Buying into the buzz - Pega CEO says companies repeating past mistakes in the cloud

Pegasystems CEO Alan Trefler took to the stage at the company’s annual user conference in Las Vegas this week to take a swipe at some of the industry’s leading cloud vendors, claiming that their customers are often repeating the problems that they made in the past because they are buying into buzzwords and marketing.

Without mentioning any names on stage, it was clear that Trefler doesn’t believe that some cloud buying customers are thinking about the ‘big picture’ (the integrated business outcomes) when snapping up their new cloud platforms, as he seems them still operating in isolation from the rest of the business.

In fact, in a pre-brief on the day before the keynoteTrefler said something along the lines that the biggest cloud vendors could only ‘dream of the capabilities that Pega can offer’.

As I noted last year, Trefler is pitching to the large, complex enterprises that have inherited a plethora of legacy systems over the years. He sees Pega as an alternative (either cloud, on premise or both), which can operate as a mesh and bring all of these silos together for a single business view and is designed around the business outcomes.

He calls this the ‘model driven approach’ - whereby you design your systems around the top-level business outcomes, based on the customer lifecycle, which the system then dynamically generates the code and UI from. This means that as technology progresses or as you move into new deployments, you don’t have to think about the code, but only what it means for the customer.

It’s a pitch that isn’t as simple as some of those coming from the cloud vendors - but that’s to be expected from Trefler, given that his background is in engineering. He doesn’t believe that customers with complexity will want a simple marketing pitch, he argues that they want to know how they can pull all of their systems together and future-proof them for any changes in the tech landscape.

And ultimately it’s his focus on the customer that Trefler believes will win out, even if the pitch is not one that might appeal to the casual business user. During the keynote Trefler said:

Ultimately it’s really about doing the right things for the customer. Doing them today and doing them in a way that lets you do it tomorrow. Make sure you understand your customers, make sure you understand your prospects, make sure you retain them, grow them and build new ones in a world that is increasingly competitive.

You’d think that everyone would agree with this. But you don’t have to look far to realise how distant most companies are from being able to achieve what they want with their clients.

Buzzword bingo

Trefler said that he felt that a lot of buyers were being “misdirected” and that it was becoming too easy to fall into the latest fashion or fad. He rightly argued that understanding your customers isn’t a “one day thing”, but takes a lifetime of “refinement and understanding” and an ability to engage with them in lots of different ways (complexity).

He said:

If you actually take a look at what’s really happening, we are a far way off from that. We really risk reimplementing disastrous mistakes of the past. Organisation after organisation talks about the customer, but then runs off and implements things in silos. Creating what are in effect point solutions that don’t have an ability to really address a customer journey, a customer lifecycle, in a meaningful way.

Trefler said that this is increasingly being seen in companies’ approach to the cloud, where he described it by saying businesses need to create a ‘layer cake’ design, rather than isolated ‘cupcakes’. He said:

Cupcakes are little silos, but what you need to do is not have cupcakes. You need to have things that understand a customer journey. And putting a cupcake in the cloud isn’t going to make it any less of a cupcake. You may be able to serve that cupcake quicker, but you’re going to live with the consequence of that cupcake for a long, long time.

Organisations are also back to replicating data. Today we feel better about it because we call it a data lake. But the facts are the facts, if you’re actually replicating data so that your cupcake has something to run on, you are not operating in a world where you are able to do that real-time, end-to-end immediate insight. You’re just operating in a new version.

Does this feel and sound like the future? Not to us. Not to us whatsoever.

Model-driven

Ultimately, Trefler was keen to push Pega’s idea of a model-drive approach to design. I’ve found a blog from a Pega architect that explains it quite well, which can be read on LinkedIn. As you can see it’s not something that every business person sitting in the audience will immediately ‘get’ and it’s definitely not a soft marketing pitch. However, if it works in practice as described, it should actually strip out a lot of complexity for companies that operate from a number of disparate, disaggregated systems that don’t currently think about integration for the benefit of the customer multi-channel journey. He said:

And then finally we see people burying their critical business knowledge, their rules, their processes, burying them back in code again. Buried in code means buried. The interesting thing is that a lot of these so called modern systems represent the worst form of vendor lock-in that you ever imagine. Because not only can you not change them after a while, you can’t see what they do.

It’s got to be more than just buzzwords. It’s got to be about the concept, about the next approach to software. Software needs to have a concept, it needs to have an architecture, it needs to have the right stuff to enable businesses to engage with it and enable their customers a way to engage that is cohesive.

This brings us to Pega’s vision and one of our core operating principles. Yes it’s about software. But modern software is about the model. It’s about being able to create a model of your business, of what you want to achieve, being able to have that model accessible, not just by IT, but by business. Not like new traditional ways in which the business runs off and does something and IT doesn’t feel engaged.

It’s the thing that we see as empowering organisations to do fully what they need to do with customers. You need a customer experience that crosses those boundaries, crosses those silos, that is able to be tailored to the customer. And you need end-to-end efficiency that makes that possible, because today we are all under cost pressures.

Trefler said that whilst the cloud has been good in that it has put pressure on traditional IT, it has also led people to believe that it is the answer to all problems, when in fact, companies should still be thinking about the top level approach to how they do business. And how all of their systems are going to work together to achieve a good customer experience.

This falls into four areas for Pega - federated systems (a collection of systems that are able to operate as if they were one), outcome orientated (how are you serving you customer?), agility (all parts of the business and IT working together) and a beautiful user experience.

From what I’ve heard from customers today at the conference, Pega is playing nicely to a certain group of

big enterprise, complex organisations that have adopted huge numbers of legacy systems over the years and need a platform that will let them start again (redesign their customer experiences), without actually starting again. In other words, Pega enables them to glue it all together and build something that is far more efficient on the back-end, whilst being far more palatable for the customer on the front end.

Pega believes its model-driven approach gives these organisations the capability they need to attack ‘digital transformation’ head on. Trefler said:

Getting back to what this all means, we talked a little bit about the world of buzzwords and the stuff that is coming. This isn’t getting easier. It’s not like this is the final list of buzzwords and new ideas. I’m blown away by the speed at which we can take this highly complicated environment and make it even more complicated, with more gibberish and more Github projects.

All of which is operating at extremely low level of abstraction, is operating miles and miles from the way that business people need to think about their business and their customers. What Pega is committed to is having a model that today can allow people to write, author and build incredibly sophisticated applications with absolutely no code.

As these changes occur, we are able to change the way that the model generates the code. So as HTML5 becomes HMTL6, you don’t have to change your applications, it’s incumbent on us to build models that are powerful enough to bring you along that journey. Model driven is about being future-proof. It’s about making it so that you can concentrate on the business aspects and still have state of the art, no compromise technology.

My take

An interesting first day with Pega. The morning was pretty light on the news announcements (an expansion to the Pega app exchange, some big win customer announcements) - but nothing significant about the platform and the technology itself. And I think that’s because Pega is refining its pitch and is getting some legs out of the Pega 7 platform and its redesigned cloud architecture.

As I noted above, the pitch from Trefler isn’t necessarily going to appeal to the buyer that may be buying some of the other more ‘populist’ clouds out there - but it’s a pitch that is going to appeal to an organisation that is struggling to get to grips with what this whole idea of digital transformation means. It allows them to keep their existing systems and build something that is better for the customer, which ties everything together.

I wouldn’t go as far to say it’s ‘lipstick on the pig’, as I’ve heard from some customers today that are doing some very interesting things with the platform that are impressive by any measure. However, the question has to be asked as to whether Pega can appeal to companies outside of the ‘incumbents’ in the industry.

However, having said that, Pega has some big names speaking here this week (I will be writing up a few case studies) and we have a sit down with Mr. Trefler himself - so plenty more to come…