Seeking Alpha


Send Message
View as an RSS Feed
View thor34's Comments BY TICKER:
Latest  |  Highest rated
  • Video game sales stronger than expected in February [View news story]
    Dempsey. I agree. GME should do very well after the earnings call.
    Mar 24, 2015. 09:53 AM | Likes Like |Link to Comment
  • Netsuite's Massive Moat: Amazing Growth For The Next 5-7 Years [View article]
    Now you are just leaving out "Cloud" altogether with "proper SaaS and in-house", and that is great, because those two are very close to being the same from a technology standpoint, but are getting closer to understanding the difference between Cloud and Saas.

    Here is a history of dynamics from Wiki:

    Microsoft Dynamics GP is a mid-market business accounting software or ERP Software package marketed in North and South America, UK and Ireland, the Middle East, Singapore, Australia and New Zealand. It is used in many additional countries with partner supported localisations. It uses either Microsoft SQL Server 2005, 2008, or 2012 to store data. It is one of four accounting packages acquired by Microsoft that now share the Microsoft Dynamics Business Solutions brand. Dynamics GP is written in a language called Dexterity.

    "The Dynamics GP product was originally developed by Great Plains Software, an independent company located in Fargo, North Dakota....[1] It was one of the first accounting packages in the USA that was designed and written to be multi-user and to run under Windows as 32 bit software.[2] ...........

    The latest version of Dynamics GP 2013 (Version 12) was released by Microsoft on Dec. 19, 2012.;[3] For the first time the software has evolved from a pure client-server application to a web-enabled application.;[4] The full client will continue to provide a 'rich' content, since it's the only way to cover all the modules and third-party products properly in the application. The web-enabled client for now only covers the basic modules (Financial & Distribution in Phase 1, HR & Payroll added in Phase 2, Project Accounting in Phase 3, Customer support (Sales ?) in Phase 4 and finally Manufacturing in Phase 5). The various modules are going to be added over the course of the development between the initial release date and the next version of Dynamics GP (which is supposed to be somewhere in 2014). So it is expected the phases will be 3–4 months apart each."

    Please note the term "web-ENABLED" (and not web based) as this is the SaaS model that you seem to constantly refer to in your post. So what Dynamics has done is taken old client server technology, put it in a hosted datacenter, put a web browser front end on it, and called it SaaS, because they can "lease" the same solution to customers willing to pay for it over time. The Customization to make it work is the SAME because it is the same technology. They roll up the cost of the hardware and hosting into the pricing. This is the definition of SaaS that you use interchangeably with Cloud, accept as I have pointed out a few times, is incorrect. Its the same technology underbelly as in-house, they just put lipstick on it with a browser and instead of accessing it behind a corporate firewall, you access it over the web in a hosted datacenter (NOT a Cloud datacenter.) Therefor, SaaS is a pricing model. It is the same technology as in-house, accessible over the web, priced on some lease term.

    Cloud or platform as a service: Cloud providers install and operate application software in the cloud (Cloud datacenter like Raxspace) and cloud users access the software from cloud clients. Cloud users do not manage the cloud infrastructure and platform where the application runs. This eliminates the need to install and run the application on the cloud user's own computers, which simplifies maintenance and support. Cloud applications are different from other applications in their scalability—which can be achieved by cloning tasks onto multiple virtual machines at run-time to meet changing work demand. Load balancers distribute the work over the set of virtual machines. This process is transparent to the cloud user, who sees only a single access point. To accommodate a large number of cloud users, cloud applications are multitenant, that is, any machine serves more than one cloud user organization.

    The pricing model for Cloud applications is typically a monthly or yearly flat fee per user, making it look like SaaS above, so price is scalable and adjustable if users are added or removed at any point. This is the only similarity between Cloud and SaaS.

    Cloud allows a business the potential to reduce IT operational costs by outsourcing hardware and software maintenance and support to the cloud provider. This enables the business to reallocate IT operations costs away from hardware/software spending and personnel expenses, towards meeting other goals like running their core business. In addition, with applications hosted centrally, updates can be released without the need for users to install new software. Therefor, Cloud is a delivery method, not a pricing model.

    My main point above was that when companies are going to purchase a new ERP system, they will have to go through a cost justification process when looking at what to buy. When they do their homework, they will find the Cloud solution to have a better overall ROI and much lower TCO, with a guaranteed up-time (safety) lower cost to maintain, and will know they when their are upgrades, it will not break what they have configured (not customized) to run their business.

    What I am saying is that the marketing departments are pushing SaaS as Cloud to the point where even savvy investors like yourself can not tell the difference, but there is a huge difference. And as far as "that a cloud solution or something like that can be customized to produce different results without one having to go through similar work needed to customize an in-house solution makes no sense" you need to dig deeper. When you do you find out that it makes total sense, because that is exactly the advantage, because configuration done by a business analyst on the fly that writes to the database back end is the opposite of customization that has to be done to base code that has to be tested with every software upgrade. It will make sense if you look instead of saying "this makes no sense".
    Oct 11, 2014. 11:36 AM | Likes Like |Link to Comment
  • Netsuite's Massive Moat: Amazing Growth For The Next 5-7 Years [View article]
    Hi Paulo,

    Last one, I promise. Again, you just used Cloud/SaaS as the same thing. My Configuration vs customization was not addressed.

    Regardless, my 23 years in technology trumps your being a shareholder in a technology company, however, you don't have to take my word for it.

    Simply google "Saas vs Cloud computing differences" and there are hundreds of links that will support my argument.

    There is a reason that companies are buying cloud solutions over a SaaS hosted model. NetSuite will continue to win (more sales for NetSuite) in competitive deals over Dynamics, SAP, JD Edwards, JDA, and other Fake Cloud (SaaS hosted posing as Cloud). The reason is lower TCO, rapid deployment, ease of use, ease of changing, no breaks during upgrades. It is the technology that wins, not the company. Its cheaper, faster, better, and more flexible.

    Hope that helps, best of luck to you.
    Oct 10, 2014. 07:55 AM | Likes Like |Link to Comment
  • Netsuite's Massive Moat: Amazing Growth For The Next 5-7 Years [View article]
    Sorry that I could not break it down more. Didn't mean for it to be senseless for you, because I did take the time to try. I would suggest you dig deeper on understanding the difference between SaaS and Cloud. You may find that they are not the same at all. Best of luck to you.
    Oct 9, 2014. 04:32 PM | Likes Like |Link to Comment
  • Netsuite's Massive Moat: Amazing Growth For The Next 5-7 Years [View article]
    Hi Paulo,

    You are not getting the difference and it is a big difference. My guess is maybe you do not want to understand the technology difference as to rationalize some decision I am not aware of and that I do understand, but in the hope that you really want to understand the difference, I will take one more shot at it.

    Of Course being on the same code would not work for ERP customers. It didn't work for Seibel customers either (Salesforce you can configure with no changes to the base code, but its high adoption rate is because it is easy to configure or add-stuff that mirrors the business).

    That is why so many ERP solutions have been Customized (Change to code) in the past, to fit how they do business, because there was no easy way to configure until the Cloud. These Customization are largely the problem because NO two companies do business EXACTLY alike. Please take another look at the problems with upgrading SaaS hosted I outlined above.

    With Cloud they don't have to customize. Instead at the presentation layer (the browser that shows their stuff) they make it look like they want to, add fields, screens, workflows, etc that look like the way THEY do business. No change to code, just how it looks and what they see (Flexible like a yoga teacher) and theses additions (Created by the erp customer) are instantly report-able if the report writer is built in. This equals high adoption and happy end users (like the happy aurthor of the article. (So then, ERP is looked as a line item in an IT budget, rather than an accounting expense, but i digress)

    Do you see how valuable that is? This is why cloud will always win in a competitive sales environment. NetSuite vs Dynamics is a no brainier, Millions upon millions saved by a fortune 500 on implementation costs for a more flexible system that is infinitely scale-able, where the vendor will contractually guarantee a 99.98 percent uptime. Hundreds of thousands saved on IT and Hardware and support (yearly)and it doesn't break when you upgrade to a new version. No way traditional SaaS posing as a cloud solution can promise this.

    "Most want or need specialized modules" Agreed, advantage cloud.

    "Even in the old in-house hosted solutions being on the same code would bring many benefits to those clients - but it is the clients, themselves, who refuse it." You have an equivocation of the term "code" here, but Exactly, because they want flexibility, easy of use, and ability to change as the business changes over time-again, and add fields, workflows etc without paying a developer $500 an hour, again advantage cloud.

    Again, hope this helps.
    Oct 9, 2014. 03:16 PM | Likes Like |Link to Comment
  • Netsuite's Massive Moat: Amazing Growth For The Next 5-7 Years [View article]
    Hi Paulo,

    You are not correct. I know that companies that sell Dynamics, SAP, Great Plains, JD Edwards, JDA would like you to think that SaaS means Cloud. But again, SaaS is a pricing module, Cloud is a delivery method. Slapping a web browser on the front end may make it SaaS, it does not make it Cloud.

    Here are a few questions you can ask any ERP Vendor like the ones listed above that will expose fake cloud solutions:

    1. Is it delivered in a one-to-many model (multi-tenant). A true cloud solution must be multi-tenant.

    2. Will the ERP vendor agree to a different SLA with the client or Unique maintenance window for upgrades and patches. A true cloud provider has to ensure that all clients have the exact SLA's to make sure they take advantage of economies of scale.

    3. Is the solution hosted in a cloud data center (Raxspace, etc) or in a traditional data center? A true cloud product is fully virtualized, meaning that the software is not resident in a rack that contains just that software vendors solution. Instead, a true cloud solution is delivered on virtual servers running enormous clusters that is shared across hundreds or thousands of software vendors. Think of this as the equivalent of the electricity grid replacing self production of electricity with water wheels in the 1920's.

    4. Are upgrades completely free? This is one of the easiest ways to debunk a fake cloud solution. One of the core principles of a true cloud solution is that all the clients are on the same code. This allows true cloud solutions to upgrade ONE set of code and thoroughly test it with enough confidence to know that it will not break any of the client configurations. Fake Cloud or hosted SaaS solutions, will install each client on a unique set of servers, and then Customize the code. When updates are available to the core product, fake cloud and SaaS vendors have the massive job to ensure that the code works in EVERY unique client environment and that it does not break the customization (And something always breaks). This is very expensive and requires that the SaaS vendor charge for upgrades or worse, clients languish on outdated versions despite the fact that they are paying annual maintenance fees. (This also leads to client dissatisfaction that the author mentioned in the article).

    in 2000, Seibel was the king of CRM software. The technology changed when salesforce came on the scene and now saleforce dominated due to CLOUD. It seems reasonable to assume that ERP market will follow because of the technology of Cloud being a delivery method. Many companies are using cloud as SaaS as an interchangeable term, easily dismissing the difference in technology and scale. This is why you are incorrect.

    Hope that helps.
    Oct 9, 2014. 10:52 AM | Likes Like |Link to Comment
  • Netsuite's Massive Moat: Amazing Growth For The Next 5-7 Years [View article]
    I am a big fan of Cloud solutions, and it seems that adoption of core solutions like ERP's is happening at very large companies as well as small ones. (cost justification and ROI explained below)

    Through the comment section, SaaS and Cloud seemed to be used as interchangeable, they are not.

    Saas is a pricing model, Cloud is a delivery method. NetSuite is a cloud solution. Microsoft Dynamics and Great Plains are SaaS, not Cloud.

    In the Cloud, there is a difference between the presentation layer (making it easy to mirror the internal business process of the client, but easy enough to allow the client to make changes to the process as their process changes over time) and the database layer. in a Multi-tenant Cloud environment like NetSuite, ALL of the clients are on ONE instance of the code. If there are upgrades, this does not affect on the presentation layer. What the client has created is theirs to keep and the upgrades are seem-less, but upgrades don't break the presentation layer.

    Also, in looking at these companies (SaaS vs Cloud), it seems that the comments (and the author) uses the term "customization" or "customize" rather than "customize vs. configure" In a SaaS environment, customization is what happens to mirror a process. Meaning every time there is an upgrade, the new code has to be tested against the customized code to make sure it works. When this has to be done for EVERY client (expensive to the SaaS provider, zero cost to the cloud provider), there are "breaks" (every time). In practice, some clients can not upgrade, and eventually are several releases behind and one day will have to upgrade or abandon (Costly to the client) as the old versions are no longer supported.

    However, in a Cloud solution, it is configuration not customization, as the changes made are done at the presentation layer. Again, all clients are on ONE instance of the code. Configurations are easy to create and the automatically map to the database back end.

    There are many other benefits to Cloud like load balance, and virtual server provisioning when many are hitting the solution. Another is Rapid Deployment, Netsuite in months for complex implementations (Low implementation cost), SAP takes years (Very high implementation costs.) Once Implemented, SAP has to be "customized" to make any changes to the business process, Netsuite does not.

    Cloud is the value driver. Salesforce (cloud) completely took over SaaS and Client Server CRM solutions and now dominates CRM. NetSuite and others in the cloud will take over ERP, due to rapid deployment, low costs to install and maintain, with configuration available in a toolkit that allows a business analyst to configure (mirror) process rather than an IT consultant at $250-$500 an hour to hit an open check book.

    So, any company that would be considering a new ERP, will have to look at a cost comparison to justify the purchase. What they will find is that the SaaS costs for subscription and the Cloud cost look about the same, but the SaaS cost (annual subscription) are the tip of an iceberg. They will find that with SaaS implementation and customization costs are 50% higher, long term IT (internal) support will need to be hired, they may have to procure hardware, the hardware will have a cost to own/lease as well as the maintenance of the hardware, there is a cost to deploy the hardware, there may be training costs associated with the hardware. With the cloud, there is only the cost of the subscription and the cost to implement and configure (Much Much less expensive).

    I can not speak to the high valuation or justification for it, but when any company has to evaluate cost, I am certain that more and more will choose the cloud over SaaS.

    Hope this helps to clarify.
    Oct 9, 2014. 01:03 AM | Likes Like |Link to Comment
  • SeaWorld's Stock Can't Swim [View article]
    Did you see the wholesome former Seaworld employee's in Blackfish? Former trainers, who loved animals, admitted they were duped by management into unsafe conditions while at the same time making an argument for animal cruelty. PR Nightmare for the Brand. My wife after seeing this on netflix, nixed any future Seaworld plans. Will the crowds dwindle?
    Aug 16, 2014. 11:20 AM | Likes Like |Link to Comment
  • Ruby Tuesday: A Ruby In The Rough [View article]
    It is an interesting article, but please consider:

    1. RT has a store life-cycle problem.
    a. Site Selection: The locations for their restaurants seem to be chosen at whatever space happens to be open at the time they wish to fill a void. There is no apparent demographic that they want as a client, so the demographic that shows up at each location (when they show up) can be extremely diverse. Ask Darden's Red Lobster if this is a problem.
    b. Deal tracking: How is RT interacting with Landlords/brokers/GC's?
    c. Construction for new store development: RT seems to take longer to build out than most of their competitors like Ignite, Brinker, and way WAY more time than fast casual like Smashburger, fiveguys, Jack in the Box Etc. Even their stores in TN can take over a year. This is a planning challenge as new store revenue weeks are lost due to poor planning and a lack of a system of record or accountability.
    d. Lease Accounting/CAM/TAX/Ins... of the largest areas where landlords can take advantage of tenants is CAM. What is the cost savings to desktop audit CAM bills and what steps are being taken to find savings? Is there an Audit of Property tax? Also, the upcoming FASB changes will have a direct impact on RT looking at the leases as a liability rather than an expense.

    The article talks about the RE asset as a way to predict value, but I can see no way that RT has visibility into its second largest expenditure behind payroll. I can not see investing long term into a company that doesn't know what it has, and is making no plans to correct it, regardless of the potetnial value of the pad the store is sitting on.
    Feb 28, 2014. 02:51 PM | Likes Like |Link to Comment
  • J.C. Penney Can Make A Profit During 2014 [View article]
    Another positive sign for JCP is that they just inked a deal with Plano based Lucernex to get all of the store lease/rent/cam/tax data into a new system. This will allow greater oversight into Subtenant billing and pass through costs (Sephora) and will provide visibility into Real Estate costs.
    Feb 27, 2014. 09:02 AM | 2 Likes Like |Link to Comment
  • Where Are The Facebook Bodies Buried? [View article]
    I'm not a fan of FB, but they have done a good job of forced use. I can not comment on local digital media articles or even my favorite players on ESPN without a FB login, which I still don't have. On a long enough timeline.........who can say?
    Jan 27, 2014. 08:57 AM | 3 Likes Like |Link to Comment
  • Facebook Is About To Destroy Its Business [View article]
    Yes, except that FB can simply offer, for a small monthly fee, their users the ability to get access to FB on mobile without the adds. You know its coming.
    Feb 18, 2013. 03:49 PM | 5 Likes Like |Link to Comment
  • Facebook Insiders Play Public Market For Fools [View article]
    I used myspace 10 years ago
    I used webvan 10 years ago
    I used ecolor 10 years ago
    Nov 28, 2012. 04:35 PM | 1 Like Like |Link to Comment
  • Facebook Insiders Play Public Market For Fools [View article]
    Nov 28, 2012. 11:18 AM | Likes Like |Link to Comment
  • Shares of J.C. Penney (JCP +3.3%) trade higher after CNBC reports Black Friday sales were strong at the retailer. Is this the type of knee-jerk stock move that Barry Ritholtz is vociferously warning about being a media fantasy? [View news story]
    answer: Yes
    Nov 28, 2012. 09:57 AM | Likes Like |Link to Comment