Searching for data scientists as a service

This guest post comes courtesy of Tony Baer's OnStrategies blog. Tony is senior analyst at Ovum.

By Tony Baer

It’s no secret that rocket .. err … data scientists are in short supply. The explosion of data and the corresponding explosion of tools, and the knock-on impacts of Moore’s and Metcalfe’s laws, is that there is more data, more connections, and more technology to process it than ever. At last year’s Hadoop World, there was a feeding frenzy for data scientists, which only barely dwarfed demand for the more technically oriented data architects. In English, that means:

1. Potential MacArthur Grant recipients who have a passion and insight for data, the mathematical and statistical prowess for ginning up the algorithms, and the artistry for painting the picture that all that data leads to. That’s what we mean by data scientists.

2. People who understand the platform side of Big Data, a.k.a., data architect or data engineer.

The data architect side will be the more straightforward nut to crack. Understanding big data platforms (Hadoop, MongoDB, Riak) and emerging Advanced SQL offerings (Exadata, Netezza, Greenplum, Vertica, and a bunch of recent upstarts like Calpont) is a technical skill that can be taught with well-defined courses. The laws of supply and demand will solve this one – just as they did when the dot com bubble created demand for Java programmers back in 1999.

Behind all the noise for Hadoop programmers, there’s a similar, but quieter desperate rush to recruit data scientists. While some data scientists call data scientist a buzzword, the need is real.

It’s all about connecting the dots, not as easy as it sounds.

However, data science will be a tougher number to crack. It’s all about connecting the dots, not as easy as it sounds. The V’s of big data – volume, variety, velocity, and value — require someone who discovers insights from data; traditionally, that role was performed by the data miner. But data miners dealt with better-bounded problems and well-bounded (and known) data sets that made the problem more 2-dimensional.

The variety of Big Data – in form and in sources – introduces an element of the unknown. Deciphering Big Data requires a mix of investigative savvy, communications skills, creativity/artistry, and the ability to think counter-intuitively. And don’t forget it all comes atop a foundation of a solid statistical and machine learning background plus technical knowledge of the tools and programming languages of the trade.

Sometimes it seems like we’re looking for Albert Einstein or somebody smarter.

Nature abhors a vacuum

As nature abhors a vacuum, there’s also a rush to not only define what a data scientist is, but develop programs that could somehow teach it, software packages that to some extent package it, and otherwise throw them into a meat … err, the free market. EMC and other vendors are stepping up to the plate to offer training, not just on platforms, but for data science. Kaggle offers an innovative cloud-based, crowdsourced approach to data science, making available a predictive modeling platform and then staging sponsored 24-hour competitions for moonlighting data scientists to devise the best solutions to particular problems (redolent of the Netflix $1 million prize to devise a smarter algorithm for predicting viewer preferences).

With data science talent scarce, we’d expect that consulting firms would buy up talent that could then be “rented’ to multiple clients. Excluding a few offshore firms, few systems integrators (SIs) have yet stepped up to the plate to roll out formal big data practices (the logical place where data scientists would reside), but we expect that to change soon.

Opera Solutions, which has been in the game of predictive analytics consulting since 2004, is taking the next step down the packaging route. having raised $84 million in Series A funding last year, the company has staffed up to nearly 200 data scientists, making it one of the largest assemblages of genius this side of Google. Opera’s predictive analytics solutions are designed for a variety of platforms, SQL and Hadoop, and today they join the SAP Sapphire announcement stream with a release of their offering on the HANA in-memory database. Andrew Brust provides a good drilldown on the details on this announcement.

With market demand, there will inevitably be a watering down of the definition of data scientists so that more companies can claim they’ve got one… or many.

From SAP’s standpoint, Opera’s predictive analytics solutions are a logical fit for HANA as they involve the kinds of complex problems (e.g., a computation triggers other computations) that their new in-memory database platform was designed for.

There’s too much value at stake to expect that Opera will remain the only large aggregation of data scientists for hire. But ironically, the barriers to entry will keep the competition narrow and highly concentrated. Of course, with market demand, there will inevitably be a watering down of the definition of data scientists so that more companies can claim they’ve got one… or many.

The laws of supply and demand will kick in for data scientists, but the ramp up of supply won’t be as quick as that for the more platform-oriented data architect or engineer. Of necessity, that supply of data scientists will have to be augmented by software that automates the interpretation of machine learning, but there’s only so far that you can program creativity and counter-intuitive insight into a machine.

This guest post comes courtesy of Tony Baer's OnStrategies blog. Tony is senior analyst at Ovum.

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• Fast data hits the big data fast lane
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MuleSoft suite of tools eases way for SaaS integration in the cloud

MuleSoft this week launched Mule iON SaaS Edition, providing a broad set of new tools and services for swift software-as-a -Service (SaaS) integration in the cloud, and lowering the barrier to SaaS adoption for SaaS providers and developers.

The Mule iON integration platform as a service (iPaaS) connects across cloud-based applications and also connects SaaS to on-premise applications. MuleSoft's Anypoint technology for on-demand API connectivity eliminates the need for copious custom point-to-point code, said MuleSoft. [Disclosure: MuleSoft is a sponsor of BriefingsDirect podcasts.]

In recent commentary, Ross Mason, founder and CTO of Mulesoft, said, "The world today is moving at lightning speed to SaaS and cloud applications, and the idea of gaining competitive advantage through legacy enterprise applications is no longer relevant."

I agree. Key differentiators less involve building applications now than in the effective composition of services. Cloud and SaaS providers need to give their clients better means to leverage APIs and craft business processes across both enterprise and multiple Saas provider boundaries. This rationalization of cloud services stew is the new integration nut to crack.

The problem is, what type of platform and organizations can fulfill the role of cloud services orchestration hub? The role may not fit well for any one SaaS provider, nor any single or cadre of enterprises. For the time being, a best of breed platform and supporting ecosystem must evolve, and then the market will decide on who or what will be the acceptable hub mechanisms.

And the market for cloud integration technologies is clearly heating up. Also this week, FuseSource unveilved at CamelOne in Boston the Fuse ESB Enterprise 7.0 and Fuse MQ Enterprise 7.0 products to general availability. These platforms enable "Integration Everywhere," says FuseSource, with modular, open source products based on Apache Software Foundation projects. [Disclosure: FuseSource is a sponsor of BriefingsDirect podcasts.]

QuickStart Plan


Integration platform provider MuleSoft also unveiled on Monday a new QuickStart Plan for fast growth SaaS vendors and systems integrators (SIs) that enables them to build their own revenue-generating integration apps on the Mule iON cloud platform in just a few days. Pricing for Mule iON SaaS Edition is based on a per month, volume of use basis, not based on connectivity, encouraging more connections over time.

On other integration news, SAP today said it plans to offer its own cloud-based integration technology, and also plans to enable its ecosystem of partners, including solutions from Mulesoft.

New features available with Mule iON SaaS Edition, which is available now, include:

• Graphical data mapping and transformation capabilities enable SaaS vendors and SIs to build and deploy integration apps without writing custom code by using the Mule Studio drag-and-drop interface.
  The dark side of SaaS and Cloud is that while they are relatively easy to procure and deploy, it is difficult to integrate them with existing enterprise applications and other SaaS offerings.
• Cloud Connector ToolKit creates new cloud connectors in Mule Studio for any public or private Web API.
• Customer self-service portals allow customers to independently manage integrations, minimizing dependency on developers and reducing support calls.
• SaaS Operations Center provides complete visibility into end user environments with a multi-tenant portal to monitor, manage and maintain integration apps, including:
  
  
  • Operational dashboards: deliver better customer support with live integration status and performance metrics.
  • Real-time notifications: meet availability requirements and improve service level agreements (SLAs) with immediate notifications for events or performance issues as they occur.
  • Proactive alerts: reduce support calls by proactively monitoring and addressing issues before they impact customers.

In addition, Mule iON SaaS Edition introduces a gallery of over 20 packaged integration apps and more than 100 Cloud Connectors for the most common integration use cases.

Opportunities for everyone

Ovum's Carter Lusher sees opportunities for everyone involved:

The dark side of SaaS and Cloud is that while they are relatively easy to procure and deploy, it is difficult to integrate them with existing enterprise applications and other SaaS offerings. What makes integration even more challenging is the proliferation of SaaS deployed within an organisation as line-of-business managers procure point solutions to their specific needs that really should be integrated with other systems in order to maximize value and manageability.

This becomes a challenge for IT and the vendors who are faced with a plethora of public and private APIs that require brute force to integrate. Integration is expensive, with estimates of $8 of integration work for every $1 of SaaS subscription or software license.

For systems integrators, Mule iON SaaS Edition offers the ability to create reusable connectors for a variety of horizontal and industry-specific applications and SaaS.

For SaaS and traditional enterprise applications, MuleSoft’s Mule iON SaaS Edition offers the ability to create pre-packaged integration modules that will give them a compelling story during the sales cycle without dramatically increasing costs or long-term maintenance. For example, HR talent management SaaS vendor PeopleMatter used Mule iON to create a new hire onboard module that connects with ADP payroll processing through ADP’s private APIs.

For systems integrators, Mule iON SaaS Edition offers the ability to create reusable connectors for a variety of horizontal and industry-specific applications and SaaS. This not only reduces the cost of integrations, which can be a competitive advantage in a sales cycle, but also gives the SI the opportunity to sell more value-added consulting as the focus of sales discussion moves away from brute force integration to maximizing the business value of enterprise applications or SaaS.

In other news, MuleSoft announced a record quarter in Q1 2012, achieving a 109 percent increase in bookings year over year, the privately held San Francisco company said. This was driven by new customer wins among major companies and key SaaS vendor partnerships added in Q1 include Avalara and Zuora. Additionally, the company reported a strong customer renewal rate of 95 percent.

You may also be interested in:

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Investing well in IT with emphasis on KPIs separates business leaders from laggards, survey results show

Listen to the podcast. Find it on iTunes/iPod. Read a full transcript or download a copy. Sponsor: HP.

The latest BriefingsDirect enterprise IT trends discussion surfaces some fascinating new findings from a recent survey on chief information officer (CIO)-level priorities. We uncover what distinguishes leaders from laggards among businesses, and identify which IT approaches and solutions are driving the most powerful business results these days.

To help dig into the HP-sponsored, blind survey, explain what it means, and learn how these results can lead to establishing winning new IT strategies we're joined by Joel Dobbs, President and CEO of Compass Talent Management Group. He's also an Executive in Residence at the School of Business at the University of Alabama at Birmingham (UAB), and a lead blogger and member of the Enterprise CIO Forum. What’s more, Joel is a retired CIO himself, coming from such organizations as GlaxoWellcome, Schering-Plough, and Eisai.

We're also joined by Daniel Dorr, a Worldwide Solutions Manager for HP Enterprise Marketing. The discussion is moderated by Dana Gardner, Principal Analyst at Interarbor Solutions. [Disclosure: HP is a sponsor of BriefingsDirect podcasts].

Here are some excerpts:

Gardner: What was the idea behind doing this survey at this time?

Dorr: Dana, a lot of companies talk about how important technology is, and we all represent our technology as the right answer to the problem. But if our job is to help our CIO clients better use technology to solve business results -- and if our job is to help our CIOs work more effectively with their executive committees and CEOs -- the best way for us to help them is to determine which technologies actually change or correlate with in-market results.

In other words, if we look at revenue leaders in-market, which technology seems to be most closely associated with those who lead in-market performance? It's not technology for technology’s sake, or because it’s exciting or new -- but technology that actually seems to represent business results.

So our goal here was to help our clients do a better job of assessing which technologies lead to in-market business results and which technologies might not.

We wanted to understand the difference between market leaders, from a revenue perspective, and market laggards or followers, and see what their IT environments looked like. We surveyed 688 organizations. We spoke to IT decision makers, so we would call that "CIO minus one." We didn’t speak to the CIO directly. We spoke to the people that reported to him or her.

Everyone that we spoke to had to have significant knowledge about applications, information, data center operation, security, and cloud. The survey was conducted over nine different geographies: the US, Brazil, Mexico, UK, Germany, France, Japan, China, Australia, and covered a number of different industry groups.

This was not a public survey. In other words, the people responding didn't know the survey was coming from HP. It was a blind survey. We asked over 55 different questions around areas of application, security, information, cloud, etc. to understand which attributes were most strongly correlated with in-market or revenue performance, and those that weren't.

The questions we were trying to answer were what do market leaders do versus followers? How do industry leaders differ from followers? Is there a difference depending on the region or the market or the industry? And where do IT decision makers focus on a day-to-day level, versus the more CIO strategic forward two-year thinking level?

The results came into us in December 2011. So this is pretty accurate and up-to-date data.

Gardner: How about some of the top findings?

In search of priorities

Dorr: We asked more than 50 questions to understand from organizations where their priorities were and what they were doing today and then we compared that to their in-market performance. And I would say the answers fell into three buckets: They were around infrastructure issues, information and information management, and people and processes.

On the infrastructure side of the equation, we asked a number of questions, but the ones that rose to the top in terms of driving in-market or correlation between revenue performance were probably three or four. A lot of it had to do with application modernization and security, when it came to the infrastructure side of the equation.

For example, market leaders tended to have fewer custom applications and fewer legacy applications. They tended to use their server capacity more efficiently than their peers. Those were some of the big ones around the infrastructure side of equation.

With security, the market leaders tended to build security, not only into the boundary, but also into the applications themselves, versus the market followers who tended to focus on an us-versus-them mentality, or just boundary security.

… Companies that manage risk more effectively and more automated definitely outperformed their peers. As a technology company, we're always looking at the infrastructure. We're always talking about how infrastructure can lead to competitive advantage, and we saw that. But a lot of times we forget the people and process side of the equation.

Companies that manage risk more effectively and more automated definitely outperformed their peers.

One of the other areas that jumped out at me was the need for clarity and agreement of key performance indicators (KPIs). Market-leading companies who outperform in revenue over their peers had more clarity within IT about which KPIs were important and had agreement on those KPIs. Everyone is marching and working toward the same goals. That had a huge impact on me as well.

It’s not just about infrastructure. It’s not just about managing risk. It’s also the people/process side of the equation that is critical in market-leading companies.

Gardner: Joel, when you hear that those who are doing well seem to have fewer custom apps, fewer legacy apps, higher utilization rates on their servers, what does that tell you about these types of organizations?

Dobbs: It tells me a couple of things. We'll start with the second one, server utilization. What I think you're seeing there is the affected people who have really done a good job with virtualization. You're not having is a lot of equipment sitting around idle or used at under-capacity. So I suspect virtualization probably plays into that difference significantly for a number of people.

Custom and legacy applications was something I hadn't really thought about until I read this material. I suspect that what you're seeing is probably a result of modernization of the applications that I call commodity applications, things like human resources, some of the financial applications, a lot of things that are generic across businesses. You're probably seeing some of the leaders move to more software-as-a-service (SaaS)-type applications in order to free up their staff to work on things that are much more strategic to their business.

Unique value

So the things that they're working on are probably things that are adding unique value to their business, and they're not spending a lot of cycles doing things with generic applications that they can buy and let somebody else manage.

If you're just doing security on the boundaries, that's a cheap way to do security, if you think about it. You put a firewall in place, you configure the thing, and you do the boundary security stuff. But when you're building another layer of security into your applications, that tells me that there's a lot more focus on the realization of the value of what's in there, in terms of the data and the way that it’s used.

There's very much an intentional focus on protecting not only the perimeter of the institution, but making sure that there's added security and protection within the perimeter. I would expect that folks who are really serious about understanding the value of the information within those systems, and [understanding] the risk to their corporate reputation, should those be compromised, are being very intentional about mitigating those risks.

Gardner: So it's a strategic, comprehensive approach to security across the assets -- including the applications.

Daniel, before we move on, a question on the infrastructure. When I saw this, I said that sounds like services orientation (SOA) -- modernized apps, fewer monolithic stacks, higher utilization vis-à-vis virtualization. Was there anything else that would back up my hunch that services orientation or SOA was also prominent in the way they are doing infrastructure?

Virtualization, in and of itself, did not rise to the surface of market leaders versus followers.

Dorr: You're absolutely right, but the key component here is actually using it for the right purposes. Virtualization was one of the questions, but you'll notice virtualization, in and of itself, did not rise to the surface of market leaders versus followers.

It wasn't just that you're moving to a service-oriented view, but you're actually implementing it in a way that means something to the business. You're actually seeing a change in capacity usage. You're actually seeing a change in custom and legacy applications.

Again, not following that shiny object, but it's implementing it in a way that's strategic to the business, is what we are seeing here that leads to success. It's not just virtualization, but it's using virtualization to its full capacity.

Dobbs: I agree completely.

Gardner: So we have talked a little bit about infrastructure. What were some of the other major areas, Daniel?

Dorr: The second big area was around information. There was a huge difference around the area of audit and compliance. For example, we saw that more than half of the market leaders had automated their audit and compliance, about 52 percent. Market followers tended to be much less. Around 39 percent had automated their audit and compliance.

Information strategy

There was an information strategy in place in both market leaders and market followers. However, market leaders tended to have automated their information-management strategy, versus followers, who just had it documented.

Also, we see a big difference in the use of business intelligence (BI) to automate decision making. About 18 percent of market leaders are automating their decision making using BI tools, while only 7 percent, so less than half of them, less than half of them as leaders, are doing that.

Now, there is still a huge amount of room for growth on both leaders and followers there, but to see only 18 percent rise to the surface already tells you the importance of automating BI decision making as a clear difference for market leadership.

Gardner: Let's go back to Joel on those two items. This gets to a point that I'm really interested in, a movement in business nowadays to much more of a data-driven and analysis-driven decision process. Perhaps the older way might be summed up by the highest paid person's opinion (HPPO) being the way that ultimately decisions were made.

But Joel, how do you react to some of these findings around information management and BI?

Dobbs: There are a couple of things here. One is that there's been an interesting evolution over the last 20 years in this field. We started out in IT automating various business processes. The focus was on making those processes faster or more efficient or something of that sort. As a result of that, we were generating information that had valuable use, but really wasn't being used that much.

What you're seeing with the leaders is that they not only understand it, but they're doing it.

It was during the reengineering revolution in the early '90s that people began to look at that. Along with the uptake of Six Sigma and Lean Sigma, people began looking at harvesting that data that was collected almost as a byproduct of automation and using it for continuous improvement and various other things.

This whole field has matured. Take the example of just the retail industry and all the information that’s collected as a result of point-of-sale processing and things like that. What we've learned is that that’s a rich trove of information that can be mined and used for all kind of things.

What you're seeing with the leaders is that they not only understand it, but they're doing it. That’s a big differentiator between those who understand it and have the insight and the capabilities to take this information and look at it in different ways. I suspect some of the automating of business, the BI automation, as we were talking about, is really a way of going back and using technology to create options for decision making, based on automated looks at data.

Let's talk about the automation of, I think the term you used, Daniel, was the automation of their information strategy, versus documentation. What that tells me is one group is doing it and the other group is just writing it down, and that’s a big difference. It’s like the difference between what most people do with strategy. Most people develop a strategy and there comes nice a book that sits on a shelf somewhere, and very little gets done about it.

The ones who are really leaders are the people who develop a strategy and then part of that strategy is a strategy to implement the strategy. That’s what this automation that you saw among the leaders really reflects -- not just talking about it, but actually doing it.

Single view

Dorr: I agree completely with Joel’s points. If you think about it, there were seven key attributes that rose to the surface for market leaders, revenue leaders, and revenue followers.

Three of those were around information. Automating your audit and compliance, having an automated information strategy. In other words, as Joel said, doing it, versus just writing it down, and really using BI for decision making. Three out of seven are around information. So clearly this is a key theme for in-market performance.

One of the things we do at HP is workshops for CIOs to help align business and IT and identify the impact that IT can have on the business. This comes up every single workshop we do.

I don’t think we can understate the importance of helping the business see what’s happening and understand what’s happening through automating audit and compliance.

We did it with a retailer recently. It took them days to process in-store information, in order to know what SKUs were selling and how well marketing programs were doing. By the time they had that information, it was too late for them to do anything.

They couldn’t change the SKUs on shelf. They couldn’t update, migrate, manage, or move the marketing program into new regions or what have you. As a result, their performance in-market clearly showed the difference. They were at a 20 percent disadvantage to the revenue leader in their category.

So I don’t think we can understate the importance of helping the business see what’s happening and understand what’s happening through automating audit and compliance, through actually implementing the information management strategy and trying to automate as much as possible decision making using BI.

Dobbs: I would add one thing. Daniel pointed out that there is increasingly a competitive advantage. The competitive advantage becomes not just doing it, but doing it faster than your competitors and being able to understand the meaning and the application of the data ahead of your competitor.

The retail example is a great one, where you're lagging days behind in your ability to harvest and use the information. Increasingly, the competitive advantage becomes being able to make adjustments and move much more quickly, whether it’s deciding where to place inventory or how much inventory you need to keep on hand, and all those kind of things. Time is money, and being able to move quickly can be a huge advantage.

What about cloud?

Gardner: We haven’t talked too much about cloud computing, and this did come up as one item that distinguishes leaders over laggards. Perhaps we could address that. Daniel, what is it about cloud that popped out in this survey?

Dorr: The focus of the survey was what capabilities clients have today and how that correlates to their revenue performance. We didn’t see a lot of cloud attributes rising to the service in people’s current capabilities. We did, however, see it rising to the surface in the focus area, where we asked IT decision makers, the CIO minus one, what was important to them. We did see a pretty significant difference between what market leaders, revenue leaders, thought was important about cloud versus market followers.

In fact, almost half of revenue leaders see cloud as incredibly important to them versus their peers, almost half of that number in the market followers. So, we're seeing a lot more priority focus on cloud computing going forward.

We didn’t see it driving current revenue performance, which makes sense. Cloud is somewhat of a new technology. We haven’t seen it fully deployed in many cases in driving today’s revenue.

Gardner: For the benefit of our listeners and readers, Daniel, maybe we could just go through the list at a prioritized basis, with descending priority, on what distinguished the leaders over the laggards. I think the top one is security as we mentioned, but let’s just go through it on a list basis, so they can get a sense of the importance.

Cloud is somewhat of a new technology. We haven’t seen it fully deployed in many cases in driving today’s revenue.

Dorr: Sure. Of the 50 attributes that we asked our CIO minus one IT decision makers and directors, what was happening within their IT environment, seven of those attributes rose to the surface, and they fell into three buckets, as we talked about briefly before. One was around the infrastructure side of the equation or the core computing environment, one was around information, and then the final one was around people and processes.

… With the survey, once we identified which specific attributes differentiated market leaders and market laggards or market followers from a revenue perspective, we then put it on a maturity score and we would score them based on those key attributes. You can see a clear difference between those with obviously a higher score, a higher maturity in their IT environment, around those key specific areas and their in-market performance.

Specific areas

So from the infrastructure side, it was custom applications and legacy applications. Leaders had fewer custom applications -- 38 percent versus the followers at 45 percent.

Leaders had fewer legacy applications -- 25 percent versus followers at 32 percent.

Leaders used their server capacity more efficiently. They used about 80 percent of their server capacity at peak usage, versus followers using only 71 percent.

Leaders had security built into the applications as well as at the boundary, versus only a boundary-level security, inside/outside view of the world.

In the information area, leaders automated audit and compliance at an average of about 52 percent versus followers at 39 percent.

Leaders had automated their information strategy, versus followers only documenting their information strategy.

Leaders tended to use more BI and automated decision making versus followers. So 18 percent of leaders had automated business decision making using BI, versus followers at only 7 percent.

Then there is the people and processes side -- and this is an area where CIOs can actually start working on right now without spending a cent -- which was clarity and agreement of KPIs. We saw a big difference in market leaders. There was a high degree of clarity within their organizations about what the KPIs were and agreement on those KPIs, versus only a moderate level of agreement within market followers.

That’s an area where CIOs can take action today. They don’t even have to talk to a vendor or an analyst at all. They can walk right into the CEO’s office and start working on that problem today.

Gardner: Let’s move to a separate lens to view this through. One of the things you asked was a series of questions that led to some conclusions about what distinguishes those who do best, and what leaders were focused more on. You broke it out into five different areas and you got some indicators of why it’s important, leaders versus laggards. Perhaps you could run through those as well.

Leaders had security built into the applications as well as at the boundary, versus only a boundary-level security, inside/outside view of the world.

Dorr: At the end of the survey, we asked them areas of importance, and we gave them security, information and insight, infrastructure convergence, application transformation, and cloud computing. We asked them to rank which were the most important to them. And we asked them to rank their current capabilities.

This was different from the attributes. For example, most of our IT decision makers ranked security, defined as keeping the lights on, as the number one priority. When they ranked their current capability, again, they ranked their current capabilities quite high, doing that well today. Although leaders tended to feel they were doing a better job of keeping the lights on, versus revenue followers.

Number two on the list was information and insight, in terms of driving what is important today from an IT organization. Again, the average of how important it is was not significantly different between leaders and followers. What was significantly different was how well they rated themselves.

We saw this in the individual attributes, but also when they ranked it at the end as well. Leaders tended to outperform, or believe they were doing a better job managing information and insight, than their followers by almost twice as much.

No huge difference

There were no huge differences on converged infrastructure or applications between leaders and followers, but the area where we saw a big difference was in cloud computing. Leaders ranked it much higher in importance and believed their current capabilities are much higher than their industry peers.

Gardner: So we've got some interesting takeaways here about the role of modernizing, gaining visibility, measuring along the way, being comprehensive in how IT approaches these problems, being responsive to the business on the business terms rather than the technology terms, with an emphasis on culture as well and the people and the process.

Daniel, for those folks who are intrigued and would like to get some of these statistics and findings themselves, do you have a place they can go to learn more to either perhaps see a slide deck, a white paper? What’s available for them?

Dorr: A couple of places. First of all, you can join us at the HP Discover 2012 event in Las Vegas in June. We'll be presenting these results there and sharing it with attendees there. In addition, they will be posted on hp.com.

Gardner: Great. Joel, what takeaways do you have from this in terms of whether people should readjust their thinking or perhaps take a pause and ask what they can be doing different when they sort of tease out some of the findings here?

Impact of investments

Dobbs: There was an interesting study published by MIT just a month or so ago that looked at a number of companies. What they found is that some of these companies that were investing heavily in IT, the IT investments actually had a greater impact on profitability than the same amount of money invested in research and development or in advertising. That’s a shocking finding.

I think what happens, when you delve underneath these companies who get such great returns on IT, you find two or three different things that are embodied in what we saw in some of the leaders here.

One of them is really good governance around decision making. The second thing is probably ownership of IT by the entire executive team. And I think the third thing is that they're probably measuring their return using business metrics on the investments that they make.

That’s what differentiates the leaders from the laggards -- they're approaching IT holistically as a core part of their business strategy, instead of seeing it as a support function or a back-office function.

That’s what differentiates the leaders from the laggards -- they're approaching IT holistically as a core part of their business strategy.

And things like this study that we've just been talking about today, as well as the MIT study, help add credence to the idea that money is well invested in IT, and I emphasize well-invested. It can have a tremendous payback, but only if you use it wisely.

Gardner: And that sort of runs counter to the perception of IT as a cost center, rather than as an enabler for growth and opportunity.

Dobbs: Precisely.

Gardner: Okay. Daniel, last word to you, are there takeaways or areas that we may not have covered that you think we should also uncover here?

Dorr: Joel said it very eloquently. There is a large body of research. Now, we have HP's own research. We have the MIT study, showing that there is a clear correlation between technology and in-market revenue results. As CIOs, we should feel confident to walk into the CEO’s office and talk to them about the strategic benefits that we can offer the organization.

The two biggest areas that we should be having conversations with our business counterparts today are clearly around information and KPIs. If we have agreement on those, we've covered more than half of the key attributes that we see between market leaders and market followers.

So there's a lot of opportunity for us in IT to start playing an even bigger leadership role in helping our companies innovate and drive in-market results. I look forward to seeing what the results look like two years from now, once we see cloud and other things deployed and driving even bigger benefits.

Listen to the podcast. Find it on iTunes/iPod. Read a full transcript or download a copy. Sponsor: HP.

You may also be interested in:

• HP Discover 2012 conference promises insights, information and user networking as businesses face a crossroads in IT delivery
  
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HP Discover 2012 conference promises insights, information and user networking as businesses face a crossroads in IT delivery

Listen to the podcast. Find it on iTunes/iPod. Read a full transcript or download a copy. Sponsor: HP.

The latest BriefingsDirect podcast previews the upcoming HP Discover 2012 conference and explores why this June event in Las Vegas is both an exclamation point on the current enterprise IT climate of change, as well as a neon signpost for HP's strategy and direction.

Look at why IT is at a crossroads, and how the very nature of IT is being redefined as a result of such large and global trends as the accelerating speed of business, cloud computing, security needs, mobile, energy-conservation demands, and especially the new role of IT as a service.

Such trends are pushing those tasked with supporting their businesses, as never before, to meet and collaborate with their peers and colleagues, and really re-evaluate how IT and business come together.

HP Discover 2012 provides an unparalleled opportunity for HP users to absorb the insights of the HP ecosystem and to learn more about their fields and technologies from their peers and associates. [Disclosure: HP is a sponsor of BriefingsDirect podcasts.]

The event marks an important time for HP, as it solidifies its responses to these trends, provides new levels of education and more insight into its new product services, vision, and leadership.

To help better understand HP Discover and its benefits noted blogger, author, and a longtime observer of all things HP Nina Buik, Chief Marketing Officer at Connect Worldwide, is interviewed by Dana Gardner, Principal Analyst at Interarbor Solutions. Connect is the largest user community of HP Business Technology customers, with more than 55,000 members worldwide.

Here are some excerpts from their chat:

Buik: I think we're at a crossroads right now, going into a new era of computing with cloud computing, bring your own device (BYOD), the challenges with security, and a laser focus on gaining better business outcomes through technology. This is why it's so important this year to come to events like HP Discover to get answers.

You’ve got fewer and fewer people supporting IT. IT has become very sophisticated, requiring fewer hands to touch the system. Therefore folks need to get out and hear messaging from their partners, HP, and HP’s partners to see how they can achieve these goals.

Gardner: Those who are managing and implementing IT are being asked to be both specialists and generalists. You need to be very deep technically, but you also need to understand the business implications.

Folks who were in more of a management or a systems management role are being asked to be strategic as well.

Buik: You're absolutely right. You bring up an important point, because I think that the trend also is that folks who were in more of a management or a systems management role are being asked to be strategic as well.

They're having to expand their knowledge of systems, instead of just focusing on the network and the integration of how storage fits into this ... [but] how do we achieve these goals by integrating all of these aspects?

Gardner: HP Discover at the Venetian Hotel and Sands Convention Center is in Las Vegas the week of June 4 and goes for 4-5 days. For those folks who might not be familiar, Discover is really the culmination and the integration of a number of other conferences. Isn't that right, Nina?

Buik: Yes, Software Universe merged with HP Technology Forum & Expo to become HP Discover. That was really an important addition to this event, because you really can't have one without the other. They need to be together, and it's very exciting to see the results of that. Last year was incredible with 10,000 people together, and really, it helps the attendees get the most out of their investments.

Gardner: One of the things about HP is that there are really just a very few organizations that can be brought to bear at that strategic level.

There are so many opportunities where you can sit down side by side with engineers and get questions answered.

Buik: You hit on something key. Partnerships and alliances are so critical right now. A lot of companies in the small-to-medium size business (SMB) space typically don't have that opportunity to sit down with a company like HP to discuss all of these concerns and how to tie them all in together. At HP Discover they can do that.

There are so many opportunities where you can sit down side by side with engineers and get questions answered. So you have that expertise at your fingertips. You're able to bring that back to your organization, make those plans, and achieve the goals that you're looking for.

But in terms of partnership, relationships are built on trust. When you have that trust relationship, there's accountability on both sides to communicate well, to focus on the goals, and look at HP as a trusted partner.

Gardner: Tell me a little bit about the history of Connect and why this is such a big deal for you too?

Buik: I’ve been involved with the HP user communities going back almost 20 years, as a former member of the community and a member of the board of directors. The communities decided to come together in 2008. You had the NonStop community, the traditional HP-Interex community, as well as Encompass come together to form one large HP enterprise user community, and we became Connect.

The things that we’ve accomplished together and the way that we focus on help the users become successful with the technologies they use. Our goal is to help a member get the most out of their business technology investments. We do that through providing opportunities to influence HP and HP’s partners, or advocacy, and education and awareness. We're making the members aware of not only what’s going on within HP, but educating them on products and solutions that HP has available for them.

Most importantly, we provide opportunities for like-minded users to get together and share best practices. They can learn from each other, and it’s magical when it comes together. It truly is. So we look forward to having a record number of members attend HP Discover this year.

They bring these two together and they're able to make some strategic decisions that they can bring back to their organizations.

We're introducing new special-interest group meetings at HP Discover this year. We're launching a cloud special interest group (SIG). We have a Superdome SIG and a variety of other SIGs. But aside from community, I think this is the right time.

We're at crossroads in technology, and people within the community know that, at community events, they're going to be able to discuss with other folks how they're using a particular technology. For example, if they're interested in cloud computing, what’s a better place to come together to learn how other companies are using these technologies as well as understand what HP is offering? So they bring these two together and they're able to make some strategic decisions that they can bring back to their organizations.

Gardner: I should point out as full disclosure that I'm a blogger on the Connect site and really appreciate the opportunity to participate. Have you’ve been doing any polling recently? What have you been able to tell us about what the zeitgeist, the mentality, is among your users?

Peer networking

Buik: Just before the registration for Discover launched, we wanted to understand why our members wanted to attend Discover. The number one reason was peer networking, followed closely by education.

That ties right back into what we were just talking about, being able to talk to other members and just other attendees about their experiences working with HP and using various HP technologies. What is the saying, "Self praise is no recommendation?" You really learn more from others.

Then again, tie that right into speaking with the HP engineers and other professionals about what HP has to offer, and between the two, you can make great decisions. In terms of education, there are over 700 sessions in the session catalog. There's everything from cloud to security. There is just so much being offered.

Another interesting poll that we did on the top technology trends for 2012, a lot of folks are looking at platform migration, the Oracle announcement. So we know there are members who are looking at platform migration, and that could be a huge endeavor, depending on the company size, the size of the systems, or the number of systems involved.

So what better place to go to, to learn from others who perhaps have experienced that, than at an event like HP Discover?

There are members who are looking at platform migration, and that could be a huge endeavor, depending on the company size, the size of the systems, or the number of systems involved.

Gardner: Certification is also a big deal now. Getting back to that issue about career and how to position yourself at these crossroads for your personal future, isn’t there sort of a big opportunity around certification here at these events?

Buik: The ExpertONE community is offering five free certifications with your registration. Each one of those certifications cost anywhere between $150 and $200. So that’s a huge deal. But more than that, through the years, the importance and significance of certifications has changed.

Now, more than ever, IT professionals are looking at certification as a means to separate themselves from the competition for particular job opportunities, or even within an organization, to show that they can kind of move up within an organization.

Flooded market

There are just so many people now looking for work. It’s a very flooded market. I recently spoke with the CIO who said, I post one opportunity and my human resource manager brings me 1,500 résumés. The only way I can differentiate, to weed out the first round, is through certification. So it’s really important.

Gardner: Discover, of course, provides an unprecedented opportunity for HP itself. They have the opportunity of getting 10,000 people under "one tent." They have their main stage presentations. It’s really the premiere coming-out party for HP, when it has new vision, when it has strategies that it wants to solidify, and when it comes to introducing and affirming leadership.

We're going to hear from Meg Whitman, HP’s President and CEO. I think it’s her first big appearance in North America. She did, of course, present in Vienna at the fall Discover. Is this a big deal for Meg, in particular, do you think, Nina?

Buik: I think so. I did hear her speak in Vienna, as her first opportunity to address HP customers. She did absolutely what she should do, as explained in her vision for the company. Now it’s time to turn the corner and talk about technology, where we're going with technology, and how HP has committed to supporting the customer through these changes.

There are just so many people now looking for work. It’s a very flooded market

This is even more important than that first opportunity to say, "Here’s who I am. Here’s a little bit about me." She has established herself, and now it’s time to focus on the technology and on how HP is committed and dedicated to helping HP business technology customers achieve success in this new environment.

Gardner: And she is going to be joined on stage by such HP leaders as Dave Donatelli, the Executive Vice President and General Manager of the Enterprise Group; Todd Bradley, the Executive Vice President of Printing and Personal Systems Group; Bill Veghte, the Chief Strategy Officer and Executive Vice President of HP Software; Mike Lynch, the Executive Vice President for Information Management; and John Visentin, Executive Vice President for Enterprise Services.

I also understand that Jeffrey Katzenberg, the CEO of Dreamworks Animation, is going to be on stage. Of course, Dreamworks has been in tight collaboration with HP in the production of its animation and 3D products. So that should be very interesting.

You mentioned earlier that we’ve got something like 700-800 business and technical sessions. There is the Discover Zone of the exhibits area, where more than 350,000 square feet space will be devoted to IT solutions from the ecosystem, where you can find the partners and the folks that are part and parcel of the total-solution approach.

There is the one-day Partner Summit on Monday, June 4, and an invitation-only CIO Summit as well. Now, tell me about Connect. You’ve got some of your own events at Discover, I think there is a community night?

Opportunity to network

Buik: Absolutely. Connect will be part of the Community Lounge in the Discover Zone. It’s right next to the bloggers’ lounge. So it’s an opportunity for Connect members and folks who don’t know about Connect to come to learn more, as well as take a load off their feet. No one is trying to sell anything. We're just trying to make sure everybody is comfortable, happy, and has an opportunity to meet and network with others.

Typically, a lot of folks come to the Community Lounge and use it somewhat as an informational area. Where can they learn more about x, y, z, or where might there be a particular topic? The great thing is that so many people are attending, we can actually make those connections right there. So it’s really a neat place to be.

Also, on Wednesday evening, we're hosting a community appreciation night with Vivit which is the HP software community. That’s going to be at Gilley’s, across the street from the Venetian at Treasure Island. Wednesday evening, we're going to host a tweet up from 7:00 to 8:00 followed by a Going for the Gold community appreciation night. So there’s going to be a lot of fun, as we kind of celebrate the ancient Greek games, but western style with a twist. So we’ve got a lot of fun things coming.

We're really tying in social media as part of this event to extend the buzz around the world.

My advice to folks who are attending an event as big as HP Discover is to define what your goals are for the event: "I want to learn more about XYZ,"or "My goal is to come back with a plan for how we're going to implement a hybrid cloud or a private cloud." Or my goal could be that I find myself in between jobs. I know folks who are doing this. They've bought their registration and they're going there to network, because they’ve worked in the HP space for so many years.

But have a plan. Then, go look at the session scheduler and find the sessions that match your plan. You can do a keyword search. You can do a search by track. Identify the sessions that will meet your needs or help you meet those objectives.

Look for SIG meetings, if you want to hear from peers. Connect has 12 SIG meetings. So keyword search SIG. That's a great opportunity for you to interact not only with other like-minded professionals, but also with HP folks who are subject matter experts on that particular topic or SIG.

You can learn more about Connect by visiting connect-community.org, but also if you register for HP Discover you can get a $300 discount and be affiliated with the community, so that you can get your fast pass into the community party on Wednesday evening. The code is UG2012.

Gardner: That's worth $300?

Buik: $300. Easy money.

Listen to the podcast. Find it on iTunes/iPod. Read a full transcript or download a copy. Sponsor: HP.

You may also be interested in:

• Expert Chat with HP on How Better Understanding Security Makes it an Enabler, Rather than Inhibitor, of Cloud Adoption
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Join HP support expert Tommaso Esmanech for a May 15 live chat on IT support automation

Register now as seats are limited for this free HP Expert Chat.

The speed of business has never been faster, and leaders will continue to need to be ever-more responsive, ever-more able to react to customers before and better than the competition.

Data centers -- the information engines behind modern businesses -- must do whatever it takes to make businesses lean, agile and intelligent as they innovate and excel in their fast-changing markets.

Modern support services therefore need to be able to empower the workers and IT personnel alike to maintain peak control over data centers, and to keep the systems and processes performing reliably at lowest cost.

Live discussion

On May 15 in a free, online, live multimedia "Expert Chat," I'll be interviewing Tommaso Esmanech, Director of Automation Strategies at HP Technology Services. We'll also be taking live questions from the online audience. [Disclosure: HP is a sponsor of BriefingsDirect podcasts.]

The stakes have never been higher for keeping applications and businesses up and running.

Register now as seats are limited for this free HP Expert Chat.

In this free discussion (registration required), hear recommendations from Esmanech on improving support, the new spectrum of support options and details on how HP is revolutionizing support to offer new innovations in support automation.

View a video on what to expect during the event.

Moreover, throughout the presentation, the live audience will pose questions on IT support services, automated support and remote support for an on-hand live panel to respond to.

Register now as seats are limited for this free HP Expert Chat.

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Ariba Network plus Dynamic Discounting give startup Mediafly cash flow benefits, help in managing capital

Listen to the podcast. Find it on iTunes/iPod. Read a full transcript or download a copy. Sponsor: Ariba.

The latest BriefingsDirect podcast, from the 2012 Ariba LIVE Conference in Las Vegas, explores the latest in cloud-based collaborative commerce with Mediafly, a startup company that delivers cloud-based applications for content management and distribution on mobile devices for Fortune 500 companies.

We’ll learn how Chicago-based Mediafly, through the Ariba Network, gained insight and control over its cash flow and found new means of managing capital and in aiding its ability to support ongoing operations, as well as to drive future growth.

To hear more about how they did it, Interarbor Solutuons Principal Analyst Dana Gardner interviews two executives from Mediafly, Carson Conant, CEO, and John Evarts, Chief Financial Officer and Chief Operating Officer. [Disclosure: Ariba is a sponsor of BriefingsDirect podcasts.]

Here are some excerpts:

Gardner: Tell me about your startup company and why managing cash flow is so important.

Conant: Mediafly is the leader in the presentation platform market. What that means is that we’re the company that helps bridge the gap between large Fortune 1000 companies, their internal systems, and primarily mobile applications, but also things like Internet-connected televisions, and so forth.

Large companies create lots of video. It could be live broadcast, sales presentations, training videos, and TV and movie industry content. When they're trying to distribute that content to make it available on all of these emerging devices, particularly at that large scale, they need a provider like Mediafly.

Think of all the TV and movie productions that are going on the studios. Those companies have thousands of video files that they're housing inside of their four walls. They're trying to expose that content to all of their executives and staff, everybody from the makeup artist that needs to watch the last three dailies to the CEO and the president.

Perfect platform

Now, they want to be able to do that on iPads, iPhone, Android, and on televisions connected to the web. We're the perfect platform, because there is so much that has to go on that so many gears are turning to make all that happen.

That’s a perfect solution for the cloud, and those companies now integrate with us so that that material is available to all the different stakeholders on all of these different devices. So we’ve dropped ourselves in and filled the gap between their in-house systems and all of these mobile devices.

Gardner: As a small company, what are you facing, when it comes to the financial pressures?

Evarts: As a small company, we often don't have a balance sheet that’s attractive to banks, among other things. As we seek things like angel investment or equity investment, we need to do things that are extremely capital efficient with those funds.

When we have an opportunity for revenue, especially revenue at large corporations, Fortune 100 companies, these are large contracts. As a small organization, contracting with larger organizations, it’s absolutely critical for us to manage that cash flow well and have visibility into the cash flow.

As we said, we’ve been growing very quickly. So our recurring revenue has grown by 3x over the last two years. As we grow quickly, we need to have that visibility into cash management, because it’s absolutely critical that we staff at the right time relative to taking advantage of opportunities that are out there in the market.

Gardner: So looking at this from an elasticity point of view, larger companies have a bit more wiggle room. As a smaller company you don't, but you need to grow fast. Help me understand what led you to do things differently in order to make this elasticity work in your favor.

Conant: We’re very fortunate. One of our largest customers is in the media entertainment space and we did a large seven-figure deal with them over a series of years. But the way that they do invoicing and transactions is through the Ariba Network. They said, "For you to get paid, join the Ariba Network."

So that was the first thing that got us onto the network. What was amazing is that once we got on there, as John said, it was unlike a lot of our other transactions with similarly large companies. In those companies it’s just like a black box. You've got a several hundred thousand-dollar invoice that goes out, and you may not know if that’s going to come in in two weeks or six weeks.

What was amazing to us with Ariba was the ability to know exactly where we were in that payment process. Ultimately we took advantage of this program they call "dynamic discounting," which allowed us to accelerate cash for a couple of basis points.

Huge ramifications

So for a fairly inconsequential amount of money to us, we were able to get paid in about 14 days instead of 60 days. It had huge ramifications on our business. What that did for us is allowed us to interact with them in a way that they preferred, but still have the nimbleness that we need from it as being a small company.

Gardner: So visibility and predictability are really important. In the past, people would generally go to a bank to get a line of credit and pay a high interest rate in order to have that accordion to manage their cash flows. You’ve found a way to do this, not through a bank, but through working directly with your customers and perhaps even incentivizing them to help you with your cash flow and visibility and your saving on the interest. It sounds like a win-win all around.

Evarts: It's an excellent opportunity for us to work with a partner and deepen that partnership with our vendors. We’ve found that, as Carson said, for a few basis points of a concession on the contract, we’re able to factor 100 percent of the contract value of the invoice.

When that occurs, the advantage to us is that we're able to immediately take advantage of it, as soon as it hits the system, to take 100 percent of those otherwise unknown collection periods. When we can reduce the collection periods from 60 days all the way to 14 days. We’re in a much stronger financial position, because we can take advantage of those dollars.

Conant: The first time we took advantage of dynamic discounting, it was relatively early in a development cycle for a security package that we were in the process of building. What that did allowed us to get access to cash to bring in additional resources to accelerate those featured enhancements.

It sparked additional Fortune 100 contracts. It was fundamentally game changing for us.

Literally, two weeks after signing this deal with one of the largest entertainment companies in the world, we were in the board room with one of the largest global banks in the world touting these new security features we had, which we otherwise wouldn’t have had for maybe 60 days.

It sparked additional Fortune 100 contracts. It was fundamentally game changing for us. We joke that it would be interesting if all of our customers leveraged something like dynamic discounting. It would be transformative for our business. It would drastically accelerate how we can deploy cash. Then you think about it in terms of what could it do for the economy.

If all these companies were taking advantage of this, it would boost the stability and the growth of their partners and their vendors. It would be something. That’s why we’re so vocal about it.

Evarts: As a small organization that is very nimble and trying to innovate, it speeds up and accelerates the pace of innovation that we’re able to generate. The new features that we offered to this first client, we were immediately able to turn and sell to one of the leading investment banks as the same security capability.

So when we’re able to quickly accelerate and bring new innovations to market, obviously everybody benefits. Mediafly benefits, and ultimately, our customers are going to benefit as well.

Level playing field

Gardner: And what strikes me is that this seems to be a level playing field between you, a small company, and as you point out, some of the largest media companies in the world. You’re playing with the same rules with Ariba being the trusted arbiter.

Conant: Absolutely. There are probably two or three technologies that we've taken advantage of that have just come into play in the last three to five years. One of them is cloud-based infrastructure. We don't have to buy servers anymore. That’s allowed a company of our size to outpace and out-compete companies that have been around for a long time and provide enterprise services to Fortune 100 global companies.

Then, you look at Ariba, and it's very similar. It allows us to interact with them the same way that they would interact with another large company. Doing business with us doesn’t feel different than doing business with another large company.

They get what they want, we get some additional visibility and some things that are valuable to us. But, these technologies have just come into play in the last three to five years, and it's really allowed a company like Mediafly to exist.

Gardner: A lot of times, analysts like myself focus on the technology behind the cloud, but it's really a game changer, when it comes to business processes and allows for the compression of what used to be latency in terms of business functions, monetization, and cash flow. Now, when everybody has visibility, when the level field is there for all participants, it's much more efficient and direct, and we’re just starting to pick some of the fruit of that.

These technologies have just come into play in the last three to five years, and it's really allowed a company like Mediafly to exist.

Evarts: And you touched on it. Creating scalable solutions is absolutely critical and it allows a small organization with relatively limited initial capital, first to be able to scale to a level, and participate in the Ariba Network, and basically have the same credentials as some of the largest companies in the world.

Folks who are transacting with Mediafly are doing it in the exact same way that they do with other Fortune 100 peers. To some degree, to us, it's a competitive advantage, and we feel that way. We feel that if we're on the system, we’ve been vetted, and other folks are using us on the system. It's an excellent credential for us to have and a nice reference for us.

We feel that this Ariba Discovery concept is extremely valuable to us as a small organization, as we look to scale as a lead generation opportunity and ultimately, as we’re transacting business.

Gardner: We’ve touched briefly on how this could be a go-to market benefit for you. Let's expand on that. How in providing a discount incentive to cash flow, and using the Ariba Network, does that end up getting you more customers?

Evarts: One of the tools that we’re just trying to tap into is this concept called Ariba Discovery. Discovery allows you to self select a series of industries, what they call commodities. That allows you to say, "These are the services that we offer." Then, large companies are able to go on that system and say, "These are the services that we're looking for." So it's really kind of a matchmaking function.

While we’ve only scratched the surface -- we feel we're relatively new to this system -- we feel that this Ariba Discovery concept is extremely valuable to us as a small organization, as we look to scale as a lead generation opportunity and ultimately, as we’re transacting business.

We feel that as a small vendor, if there are a number of individual companies that are looking to leverage this system, we're happy to make a light concession, obviously, for the right amount of basis points and just for the right timing. We're able to then take advantage of that, accelerate cash in. When non-financial companies, at the end of third quarter last year, had $3 trillion sitting on their balance sheets, you know that there's a ton of liquidity out there that will be invested, and is going to be invested in different ways.

One way that folks can take advantage of it is using a system like Ariba in order to support the supply chain, investing in their current partners.

Of, for, by the cloud

Gardner: So you're sort of of, for, and by the cloud. When it came to moving toward Ariba and using some of their services, did that work as an off-the-cloud service, where there wasn't anything on premise or you didn’t have to have your IT people involved in? How friendly a cloud player did Ariba turn out to be?

Conant: Extremely friendly, relative to some other more manual processes that some of our other customers leverage. The best example that is our ultimate discovery of the dynamic discounting program. Our controller noticed a checkbox in our interface. It's a web-based interface and he asked John, "This looks interesting. Should we take advantage of it?" We said, "Yeah, let's try it on our first invoice."

This was not some training that had to happen before we understood how to use this system. It was a couple of checkboxes, and now we are getting paid earlier.

To me, that's really what the cloud is. A company like Ariba, in my opinion, has done a really good job of abstracting, so you're left with just an elegant functionality and it's in the cloud. It's all web-based. There's nothing we had to deploy on premises.

We're a cloud company. So it feels natural. I can't even imagine how simple it must seem to somebody who's used to using things on premises.

Not only can we now take full advantage of their entire cloud-based infrastructure, but it was very easy for us as a small vendor to get onto this system.

Evarts: One of the key elements for us was the ease to get on the system. When a customer whose that large asks you to join, and you're as small as you are, you say absolutely, how quickly and when. Ariba was absolutely fantastic in helping us to get onto this system and then ultimately helping us navigate, within the course of a couple of hours max, to have been fully integrated into the system. Not only can we now take full advantage of their entire cloud-based infrastructure, but it was very easy for us as a small vendor to get onto this system.

Gardner: On the other side, the flip side of the coin, these global Fortune 500 companies were familiar with Ariba. You didn’t have to drag them along and convince them. There was already the established trust and credibility.

Conant: We’re still scratching the surface, as more and more companies are moving this way. It seems like a lot of the people that we’re talking to are moving into cloud-based procurement solutions, things like Ariba. As more time goes on, more and more of our customers will be on Ariba and leveraging dynamic discounting and so forth.

What's great is that each one that is using Ariba is already set up. It's just a matter of them attaching our profile or however it happens behind the scene. But there are not a whole lot of additional process. That’s what's neat about the network effect. Once multiple parties are on a network, it's just a matter of connecting the two lines together.

Listen to the podcast. Find it on iTunes/iPod. Read a full transcript or download a copy. Sponsor: Ariba.

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