In this episode of ASUG Talks, we talk with Vinnie Mirchandani, founder of Deal Architect and the prolific author of the “SAP Nation” books. Vinnie walked us through how he got into writing in the first place and his thoughts on the changes in the SAP ecosystem.
ASUG Talks: Candid Career Conversation with Vinnie Mirchandani
Jim Lichtenwalter:
Okay. All right. I'm excited to be joined today by Vinnie Mirchandani, the CEO of Deal Architect, Inc. Vinnie, thank you so much for joining me today.
Vinnie Mirchandani:
Thank you for having me.
Jim Lichtenwalter:
So Vinnie, I want to start off with your time... You have a very storied career. You've been in the IT landscape industry for a while, and I'm excited to dive into that, but I want to start with your time as a consultant at PWC, where you started your career. We'd love to know how did you wind up in that role and how did it prepare you for what you're doing now?
Vinnie Mirchandani:
So out of school, I wanted to go into consulting. It was a young profession back then, technology consulting, but I joined an accounting firm, Pricewaterhouse. And back then they had you got to pay your dues. You got to go to the audit side. You got to get your CPA. Oh, by the way, it's going to be good education. You're going to learn about business processes and all these audit clients. It was about half true what they told me. A lot of it was drudgery, and auditing is not much fun. So I couldn't wait to get out of that and get into consulting.
Vinnie Mirchandani:
Eventually had my chance. They said, we've got good news and bad news for you. You got an assignment in Saudi Arabia. This is not exactly a plum assignment. You wanted to get into consulting, and I jumped at the opportunity. And the first project was we were putting in packet software for a bunch of different oil and gas company operations in Saudi Arabia. So that was a great start for a young consultant. And it introduced me.
Vinnie Mirchandani:
Back then people used to custom develop a lot of functionality. So that was my first exposure to packet software. And since then I've done nothing but packet software, SAP being obviously a very dominant form of package software. So no, it was very good introduction and allowed me to see a lot of different products, ended up being my Gabriel Gartner and all the things I've done since.
Jim Lichtenwalter:
Let’s get back to your time as a consultant and then obviously, your time at Gartner where you were an analyst. Where were you? Were you at PWC or were you at Gartner when you first encountered SAP? When did you first encounter SAP?
Vinnie Mirchandani:
I first encountered SAP in 1989. So part of what I was doing in London was helping the UK operations get into packet software. So they had just put in a data center in the Docklands area. I don't know if you... Docklands were undeveloped back then, but it's become a major financial hub center. And they put a data center there and it was like nothing there in the data center. Right? It was like people were rattling around in that building, nothing there. So they came to me and they said, hey, look, Vinnie, why don't we put two pieces of software here so we can do demos, we can do prototyping, and so on. Pick an American software and pick a European software.
So the American software was pretty easy. McCormack & Dodge was a dominant vendor back then. And so we said, we pick McCormack & Dodge. European, we go, my God, what are we going to find? So somebody said, hey, there's this promising vendor called SAP. So I had two teams set up demos and prototypes on both pieces of software. The US one, that team loved me because it was like I had done it before, I could coach them and so on. SAP, the team hated me because not only did I not know much about it, all the manuals were in German. There was no support in London. Oh, my God. The contrast was quite...
But you could see back then it was a very, very comprehensive system even back then. And you could see the promise. So when I came back to the US in 1990, I said, guys, we've got to invest heavily in this piece of software.
Jim Lichtenwalter:
With that in mind, this is, I guess, an epic question. But since you first encountered SAP back in 1989, what are the main ways SAP as a company-
Jim Lichtenwalter:
What are the main ways SAP as a company has changed and its focuses have changed? What are some of those pronounced changes that you've seen over the years?
Vinnie Mirchandani:
Oh my God. That's 30 years, right?
Jim Lichtenwalter:
Yeah.
Vinnie Mirchandani:
It's probably gone through five or six iterations. Back then the product was green screen, ugly, ugly, ugly. I mean, very difficult to navigate. Some of the help was still in German. So from a US perspective, it's a miracle they've done as well as they did. To their credit.
I mean, they made a lot of investments to make it much more usable for the US market and so on. But that was one iteration, right? At Gartner, I saw their second iteration, which is people were looking for a Y2K solution and they were looking for a global solution and they were looking for an enterprise wide, not just a one module at a time solution.
And so they really took off like a rocket. So I joke with SAP folks, I go, "I probably sent you a thousand customers in that timeframe. You owe me a lot of commission for those five years." I would say that was the second, probably the most impactful of the iterations they've had.
I would say the next 10 years, verticalization became a major focus. So the different IoS solutions started to come out. They started to become much more internet savvy, because they were very, very mainframe up to that point. So that probably was the third iteration.
The fourth iteration was when McDermott started making all the cloud acquisitions, because by now they were looking data in that they didn't have a cloud solution, multi-tenant solution and so on. And so all the acquisitions you started to make of success factors and so on would be another iteration.
And by the way, around the same time they were pushing HANA very heavily. So that was another part of that stage. And then in the last few years S/4HANA has been a major focus, along with the cloud applications maturing, becoming more integrated and so on.
So I would say that's the iterations I've seen them go through. And I'd like to see them go through a couple more. So we talk about that. I mean, I admire companies that can reinvent themselves that often.
You'll talk to some people and they'll say, "Oh my God, SAP's such a boring mainframe, dirty, ugly UX company." I just give you a very nuanced view of it's been evolving every five years.
Jim Lichtenwalter:
You said that you would like to see them take some other iterations. Do you have an iteration that you would like to pitch on this podcast?
Vinnie Mirchandani:
No. I mean, in the last book I wrote about them. One of the things I brought out was I used the example of how the US expanded. When Jefferson bought the Louisiana purchase, it doubled our landmass.
And then the different pioneers, the Oregon Trail, the Mormon Trail, the 49ers just grew and grew and grew gradually, right? The slogan back then was manifest destiny. So my book actually, the subtitle was manifest destiny, because that was like SAP.
You've done great, but there's so much more you could have done. Facebook and Google didn't exist 15 years ago. Google's become $100 billion company. You missed the whole digital marketing opportunity.
Look at Amazon or Microsoft Azure. The infrastructure has a service opportunity. So I had several hundred billion dollar markets that SAPs kind of like. That's not us or it'd be too difficult. Something has kept them very focused, which in a way is good. But then if you miss out on a hundred-billion-dollar market.
Jim Lichtenwalter:
Yeah. You mentioned your book. I think that's a nice transition to sort of the next part of our conversation that I want to have SAP Nation. Beyond SAP Nation, you're a prolific author in this space and writer. I'm also a writer. So I like asking writers this question. What got you into consistent professional writing? What was sort of your writing origin story?
Vinnie Mirchandani:
I think it was a moment of madness. Every time I finish a book, I go, "Never again." I've written seven books. You really have to be very passionate. It takes a lot of work to be able to deliver one.
Kind of like when I left Gartner, I did a startup and after three years kind of we hit the dot-com bubble and it failed in the end. So, I had to make a decision whether I go back to a job or start another company. And I started a Deal Architect, which is partly an analyst firm, it's partly and advisory firm, it's partly a publishing firm.
And so, I said, well, if we're going to call ourselves a publisher, we need to publish something. So I started to write a couple of blogs in 2005. And now blogs are relatively easy, right? It's one or two pages at a time.
But if you look at what I'm made up for, in the 15 years, I've written about 7,000 blogs. So at the end of five years, I was writing so much and somebody said, "Vinnie, why don't you write a book? Take this and make a book out of it."
So that's when the moment of madness came. A book is quantum more difficult. Just because you've written blogs, it doesn't mean that translates into a book.
Jim Lichtenwalter:
I'm sure a lot of our listeners are at least familiar with SAP Nation, but for those of them who aren't, can you tell us a bit about SAP Nation and how the project and the book itself came about? I know there have been a few different versions too.
Vinnie Mirchandani:
Absolutely. Absolutely. Again, evolution. There have been three episodes of SAP Nation. The first one came about, SAP wasn't happy that it came about was, having come from Pricewaterhouse, I understood the whole systems integration game. When I was a Gartner, I was already starting to see integrators, the quality wasn't very good. I mean, it is very difficult to scale people's businesses because everyone is so different. The quality wasn't very good. The overruns were starting to show up. This is already in the late '90s. Every chance I got to sit down with SAP, I would say, "Guys, you need to pay more attention to this." They were like, "Well, Vinnie, it's not our competence. I mean, come on. It's not that bad." It was always they would always be polite to their partners. I said, "I don't expect you to be hostile to them, but put guardrails around them because really it's costing your customers a lot of money and a lot of quality issues."
Well, for 10 more years, so this was in 2000 I left Gartner, 10 more years as an advisor, I was seeing that I was helping clients procure SAP application management or SAP upgrades or SAP hosting. I was seeing all the quality issues continue. In 2009, I had an opportunity. A client said to me, "Estimate for me what the opportunity is in the SAP ecosystem." I built a very detailed model of how many people does Accenture have? How many people Ernst & Young have? How many people does IBM have? How many staff support ABAP for customers? I mean, so it was a very elaborate model. How much have people spent on hardware? How much have people spent on telecom in the SAP world and so on?
When I crunched the numbers, I was shocked. The cheapest of the versions, I'd had different assumptions. The lowest cost assumption model made SAP Nation if there is such a thing, 48th largest GDP in the world. I go, "This can't be right." I looked at it every which way, but I went to SAP and I said, "Guys, I'm going to write a book about this, but I want you to validate it. And, I'll give you 30 pages at the end. You guys I want to edit it. It's your voice. Tell me what you're going to do to change it." I thought it was fair. I gave them to validate it and tell us what you're going to do. They did take me up on the first one. They have a couple of strategy consulting folks, ex-McKinsey folks who looked at it. They nitpicked a little bit, but they said, "Look, Vinnie. I mean, can't argue with you too much. It's your assumption. The numbers look okay."
The second part they kept saying, "Yeah, yeah, yeah, we'll settle. They didn't settle." I don't think they thought I was going to publish this, honestly. But when it came out, all the panic buttons went off. But I had to keep telling them, "Guys, this is not about you. This is about your ecosystem. Don't take this personally. This is meant to just showcase how much money is being wasted in the ecosystem." I had strategies for customers on how to reduce the spending, and how to ring-fence around SAP. I had a whole bunch of them. I had a lot of customer case studies of people who had made some progress toward controlling their spending.
The book was pretty successful, most customers bought it. Some of them wished I hadn't written it because their CEOs were saying, "What the hell is going on? Why are you spending on this?" But most of them appreciated the fact that I had shown them how to try and manage that cost. SAP hated it. They were like, "Oh, you're making us look bad." I was like, "Guys, it's taken me 15 years to tell you this. I didn't spring a surprise on you." That was the first one. Around the time they had announced S/4HANA, but they missed their opportunity to talk about it in the 30 pages. I didn't know it was coming out. Within three months of my book coming out, they announced it. I said-
Jim Lichtenwalter:
Oh, no.
Vinnie Mirchandani:
I released SAP Nation 2.0, which was my view on how mature S/4HANA would be and how long would it take and so on. What I did there was I said, let me compare to other next generation products, Oracle Fusion, Microsoft had its own. It's a look at four or five other comparable software vendors and how long it took their next-generation products to mature. I wasn't far off. You could see S/4HANA is still going through its paces. It's taken a while to become mainstream within the SAP customer base. But, that was more of a comparison. It was more of showcasing of what other vendors had done.
SAP Nation 3.0, which came out about four years ago, was much more generous to SAP because this reflected SAP. I avoided the ecosystem. I said, "That is still not solved, but I'm not going to focus on that. I'm going to focus on all the good stuff SAP has done around S/4HANA, around its cloud properties, around different products they don't talk much about, asset information network and so on." SAP helped me get a lot of customers at ESA. Jeff introduced me to a number of ESA customers who became case studies in the book and so on. It was a much more positive book about SAP.
Some people were very disappointed. Some people thought it would be another hammer SAP book. "What happened to you, Vinnie?" I'm like, "Why should I always be nasty? SAP is a very positive company that does a lot of good stuff."
Jim Lichtenwalter:
I’ve got to ask, is there a part four in the works?
Vinnie Mirchandani:
Well, there is a version that's going to come out, but it's not going to be part four. That's all I can see for now. I'll be able to tell you in a few months what's coming up.
Jim Lichtenwalter:
When you're ready to talk about it, let me know and you can come back on the podcast and talk about it.
Vinnie Mirchandani:
I'll be happy to. I'll be happy to, but let me just as a glimpse, it is looking at what has happened in the last three or four years. The world has gone through a lot of shocks. We've had a digital transformation shock in some companies, I mean, dramatically. I mean, when you change business models, when you dramatically do transformation, it's a shock to an enterprise. COVID has been a huge shock to different industries. Climate change is affecting a lot of industries in terms of circular economy thinking, sustainability and product design. I mean, every aspect is being challenged. Now, the whole energy transition as a result of what's happening in Ukraine, that's a huge shock to the global economy.
Given all these shocks, what I'm working on is looking at how is that affected industries, technologies, processes, and how are SAP customers faring, given all these shocks. Actually, SAP, if I were to remove some of the suspense, SAP is such a global, such a cross-industry, such a technologically-savvy company that actually SAP customers are coping better than many others.
Jim Lichtenwalter:
We've found that, too, in our Pulse survey that we do every year. The Pulse, the SAP customer. I don't want to make you tip your hand too much on this new upcoming release, but out of curiosity, purely from a writer's perspective, obviously Russia invaded the Ukraine, was that a moment for you when you were writing where you were like, "Oh, man, this project has changed, and I have a whole new edition that I have to add in?"
Vinnie Mirchandani:
No, but I think two or three things became very, very, very acutely ... Came into focus. We are going through this back and forth on fossil fuel is bad, and we need to move to renewable. Well, I've been trying to tell anyone who listened to me, only about less than 10% of the world's energy is fueled by renewables. About 80% is fueled by fossil fuels. Coal, gas, and oil. And 10% comes from nuclear, geothermal, hydroelectric, and so on. And so my point has been till the bottom two can scale up to 50, 60%, we should not be demonizing fossil fuels. Sure, there's fossil fuels and they're fossil fuels. You can demonize coal, maybe oil, but natural gas has been a pretty clean solution, right?
Very few people realize US greenhouse gas emissions in 2020 were the same as in 1990. Not because you're a clean tech leader, but because our utilities have moved away from coal to natural gas, right? So I think we'll have to be a lot more pragmatic about we are not there in terms of renewables or other alternatives. How do we make that transition? That transition becomes hugely important, and we can't politicize it. We got to plan for that very, very carefully.
Jim Lichtenwalter:
SAP Nation--a project like that--it sounds like you start with a central thesis, which is great to start with a thesis like that. How do you go about tackling a project like that though? What are the specifics? Do you sit down and sketch it out? Do you already have it mapped out in your head?
Vinnie Mirchandani:
It evolves. The research takes about six months on a given book, and it evolves quite a bit. But my style has been case study heavy. So every book ends up with 15 or 20 case studies, so that is often the gating factor. Not so much the team, it is will I be able to get good brand names, a variety of industries, a variety of countries in the case studies?
If somebody brings those to me ... I've written a book for a CEO where he organized all the case studies. It was much quicker. I did it in three months for him. So I think the team comes together, but for me, the meat on the bones is can I get customers to passionately talk about what they've done? Because my voice, I'm an analyst. Of course I can talk forever, but it's boring stuff. When the customers talk, it's much more in the voice of what the reader wants to hear.
Jim Lichtenwalter:
Vinnie, last question for you. We're running out of a little bit of time. I'd like to give you an opportunity to talk a little about Deal Architect Inc. Tell us a little bit about what the organization is and what you all do.
Vinnie Mirchandani:
So Deal Architect is partly an analyst firm. So I get invited by SAP, Workday, Salesforce, most of the leading enterprise vendors to their events. I get briefed by them a lot. And a lot of smaller vendors do the same, have a video series where I let them present in what's called the analyst cam. So in different ways, I get information flow from most of the major software vendors and outsourcers. So that's my analyst role.
I have an advisory role, where we work with both vendors and buyers typically in next generation stuff. "Vinnie, what are you seeing that is going to be different for our industry?" Or "We're looking at next generation automation. What should we be looking at from a strategy perspective?" Or buyers will hire me to do due diligence. Some attorneys have hired me to do expert witnesses, testimony for litigation. So the advisory role tends to be ... It's hard to just say, "Hey, look, I only do this." It tends to be projects, and it tends to be very, very focused on the individual client's needs. And generally pretty high value for 3, 4, 6 weeks of work. That's a typical project.
The third one is publishing. So couple of blogs, and I've written seven books so far. So that takes a fair amount of time. Now, you'll say, "When do you sleep?" Actually, these feed each other. I will not publicly ever disclose if I do something confidential for a client. I'll never share that publicly. But I can glean some information for that. That may come up in the blog. The blogs feed the books.
I always go back to vendors and say, "Give me the case studies for books." So it's kind of [inaudible 00:37:51] circle. They feed each other. Different ways of distributing content, if you will. Different forms of content, if you will. Some of them shows up as advice. Some of them shows up as printed books. Some of them shows up as video. There a lot of different channels that the intelligence I gather gets out.
It's nice to get paid. In the social media world, unfortunately, everybody expects everything for free. So we got to do some balancing on what goes where.
Jim Lichtenwalter:
Yeah, certainly. Vinnie. I really do appreciate your time here today and being able to talk us through your career and what you do, and your authorship of a lot of great books. So thank you so much for joining me.
Vinnie Mirchandani:
Thank you for having me, Jim.