The Cloud – Risk or Chance for Business Partners?

During the last year, I attended many entrepreneur meetings all over Switzerland and I met many, many new cloud fans. Cloud solutions are spreading. What does that mean for the traditional business partner? Bad news actually.
Cloud solutions with the most impact on our business, are normally provided by the biggies. Microsoft, IBM, Oracle, SAP, Google you name it, they have it.
SAP one design is eating into the SAP Business One business, Microsoft 356 into every business partners revenue stream, IBMs LotusLive, too. Suddenly, the Big Ones can provide services to everybody fast and easy and all we can do, is migrating our customers and then they are gone for good.
Customers love cloud solutions. No more hassle with servers and all the updates. Access it everywhere. It is cool. They may loose a bit of individualism, but today’s software has so many features, that at least 90% of the needs are covered by one provider or the other. The need of the average business for individual software is diminishing. Some of this is just happening in the heads of CIOs and CEOs who want main stream solutions. They see it as less risky to buy of the shelf. That this may lead to additional manual work, instead of automatizing, is just not a factor. ROI isn’t an overwhelming argument (Silly, if you ask me). Many customers see recurring manual work as more productive, then taking the time to create a template and reusing it. Really! I heard this story so many times, my blood pressure doesn’t even raise anymore. A gain of productivity and a pay back within 6 month just isn’t always an argument in IT. BTW, that’s one reason, why Lotus Foundations failed in the market (apart from that nobody knew it). Gaining time in setting it up and having a incredible good backup and recovery system, isn’t enough. Because during normal operation it works like anything else and you can’t complain at the country club, like your chums who went main stream, or in other words, it had no want-to-have-feature for the user.
Now back to the cloud. It’s the new black. It was Apple and Google that broke the Microsoft monopole for good to make room for everybody else to start cloud solutions. Today it’s cool to have an iPhone, iPad, Mac Book, iPod, at least at home. Android is kinda cool, too and Microsoft is just for the rest. You need it in your company, it is taken for granted, but it is not the ultimate thing to have. Today customers only want to know, if the new CRM works in the web browser and on the smart phone. The technology isn’t important at all anymore. Or would you care, if SAP uses Oracle or DB2 for SAP by design?
As a Business Partner of any of the biggies, we should be alarmed. Don’t get me wrong. If I was Sam or Steve or Gini or Larry, I would do exactly the same thing. Eliminate the middle man (the BP!) and bind the customer directly to me. Hey, but what about the BP, who has been a loyal follower for years? Who cares. Frankly, we are all attached to Notes, not so much to IBM. Probably to Ed, but not to IBM. BPs who are playing on both sides, Exchange and Domino, are from my point of view as the boss of IBM, not my loyal followers. Yes, yes, we always told customers that Domino is so much better, but they still want Exchange. Got it? We are rather loyal to the customer. If there was a completely new product with all the nice things of Notes and more, more speed, better design and so on, we would all jump wagon before you can say SUPERCALIFRAGILISTIC – EXPIALIDOCIOUS. Now why should IBM care about us? They don’t have to (we would better call ourselves resellers or something neutral, than partners).

It’s all about keeping the customer. There are a quite a few arguments, that do not work.

If you tell customers that by US law for US companies or companies that just do business in the US, his data must be made available on request to the US authorities, without the need to inform him!
He does not care. I do, but I have yet to find somebody who does care.

„If you have no internet, you don’t work.“
Internet is extremely reliable today, therefore not an argument.

„You still have to do backup, because you can’t trust your cloud provider.“
Customers just expect, that the clouds backup works.

„You will have problems to get your data back, when you want to migrate.“
Why should I think about migration now?

„You will have problems to get support.“
No, not really, it may be less comfortable than just calling you, but it works.

„You will have outages at the worst possible time.“
But they do guarantee 99% accessibility!

… and so on. The answers of the customer may not be always entirely correct, but he believes it, because the cloud sales told it.

What should we do now, to keep our customers? I know, on premises isn’t dead, but if the stuff in the server room is more complicated and less performant, than the cloud, more customers will move to the cloud. Incidentally, there are solutions which are less complicated, than the traditional stuff (LF was one, Collax is another) and they could provide customers with something that feels like the cloud.
IT companies can set up on those tools their own clouds. Collax cluster solution is pretty cool … and has a license scheme, which is clear and easy. Even I can handle the installation and the administration and it is the chance for any IT company to go forward and keep customers.
Another idea would be fractional ownership in the cloud. Buy part of a cluster and share the hard- and software with other IT companies. Makes it easier to start.

What is the advantage, if you go cloud? Keep the customer! Create a continuous revenue stream. Easier path to the customer to offer new services. Become a customer to the big ones, instead of a reseller. They will like you much more. You can take whatever technology suits YOU.
Disadvantage? Initial investment, but that isn’t so big, if you start with KVM solutions. The change of the business modell is quite a step, but managable with good planing.

If you have a customer, that wants to go cloud, why not going with him? It’s a chance or a lost customer. Rather take the chance.
And now think about XPages and XWork Server. We just got the easiest path for extremely cool cloud solutions presented on a silver tray.
Grab it. See! IBM is still caring a little bit about it’s BPs. But IBM is changing and the BP has to change, too.

I completely forgot to tell you …

… that I am not always devils advocate, as Ed called me.
Here is my article that was published in November in the publication of the Swiss Small Business Association.
… and a quick search on Google reveals, that I am probably the only one, who ever wrote in a Swiss printed publication about the XWork server.

Das geheimnisumwitterte Projekt: IBM XWork Server

X-FILES – SIE SIND UNTER UNS! Im Oktober stellte IBM den XWork Server vor. Meiner  Meinung nach eine ideale Plattform für KMU, um die eigene, vielleicht nicht sonderlich homogene Umgebung, für Mobilgeräte und Internetbrowser fit zu machen. Der XWork Server enthält vom Start weg alles, um webbasiert Business-Logik diversen Endgeräten zur Verfügung zu stellen. Webserver, Datenbank und Userverwaltung sind integriert und wer zufällig IBM Notes nutzt, kann lokal replizieren. Ein nicht zu unterschätzender Vorteil für Mac und PC Benutzer, die nicht immer online sein können oder wollen.
IBM hat es verstanden, aus vorhandenen und neuen Technologien einen Webserver zu kreieren, der offene Webstandards, Entwicklungsumgebung und Lizenzmodell zu einer Plattform vereint, die den Einstieg in die mobile, bzw. browserbasierte Welt erleichtert.
Der Clou am XWork Server ist die Fähigkeit, wie eine Spinne im Netz zu sitzen und verschiedene bestehende Datenquellen, z.B. SQL, Filesystem usw. zu Web-Anwendungen zu verbinden. Das eröffnet Möglichkeiten beispielsweise für Reportgeneratoren und individuelle CRM Systeme. XWork Server braucht nur eine Hardware und kostet genau einen festen Betrag pro Jahr. Keine CALs, POV oder sonstige Gemeinheiten die Preisberechnungen zum Projekt ausarten lassen. Das es das noch gibt?
Mit kostenlosen Erweiterungsbibliotheken und auch Code-Beispielen die man sich aus dem Internet holt, ist der Fantasie für auf den Nutzer zugeschnittene Business Applikationen kaum Grenzen gesetzt (Sie wollten sicher schon mal ein Business-Cockpit)! Das ausgefeilte Berechtigungssystem funktioniert bis hinunter auf Feldebene und ist relativ einfach verständlich. Anbindung an die gängisten Benutzerverwaltungen ist selbstredend integriert.
Der XWork Server nutzt  zwar offene Standards wie beispielsweise Java Server Faces, doch es reichen normale Webentwickler-Kenntnisse, HTML, XML und JavaSkript. Als Einstieg kann man sich schon mit Drag&Drop ausgefeilte “Webapps” (denglisch für Internet Anwendung, aber man muss dem Zeitgeist hinterher hecheln) zusammenklicken. IBMs “XPages” machen es möglich.
Mit XWork Server wird insbesondere individuelle oder schon erhältliche Standardsoftware erschwinglicher.


See Ed? I am acctually trying to help you selling it (and I am still waiting for that invitation for that feast).


XWork Server … a new era?

Ed announced the XWork Server one day early … probably just because he wanted to be the first! I me, the silly idiot, even asks before posting anything on the 4th, if it is OK, to write about it before they wake up, because of another time zone.
Anyway, let’s look at Ed’s new toy.
Now what about the the fuss? First, it’s an ISV offering. It’s up to you and me (again!) to push it in the market. That’s great news for all the XPages developers out there, who’d like to sell their browser based applications without having to sell Domino. Now you can tell customers that your app is based on an IBM application server. It’s bad news for those who saw marketing money raining down on us, because of the re-branding, but I come to that later.
During the webcast last week, they made the point, that ASL would be a good way to sell it. If you consider ASL, please look at the warranty. All the warranty IBM is giving for the licenses you sold remain with you. Your customer does not get warranty from IBM. You have to provide the warranty for your products AND the XWork server. This sometimes leads to extensive discussions with the legal department of your customer.

Let’s look at a few things I discovered in the F&Q’s:

Q: How is XWork Server licensed?
A: XWork Server uses a fixed term licence and is licensed per install.

Q: What is a fixed term license?
A: A fixed term license offering grants the right to use the software, including Software Maintenance, for a fixed period of time. At the end of the Fixed Term License period the license and its associated Software Maintenance will be automatically extended for another period and the customer will be invoiced for that new period unless they notify IBM or their IBM Business Partner prior to the end of the term of their intent to terminate the license. If they choose to terminate, they will no longer be authorized to use the software and they will lose their entitlement to Software Maintenance.

This is more a subscription modell. If you use it, you pay… $2000 every single year. No more „It works, why would I need maintenance for it!“
… and this answers also the question that came up during the webcast, if IBM will still send our customers the bill 3 month before the end of the licensing term. Yes, they will.
If you use ASL, IBM will come after YOU, if you let slip the date!

Q: Can you give me an example of what constitutes an application?
A: Say you have a product launch application comprised of the following.

  • One database for administrative/configuration
  • One database for marketing content
  • One database for launch tasks
  • One database for workflow logic

    This would constitute one of the four applications per install

Q: What if my application requires more than 4 databases or I want to run more than 4 applications on the XWork Server?
A: You may purchase an additional XWork Server entitlement for that physical server. This means that each application may contain up to 8 databases. It also means means you can have up to 8 applications on that same physical server thus allowing customers to run more applications before purchasing additional hardware.

Q: XWork Server ships with a lot of databases. Which ones count towards the definition of an application?
A: XWork Server ships with numerous databases that can be broken into two categories. Social Business databases deliver business value to individuals or groups of individuals and would count towards the definition of an application. They consist of Teamroom, Discussion, Document Library and Blog. All other databases are defined as system databases and do not count towards the definition of an application. Some examples of a system database are Directory and Log.

I am sure, the whole database/application thing will be a thing of many (probably heated) discussions. If I use a blog and a online shop with 3 databases, is that one or two applications. The blog has technically nothing to do with the CRM, but is part of marketing, because I would very often link to products in may shop. I would use only 4 .nsf, but that would count as 2 applications? IBM, I think that modell is bound to rise blood pressure on many occasions, especially if a customer is just one or two databases over the limit.
Why couldn’t IBM just think simple once in a while.

Q: With XPages, can I access data that resides in an NSF on a Domino server?
A: Yes. XPages allows you bind your controls to data that resides in a separate NSF and that NSF may be on a different Domino server. If that NSF resides on a non-XWork Server, you can access that NSF and
that NSF would not be counted as part of an XWork Server application.

Now that made me smile. I can have 27 databases on different Domino servers, all accessed through one XPages app on a XWorks server. If your customer has already Domino, there is a loop hole. If he hasn’t, how about buying a single Express license and the XWork Server? Unlimited access through the XWork Server but the data of more then 16 nsf on an extra Domino Server, plus the replication.
The silly thing is, if you start looking for loop holes, the licensing modell isn’t a very good one. The more you have to explain the licensing to the customer, the less confidence he has. Look at VMWare, there is a half day course about the licensing. A competitor with an easier licensing modell, has a head start (Collax, hint, hint, sorry, had to do it).

Now the marketing, or rather the lack of it. The offering is for ISV’s. If you’r not an ISV, move on, nothing to see here, really (after having read all the stuff above, thank you). It will not be a new LFD (Lotus Foundations Desaster), because not even IBM thinks, that they will sell many XWork Servers, but it’s a good offering for ISVs and it opens the way into new companies, who hang up on you, if you just say „DOMINO“.
I think, that XWork Server is a shot in the dark, to find out, if the re-branding works. I am pretty much convinced (I have said it before), that „Domino“ and „Notes“ will be gone within 12 month, and I applaude IBM for this. But as I also said before, that IBM has to deliver a completely new product. (from the outside! What user cares if the technology is still Notes, as long as it looks better, has cool new features and is faster, AFIAK Exchange also still runs on Access/Jet). Throwing marketing money at the XWork Server, does not make sense. The next Domino (called XTalk? Naa, that’s taken, XCollaboration, that’s not snappy…) and XWorks Server together will be a more complete offering. Marketing will make sense for the whole product line. But if IBM tells us again, that it is up to us to promote it, it will be a LFD.
If you count on „viral“ marketing, uh oh. That works for cool products from underdogs much better. Apple has this success also because of good marketing and they do lot’s of it. They are here in Switzerland in the top 10 regarding marketing budget and have over 20% market share. Think about it.

„Dear IBM, even though you may believe, that many of your BPs rant and whine, you should realise something: the majority is calm, but will move away without saying a word. Your partner base is shrinking, your customer base is shrinking. If YOU want to stop that, it’s up to YOU!“

Anything else?