SAP Memories
Until the past couple of years, I didn’t have a lot of dealings with SAP. (That has now changed significantly.) But it seems that the things I do recall aren’t that widely known anymore.
I first heard of SAP in the 1980s. It was a smaller company than the then-leading mainframe application software vendors. Peter Zencke told me earlier this week that when he joined in 1983, the company had around 100 employees. From memory about MSA’s figures, I’d guess SAP’s revenue was somewhere in the $150-250,000 per employee range. Also from memory, I’d guess that MSA and M&D (McCormack & Dodge) were meaningfully bigger than SAP at that time. I also think that SAP combined financial and manufacturing applications earlier than the other mainframe vendors did, and hence probably got more revenue per client from a small number of clients. (MSA didn’t get into manufacturing apps until they bought Comserv, which if I recall correctly never broke the $20 million revenue mark on its own.)
SAP was almost unique among significant software vendors in being based outside the US, Software AG being the other obvious big example. There was no Business Objects then, of course. I don’t think that any of the UK companies that eventually made a modest impact — MicroFocus, LBMS, and much more recently Autonomy — were even active then. So it was pretty much off of people’s radar screens …
Indeed, at one point in the early 1990s I wrote to the effect of “Hey! There really are some important European software companies!” And spurred by that, my clients at Fidelity Investments invested in SAP. Too bad they were perennially stingy about compensation for good investment ideas …
Anyhow, the word on SAP from its competitors was that in the US at least, SAP focused tremendous sales effort on a small number of prospects, and in those accounts they were very hard to beat. These accounts seemed to be centered on the chemical and pharmaceutical industries, presumably because those industries were particularly strong in SAP’s home German market. Not coincidentally, SAP’s US operations were headquartered in Pennsylvania, near the New Jersey stronghold of those industries in the US. It’s natural to conjecture that SAP had superior functionality for process manufacturing industries, something that was pretty primitive in those days, but I don’t recall any direct mentions of this.
I learned more in the early 1990s when Jeremy Coote called up and introduced himself. He was the CFO of SAP’s US operations (he later went on to a big job at Siebel). It turned out that SAP had some contractual reason only to invest limited resources in the US. But that would change soon; one of the directors was coming over to run things in the US personally; and so on. Obviously, they lived up to that much more than I could possibly have envisioned at the time.
The story of how SAP’s rise dovetailed with the growth of the public accounting firms’ consulting practices is better known; I’ll leave the telling of that to another time.
| Categories: Application software, MSA, Pre-relational era, SAP | 5 Comments |
Ingres memories
The news about Ingres being spun off by Computer Associates brings back a lot of memories. First of all, Ingres (then called Relational Technology Inc.) was one of the centerpieces of my first-ever research trip to the West Coast in April, 1982. Second, the day CA’s acquisition of Ingres closed, Charles Wang (CA’s CEO, of course), called me personally and asked me to consult to CA about their forthcoming product strategy. It was an intense, month-long project, perhaps still the single largest one I’ve ever done.
So with no further ado, here some observations of and about Ingres through the years.
- Ingres was of course the first of several DBMS companies spun off from UC Berkeley’s INGRES research project, and one of several started with Mike Stonebraker’s involvement. I wrote about that history briefly in my now-defunct Computerworld blog.
- Ingres (then called RTI) and Oracle (then called RSI, for Relational Software Inc.) were of course arch-rivals. As a general rule, Ingres was first to market with new features such as a 4GL or a truly distributed DBMS. Oracle, however, was the first to market with the features customers most cared about, at a level of completeness they found acceptable. Eventually, when Sybase was a factor too, Ingres was always betwixt and between — everybody’s second choice, but not the first choice of enough buyers to keep on prospering. (Later on in the 1990s, Gupta took over the Ingres role in the low-end market — the product was broader than Powersoft, but who cared?)
- Ingres was eventually merged into ASK Computer Systems. While surely a distraction, that’s not what killed it. Each predecessor company had its own problems, and they pretty much stayed out of each other’s way, at least in product strategy. What killed them is that neither side of the business managed to stay fully competitive in product.
- Ingres’s fatal technological mistake was whiffing on parallelism. And it did so in the most painful of ways. Ingres had a joint development project going in the Portland, OR area with Sequent, to develop a parallelized version of their DBMS. They pulled out due to expense, and Informix stepped in. And that’s how Informix managed to be competitive with Oracle in parallel processing, while lack of competitiveness in that area is what doomed Sybase and Ingres. Ouch!!!
- A second Ingres failing probably wasn’t as big as I thought at the time. This was an inability to offer abstract datatypes, aka object/relational, aka UDBMS (where the “U” is for “universal”). I thought this feature would be hugely important, and my opinion on that score probably was a big part of influencing Informix to overpay for Illustra. But Microsoft has never had the feature, and it doesn’t seem to have suffered all that much in the marketplace for its lack.
- ASK was doing even worse on the product side than Ingres — it never came out with a decent GUI version of the product, although ASK did get a license to resell Baan’s code — and the whole sorry mess was eventually sold to CA. CA has a well-deserved reputation for slashing development costs and profiting from slowly-dying software products. But I watched this acqusition from the inside, and to this day I think they really wanted to make the product competitive. But there was one not-so-little problem …
- … CA ran off all of Ingres’s engineers right after the acquisition. CA’s policy upon acquiring companies was requiring employees who wanted to keep their jobs to sign non-compete agreements. In Ingres’s case, however, that policy was a spectacular failure. Oracle, Informix, Sybase, and much of IBM’s DBMS development were all located in the Bay Area. Finding another local job for these guys (and gals) was EASY. Competitors went into a feeding frenzy hiring Ingres engineers, and there was essentially NOBODY left. In my judgment there was a reasonable chance CA could revitalize development with an aggressive investment strategy, but they ultimately blinked. And with very limited ongoing development, the product obviously faded quickly as a mainstream competitor.
I think I’ll go write about the rest of the story over in the DBMS 2 blog.
| Categories: Application software, ASK Computer Systems, Computer Associates, Database management systems, IBM, Ingres, Oracle, Sybase, System software | 13 Comments |
Lessons for today
This blog is about history, and the parts I’m most interested in may not be the ones with the most immediate consequences. But here’s a list of some things I see from a historical perspective that can maybe provide insight for at least some people looking at today’s industry landscape.
- On-premises and time-shared software used to be highly synergistic. There’s no good reason they won’t be again (although multi-enterprise bottlenecks may have crept into the real-time architectures that didn’t arise in the batch and partly-batch cases. Which reminds me …
- A big part of the history of software development is clearing bottlenecks: Find one; clear it. Find the next; clear it. That’s a big part of the reason product evolution is so seemingly slow and incremental. Modularizing is a big part of the bottleneck-clearing process, but not actually a replacement.
- Similarly, a big part of the history of artificial intelligence — and of software that has anything to do with text — can be described as “Start with a bad system; keep improving it.”
- Oracle always had a NIH (Not Invented Here) syndrome about system software. Although there are increasingly many exceptions, that still seems relatively true as compared with other system software vendors. However, Oracle never had an NIH syndrome about applications.
- Microsoft people used to be utterly driven. If it’s not that way any more – and I get the impression it isn’t — this is a big change.
- There always are important conferences. Their identities just change. Mid-level marketing people take over the previously good ones, and newer more exclusive ones emerge in large sectors. In particular, new industry sectors commonly have great trade shows, conferences, and other gatherings. (Example: 2005’s inaugural Text Mining Summit.) A huge part of what I learned about the software industry was at conferences, and occasionally one is still very worthwhile.
- The software industry is quick to use some technologies, slow to adopt others. Tracking which is which can be good guide in predicting which will eventually succeed.
I hope to address some or all of these subjects more substantively as time permits. Please stay tuned.
| Categories: Lessons learned | Leave a Comment |
30 years of software stories
I’ve long wanted to document the history of the software industry – and related parts of the technology world — for two major sets of reasons.
First, it’s simply an amazing industry – one of the great entrepreneurial successes of all time. From its start in the early 1960s, the computer software and services industry fought off a series off virulent attacks from much stronger and more powerful groups – the computer hardware industry, the aerospace industry (the first big timesharers), the banks, and the accountants. Products were innovated right and left; so were sales and marketing strategies. (And so, alas, also were financial accounting shenanigans.) With limited exceptions, this wonderful slice of business history is not well documented at all. And all instruction aside — I have experienced or otherwise picked up a lot of great stories in my 24 years of involvement in the technology industry, and just want to share some of them.
Second, a lot of the industry’s history is recent enough to provide significant perspective on our present and future. Software is central to how businesses and other enterprises (including governments) operate. It’s increasingly central to how we live at home. Software is important, and how it has been sold and used in the recent past is in many cases a good guide to how it will affect our lives in the near future. And since I’m a software industry consultant and analyst, professionally interested in which strategies and companies will succeed and fail, I have an especial interest in extracting whatever lessons I can from what has gone before.
I’ve been lucky enough to watch this industry from an early stage. The first time I visited Oracle it had fewer than 50 employees. The same is true of Lotus. I’ve consulted at the CEO level to a lot of the industry’s most interesting or biggest companies, and at lower levels to some of the rest. I’ve had spirited, multi-hour talks with many of the industry’s luminaries (some were even sober at the time). I’ve been a newsbreaker and a newsmaker. Along the way I even picked up considerable insight into the industry’s doings well before I got involved (which was in 1981). And I don’t want all these memories to be lost.
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About the author
I’m having trouble with static pages in WordPress right now, so I’ll just do the “About” pages for the blog inline as posts.
About the author
In the early and mid-1980s, Curt Monash was a top-ranked stock analyst covering software/computer services. “software and data services” in the early and mid-1980s. Since then, he has always been around the news of software and related industries — reporting it, analyzing it, predicting it, and sometimes even making it. Entrepreneurs and other luminaries with whom he’s been privileged to have instructive private conversations include Bill Gates, Larry Ellison, Ross Perot, Mitch Kapor, Dan Fylstra, Ann Winblad, Mitchell Kertzman, John Doerr, Bill Janeway, Dave Duffield, John Imlay, John Maguire, John Cullinane, Rick Crandall, Marty Goetz, Steve Case, John Landry, Esther Dyson and many, many others. Fuller biographical information about Curt can be found on the “About” page for the Monash Report and at Curt’s Monash Information Services bio page; software industry leaders’ views of Curt may be seen on the Monash Information Services testimonials page. (Note: The Monash Information Services site hasn’t been updated for a while, and accordingly needs a bit of freshening.)
Curt’s views, including some historical observations, may also be found in the Monash Report (analysis of software and related industries), Text Technologies (covering text mining, search, speech recognition, text command-and-control, and other linguistics-related software sectors), and DBMS2 (covering developments in enterprise database management and XML-based SOAs).
Curt’s primary email address follows the template FirstnameLastname@Lastname.com , although disguising it that way is tantamount to closing the pantry door after the spam has already gotten in. Thus, please put a distinctive title on your email, so that your email won’t mistakenly be thrown out with the bad stuff. Mentioning “Software Memories Blog” would be one excellent idea.
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About this blog
I’m having trouble with static pages in WordPress right now, so I’ll just do the “About” pages for the blog inline as posts.
About this blog
This blog is about the history of the software industry — its products, its people, its users, its companies, its triumphs, its failures, and everything else. That’s a huge subject, of course, so I’ll only be able to get to the barest fraction of it. Realistically, I suspect that many of the posts here will grow out of current-day issues I’m thinking about; indeed, I may blog elsewhere about present/future stuff, then add a link to a second historical note that I put here.
For more about what I intend to do with this blog, please see the post “30 years of software stories” right after this one.
| Categories: About this blog | 1 Comment |