Month: November 2011


Thinking about the Euro and German monetary orthodoxy

November 29, 2011

Monetary

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This will be a blog entry in English because I would like to make it easier for international readers to engage in the debate. So please be forgiving with regard to errors of language. There is a deep divide between the way the Euro crisis is discussed in Germany and elsewhere in the world. There is a lot of talk about German orthodoxy in questions of monetary policy. In its current edition the Economist claims in one of its editorials that the German position is plain wrong and that its reluctance to allow the ECB to act as a lender of last resort is going to finally break the back of the Euro.

In the past I have defended the German position on two grounds. I think that we create a lot of moral hazard in the future if we make it too easy for spendthrift countries to evade the consequences of their irresponsible policies. Second I think one has to acknowledge that economic logic and political logic are at loggerheads in this case. Economic rational would have called for an early bail-out for Greece of huge proportions in order to stop the markets from worrying about other countries as well. But that would have solved the crisis in the short term without forcing the governments in the problematic countries to enact the necessary reforms. And so the same problem would have represented itself time and again, because the unsustainable social and political systems eg of Greece and Italy would have remained the same. Even after two years of tremendous market pressure, the Greeks have awoken very late to the fact that things will have to change dramatically and the real liberalizing reforms that could unleash the potential of the Greek economy are still to be enacted. So absent any other European tools of coercion, market pressure is the best leverage we have in order to force these countries to act responsibly.

I think these are still very valid aguments today. But I have grown a little suspicious if the German discussion has narrowed too much in this regard. Thats why I want to put this up for debate. Because evidently the politics of bits and pieces has convinced markets that the Euro zone is not going to resolve the crisis forcefully. And now investors even panic about countries where there is nothing to panic about. There doesnt seem to be convincing reasons why Austrian and Finnish spreads are on the rise against the German Bund. It seems that investors are increasingly considering opting out of the Eropean market as a whole.

So the question is: Has the German position run its course? Should we reconsider? Because clinging to monetary orthodoxy is not going to help anybody if the result will be a complete implosion of the Euro zone.

I have to say that it still goes against my gut feeling  and against my knowledge of Italian and Greece politics to let the problematic countries off the hook. And I am also wondering if Germany will run the risk of loosing its credit credibility if the ECB, which is finally guaranteed by the still solvent countries of the Euro zone, will engage in massive printing of money to throw huge credit lines to Greece, Italy and maybe Spain. By now either scenario looks bleak. And thats why I would like to invite people with more knowledge about monetary policies to engage in the debate and to try and draw some possible future scenarios.


Leading Indicators Is An Index Of Broken Monetary Policy

November 26, 2011

Monetary

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The LEI is a broken indicator because it is too heavily influenced by monetary policy. In October, the interest rate spread (steep yield curve) contributed 0.22% to the 0.9% increase in leading indicators. Even though the steepness of the yield curve has changed only marginally since 2009, the interest rate spread has pushed the LEI higher by roughly this amount every month since the Fed started easing. This accounts for much of the divergence from CEI. As long as the curve is held artificially steep, it will continue to drive LEI higher.


Fisher Says Bank Supervision Helps Fed in U.S. Monetary Policy

November 20, 2011

Monetary

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Federal Reserve Bank of Dallas
President Richard Fisher said supervision of US banks has been
important to the central bank in making monetary policy.

“You just can’t operate as lender of last resort unless
you know who you are lending to,” Fisher said in a speech to
the Texas Tech Alumni Association in Dallas. “That helps in the
formation of monetary policy.”

To contact the reporter on this story:
Steve Matthews in Atlanta at
smatthews@bloomberg.net

Darrell Preston in Dallas at
dpreston@bloomberg.net

To contact the editor responsible for this story:
Christopher Wellisz at
cwellisz@bloomberg.net

VMware, SuccessFactors add business execution software to cloud

November 16, 2011

Business

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VMware and business execution software developer SuccessFactors are bringing their forces together to create a solution that should add business execution value to cloud computing.

To break it down clearly, SuccessFactors will be integrating its business execution software on to VMwares Cloud Foundry Platform-as-a-Service (PaaS) platform, in beta.

Developers can use standard languages (ie Java, PHP, Ruby-on-Rails, HTML, Ajax, Javascript, etc.) as web service APIs to deploy applications rapidly and flexibly across both public and private clouds.

SuccessFactors founder and CEO Lars Dalgaard boasted in a release that his company has the worlds largest cloud deployments, and support for more than 3,500 customers with 15 million subscription seats. Therefore, partners should be able to develop extensions and integrations of SuccessFactors solutions on Cloud Foundry in an open and non-proprietary manner.

Dalgaard added that the fruits of this partnership will also a paradigm shift in the way companies will consume cloud services because it will create unseen cross functional business value while touting it as a lower-risk option for new customers.

So far, SuccessFactors has already built its first application (within hours) to run on CloudFoundry.com, which combined Google Maps data with SuccessFactors employee location data deriving from Employee Central, its HR information systems platform. More applications are expected to be on the way soon that will integrate SuccessFactors capabilities with other web applications on Cloud Foundry.

Related:

  • Customer comment on the VMware pricing/licensing/terms dance
  • Case study: City of Fairfield uses virtualization to more efficiently deliver crucial city services
  • Cisco teams with Citrix on large-scale virtual desktops
  • Misleading, over reaching catch phrases abound in the cloud computing and virtualization markets
  • Box.com CEO: Were building the smarter enterprise

Analysis: IMF mulls bonds, borrowing to pump up war chest

November 15, 2011

Monetary

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IMF Managing Director Christine Lagarde holds a news conference after the International Monetary and Financial Committee (IMFC) meeting in Washington, September 24, 2011.

Credit: Reuters/Jonathan Ernst


RIM quietly teases BlackBerry 9380 and 9790

November 12, 2011

Business

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Tech tech boom

Blogging on the inner workings of business tech including, but not limited to, business intelligence (BI), analytics, enterprise software, desktop and portable hardware, IT in education, open-source phellip; Read more raquo;rojects and breaking developments in the mobile world. You can follow me on Twitter at @BenWoodsZD.


Tidemark takes EPM to the cloud

November 3, 2011

Business

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Some weeks ago, I met with Nenshad Bardoliwalla, one of Tidemarks co-founders. At the time, the company was called Proferi and was in locked down stealth mode. He gave me a preview of the companys cloud based enterprise performance management solution. Now the wraps are off.

While I have long followed the broad business intelligence/decision support market, I had become jaded to the point of avoiding the space altogether. It just wasnt that interesting. However, along with Workday analytics, Tidemark has revived my interest, signposting a future that gets away from rear view mirror reporting and which gets close to offering analytics upon which the operational manager can act at the right time.

What differentiates Tidemark for me is its melding of risk assessment in the analytics mix. The blurbs describe it well:

The Tidemark Enterprise Performance Management Platform delivers real-time, risk-adjusted metrics management; strategic, financial, operational planning and forecasting; and profitability modeling applications. Today’s EPM applications hinder businesses from being able to harness the larger and more varied data sources in the modern enterprise due to their legacy, database -centric architecture and design for only sophisticated power users. As a result, today’s analytics are delivered too late and to the wrong people to be of actionable value. Tidemark’s new applications feature rich, pre-built functionality that enable enterprises to extract immediate value for actionable decision-making from large amounts of complex, dynamic data at a lower total cost of ownership (TCO) than proprietary solutions.

Too good to be true? I spent a couple of hours with Bardoliwalla walking through the solution, poking around inside it and peppering him with questions. I came away from the discussion excited at what I had seen. This will have immediate application inside finance departments and beyond.

To date, most finance people have been hamstrung by historical reporting and clunky budgeting and forecasting systems that take forever to produce. It is something finance understands as a compliance necessity but which has little value in todays high speed world. The need to understand what is happening in a risk context has always been missing or has required the tacking on of other softwares. Then theres the problem of assembling all the required information into a comprehensible pack that management can use. And assuming that gets done then what about taking decisions in the context of business processes, at the right time? Tidemark changes that. Dont take my word for it, check out what Acosta Sales and Marketing say. Again from the blurbs:

Our existing EPM system delivered some value to our finance team but provided only basic reporting to our management group. Working with Tidemark over the last year, I finally see a unified system that both finance AND management can use to gain key insights into the relevant financial drivers of the business,” said Sean Anthony, Vice President of Treasury and Planning at Acosta Sales amp; Marketing.

During my conversation with Bardoliwalla, he frequently referenced the way the company had been working closely with the then undisclosed customer to ensure that what Tidemark delivers is relevant but without being a glorified toy.

The impact this style of application brings should not be under estimated. At a stroke (or as near as Im likely to see in my lifetime) the barriers of understanding between finance and operations evaporate. This alone is such an important win that it will serve as the platform from which finance departments transform from being an overhead to business value creators. Thats the kind of step change business needs.

In order to design a system for all classes of user, Tidemark has rethought how analytics should be presented and prepared. In doing so, theyve not settled for a lowest common denominator appearance but a sophisticated UI that I could immediately understand and relate to. As a former finance chief, I didnt detect much sacrificing of functionality but I appreciated the fact I dont have to understand ETL. Theyve done things like removed the need to understand how charts are assembled, the system knows based upon the preferences that are set.

See also: Tidemark emerges from stealth mode, eyes business intelligence for real people

For anyone thinking that as a version one, this is bound to be lacking in functionality, youd be wrong. Out of the gate I could see how business processes are tied to KPIs, structured and unstructured data sources are accessible, controls can be readily established with a rich set of computational algorithms to get me started. I liked for example the idea that I could embed (say) Bloomberg or Yahoo! Finance data inside the process I am reviewing. Thats the sort of included data that will be helpful when assessing large scale contracts, projects or in benchmarking scenarios.

Inside the guts of TIdemark, the company has made the solution both mobile and social. On the mobile front, the service is built upon HTML5 with emphasis on iPad. When collaborating, performance matters. I accessed it over a downtown San Francisco 3G connection on an iPad2 and it was zippy. Blogs, PDFs Word and other documents can be embedded inside the analytics interface further adding to the variety of information that can be accessed from the single interface.

Tidemarks business model is based around what is starting to emerge as classical cloud thinking: per user, per month pricing that starts at $200/u/m with a try before you buy option. As Bardoliwalla says on the above video, give Tidemark some historical data, tell it what your forecast looks like, provide a handful of metrics you want to assess and they will do the rest. For free. The logical candidate for such a test would be product and/or regional profitability forecasting. Tidemark will then give you a flavor of what the solution can achieve.

Like Larry Dignan, I wonder whether $200 is the right price point for all classes of user but then with this type of solution it is hard to imagine many as purely casual viewers of information. The more likely scenario is that users will want access to more or at least fluctuating amounts and sources of data. How that will add up in volume remains to be seen. Like many SaaS solutions, Tidemark will need to provide price breaks for volume.

From what I have seen, training should be minimal though I can readily imagine the need for change management. That will need to encompasses:

  • Recognition of how structured and unstructured data come together
  • Carefully defining roles and the amount of information thats accessible to different people inside the organization
  • Assessing which data types will be required and how they are managed over time

None of this will be trivial but if organizations start small there is good reason to think that value will be seen very quickly, allowing the solution to naturally scale out and up within the organization.

Tidemark looks genuinely promising in a space that has suffered from a lack of disruptive innovation. Will it challenge the big guns of Hyperion, BusinessObjects, Cognos and SAS Institute? It is far too early to say although the warning signs are there. As Larry Dignan notes in his conversation with Acostas treasurer:

his plan is to load Oracle financials and the data in his SAP budgeting system into Tidemark for next years budget season. Tidemark is being used as an overlay right now because Acostas fiscal year ends Oct. 31.

GIven the SAP BOBJ community has just come off its annual customer conference, Im wondering what this will do to confidence among SIs who are used to making shedloads of money with bespoke reporting, budgeting and forecasting? From what I hear, this is the one bright spark for those implementation shops looking into 2012. If Tidemark proves disruptive to the (likely) mid-market audience, they may not be affected in the early stages.

What I do know is that senior people within certain of those organizations are keeping a close eye on anything enterprisey that has a whiff of SaaS/cloud. They see the future and it doesnt look comfortable. Add into the mix that Aneel Bhusri, co-CEO Workday is on Tidemarks board and that both Greylock (in which he is a partner) and Dave Duffield, Bhusris other co-CEO are investors and you start to see where this is going. If you need a hint then think Workday/Salesforce.com as the twin pillars for diving a wedge into the SAP/Oracle hegemony.

And since were on an upgrade cycle, now is a very good time for Tidemark to come out of the traps. This is one to watch.