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Was there debate within PeopleSoft that it might be a bit shortsighted not to give steady-as-you-go maintenance?
Other than from me? You had development lining up on the side of, 'Absolutely hold to these support polices.' The consulting group wants to sell upgrade services. The development organization only wants to support a limited number of product lines, and there are practical reasons for that. They can't technically support 10 lines forever. In general, they were just incensed it accreted life to releases that they wanted to see retired. Isn't this a problem for all software? Everyone has to carry forward their baggage, and a backwards compatibility. Very rarely do you come out with a brand new release that has no connection, in technology, to what you had before, because then you open up the whole competitive realm. 'Well, hell, if your new product isn't really an upgrade, it's a migration, then I might as well look at everybody's else's if I am going to move to a migration.' How have companies managed this problem before your software maintenance businesses existed? They thought they could basically use the stick to beat customers forward by threatening them. You've seen that with Oracle. Siebel is the same way -- basically, if you don't upgrade, we're going to pull your support, you'll rue the day, you'll get nothing from us, and we'll still charge you the full amount. What are the reasons your customers opt for third-party software maintenance? They do it for different reasons. The small customers were making the move, because it was right after the dot-com meltdown. Prior to that, people were very optimistic, thinking they would be growing 10 times their size. They went in and bought PeopleSoft; it was the Rolls-Royce of HR systems and finance. So now they're stuck with the Rolls-Royce. They love it; they don't want to get rid of it. But they can't afford to keep it. So, a lot of those people, by switching to third-party maintenance, actually were able to keep the software they loved at price points they could afford. Why did you leave TomorrowNow after the acquisition by SAP? I left three months after the SAP acquisition; as an entrepreneur I needed to be on to my next thing. I actually was going to go build a software company, but after looking at it, I couldn't stay away from the maintenance stream. When you've got a 90% profit margin, it's just too hard to resist. And TomorrowNow didn't even take 1% of the market. As soon as Oracle announced its acquisition of Siebel, I decided to launch Rimini Street and offer the first third-party alternative into Siebel space. Oracle must love you, especially given its suit against SAP -- targeted at TomorrowNow. Oh yeah. I announced Rimini Street at OracleWorld 2005 and I think the words were, 'He's back.' As soon as my noncompetes expired with PeopleSoft and J.D. Edwards products, we introduced those at Rimini Street, too. So now you have two companies -- the captured, SAP-TomorrowNow and our independent Rimini Street -- and we are the only two really credible companies in the industry. The Oracle lawsuit against TomorrowNow is notable for its strong language -- "corporate theft on a grand scale." Some analysts said that one of the aims of the lawsuit was to scare companies off using third-party maintenance. Just to give you that color from the lawsuit -- it hasn't deterred the business. The lawsuit actually opened up business -- because some people didn't even know there was a choice. A lot of people read the lawsuit and said, 'My God, Merck and Honeywell, and all these large companies using third-party support.' And instead of saying, 'Wow, look what happened here!' The issue really is, 'Holy gee, am I the only guy paying full price?' What about maintenance of SAP software at Rimini? I have a noncompete that expires in January. Let's just say, we're looking with interest at the SAP market. With 30,000 customers, who wouldn't be? They recognize what is good for the goose is good for the gander. You can't complain and say you want Oracle to open up and allow third parties more access and think that is not going to boomerang back on you. They know this is about open access. AMR analyst Jim Shepherd makes the argument that because everything is changing -- the software platform, the underlying components, your company's business -- that the software needs to be continuously updated. That's not what we're hearing from clients. They have incredibly stable platforms that they feel like they can run their business on for 10 years. And, in fact, if you look at the recent enhancements from the PeopleSoft product line, it is akin to heated and cooling cup holders -- they're really cool, but it doesn't help me pay my employee any faster. Who do you go to when you make your pitch? The CEO, the CIO -- who is most receptive to your message? It's gotta be the CIO and the CFO. The reason is, this is a lot like outsourcing. You're not going to go pitch the IT team how great it is to send your jobs to Infosys. When we come in, how much excitement is there to tell a team, 'Hey, we've got some great news for you -- you guys are going to drive the same car for the next five to seven years instead of that new one you were hoping to play with.' A lot of IT folks do want the excitement of getting new tools and new technology to play with -- and that is part of the fun of it. Our decision is very much a cost-driven decision, so it is very often the CFO or the CIO who says, 'I'm the guy who has to go before the board and justify we need to spend $2 million on an upgrade when we did it just three years ago, and I can't put down on paper how that money is going to be returned to us in benefits.' What about people who have just upgraded to the newest version of software -- are they off-limits? We used to work primarily with more retired or retiring-level versions of the software. Today, 30% to 40% of our business is on the latest versions of the software, so it is people who literally go and do the next upgrade and say, 'You know what, we are done for the next decade. And all that money we bank over the next decade? We will then do a capital expense because a whole new version of software is coming.' In 2015, '17, as late as 2018, you'll see a mature Fusion product against a mature NetWeaver product from SAP, hell Microsoft will probably be offering a full enterprise-level product at the rate they are investing. Rather than play the upgrade game every two or three years that doesn't necessarily yield results but ties up the entire IT team, costs a fortune, instead we're going to make a generational change. How long should a company hold on to a software product? We have more customers than ever looking for five- and 10-year guarantees for support. No one makes this change for a six-month change; it is not worth it. Let us know what you think about the story; email: Linda Tucci, Senior News Writer It doesn't take much to get Seth Ravin badmouthing big software companies. Ravin co-founded TomorrowNow, which he sold to SAP, and eventually went on to found Rimini Street Inc., an independent provider of enterprise software support services for Siebel Systems Inc., PeopleSoft Inc. and J.D. Edwards & Co. licensees. The companies share the same aim: make software last longer. Ravin's idea of software maintenance evolved from his work at PeopleSoft in the late 1990s. He was in charge of getting 4,000-plus customers through Y2K. The board authorized Ravin to quietly sell customers a Y2K package of support -- on top of their regular maintenance support -- so they could stay on their older releases. Indeed, as word of the special program spread, enthusiasm reached fever pitch. By 1999, Ravin had customers left and right willing to pay him more than regular maintenance fees, so they wouldn't have to upgrade. Not long after, he left PeopleSoft to join former colleague Andrew Nelson, who had a little consulting business, TomorrowNow. What differentiates your systems from the competition?
Our blade architecture is very easy to integrate servers and storage into the same form factor. Another big difference is the use of off-the-shelf components. It gives us a couple of advantages: When something changes, we're able to implement as soon as it happens. We're shipping [Intel's latest offering] Woodcrest the day it's available. It makes it much easier to come out with new products. Normally, the servers at the base of the rack get all the cooling, and the ones at the top of the rack take what they can. We draw in more than 2,400 cubic feet per minute (CFM) of air. Each blade is getting 100 CFM. We don't have one blade getting 300 CFM and others getting less. Our blades have no cooling on the parts themselves. All of it is provided by the cabinet. If you're in a raised floor environment, our installations have no problem being in a hot row. We don't draw air in from the ambient room unless we're in a solid floor environment. [Driggers founded San Diego-based Verari 10 years ago. The company recently appointed former EMC-exec David Wright to CEO. Wright will take over the business functions, allowing Driggers to focus on the technology.] Vice president of Eco-Responsibility is a rather new job title in the industry. What prepared you for this job?
My interest in this whole space got started early in my career building supercomputers in Cambridge [Douglas received his bachelor of science and master of science degrees in computer science and electrical engineering at MIT]. We built some of the first air-cooled supercomputers back then. Then at Sun, I was really involved in getting into low-end server business, which was a similar process -- how to take these big mainframe servers and put them in people's offices and have low-power and low-noise solutions. It's something I've been hitting over and over and it became a theme for me in my career. On the personal side, I've been looking at my kids and the world where I'm raising them and thinking about things we enjoy doing as family. I've been thinking about how we make sure our kids have a great place to live in future. Is the VP of eco-responsibility an evangelist, a manager or an engineer? All of them. Some people who will be reporting to me will be running specific projects. But there is certainly a lot of evangelism both inside and outside the company trying to raise awareness. At Sun, I'll help get a lot of the various businesses moving in same direction. Eco-responsibility is a broad concept. Where do you think you will be focusing most of your attention this year? There are two broad areas. Some of it being set by outside players, like the [Environmental Protection Agency (EPA)], and the regulatory stuff happening in Europe. They kind of have a time frame of their own. Another big priority is internally working on our short-term and long-term road map. And there are tons and tons of other things to do, like "Bike to JavaOne." [During its annual Java developers' conference JavaOne on May 16 in San Francisco, Sun will encourage local attendees to ride bicycles to the conference. A local biking coalition will offer free bicycle valet service.] Environmentalists see virtue in an eco-friendly computing initiative, but why is it good business for Sun and for your customers? I think it's a really similar situation to why people are buying hybrid cars today. There is money savings to be had by paying attention to energy consumption. And doing more eco-friendly things, there is a class of people to whom it's personally important to do that. Toyota is seeing customers demand eco-friendly products, and we're seeing the same thing with Sun, demanding our CoolThread processors. People are saying, "You've really hit something important for me going forward." When and how did you realize that eco-friendly computing was going to be an important issue? It is kind of something that has sunk in over the last four or five years, just thinking about the energy that's consumed in the data center. And then on the flip side, watching our customers use our technology to try to solve eco-friendly problems, such as designing better cars, tightening up the supply chain. It's a yin-yang situation, [IT is] part of problem but it's also part of solution. Where is Sun strongest in its commitment to eco-responsibility? There are a lot of programs under way. With just three days on the job, what jumps out at me is the product leadership right now with the new processors and servers and our work with AMD on x86 compatible servers. Where is it weakest? I think it's a Sun problem and also a bigger industry problem. There's amazingly little data available that decision makers who want to factor power into their decision-making process can really turn to. We are not doing a good job at this at Sun. Nor is anyone else. One priority is to keep pushing to work with the EPA to get visible metrics out there so we can be up front and honest about what people can do. Data and transparency drive a lot of things in this country and the world overall just getting the facts out on the table can do a lot of good. What can you tell us about the formal metric for measuring the miles-per-gallon equivalent for servers? Why is this metric important? It's a process that started up with leadership from Sun, the EPA and others. The goal is to give people an up-front, visible way to make tradeoffs and understand what the long-term costs are going to be for various technology choices. Today you go in and talk to people setting up data centers, there are a lot of back envelope things and an overdesigning of things for cooling just in case. This is just a way to say this company is doing better than that company (with energy consumption). [People might say] 'This technology might get me where I'm going at a lower cost for power and cooling and that stuff.' If you give people facts they can make better decisions. What is Sun doing to make its technology run cooler and more efficiently? A lot of it starts down at the chip and processor level, very low-level engineering. You focus on how you do computing with less power. There's no magic. It's just been the focus for awhile. Sun took a particular leadership position with the multi-threaded and multi-core space. It re-thought processor design from ground up. We're doing a similar thing with AMD, who we use in our x86 systems. Will you be Sun's point man on the Green Grid consortium? Yes, I will certainly be very active and we've got other folks in company involved already. I think that's going be a nice piece of technology, particularly around interacting with broader population. Why come back to Sun? A couple of reasons. There are still a lot great people here who I knew from last time here. And I'm very upbeat on the long-term business. And third, what I really want do -- what I felt like I wanted do in the eco-responsibility space, Sun already has some momentum. It has the engineering capability to really go and tackle these kinds of problems. If you look at Dell, for example, they have got to go get processors from someone else. We design our own processors. It's a big enough company and it's got a lot of horsepower to go and do some fundamental things. Douglas, who is returning to Sun after 5 1/2 years, co-founded in 2001 ConnecTerra Inc., a Cambridge, Mass.-based startup radio frequency identification middleware company, where he served as vice president of products and strategy. In 2005 Douglas became BEA Systems Inc.'s chief architect for WebLogic after San Jose, Calif.-based BEA acquired ConnecTerra. In his first interview as VP of eco-responsibility, Douglas talks to SearchCIO.com about how serious Sun is about eco-friendly computing and when CIOs can expect energy solutions from Sun. RELATED TIPS
application and all of the related data in the time frame of 24, 48 or 72 hours?" For most companies the answer is no, Morency said.
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