Posts Tagged ‘Obama’


Chancellor Angela Merkel of Germany is in trouble.  So is David Cameron, Prime minister of Great Britain though not as much.  Merkel has an election looming and both have been caught on the wrong side of the most important political-economic issue of the generation, the continuing depression and joblessness plaguing Europe and to a lesser degree the United States.

Economists disagree about what to do.  We often call them political economists in part because their judgments and advice are sometimes couched more in political terms than in the social science of economics.  Thus we have two schools of thought on how to recover from the economic crash.  One school, holding sway mostly in Europe, demands austerity while the other, a mostly American driven idea, call for stimulus.

So far the stimulus advocates can claim better results and if you read Paul Krugman’s new book, “End This Depression Now” you get the unmistakable notion that additional stimulus could do a lot to pull the global economy out of its tail spin.  So why don’t we all stimulate?  Krugman owns a Nobel Prize in Economics and knows what he’s talking about.  He considers himself a Keynesian after John Maynard Keynes, the mid twentieth century economist who invented, more or less, the branch of economics we call macroeconomics which is the obverse side of the coin from microeconomics.

It’s difficult to quantify, but if you’ve had any conversations with regular people, as I have recently, you see the two camps run deep.  The Austerians as Krugman calls them want austerity, smaller budgets, increased savings, less government spending.  The Stimulators think this is exactly the time for government to spend money, deficits be damned.  There will be time later, they say, when the economy is back on its feet, to raise taxes and pay for the spending.

Who’s right?  Each side thinks it is.  And you know what?  Each side is, though only one can be right in the context of today’s economy.  Economists have been famous for this kind of duality, so much so that Harry Truman once got tired of economists speaking to him in the vernacular of “on one hand and then on the other hand,” that he asked his staff to find him a one armed economist.

But back to stimulus and austerity or macro vs. micro.  The austerity people have a clear idea of how to pull out of a personal economic crisis.  Stop spending more than you take in, pay down debt, save a little and you will be out of the woods before you know it.

The macro people say that’s the problem.  We’re not dealing with micro or personal economics but with macro, global economies and they operate differently.  If everyone takes the austerity approach spending will decline and the economy will go into a tailspin.  As Krugman rightly points out, my spending is someone else’s revenue and in a big economy that inevitably drives the spending that results in what I call a paycheck.  That’s why when everyone is not spending either the government picks up on spending for a little while or the economy spins down into a deep hole.

Typically, governments spend on roads, bridges, teachers and other public infrastructure.  They also spend on unemployment insurance.  Unemployed people are a great investment because you can count on them to spend the money they get and spending is what spins an economy up.  Also, in a recession, with construction at low levels, government can get these things at bargain prices again putting money into the economy.  And if you buy productive assets like infrastructure, you have these things to work with as the economy improves.  Government spending is like training wheels, soon you don’t need them and you ride off on your own.  Think of this as investment.

Unlike the U.S. the Europeans have a small problem with infrastructure spending or any other kind of spending.  The spending, if it happened, would occur with German money in non-German countries so the Germans are reluctant to try this approach.  That’s the problem of having a unified currency but a non-unified government where each state is sovereign.  There is also more than a touch of righteous moralizing going on by the haves over the have-nots.

The German conundrum notwithstanding, there is a huge body of evidence from studying the Great Depression of the 1930s onward that shows government spending drives recovery from severe economic crashes.  The body of evidence also shows that failure to spend simply deepens the hole everyone is in.

Krugman and his colleagues would have liked it if the U.S. stimulus had been bigger or if multiple tranches of stimulus had been applied.  The people who say stimulus doesn’t work are the same ones who denied further spending and fought against the original stimulus plan.  All that is water under the bridge.  A kind of social experiment has nonetheless been performed and the economy that was stimulated, even inadequately, is doing much better than the economy with the brakes on.

If that’s not enough, what Merkel sees is that the French just elected Francois Hollande, a Socialist who promised to focus on stimulus and job creation in diametric opposition to Nicolas Sarkozy, a Merkel acolyte.  So we were treated to a delicate face saving about face by Merkel this weekend when the leaders of the G8 convened at Camp David with the unofficial goal of convincing Germany that austerity isn’t working and won’t.

Merkel really likes her policy and is not going to change her mind easily.  But with that election looming, she is at least now saying that austerity and job creation must go hand in hand.  Such is progress in international politics.  One wonders how much faster things would go if Merkel had a chance to see first hand how her policies are affecting millions of people.


You know this is a CRM blog and I rarely, if ever, venture very far from CRM.  I tried having a blog for economics and for green technology but decided they were too dilutive of my efforts so I ended up writing and posting on other relevant sites.  But today’s news that Obama won the Nobel Peace Prize literally left me slack jawed at 8:00 am when I turned on my computer and I have to comment on it.

First some house keeping.  I am a left of left, Medicare for all, delete the nukes and go green Democrat.  Ok?

This could be big — ya think?

Too often the Nobel is given to reward lifetime achievement.  There’s nothing wrong with that but imagine how much more an individual might be able to accomplish with the Nobel’s wind in his or her sails?  The Nobel is supposed to be awarded for the accomplishments of the last year, which qualifies Obama (barely).  This is a close call, but like any close call, if it goes in your favor, are you gonna complain?

Good on him, I say.  Now maybe we can get out of Afghanistan.


Market analysis firm IDC figures the market for service and support software will reach $4.2 billion before the end of the first Obama administration.  That’s reason enough for software vendors to want to be all over the market like a cheap suit, like white on rice, like a junkyard dog.  But as the market moves from on premise to on-demand you can expect the revenue potential to go way down.  That’s the beauty of on-demand computing — score one for the customer.

But whether it’s a billion or four, it’s still real money and enough to motivate lots of people’s behaviors so it was no surprise that both Salesforce.com and Oracle shored up their service and support offerings this week.  What was fascinating to me is that despite all the secrecy surrounding each company’s announcement, which I witnessed first hand, the two CRM titans managed to make similar announcements within a day of each other.

I attribute the coincidence to the simple logic of the situation.  Each company has built out very good offerings in sales and marketing and each is making its attempts in social media so it was time that each gave some attention to service and support.

To be rigorously fair, each company has devoted significant time and attention to the subject and each made announcements about intention and direction earlier this year or very late last year so it is no surprise that they decided to redeem their pledges and September is a great time to do just that.  So what’s what and what different?  Well…

Oracle announced integration between Oracle CRM On Demand and InQuira’s Web self-service applications.  The integration lets customers go seamlessly from self-service to live agent-assisted service, according to the press release.  This is a big deal because it enables customers to escalate their service requests and provide the service agent with a warm case full of basic information about the customer and the problem.  This completes a trip started with integration between Inquira and Oracle’s on-premise service and support systems.

Meanwhile on Wednesday, Salesforce redeemed a promise it made when it announced the acquisition of InStranet.  Salesforce said that it has successfully ported the technology to its cloud platform so that its customers can now use all of the cloud platform functionality such as user interface development and customization tools as well as workflow and approvals and its knowledge publishing capability.

To me Oracle’s announcement is more about service – and I think it’s important to tease apart service and support here.  Service being an issue that a customer has that can only be dealt with by the vendor and support falling into the category of how to use/fix a product.  Each is important and this in no way elevates one over the other, it’s just my observation.

Ok, the Oracle scheme takes a customer with a service issue from a self-service modality to an interaction with a live agent while preserving the thread of the interaction.  No more, “Can you give me your account number again?” and hopefully faster more accurate service.

The Salesforce announcement says that customers with how to use/fix issues can access the wisdom of peer users.  This is a good thing and a little brave on the part of companies who use it because it says a lot about the faith they place in their customers and ultimately the confidence they have in their own processes and procedures.  Using social media like Facebook, the Salesforce solution helps companies to gather input from customers and organize it through stack ranking and other crowd sourcing techniques to bubble up answers to customer problems.

Vendors like the Salesforce solution because it has a very low cost profile and customers should like it because it gives them the answers they need much faster.  Vendors should like the Oracle approach for very similar reasons.

Frankly it’s nice to see such heavy investment in customer service and support and the resulting benefits.  I think these announcements say a lot about the relative importance of keeping existing customers happy in today’s economy vs. the never-ending quest for new customers.  It speaks to the growing maturity of the CRM market and the growing clout that customers have.  Good for us.

On another note, Oracle is running a string of successes in CRM.  They’ve made some good numbers recently and they are generating some interesting products.  It has been a few years since Salesforce has been challenged to the degree that Oracle now challenges it.  Nonetheless, in two consecutive weeks with big announcements (last week was contact manager) Salesforce is the common denominator.  Simply put these guys are investing heavily in R&D and they have the goods to show for it and I would give the edge for raw sex-appeal to Salesforce.

But two weeks is just a snapshot.  Oracle Open World is coming in October, and Dreamforce is in November.  Expect some fireworks.

Salesforce and Obama hook up

Posted: January 15, 2009 in CRM
Tags: , ,

You really have to read the last three posts backward.  I was trying to make a point about leveraging Internet technology to connect people and save time and money over conventional business processes that involve face-to-face meetings.  It’s very hard to make this claim, but this is about as close as I have ever been to being in a moment when a lot of things changed all at once.  Check out this thread.

Salesforce’s second PR of the day is a wonderful slap upside of the head.  In case you doubted the importance of the support cloud announcement, the good people at Change.gov—Barack Obama’s tell-me-what-you-think-is most-important citizen feedback site just announced that they are using Salesforce CRM Ideas to collect citizen feedback.  Not bad for a product that will be announced in three hours.