Protocol | Enterprise
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Why enterprise tech is like your high school’s cafeteria

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Welcome to Protocol | Enterprise, your comprehensive roundup of everything you need to know about the week in cloud and enterprise software. This Monday: The partnership conundrum, Dataiku's big raise and Silicon Valley's new recruiting tactic.

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The Big Story

With frenemies like these…

Partnerships in enterprise technology are as old as enterprise technology. Microsoft and Red Hat have worked together for years despite directly competing in certain markets. And Oracle had a joint initiative with Sun Microsystems before purchasing the Java creator in 2009.

But as the value of enterprise software shifts from the code itself to how easily that code works with other types of enterprise software, those partnerships are taking on a whole new meaning.

  • Cloud providers are rushing behind the scenes to strike exclusive arrangements with top software providers and up-and-coming startups to edge out competitors, creating something of a cold war within the industry.
  • "The cloud vendors are in fierce competition, and it makes sense they are trying to get advantages through partnerships," Databricks CEO Ali Ghodsi told Protocol, as part of a story we published earlier this week on the new landscape.
  • "All cloud vendors want to offer deeper integrations," he said. "They want to give us access to APIs that might not be available to others and deepen the partnership."

That trend is apparent in AWS's new partnership with Salesforce. The arrangement will allow customers to use a single login to access both systems and enable users to create blanket data-access policies, among other features.

  • In a notable move, however, AWS said it won't strike as deep a partnership with any other providers.
  • "There is nothing in the language that says it was exclusive," said Peder Ulander, the director of solutions marketing at AWS. But "it's not something that we would do elsewhere … [and] the reality is we don't do a lot of these types of deals," he added.
  • While AWS walls itself off, Salesforce clearly has a multicloud strategy. In December, the company introduced Hyperforce, which will enable its software to work with any cloud provider. Salesforce has also had an evolving partnership with Google Cloud for the past several years.

The divide gets to the heart of the partnership craze going on in enterprise tech right now. Software providers see value in bundling products with hyperscalers, but ultimately want to sell their services across all the key infrastructure players.

  • SAP, for example, ended its preferred partnership with Microsoft earlier this year, an acknowledgement that customers wanted choice.
  • Still, engineering resources are limited even at the largest vendors. And that means the depth of the partnerships are going to vary.
  • That's evident at SAP: Despite a growing focus on Google Cloud, Microsoft remains its closest partner.
  • "We cannot do the same degree of partnership with every partner," said Stefan Goebel, the firm's head of strategic engineering partnerships. "At the end of the day, not everybody will be able to partner with everybody … [and] at some point in time you have to focus on those applications that you can make a difference with."

But it's not just the large industry giants. As the world of software-as-a-service explodes, it's easier to cross-sell products between large vendors and striking partnerships with independent service vendors (ISVs).

  • SAP resells BlackLine products. And Microsoft works with many, including Troops.ai and other startups.
  • "What customers are looking for now is a much deeper level of partnership," said Casey McGee, Microsoft's vice president of global ISV sales. "They're looking for us to deeply integrate the technology … and the expectation from customers is that we are much closer to the ISV ecosystem."

The proliferation of partnerships is forcing CIOs to probe deeper into the details. "Integration" is one of the biggest buzzwords in software right now, but that word can be many different things.

  • One vendor may use it to describe the ability to switch to different file formats. Others may mean the ability to transfer data easily between the two programs.
  • Even API-based connections, which typically offer a more secure link but can be spotty, require investments to maintain. And that cost can begin to add up.
  • "A lot of these tools, they don't do much standalone. They have to be integrated into other tools to show their value. And that can get cumbersome," said Linh Lam, the CIO for mortgage tech at the Intercontinental Exchange. And "it's not just from a dollars standpoint. It's a resourcing standpoint … to keep them up and running," she added.

Some corporate buyers see partnerships as a precursor to an acquisition. Given the surge in share prices for many enterprise tech vendors over the past year, all-stock deals like Zoom's bid for Five9 could become more common.

  • Whether there is a broader wave of consolidation remains to be seen. But one thing is certain: The partnership wave is bound to continue. And that means the evolving ecosystems are bound to get more complicated.
  • Ultimately, it'll be up to savvy CIOs to understand where to gamble on so-called "best of breed" applications and when to double down on a suite provider like SAP or Microsoft.

— Joe Williams

A MESSAGE FROM SINGAPORE EDB

Expanding to Asia can be difficult, but Singapore is here to help. The Singapore Economic Development Board's guide to setting up in Singapore has all the information you need to find the right partners, talent, and connections to succeed in Asia.

Learn More

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Join Protocol's David Pierce for a conversation with Mural's CEO Mariano Suarez-Battan and Calendly's Annie Pearl during our upcoming event: A Better Meeting August 17 at 10 a.m. PT / 1 p.m. ET Learn More

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Five Questions For...

Rahul Pathak, vice president of analytics, AWS

Schultz was on our recent list of 10 people defining the new database landscape. Read the whole list here.

What was your first foray into the world of databases?

I was lucky to be introduced to computers as a little kid. My earliest memory of working with a database was trying to write a simple billing application for my mom's medical practice when I was a 10-year-old.

What excites you the most about the future of the industry?

We're living at an amazing time when customers are reinventing their businesses with data and moving to the cloud. They're also using advanced techniques such as machine learning to create entirely new experiences for their customers. For example, one of our customers, Domino's Pizza, is using ML to predict when pizza orders will come in so they can start making them before the order is actually placed. This means they can have a pizza to your door in less than 10 minutes after you place an order, which is incredible if you step back and think about it.

What's your advice to younger technologists who want to build a career in this field?

First, commit to learning and staying current as our space evolves. You can learn something from any situation. Technology evolves so quickly, your knowledge will get stale if you aren't constantly learning. Second, whatever situation you're in, try to leave it better off because you were there. Be useful to folks around you. Finally, remember that the people you work with will have a bigger impact on your experience than anything. Try to find ways to work with people you respect and admire – it makes all the difference.

What's the biggest hurdle companies are going to face in becoming a data-driven enterprise?

Companies are dealing with more data than ever before, and want to put it to work in more ways than they have in the past. It's not just technology that is needed to make this happen. It's also people and processes. Companies need to create a data-driven culture, which requires support from their senior leadership teams. In addition, they'll need to adopt processes and technology such as ML that enable them to experiment quickly using data so they can learn faster and then deploy the experiments that work at scale.

What's one piece of reading that you think should be a requirement for those in the industry?

"Transaction Processing," "The Mythical Man-Month" and "Built to Last."

Around the Enterprise

A MESSAGE FROM SINGAPORE EDB

Expanding to Asia can be difficult, but Singapore is here to help. The Singapore Economic Development Board's guide to setting up in Singapore has all the information you need to find the right partners, talent, and connections to succeed in Asia.

Learn More

Thanks for reading — see you Thursday!

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