In this week’s episode of Enterprise Software Podcast, Todd, Bob & Darcy discuss the latest industry news, and interview Ray Wang, Principal Analyst, Founder at Constellation Research, Inc. and bestselling author for Harvard Business Press.
Ray is passionate about how disruptive technologies such as digital can transform business models and how artificial intelligence will augment humanity.
A highly sought after market maker focused on business strategy and disruptive technologies, R “Ray” Wang has advised Global 2000 organizations and spoken to millions of people around the world. His dynamic presentation style brings life and energy to technology and business topics such as artificial intelligence, digital business, future of work, digital marketing transformation, matrix commerce, next generation customer experience, consumerization of technology, and data to decisions.
Ray’s best selling book Disrupting Digital Business published by Harvard Business Press describes why 52% of Fortune 500 have been merged, acquired, or gone bankrupt since 2000.
He is the author of the popular blog “A Software Insider’s Point of View.” With viewership in the millions of page views a year, his blog provides insight into how disruptive technologies and business models impact brands and enterprises.
The topics covered in this episode include:
- MillerCoors lawsuit
- Dutch Police lawsuit
- George Foreman Sage Summit
- #Fabrikam Day tweets from the #MSDynGP community
- Ray Wang Twitter
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In case you prefer to read the transcript:
Episode 61 Transcription
TODD Hello and welcome to Enterprise Software Podcast, the world’s first independent podcast dedicated to business applications. We provide news, views, reviews, and interviews for CEOs, CIOs, developers, users, and partners. My name is Todd McDaniel.
BOB I’m Bob McAdam. The views expressed by the hosts on this show are not those of Dynavistics, Dynamic Communities, or Website Pipeline.
DARCY And I’m Darcy Boerio. Links to some of the things we’re discussing today are readily available at enterprisesoftwarepodcast.com. visit our homepage, click on any episode title, and you’ll find that episode’s specific page with all the links in the red ‘Download Audio’ button.
BOB Welcome to Enterprise Software Podcast Episode 61. It’s been a little bit of a break here. We’ve been all so busy. But hey, we are catching up this time around and later on we’ve got Ray Wong, Constellation Research founder and principle man there talking to us about all kinds of topics. We tried to squeeze him in and he found some time for us and I’m happy to say it’s a great interview.
TODD Also Twitter Master. I don’t think you could leave that off of his CV as it were.
BOB Yea. Agreed.
TODD He has tweeted 225,000 times when we recorded this episode.
TODD I don’t think I’ve said 225,000 things in my life.
BOB No. certainly not tweetable.
TODD No, absolutely. Yea.
DARCY We are three of his 107,000 followers at this table.
DARCY And did we mention big thanks to our friend Kim Brault at Vertical Solutions
BOB Thanks, Kim.
DARCY For introducing us to Ray at GPUG Summit at Tampa.
BOB That’s right, this past October. Tampa, Florida, USA. Nashville this October.
TODD You may hear that again.
BOB Sign up today.
DARCY Keep a tally of the shameless plugs today.
BOB There’s a lot of them. You’ll need two hands.
TODD It should be a drinking game.
BOB Alright, so before we get to our chat with Ray, which was very fast paced and exciting.
BOB He covered a lot of ground in a short amount of time.
BOB Let’s chat about what’s cooking in the news since it’s been a while since we all got together.
DARCY Lawsuits, lawsuits, lawsuits.
TODD Lawsuits, lawsuits, lawsuits. So, the first one I guess I’ll take. Miller Coors, or those of you not in the United States, a large brewing company here in the United States. Miller High Life, the champagne of beers.
TODD Yes. They are suing their IT implementation company HCL for their SAP implementation that has not gone well. So the implementation started out as a $50+ million implementation. $53 million.
BOB $53 million software deployment.
TODD Then at some point, my favorite part of the story is at some point, there was a $9.6 million change order. Now I have presented plenty of change orders in my life, and they’re never fun.
DARCY But did you guys ever see that picture, it was years ago that it was going around, it had this big yacht and said ‘Change Order’ and it had a little dingy that had said ‘Original Contract’?
TODD Yea. I guess. But I just can’t imagine putting a change order in front of someone for $9.6 million. But anyway, so they had done that, and then apparently, it still did not go well. So, they are now suing, all they’ll say is for in excess of $100 million.
BOB Yea. That’s quite a bit.
TODD Yea. So, with large projects comes large liability.
BOB Yea, they’re saying that they didn’t meet project deadlines, which you know, isn’t totally uncommon. And then it also says they didn’t staff the project with sufficient number of people. I mean, you would think on a large implementation, one like that, that having too many people on staff on a project would be more of a problem as opposed to not enough.
TODD Yea. Well it was significant customization, they said. But also, not in defense of the implementer or anything, but from the standpoint of choosing a software deployment for a company like Miller Coors, it’s not like you’re gonna do on-site reference visits. I mean there’s only, what, maybe five or six other companies in the world like you?
TODD So you are kinda taking a chance there no matter what you’re doing. But it sounds like it’s basically over. They signed a notice of termination. They’re gonna find a new supplier. Don’t know if they’re gonna stick with SAP, or it doesn’t say in the article if they’re gonna stick with SAP or if they’re looking for a whole new – so Dynamics AX resellers out there, send in some literature.
DARCY Did they ever go live?
TODD I don’t think so. No.
BOB It doesn’t say. That’s what I was wondering.
TODD It doesn’t say, but it certainly doesn’t sound like it. Did not bode well, that’s for sure. And then Darcy, you found a great story from the Netherlands about a nice lawsuit.
DARCY The Dutch police of 2008, a law enforcement employee accidentally ordered 13,656 licenses for a special home working edition of Office.
BOB Well, imagine the commission on that.
TODD Yea, no kidding.
DARCY Yea. Somebody got paid for that. That’s awesome. So that was like a 3-million-euro deal. And then they realized their mistake. They used almost none of the licenses yet. So they asked for the money back and ended up trying to sue Microsoft and then were not successful in that, in part because in 2005, they had a similar wrongly placed order for 765,000 euros that Microsoft had refunded. So at this point, it’s kinda like, well come on.
TODD Yea, yea.
BOB Fool me once, shame on you.
TODD So nine years later, the court system comes in and says no. Microsoft gets to keep the money.
DARCY Oh. And here’s $10,000 in legal fees, too.
BOB Which by comparison is peanuts, right? You don’t need a spreadsheet to calculate that.
TODD I know. I wonder, even Microsoft, 3-million-euro lawsuit has to be at least a footnote somewhere.
BOB In their financial statements?
BOB A footnote.
TODD Over an incorrectly placed purchase order.
BOB If only they had word flow.
TODD I wonder if that law enforcement employee still has a job.
DARCY That’s a good question.
BOB That wasn’t mentioned at all.
BOB I could only guess yes.
TODD Yes. Inquiring minds. Alright.
BOB Alright, what’s next?
TODD Sage news.
DARCY Well, I wanted to take a moment, I just got back from TPAC in Niagara Falls, which was awesome. I’d never been there before. It’s the Third-Party Advantage Conference and it’s the Sage 300 ERP Accpac partner conference. They do have a few hours of customer attendance, but primarily it’s a partner conference where all the third parties in the Sage 300 channel have a booth and can go and kinda partners walk around. It’s partner only. It’s a really good event. I remember when Accpac was acquired by Sage, it was the same year that Timberline was acquired by Sage. So, I remember we were all kinda new there and we’d look at each other at Insights, former Sage Summit and be like, wow, this is a lot. But I think both those groups still maintained their own sort of groups together and sort of stick together anyways. And this is just evidence the Accpac group is still strong. There are still a lot of partners that have been around there a really long time. And this is their time to get together and reacquaint each other and see what’s new with the ISVs and with the different partners. There was a really large Sage presence there, quite a few Sage people there. So, it was a good event.
BOB It’s probably quite nostalgic for some of them.
DARCY Exactly, yes.
TODD I kinda like the concept, though, of partners and ISVs getting together and being able to talk without customers. That sounds nice.
DARCY I guess Reimagine, or what’s it called now?
TODD The Dynamics GP Tech Conference, this August in Fargo, North Dakota.
DARCY Shameless plug number 2. So, that is
TODD Drink, drink, drink.
DARCY probably the closest thing I can think of, right? ‘Cause ISVs are there.
BOB Right, yup. And we invited sales and marketing folks a day before GPUG Amplify to do kinda the same thing.
DARCY And kickoff was like that, but I think that’s no more.
TODD Yea. The even that would just pop up on your calendar a month before.
BOB The US Dynamics kickoff?
TODD Yea. That was kinda interesting.
DARCY So that was good. And we didn’t talk much about this at the TPAC, but Sage also had an announcement of an acquisition of a company called Compass. And when I first saw just the headline, it was like e-commerce. I was like, what? But it’s not e-commerce in the Website Pipeline sense of e-commerce. Ooh, shameless plug. I did one.
BOB That doesn’t happen on this show.
DARCY But it’s more like an e-commerce analytics company, so a surprising, interesting acquisition, I’d say.
TODD Yea. It seems a little bit out of left field, to say the least.
BOB A bit surprising.
TODD Our friend Wayne Schulz, I don’t know if he wants us to quote this, but he said it seems maybe they just wanted to be able to check off big data as something that they do now.
DARCY As well they should. We’ll see where it ties in, you know. It could be tied in with Sage Live and
BOB Yea, they could integrate it in a lot of places.
DARCY We will see more to come on that, I’m sure. And then other Sage news, we still have no music for this
TODD Or sponsored by Robert Half Employment Solutions.
DARCY We need to work on that.
TODD I know.
DARCY Maybe they’d sponsor the music, but Ray Barlow, VP of Accountant Solutions, has departed Sage, is now free to pursue other opportunities.
DARCY Ray was awesome. I met Ray a couple of times at ITA and other events, and super nice guy. And what was remarkable to me about Ray is he had come from Intuit and he was really super excited about what he was doing and what the team there was doing and the accountants network at Sage.
DARCY Really excited about Sage Live and how that could apply with accountants and building the accountants networks and sad to see him go, but hopefully he’ll end up somewhere else and cooler and maybe we’ll catch back up with him one of these days.
TODD Yea. I tell ya, CPAs – still an untapped market for software publishers some 25, 30 years later. They still don’t really have a good, I mean you talk to a typical small to medium sized CPA firm, they still don’t have a good technology grasp. And I’m a CPA.
BOB Yea, but you have a reasonably good technology grasp, I’d say.
TODD Yea, I don’t know.
BOB But you’re right. The average firm, probably not, or needs to focus on that more so.
DARCY Well Sage does a lot of outreach in that and that’s part of why they send a large contingency to ITA because there’s a lot of technical leaders at CPA firms that are in attendance there. So Sage has definitely always been pushing that market and kinda taken the lead on that.
TODD Yea, they’ve definitely been the strongest. There’s no doubt about that.
DARCY And speaking of strong
BOB Speaking of strong and muscular
TODD Nice segue.
DARCY Sage announcing that George Foreman
BOB Big George Foreman
TODD He’s the one that makes the grills, right? Did he do anything before that or has it just been the grill business?
BOB He got into the ring with some of the greats like Muhammad Ali and Joe Frazier. And I mean man, that guy, he was a big, tough boxer in his day.
TODD So he’s the keynote speaker for Sage Summit.
BOB Yup. In May in Atlanta, right?
DARCY You gotta bring Pamela. She and I can learn some new moves from him.
TODD Yea. That’s what I need is my wife to know more about martial arts and how to punch people.
BOB You probably had enough black eyes.
DARCY Pamela is black belt recommended. She’s a tough cookie.
BOB So I think George Foreman, he is a marketing guru. I mean the guy does a great job. He went from boxing and beating people up to selling all kinds of stuff and really making a brand out of his name that has nothing to do with what he did in his younger years. Huge transition.
TODD So will there be a Sage 100C George Foreman green grill that
BOB Maybe in the cloud?
TODD Yea. Connected to the cloud?
BOB Maybe they’ll have burgers at lunch one day served on George Foreman grills at Sage Summit.
DARCY Oh, they might. They could be IOT. You know, like you tell Alexa to turn the grill up.
TODD Yea. Or it tracks how many hamburgers you make and puts hamburger on your shopping list when it’s ready.
BOB Right? These ones were done medium rare, these ones were done medium well.
TODD Are you listening George?
BOB Yea. Think of the ideas we’re coming up with.
TODD I know. These are free.
BOB They’re free.
TODD We’re giving you gems here.
BOB I’m dying to know what he’s going to talk about. He’s a marketing guy. He’s not like a leadership or executive guy. So I’m curious what the theme of his message will be.
DARCY We shall see.
TODD Anyways. So Sage Summit. George Foreman. There you go.
DARCY Speaking of marketing geniuses, whoever came up with this Fabrikam Day
BOB I know. It was just a day picked out of Fargo by some developer. But yes, Fabrikam Day was earlier this month. April 12, 2017, the default processing date in the sample database company if you deploy it with Dynamics GP. And it’s been that way for at least ten years. They changed some things around ten years ago, pushed up the date, and we all looked at that little pop-up when you log in and said, gee, that’s not for a long time. And here we are. We made it.
TODD That was when they made the change from the World Online to the Fabrikam, which was shortly after Microsoft purchased it, I believe.
BOB Mmm hmm.
TODD ‘Cause it turns out there were companies in the world called The World Online, so they didn’t want to have
BOB didn’t want to get in trouble.
TODD didn’t want to get in trouble, so we ended up with Fabrikam.
BOB Yup. Same inventory.
TODD And for those of us that have been doing demos of GP and GP related products for years, Aaron Fitz and the 100 XLG phone in Fabrikam we’ve come to know and love
BOB Mmm hmm. Sold a lot of XLG phones. They’re never out of stock, ever. It never goes over.
TODD No, but they have serial numbers so if you want to avoid that, use the 128 SD RAM.
BOB That one’s an easy one.
DARCY They probably use one of the Dynavistics products to make sure that they always have the inventory.
TODD I hope so. Yea. The inventory replenishment for 100 XLG phones would be interesting.
DARCY Shameless plug.
BOB But yes. We did Fabrikam Day in New York City at the GPUG New York City chapter meeting at Times Square, which was just lots of fun. Lots of people who don’t normally attend meetings in New York City, including me, went to this meeting. It was a great turnout. We had some fun with it. Did a little marketing, did a little nostalgia around Dynamics GP and the deployment company, which again, kind of a nerd holiday, but fun to get together with all the folks that have been in the space for so long, and talk shop and good memories.
DARCY I loved it. If you follow, look at the hashtag #FabrikamDay, it’s Fabrikam with a K, and just check out all the tweets. It was so fun watching everybody from their offices and from wherever and tweeting their pictures. It was cool.
TODD Yea. Errol Schoenfish did
BOB a tour
TODD basically a tour of Fargo of all the buildings he had worked in in Fargo during his extensive
BOB 50 year career at Microsoft.
TODD I didn’t say that. That was Bob McAdam who said that. But if you look at his Twitter feed, it’s kinda fun to watch and see all the places
BOB We will have to link to those ‘cause there were tons and tons of offices, people that do GP but do other things as well, with a Fabrikam Day picture or video from their office with people there holding up a sign. It was cool.
DARCY We took time out from the Sage conference to do one at Niagara Falls, Gabby Morales and I did.
BOB Yes. I saw that.
DARCY And Bob and I did one here at the Dynavistics Studio.
BOB I didn’t see anything from Dynavistics. Did you?
TODD Let’s not lose track. We were celebrating demo data.
BOB Any excuse for a party.
TODD Yea, I mean I understand, but we didn’t quite get around to a Fabrikam Day picture.
BOB But at least we can say one was published from this office ‘cause you and I were in it.
TODD That’s true.
BOB So that counts.
TODD Yea, exactly.
BOB Alright, well time to fasten your seatbelts for our chat with Ray Wong ‘cause it was a great chat.
BOB Time now for an interview segment. Today we’re pleased to welcome Ray Wong, founder at Constellation Research here at Enterprise Software Podcast. Ray, thanks for joining us today. We really appreciate it.
RAY Hey, how are you guys doing? Awesome to be here.
BOB Hey, if you would please for the few people in our audience that don’t know who you are already, can you introduce yourself?
R No problem. I’m Ray Wong. I’m with Constellation Research. We’ve been spending a lot of time as you know talking about the future, the topics. Constellation Research, we’re basically a research advisory firm. We spend a lot of time helping folks understand, hey what are the new business models? How’s digital affecting us? What’s gonna happen with artificial intelligence? We talk less about the technology, but more about how to get this to happen. What are those business models? How does it affect customer experience? The future of work? Data, analytics, and insights? And how do you make better decisions? You know, how do you use that to improve technology optimization? And of course we’ve been big supporters and big in the community around Microsoft for a long time.
DARCY Those are all things that our listeners want to hear about. That’s a great fit.
RAY These are hot topics, and definitely we are seeing the mass of transition. It’s not just the cloud, but it’s also the shifts in how our organizations work. We’re moving from selling products to selling services to ultimately selling insights as well.
TODD So one of the terms that you throw around quite a bit, we hear quite a bit now, is digital disruption. Can you explain that in a little more detail? Especially for our audience what it would mean for somebody in the SMB space.
RAY No, it’s a great point. When we talk about digital disruption, a lot of people have these visions of oh, it’s an e-commerce site. Or you’re doing a big data project. Or something in mobile. And we try to help people understand that this is more than just adding a technology, that it’s fundamentally a business model shift. And what I mean by this is we’ve drawn some interesting stats all the time, 52% of the Fortune 500, they’ve been merged, acquired, gone bankrupt, fallen off the list. But what does that mean? It means, well if you used to be just selling a product and you made great money and margins on products, you still may discover that, hey that’s going away. What happened? Right? Well, you’ve gotta make it up. So people are giving products away for services revenue. A great example of that is, take cell phones, right? Free cell phone with a 2 year service contract. I mean, oh my God. Where’d all my margins on the product go? So we’ve gone from getting all the money upfront to getting it paid out in monthly payments. What’s going on here, right? And so things like that start to happen. Other examples of digital disruption. You see that classic examples are companies who suddenly discovered that, hey what happens if autonomous vehicles pop up? What happens to the trucking industry? If you look around the country, for example, trucking is probably the top employment, top job in about 40 out of the 50 states, alright? So autonomous vehicles show up. What happens? Well, those jobs go away, right? We’ve got these robot autonomous vehicles and trucks flying around all over the place. So that’s one of the examples. Another great example was thinking about what happens in a model where you look at something as simple as you started out with one shop, you ended up hiring a whole bunch of folks, and robotic automation comes into place, or globalization happens. Alright, so those are all examples of disruption. Now, when you add the digital component, what we’re talking about is the fact that we’re changing not only the business models, but how we engage, right? In the past, you didn’t have as much input with the customer. You didn’t have as much personalization that would happen. Today, if you think about the way some shops work in manufacturing, for example, the way we do engineer to order or make to order has completely changed. Things like 3D printing or changing the way that we look at how C and C machines work or how we get to customization of that scale. So these are all examples of digital disruption. And if you think about in every industry you’re in, the top three to five competitors are taking anywhere from 40 to 70% of the market share and 40 to 77% of the profits. And so that’s how we’re getting this winner takes all market.
TODD So you go to a lot of events. You see a lot of new technology. You’re constantly, you’re in the know, as they say. What do you see in things at the enterprise level that will eventually drift down to the SMB level around the next two to three years that you think will be important?
RAY We have to realize that while enterprise and SMB markets are different, SMBs are ultimately competing on the global stage. And so things that are happening on the enterprise side, for example organizations are plugging into large networks and manufacturing supply chains, we’re gonna see more of that going forward. We’re gonna see more services and service based industries pop up because what’s happening is the margins are in services, but more importantly, it’s about accessing capabilities such as AI, ..? and these insights. And in fact, there’s gonna be a democratization of that. It’s not just gonna be large companies that have the compute power, the analytical processing. That’s gonna be delivered in microservices which companies are gonna subscribe to. So for example, take something already that works really well. I was just on the phone with one of our friends Joel Myers. He’s the CEO and founder of AccuWeather, right? These guys, I mean they basically provide data to tell you what the national weather service might say, a tornado is coming. And the problem is, there are false positives, something like 70-80%, whereas the false positives for an AccuWeather type service is like 10-15% or 11%. The point being, instead of shutting down three lines and a whole manufacturing run, you have insights and data actually change the way you operate. And that type of service, not just for emergencies or weather or disaster, that’s gonna happen on everything from supply chains, or the price of aluminum. Or in the labor market, what’s it gonna cost for a Dynamics resource, right? So all these things are gonna be popping up and people are gonna be subscribing to these types of insights. And it’s not just gonna be big companies. You know, another area is when we think about the way we do contract manufacturing today. That’s gonna happen across all areas, not just supply chains or by process automation. That’s gonna be, we’re gonna be able to access things instead of having to pay upfront for tons and tons of shipping or tons and tons of supplies. We’re gonna be able to buy what we need, buy on demand, access versus own things from equipment all the way to resources and services. So I think we are seeing that level of shift, and it’s continued to happen. So I think SMBs have a lot more capabilities than they did before. And I think there’s a lot of the enterprises have that may actually be more of a burden, which is the infrastructure, the capital, the requirements just even to sustain basic operations. You can run a lot leaner in the SMB than you can in the enterprise, and I think we’re seeing that all across the board.
TODD I remember reading an article years ago, I think it was in Wired magazine, about what the effect would be if we could predict weather a year out.
RAY Wow, that would be wow.
TODD And one of the examples they brought up, which I thought was just amazing, was the effect on the wedding planning industry, because now all of a sudden you know when the good weather’s gonna be.
DARCY And tourism, too.
TODD Yea. And so it was like that would just completely change the industry, that one thing.
DARCY So that’s interesting. It sounds like SMBs are increasingly able to take advantage of technologies that were previously inaccessible to them. And you touched on this a little, but what are some of the things, the lessons that the enterprise level can learn from the SMB, technologies that the SMBs have already been using.
RAY They have a massive amount of technology democratization that SMBs can take advantage of. And the thing the enterprises have to learn from SMBs is how to be more agile. I mean I’m not gonna make fun of us, but there are a lot of AS 400s running, and I love them, those things are awesome, they last forever.
TODD You plug them into the wall and they run. It’s beautiful.
RAY But you know, there’s this one story we have of a client. It’s actually hilarious. So you know, we walk into a client site. They’re doing this remodeling. They’re putting up a brand, you know, it’s this whole warehouse that they’re just remodeling. So they’ve got everything up and running, it’s all ready to go, they’ve done the remodeling. And all of a sudden, I see people smashing through walls. And I’m like, hey what’s that about? You know, because the remodeling’s done, everything’s great, the factory floor looks new, the new office space is awesome. What are these guys doing? These guys are putting holes in the wall. They’re like, we can’t find our AS 400. This is like crazy. But anyways, back to your point. Enterprises can learn about getting off legacy technology and being able to be a lot more agile moving to things. Like today, we started our company Constellation in 2010. I have no idea where our compute power comes from. We had no servers, we had no hardware. Everything we have is in the cloud or payroll, HR, our website. To start a business seven years ago, it was awesome. We didn’t have to do anything. I did the same business 20 years ago, I had to have at least 10 million in cap ex before I could even get started. And so it’s things like that that large enterprises have to realize, it’s that a lot of their overhead doesn’t really give them an advantage anymore. And that’s something I think about.
BOB We met you in October at the Dynamic Communities Summit here in Tampa, which I hope you had a great time with. I know I did.
RAY Oh, it was awesome.
DARCY Shameless plug.
TODD Shameless plug.
BOB Shameless plug, but I’m good at that. But anyway, Todd and I were sitting around a few minutes ago before we got on the phone and it was like, I wonder how many events Ray does in a year because you’re constantly, we see you on Twitter. You’re at this event, you’re at that event. Do you have a favorite event? And maybe you don’t want to pick one, ‘cause besides the Dynamic Communities Summit each year in October, but do you have any favorite destination city? I mean, you’re on the road so much, doing so many events. You probably attend more events in the year than the average listener to Enterprise Software Podcast does in a decade. So what are your favorites? What do you like?
RAY You know, that’s a really good point. We were looking at the stats from last year and I think I spoke at 200 events. So I was at about 220 events. And I know that because I did about 220-some trips and I actually earned something like 648,000 miles. So yes, we travel a lot. I do have to say the event in Tampa was one of my highlights. Look, I love being in the Dynamics environment. I love talking to partners and customers. And since Microsoft changed their format, this is the event. This is the event for users. And I think the Dynamic Communities event is gonna do well for a long time because there’s a lot of interest in the Microsoft market, a lot of folks still want to talk about what’s happening in the AX market. The Dynamic Communities are expanding to all these different areas. So I think it’s definitely a great place. Destination wise, it’s gonna sound really bad, but I don’t mind being in Las Vegas. Take away all the stereotypes of Las Vegas, it’s actually a cultural capital. And people might be laughing, they might be groaning, but most of the best restaurants are in Vegas. I mean, if you get off The Strip, it’s actually really nice. You get out to Red Rock, there’s some great places, great scenery. You can always get a nice trip out to Hoover Dam and just really get out. Like, get off The Strip and Las Vegas is actually very fascinating as a place. You know, other places are international. It’s always fun being in Australia. I’m actually gonna be in Australia in a few weeks. I’m off to Dubai next week. And so there are things, I mean it’s fun. It’s fun in different places, but I you have to say what’s a good place for a conference/convention, Las Vegas is awesome. San Diego you can’t beat for the weather. Tampa was fun. You’re on the water. It’s hard to beat when you’re on the water. So those are some great cities, but ultimately it’s who you’re with, not where you’re at.
TODD So since you brought up Microsoft, we don’t want to let you go before we get some opinion from you on where you think we’re at with Dynamics 365, both the enterprise and the business edition. The business edition especially seems like it’s fizzled a little bit since the launch in November. But just kinda your thoughts on how Microsoft’s handling that and where you think that ends up eventually.
RAY So here’s the thing. For traditional Microsoft users, the ability to have choice, to be on premises, have a partner host it, or even in the cloud I think was a very important factor. The shift to Dynamics 365 is really you can see a rationalization by Microsoft to say look, we made all these acquisitions. We want to deliver all this stuff to you in one spot. It’s early, right? But I see a lot of customers, new customers, move in that direction because they’re naturally inclined to go to the cloud. They want the Office integration. They want to get it to the linked in piece, you know when that comes out in the future. And they like the fact that they can get it one stop shopping, right? And if you’re in the mid-market, ultimately you don’t want to deal with ultimate vendors, multiple partners, multiple providers. You just want to deal with the one person you trust and get this stuff up and running. And so we think there’s gonna be a lot of traction going forward. Is it gonna replace someone who’s on Dynamics? No. Who’s on AX version 4 and is not leaving? No, right? You’re gonna stay on it for as long as you can, right? Because you own it, right? And it’s on premises. And you know, so you don’t do the upgrade. I get it. But if you’re moving really fast and your business is changing, you’ve gotta be agile and you’ve gotta be in the cloud. And here’s the basic reason. I’m for on premises from a value perspective because you can run that software ten years, twelve years without having to do an upgrade or make a shift. But I’m in the cloud if I’m moving and businesses are integrating so quickly and my business models are changing because by the time you procure your server, get the database up and running, cue in the app server, and get something up and running, I’ll have lapped you three times in terms of dev. cycles. And I’m gonna move faster than you. And that’s an issue. So that’s kind of what it is. And so I think people have to think about today is, is that right for me at this point in time? And I’m glad that Microsoft is innovating because in the long run, if I have to upgrade or move to something else, I’m glad there’s something new to be able to choose from. That’s probably the best way to look at that.
B Yea. I mean, so many SMB partners in the Dynamics channel are put off by Dynamics 365, or at least they were initially. So for them to wrap their arms around this big change has been somewhat burdensome for them, but you’re saying it’s on track and it’s not gonna necessarily scare folks away who want to be on premises from staying that way.
RAY No, it’s definitely not. But look, let’s be honest. The partners are peeved. They are peeved. I mean
DARCY Bob’s not gonna say that.
RAY The partners are peeved. We know that, right? They’re cutting the payments. They’re shifting the advance. They’re changing all the things. And they know it, right? I mean, I think we’ve made that feedback to Microsoft. I think they’re listening. I think they’re trying to figure out, what do we do in this model? How do we align folks into the cloud? And they see it and at the same time, the partners are doing better than ever. I mean, there’s a consolidation going in the market. You saw how Sonoma is out of the market. You see how different players are being consolidated, full scale ..? Lots of folks, there’s a lot of interest in consolidating the market and taking it up to another notch. So in general the market is great. There’s a lot of optimism. But from a Microsoft partner perspective, things are changing and it’s not like how it used to be and there’s a lot of grumbling.
TODD We wouldn’t be Microsoft partners if we weren’t grumbling, though. I think it’s in the job description.
RAY Yea, it’s in the job description. But here’s the thing. Like honestly, if I wasn’t in this business, and I tell people this all the time, I’d wanna be a partner, right? It’s a great business. It’s still a great business and the only challenge you have today is trying to figure out, who do you sell that business to? You’ve had such a great life, your kids may not even want to take over your business. They’re living really well. So for partners, that’s a good thing.
TODD You spoke at the World Economic Forum recently. How was that?
RAY You know, we went to the World Economic Forum and it was interesting. Davos is one of those places where a third of the people are just good souls. They’re there, they’re excited, you know. They’re got a great idea. They want to share it with the world. They’re definitely well intentioned. A third of the folks there are just, I mean, a-holes.
TODD We’re a PG-13 episode.
RAY I mean they think they’re the hottest thing in the world and you’re just like, seriously? And then the third of the folks are really there for like, I mean there’s business development, there’s networking, they want to do that. I mean, like every conference that’s an important mix. But it is cold. It is freezing. Like, you see billionaires in line waiting and it’s just kinda funny, right? You’re just like, oh neat. But people are open to conversations. They’re willing to talk. I mean, this year of course everyone’s worried about the US presidential election and people are like completely shattered, like their view of the world has completely been changed and it’s no longer right. It’s funny to watch. And if you’re any practical person, you’re like look, the US presidency can have tons of swings. With any political party, right? You could have said the last eight years were hell. You could say the next eight years are gonna be hell. I mean, the system works, right? Nothing changes so much that people are massively devastated and the world’s still here. So I think, you know, it’s the place for ideas. It’s the place for sharing. We definitely see lots of interesting innovative talks that are happening. And I think that’s a good place for networking. But it is darn cold. I mean it’s like seven degrees during the day and you’re like ah, can it get any warmer?
TODD I have to ask. Was Dr. Evil actually in attendance or did you see him personally? Because that was always the image I have of Davos, is a bunch of bald guys sitting around petting cats.
RAY No, I don’t think so. But the security is pretty tight. Like there was like an armed guard on top of every roof and that’s pretty wild. It’s as tight as it gets. And I mean, I think Joe Biden came through and I think John Kerry was there, too. But you could literally see the armored vehicles coming through and the caravans and stuff. So it was pretty wild.
TODD Wow. I can only imagine.
BOB Alright, Ray. We know you gotta go. So we just want to say thank you for taking some time with us on Enterprise Software Podcast. It was great meeting you and great talking with you. And I personally hope that one of your 220 events in 2017 is gonna be in Nashville this October, but that’s just me.
RAY I’ll look for the invite. We’ll see what Microsoft does. I’d love to be there. And definitely always fun. And definitely fun doing stuff with the user groups and communities.
BOB Alright Ray. Thanks again. Take care of yourself.
DARCY Thanks, Ray.