Application Lifecycle Management in the Cloud: As SAP Moves Forward, Microsoft Drops the Ball.

One of the things I hate as an analyst is to see good a product development effort lost to the vagaries of management inattention, and my latest candidate is an old favorite, Microsoft LifeCycle Services, or LCS. At the time of its release on 2014 LCS was a truly innovative and forward-looking service that literally wrote the rulebook on application lifecycle management in the cloud. Today LCS is an afterthought, relegated to a splashy home page that belies the inattention this product is getting.

The loss in this case is even more acute because during the time Microsoft Dynamics cleaned house of most of its senior management and left LCS bereft of a strong stakeholder in the Dynamics organization, an important software and cloud platform rival (and partner), SAP, saw the same opportunity and got working on their own cloud-based ALM service. The new SAP service, Cloud ALM (aka CALM, though I’m not sure that acronym will make it past the brand police at SAP), will have its first public announcement sometime later this month. The plan is to roll out CALM’s capabilities over the next two years, and in the process offer its capabilities across the entirety of the SAP cloud portfolio. That alone puts it ahead of Microsoft’s LCS, which as far as I can glean is only intended for Dynamics AX 2012 and its successor, Dynamics 365 for Operations, despite plans once upon a time to extend LCS to Dynamics’ CRM offerings.

It’s possible that Dynamics has bigger plans for LCS – and no doubt, Dynamics should have bigger plans for LCS – but as far as I can tell either those plans don’t exist or Dynamics doesn’t think they’re important enough to communicate to customers and partners. I’ll go with the latter reason, and it’s a good example of what I feel is a lack of appreciation among the Dynamics leadership of the business value that products like LCS can bring to their customers and partners. As well as a lack of appreciation of the competitive value LCS could have in the increasingly complex battle for customer success in the cloud. As someone who thought LCS was an important breakthrough that could catapult Dynamics and Azure to the top of the enterprise cloud heap, this lack of appreciation is just a damn shame.

Meanwhile, SAP’s Digital Business Services team has no such problem understanding the value of CALM. DBS knows that cloud customers are struggling to have successful implementations, particularly as the partners that really know cloud and enterprise software are stretched too thin and the those that don’t are doing a bad job. (See for example Jarret Pazahanick’s wild west crusade in the SuccessFactor’s ecosystem. Jarret has an seemingly endless Twitter feed mostly focused the SuccessFactor’s market, which is frankly no better or worse than any other major cloud market, including SalesForce.com, Infor, and Workday, among many others.) SAP also gets that the telemetry that the cloud brings can inform an enormous range of business and technical functions, and the value of deploying those data in the service of customer success is incalculably large. And they know that in the multi-front war for the cloud – against Azure, and AWS, and Google – services like CALM can provide a huge reason to go with SAP’s Cloud Platform instead of those of its erstwhile competitors/partners.

Over in Redmond, it would appear that few on the Dynamics side, much less on the Azure side, understand the true value of LCS. The lack of visibility, a strategic roadmap, and an executive stakeholder, was clearly evident at an analyst event Dynamics held earlier this year: nary a mention of LCS crossed the lips of any of senior leadership. It’s the same on the conference circuit: Back in July, Microsoft’s Inspire partner conference did manage to have a single session that talked about Dynamics’ ALM (out of a total of 1552 sessions), though it’s not clear from the catalogue whether LCS was going to be mentioned or not.

Not pushing LCS in the partner community is a particularly huge miss for Dynamics. Partners are both  the problem and the solution to customer success, and tools like LCS allow partners to both step up their quality game as well as differentiate on the basis of the methodologies they bring to the customers. When LCS was first rolled out the idea was that partners could develop custom methodologies specific to an industry or geography and deploy them in LCS, while Dynamics could use LCS to make sure partners were adhering to the rules of the cloud game and ensuring that their implementations wouldn’t engender unintended and costly support problems when they went live in Azure. It’s possible there’s still somebody at Dynamics who thinks this way, but if they are they’re not thinking it out loud.

The inattention to the business value of LCS is at least consistent.  There was a lone LCS session at last summer’s Dynamics Business Applications conference, and judging from the replay I heard, it was well-attended. But the session was all about environment monitoring, killing rogue processes, and other deeply technical issues that, while important, effectively avoided the larger discussions about LCS’ value. The different roadmaps shown to the audience reflected this sys admin/dev ops viewpoint, and the overall session pointedly avoided any high level discussion of what LCS actually is (despite an apparent show of hands that revealed relatively few people in the audience understood LCS), what its business value represents, how it helps partners and customers compete, and how it serves a broad range of stakeholders.

And that’s about all I could find from the public-facing events Dynamics has had or will have this year. Indeed, later this month Microsoft will be holding two major enterprise software events, Envision and Ignite, neither of which have any sessions devoted to LCS or ALM. Again, it would seem pretty clear that Dynamics’ senior leadership thinks this is a deep techy tool with little business value, kind of on the order of Sharepoint (which actually gets tons of conference love), and buries it accordingly.

(I would argue that Dynamic’s strategy to focus its marketing efforts on PowerApps, Flow, Power BI and other citizen developer tools is all about Dynamics’ leadership trying to take the company’s impressive personal computing chops and apply them to the enterprise. IMO they’re doing this not because it’s necessarily the best foot forward for enterprise software but because they don’t really grok the enterprise software market in all its complexity.)

SAP has no such problem with the concept of why cloud ALM has a huge value across the enterprise. For better or worse SAP has been in the on-premise ALM space for years, having cobbled together a bunch of ALM tools into its somewhat bedraggled and overly complex on-premise Solution Manager ALM tool. I’ve been a critic of SolMan’s complexity and cost for years – it requires its own costly and time-consuming implementation to get the full product up and running. But there’s no doubt that the experience SAP garnered over the years with SolMan has informed the development of CALM, as well informing a deep appreciation of what CALM can bring to the SAP ecosystem.

It’s also important to note that too often the competitive go-to-market message in the cloud, particularly among cloud platform providers, is about speeds and feeds, virtualization, elasticity, and cost. This focus has made much of the cloud platform marketing wars a virtual race to the bottom, and has ignored the need for high-value services that speak to the needs of the entire enterprise. ALM in the cloud is a great example of such a high-value service, and its one that I imagine will be much more differentiating for SAP (and Dynamics, if they ever get their act together) than much of what passes for competitive differentiation in cloud platforms today. Customer need this “single pane of glass” to ensure their cloud processes are working efficiently and effectively, partners need cloud ALM to keep them honest and help them learn how to do a better job, and vendors need this to help end the growing problems with poor customer success rates and renewal rates that are threatening their revenues and profits.

Dynamics’ decision to leave this opportunity to whither on the vine is unfortunate, but their misfortune is SAP’s opportunity. CALM has the potential to really change the game for SAP, particularly as it labors to integrate and synchronize the plethora of cloud properties it has acquired over the years, and overcome the partner ecosystem problem that bedevils the entire enterprise cloud market. ALM may be one of the most unsexy corners of the market, but getting ALM right will probably have a greater impact than most people realize. Even those that should know better.