI, ambient computing, IoT, to name a few, made the machinery — the platform — the new black.
A — perhaps not so — brief history
When looking at the broad topic of CRM, customer engagement or customer experience, we have seen a lot of change happening since the early days of Sales Force Automation, SFA.
Back in the early 90s one of the first topics has been SFA, with a focus on making a distributed sales force more effective and efficient. Contact management came even earlier, call center software and field service quickly followed.
The emerging industry was dominated by little players that mostly got acquired by bigger enterprise software companies (anyone still knows a company called Kiefer & Veittinger?). Essentially we lived in a best-of-breed world. Nobody really talked about user- or customer experience. Times were all about efficiency. But what happened was that these point solutions brought an improved customer engagement, and with it an improved experience. Sales cycles shortened, got more predictable, which led to increased customer satisfaction overall.
One of the players, Siebel, stepped up the game by coining the term Customer Relationship Management, CRM, and with it came the solution suite that increasingly covered all areas of CRM: Sales, Service, and Marketing. The advantage was clear: Having a highly integrated system not only allows for more efficient internal collaboration but also enabled one consistent face to the customer — better engagement possibilities and therefore potential for improved experiences again.
The first real protagonist of this was SAP, but let’s not forget Oracle.
In the mid 2000s Cloud Computing fully arrived, or rather took off. One could say, that this was also propelled by Salesforce with its then disruptive Software as a Service model. With this model we arrived at best-of-breed software again, as nimble SaaS players could offer quick solutions for departmental problems, something the big software houses could not do — nor did they want to.
SaaS was born, and with it came the possibility to nimbly react to increasing customer demands, which in times of social media and the communications revolution that mobile devices caused, came very handy. The big incumbents realized this, too; some faster than the others.
All of them, SaaS players or not, had their own development platforms, with different strengths, with or without own databases. This is important as it allowed them as well as their partners to efficiently enhance their software to offer more specialized functionality.
Again, without talking about it, one result was better user- and customer experience through improved engagement.
At the same time players like Google started to offer their environments as development platforms, too.
PaaS — platform as a service was born.
Add a vast number of little players and great software that got built using available open source technologies only.
Shortly after, with the arrival of AWS, Infrastructure as a Service became a hot topic.
However, a problem arose of all this, too. The many SaaS applications that were built using the different technology and development platforms had a hard time integrating, which ate up a lot of the advantages the SaaS applications themselves offered. Consistent engagement, and with it customer experience suffered.
To address this, middleware services became part of PaaS offerings. Additionally there was also an increasing trend of consolidation on a smaller number of offered platforms, increasing the economies of scale for all involved parties.
As a side effect the suite reappeared on stage, but with a twist. Instead of being a kind of supermarket it had converted to something more like a mall. Specialized software was integrated via a (fairly) common data layer, based upon one platform. While this is not entirely true you get the picture.
This happened towards the end of the first half of the 2010s, and, along with increasing commoditization of enterprise software, gave birth to the ‘platform war’. Just that, sticking to military terminology, CEM, CEX, Martech, etc., have been the proxy wars.
In came topics like chatbots, AI, machine learning, IoT, ambient computing.
And this brought the platform topic into the foreground.
A well-architected and comprehensive platform is the foundation for integrated business processes. This, in turn is the precondition for being able to deliver great engagements and therefore for the end customer to perceive a great experience. There is no experience without engagement.
The platform is the customer experience platform.
But wait, what is a platform?
Now, this is a good question!
There are probably as many definitions as there are enterprise software and infrastructure vendors. And these definitions are largely based upon the vendors’ legacy and core business.
The industry largely distinguishes between two layers of platform:
- Infrastructure — IaaS
- Software — PaaS (and to some extent SaaS)
Infrastructure is the skeleton
While IaaS is fairly simple (no disrespect meant) as it mainly deals with the many hardware aspects of a distributed cloud platform, it is challenging on its own.
And, supplying the compute, storage, and networking abilities, IaaS is literally fundamental. That makes it a part of the platform to reckon with. IaaS is a core element of Oracle’s strategy, and increasingly gets Microsoft’s attention. And then there are players like AWS, Google, Ali Baba, IBM, Rackspace, etc. that are providing cloud infrastructure to businesses as (a part of) their main business.
The importance of IaaS is evidenced by all major enterprise software vendors heavily investing into their own datacenters. Although infrastructure is a commodity it is a commodity that the big software vendors are depending upon — at a scale that makes them vulnerable.
Software are the muscles
PaaS is more complex than IaaS. It is the foundation for building thriving application ecosystems. It therefore needs to supply all services that are needed to efficiently build, deploy, sell, and manage business applications and business application services (aka micro services). It also needs to provide the foundational services that enable business application developers to concentrate on solving business problems. That’s why analytics, IoT services, machine learning infrastructures, AI services, middleware, database engines, and much more, are part of it, too.
Choose your platform wisely
It is the software platform that lays the foundation for being able to consistently engage in a way that can deliver positive experiences. The IaaS part of the platform makes sure that the software platform itself can deliver with low latency and the performance that is necessary at any time.
The ability to consistently engage in a way that can deliver positive experiences is why especially the PaaS platform is that important.
And then there is the challenge of on premise software and/or “private clouds” as well as increasing regulatory pressure that places demands on the storage location of data with the latter becoming a non-issue soon, as every significant IaaS vendor will be able to support upcoming regional legislation — doing so is a matter of survival for them.
The other matter of survival for them is whether and how they can attract business workloads to their infrastructures. And this means partnerships. No big enterprise software vendor — who all provided PaaS — will make itself dependent on one single, or only two IaaS providers.
Which means that the software platform will remain the decisive factor.
So, which platform to go for?
As bland as it sounds, this is an individual decision. There is no one size fits it all.
The main criteria are:
- Fit to the existing (on premise) back end
- Fit of current offering to current needs
- Fit of offering in 3 years to perceived needs
- Adaptability to changing needs
- Willingness to accept a given IaaS by choosing a PaaS
The four vendors have very different strategies. All of them have their own infrastructure, but Microsoft and Oracle strongly prefer its own, while Salesforce and SAP are partnering, which also helps drive cost down.
Microsoft, Oracle, and SAP are full suite vendors, with offerings covering the full value chain, while Salesforce concentrates on the customer side of processes. Microsoft on top of this has a strong productivity suite and essentially ‘owns’ the office.
Microsoft, Salesforce and SAP are running thriving ecosystems, with Microsoft and Salesforce clearly having an edge over SAP. Oracle is less strong.
All four are investing heavily into important technologies like machine learning, blockchain, VR and AR. Oracle’s investments into AI based database security is something unique in this area; until Microsoft goes that route, too — followed by SAP, which has least data on database attacks — but likely lots on attacks on the application server.
Microsoft, followed by SAP have best access to data, Microsoft via LinkedIn and its stake in InsideSales, SAP via the Ariba network and now Gigya.
Tl;dr — Which platform will win?
In brief: The race is on.
My personal view is that Microsoft, Oracle, and SAP have an edge over Salesforce, as these companies offer more of the value chain, in breadth and depth. Salesforce, on top of it, is not overly profitable. The company surely provides high value, but also at a high price. What if other vendors provide (or are perceived to provide) similar value at a lower price point? After all one major driver for a move into the cloud is lowering cost.
On the other hand at least Oracle and SAP, probably even Microsoft, can learn from Salesforce about eco systems.
Look out for what Microsoft is offering, especially if you are not (yet) a large enterprise but consider yourself upper end of mid market. If your concern is the whole value chain and you want to grow, look for SAP. Look for Oracle if you are an Oracle shop.
If your main, or only, concern is customer engagement, have a good look at Salesforce.
But always keep your existing infrastructure in mind.